|
|
ý
|
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to
|
|
Delaware
|
|
20-4536774
|
(State of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
601 Jefferson Street, Suite 3400, Houston, Texas
|
|
77002
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock par value $0.001 per share
|
|
New York Stock Exchange
|
Large accelerated filer
|
|
ý
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
Page
|
|
|
|
|
FINANCIAL STATEMENTS
|
|
Consolidated Statements of
Operations
|
|
|
|
|
|
•
|
market-leading health, safety and environmental standards and sustainable practices;
|
•
|
customer relationships;
|
•
|
successful prior execution of large projects in difficult locations;
|
•
|
technical excellence and differentiation;
|
•
|
high value in delivered projects and services measured by performance, quality, operability and cost;
|
•
|
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;
|
•
|
consistent superior service quality;
|
•
|
financial strength through liquidity, capital capacity and the ability to support warranties;
|
•
|
breadth of proprietary technology, know-how and technical solutions; and
|
•
|
robust risk awareness and management processes.
|
•
|
international oil companies ("IOC"s) and national oil companies ("NOC"s);
|
•
|
independent refiners;
|
•
|
petrochemical, fertilizer and chemical producers;
|
•
|
manufacturers;
|
•
|
domestic and foreign governments; and
|
•
|
regulated electric utilities.
|
•
|
expropriation and nationalization of our assets in that country;
|
•
|
political and economic instability;
|
•
|
civil unrest, acts of terrorism, force majeure, war or other armed conflict;
|
•
|
currency fluctuations, devaluations and conversion restrictions;
|
•
|
confiscatory taxation or other adverse tax policies; or
|
•
|
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.
|
•
|
worldwide or regional political, social or civil unrest, military action and economic conditions;
|
•
|
the level of demand for oil, natural gas, industrial services and power generation;
|
•
|
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;
|
•
|
a reduction in energy demand as a result of energy taxation or a change in consumer spending patterns;
|
•
|
global economic growth or decline;
|
•
|
the level of oil production by non-OPEC countries and the available excess production capacity from OPEC countries;
|
•
|
global weather conditions and natural disasters;
|
•
|
oil refining capacity;
|
•
|
shifts in end-customer preferences toward fuel efficiency and the use of natural gas;
|
•
|
potential acceleration of the development and expanded use of alternative fuels;
|
•
|
environmental regulation, including limitations on fossil fuel consumption based on concerns about its relationship to climate change; and
|
•
|
reduction in demand for the commodity-based markets in which we operate.
|
•
|
Valuation methodologies may not accurately capture the value proposition;
|
•
|
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 posing additional risks to our operations as a whole;
|
•
|
We may have difficulty managing our growth from acquisition activities;
|
•
|
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;
|
•
|
The effectiveness of our daily operations may be reduced by the redirection of employees and other resources to acquisition activities;
|
•
|
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;
|
•
|
We may assume unprofitable projects that pose future risks to our working capital needs, cash flows and the profitability of related operations;
|
•
|
Business acquisitions may include substantial transactional costs to complete the acquisition that exceed the estimated financial and operational benefits; or
|
•
|
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.
|
•
|
policy and/or spending changes implemented by the current administration, DoD or other government agencies;
|
•
|
changes, delays or cancellations of government programs or requirements;
|
•
|
adoption of new laws or regulations that affect companies providing services to the governments;
|
•
|
curtailment of the governments’ outsourcing of services to private contractors; or
|
•
|
level of political instability due to war, conflict or natural disasters.
|
Location
|
|
Owned/Leased
|
|
Description
|
|
Business Segment
|
Greenford, United Kingdom
|
|
Owned
|
|
Office facilities
|
|
Engineering & Construction
|
|
|
|
|
|
|
|
Leatherhead, United Kingdom
|
|
Owned
|
|
Office facilities
|
|
Engineering & Construction and Government Services
|
Birmingham, Alabama
|
|
Owned
|
|
Office facilities
|
|
Non-strategic Business
|
|
|
|
|
|
|
|
North America:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arlington, Virginia
|
|
Leased
|
|
Office facilities
|
|
Government Services
|
|
|
|
|
|
|
|
Edmonton, Alberta, Canada
|
|
Leased
|
|
Office and Project facilities
|
|
Engineering & Construction and Other
|
|
|
|
|
|
|
|
Houston, Texas
|
|
Leased
|
|
Office facilities
|
|
All and Other
|
|
|
|
|
|
|
|
Monterrey, Nuevo Leon, Mexico
|
|
Leased
|
|
Office facilities
|
|
Engineering & Construction
|
|
|
|
|
|
|
|
Newark, Delaware
|
|
Leased
|
|
Office facilities
|
|
Engineering & Construction
|
|
|
|
|
|
|
|
Europe, Middle East and Africa:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Al Khobar, Saudi Arabia
|
|
Leased
|
|
Office facilities
|
|
Engineering & Construction
|
|
|
|
|
|
|
|
Gothenburg, Sweden
|
|
Leased
|
|
Office facilities
|
|
Technology & Consulting
|
|
|
|
|
|
|
|
Asia-Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Singapore
|
|
Leased
|
|
Office facilities
|
|
Technology & Consulting and Engineering & Construction
|
|
|
|
|
|
|
|
Sydney, Australia
|
|
Leased
|
|
Office facilities
|
|
Engineering & Construction
|
|
|
|
|
|
|
|
Perth, Australia
|
|
Leased
|
|
Office and project facilities
|
|
Engineering & Construction
|
|
|
|
|
|
|
|
Melbourne, Australia
|
|
Leased
|
|
Office facilities
|
|
Engineering & Construction
|
Item 5.
|
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 2014
|
|
|
|
|
|
|
||||||
First quarter ended March 31, 2014
|
|
$
|
34.77
|
|
|
$
|
26.34
|
|
|
$
|
0.08
|
|
Second quarter ended June 30, 2014
|
|
$
|
28.29
|
|
|
$
|
22.48
|
|
|
$
|
0.08
|
|
Third quarter ended September 30, 2014
|
|
$
|
24.44
|
|
|
$
|
18.77
|
|
|
$
|
0.08
|
|
Fourth quarter ended December 31, 2014
|
|
$
|
20.48
|
|
|
$
|
14.65
|
|
|
$
|
0.08
|
|
Fiscal Year 2013
|
|
|
|
|
|
|
||||||
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
|
|
Purchase Period
|
Total Number
of Shares
Purchased
(1)
|
|
Average
Price Paid
per Share
(3)
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
(2)
|
|
Dollar Value of Maximum Number of Shares that May Yet Be
Purchased Under the Plan
|
||||||
October 1 – 31, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
265,330,176
|
|
November 3 – 28, 2014
|
—
|
|
|
$
|
20.78
|
|
|
(2,880
|
)
|
|
$
|
265,390,024
|
|
December 1 – 31, 2014
|
230,400
|
|
|
$
|
15.59
|
|
|
228,208
|
|
|
$
|
261,832,261
|
|
Total
|
230,400
|
|
|
$
|
15.52
|
|
|
225,328
|
|
|
$
|
261,832,261
|
|
|
(1)
|
Does not include shares withheld for tax purpose or forfeitures under our equity plans. Shares are acquired from employees in connection with the settlement of income tax and related benefit-withholding obligations arising from the vesting of restricted stock units. For the three month period ended
December 31, 2014
,
507
shares were acquired to cover employee transactions at an average price of
$18.23
.
|
(2)
|
Represents the number of shares applied to the share repurchase program authorized and announced on February 25, 2014 less shares allocated to our maintenance program. Repurchases applied to cover our share maintenance plan for the three month period ended
December 31, 2014
, were
5,072
shares at an average price of
$18.54
per share.
|
(3)
|
We did not repurchase shares in October and November of 2014. The average price paid per share of
$20.78
reflects the average price paid on the previous repurchases in August 2014.
|
|
12/31/2009
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
||||||||||||
KBR
|
$
|
100.00
|
|
|
$
|
161.70
|
|
|
$
|
148.90
|
|
|
$
|
160.95
|
|
|
$
|
171.54
|
|
|
$
|
91.18
|
|
Dow Jones Heavy Construction
|
100.00
|
|
|
127.89
|
|
|
105.04
|
|
|
126.90
|
|
|
165.86
|
|
|
122.89
|
|
||||||
Russell 1000
|
100.00
|
|
|
113.87
|
|
|
113.29
|
|
|
129.07
|
|
|
168.36
|
|
|
186.99
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Dollars in millions, except per share amounts
|
|
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
6,366
|
|
|
$
|
7,214
|
|
|
$
|
7,770
|
|
|
$
|
9,103
|
|
|
$
|
9,962
|
|
Gross profit (loss)
|
|
(65
|
)
|
|
417
|
|
|
518
|
|
|
640
|
|
|
689
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
|
163
|
|
|
137
|
|
|
151
|
|
|
158
|
|
|
137
|
|
|||||
Impairment of goodwill, asset impairments and restructuring charges (a)
|
|
(660
|
)
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Operating income (loss)
|
|
(794
|
)
|
|
308
|
|
|
299
|
|
|
587
|
|
|
609
|
|
|||||
Income (loss) from continuing operations, net of tax (b)
|
|
(1,198
|
)
|
|
171
|
|
|
202
|
|
|
540
|
|
|
395
|
|
|||||
Net income attributable to noncontrolling interests
|
|
(64
|
)
|
|
(96
|
)
|
|
(58
|
)
|
|
(60
|
)
|
|
(68
|
)
|
|||||
Net income (loss) attributable to KBR
|
|
(1,262
|
)
|
|
75
|
|
|
144
|
|
|
480
|
|
|
327
|
|
|||||
Basic net income (loss) attributable to KBR per share
|
|
$
|
(8.66
|
)
|
|
$
|
0.50
|
|
|
$
|
0.97
|
|
|
$
|
3.18
|
|
|
$
|
2.08
|
|
Diluted net income (loss) attributable to KBR per share
|
|
$
|
(8.66
|
)
|
|
$
|
0.50
|
|
|
$
|
0.97
|
|
|
$
|
3.16
|
|
|
$
|
2.07
|
|
Cash dividends declared per share (c)
|
|
$
|
0.32
|
|
|
$
|
0.24
|
|
|
$
|
0.28
|
|
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (as of the end of period):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
4,199
|
|
|
$
|
5,438
|
|
|
$
|
5,767
|
|
|
$
|
5,666
|
|
|
$
|
5,417
|
|
Long-term nonrecourse project-finance debt
|
|
63
|
|
|
78
|
|
|
84
|
|
|
88
|
|
|
92
|
|
|||||
Total shareholders’ equity
|
|
$
|
935
|
|
|
$
|
2,439
|
|
|
$
|
2,511
|
|
|
$
|
2,442
|
|
|
$
|
2,204
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data (as of the end of period):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Backlog of unfulfilled orders
|
|
$
|
10,859
|
|
|
$
|
14,118
|
|
|
$
|
14,931
|
|
|
$
|
10,931
|
|
|
$
|
12,041
|
|
|
(a)
|
Included in 2014 is a goodwill impairment charge of
$446 million
related to three of our previous reporting units. Included in 2012 is a goodwill impairment charge of
$178 million
related to one of our previous reporting units. Included in 2014, 2012 and 2010 are impairment of long-lived asset charges of
$171 million
,
$2 million
and
$5 million
, respectively, primarily related to equipment, land and buildings. Also included in 2014 are restructuring charges of
$43 million
.
|
(b)
|
Included in 2014 is a
$421 million
of tax expense primarily related to valuation allowance on U.S. federal, foreign and state net operating loss carryforwards, foreign tax credit carryforwards, other deferred tax assets and foreign tax expense.
|
(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
|
•
|
Fixed priced EPC power projects
|
•
|
Fixed priced U.S. infrastructure and mining business
|
•
|
Building Group
|
•
|
Fixed price construction-only projects
|
•
|
Reduced revenues and gross profit due to lower activity or the completion of several mega LNG and GTL projects
|
•
|
Reduced gross profit due to increases in estimates of costs to complete certain projects, including recognition of additional losses on our Canadian pipe fabrication and module assembly projects.
|
Equity in Earnings of Unconsolidated Affiliates
|
|||||||||||||||||||||||||
|
|
|
|
|
2014 vs. 2013
|
|
|
|
2013 vs. 2012
|
||||||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2012
|
|
$
|
|
%
|
||||||||||||
Equity in earnings of unconsolidated affiliates
|
$
|
163
|
|
|
$
|
137
|
|
|
$
|
26
|
|
|
19
|
%
|
|
$
|
151
|
|
|
$
|
(14
|
)
|
|
(9
|
)%
|
General and Administrative Expenses
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
2014 vs. 2013
|
|
|
|
2013 vs. 2012
|
||||||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2012
|
|
$
|
|
%
|
||||||||||||
General and administrative expenses
|
$
|
(239
|
)
|
|
$
|
(248
|
)
|
|
$
|
(9
|
)
|
|
(4
|
)%
|
|
$
|
(222
|
)
|
|
$
|
26
|
|
|
12
|
%
|
Non-operating Income (Expenses)
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
2014 vs. 2013
|
|
|
|
2013 vs. 2012
|
||||||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2012
|
|
$
|
|
%
|
||||||||||||
Non-operating income (expenses)
|
$
|
17
|
|
|
$
|
(8
|
)
|
|
$
|
25
|
|
|
313
|
%
|
|
$
|
(11
|
)
|
|
$
|
(3
|
)
|
|
(27
|
)%
|
Provision for Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
2014 vs. 2013
|
|
|
|
2013 vs. 2012
|
|||||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2012
|
|
$
|
|
%
|
|||||||||||
Income (loss) before provision for income taxes
|
$
|
(777
|
)
|
|
$
|
300
|
|
|
$
|
(1,077
|
)
|
|
n/m
|
|
$
|
288
|
|
|
$
|
12
|
|
|
4
|
%
|
Provision for income taxes
|
$
|
(421
|
)
|
|
$
|
(129
|
)
|
|
$
|
292
|
|
|
n/m
|
|
$
|
(86
|
)
|
|
$
|
43
|
|
|
50
|
%
|
|
Net Income Attributable to Noncontrolling Interests
|
|||||||||||||||||||||||||
|
|
|
|
|
2014 vs. 2013
|
|
|
|
2013 vs. 2012
|
||||||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2012
|
|
$
|
|
%
|
||||||||||||
Net income attributable to noncontrolling interests
|
$
|
(64
|
)
|
|
$
|
(96
|
)
|
|
$
|
(32
|
)
|
|
(33
|
)%
|
|
$
|
(58
|
)
|
|
$
|
38
|
|
|
66
|
%
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
|
|
|
|
|
2014 vs. 2013
|
|
|
|
2013 vs. 2012
|
||||||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2012
|
|
$
|
|
%
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Technology & Consulting
|
$
|
353
|
|
|
$
|
330
|
|
|
$
|
23
|
|
|
7
|
%
|
|
$
|
296
|
|
|
$
|
34
|
|
|
11
|
%
|
Engineering & Construction
|
4,584
|
|
|
4,956
|
|
|
(372
|
)
|
|
(8
|
)%
|
|
5,616
|
|
|
(660
|
)
|
|
(12
|
)%
|
|||||
Government Services
|
638
|
|
|
931
|
|
|
(293
|
)
|
|
(31
|
)%
|
|
1,105
|
|
|
(174
|
)
|
|
(16
|
)%
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||||
Subtotal
|
$
|
5,575
|
|
|
$
|
6,217
|
|
|
$
|
(642
|
)
|
|
(10
|
)%
|
|
$
|
7,017
|
|
|
$
|
(800
|
)
|
|
(11
|
)%
|
Non-strategic Business
|
791
|
|
|
997
|
|
|
(206
|
)
|
|
(21
|
)%
|
|
753
|
|
|
244
|
|
|
32
|
%
|
|||||
Total
|
$
|
6,366
|
|
|
$
|
7,214
|
|
|
$
|
(848
|
)
|
|
(12
|
)%
|
|
$
|
7,770
|
|
|
$
|
(556
|
)
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Technology & Consulting
|
$
|
53
|
|
|
$
|
69
|
|
|
$
|
(16
|
)
|
|
(23
|
)%
|
|
$
|
80
|
|
|
$
|
(11
|
)
|
|
(14
|
)%
|
Engineering & Construction
|
141
|
|
|
263
|
|
|
(122
|
)
|
|
(46
|
)%
|
|
450
|
|
|
(187
|
)
|
|
(42
|
)%
|
|||||
Government Services
|
(32
|
)
|
|
90
|
|
|
(122
|
)
|
|
(136
|
)%
|
|
83
|
|
|
7
|
|
|
8
|
%
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||||
Subtotal
|
$
|
162
|
|
|
$
|
422
|
|
|
$
|
(260
|
)
|
|
(62
|
)%
|
|
$
|
613
|
|
|
$
|
(191
|
)
|
|
(31
|
)%
|
Non-strategic Business
|
(227
|
)
|
|
(5
|
)
|
|
(222
|
)
|
|
n/m
|
|
|
(95
|
)
|
|
90
|
|
|
95
|
%
|
|||||
Total
|
$
|
(65
|
)
|
|
$
|
417
|
|
|
$
|
(482
|
)
|
|
(116
|
)%
|
|
$
|
518
|
|
|
$
|
(101
|
)
|
|
(19
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in earnings of unconsolidated affiliates
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
Engineering & Construction
|
90
|
|
|
76
|
|
|
14
|
|
|
18
|
%
|
|
79
|
|
|
(3
|
)
|
|
(4
|
)%
|
|||||
Government Services
|
73
|
|
|
61
|
|
|
12
|
|
|
20
|
%
|
|
67
|
|
|
(6
|
)
|
|
(9
|
)%
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||||
Subtotal
|
$
|
163
|
|
|
$
|
137
|
|
|
$
|
26
|
|
|
19
|
%
|
|
$
|
146
|
|
|
$
|
(9
|
)
|
|
(6
|
)%
|
Non-strategic Business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
5
|
|
|
(5
|
)
|
|
(100
|
)%
|
|||||
Total
|
$
|
163
|
|
|
$
|
137
|
|
|
$
|
26
|
|
|
19
|
%
|
|
$
|
151
|
|
|
$
|
(14
|
)
|
|
(9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total general and administrative expense
|
$
|
(239
|
)
|
|
$
|
(248
|
)
|
|
$
|
(9
|
)
|
|
(4
|
)%
|
|
$
|
(222
|
)
|
|
$
|
26
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impairment of goodwill
|
$
|
(446
|
)
|
|
$
|
—
|
|
|
$
|
446
|
|
|
—
|
%
|
|
$
|
(178
|
)
|
|
$
|
(178
|
)
|
|
(100
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairment and restructuring charges
|
$
|
(214
|
)
|
|
$
|
—
|
|
|
$
|
214
|
|
|
—
|
%
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
(100
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on disposition of assets
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
250
|
%
|
|
$
|
32
|
|
|
$
|
(30
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total operating income
|
$
|
(794
|
)
|
|
$
|
308
|
|
|
$
|
(1,102
|
)
|
|
(358
|
)%
|
|
$
|
299
|
|
|
$
|
9
|
|
|
3
|
%
|
|
|
December 31,
|
|
|
|
Changes in scope on existing contracts (a)
|
|
|
|
December 31,
|
||||||||||
Dollars in millions
|
2013
|
|
New Awards
|
|
|
Net Workoff (b)
|
|
2014
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Technology & Consulting
|
$
|
458
|
|
|
$
|
182
|
|
|
$
|
130
|
|
|
$
|
(370
|
)
|
|
$
|
400
|
|
Engineering & Construction
|
10,712
|
|
|
1,571
|
|
|
239
|
|
|
(4,734
|
)
|
|
7,788
|
|
|||||
Government Services
|
2,175
|
|
|
216
|
|
|
83
|
|
|
(711
|
)
|
|
1,763
|
|
|||||
Subtotal
|
13,345
|
|
|
1,969
|
|
|
452
|
|
|
(5,815
|
)
|
|
9,951
|
|
|||||
Non-strategic Business
|
773
|
|
|
803
|
|
|
46
|
|
|
(714
|
)
|
|
908
|
|
|||||
Total backlog
|
$
|
14,118
|
|
|
$
|
2,772
|
|
|
$
|
498
|
|
|
$
|
(6,529
|
)
|
|
$
|
10,859
|
|
|
(a)
|
In addition to changes in scope, these amounts reflect the elimination of our proportionate share of non-partner costs related to our unconsolidated joint ventures.
|
(b)
|
These amounts include the net workoff of our projects as well as our proportionate share of the net workoff of our unconsolidated joint ventures projects.
|
Cash flows activities summary
|
|
|
|
|
|
|
||||||
|
|
December 31,
|
||||||||||
Dollars in millions
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
||||||
Cash flows provided by operating activities
|
|
$
|
170
|
|
|
$
|
297
|
|
|
$
|
142
|
|
Cash flows provided by (used in) investing activities
|
|
(44
|
)
|
|
(62
|
)
|
|
52
|
|
|||
Cash flows used in financing activities
|
|
(210
|
)
|
|
(148
|
)
|
|
(116
|
)
|
|||
Effect of exchange rate changes on cash
|
|
(52
|
)
|
|
(34
|
)
|
|
9
|
|
|||
Increase (decrease) in cash and equivalents
|
|
$
|
(136
|
)
|
|
$
|
53
|
|
|
$
|
87
|
|
|
Payments Due
|
||||||||||||||||||||||||||
Dollars in millions
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases (a)
|
$
|
99
|
|
|
$
|
85
|
|
|
$
|
71
|
|
|
$
|
62
|
|
|
$
|
53
|
|
|
$
|
383
|
|
|
$
|
753
|
|
Purchase obligations (b)
|
8
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
17
|
|
|||||||
Pension funding obligation (c)
|
48
|
|
|
44
|
|
|
44
|
|
|
44
|
|
|
44
|
|
|
173
|
|
|
397
|
|
|||||||
Nonrecourse project finance debt
|
10
|
|
|
10
|
|
|
11
|
|
|
12
|
|
|
12
|
|
|
18
|
|
|
73
|
|
|||||||
Total (d)
|
$
|
165
|
|
|
$
|
143
|
|
|
$
|
127
|
|
|
$
|
119
|
|
|
$
|
110
|
|
|
$
|
576
|
|
|
$
|
1,240
|
|
|
(a)
|
Amounts presented are net of subleases.
|
(b)
|
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 revenues 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.
|
(c)
|
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, 2014
. 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 U.K. Pensions Act 1995.
|
(d)
|
Not included in the total are uncertain tax positions recorded pursuant to ASC 740 - Income Taxes, which totaled
$228 million
as of
December 31, 2014
. 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
13
to our consolidated financial statements for further discussion on income taxes.
|
|
Effect on
|
||||||||||
|
Pretax Pension Cost in 2015
|
|
Pension Benefit Obligation at December 31, 2014
|
||||||||
|
U.S.
|
|
U.K.
|
|
U.S.
|
|
U.K.
|
||||
Dollars in millions
|
|
|
|
|
|
|
|
||||
25-basis-point decrease in discount rate
|
—
|
|
|
5
|
|
|
2
|
|
|
111
|
|
25-basis-point increase in discount rate
|
—
|
|
|
(5
|
)
|
|
(2
|
)
|
|
(103
|
)
|
25-basis-point decrease in expected long-term rate of return
|
1
|
|
|
4
|
|
|
N/A
|
|
|
N/A
|
|
25-basis-point increase in expected long-term rate of return
|
—
|
|
|
(4
|
)
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Page No.
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
Years ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Revenues
|
$
|
6,366
|
|
|
$
|
7,214
|
|
|
$
|
7,770
|
|
Cost of revenues
|
(6,431
|
)
|
|
(6,797
|
)
|
|
(7,252
|
)
|
|||
Gross profit (loss)
|
(65
|
)
|
|
417
|
|
|
518
|
|
|||
Equity in earnings of unconsolidated affiliates
|
163
|
|
|
137
|
|
|
151
|
|
|||
General and administrative expenses
|
(239
|
)
|
|
(248
|
)
|
|
(222
|
)
|
|||
Impairment of goodwill
|
(446
|
)
|
|
—
|
|
|
(178
|
)
|
|||
Asset impairment and restructuring charges
|
(214
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Gain on disposition of assets
|
7
|
|
|
2
|
|
|
32
|
|
|||
Operating income (loss)
|
(794
|
)
|
|
308
|
|
|
299
|
|
|||
Other non-operating income (expenses)
|
17
|
|
|
(8
|
)
|
|
(11
|
)
|
|||
Income (loss) before income taxes and noncontrolling interests
|
(777
|
)
|
|
300
|
|
|
288
|
|
|||
Provision for income taxes
|
(421
|
)
|
|
(129
|
)
|
|
(86
|
)
|
|||
Net income (loss)
|
(1,198
|
)
|
|
171
|
|
|
202
|
|
|||
Net income attributable to noncontrolling interests
|
(64
|
)
|
|
(96
|
)
|
|
(58
|
)
|
|||
Net income (loss) attributable to KBR
|
$
|
(1,262
|
)
|
|
$
|
75
|
|
|
$
|
144
|
|
Net income (loss) attributable to KBR per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(8.66
|
)
|
|
$
|
0.50
|
|
|
$
|
0.97
|
|
Diluted
|
$
|
(8.66
|
)
|
|
$
|
0.50
|
|
|
$
|
0.97
|
|
Basic weighted average common shares outstanding
|
146
|
|
|
148
|
|
|
148
|
|
|||
Diluted weighted average common shares outstanding
|
146
|
|
|
149
|
|
|
149
|
|
|||
Cash dividends declared per share
|
$
|
0.32
|
|
|
$
|
0.24
|
|
|
$
|
0.28
|
|
|
Years ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(1,198
|
)
|
|
$
|
171
|
|
|
$
|
202
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of tax
|
(71
|
)
|
|
(35
|
)
|
|
(11
|
)
|
|||
Reclassification adjustment included in net income
|
1
|
|
|
1
|
|
|
(7
|
)
|
|||
Foreign currency translation adjustments, net of tax of $(4), $(27) and $8
|
(70
|
)
|
|
(34
|
)
|
|
(18
|
)
|
|||
Pension and post-retirement benefits, net of tax:
|
|
|
|
|
|
||||||
Actuarial losses, net of tax
|
(104
|
)
|
|
(122
|
)
|
|
(77
|
)
|
|||
Reclassification adjustment included in net income
|
42
|
|
|
35
|
|
|
27
|
|
|||
Pension and post-retirement benefits, net of taxes of $(10), $(18) and $(14)
|
(62
|
)
|
|
(87
|
)
|
|
(50
|
)
|
|||
Changes in fair value of derivatives:
|
|
|
|
|
|
||||||
Changes in fair value of derivatives, net of tax
|
(2
|
)
|
|
1
|
|
|
2
|
|
|||
Reclassification adjustment included in net income
|
—
|
|
|
(1
|
)
|
|
4
|
|
|||
Changes in fair value of derivatives, net of taxes of $0, $0 and $(1)
|
(2
|
)
|
|
—
|
|
|
6
|
|
|||
Other comprehensive loss, net of tax
|
(134
|
)
|
|
(121
|
)
|
|
(62
|
)
|
|||
Comprehensive income (loss)
|
(1,332
|
)
|
|
50
|
|
|
140
|
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
(66
|
)
|
|
(105
|
)
|
|
(58
|
)
|
|||
Comprehensive income (loss) attributable to KBR
|
$
|
(1,398
|
)
|
|
$
|
(55
|
)
|
|
$
|
82
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
970
|
|
|
$
|
1,106
|
|
Accounts receivable, net of allowance for doubtful accounts of $19 and $18
|
847
|
|
|
1,056
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE")
|
490
|
|
|
399
|
|
||
Deferred income taxes
|
90
|
|
|
168
|
|
||
Other current assets
|
147
|
|
|
196
|
|
||
Total current assets
|
2,544
|
|
|
2,925
|
|
||
Property, plant, and equipment, net of accumulated depreciation of $385 and $397 (including net PPE of $57 and $67 owned by a variable interest entity)
|
247
|
|
|
415
|
|
||
Goodwill
|
324
|
|
|
772
|
|
||
Intangible assets, net of accumulated amortization of $96 and $112
|
41
|
|
|
85
|
|
||
Equity in and advances to unconsolidated affiliates
|
151
|
|
|
156
|
|
||
Deferred income taxes
|
174
|
|
|
344
|
|
||
Claims and accounts receivable
|
570
|
|
|
628
|
|
||
Other assets
|
148
|
|
|
113
|
|
||
Total assets
|
$
|
4,199
|
|
|
$
|
5,438
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
742
|
|
|
$
|
747
|
|
Payable to former parent
|
56
|
|
|
105
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts ("BIE")
|
531
|
|
|
401
|
|
||
Accrued salaries, wages and benefits
|
197
|
|
|
235
|
|
||
Nonrecourse project debt
|
10
|
|
|
10
|
|
||
Other current liabilities
|
488
|
|
|
409
|
|
||
Total current liabilities
|
2,024
|
|
|
1,907
|
|
||
Pension obligations
|
502
|
|
|
477
|
|
||
Employee compensation and benefits
|
112
|
|
|
114
|
|
||
Income tax payable
|
69
|
|
|
70
|
|
||
Deferred income taxes
|
170
|
|
|
86
|
|
||
Nonrecourse project debt
|
63
|
|
|
78
|
|
||
Deferred income from unconsolidated affiliates
|
95
|
|
|
—
|
|
||
Other liabilities
|
229
|
|
|
267
|
|
||
Total liabilities
|
3,264
|
|
|
2,999
|
|
||
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, 174,448,399 and 173,924,509 shares issued, and 144,837,281 and 148,195,208 shares outstanding
|
—
|
|
|
—
|
|
||
Paid-in capital in excess of par ("PIC")
|
2,091
|
|
|
2,065
|
|
||
Accumulated other comprehensive loss ("AOCL")
|
(876
|
)
|
|
(740
|
)
|
||
Retained earnings
|
439
|
|
|
1,748
|
|
||
Treasury stock, 29,611,118 shares and 25,729,301 shares, at cost
|
(712
|
)
|
|
(610
|
)
|
||
Total KBR shareholders’ equity
|
942
|
|
|
2,463
|
|
||
Noncontrolling interests ("NCI")
|
(7
|
)
|
|
(24
|
)
|
||
Total shareholders’ equity
|
935
|
|
|
2,439
|
|
||
Total liabilities and shareholders’ equity
|
$
|
4,199
|
|
|
$
|
5,438
|
|
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Balance at January 1,
|
$
|
2,439
|
|
|
$
|
2,511
|
|
|
$
|
2,442
|
|
Deferred tax and foreign currency adjustments to PIC
|
—
|
|
|
—
|
|
|
17
|
|
|||
Share-based compensation
|
22
|
|
|
16
|
|
|
16
|
|
|||
Common stock issued upon exercise of stock options
|
4
|
|
|
6
|
|
|
7
|
|
|||
Tax benefit increase related to share-based plans
|
—
|
|
|
—
|
|
|
4
|
|
|||
Dividends declared to shareholders
|
(47
|
)
|
|
(36
|
)
|
|
(42
|
)
|
|||
Adjustments pursuant to tax sharing agreement
|
—
|
|
|
(7
|
)
|
|
—
|
|
|||
Repurchases of common stock
|
(106
|
)
|
|
(7
|
)
|
|
(40
|
)
|
|||
Issuance of employee stock purchase plan ("ESPP") shares
|
4
|
|
|
4
|
|
|
3
|
|
|||
Investments from noncontrolling interests
|
10
|
|
|
9
|
|
|
—
|
|
|||
Distributions to noncontrolling interests
|
(61
|
)
|
|
(109
|
)
|
|
(36
|
)
|
|||
Change in NCI due to consolidation of previously unconsolidated JV
|
—
|
|
|
2
|
|
|
—
|
|
|||
Other NCI activity
|
2
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income (loss)
|
(1,332
|
)
|
|
50
|
|
|
140
|
|
|||
Balance at December 31,
|
$
|
935
|
|
|
$
|
2,439
|
|
|
$
|
2,511
|
|
KBR, Inc.
Consolidated Statements of Cash Flows
(In millions)
|
|||||||||||
|
Years ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(1,198
|
)
|
|
$
|
171
|
|
|
$
|
202
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
72
|
|
|
68
|
|
|
65
|
|
|||
Equity in earnings of unconsolidated affiliates
|
(163
|
)
|
|
(137
|
)
|
|
(151
|
)
|
|||
Deferred income tax (benefit) expense
|
353
|
|
|
18
|
|
|
18
|
|
|||
Gain on disposition of assets
|
(7
|
)
|
|
(2
|
)
|
|
(32
|
)
|
|||
Gain on negotiated settlement with former parent
|
(24
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of goodwill
|
446
|
|
|
—
|
|
|
178
|
|
|||
Asset impairment
|
171
|
|
|
—
|
|
|
2
|
|
|||
Other
|
11
|
|
|
21
|
|
|
35
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net of allowance for doubtful accounts
|
170
|
|
|
—
|
|
|
(9
|
)
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
(107
|
)
|
|
140
|
|
|
(239
|
)
|
|||
Accounts payable
|
(10
|
)
|
|
49
|
|
|
(14
|
)
|
|||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
144
|
|
|
(20
|
)
|
|
(93
|
)
|
|||
Accrued salaries, wages and benefits
|
(29
|
)
|
|
(14
|
)
|
|
(8
|
)
|
|||
Reserve for loss on uncompleted contracts
|
57
|
|
|
53
|
|
|
34
|
|
|||
Receipts of advances from unconsolidated affiliates, net
|
13
|
|
|
14
|
|
|
(6
|
)
|
|||
Distributions of earnings from unconsolidated affiliates
|
249
|
|
|
180
|
|
|
108
|
|
|||
Payment on performance bonds for EPC 1 project in Mexico
|
—
|
|
|
(108
|
)
|
|
—
|
|
|||
Income taxes payable
|
14
|
|
|
(51
|
)
|
|
(62
|
)
|
|||
Pension funding
|
(48
|
)
|
|
(54
|
)
|
|
(30
|
)
|
|||
Retainage payable
|
(16
|
)
|
|
(35
|
)
|
|
(70
|
)
|
|||
Subcontractor advances
|
(3
|
)
|
|
20
|
|
|
131
|
|
|||
Other assets and liabilities
|
75
|
|
|
(16
|
)
|
|
83
|
|
|||
Total cash flows provided by operating activities
|
170
|
|
|
297
|
|
|
142
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition or disposition of businesses
|
—
|
|
|
10
|
|
|
(3
|
)
|
|||
Purchases of property, plant and equipment
|
(53
|
)
|
|
(78
|
)
|
|
(75
|
)
|
|||
Proceeds from sale of assets and investments
|
9
|
|
|
6
|
|
|
127
|
|
|||
Return of capital from equity method joint ventures
|
—
|
|
|
—
|
|
|
3
|
|
|||
Total cash flows provided by (used in) investing activities
|
$
|
(44
|
)
|
|
$
|
(62
|
)
|
|
$
|
52
|
|
KBR, Inc.
Consolidated Statements of Cash Flows
(In millions)
|
|||||||||||
|
Years ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments to reacquire common stock
|
(106
|
)
|
|
(7
|
)
|
|
(40
|
)
|
|||
Investments from noncontrolling interests
|
10
|
|
|
9
|
|
|
—
|
|
|||
Distributions to noncontrolling interests
|
(61
|
)
|
|
(109
|
)
|
|
(36
|
)
|
|||
Payments of dividends to shareholders
|
(47
|
)
|
|
(36
|
)
|
|
(37
|
)
|
|||
Net proceeds from issuance of common stock
|
4
|
|
|
6
|
|
|
7
|
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
—
|
|
|
4
|
|
|||
Payments on short-term and long-term borrowings
|
(11
|
)
|
|
(14
|
)
|
|
(14
|
)
|
|||
Other
|
1
|
|
|
3
|
|
|
—
|
|
|||
Total cash flows used in financing activities
|
(210
|
)
|
|
(148
|
)
|
|
(116
|
)
|
|||
Effect of exchange rate changes on cash
|
(52
|
)
|
|
(34
|
)
|
|
9
|
|
|||
Increase (decrease) in cash and equivalents
|
(136
|
)
|
|
53
|
|
|
87
|
|
|||
Cash and equivalents at beginning of period
|
1,106
|
|
|
1,053
|
|
|
966
|
|
|||
Cash and equivalents at end of period
|
$
|
970
|
|
|
$
|
1,106
|
|
|
$
|
1,053
|
|
Supplemental disclosure of cash flows information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
15
|
|
Cash paid for income taxes (net of refunds)
|
$
|
37
|
|
|
$
|
127
|
|
|
$
|
81
|
|
Noncash operating activities
|
|
|
|
|
|
||||||
Other assets change for payments made on our behalf by former parent
|
$
|
—
|
|
|
$
|
(219
|
)
|
|
$
|
22
|
|
Other liabilities change for payments made on our behalf by former parent
|
$
|
—
|
|
|
$
|
219
|
|
|
$
|
(22
|
)
|
Noncash financing activities
|
|
|
|
|
|
||||||
Dividends declared
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
12
|
|
•
|
project revenues, costs and profits on engineering and construction contracts and government services contracts, including recognition of estimated losses on uncompleted contracts
|
•
|
provisions for uncollectible receivables and client claims and recoveries of costs from subcontractors, vendors and others
|
•
|
provisions for income taxes and related valuation allowances and tax uncertainties
|
•
|
recoverability of goodwill
|
•
|
recoverability of other intangibles and long-lived assets and related estimated lives
|
•
|
recoverability of equity method and cost method investments
|
•
|
valuation of pension obligations and pension assets
|
•
|
accruals for estimated liabilities, including litigation accruals
|
•
|
consolidation of variable interest entities
|
•
|
valuation of stock-based compensation
|
•
|
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.
|
•
|
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.
|
Revenues from major customers:
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Chevron revenues
|
$
|
1,069
|
|
|
$
|
1,859
|
|
|
$
|
2,302
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Inventory
|
$
|
8
|
|
|
$
|
13
|
|
Restricted cash
|
17
|
|
|
1
|
|
||
Prepaid expenses
|
58
|
|
|
72
|
|
||
Value-added tax receivable
|
27
|
|
|
24
|
|
||
Assets held-for-sale
|
10
|
|
|
—
|
|
||
Other miscellaneous assets
|
27
|
|
|
86
|
|
||
Total other current assets
|
$
|
147
|
|
|
$
|
196
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Reserve for estimated losses on uncompleted contracts (a)
|
$
|
159
|
|
|
$
|
109
|
|
Retainage payable
|
88
|
|
|
102
|
|
||
Income taxes payable
|
61
|
|
|
60
|
|
||
Deferred tax liabilities
|
46
|
|
|
31
|
|
||
Value-added tax payable
|
31
|
|
|
29
|
|
||
Insurance payable
|
19
|
|
|
26
|
|
||
Dividend payable
|
12
|
|
|
12
|
|
||
Other miscellaneous liabilities
|
72
|
|
|
40
|
|
||
Total other current liabilities
|
$
|
488
|
|
|
$
|
409
|
|
|
(a)
|
See Note
2
for further discussion on our reserve for estimated losses on uncompleted contracts.
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
353
|
|
|
$
|
330
|
|
|
$
|
296
|
|
Engineering & Construction
|
4,584
|
|
|
4,956
|
|
|
5,616
|
|
|||
Government Services
|
638
|
|
|
931
|
|
|
1,105
|
|
|||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Subtotal
|
5,575
|
|
|
6,217
|
|
|
7,017
|
|
|||
Non-strategic Business
|
791
|
|
|
997
|
|
|
753
|
|
|||
Total
|
$
|
6,366
|
|
|
$
|
7,214
|
|
|
$
|
7,770
|
|
Gross profit (loss):
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
53
|
|
|
$
|
69
|
|
|
$
|
80
|
|
Engineering & Construction
|
141
|
|
|
263
|
|
|
450
|
|
|||
Government Services
|
(32
|
)
|
|
90
|
|
|
83
|
|
|||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Subtotal
|
162
|
|
|
422
|
|
|
613
|
|
|||
Non-strategic Business
|
(227
|
)
|
|
(5
|
)
|
|
(95
|
)
|
|||
Total
|
$
|
(65
|
)
|
|
$
|
417
|
|
|
$
|
518
|
|
Equity in earnings of unconsolidated affiliates:
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
90
|
|
|
76
|
|
|
79
|
|
|||
Government Services
|
73
|
|
|
61
|
|
|
67
|
|
|||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Subtotal
|
163
|
|
|
137
|
|
|
146
|
|
|||
Non-strategic Business
|
—
|
|
|
—
|
|
|
5
|
|
|||
Total
|
$
|
163
|
|
|
$
|
137
|
|
|
$
|
151
|
|
Impairment of goodwill (Note 8):
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
(293
|
)
|
|
—
|
|
|
—
|
|
|||
Government Services
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Subtotal
|
(293
|
)
|
|
—
|
|
|
—
|
|
|||
Non-strategic Business
|
(153
|
)
|
|
—
|
|
|
(178
|
)
|
|||
Total
|
$
|
(446
|
)
|
|
$
|
—
|
|
|
$
|
(178
|
)
|
Asset impairment and restructuring charges (Note 9):
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
(24
|
)
|
|
—
|
|
|
—
|
|
|||
Government Services
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(149
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Subtotal
|
(180
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Non-strategic Business
|
(34
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
(214
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Segment operating income (loss):
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
49
|
|
|
$
|
70
|
|
|
$
|
80
|
|
Engineering & Construction
|
(114
|
)
|
|
278
|
|
|
499
|
|
|||
Government Services
|
25
|
|
|
145
|
|
|
146
|
|
|||
Other
|
(312
|
)
|
|
(181
|
)
|
|
(155
|
)
|
|||
Subtotal
|
(352
|
)
|
|
312
|
|
|
570
|
|
|||
Non-strategic Business
|
(442
|
)
|
|
(4
|
)
|
|
(271
|
)
|
|||
Total
|
$
|
(794
|
)
|
|
$
|
308
|
|
|
$
|
299
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Engineering & Construction
|
19
|
|
|
10
|
|
|
8
|
|
|||
Government Services
|
—
|
|
|
1
|
|
|
1
|
|
|||
Other
|
34
|
|
|
67
|
|
|
65
|
|
|||
Subtotal
|
53
|
|
|
78
|
|
|
75
|
|
|||
Non-strategic Business
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
53
|
|
|
$
|
78
|
|
|
$
|
75
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Technology & Consulting
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Engineering & Construction
|
23
|
|
|
23
|
|
|
23
|
|
|||
Government Services
|
8
|
|
|
9
|
|
|
9
|
|
|||
Other
|
33
|
|
|
27
|
|
|
22
|
|
|||
Subtotal
|
66
|
|
|
61
|
|
|
56
|
|
|||
Non-strategic Business
|
6
|
|
|
7
|
|
|
9
|
|
|||
Total
|
$
|
72
|
|
|
$
|
68
|
|
|
$
|
65
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at January 1,
|
$
|
109
|
|
|
$
|
56
|
|
|
$
|
22
|
|
Changes in estimates on loss projects
|
177
|
|
|
106
|
|
|
53
|
|
|||
Change due to progress on loss projects
|
(127
|
)
|
|
(53
|
)
|
|
(19
|
)
|
|||
Balance at December 31,
|
$
|
159
|
|
|
$
|
109
|
|
|
$
|
56
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Total assets:
|
|
|
|
||||
Technology & Consulting
|
$
|
173
|
|
|
$
|
224
|
|
Engineering & Construction
|
2,020
|
|
|
2,308
|
|
||
Government Services
|
532
|
|
|
693
|
|
||
Other
|
1,304
|
|
|
1,838
|
|
||
Subtotal
|
4,029
|
|
|
5,063
|
|
||
Non-strategic Business
|
170
|
|
|
375
|
|
||
Total
|
$
|
4,199
|
|
|
$
|
5,438
|
|
Goodwill (Note 8):
|
|
|
|
||||
Technology & Consulting
|
$
|
31
|
|
|
$
|
31
|
|
Engineering & Construction
|
233
|
|
|
528
|
|
||
Government Services
|
60
|
|
|
60
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
324
|
|
|
619
|
|
||
Non-strategic Business
|
—
|
|
|
153
|
|
||
Total
|
$
|
324
|
|
|
$
|
772
|
|
Equity in and advances to related companies (Note 10):
|
|
|
|
||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
119
|
|
|
99
|
|
||
Government Services
|
31
|
|
|
53
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
150
|
|
|
152
|
|
||
Non-strategic Business
|
1
|
|
|
4
|
|
||
Total
|
$
|
151
|
|
|
$
|
156
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues:
|
|
|
|
|
|
||||||
United States
|
$
|
2,324
|
|
|
$
|
2,470
|
|
|
$
|
2,118
|
|
Australia
|
1,380
|
|
|
1,768
|
|
|
1,767
|
|
|||
Africa
|
251
|
|
|
593
|
|
|
1,610
|
|
|||
Middle East
|
707
|
|
|
913
|
|
|
1,013
|
|
|||
Europe
|
624
|
|
|
575
|
|
|
582
|
|
|||
Canada
|
752
|
|
|
687
|
|
|
431
|
|
|||
Other countries
|
328
|
|
|
208
|
|
|
249
|
|
|||
Total
|
$
|
6,366
|
|
|
$
|
7,214
|
|
|
$
|
7,770
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Property, plant & equipment, net:
|
|
|
|
||||
United States
|
$
|
115
|
|
|
$
|
272
|
|
United Kingdom
|
68
|
|
|
83
|
|
||
Other countries
|
64
|
|
|
60
|
|
||
Total
|
$
|
247
|
|
|
$
|
415
|
|
|
December 31, 2014
|
||||||||||
Dollars in millions
|
International (a)
|
|
Domestic (b)
|
|
Total
|
||||||
Operating cash and equivalents
|
$
|
209
|
|
|
$
|
121
|
|
|
$
|
330
|
|
Time deposits
|
481
|
|
|
79
|
|
|
560
|
|
|||
Cash and equivalents held in joint ventures
|
71
|
|
|
9
|
|
|
80
|
|
|||
Total
|
$
|
761
|
|
|
$
|
209
|
|
|
$
|
970
|
|
|
December 31, 2013
|
||||||||||
Dollars in millions
|
International (a)
|
|
Domestic (b)
|
|
Total
|
||||||
Operating cash and equivalents
|
$
|
197
|
|
|
$
|
215
|
|
|
$
|
412
|
|
Time deposits
|
478
|
|
|
140
|
|
|
618
|
|
|||
Cash and equivalents held in joint ventures
|
67
|
|
|
9
|
|
|
76
|
|
|||
Total
|
$
|
742
|
|
|
$
|
364
|
|
|
$
|
1,106
|
|
|
(a)
|
Includes deposits held in non-U.S. operating accounts
|
(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, 2014
|
||||||||||
Dollars in millions
|
Retainage
|
|
Trade & Other
|
|
Total
|
||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
51
|
|
|
$
|
51
|
|
Engineering & Construction
|
45
|
|
|
538
|
|
|
$
|
583
|
|
||
Government Services
|
5
|
|
|
84
|
|
|
$
|
89
|
|
||
Other
|
—
|
|
|
3
|
|
|
$
|
3
|
|
||
Subtotal
|
50
|
|
|
676
|
|
|
$
|
726
|
|
||
Non-strategic Business
|
48
|
|
|
73
|
|
|
$
|
121
|
|
||
Total
|
$
|
98
|
|
|
$
|
749
|
|
|
$
|
847
|
|
|
December 31, 2013
|
||||||||||
Dollars in millions
|
Retainage
|
|
Trade & Other
|
|
Total
|
||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
63
|
|
|
$
|
63
|
|
Engineering & Construction
|
52
|
|
|
725
|
|
|
$
|
777
|
|
||
Government Services
|
3
|
|
|
85
|
|
|
$
|
88
|
|
||
Other
|
—
|
|
|
1
|
|
|
$
|
1
|
|
||
Subtotal
|
55
|
|
|
874
|
|
|
$
|
929
|
|
||
Non-strategic Business
|
45
|
|
|
82
|
|
|
$
|
127
|
|
||
Total
|
$
|
100
|
|
|
$
|
956
|
|
|
$
|
1,056
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Technology & Consulting
|
$
|
38
|
|
|
$
|
37
|
|
Engineering & Construction
|
357
|
|
|
230
|
|
||
Government Services
|
73
|
|
|
123
|
|
||
Subtotal
|
468
|
|
|
390
|
|
||
Non-strategic Business
|
22
|
|
|
9
|
|
||
Total
|
$
|
490
|
|
|
$
|
399
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Technology & Consulting
|
$
|
56
|
|
|
$
|
53
|
|
Engineering & Construction
|
212
|
|
|
139
|
|
||
Government Services
|
93
|
|
|
88
|
|
||
Subtotal
|
361
|
|
|
280
|
|
||
Non-strategic Business
|
170
|
|
|
121
|
|
||
Total
|
$
|
531
|
|
|
$
|
401
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Amounts included in project estimates-at-completion at January 1,
|
$
|
115
|
|
|
$
|
167
|
|
Changes in estimates-at-completion
|
87
|
|
|
109
|
|
||
Approved
|
(171
|
)
|
|
(161
|
)
|
||
Amounts included in project estimates-at-completion at December 31,
|
$
|
31
|
|
|
$
|
115
|
|
|
|
|
|
||||
Amounts recorded in revenues on a percentage-of-completion basis at December 31,
|
$
|
24
|
|
|
$
|
93
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Engineering & Construction
|
$
|
425
|
|
|
$
|
401
|
|
Government Services
|
145
|
|
|
227
|
|
||
Total
|
$
|
570
|
|
|
$
|
628
|
|
|
Estimated
Useful
Lives in Years
|
|
December 31,
|
||||||
Dollars in millions
|
|
2014
|
|
2013
|
|||||
Land
|
N/A
|
|
$
|
13
|
|
|
$
|
19
|
|
Buildings and property improvements
|
5-44
|
|
198
|
|
|
213
|
|
||
Equipment and other
|
3-25
|
|
421
|
|
|
580
|
|
||
Total
|
|
|
632
|
|
|
812
|
|
||
Less accumulated depreciation
|
|
|
(385
|
)
|
|
(397
|
)
|
||
Net property, plant and equipment
|
|
|
$
|
247
|
|
|
$
|
415
|
|
Dollars in millions
|
Technology & Consulting
|
|
Engineering & Construction
|
|
Government Services
|
|
Other
|
|
Subtotal
|
|
Non-strategic Business
|
|
Total
|
||||||||||||||
Balance as of January 1, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross goodwill
|
$
|
31
|
|
|
$
|
534
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
626
|
|
|
$
|
331
|
|
|
$
|
957
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
|
(178
|
)
|
|||||||
Net goodwill as of January 1, 2013
|
$
|
31
|
|
|
$
|
534
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
626
|
|
|
$
|
153
|
|
|
$
|
779
|
|
Goodwill written off related to sale of
reporting unit
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Net foreign exchange difference
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balances as of December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross goodwill
|
$
|
31
|
|
|
$
|
528
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
619
|
|
|
$
|
331
|
|
|
$
|
950
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
|
(178
|
)
|
|||||||
Net goodwill as of December 31, 2013
|
$
|
31
|
|
|
$
|
528
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
619
|
|
|
$
|
153
|
|
|
$
|
772
|
|
Impairment loss
|
$
|
—
|
|
|
$
|
(293
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(293
|
)
|
|
$
|
(153
|
)
|
|
$
|
(446
|
)
|
Net foreign exchange difference
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance as of December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross goodwill
|
$
|
31
|
|
|
$
|
526
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
617
|
|
|
$
|
331
|
|
|
$
|
948
|
|
Accumulated impairment losses
|
—
|
|
|
(293
|
)
|
|
—
|
|
|
—
|
|
|
(293
|
)
|
|
(331
|
)
|
|
(624
|
)
|
|||||||
Net goodwill as of December 31, 2014
|
$
|
31
|
|
|
$
|
233
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
324
|
|
|
$
|
—
|
|
|
$
|
324
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Intangibles not subject to amortization
|
$
|
11
|
|
|
$
|
11
|
|
Intangibles subject to amortization
|
126
|
|
|
186
|
|
||
Total intangibles
|
137
|
|
|
197
|
|
||
Accumulated amortization of intangibles
|
(96
|
)
|
|
(112
|
)
|
||
Net intangibles
|
$
|
41
|
|
|
$
|
85
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Intangibles amortization expense
|
$
|
11
|
|
|
$
|
14
|
|
|
$
|
15
|
|
Dollars in millions
|
Expected future
intangibles
amortization expense
|
||
2015
|
$
|
4
|
|
2016
|
$
|
3
|
|
2017
|
$
|
3
|
|
2018
|
$
|
3
|
|
2019
|
$
|
3
|
|
Beyond 2019
|
$
|
14
|
|
|
Technology & Consulting
|
|
Engineering & Construction
|
|
Government Services
|
|
Other
|
|
Subtotal
|
|
Non-strategic Business
|
|
Total
|
||||||||||||||
Dollars in millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Asset impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Enterprise resource planning
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
135
|
|
|
$
|
135
|
|
|
$
|
—
|
|
|
$
|
135
|
|
Intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
|||||||
Property, plant & equipment
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||||
Subtotal
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
$
|
140
|
|
|
$
|
31
|
|
|
$
|
171
|
|
Restructuring charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Severance
|
$
|
2
|
|
|
$
|
14
|
|
|
$
|
3
|
|
|
$
|
10
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
29
|
|
Lease termination
|
—
|
|
|
9
|
|
|
2
|
|
|
—
|
|
|
11
|
|
|
3
|
|
|
14
|
|
|||||||
Subtotal
|
2
|
|
|
23
|
|
|
5
|
|
|
10
|
|
|
40
|
|
|
3
|
|
|
43
|
|
|||||||
Total
|
$
|
2
|
|
|
$
|
24
|
|
|
$
|
5
|
|
|
$
|
149
|
|
|
$
|
180
|
|
|
$
|
34
|
|
|
$
|
214
|
|
Dollars in millions
|
2014
|
|
2013
|
||||
Balance at January 1,
|
$
|
156
|
|
|
$
|
217
|
|
Equity in earnings of unconsolidated affiliates
|
163
|
|
|
137
|
|
||
Dividends received (a)
|
(249
|
)
|
|
(180
|
)
|
||
Advances
|
(13
|
)
|
|
(14
|
)
|
||
Foreign currency translation adjustments
|
(1
|
)
|
|
(5
|
)
|
||
Other
|
—
|
|
|
1
|
|
||
Balance at December 31, before reclassification
|
56
|
|
|
156
|
|
||
Reclassification of excess distributions (a)
|
95
|
|
|
—
|
|
||
Balance at December 31,
|
$
|
151
|
|
|
$
|
156
|
|
|
(a)
|
During the third quarter of 2014, we received cash dividends of
$102 million
in excess of the carrying value of one of our investments. We have no obligation to return any portion of the cash dividends received. We recorded the excess dividend amount as “deferred income from unconsolidated affiliates” on our consolidated balance sheets which will be reduced as we recognize future equity in earnings on this investment. During 2014, we recognized
$7 million
of the excess dividends.
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
$
|
7
|
|
|
$
|
6
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
2
|
|
|
$
|
2
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
$
|
21
|
|
|
$
|
24
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Current assets
|
$
|
3,098
|
|
|
$
|
4,114
|
|
Noncurrent assets
|
4,069
|
|
|
4,222
|
|
||
Total assets
|
$
|
7,167
|
|
|
$
|
8,336
|
|
|
|
|
|
||||
Current liabilities
|
$
|
2,969
|
|
|
$
|
3,679
|
|
Noncurrent liabilities
|
4,090
|
|
|
4,400
|
|
||
Total liabilities
|
$
|
7,059
|
|
|
$
|
8,079
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues
|
$
|
6,439
|
|
|
$
|
4,800
|
|
|
$
|
3,442
|
|
Operating income
|
$
|
659
|
|
|
$
|
660
|
|
|
$
|
777
|
|
Net income
|
$
|
419
|
|
|
$
|
355
|
|
|
$
|
363
|
|
|
December 31, 2014
|
||||||||||
Dollars in millions
|
Total assets
|
|
Total liabilities
|
|
Maximum
exposure to
loss
|
||||||
Aspire Defence project
|
$
|
17
|
|
|
$
|
118
|
|
|
$
|
17
|
|
Ichthys LNG project
|
$
|
49
|
|
|
$
|
35
|
|
|
$
|
49
|
|
U.K. Road projects
|
$
|
34
|
|
|
$
|
11
|
|
|
$
|
34
|
|
EBIC Ammonia project
|
$
|
42
|
|
|
$
|
2
|
|
|
$
|
26
|
|
Dollars in millions
|
December 31, 2013
|
||||||
Total assets
|
|
Total liabilities
|
|||||
Aspire Defence project
|
$
|
20
|
|
|
$
|
2
|
|
Ichthys LNG project
|
$
|
1
|
|
|
$
|
18
|
|
U.K. Road projects
|
$
|
34
|
|
|
$
|
8
|
|
EBIC Ammonia project
|
$
|
47
|
|
|
$
|
2
|
|
Dollars in millions
|
December 31, 2014
|
||||||
Total assets
|
|
Total liabilities
|
|||||
Gorgon LNG project
|
$
|
282
|
|
|
$
|
309
|
|
Escravos Gas-to-Liquids project
|
$
|
23
|
|
|
$
|
36
|
|
Fasttrax Limited project
|
$
|
83
|
|
|
$
|
81
|
|
Dollars in millions
|
December 31, 2013
|
||||||
Total assets
|
|
Total liabilities
|
|||||
Gorgon LNG project
|
$
|
446
|
|
|
$
|
476
|
|
Escravos Gas-to-Liquids project
|
$
|
43
|
|
|
$
|
72
|
|
Fasttrax Limited project
|
$
|
96
|
|
|
$
|
98
|
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Dollars in millions
|
2014
|
|
2013
|
||||||||||||
Change in projected benefit obligations:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligations at beginning of period
|
$
|
79
|
|
|
$
|
2,048
|
|
|
$
|
91
|
|
|
$
|
1,862
|
|
Service cost
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Interest cost
|
3
|
|
|
90
|
|
|
3
|
|
|
79
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
(123
|
)
|
|
—
|
|
|
37
|
|
||||
Actuarial (gain) loss
|
11
|
|
|
191
|
|
|
(5
|
)
|
|
129
|
|
||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Benefits paid
|
(6
|
)
|
|
(66
|
)
|
|
(10
|
)
|
|
(59
|
)
|
||||
Projected benefit obligations at end of period
|
$
|
87
|
|
|
$
|
2,138
|
|
|
$
|
79
|
|
|
$
|
2,048
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of period
|
$
|
70
|
|
|
$
|
1,580
|
|
|
$
|
71
|
|
|
$
|
1,491
|
|
Actual return on plan assets
|
—
|
|
|
194
|
|
|
8
|
|
|
65
|
|
||||
Employer contributions
|
2
|
|
|
46
|
|
|
1
|
|
|
53
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
(98
|
)
|
|
—
|
|
|
33
|
|
||||
Benefits paid
|
(6
|
)
|
|
(66
|
)
|
|
(10
|
)
|
|
(59
|
)
|
||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Fair value of plan assets at end of period
|
$
|
66
|
|
|
$
|
1,652
|
|
|
$
|
70
|
|
|
$
|
1,580
|
|
Funded status
|
$
|
(21
|
)
|
|
$
|
(486
|
)
|
|
$
|
(9
|
)
|
|
$
|
(468
|
)
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Dollars in millions
|
2014
|
|
2013
|
||||||||||||
Amounts recognized on the consolidated balance sheets
|
|
|
|
|
|
|
|
||||||||
Other current liabilities (a)
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension obligations
|
(16
|
)
|
|
(486
|
)
|
|
(9
|
)
|
|
(468
|
)
|
||||
Total
|
$
|
(21
|
)
|
|
$
|
(486
|
)
|
|
$
|
(9
|
)
|
|
$
|
(468
|
)
|
|
(a)
|
In 2014, we reclassified the pension liability related to one of our terminated U.S. pension plans to "other current liabilities" on our consolidated balance sheets as we expect to settle the pension obligation within the next 12 months.
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest cost
|
3
|
|
|
90
|
|
|
3
|
|
|
79
|
|
|
3
|
|
|
81
|
|
||||||
Expected return on plan assets
|
(4
|
)
|
|
(102
|
)
|
|
(5
|
)
|
|
(86
|
)
|
|
(4
|
)
|
|
(93
|
)
|
||||||
Settlements/curtailments
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized actuarial loss
|
3
|
|
|
39
|
|
|
2
|
|
|
33
|
|
|
2
|
|
|
25
|
|
||||||
Net periodic benefit cost
|
$
|
3
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
28
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Dollars in millions
|
2014
|
|
2013
|
||||||||||||
Unrecognized actuarial loss, net of tax of $9 and $222, and $10 and $211, respectively
|
$
|
31
|
|
|
$
|
639
|
|
|
$
|
18
|
|
|
$
|
590
|
|
Total in accumulated other comprehensive loss
|
$
|
31
|
|
|
$
|
639
|
|
|
$
|
18
|
|
|
$
|
590
|
|
Dollars in millions
|
United States
|
|
International
|
||||
Actuarial loss
|
$
|
3
|
|
|
$
|
35
|
|
Total
|
$
|
3
|
|
|
$
|
35
|
|
Weighted-average assumptions used to determine
net periodic benefit cost
|
|
||||||||||||||||
|
United States
|
|
Int'l
|
|
United States
|
|
Int'l
|
|
United States
|
|
Int'l
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Discount rate
|
3.38
|
%
|
|
4.45
|
%
|
|
3.09
|
%
|
|
4.50
|
%
|
|
3.74
|
%
|
|
4.90
|
%
|
Expected return on plan assets
|
5.28
|
%
|
|
6.45
|
%
|
|
7.00
|
%
|
|
6.15
|
%
|
|
7.00
|
%
|
|
6.60
|
%
|
Asset Allocation
|
2015 Targeted
|
||||
|
United States
|
|
Int'l
|
||
Cash and cash equivalents
|
22
|
%
|
|
—
|
%
|
Equity funds and securities
|
47
|
%
|
|
19
|
%
|
Fixed income funds and securities
|
31
|
%
|
|
56
|
%
|
Hedge funds
|
—
|
%
|
|
8
|
%
|
Real estate funds
|
—
|
%
|
|
5
|
%
|
Other
|
—
|
%
|
|
12
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
International Plans
|
2015 Targeted
|
|
2014 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
|
2015 Targeted
|
|
2014 Targeted
|
||||||||
|
Percentage Range
|
|
Percentage Range
|
||||||||
|
Minimum
|
|
Maximum
|
|
Minimum
|
|
Maximum
|
||||
Cash and cash equivalents
|
22
|
%
|
|
22
|
%
|
|
25
|
%
|
|
25
|
%
|
Equity funds, securities and other
|
47
|
%
|
|
47
|
%
|
|
39
|
%
|
|
51
|
%
|
Fixed income funds and securities
|
31
|
%
|
|
31
|
%
|
|
24
|
%
|
|
36
|
%
|
|
Fair Value Measurements at Reporting Date
|
||||||||||||||
Dollars in millions
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Asset Category at December 31, 2014
|
|
|
|
|
|
|
|
||||||||
United States plan assets
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
Equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fixed income funds
|
23
|
|
|
|
|
|
23
|
|
|
—
|
|
||||
Government bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Total United States plan assets
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
—
|
|
International plan assets
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
$
|
406
|
|
|
$
|
143
|
|
|
$
|
218
|
|
|
$
|
45
|
|
Equity securities
|
56
|
|
|
53
|
|
|
3
|
|
|
—
|
|
||||
Fixed income funds
|
706
|
|
|
287
|
|
|
354
|
|
|
65
|
|
||||
Hedge funds
|
167
|
|
|
—
|
|
|
57
|
|
|
110
|
|
||||
Real estate funds
|
83
|
|
|
—
|
|
|
41
|
|
|
42
|
|
||||
Other funds
|
173
|
|
|
—
|
|
|
105
|
|
|
68
|
|
||||
Cash and cash equivalents
|
60
|
|
|
60
|
|
|
—
|
|
|
—
|
|
||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total international plan assets
|
$
|
1,652
|
|
|
$
|
543
|
|
|
$
|
778
|
|
|
$
|
331
|
|
Total plan assets at December 31, 2014
|
$
|
1,718
|
|
|
$
|
543
|
|
|
$
|
844
|
|
|
$
|
331
|
|
|
Fair Value Measurements at Reporting Date
|
||||||||||||||
Dollars in millions
|
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
|
|
Dollars in millions
|
Total
|
|
Equity Funds
|
|
Fixed Income Funds
|
|
Hedge Funds
|
|
Real Estate Funds
|
|
Other Funds
|
|
Other
|
||||||||||||||
International plan assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance as of 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
|
(15
|
)
|
|
1
|
|
|
(12
|
)
|
|
—
|
|
|
2
|
|
|
(6
|
)
|
|
—
|
|
|||||||
Foreign exchange impact
|
3
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|||||||
Balance as of December 31, 2013
|
$
|
230
|
|
|
$
|
1
|
|
|
$
|
33
|
|
|
$
|
105
|
|
|
$
|
33
|
|
|
$
|
51
|
|
|
$
|
7
|
|
Return on assets held at end of year
|
33
|
|
|
4
|
|
|
4
|
|
|
10
|
|
|
8
|
|
|
7
|
|
|
—
|
|
|||||||
Return on assets sold during the year
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases, sales and settlements, net
|
115
|
|
|
42
|
|
|
32
|
|
|
33
|
|
|
—
|
|
|
14
|
|
|
(6
|
)
|
|||||||
Transfers to Level 2 (a)
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Foreign exchange impact
|
(20
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
—
|
|
|||||||
Balance as of December 31, 2014
|
$
|
331
|
|
|
$
|
45
|
|
|
$
|
65
|
|
|
$
|
110
|
|
|
$
|
42
|
|
|
$
|
68
|
|
|
$
|
1
|
|
|
(a)
|
During 2014, liquidity restrictions on some of our investments in hedge funds lapsed. As a result, these investments were transferred to Level 2 as they may be redeemed at their net asset value within 90 days.
|
|
Pension Benefits
|
||||||
Dollars in millions
|
United States
|
|
Int’l
|
||||
2015
|
$
|
23
|
|
|
$
|
63
|
|
2016
|
$
|
4
|
|
|
$
|
65
|
|
2017
|
$
|
4
|
|
|
$
|
66
|
|
2018
|
$
|
4
|
|
|
$
|
68
|
|
2019
|
$
|
4
|
|
|
$
|
70
|
|
Years 2020 – 2024
|
$
|
21
|
|
|
$
|
375
|
|
|
December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Deferred compensation plans obligations
|
$
|
71
|
|
|
$
|
66
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
United States
|
$
|
(1,051
|
)
|
|
$
|
(141
|
)
|
|
$
|
(366
|
)
|
Foreign:
|
|
|
|
|
|
||||||
United Kingdom
|
130
|
|
|
162
|
|
|
203
|
|
|||
Australia
|
180
|
|
|
280
|
|
|
267
|
|
|||
Canada
|
(101
|
)
|
|
(117
|
)
|
|
29
|
|
|||
Other
|
65
|
|
|
116
|
|
|
155
|
|
|||
Subtotal
|
274
|
|
|
441
|
|
|
654
|
|
|||
Total
|
$
|
(777
|
)
|
|
$
|
300
|
|
|
$
|
288
|
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Provision for income taxes
|
$
|
(421
|
)
|
|
$
|
(129
|
)
|
|
$
|
(86
|
)
|
Shareholders' equity, foreign currency translation adjustment
|
4
|
|
|
27
|
|
|
(8
|
)
|
|||
Shareholders' equity, pension and post-retirement benefits
|
10
|
|
|
18
|
|
|
14
|
|
|||
Shareholders' equity, compensation expense and other
|
—
|
|
|
—
|
|
|
5
|
|
|||
Total income taxes
|
$
|
(407
|
)
|
|
$
|
(84
|
)
|
|
$
|
(75
|
)
|
Dollars in millions
|
Current
|
|
Deferred
|
|
Total
|
||||||
Balance as of December 31, 2014
|
|
|
|
|
|
||||||
Federal
|
$
|
41
|
|
|
$
|
(333
|
)
|
|
$
|
(292
|
)
|
Foreign
|
(110
|
)
|
|
(11
|
)
|
|
(121
|
)
|
|||
State and other
|
1
|
|
|
(9
|
)
|
|
(8
|
)
|
|||
Provision for income taxes
|
$
|
(68
|
)
|
|
$
|
(353
|
)
|
|
$
|
(421
|
)
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2013
|
|
|
|
|
|
||||||
Federal
|
$
|
(6
|
)
|
|
$
|
17
|
|
|
$
|
11
|
|
Foreign
|
(109
|
)
|
|
(31
|
)
|
|
(140
|
)
|
|||
State and other
|
4
|
|
|
(4
|
)
|
|
—
|
|
|||
Provision for income taxes
|
$
|
(111
|
)
|
|
$
|
(18
|
)
|
|
$
|
(129
|
)
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2012
|
|
|
|
|
|
||||||
Federal
|
$
|
61
|
|
|
$
|
12
|
|
|
$
|
73
|
|
Foreign
|
(130
|
)
|
|
(42
|
)
|
|
(172
|
)
|
|||
State and other
|
1
|
|
|
12
|
|
|
13
|
|
|||
Provision for income taxes
|
$
|
(68
|
)
|
|
$
|
(18
|
)
|
|
$
|
(86
|
)
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
United Kingdom
|
$
|
(22
|
)
|
|
$
|
(34
|
)
|
|
$
|
(53
|
)
|
Australia
|
(24
|
)
|
|
(41
|
)
|
|
(40
|
)
|
|||
Canada
|
6
|
|
|
(3
|
)
|
|
(7
|
)
|
|||
Other
|
(81
|
)
|
|
(62
|
)
|
|
(72
|
)
|
|||
Foreign (provision) benefit for income taxes
|
$
|
(121
|
)
|
|
$
|
(140
|
)
|
|
$
|
(172
|
)
|
|
Years ended December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Deferred benefit
|
$
|
254
|
|
|
$
|
48
|
|
|
$
|
15
|
|
Tax reserves and allowances on current year activity
|
(210
|
)
|
|
(39
|
)
|
|
(10
|
)
|
|||
Tax reserves and allowances on beginning of year deferred balances
|
(320
|
)
|
|
(9
|
)
|
|
1
|
|
|||
Unremitted foreign earnings
|
(77
|
)
|
|
(5
|
)
|
|
(14
|
)
|
|||
U.K. statutory rate change
|
—
|
|
|
(13
|
)
|
|
(10
|
)
|
|||
Total deferred provision for income taxes
|
$
|
(353
|
)
|
|
$
|
(18
|
)
|
|
$
|
(18
|
)
|
|
Years ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
U.S. statutory federal rate, expected (benefit) provision
|
(35
|
)%
|
|
35
|
%
|
|
35
|
%
|
Increase (reduction) in tax rate from:
|
|
|
|
|
|
|||
Rate differentials on foreign earnings
|
(5
|
)
|
|
(12
|
)
|
|
(5
|
)
|
Noncontrolling interests
|
(4
|
)
|
|
(5
|
)
|
|
(3
|
)
|
State and local income taxes, net of federal benefit
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
Other permanent differences, net
|
2
|
|
|
2
|
|
|
(16
|
)
|
Contingent liability accrual
|
9
|
|
|
7
|
|
|
(10
|
)
|
U.S. taxes on foreign unremitted earnings
|
11
|
|
|
2
|
|
|
4
|
|
Non-deductible goodwill impairment
|
20
|
|
|
—
|
|
|
22
|
|
Increase in valuation allowance
|
58
|
|
|
15
|
|
|
3
|
|
Effective tax rate on income from operations
|
54
|
%
|
|
43
|
%
|
|
30
|
%
|
|
Years ended December 31,
|
||||||
Dollars in millions
|
2014
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee compensation and benefits
|
$
|
175
|
|
|
$
|
176
|
|
Foreign tax credit carryforwards
|
233
|
|
|
179
|
|
||
Accrued foreign tax credit carryforwards
|
89
|
|
|
81
|
|
||
Loss carryforwards
|
133
|
|
|
118
|
|
||
Insurance accruals
|
22
|
|
|
25
|
|
||
Allowance for bad debt
|
10
|
|
|
8
|
|
||
Accrued liabilities
|
51
|
|
|
50
|
|
||
Total gross deferred tax assets
|
713
|
|
|
637
|
|
||
Valuation allowances
|
(538
|
)
|
|
(83
|
)
|
||
Net deferred tax asset
|
175
|
|
|
554
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Construction contract accounting
|
$
|
(15
|
)
|
|
$
|
(40
|
)
|
Intangibles
|
(35
|
)
|
|
(49
|
)
|
||
Depreciation and amortization
|
(2
|
)
|
|
(44
|
)
|
||
Unremitted foreign earnings
|
(98
|
)
|
|
(19
|
)
|
||
Other
|
23
|
|
|
(6
|
)
|
||
Total gross deferred tax liabilities
|
(127
|
)
|
|
(158
|
)
|
||
Deferred income tax asset, net
|
$
|
48
|
|
|
$
|
396
|
|
Dollars in millions
|
Net Gross Deferred Asset (Liability)
|
|
Valuation Allowance
|
|
Deferred Asset (Liability), net
|
||||||
United States
|
$
|
487
|
|
|
$
|
(484
|
)
|
|
$
|
3
|
|
United Kingdom
|
126
|
|
|
—
|
|
|
126
|
|
|||
Australia
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Canada
|
24
|
|
|
(25
|
)
|
|
(1
|
)
|
|||
Mexico
|
(88
|
)
|
|
—
|
|
|
(88
|
)
|
|||
Other
|
36
|
|
|
(28
|
)
|
|
8
|
|
|||
Total
|
$
|
586
|
|
|
$
|
(538
|
)
|
|
$
|
48
|
|
|
|
||||
Dollars in millions
|
December 31, 2014
|
|
Expiration
|
||
Foreign tax credit carryforwards
|
$
|
295
|
|
|
2021-2023
|
Federal net operating loss carryforwards
|
$
|
306
|
|
|
2033-2034
|
Foreign net operating loss carryforwards
|
$
|
301
|
|
|
2015-2034
|
Foreign net operating loss carryforwards
|
$
|
73
|
|
|
Indefinite
|
State net operating loss carryforwards
|
$
|
632
|
|
|
Various
|
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at January 1
|
$
|
68
|
|
|
$
|
95
|
|
|
$
|
120
|
|
Increases related to current year tax positions
|
13
|
|
|
3
|
|
|
6
|
|
|||
Increases related to prior year tax positions
|
168
|
|
|
15
|
|
|
13
|
|
|||
Decreases related to prior year tax positions
|
(13
|
)
|
|
(36
|
)
|
|
(25
|
)
|
|||
Settlements
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Lapse of statute of limitations
|
(5
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|||
Other, primarily due to exchange rate fluctuations affecting non-U.S. tax positions
|
(2
|
)
|
|
(7
|
)
|
|
1
|
|
|||
Balance at December 31
|
$
|
228
|
|
|
$
|
68
|
|
|
$
|
95
|
|
|
December 31,
|
|
December 31,
|
||||
Dollars in millions
|
2014
|
|
2013
|
||||
Form 1s issued by the government and outstanding (a)
|
$
|
188
|
|
|
$
|
274
|
|
Amounts withheld by government (included in the Form 1s amount above) (b)
|
96
|
|
|
137
|
|
||
Amounts withheld from subcontractors by us
|
32
|
|
|
50
|
|
||
Claims loss accruals (c)
|
29
|
|
|
74
|
|
|
(a)
|
Included in the amounts shown is
$56 million
related to our Private Security matter discussed below in which KBR was granted full recovery of the amounts claimed. See discussion below.
|
(b)
|
Recorded in "claims and accounts receivable" on our consolidated balance sheets. We believe these amounts are probable of collection.
|
(c)
|
Recorded as a reduction to "claims and accounts receivable" and in "other liabilities" on our consolidated balance sheets. At this time, we believe the likelihood we would incur a loss related to this matter in excess of the loss accruals we have recorded is remote.
|
Dollars in millions
|
Future rental
payments (a)
|
||
2015
|
$
|
99
|
|
2016
|
$
|
85
|
|
2017
|
$
|
71
|
|
2018
|
$
|
62
|
|
2019
|
$
|
53
|
|
Beyond 2019
|
$
|
383
|
|
|
(a)
|
Amounts presented are net of subleases.
|
Dollars in millions
|
Total
|
|
PIC
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
AOCL
|
|
NCI
|
||||||||||||
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
|
)
|
Share-based compensation
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjustment pursuant to Accounting Referee's report on tax sharing agreement
|
(7
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
4
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Investments by noncontrolling interests
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Distributions to noncontrolling interests
|
(109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109
|
)
|
||||||
Change in NCI due to consolidation of previously unconsolidated JV and other transactions
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Net income
|
171
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||||
Other comprehensive (loss), net of tax
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|
9
|
|
||||||
Balance at December 31, 2013
|
$
|
2,439
|
|
|
$
|
2,065
|
|
|
$
|
1,748
|
|
|
$
|
(610
|
)
|
|
$
|
(740
|
)
|
|
$
|
(24
|
)
|
Share-based compensation
|
22
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(106
|
)
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||
Investments by noncontrolling interests
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||||
Distributions to noncontrolling interests
|
(61
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
||||||
Other noncontrolling interests activity
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Net income (loss)
|
(1,198
|
)
|
|
—
|
|
|
(1,262
|
)
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||
Other comprehensive income (loss), net of tax
|
(134
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(136
|
)
|
|
2
|
|
||||||
Balance at December 31, 2014
|
$
|
935
|
|
|
$
|
2,091
|
|
|
$
|
439
|
|
|
$
|
(712
|
)
|
|
$
|
(876
|
)
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
During the third quarter of 2012, we recorded out-of-period adjustments in our deferred tax accounts, most of which relate to years before 2010. These adjustments were not material to 2012 or the periods to which they relate. The out-of-period adjustments were
$3 million
to our 2012 annual tax expense and
$9 million
to our equity accounts. Deferred tax and foreign currency adjustments above includes
$16 million
related to these adjustments.
|
|
December 31,
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Accumulated foreign currency translation adjustments, net of tax of $(4), $0 and $27
|
$
|
(203
|
)
|
|
$
|
(131
|
)
|
|
$
|
(88
|
)
|
Pension and post-retirement benefits, net of tax of $(231), $(221) and $(203)
|
(670
|
)
|
|
(608
|
)
|
|
(521
|
)
|
|||
Changes in fair value of derivatives, net of tax of $0, $0 and $0
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Total accumulated other comprehensive loss
|
$
|
(876
|
)
|
|
$
|
(740
|
)
|
|
$
|
(610
|
)
|
Dollars in millions
|
Accumulated foreign currency translation adjustments
|
|
Pension and post-retirement benefits
|
|
Changes in fair value of derivatives
|
|
Total
|
||||||||
Balance as of 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
|
)
|
Other comprehensive income adjustments before reclassifications
|
(73
|
)
|
|
(104
|
)
|
|
(2
|
)
|
|
(179
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
1
|
|
|
42
|
|
|
—
|
|
|
43
|
|
||||
Balance at December 31, 2014
|
$
|
(203
|
)
|
|
$
|
(670
|
)
|
|
$
|
(3
|
)
|
|
$
|
(876
|
)
|
Dollars in millions
|
December 31, 2014
|
|
December 31, 2013
|
|
Affected line item on the Consolidated Statements of Operations
|
||||
Accumulated foreign currency translation adjustments
|
|
|
|
|
|
||||
Realized foreign currency translation adjustments
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
Loss (gain) on disposition of assets, net
|
Tax expense
|
3
|
|
|
—
|
|
|
Provision for income taxes
|
||
Net foreign currency translation adjustments realized
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Net of tax
|
Pension and post-retirement benefits
|
|
|
|
|
|
||||
Amortization of actuarial loss (a)
|
$
|
(52
|
)
|
|
$
|
(53
|
)
|
|
See (a) below
|
Tax benefit
|
10
|
|
|
18
|
|
|
Provision for income taxes
|
||
Net pension and post-retirement benefits
|
$
|
(42
|
)
|
|
$
|
(35
|
)
|
|
Net of tax
|
Changes in fair value of derivatives
|
|
|
|
|
|
||||
Realized losses on derivatives
|
$
|
—
|
|
|
$
|
1
|
|
|
Cost of revenues
|
Tax benefit
|
—
|
|
|
—
|
|
|
Provision for income taxes
|
||
Net change in fair value of derivatives
|
$
|
—
|
|
|
$
|
1
|
|
|
Net of tax
|
|
(a)
|
This item is included in the computation of net periodic pension cost. See Note
11
to our consolidated financial statements for further discussion.
|
Shares in millions
|
Shares
|
|
Balance at December 31, 2012
|
173.2
|
|
Common stock issued
|
0.7
|
|
Balance at December 31, 2013
|
173.9
|
|
Common stock issued
|
0.5
|
|
Balance at December 31, 2014
|
174.4
|
|
Shares and dollars in millions
|
Shares
|
|
Amount
|
|||
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
|
|
|
Treasury stock acquired, net of ESPP shares issued
|
3.9
|
|
|
102
|
|
|
Balance at December 31, 2014
|
29.6
|
|
|
$
|
712
|
|
|
December 31, 2014
|
|||||||||
|
Number of Shares
|
|
Average Price per Share
|
|
Dollars in Millions
|
|||||
Repurchases under the $350 million authorized share repurchase program
|
3,374,479
|
|
|
$
|
26.13
|
|
|
$
|
88
|
|
Repurchases under the existing share maintenance program
|
666,599
|
|
|
$
|
26.24
|
|
|
18
|
|
|
Total
|
4,041,078
|
|
|
|
|
$
|
106
|
|
•
|
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
|
2014
|
|
2013
|
||||
Granted stock options (shares in millions)
|
0.6
|
|
|
0.9
|
|
||
Weighted average expected term (in years)
|
5.5
|
|
|
6.5
|
|
||
Weighted average grant-date fair value per share
|
$
|
9.57
|
|
|
$
|
11.40
|
|
|
Years ended December 31,
|
||||||||||
KBR stock options range assumptions summary
|
2014
|
|
2013
|
||||||||
|
Range
|
|
Range
|
||||||||
|
Start
|
|
End
|
|
Start
|
|
End
|
||||
Expected volatility range
|
36.48
|
%
|
|
40.49
|
%
|
|
39.98
|
%
|
|
41.89
|
%
|
Expected dividend yield range
|
1.08
|
%
|
|
1.52
|
%
|
|
0.89
|
%
|
|
1.11
|
%
|
Risk-free interest rate range
|
1.67
|
%
|
|
2.21
|
%
|
|
0.98
|
%
|
|
2.09
|
%
|
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, 2013
|
3,274,623
|
|
|
$
|
26.27
|
|
|
6.93
|
|
$
|
22.49
|
|
Granted
|
638,270
|
|
|
27.78
|
|
|
|
|
|
|||
Exercised
|
(266,829
|
)
|
|
15.91
|
|
|
|
|
|
|||
Forfeited
|
(339,882
|
)
|
|
30.41
|
|
|
|
|
|
|||
Expired
|
(146,091
|
)
|
|
27.26
|
|
|
|
|
|
|||
Outstanding at December 31, 2014
|
3,160,091
|
|
|
$
|
26.96
|
|
|
6.54
|
|
$
|
2.40
|
|
Exercisable at December 31, 2014
|
2,078,401
|
|
|
$
|
25.59
|
|
|
5.48
|
|
$
|
2.40
|
|
Share-based compensation summary table
|
Years ended December 31
|
||||||||||
Dollars in millions
|
2014
|
|
2013
|
|
2012
|
||||||
Share-based compensation
|
$
|
22
|
|
|
$
|
16
|
|
|
$
|
16
|
|
Total income tax benefit recognized in net income for share-based compensation arrangements
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Incremental compensation cost
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Tax benefit increase related to share-based plans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Years ended December 31,
|
|||||||
Shares in millions
|
2014
|
|
2013
|
|
2012
|
|||
Basic weighted average common shares outstanding
|
146
|
|
|
148
|
|
|
148
|
|
Stock options and restricted shares
|
—
|
|
|
1
|
|
|
1
|
|
Diluted weighted average common shares outstanding
|
146
|
|
|
149
|
|
|
149
|
|
|
|
Years ended December 31,
|
||||
USD Equivalent, Dollars in Millions
|
|
2014
|
|
2013
|
||
Australian Dollar
|
|
190
|
|
|
309
|
|
United States Dollar
|
|
459
|
|
|
185
|
|
Pound Sterling
|
|
126
|
|
|
91
|
|
Swedish Kroner
|
|
6
|
|
|
3
|
|
Norwegian Kroner
|
|
5
|
|
|
5
|
|
Qatari Riyal
|
|
3
|
|
|
—
|
|
Canadian Dollar
|
|
—
|
|
|
138
|
|
Saudi Riyal
|
|
—
|
|
|
3
|
|
Total balance sheet hedges
|
|
789
|
|
|
734
|
|
|
Years ended December 31,
|
||||
Gains (Losses) Dollars in Millions
|
2014
|
|
2013
|
||
Balance Sheet Hedges - Fair Value
|
(47
|
)
|
|
(22
|
)
|
Balance Sheet Position - Remeasurement
|
47
|
|
|
21
|
|
Net
|
—
|
|
|
(1
|
)
|
(Dollars in millions, except per share amounts)
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
||||||||||
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
1,633
|
|
|
$
|
1,659
|
|
|
$
|
1,657
|
|
|
$
|
1,417
|
|
|
$
|
6,366
|
|
Gross profit (loss) (a)
|
39
|
|
|
28
|
|
|
30
|
|
|
(162
|
)
|
|
(65
|
)
|
|||||
Equity in earnings of unconsolidated affiliates
|
31
|
|
|
49
|
|
|
38
|
|
|
45
|
|
|
163
|
|
|||||
Operating income (loss) (b)
|
10
|
|
|
25
|
|
|
10
|
|
|
(839
|
)
|
|
(794
|
)
|
|||||
Net income (loss) (c)
|
(20
|
)
|
|
8
|
|
|
45
|
|
|
(1,231
|
)
|
|
(1,198
|
)
|
|||||
Net income attributable to noncontrolling interests
|
(23
|
)
|
|
(16
|
)
|
|
(15
|
)
|
|
(10
|
)
|
|
(64
|
)
|
|||||
Net income (loss) attributable to KBR
|
(43
|
)
|
|
(8
|
)
|
|
30
|
|
|
(1,241
|
)
|
|
(1,262
|
)
|
|||||
Net income (loss) attributable to KBR per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) attributable to KBR per share—Basic
|
$
|
(0.29
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.21
|
|
|
$
|
(8.57
|
)
|
|
$
|
(8.66
|
)
|
Net income (loss) attributable to KBR per share—Diluted
|
$
|
(0.29
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.21
|
|
|
$
|
(8.57
|
)
|
|
$
|
(8.66
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(Dollars in millions, except per share amounts)
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
||||||||||
2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
1,829
|
|
|
$
|
1,950
|
|
|
$
|
1,755
|
|
|
$
|
1,680
|
|
|
$
|
7,214
|
|
Gross profit (d)
|
156
|
|
|
140
|
|
|
114
|
|
|
7
|
|
|
417
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
30
|
|
|
46
|
|
|
31
|
|
|
30
|
|
|
137
|
|
|||||
Operating income (loss)
|
133
|
|
|
123
|
|
|
79
|
|
|
(27
|
)
|
|
308
|
|
|||||
Net income (loss) (d)
|
97
|
|
|
111
|
|
|
15
|
|
|
(52
|
)
|
|
171
|
|
|||||
Net income attributable to noncontrolling interests
|
(9
|
)
|
|
(21
|
)
|
|
(62
|
)
|
|
(4
|
)
|
|
(96
|
)
|
|||||
Net income (loss) attributable to KBR
|
88
|
|
|
90
|
|
|
(47
|
)
|
|
(56
|
)
|
|
75
|
|
|||||
Net income (loss) attributable to KBR per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) attributable to KBR per share—Basic
|
$
|
0.59
|
|
|
$
|
0.61
|
|
|
$
|
(0.32
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
0.50
|
|
Net income (loss) attributable to KBR per share—Diluted
|
$
|
0.59
|
|
|
$
|
0.61
|
|
|
$
|
(0.32
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
0.50
|
|
|
(a)
|
The losses in gross profit in the fourth quarter of
2014
reflect changes in cost estimates increasing the loss provision by
$80 million
on two power projects in our Non-strategic Business segment and changes in estimates of
$53 million
in our E&C business segment. See Note
2
to our consolidated financial statements.
|
(b)
|
Included in the operating loss of the fourth quarter of
2014
is a goodwill impairment charge of
$446 million
as well as asset impairment and restructuring charges of
$214 million
. See Notes
8
and
9
for our discussion on these charges.
|
(c)
|
Net loss for the fourth quarter of
2014
includes
$391 million
of provision for income taxes primarily from an increase in our valuation allowance on deferred tax assets.
|
(d)
|
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 E&C 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.
|
•
|
Material weakness related to project reporting over the completeness and accuracy of estimates of revenues, costs and profit at completion for certain long-term construction projects with multiple currencies
.
|
•
|
Implemented 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.
|
•
|
Enhanced 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 monitoring and reviewing project status reports for proper application of foreign currency effects in project estimates.
|
•
|
Provided training to our personnel involved in the estimation of revenues, costs and profit at completion on projects with multiple currencies.
|
•
|
Material weakness related to control environment for our Canadian pipe fabrication and modular assembly business
.
|
•
|
Conducted town hall meetings throughout the Company's worldwide organization led by executive management to reinforce the requirement for employees to follow the Company's corporate culture, policies and procedures.
|
•
|
Changed certain management personnel and increased the number of qualified professionals.
|
•
|
Provided additional training to new and key personnel on roles and responsibilities, including line of communications in the event of concerns.
|
•
|
Provided additional training to new and key personnel on Company standard processes and systems across all project operations, oversight and support functions, including project management and module yard management.
|
•
|
Implemented processes to ensure standard project controls work processes and systems were executed across the Canada pipe fabrication and module assembly projects.
|
•
|
Increased standard project management oversight from corporate management.
|
(a)
|
The following documents are filed as part of this report or incorporated by reference:
|
1.
|
The consolidated financial statements of the Company listed on page
45
of this annual report.
|
2.
|
The consolidated financial statement schedule on page
113
of this report.
|
3.
|
The exhibits of the Company listed below under Item 15(b); all exhibits are incorporated herein by reference to a prior filing as indicated, unless designated by a * or **.
|
(b)
|
Exhibits:
|
Exhibit
Number |
|
Description
|
|
|
|
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; File No. 1-33146)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of KBR, Inc. (incorporated by reference to Exhibit 3.2 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
10.7
|
|
Form of Indemnification Agreement between KBR, Inc. and its directors and executive officers (incorporated by reference to Exhibit 10.7 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
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
|
|
Waiver dated May 9, 2014 (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated May 9, 2014; File No. 1-33146)
|
|
|
|
10.10
|
|
First Amendment to Credit Agreement dated as of December 11, 2014 to the Five Year Revolving Credit Agreement dated as of December 2, 2011 among KBR, Inc., the several banks and other institutions parties to the Credit Agreement, Citibank, NA., as administrative agent, The Royal Bank of Scotland PLC, as syndication agent, and ING Bank, N.V. and The Bank of Nova Scotia as co-documentation agents (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated December 11, 2014; File No. 1-33146)
|
|
|
|
10.11+
|
|
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)
|
|
|
|
10.12+
|
|
KBR, Inc. Senior Executive Performance Pay Plan (incorporated by reference to Exhibit 10.10 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
10.13+
|
|
KBR, Inc. Management Performance Pay Plan (incorporated by reference to Exhibit 10.11 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
10.14+
|
|
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)
|
|
|
|
Exhibit
Number |
|
Description
|
10.15+
|
|
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)
|
|
|
|
10.16+
|
|
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)
|
|
|
|
10.17+
|
|
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)
|
|
|
|
10.18+
|
|
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)
|
|
|
|
10.19+
|
|
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)
|
|
|
|
10.20+
|
|
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)
|
|
|
|
10.21+
|
|
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)
|
|
|
|
10.22+
|
|
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)
|
|
|
|
10.23+
|
|
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)
|
|
|
|
10.24+
|
|
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)
|
|
|
|
10.25+
|
|
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)
|
|
|
|
10.26+
|
|
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)
|
|
|
|
10.27+
|
|
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)
|
|
|
|
10.28+
|
|
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)
|
|
|
|
10.29+
|
|
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)
|
|
|
|
10.30+
|
|
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)
|
|
|
|
10.31+
|
|
Form of Restricted Stock Unit Agreement (Three-Year Cliff Vesting) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.29 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
10.32+
|
|
Form of revised KBR Performance Award Agreement 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, 2014; File No. 1-33146)
|
|
|
|
10.33+
|
|
Form of revised Nonstatutory Stock Option Agreement 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, 2014; File No. 1-33146)
|
|
|
|
Exhibit
Number |
|
Description
|
10.34+
|
|
Form of revised Restricted Stock Unit Agreement (U.S. Employee) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.3 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2014; File No. 1-33146)
|
|
|
|
10.35+
|
|
Form of revised Restricted Stock Unit Agreement (U.S. Employee - 3 Year Vesting) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.36+
|
|
Form of revised Restricted Stock Unit Agreement (International Employee - 3 Year Vesting) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.37+
|
|
Form of Restricted Stock Unit Agreement (U.S. Employee - 3 Year Vesting; Involuntary Termination Trigger) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.38+
|
|
Form of Restricted Stock Unit Agreement (U.S. Employee - 5 Year Vesting; TSR Requirement) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.39+
|
|
Form of Restricted Stock Unit Agreement (U.S. Employee - 3 Year Vesting; TSR Requirement) pursuant to KBR, Inc. 2006 Stock and Incentive Plan
|
|
|
|
10.40+
|
|
Form of KBR Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan
|
|
|
|
10.41+
|
|
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)
|
|
|
|
10.42+
|
|
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)
|
|
|
|
10.43+
|
|
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)
|
|
|
|
10.44+
|
|
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)
|
|
|
|
10.45+
|
|
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)
|
|
|
|
10.46+
|
|
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)
|
|
|
|
10.47+
|
|
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)
|
|
|
|
10.48+
|
|
Severance and Change in Control Agreement effective as of June 2, 2014, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc. and Stuart J. Bradie (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated April 9, 2014; File No. 1-33146)
|
|
|
|
10.49+
|
|
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)
|
|
|
|
10.50+
|
|
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)
|
|
|
|
Exhibit
Number |
|
Description
|
10.51+
|
|
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)
|
|
|
|
10.52+
|
|
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)
|
|
|
|
10.53+
|
|
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.
|
|
|
|
*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
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
+
|
Management contracts or compensatory plans or arrangements
|
|
|
|
|
*
|
Filed with this Form 10-K
|
|
|
|
|
**
|
Furnished with this Form 10-K
|
|
|
|
|
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, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from accounts and notes receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
18
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(10
|
)(a)
|
|
$
|
19
|
|
Reserve for losses on uncompleted contracts
|
$
|
109
|
|
|
$
|
177
|
|
|
$
|
—
|
|
|
$
|
(127
|
)
|
|
$
|
159
|
|
Reserve for potentially disallowable costs incurred under government contracts
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
74
|
|
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
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
(53
|
)
|
|
$
|
109
|
|
Reserve for potentially disallowable costs incurred under government contracts
|
$
|
122
|
|
|
$
|
—
|
|
|
$
|
2
|
(b)
|
|
$
|
(33
|
)
|
|
$
|
91
|
|
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
|
|
|
(a)
|
Receivable write-offs, net of recoveries, and reclassifications.
|
(b)
|
Reserves have been recorded as reductions of revenues, net of reserves no longer required.
|
KBR, INC.
|
|
(Registrant)
|
|
|
|
By:
|
/s/ Stuart Bradie
|
|
Stuart Bradie
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
/s/ Stuart Bradie
|
|
Principal Executive Officer,
|
Stuart Bradie
|
|
President, Chief Executive Officer and Director
|
|
|
|
/s/ Brian K. Ferraioli
|
|
Principal Financial Officer,
|
Brian K. Ferraioli
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
/s/ Nelson E. Rowe
|
|
Principal Accounting Officer,
|
Nelson E. Rowe
|
|
Vice President and Chief Accounting Officer
|
|
|
|
/s/ Mark E. Baldwin
|
|
Director
|
Mark E. Baldwin
|
|
|
|
|
|
/s/ James R. Blackwell
|
|
Director
|
James R. Blackwell
|
|
|
|
|
|
/s/ W. Frank Blount
|
|
Director
|
W. Frank Blount
|
|
|
|
|
|
/s/ Loren K. Carroll
|
|
Director
|
Loren K. Carroll
|
|
|
|
|
|
/s/ Umberto della Sala
|
|
Director
|
Umberto della Sala
|
|
|
|
|
|
/s/ Jeffrey E. Curtiss
|
|
Director
|
Jeffrey E. Curtiss
|
|
|
|
|
|
/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
|
|
|
|
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; File No. 1-33146)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of KBR, Inc. (incorporated by reference to Exhibit 3.2 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
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. 1-33146)
|
|
|
|
10.7
|
|
Form of Indemnification Agreement between KBR, Inc. and its directors and executive officers (incorporated by reference to Exhibit 10.7 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
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
|
|
Waiver dated May 9, 2014 (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated May 9, 2014; File No. 1-33146)
|
|
|
|
10.10
|
|
First Amendment to Credit Agreement dated as of December 11, 2014 to the Five Year Revolving Credit Agreement dated as of December 2, 2011 among KBR, Inc., the several banks and other institutions parties to the Credit Agreement, Citibank, NA., as administrative agent, The Royal Bank of Scotland PLC, as syndication agent, and ING Bank, N.V. and The Bank of Nova Scotia as co-documentation agents (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated December 11, 2014; File No. 1-33146)
|
|
|
|
10.11+
|
|
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)
|
|
|
|
10.12+
|
|
KBR, Inc. Senior Executive Performance Pay Plan (incorporated by reference to Exhibit 10.10 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
10.13+
|
|
KBR, Inc. Management Performance Pay Plan (incorporated by reference to Exhibit 10.11 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
10.14+
|
|
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)
|
Exhibit
Number
|
|
Description
|
|
|
|
10.15+
|
|
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)
|
|
|
|
10.16+
|
|
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)
|
|
|
|
10.17+
|
|
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)
|
|
|
|
10.18+
|
|
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)
|
|
|
|
10.19+
|
|
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)
|
|
|
|
10.20+
|
|
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)
|
|
|
|
10.21+
|
|
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)
|
|
|
|
10.22+
|
|
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)
|
|
|
|
10.23+
|
|
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)
|
|
|
|
10.24+
|
|
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)
|
|
|
|
10.25+
|
|
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)
|
|
|
|
10.26+
|
|
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)
|
|
|
|
10.27+
|
|
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)
|
|
|
|
10.28+
|
|
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)
|
|
|
|
10.29+
|
|
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)
|
|
|
|
10.30+
|
|
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)
|
|
|
|
10.31+
|
|
Form of Restricted Stock Unit Agreement (Three-Year Cliff Vesting) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.29 to KBR’s annual report on Form 10-K for the year ended December 31, 2013 filed on February 27, 2014; File No. 1-33146)
|
|
|
|
10.32+
|
|
Form of revised KBR Performance Award Agreement 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, 2014; File No. 1-33146)
|
|
|
|
10.33+
|
|
Form of revised Nonstatutory Stock Option Agreement 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, 2014; File No. 1-33146)
|
|
|
|
Exhibit
Number
|
|
Description
|
10.34+
|
|
Form of revised Restricted Stock Unit Agreement (U.S. Employee) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.3 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2014; File No. 1-33146)
|
|
|
|
10.35+
|
|
Form of revised Restricted Stock Unit Agreement (U.S. Employee - 3 Year Vesting) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.36+
|
|
Form of revised Restricted Stock Unit Agreement (International Employee - 3 Year Vesting) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.37+
|
|
Form of Restricted Stock Unit Agreement (U.S. Employee - 3 Year Vesting; Involuntary Termination Trigger) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.38+
|
|
Form of Restricted Stock Unit Agreement (U.S. Employee - 5 Year Vesting; TSR Requirement) 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 September 31, 2014; File No. 1-33146)
|
|
|
|
10.39+
|
|
Form of Restricted Stock Unit Agreement (U.S. Employee - 3 Year Vesting; TSR Requirement) pursuant to KBR, Inc. 2006 Stock and Incentive Plan
|
|
|
|
10.40+
|
|
Form of KBR Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan
|
|
|
|
10.41+
|
|
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)
|
|
|
|
10.42+
|
|
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)
|
|
|
|
10.43+
|
|
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)
|
|
|
|
10.44+
|
|
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)
|
|
|
|
10.45+
|
|
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)
|
|
|
|
10.46+
|
|
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)
|
|
|
|
10.47+
|
|
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)
|
|
|
|
10.48+
|
|
Severance and Change in Control Agreement effective as of June 2, 2014, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc. and Stuart J. Bradie (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated April 9, 2014; File No. 1-33146)
|
|
|
|
10.49+
|
|
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)
|
|
|
|
10.50+
|
|
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)
|
|
|
|
Exhibit
Number
|
|
Description
|
10.51+
|
|
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)
|
|
|
|
10.52+
|
|
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)
|
|
|
|
10.53+
|
|
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.
|
|
|
|
*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
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
+
|
Management contracts or compensatory plans or arrangements
|
|
|
|
|
*
|
Filed with this Form 10-K
|
|
|
|
|
**
|
Furnished with this Form 10-K
|
|
(a)
|
Vesting
. Except as otherwise provided in subparagraphs (b) and (d) below, you will vest in the Performance Units earned (if any) for the Performance Period only if you are an employee of the Company or a Subsidiary on the date such earned Performance Units are paid, as provided in Paragraph 3 below.
|
(b)
|
Death, Disability, Retirement or Early Retirement
. Unless otherwise provided in an agreement pursuant to Paragraph 13, if you cease to be an employee of the Company or a Subsidiary as a result of (i) your death, (ii) your permanent disability (disability being defined as being physically or mentally incapable of performing either your usual duties as an employee or any other duties as an employee that the Company reasonably makes available and such condition is likely to remain continuously and permanently, as determined by the Company or employing Subsidiary), (iii) normal retirement on or after reaching age 65, or (iv) your early retirement prior to reaching age 65 with the approval of both (A) the Company or employing Subsidiary and (B) the Committee or its delegate (with such approval to be granted or withheld in the sole discretion of the Company, employing Subsidiary, Committee and/or delegate of the Committee, as applicable), then, in any such case, a prorata portion of your Performance Units that become “earned”, if any, as provided in Exhibit A, will become vested. The “prorata portion” that becomes vested shall be a fraction, the numerator of which is the number of days in the Performance Period in which you were an employee of the Company or a Subsidiary and the denominator of which is the total number of days in the Performance Period. If your termination for the above reasons is after the end of the Performance Period but before payment of the Performance Units earned, if any, for such Performance Period, you will be fully vested in any such earned Performance Units.
|
(c)
|
Other Terminations
. If you terminate from the Company and its Subsidiaries for any reason other than as provided in subparagraph (b) above or subparagraph (d) below, all unvested Performance Units held by you shall be forfeited without payment immediately upon such termination.
|
(d)
|
Corporate Change
. Notwithstanding any other provision hereof, unless otherwise provided in an agreement pursuant to Paragraph 13, your Performance Units shall become fully vested at the maximum earned percentage provided in Exhibit A upon your Involuntary Termination or termination for Good Reason within two years following a Corporate Change (as provided in the Plan) (a “Double Trigger Event”) during the Performance Period. If a Double Trigger Event occurs after the end of the Performance Period and prior to payment of the earned Performance Units, you will be 100% vested in your earned Performance Units upon the Double Trigger Event and payment will be made in accordance with the results achieved for the Performance Period ended as provided in Exhibit A.
|
3.
|
Payment of Vested Performance Units
. As soon as administratively practicable after the end of the Performance Period, but no later than the March 15th following the end of the Performance Period, or with respect to a Double Trigger Event occurring prior to the end of the Performance Period, the date of the Double Trigger Event (but no later than the March 15
th
following the calendar year in which occurs the date of the Double Trigger Event), you shall be entitled to receive from the Company a payment in cash equal to the product of the Payout Percentage (as defined in Exhibit A) and the sum of the target values of your vested Performance Units. Except as provided in Exhibit A with respect to a Double Trigger Event, if the performance thresholds set forth in Exhibit A are not met, no payment shall be made with respect to the Performance Units, whether or not vested. Notwithstanding the foregoing, in no event may the amount paid to you by the Company in any year with respect to Performance Units earned hereunder exceed the applicable limit under Article V of the Plan.
|
4.
|
Recovery of Payment of Vested Performance Units
. If you are a senior executive of the Company (defined as an employee of the Company or any employing Subsidiary of the Company who is either the Chief Executive Officer of the Company (the “CEO”) or a direct report to the CEO) and, within the three-year period beginning on the date that you receive a payment pursuant to Paragraph 3, the extent to which the performance measurements were achieved during any calendar year of the Performance Period changes because of any revision of the Company’s financial results for the same calendar year, and the value of the Performance Units earned at the end of the Performance Period is determined to have resulted in an overpayment based on such calendar year’s revised financial results, the Committee may, in its sole and absolute discretion, seek recovery of the amount of the Performance Award determined to be an overpayment or hold the overpayment as debit against future Performance Awards for up to a three-year period following the end of the Performance Period. In addition, the Company may seek recovery of any benefits provided to you under this Agreement if such recovery is required by any clawback policy adopted by the Company, which may be amended from time to time, including, but not limited to, any clawback policy adopted to satisfy the minimum clawback requirements adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations thereunder or any other applicable law or securities exchange listing standard. The Company reserves the right, without your consent, to adopt any such clawback policy, including, but not limited to, such clawback policies applicable to this Performance Award with retroactive effect.
|
5.
|
Limitations Upon Transfer
. All rights under this Agreement shall belong to you and may not be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise), other than by will or the laws of descent and distribution or pursuant to a “qualified domestic relations order” (as defined by the Code), and shall not be subject to execution, attachment, or similar process. Upon any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of such rights contrary to the provisions in this Agreement or the Plan, or upon the levy of any attachment or similar process upon such rights, such rights shall immediately become null and void.
|
6.
|
Withholding of Tax
. You acknowledge that, regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally
|
7.
|
Nature of Grant
. In accepting the Performance Units, you acknowledge, understand and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; (b) the grant of the Performance Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Units, or benefits in lieu of Performance Units, even if Performance Units have been granted in the past; (c) all decisions with respect to future Performance Units or other grants, if any, will be at the sole discretion of the Company; (d) the grant of Performance Units and your participation in the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company, your Employer, or any Subsidiary and shall not interfere with the ability of the Company, your Employer or any Subsidiary, as applicable, to terminate your employment or service relationship (if any); (e) you are voluntarily participating in the Plan; (f) the Performance Units are not intended to replace any pension rights or compensation; (g) the Performance Units and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (h) the future value of the Performance Units is unknown, indeterminable and cannot be predicted with certainty; (i) no claim or entitlement to compensation or damages shall arise from the forfeiture of the Performance Units resulting from you ceasing to provide employment or other services to the Company or your Employer (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) and in consideration of the grant of the Performance Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, or your Employer or any Subsidiary; (j) in the event
|
8.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.
|
9.
|
Data Privacy
.
You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Employer, and the Company and its Subsidiaries, for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company and your Employer hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, details of all Performance Units outstanding in your favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to Morgan Stanley Smith Barney LLC or such other service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients may be located in the United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections from your country. You understand that if you reside outside the United States, you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company, Morgan Stanley Smith Barney LLC and any other possible recipients which may assist the Company (presently or in the future) to receive, possess, use, retain and transfer
the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that if you reside outside the United States, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Employer will not be adversely affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant to you Performance Units or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.
|
10.
|
Binding Effect
. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company or upon any person lawfully claiming under you.
|
11.
|
Modification
. Except to the extent permitted by the Plan, any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby.
|
12.
|
Plan Controls
. This grant is subject to the terms of the Plan, which are hereby incorporated by reference. In the event of a conflict between the terms of this Agreement and the Plan, the Plan shall be the controlling document. Capitalized terms used herein or in Exhibit A and not otherwise defined herein or in Exhibit A shall have the meaning ascribed to them in the Plan.
|
13.
|
Other Agreements
. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to and governed by, and shall not modify, the terms and conditions of any employment, severance, and/or change-in-control agreement between the Company (or a Subsidiary) and you.
|
14.
|
Electronic Delivery and Acceptance
. The Company may, in its sole discretion, decide to deliver any document related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
|
15.
|
Severability
. If one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed so as to foster the intent of this Agreement and the Plan.
|
16.
|
Language
. If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different from the English version, the English version will control.
|
17.
|
Governing Law and Venue
. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, U.S.A., except to the extent that it implicates matters that are the subject of the General Corporation Law of the State of Delaware, which matters shall be governed by the latter law notwithstanding any conflicts of laws principles that may be applied or invoked directing the application of the laws of another jurisdiction. The parties hereby submit to and consent to the sole and exclusive jurisdiction of Houston, Harris County, Texas, as exclusive venue for any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it or arising from it, or dispute resolution proceeding arising hereunder for any claim or dispute, notwithstanding any conflicts of laws principles that may direct the jurisdiction of any other court, venue, or forum, including the jurisdiction of the employee’s home country.
|
18.
|
Compliance with Law
. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Performance Units, the Company shall not be required to deliver any payment from the payout of the Performance Units prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval, the Company shall, in its absolute discretion, deem necessary or advisable. You understand that the Company is under no obligation to register or qualify the shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for payout of the Performance Units. Further, you agree that the Company shall have unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.
|
19.
|
Exhibit B
. Notwithstanding any provisions in this document, the Performance Units shall be subject to any special terms and conditions set forth in Exhibit B to this Agreement for your country. Moreover, if you relocate to one of the countries included in Exhibit B, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Exhibit B constitutes part of this Agreement.
|
20.
|
Imposition of Other Requirements
. The Company reserves the right to impose other requirements on your participation in the Plan, or on the Performance Units, to the extent the Company determines it is necessary or advisable for legal or administrative reasons and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
21.
|
Waiver
. You acknowledge that a waiver by the company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant.
|
A.
|
Average TSR
|
|
* Share price adjusted for dividends paid in the period, where the dividend payment date is the ex-dividend date.
|
|
|||||
|
|
||||||
|
|
|
B.
|
Peer Group and TSR Payout
|
TSR Peer Group Percentile and TSR Payout Table
|
||||||
|
|
|
|
|
||
|
|
Threshold
|
Target
|
Maximum
|
||
Percentile
|
<20%
|
20%
|
50%
|
≥90%
|
||
TSR Payout
|
0%
|
25%
|
100%
|
200%
|
||
|
|
|
|
|
||
LTI TSR Calculation Method
|
||||||
|
Ranking
|
Percentile *
|
TSR Payout **
|
|||
|
||||||
|
1
|
100.00
|
%
|
200.00
|
%
|
|
|
2
|
88.90
|
%
|
197.30
|
%
|
|
|
3
|
77.80
|
%
|
169.50
|
%
|
|
|
4
|
66.70
|
%
|
141.80
|
%
|
|
|
5
|
55.60
|
%
|
114.00
|
%
|
|
|
6
|
44.40
|
%
|
86.00
|
%
|
|
|
7
|
33.30
|
%
|
58.30
|
%
|
|
|
8
|
22.20
|
%
|
30.50
|
%
|
|
|
9
|
11.10
|
%
|
0.00
|
%
|
|
|
10
|
0.00
|
%
|
0.00
|
%
|
|
* Rounded to 1 decimal place.
** For a Percentile ranking between Threshold and Target or Target and Maximum, the TSR Payout percentage earned shall be determined by linear interpolation between maximum and threshold based on the Percentile ranking achieved. Rounded to 1 decimal place.
|
||||||
|
|
|
|
|
||
|
Percentile for TSR purposes
|
|
||||
|
Percentile = (
n - r)
* 100%
|
|
||||
(n - 1)
|
||||||
where:
|
|
|
|
|
||
n = number of Peer Group companies (including KBR)
|
||||||
r = KBR ranking in the list of companies (including KBR)
|
Example 1
|
|
|
Example 3
|
|
|
|
KBR ranked 8th out of 10 companies
|
KBR ranked 7th out of 9 companies
|
|||||
(10 - 8)
* 100% = 22.2%
|
|
(9 - 7)
* 100% = 25.0%
|
|
|||
(10 - 1)
|
|
|
(9 - 1)
|
|
|
|
|
|
|
|
|
|
|
Example 2
|
|
|
Example 4
|
|
|
|
KBR ranked 4th out of 10 companies
|
KBR ranked 3rd out of 8 companies
|
|||||
(10 - 4)
* 100% = 66.7%
|
|
(8 - 3)
* 100% = 71.4%
|
|
|||
(10 - 1)
|
|
|
(8 - 1)
|
|
|
|
(i)
|
if Cumulative Net Income exceeds $0, then the Cumulative Net Income Percentage shall equal 200%; provided, however, that, notwithstanding the foregoing, pursuant to an exercise of negative discretion, the Committee has determined that, if Cumulative Net Income exceeds $0, then in no event shall the Cumulative Net Income Percentage exceed the Average JIS Payout Ratio (subject to the last sentence of Part IV. of this Exhibit A);
|
(ii)
|
if Cumulative Net Income does not exceed $0 and if the Average JIS Payout Ratio (determined by excluding all Excluded Projects from the determination of JIS and Target JIS) exceeds 0%, then the Cumulative Net Income Percentage shall equal the Average JIS Payout Ratio (determined by excluding all Excluded Projects from the determination of JIS and Target JIS and subject to the last sentence of Part IV. of this Exhibit A); and
|
(iii)
|
if neither clause (i) nor (ii) above applies, then the Cumulative Net Income Percentage shall equal 0% (subject to the last sentence of Part IV. of this Exhibit A).
|
|
|
Threshold
|
Target
|
Maximum
|
Achieved JIS for the calendar year
|
˂ 80%
|
80%
|
100%
|
≥120%
|
JIS Payout Ratio for the calendar year*
|
0%
|
25%
|
100%
|
200%
|
Performance Percentage
|
Column A
|
Column B
|
|||
Weighting
|
<Threshold
0%
|
Threshold
25%
|
Target
100%
|
Maximum
200%
|
|
Company’s Average TSR Rank with Peer Group Members’ Average TSR
|
50%
|
<20%
|
20%
|
50%
|
90%
|
(1)
|
Your participation in the Plan does not constitute an acquired right.
|
(2)
|
The Plan and your participation in the Plan are offered by the Company on a wholly discretionary basis.
|
(3)
|
Your participation in the Plan is voluntary.
|
(1)
|
La participación del Participante en el Plan de ninguna manera constituye un derecho adquirido.
|
(2)
|
Que el Plan y la participación del Participante en el mismo es una oferta por parte de KBR, Inc. de forma completamente discrecional.
|
(3)
|
Que la participación del Participante en el Plan es voluntaria.
|
|
|
|
NAME OF COMPANY
|
|
STATE OR COUNTRY OF INCORPORATION
|
|
|
|
BE&K International, Inc.
|
|
United States, Delaware
|
|
|
|
BE&K Properties, Inc.
|
|
United States, Alabama
|
|
|
|
BE&K, Inc.
|
|
Delaware
|
|
|
|
Corporacion Mexicana de Mantenimiento Integral S. de R.L. de C.V.
|
|
Mexico
|
|
|
|
Fasttrax Holdings Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Fasttrax Limited
|
|
United Kingdom, England & Wales
|
|
|
|
FTX Logistics Limited
|
|
United Kingdom, England & Wales
|
|
|
|
HBR NL Holdings, LLC
|
|
Delaware
|
|
|
|
KBR (Aspire Construction) Holdings Limited
|
|
United Kingdom, England & Wales
|
|
|
|
KBR (Aspire Construction) Holdings No. 2 Limited
|
|
United Kingdom, England & Wales
|
|
|
|
KBR (Aspire Construction) Limited
|
|
United Kingdom, England & Wales
|
|
|
|
KBR (U.K.) Investments Limited
|
|
United Kingdom, England & Wales
|
|
|
|
KBR Australia Pty Ltd
|
|
Australia
|
|
|
|
KBR Building Group, LLC
|
|
Delaware
|
|
|
|
KBR Canada Ltd
|
|
Cayman Islands
|
|
|
|
KBR Construction Company, LLC
|
|
Delaware
|
|
|
|
KBR E&C Australia Pty Ltd
|
|
Australia
|
|
|
|
KBR Engineering Company, LLC
|
|
Delaware
|
|
|
|
KBR Group Holdings, LLC
|
|
Delaware
|
|
|
|
KBR Holdings Pty Ltd.
|
|
Australia
|
|
|
|
KBR Holdings, LLC
|
|
Delaware
|
|
|
|
KBR I Cayman, Ltd.
|
|
Cayman Islands
|
|
|
|
KBR II Cayman, Ltd.
|
|
Cayman Islands
|
|
|
|
KBR Indonesia Holdings, Inc.
|
|
Delaware
|
|
|
|
KBR Industrial Canada Co.
|
|
Canada
|
|
|
|
KBR Investments Limited
|
|
United Kingdom, England & Wales
|
|
|
|
KBR Netherlands Investments B.V.
|
|
Netherlands
|
|
|
|
KBR Overseas, Inc.
|
|
Delaware
|
|
|
|
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 Asia Pacific Pte Ltd
|
|
Singapore
|
|
|
|
Kellogg Brown & Root DH Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Group Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Holding B.V.
|
|
Netherlands
|
|
|
|
Kellogg Brown & Root Holdings (U.K.) Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Holdings Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root International Group Holdings LLP
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root International, Inc.
|
|
Delaware
|
|
|
|
Kellogg Brown & Root Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Limited - Azmi Abdullatif Abdulhadi & Abdullah Mahana Al-Moaibed Consulting Engineering Professional Partnership
|
|
Saudi Arabia
|
|
|
|
Kellogg Brown & Root LLC
|
|
Delaware
|
|
|
|
Kellogg Brown & Root London Holdings Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root London Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Netherlands B.V.
|
|
The Netherlands
|
|
|
|
Kellogg Brown & Root Offshore Contractors 2 B.V.
|
|
Netherlands
|
|
|
|
Kellogg Brown & Root Overseas Operations Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Overseas Projects Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Pty Ltd
|
|
Australia
|
|
|
|
Kellogg Brown & Root Services, Inc.
|
|
Delaware
|
|
|
|
KELLOGG JOINT VENTURE - GORGON PJT
|
|
Unincorporated
|
|
|
|
Laurel Financial Services B.V.
|
|
The Netherlands
|
|
|
|
MMM-SS Holdings, LLC
|
|
Delaware
|
|
|
|
PT KBR Indonesia
|
|
Indonesia
|
|
|
|
Roberts & Schaefer Holdings, Inc.
|
|
Delaware
|
|
|
|
Southern Gas Constructors Limited
|
|
Nigeria
|
|
|
|
Technical Staffing Resources, LLC
|
|
Delaware
|
|
Stuart Bradie
|
Chief Executive Officer
|
|
Brian K. Ferraioli
|
Chief Financial Officer
|
a)
|
the Form 10-K of the Company for the period ended December 31, 2014, 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 as amended; and
|
b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Stuart Bradie
Chief Executive Officer
|
a)
|
the Form 10-K of the Company for the period ended December 31, 2014, 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 as amended; and
|
b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Brian K. Ferraioli
|
Chief Financial Officer
|