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ý
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to
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Delaware
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20-4536774
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(
State of incorporation
)
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(
I.R.S. Employer Identification No.
)
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601 Jefferson Street, Suite 3400, Houston, Texas
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77002
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
|
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Condensed
Consolidated Statements of
Operations
|
|
Condensed
Consolidated Statements of Comprehensive Income
(Loss)
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
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Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
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September 30,
|
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September 30,
|
||||||||||||
|
2015
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|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
$
|
1,199
|
|
|
$
|
1,657
|
|
|
$
|
4,016
|
|
|
$
|
4,949
|
|
Cost of revenues
|
(1,112
|
)
|
|
(1,627
|
)
|
|
(3,785
|
)
|
|
(4,852
|
)
|
||||
Gross profit
|
87
|
|
|
30
|
|
|
231
|
|
|
97
|
|
||||
Equity in earnings of unconsolidated affiliates
|
35
|
|
|
38
|
|
|
123
|
|
|
118
|
|
||||
General and administrative expenses
|
(38
|
)
|
|
(58
|
)
|
|
(119
|
)
|
|
(178
|
)
|
||||
Asset impairment and restructuring charges
|
(15
|
)
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
||||
Gain on disposition of assets
|
6
|
|
|
—
|
|
|
34
|
|
|
8
|
|
||||
Operating income
|
75
|
|
|
10
|
|
|
235
|
|
|
45
|
|
||||
Other non-operating income
|
3
|
|
|
34
|
|
|
4
|
|
|
18
|
|
||||
Income before income taxes and noncontrolling interests
|
78
|
|
|
44
|
|
|
239
|
|
|
63
|
|
||||
Benefit (provision) for income taxes
|
(19
|
)
|
|
1
|
|
|
(61
|
)
|
|
(30
|
)
|
||||
Net income
|
59
|
|
|
45
|
|
|
178
|
|
|
33
|
|
||||
Net income attributable to noncontrolling interests
|
(4
|
)
|
|
(15
|
)
|
|
(17
|
)
|
|
(54
|
)
|
||||
Net income (loss) attributable to KBR
|
$
|
55
|
|
|
$
|
30
|
|
|
$
|
161
|
|
|
$
|
(21
|
)
|
Net income (loss) attributable to KBR per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.38
|
|
|
$
|
0.21
|
|
|
$
|
1.11
|
|
|
$
|
(0.14
|
)
|
Diluted
|
$
|
0.38
|
|
|
$
|
0.21
|
|
|
$
|
1.11
|
|
|
$
|
(0.14
|
)
|
Basic weighted average common shares outstanding
|
144
|
|
|
145
|
|
|
144
|
|
|
145
|
|
||||
Diluted weighted average common shares outstanding
|
144
|
|
|
145
|
|
|
144
|
|
|
145
|
|
||||
Cash dividends declared per share
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income
|
$
|
59
|
|
|
$
|
45
|
|
|
$
|
178
|
|
|
$
|
33
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net of tax
|
(13
|
)
|
|
(49
|
)
|
|
(74
|
)
|
|
(27
|
)
|
||||
Reclassification adjustment included in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Foreign currency translation adjustments, net of taxes of $6, $(6), $5 and $(1)
|
(13
|
)
|
|
(49
|
)
|
|
(74
|
)
|
|
(26
|
)
|
||||
Pension and post-retirement benefits, net of tax:
|
|
|
|
|
|
|
|
||||||||
Actuarial losses, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reclassification adjustment included in net income
|
10
|
|
|
8
|
|
|
32
|
|
|
25
|
|
||||
Pension and post-retirement benefits, net of taxes of $2, $3, $5 and $7
|
10
|
|
|
8
|
|
|
32
|
|
|
25
|
|
||||
Changes in fair value of derivatives:
|
|
|
|
|
|
|
|
||||||||
Changes in fair value of derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Reclassification adjustment included in net income
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
(1
|
)
|
||||
Changes in fair value of derivatives, net of taxes of $0, $0, $0 and $0
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
||||
Other comprehensive income (loss), net of tax
|
(2
|
)
|
|
(42
|
)
|
|
(41
|
)
|
|
(3
|
)
|
||||
Comprehensive income
|
57
|
|
|
3
|
|
|
137
|
|
|
30
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
(6
|
)
|
|
(16
|
)
|
|
(20
|
)
|
|
(55
|
)
|
||||
Comprehensive income (loss) attributable to KBR
|
$
|
51
|
|
|
$
|
(13
|
)
|
|
$
|
117
|
|
|
$
|
(25
|
)
|
|
September 30,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
768
|
|
|
$
|
970
|
|
Accounts receivable, net of allowance for doubtful accounts of $20 and $19
|
699
|
|
|
847
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE")
|
284
|
|
|
490
|
|
||
Deferred income taxes
|
68
|
|
|
90
|
|
||
Other current assets
|
143
|
|
|
147
|
|
||
Total current assets
|
1,962
|
|
|
2,544
|
|
||
Property, plant, and equipment, net of accumulated depreciation of $340 and $385 (including net PPE of $51 and $57 owned by a variable interest entity)
|
198
|
|
|
247
|
|
||
Goodwill
|
324
|
|
|
324
|
|
||
Intangible assets, net of accumulated amortization of $90 and $96
|
38
|
|
|
41
|
|
||
Equity in and advances to unconsolidated affiliates
|
261
|
|
|
151
|
|
||
Deferred income taxes
|
176
|
|
|
174
|
|
||
Claims and accounts receivable
|
549
|
|
|
570
|
|
||
Other assets
|
143
|
|
|
148
|
|
||
Total assets
|
$
|
3,651
|
|
|
$
|
4,199
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
485
|
|
|
$
|
742
|
|
Payable to former parent
|
19
|
|
|
56
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts ("BIE")
|
500
|
|
|
531
|
|
||
Accrued salaries, wages and benefits
|
176
|
|
|
197
|
|
||
Nonrecourse project debt
|
10
|
|
|
10
|
|
||
Other current liabilities
|
326
|
|
|
488
|
|
||
Total current liabilities
|
1,516
|
|
|
2,024
|
|
||
Pension obligations
|
444
|
|
|
502
|
|
||
Employee compensation and benefits
|
110
|
|
|
112
|
|
||
Income tax payable
|
72
|
|
|
69
|
|
||
Deferred income taxes
|
175
|
|
|
170
|
|
||
Nonrecourse project debt
|
56
|
|
|
63
|
|
||
Deferred income from unconsolidated affiliates
|
103
|
|
|
95
|
|
||
Other liabilities
|
201
|
|
|
229
|
|
||
Total liabilities
|
2,677
|
|
|
3,264
|
|
||
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, 175,044,525 and 174,448,399 shares issued, and 144,260,718 and 144,837,281 shares outstanding
|
—
|
|
|
—
|
|
||
Paid-in capital in excess of par ("PIC")
|
2,066
|
|
|
2,091
|
|
||
Accumulated other comprehensive loss ("AOCL")
|
(920
|
)
|
|
(876
|
)
|
||
Retained earnings
|
565
|
|
|
439
|
|
||
Treasury stock, 30,783,807 shares and 29,611,118 shares, at cost
|
(729
|
)
|
|
(712
|
)
|
||
Total KBR shareholders’ equity
|
982
|
|
|
942
|
|
||
Noncontrolling interests ("NCI")
|
(8
|
)
|
|
(7
|
)
|
||
Total shareholders’ equity
|
974
|
|
|
935
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,651
|
|
|
$
|
4,199
|
|
KBR, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
|
|||||||
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from (used in) operating activities:
|
|
|
|
||||
Net income
|
$
|
178
|
|
|
$
|
33
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
29
|
|
|
55
|
|
||
Equity in earnings of unconsolidated affiliates
|
(123
|
)
|
|
(118
|
)
|
||
Deferred income tax (benefit) expense
|
14
|
|
|
(2
|
)
|
||
Gain on disposition of assets
|
(34
|
)
|
|
(8
|
)
|
||
Gain on negotiated settlement with former parent
|
—
|
|
|
(24
|
)
|
||
Other
|
29
|
|
|
33
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
(19
|
)
|
|
66
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
168
|
|
|
(109
|
)
|
||
Accounts payable
|
(239
|
)
|
|
(43
|
)
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(10
|
)
|
|
53
|
|
||
Accrued salaries, wages and benefits
|
(5
|
)
|
|
(16
|
)
|
||
Reserve for loss on uncompleted contracts
|
(100
|
)
|
|
13
|
|
||
Receipts of advances from unconsolidated affiliates, net
|
10
|
|
|
14
|
|
||
Distributions of earnings from unconsolidated affiliates
|
84
|
|
|
212
|
|
||
Income taxes payable
|
(7
|
)
|
|
22
|
|
||
Pension funding
|
(37
|
)
|
|
(37
|
)
|
||
Net settlement of derivative contracts
|
(40
|
)
|
|
2
|
|
||
Other assets and liabilities
|
17
|
|
|
32
|
|
||
Total cash flows provided by (used in) operating activities
|
(85
|
)
|
|
178
|
|
||
Cash flows from (used in) investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(8
|
)
|
|
(46
|
)
|
||
Payment for investment in partnership
|
(15
|
)
|
|
—
|
|
||
Proceeds from sale of assets or investments
|
71
|
|
|
9
|
|
||
Total cash flows provided by (used in) investing activities
|
$
|
48
|
|
|
$
|
(37
|
)
|
KBR, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
|
|||||||
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows used in financing activities:
|
|
|
|
||||
Payments to reacquire common stock
|
$
|
(22
|
)
|
|
$
|
(102
|
)
|
Acquisition of noncontrolling interest
|
(40
|
)
|
|
—
|
|
||
Investments from noncontrolling interests
|
—
|
|
|
10
|
|
||
Distributions to noncontrolling interests
|
(21
|
)
|
|
(49
|
)
|
||
Payments of dividends to shareholders
|
(35
|
)
|
|
(35
|
)
|
||
Net proceeds from issuance of common stock
|
1
|
|
|
4
|
|
||
Payments on short-term and long-term borrowings
|
(7
|
)
|
|
(7
|
)
|
||
Other
|
(4
|
)
|
|
1
|
|
||
Total cash flows used in financing activities
|
(128
|
)
|
|
(178
|
)
|
||
Effect of exchange rate changes on cash
|
(37
|
)
|
|
(21
|
)
|
||
Decrease in cash and equivalents
|
(202
|
)
|
|
(58
|
)
|
||
Cash and equivalents at beginning of period
|
970
|
|
|
1,106
|
|
||
Cash and equivalents at end of period
|
$
|
768
|
|
|
$
|
1,048
|
|
Supplemental disclosure of cash flows information:
|
|
|
|
||||
Cash paid for interest
|
$
|
8
|
|
|
$
|
9
|
|
Cash paid for income taxes (net of refunds)
|
$
|
56
|
|
|
$
|
13
|
|
Noncash financing activities
|
|
|
|
||||
Dividends declared
|
$
|
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 VIEs
|
•
|
valuation of share-based compensation
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Reserve for estimated losses on uncompleted contracts (a)
|
$
|
54
|
|
|
$
|
159
|
|
Retainage payable
|
61
|
|
|
88
|
|
||
Income taxes payable
|
55
|
|
|
61
|
|
||
Deferred tax liabilities
|
50
|
|
|
46
|
|
||
Value-added tax payable
|
27
|
|
|
31
|
|
||
Insurance payable
|
15
|
|
|
19
|
|
||
Dividend payable
|
12
|
|
|
12
|
|
||
Other miscellaneous liabilities (b)
|
52
|
|
|
72
|
|
||
Total other current liabilities
|
$
|
326
|
|
|
$
|
488
|
|
|
(a)
|
See Note
2
for further discussion on our reserve for estimated losses on uncompleted contracts.
|
(b)
|
Included in other current miscellaneous liabilities is
$7 million
of deferred rent as of
September 30, 2015
and
December 31, 2014
, respectively.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
Dollars in millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Technology & Consulting
|
$
|
79
|
|
|
$
|
94
|
|
|
$
|
231
|
|
|
$
|
285
|
|
Engineering & Construction
|
828
|
|
|
1,196
|
|
|
2,758
|
|
|
3,546
|
|
||||
Government Services
|
176
|
|
|
178
|
|
|
489
|
|
|
527
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
1,083
|
|
|
1,468
|
|
|
3,478
|
|
|
4,358
|
|
||||
Non-strategic Business
|
116
|
|
|
189
|
|
|
538
|
|
|
591
|
|
||||
Total revenues
|
$
|
1,199
|
|
|
$
|
1,657
|
|
|
$
|
4,016
|
|
|
$
|
4,949
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
||||||||
Technology & Consulting
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
57
|
|
|
$
|
48
|
|
Engineering & Construction
|
48
|
|
|
46
|
|
|
155
|
|
|
108
|
|
||||
Government Services
|
8
|
|
|
24
|
|
|
3
|
|
|
28
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
73
|
|
|
88
|
|
|
215
|
|
|
184
|
|
||||
Non-strategic Business
|
14
|
|
|
(58
|
)
|
|
16
|
|
|
(87
|
)
|
||||
Total gross profit (loss)
|
$
|
87
|
|
|
$
|
30
|
|
|
$
|
231
|
|
|
$
|
97
|
|
Equity in earnings of unconsolidated affiliates:
|
|
|
|
|
|
|
|
||||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
26
|
|
|
26
|
|
|
87
|
|
|
63
|
|
||||
Government Services
|
9
|
|
|
12
|
|
|
36
|
|
|
55
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
35
|
|
|
38
|
|
|
123
|
|
|
118
|
|
||||
Non-strategic Business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total equity in earnings of unconsolidated affiliates
|
$
|
35
|
|
|
$
|
38
|
|
|
$
|
123
|
|
|
$
|
118
|
|
Asset impairment and restructuring charges:
|
|
|
|
|
|
|
|
||||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Engineering & Construction
|
(13
|
)
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
||||
Government Services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||
Subtotal
|
(14
|
)
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
||||
Non-strategic Business
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Total asset impairment and restructuring charges
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
Segment operating income (loss):
|
|
|
|
|
|
|
|
||||||||
Technology & Consulting
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
53
|
|
|
$
|
48
|
|
Engineering & Construction
|
61
|
|
|
58
|
|
|
201
|
|
|
129
|
|
||||
Government Services
|
15
|
|
|
34
|
|
|
34
|
|
|
77
|
|
||||
Other
|
(28
|
)
|
|
(42
|
)
|
|
(92
|
)
|
|
(122
|
)
|
||||
Subtotal
|
64
|
|
|
68
|
|
|
196
|
|
|
132
|
|
||||
Non-strategic Business
|
11
|
|
|
(58
|
)
|
|
39
|
|
|
(87
|
)
|
||||
Total segment operating income (loss)
|
$
|
75
|
|
|
$
|
10
|
|
|
$
|
235
|
|
|
$
|
45
|
|
Dollars in millions
|
Reserve for Estimated Losses
|
||
Balance at December 31, 2014
|
$
|
159
|
|
Changes in estimates on loss projects
|
(7
|
)
|
|
Change due to progress on loss projects
|
(98
|
)
|
|
Balance at September 30, 2015
|
$
|
54
|
|
|
|
||
Dollars in millions
|
Reserve for Estimated Losses
|
||
Balance at December 31, 2013
|
$
|
109
|
|
Changes in estimates on loss projects
|
76
|
|
|
Change due to progress on loss projects
|
(67
|
)
|
|
Balance at September 30, 2014
|
$
|
118
|
|
|
September 30, 2015
|
||||||||||
Dollars in millions
|
International (a)
|
|
Domestic (b)
|
|
Total
|
||||||
Operating cash and equivalents
|
$
|
136
|
|
|
$
|
298
|
|
|
$
|
434
|
|
Time deposits
|
259
|
|
|
6
|
|
|
265
|
|
|||
Cash and equivalents held in joint ventures
|
65
|
|
|
4
|
|
|
69
|
|
|||
Total
|
$
|
460
|
|
|
$
|
308
|
|
|
$
|
768
|
|
|
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
|
|
|
(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.
|
|
September 30, 2015
|
||||||||||
Dollars in millions
|
Retainage
|
|
Trade & Other
|
|
Total
|
||||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
68
|
|
Engineering & Construction
|
36
|
|
|
411
|
|
|
447
|
|
|||
Government Services
|
2
|
|
|
87
|
|
|
89
|
|
|||
Other
|
—
|
|
|
5
|
|
|
5
|
|
|||
Subtotal
|
38
|
|
|
571
|
|
|
609
|
|
|||
Non-strategic Business
|
56
|
|
|
34
|
|
|
90
|
|
|||
Total
|
$
|
94
|
|
|
$
|
605
|
|
|
$
|
699
|
|
|
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
|
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Technology & Consulting
|
$
|
32
|
|
|
$
|
38
|
|
Engineering & Construction
|
159
|
|
|
357
|
|
||
Government Services
|
90
|
|
|
73
|
|
||
Subtotal
|
281
|
|
|
468
|
|
||
Non-strategic Business
|
3
|
|
|
22
|
|
||
Total
|
$
|
284
|
|
|
$
|
490
|
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Technology & Consulting
|
$
|
65
|
|
|
$
|
56
|
|
Engineering & Construction
|
252
|
|
|
212
|
|
||
Government Services
|
90
|
|
|
93
|
|
||
Subtotal
|
407
|
|
|
361
|
|
||
Non-strategic Business
|
93
|
|
|
170
|
|
||
Total
|
$
|
500
|
|
|
$
|
531
|
|
Dollars in millions
|
2015
|
|
2014
|
||||
Amounts included in project estimates-at-completion at January 1,
|
$
|
31
|
|
|
$
|
115
|
|
Changes in estimates-at-completion
|
48
|
|
|
81
|
|
||
Approved (a)
|
(46
|
)
|
|
(134
|
)
|
||
Amounts included in project estimates-at-completion at September 30,
|
$
|
33
|
|
|
$
|
62
|
|
|
|
|
|
||||
Amounts recorded in revenues on a percentage-of-completion basis at September 30,
|
$
|
32
|
|
|
$
|
53
|
|
|
(a)
|
Includes
$6 million
of adjustments associated with the sale of our Building Group subsidiary in the second quarter of 2015.
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Engineering & Construction
|
$
|
425
|
|
|
$
|
425
|
|
Government Services
|
124
|
|
|
145
|
|
||
Total
|
$
|
549
|
|
|
$
|
570
|
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Beginning balance
|
$
|
151
|
|
|
$
|
156
|
|
Equity in earnings of unconsolidated affiliates
|
123
|
|
|
163
|
|
||
Distribution of earnings of unconsolidated affiliates
|
(84
|
)
|
|
(249
|
)
|
||
Advances
|
(10
|
)
|
|
(13
|
)
|
||
Investments (a)
|
76
|
|
|
—
|
|
||
Foreign currency translation adjustments
|
(9
|
)
|
|
(1
|
)
|
||
Other
|
2
|
|
|
—
|
|
||
Balance before reclassification
|
$
|
249
|
|
|
$
|
56
|
|
Reclassification of excess distribution
|
16
|
|
|
102
|
|
||
Recognition of excess distributions
|
(4
|
)
|
|
(7
|
)
|
||
Ending balance
|
$
|
261
|
|
|
$
|
151
|
|
|
(a)
|
Investments include a
$58 million
investment in the Brown & Root Industrial Services joint venture and a
$20 million
investment in EPIC Piping, including prior quarter dispositions related to the Building Group. See below for further discussion related to joint venture formations and investments.
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
$
|
10
|
|
|
$
|
7
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
6
|
|
|
$
|
2
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
$
|
52
|
|
|
$
|
21
|
|
|
September 30, 2015
|
||||||||||
Dollars in millions
|
Total assets
|
|
Total liabilities
|
|
Maximum
exposure to
loss
|
||||||
Aspire Defence project
|
$
|
15
|
|
|
$
|
127
|
|
|
$
|
15
|
|
Ichthys LNG project
|
$
|
72
|
|
|
$
|
58
|
|
|
$
|
72
|
|
U.K. Road projects
|
$
|
35
|
|
|
$
|
11
|
|
|
$
|
35
|
|
EBIC Ammonia plant (65% interest)
|
$
|
37
|
|
|
$
|
2
|
|
|
$
|
23
|
|
|
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 plant (65% interest)
|
$
|
42
|
|
|
$
|
2
|
|
|
$
|
26
|
|
Dollars in millions
|
September 30, 2015
|
||||||
Total assets
|
|
Total liabilities
|
|||||
Gorgon LNG project
|
$
|
152
|
|
|
$
|
176
|
|
Escravos Gas-to-Liquids project
|
$
|
15
|
|
|
$
|
31
|
|
Fasttrax Limited project
|
$
|
80
|
|
|
$
|
75
|
|
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
|
|
|
Three Months Ended September 30,
|
||||||||||||||
Dollars in millions
|
2015
|
|
2014
|
||||||||||||
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
1
|
|
|
19
|
|
|
1
|
|
|
23
|
|
||||
Expected return on plan assets
|
—
|
|
|
(24
|
)
|
|
(1
|
)
|
|
(26
|
)
|
||||
Recognized actuarial loss
|
1
|
|
|
11
|
|
|
1
|
|
|
10
|
|
||||
Net periodic benefit cost
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
Dollars in millions
|
2015
|
|
2014
|
||||||||||||
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest cost
|
2
|
|
|
57
|
|
|
2
|
|
|
68
|
|
||||
Expected return on plan assets
|
(2
|
)
|
|
(73
|
)
|
|
(3
|
)
|
|
(78
|
)
|
||||
Recognized actuarial loss
|
4
|
|
|
33
|
|
|
3
|
|
|
29
|
|
||||
Net periodic benefit cost
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
2
|
|
|
$
|
21
|
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Form 1s issued by the U.S. government and outstanding (a)
|
$
|
174
|
|
|
$
|
188
|
|
Amounts withheld by U.S. government (included in the Form 1s amount above) (b)
|
83
|
|
|
96
|
|
||
Amounts withheld from subcontractors by us
|
32
|
|
|
32
|
|
||
Claims loss accruals (c)
|
26
|
|
|
25
|
|
|
(a)
|
Included in the amounts shown is
$56 million
related to our Private Security matter discussed below.
|
(b)
|
Recorded in "claims and accounts receivable" on our condensed consolidated balance sheets. We believe these amounts are probable of collection. See discussions below for details of amounts withheld by the U.S. government on Form 1s.
|
(c)
|
Recorded as a reduction to "claims and accounts receivable" and in "other liabilities" on our condensed consolidated balance sheets. At this time, we believe the likelihood we would incur a loss related to these matters in excess of the loss accruals we have recorded is remote.
|
Dollars in millions
|
Total
|
|
PIC
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
AOCL
|
|
NCI
|
||||||||||||
Balance at December 31, 2014
|
$
|
935
|
|
|
$
|
2,091
|
|
|
$
|
439
|
|
|
$
|
(712
|
)
|
|
$
|
(876
|
)
|
|
$
|
(7
|
)
|
Acquisition of noncontrolling interest
|
(40
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to noncontrolling interests
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
||||||
Net income
|
178
|
|
|
—
|
|
|
161
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||
Other comprehensive income (loss), net of tax
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
3
|
|
||||||
Balance at September 30, 2015
|
$
|
974
|
|
|
$
|
2,066
|
|
|
$
|
565
|
|
|
$
|
(729
|
)
|
|
$
|
(920
|
)
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dollars in millions
|
Total
|
|
PIC
|
|
Retained
Earnings |
|
Treasury
Stock |
|
AOCL
|
|
NCI
|
||||||||||||
Balance at December 31, 2013
|
$
|
2,439
|
|
|
$
|
2,065
|
|
|
$
|
1,748
|
|
|
$
|
(610
|
)
|
|
$
|
(740
|
)
|
|
$
|
(24
|
)
|
Share-based compensation
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(102
|
)
|
|
—
|
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||
Investments by noncontrolling interests
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||||
Distributions to noncontrolling interests
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
||||||
Net income (loss)
|
33
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
54
|
|
||||||
Other comprehensive income, net of tax
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
||||||
Balance at September 30, 2014
|
$
|
2,317
|
|
|
$
|
2,085
|
|
|
$
|
1,692
|
|
|
$
|
(708
|
)
|
|
$
|
(744
|
)
|
|
$
|
(8
|
)
|
|
September 30,
|
||||||
Dollars in millions
|
2015
|
|
2014
|
||||
Accumulated foreign currency translation adjustments, net of tax of $1 and $(1)
|
$
|
(280
|
)
|
|
$
|
(158
|
)
|
Pension and post-retirement benefits, net of tax of $(226) and $(214)
|
(638
|
)
|
|
(583
|
)
|
||
Fair value of derivatives, net of tax of $0 and $0
|
(2
|
)
|
|
(3
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(920
|
)
|
|
$
|
(744
|
)
|
Dollars in millions
|
Accumulated foreign currency translation adjustments
|
|
Accumulated pension liability adjustments
|
|
Changes in fair value of derivatives
|
|
Total
|
||||||||
Balance at December 31, 2014
|
$
|
(203
|
)
|
|
$
|
(670
|
)
|
|
$
|
(3
|
)
|
|
$
|
(876
|
)
|
Other comprehensive income adjustments before reclassifications
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
32
|
|
|
1
|
|
|
33
|
|
||||
Balance at September 30, 2015
|
$
|
(280
|
)
|
|
$
|
(638
|
)
|
|
$
|
(2
|
)
|
|
$
|
(920
|
)
|
Dollars in millions
|
Accumulated foreign currency translation adjustments
|
|
Accumulated pension liability adjustments
|
|
Changes in fair value of derivatives
|
|
Total
|
||||||||
Balance at December 31, 2013
|
$
|
(131
|
)
|
|
$
|
(608
|
)
|
|
$
|
(1
|
)
|
|
$
|
(740
|
)
|
Other comprehensive income adjustments before reclassifications
|
(28
|
)
|
|
—
|
|
|
(1
|
)
|
|
(29
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
1
|
|
|
25
|
|
|
(1
|
)
|
|
25
|
|
||||
Balance at September 30, 2014
|
$
|
(158
|
)
|
|
$
|
(583
|
)
|
|
$
|
(3
|
)
|
|
$
|
(744
|
)
|
|
Nine Months Ended September 30,
|
|
|
||||||
Dollars in millions
|
2015
|
|
2014
|
|
Affected line item on the Condensed Consolidated Statements of Operations
|
||||
Accumulated pension liability adjustments
|
|
|
|
|
|
||||
Amortization of actuarial loss (a)
|
$
|
(37
|
)
|
|
$
|
(32
|
)
|
|
See (a) below
|
Tax benefit
|
5
|
|
|
7
|
|
|
Provision for income taxes
|
||
Net pension and post-retirement benefits
|
$
|
(32
|
)
|
|
$
|
(25
|
)
|
|
Net of tax
|
|
(a)
|
This item is included in the computation of net periodic pension cost. See Note
8
to our condensed consolidated financial statements for further discussion.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 30, 2015
|
|
September 30, 2015
|
||||||||||||||||||
|
Number of Shares
|
|
Average Price per Share
|
|
Dollars in Millions
|
|
Number of Shares
|
|
Average Price per Share
|
|
Dollars in Millions
|
||||||||||
Repurchases under the $350 million authorized share repurchase program
|
250,000
|
|
|
$
|
16.92
|
|
|
$
|
4
|
|
|
746,440
|
|
|
$
|
15.72
|
|
|
$
|
12
|
|
Repurchases under the existing share maintenance programs
|
—
|
|
|
—
|
|
|
—
|
|
|
466,974
|
|
|
15.43
|
|
|
7
|
|
||||
Withheld to cover shares
|
7,868
|
|
|
17.85
|
|
|
—
|
|
|
163,274
|
|
|
16.97
|
|
|
3
|
|
||||
Total
|
257,868
|
|
|
$
|
16.94
|
|
|
$
|
4
|
|
|
1,376,688
|
|
|
$
|
15.77
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
September 30, 2014
|
|
September 30, 2014
|
||||||||||||||||||
|
Number of Shares
|
|
Average Price per Share
|
|
Dollars in Millions
|
|
Number of Shares
|
|
Average Price per Share
|
|
Dollars in Millions
|
||||||||||
Repurchases under the $350 million authorized share repurchase program
|
175,522
|
|
|
$
|
20.78
|
|
|
$
|
4
|
|
|
3,149,151
|
|
|
$
|
26.89
|
|
|
$
|
85
|
|
Repurchases under the existing share maintenance programs
|
125,078
|
|
|
20.78
|
|
|
2
|
|
|
587,970
|
|
|
26.13
|
|
|
15
|
|
||||
Withheld to cover shares
|
6,222
|
|
|
22.11
|
|
|
—
|
|
|
73,050
|
|
|
27.76
|
|
|
2
|
|
||||
Total
|
306,822
|
|
|
$
|
20.81
|
|
|
$
|
6
|
|
|
3,810,171
|
|
|
$
|
26.79
|
|
|
$
|
102
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
Shares in millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Basic weighted average common shares outstanding
|
144
|
|
|
145
|
|
|
144
|
|
|
145
|
|
Stock options and restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted weighted average common shares outstanding
|
144
|
|
|
145
|
|
|
144
|
|
|
145
|
|
|
September 30,
|
|
December 31,
|
||||
Gains (losses) dollars in millions
|
2015
|
|
2014
|
||||
Balance sheet hedges - fair value
|
$
|
(37
|
)
|
|
$
|
(47
|
)
|
Balance sheet position - remeasurement
|
49
|
|
|
47
|
|
||
Net
|
$
|
12
|
|
|
$
|
—
|
|
Revenues
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
1,199
|
|
|
$
|
1,657
|
|
|
$
|
(458
|
)
|
|
(28
|
)%
|
Gross Profit
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Gross profit
|
$
|
87
|
|
|
$
|
30
|
|
|
$
|
57
|
|
|
190
|
%
|
Equity in Earnings of Unconsolidated Affiliates
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Equity in earnings of unconsolidated affiliates
|
$
|
35
|
|
|
$
|
38
|
|
|
$
|
(3
|
)
|
|
(8
|
)%
|
General and Administrative Expenses
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
General and administrative expenses
|
$
|
(38
|
)
|
|
$
|
(58
|
)
|
|
$
|
(20
|
)
|
|
(34
|
)%
|
Asset Impairment and Restructuring Charges
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Asset impairment and restructuring charges
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
15
|
|
|
100
|
%
|
Gain on Disposition of Assets
|
Three Months Ended June 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Gain on disposition of assets
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
100
|
%
|
Non-operating Income
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Non-operating income
|
$
|
3
|
|
|
$
|
34
|
|
|
$
|
(31
|
)
|
|
(91
|
)%
|
Benefit (provision) for Income Taxes
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Income before benefit (provision) for income taxes
|
$
|
78
|
|
|
$
|
44
|
|
|
$
|
34
|
|
|
77
|
%
|
Benefit (provision) for income taxes
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
$
|
(20
|
)
|
|
n/m
|
|
|
Net Income Attributable to Noncontrolling Interests
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Net income attributable to noncontrolling interests
|
$
|
(4
|
)
|
|
$
|
(15
|
)
|
|
$
|
(11
|
)
|
|
(73
|
)%
|
|
Three Months Ended September 30,
|
||||||
Dollars in millions
|
2015
|
|
2014
|
||||
Revenues
|
|
|
|
||||
Technology & Consulting
|
$
|
79
|
|
|
$
|
94
|
|
Engineering & Construction
|
828
|
|
|
1,196
|
|
||
Government Services
|
176
|
|
|
178
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
1,083
|
|
|
1,468
|
|
||
Non-strategic Business
|
116
|
|
|
189
|
|
||
Total
|
$
|
1,199
|
|
|
$
|
1,657
|
|
|
|
|
|
||||
Gross profit (loss)
|
|
|
|
||||
Technology & Consulting
|
$
|
17
|
|
|
$
|
18
|
|
Engineering & Construction
|
48
|
|
|
46
|
|
||
Government Services
|
8
|
|
|
24
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
73
|
|
|
88
|
|
||
Non-strategic Business
|
14
|
|
|
(58
|
)
|
||
Total
|
$
|
87
|
|
|
$
|
30
|
|
|
|
|
|
||||
Equity in earnings of unconsolidated affiliates
|
|
|
|
||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
26
|
|
|
26
|
|
||
Government Services
|
9
|
|
|
12
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
35
|
|
|
38
|
|
||
Non-strategic Business
|
—
|
|
|
—
|
|
||
Total
|
$
|
35
|
|
|
$
|
38
|
|
|
|
|
|
||||
Total general and administrative expenses
|
$
|
(38
|
)
|
|
$
|
(58
|
)
|
|
|
|
|
||||
Asset impairment and restructuring charges
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
|
|
|
||||
Gain on disposition of assets
|
$
|
6
|
|
|
$
|
—
|
|
|
|
|
|
||||
Total operating income
|
$
|
75
|
|
|
$
|
10
|
|
Revenues
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
4,016
|
|
|
$
|
4,949
|
|
|
$
|
(933
|
)
|
|
(19
|
)%
|
Gross Profit
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Gross profit
|
$
|
231
|
|
|
$
|
97
|
|
|
$
|
134
|
|
|
138
|
%
|
Equity in Earnings of Unconsolidated Affiliates
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Equity in earnings of unconsolidated affiliates
|
$
|
123
|
|
|
$
|
118
|
|
|
$
|
5
|
|
|
4
|
%
|
General and Administrative Expenses
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
General and administrative expenses
|
$
|
(119
|
)
|
|
$
|
(178
|
)
|
|
$
|
(59
|
)
|
|
(33
|
)%
|
Asset Impairment and Restructuring Charges
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Asset impairment and restructuring charges
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
34
|
|
|
100
|
%
|
Gain on Disposition of Assets
|
Nine Months Ended September 30,
|
||||||||||||
|
|
|
|
|
2015 vs. 2014
|
||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||
Gain on disposition of assets
|
$
|
34
|
|
|
$
|
8
|
|
|
$
|
26
|
|
|
n/m
|
Non-operating Income
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Non-operating income
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
(14
|
)
|
|
(78
|
)%
|
Provision for Income Taxes
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Income before provision for income taxes
|
$
|
239
|
|
|
$
|
63
|
|
|
$
|
176
|
|
|
n/m
|
|
Provision for income taxes
|
$
|
(61
|
)
|
|
$
|
(30
|
)
|
|
$
|
31
|
|
|
103
|
%
|
|
Net Income Attributable to Noncontrolling Interests
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
2015 vs. 2014
|
|||||||||
Dollars in millions
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Net income attributable to noncontrolling interests
|
$
|
(17
|
)
|
|
$
|
(54
|
)
|
|
$
|
(37
|
)
|
|
(69
|
)%
|
|
Nine Months Ended September 30,
|
||||||
Dollars in millions
|
2015
|
|
2014
|
||||
Revenues
|
|
|
|
||||
Technology & Consulting
|
$
|
231
|
|
|
$
|
285
|
|
Engineering & Construction
|
2,758
|
|
|
3,546
|
|
||
Government Services
|
489
|
|
|
527
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
3,478
|
|
|
4,358
|
|
||
Non-strategic Business
|
538
|
|
|
591
|
|
||
Total
|
$
|
4,016
|
|
|
$
|
4,949
|
|
|
|
|
|
||||
Gross profit (loss)
|
|
|
|
||||
Technology & Consulting
|
$
|
57
|
|
|
$
|
48
|
|
Engineering & Construction
|
155
|
|
|
108
|
|
||
Government Services
|
3
|
|
|
28
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
215
|
|
|
184
|
|
||
Non-strategic Business
|
16
|
|
|
(87
|
)
|
||
Total
|
$
|
231
|
|
|
$
|
97
|
|
|
|
|
|
||||
Equity in earnings of unconsolidated affiliates
|
|
|
|
||||
Technology & Consulting
|
$
|
—
|
|
|
$
|
—
|
|
Engineering & Construction
|
87
|
|
|
63
|
|
||
Government Services
|
36
|
|
|
55
|
|
||
Other
|
—
|
|
|
—
|
|
||
Subtotal
|
123
|
|
|
118
|
|
||
Non-strategic Business
|
—
|
|
|
—
|
|
||
Total
|
$
|
123
|
|
|
$
|
118
|
|
|
|
|
|
||||
Total general and administrative expenses
|
$
|
(119
|
)
|
|
$
|
(178
|
)
|
|
|
|
|
||||
Asset impairment and restructuring charges
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
|
|
|
||||
Gain on disposition of assets
|
$
|
34
|
|
|
$
|
8
|
|
|
|
|
|
||||
Total operating income
|
$
|
235
|
|
|
$
|
45
|
|
|
December 31,
|
|
|
|
Change in
|
|
Changes in scope on existing contracts (a)
|
|
Net Workoff (b)
|
|
September 30,
|
||||||||||||
Dollars in millions
|
2014
|
|
New Awards
|
|
Policy (c)
|
|
|
|
2015
|
||||||||||||||
Technology & Consulting
|
$
|
400
|
|
|
$
|
231
|
|
|
—
|
|
|
$
|
23
|
|
|
$
|
(231
|
)
|
|
$
|
423
|
|
|
Engineering & Construction
|
7,788
|
|
|
1,335
|
|
|
—
|
|
|
(537
|
)
|
|
(2,846
|
)
|
|
5,740
|
|
||||||
Government Services
|
1,763
|
|
|
124
|
|
|
5,358
|
|
|
63
|
|
|
(525
|
)
|
|
6,783
|
|
||||||
Subtotal
|
9,951
|
|
|
1,690
|
|
|
5,358
|
|
|
(451
|
)
|
|
(3,602
|
)
|
|
12,946
|
|
||||||
Non-strategic Business
|
908
|
|
|
49
|
|
|
—
|
|
|
(66
|
)
|
|
(537
|
)
|
|
354
|
|
||||||
Total backlog
|
$
|
10,859
|
|
|
$
|
1,739
|
|
|
$
|
5,358
|
|
|
$
|
(517
|
)
|
|
$
|
(4,139
|
)
|
|
$
|
13,300
|
|
|
(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 and adjustments for changes in foreign exchange rates.
|
(b)
|
These amounts include the workoff of our projects as well as our proportionate share of the workoff of our unconsolidated joint ventures' projects.
|
(c)
|
Change in policy was implemented in the second quarter of 2015.
|
|
September 30,
|
|
December 31,
|
||||
Dollars in millions
|
2015
|
|
2014
|
||||
Domestic U.S. cash
|
$
|
304
|
|
|
$
|
200
|
|
International cash
|
395
|
|
|
690
|
|
||
Joint venture cash
|
69
|
|
|
80
|
|
||
Total
|
$
|
768
|
|
|
$
|
970
|
|
Cash flows activities summary
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||
Dollars in millions
|
2015
|
|
2014
|
||||
Cash flows provided by (used in) operating activities
|
$
|
(85
|
)
|
|
$
|
178
|
|
Cash flows provided by (used in) investing activities
|
48
|
|
|
(37
|
)
|
||
Cash flows used in financing activities
|
(128
|
)
|
|
(178
|
)
|
||
Effect of exchange rate changes on cash
|
(37
|
)
|
|
(21
|
)
|
||
Decrease in cash and equivalents
|
$
|
(202
|
)
|
|
$
|
(58
|
)
|
Purchase Period
|
Total Number
of Shares
Purchased
(1)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
|
|
Dollar Value of Maximum Number of Shares that May Yet Be
Purchased Under the Plan
|
||||||
July 1 – 31, 2015
|
2,501
|
|
|
$
|
18.78
|
|
|
—
|
|
|
$
|
252,684,816
|
|
August 3 – 31, 2015
|
254,695
|
|
|
$
|
16.93
|
|
|
250,000
|
|
|
$
|
248,455,904
|
|
September 1 – 30, 2015
|
672
|
|
|
$
|
16.94
|
|
|
—
|
|
|
$
|
248,455,904
|
|
|
(1)
|
Shares repurchased in August include 4,695 shares at an average price of
$17.48
acquired from employees in connection with the settlement of income tax and related benefit withholding obligations arising from issuance of share based equity awards under the KBR Stock and Incentive Plan. Total shares acquired from employees during the three months ended of September 30, 2015 was
7,868
shares at an average price of
$17.85
per share.
|
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)
|
|
|
|
10.1
|
|
Amended and Restated Revolving Credit Agreement dated as of September 25, 2015 among KBR, Inc., the Banks party thereto, Citibank, N.A., as Administrative Agent, Bank of America, N.A., ING Bank, N.V., Dublin Branch, BNP Paribas, and The Bank of Nova Scotia as Syndication Agents, Citibank, N.A., BNP Paribas, ING Bank, N.V., Dublin Branch, The Bank of Nova Scotia, Bank of America, N.A., and Compass Bank as initial Issuing Banks, and Citigroup Global Markets Inc., BNP Paribas Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Inc., ING Bank, N.V., Dublin Branch, and The Bank of Nova Scotia as Joint Lead Arrangers and Bookrunners (incorporated by reference to Exhibit 10.1 to KBR’s Form 8-K filed October 1, 2015; File No. 1-33146)
|
|
|
|
*10.2
|
|
Form of Amendment to Severance and Change in Control Agreement
|
|
|
|
*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
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations (Unaudited), (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited), (iii) Condensed Consolidated Balance Sheets (Unaudited), (iv) Condensed Consolidated Statements of Cash Flows (Unaudited), and (v) Notes to Condensed Consolidated Financial Statements (Unaudited)
|
*
|
Filed with this Form 10-Q
|
|
|
|
|
**
|
Furnished with this Form 10-Q
|
|
|
|
|
***
|
Interactive data files
|
|
KBR, INC.
|
|
|
|
|
|
|
|
|
/s/ Brian K. Ferraioli
|
|
/s/ Nelson E. Rowe
|
Brian K. Ferraioli
|
|
Nelson E. Rowe
|
Executive Vice President and Chief Financial Officer
|
|
Vice President and Chief Accounting Officer
|
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)
|
|
|
|
10.1
|
|
Amended and Restated Revolving Credit Agreement dated as of September 25, 2015 among KBR, Inc., the Banks party thereto, Citibank, N.A., as Administrative Agent, Bank of America, N.A., ING Bank, N.V., Dublin Branch, BNP Paribas, and The Bank of Nova Scotia as Syndication Agents, Citibank, N.A., BNP Paribas, ING Bank, N.V., Dublin Branch, The Bank of Nova Scotia, Bank of America, N.A., and Compass Bank as initial Issuing Banks, and Citigroup Global Markets Inc., BNP Paribas Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Inc., ING Bank, N.V., Dublin Branch, and The Bank of Nova Scotia as Joint Lead Arrangers and Bookrunners (incorporated by reference to Exhibit 10.1 to KBR’s Form 8-K filed October 1, 2015; File No. 1-33146)
|
|
|
|
*10.2
|
|
Form of Amendment to Severance and Change in Control Agreement
|
|
|
|
*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
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations (Unaudited), (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited), (iii) Condensed Consolidated Balance Sheets (Unaudited), (iv) Condensed Consolidated Statements of Cash Flows (Unaudited), and (v) Notes to Condensed Consolidated Financial Statements (Unaudited)
|
*
|
Filed with this Form 10-Q
|
|
|
|
|
**
|
Furnished with this Form 10-Q
|
|
|
|
|
***
|
Interactive data files
|
|
/s/ Stuart Bradie
|
Stuart Bradie
|
Chief Executive Officer
|
/s/ Brian K. Ferraioli
|
Brian K. Ferraioli
|
Chief Financial Officer
|
a)
|
the Form 10-Q of the Company for the period ended
September 30, 2015
, 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.
|
/s/ Stuart Bradie
|
Stuart Bradie
Chief Executive Officer
|
a)
|
the Form 10-Q of the Company for the period ended
September 30, 2015
, 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.
|
/s/ Brian K. Ferraioli
|
Brian K. Ferraioli
|
Chief Financial Officer
|