Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 22, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Entity Central Index Key | 0001357615 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-33146 | |
Entity Registrant Name | KBR, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-4536774 | |
Entity Address, Address Line One | 601 Jefferson Street, Suite 3400 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77002 | |
City Area Code | 713 | |
Local Phone Number | 753-2000 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | KBR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 142,296,911 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 1,537 | $ 1,340 |
Cost of revenues | (1,351) | (1,187) |
Gross profit | 186 | 153 |
Equity in earnings of unconsolidated affiliates | 1 | 0 |
Selling, general and administrative expenses | (97) | (78) |
Acquisition and integration related costs | 0 | (1) |
Impairment loss | (62) | 0 |
Restructuring charges and asset impairments | (116) | 0 |
Gain on disposition of assets and investments | 19 | 4 |
Operating (loss) income | (69) | 78 |
Interest expense | (23) | (25) |
Other non-operating income | 7 | 5 |
(Loss) income before income taxes and noncontrolling interests | (85) | 58 |
Benefit (provision) for income taxes | 1 | (16) |
Net (loss) income | (84) | 42 |
Net income attributable to noncontrolling interests | (20) | (2) |
Net (loss) income attributable to KBR | $ (104) | $ 40 |
Net (loss) income attributable to KBR per share: | ||
Basic (usd per share) | $ (0.73) | $ 0.28 |
Diluted (usd per share) | $ (0.73) | $ 0.28 |
Basic weighted average common shares outstanding (shares) | 142 | 141 |
Diluted weighted average common shares outstanding (shares) | 142 | 141 |
Cash dividends declared per share (usd per share) | $ 0.10 | $ 0.08 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (84) | $ 42 |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments | (82) | (1) |
Pension and post-retirement benefits | 6 | 4 |
Changes in fair value of derivatives | (22) | (2) |
Other comprehensive (loss) income | (98) | 1 |
Foreign currency translation adjustments | 0 | 0 |
Pension and post-retirement benefits | (1) | (1) |
Changes in fair value of derivatives | 5 | 0 |
Income tax (expense) benefit | 4 | (1) |
Total other comprehensive loss | (94) | 0 |
Comprehensive income | (178) | 42 |
Less: Comprehensive income attributable to noncontrolling interests | (20) | (2) |
Comprehensive income attributable to KBR | $ (198) | $ 40 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and equivalents | $ 566 | $ 712 |
Accounts receivable, net of allowance for credit losses of $9 and $14 | 1,085 | 938 |
Contract assets | 197 | 215 |
Other current assets | 134 | 146 |
Total current assets | 1,982 | 2,011 |
Claims and accounts receivable | 58 | 59 |
Property, plant, and equipment, net of accumulated depreciation of $388 and $386 (including net PPE of $26 and $29 owned by a variable interest entity) | 120 | 130 |
Operating lease right-of-use assets | 120 | 175 |
Goodwill | 1,210 | 1,265 |
Intangible assets, net of accumulated amortization of $190 and $184 | 466 | 495 |
Equity in and advances to unconsolidated affiliates | 759 | 850 |
Deferred income taxes | 249 | 236 |
Other assets | 140 | 143 |
Total assets | 5,104 | 5,364 |
Current liabilities: | ||
Accounts payable | 693 | 572 |
Contract liabilities | 415 | 484 |
Accrued salaries, wages and benefits | 238 | 209 |
Nonrecourse project debt | 11 | 11 |
Operating lease liabilities | 42 | 39 |
Other current liabilities | 228 | 186 |
Total current liabilities | 1,627 | 1,501 |
Pension obligations | 249 | 277 |
Employee compensation and benefits | 97 | 115 |
Income tax payable | 91 | 92 |
Deferred income taxes | 14 | 16 |
Nonrecourse project debt | 6 | 7 |
Long-term debt | 1,053 | 1,183 |
Operating lease and other related liabilities | 145 | 192 |
Other liabilities | 164 | 124 |
Total liabilities | 3,446 | 3,507 |
KBR shareholders’ equity: | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.001 par value 300,000,000 shares authorized, 178,879,099 and 178,330,201 shares issued, and 142,292,295 and 141,819,148 shares outstanding, respectively | 0 | 0 |
PIC | 2,210 | 2,206 |
Retained earnings | 1,320 | 1,441 |
Treasury stock, 36,586,804 shares and 36,511,053 shares, at cost, respectively | (819) | (817) |
AOCL | (1,081) | (987) |
Total KBR shareholders’ equity | 1,630 | 1,843 |
Noncontrolling interests | 28 | 14 |
Total shareholders’ equity | 1,658 | 1,857 |
Total liabilities and shareholders’ equity | $ 5,104 | $ 5,364 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9 | $ 14 |
Accumulated depreciation, PP&E | 388 | 386 |
PP&E owned by a VIE, net | 26 | 29 |
Accumulated amortization, Intangibles | $ 190 | $ 184 |
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 178,879,099 | 178,330,201 |
Common stock, shares outstanding (shares) | 142,292,295 | 141,819,148 |
Treasury stock, shares (shares) | 36,586,804 | 36,511,053 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | PIC | Retained Earnings | Treasury Stock | AOCL | NCI |
Beginning Balance at Dec. 31, 2018 | $ 1,718 | $ 2,190 | $ 1,235 | $ (817) | $ (910) | $ 20 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 3 | 3 | ||||
Common stock issued upon exercise of stock options | 1 | 1 | ||||
Dividends declared to shareholders | (11) | (11) | ||||
Repurchases of common stock | (3) | (3) | ||||
Issuance of ESPP shares | 2 | 2 | ||||
Net (loss) income | 42 | 40 | 2 | |||
Other comprehensive loss, net of tax | 0 | 0 | ||||
Ending Balance at Mar. 31, 2019 | 1,802 | 2,194 | 1,314 | (818) | (910) | 22 |
Beginning Balance at Dec. 31, 2019 | 1,857 | 2,206 | 1,441 | (817) | (987) | 14 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 2 | 2 | ||||
Common stock issued upon exercise of stock options | 2 | 2 | ||||
Dividends declared to shareholders | (14) | (14) | ||||
Repurchases of common stock | (4) | (4) | ||||
Issuance of ESPP shares | 2 | 2 | ||||
Other noncontrolling interests activity | (6) | (6) | ||||
Net (loss) income | (84) | (104) | 20 | |||
Other comprehensive loss, net of tax | (94) | (94) | ||||
Ending Balance at Mar. 31, 2020 | $ 1,658 | $ 2,210 | $ 1,320 | $ (819) | $ (1,081) | $ 28 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared to shareholders (usd per share) | $ 0.10 | $ 0.08 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (84) | $ 42 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 27 | 25 | |
Equity in earnings of unconsolidated affiliates | (1) | 0 | |
Deferred income tax expense | (10) | 3 | |
Gain on disposition of assets and investments | (19) | (4) | |
Goodwill impairment | 62 | 0 | |
Asset impairments | 64 | 0 | |
Other | 1 | (4) | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net of allowance for doubtful accounts | (169) | (48) | |
Contract assets | 15 | (1) | |
Accounts payable | 125 | 39 | |
Contract liabilities | (59) | 4 | |
Accrued salaries, wages and benefits | 31 | 9 | |
Changes in operating assets and liabilities | 58 | (17) | |
Total cash flows provided by operating activities | 41 | 48 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (2) | (2) | |
Investments in equity method joint ventures | 0 | (70) | |
Acquisition of businesses, net of cash acquired | (9) | 0 | |
Other | 0 | 3 | |
Total cash flows used in investing activities | (11) | (69) | |
Cash flows from financing activities: | |||
Borrowings on long-term debt | 113 | 0 | |
Payments on short-term and long-term borrowings | (252) | (2) | |
Debt issuance costs | (3) | 0 | |
Payments of dividends to shareholders | (11) | (11) | |
Net proceeds from issuance of common stock | 2 | 1 | |
Payments to reacquire common stock | (4) | (3) | |
Other | 0 | (2) | |
Total cash flows used in financing activities | (155) | (17) | |
Effect of exchange rate changes on cash | (21) | 7 | |
Decrease in cash and equivalents | (146) | (31) | |
Cash and equivalents at beginning of period | 712 | 739 | $ 739 |
Cash and equivalents at end of period | 566 | 708 | $ 712 |
Noncash financing activities | |||
Dividends declared | $ 14 | $ 11 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by general accepted accounting principles for annual financial statements and should be read together with our 2019 Annual Report on Form 10-K. The condensed consolidated financial statements include all normal and recurring adjustments necessary to present fairly our financial position as of March 31, 2020 and the results of our operations for the three months ended March 31, 2020 and 2019 , and our cash flows for the three months ended March 31, 2020 and 2019 . Our significant accounting policies are detailed in "Note 1 . Significant Accounting Policies" of our 2019 Annual Report on Form 10-K. We have evaluated all events and transactions occurring after the balance sheet date but before the financial statements were issued and have included the appropriate disclosures. Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of KBR, Inc. and the subsidiaries it controls, including VIEs where it is the primary beneficiary. We account for investments over which we have significant influence, but not a controlling financial interest, using the equity method of accounting. See Note 9 to our condensed consolidated financial statements for further discussion of our equity investments and VIEs. All material intercompany balances and transactions are eliminated in consolidation. Business Reorganization and Restructuring Activities The impact of the recent declines in oil prices, the COVID-19 pandemic and related economic, business and market disruptions is evolving rapidly and its future effects are uncertain. The actual impact of these recent developments on our business will depend on many factors, many of which are beyond management's control and knowledge. During the first quarter of 2020, our management initiated and approved a broad restructuring plan in response to the dislocation of the global energy market resulting from the recent decline in oil prices and the COVID-19 pandemic. The restructuring plan is designed to optimize costs and improve operational efficiencies. As a result of certain restructuring activities and the adverse market conditions, we also performed interim impairment tests of our goodwill, intangible assets, significant investments and various other assets resulting in impairment charges recognized for the three months ended March 31, 2020. See Note 7 "Restructuring Charges and Asset Impairments" and Note 8 "Goodwill and Goodwill Impairment" for further discussion. The restructuring plan included the reorganization of KBR's management structure primarily within our Energy Solutions business segment. The reorganization did not have an impact on our identified reportable segments. See Note 2 to our condensed consolidated financial statements for further discussion on our segments. Impact of Adoption of New Accounting Standards Financial Instruments - Credit Losses Effective January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, using the modified retrospective approach. This ASU replaces the incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset, including receivables, are recorded. The estimate of expected credit losses considers not only historical information, but also current and future economic conditions and events. As a result of the adoption, we recorded a cumulative effect adjustment to retained earnings of $3 million , net of tax of $1 million , on our opening condensed consolidated balance sheet as of January 1, 2020. See Note 19 "Financial Instruments and Risk Management" for further discussion related to credit losses. Other Standards Effective January 1, 2020, we adopted ASU No. 2018-18, Clarifying the Interaction Between Topic 808 and Topic 606 which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. The adoption of this standard did not have any impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities. This ASU amends the guidance for determining whether a decision-making fee is a variable interest. The adoption of this standard did not have any impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU requires customers in a hosting arrangement that is a service contract to capitalize certain implementation costs as if the arrangement was an internal-use software project. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This ASU amends ASC 820 to add, remove and modify certain disclosure requirements for fair value measurements. For example, public companies will now be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. As a result of the adoption of this standard, we used Step 1 to measure the goodwill impairment loss recognized during the first quarter of 2020 without proceeding to Step 2 of the goodwill impairment test as required under the previous standard. See Note 8 "Goodwill and Goodwill Impairment" for discussion of goodwill impairment recognized for the three months ended March 31, 2020. Additional Balance Sheet Information Other Current Liabilities The components of "Other current liabilities" on our condensed consolidated balance sheets as of March 31, 2020 , and December 31, 2019 , are presented below: March 31, December 31, Dollars in millions 2020 2019 Current maturities of long-term debt $ 12 $ 27 Reserve for estimated losses on uncompleted contracts 9 10 Retainage payable 46 41 Income taxes payable 26 25 Restructuring reserve 28 — Value-added tax payable 34 36 Dividend payable 14 11 Other miscellaneous liabilities 59 36 Total other current liabilities $ 228 $ 186 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We provide a wide range of professional services and the management of our business is heavily focused on major projects or programs within each of our reportable segments. At any given time, a relatively few number of projects, government programs and joint ventures represent a substantial part of our operations. Our reportable segments follow the same accounting policies as those described in Note 1 to our condensed consolidated financial statements. We are organized into three core business segments, Government Solutions, Technology Solutions, and Energy Solutions and two non-core business segments as described below: Government Solutions. Our GS business segment provides full life-cycle support solutions to defense, space, aviation and other programs and missions for military and other government agencies in the U.S., U.K. and Australia. KBR covers the full spectrum from research and development; through systems engineering, test and evaluation, systems integration and program management; to operations support, maintenance and field logistics. Our acquisitions as described in Note 4 to our condensed consolidated financial statements have been fully integrated with our existing operations. Technology Solutions. Our TS business segment combines KBR's proprietary technologies, equipment and catalyst supply and associated knowledge-based services into a global business for refining, petrochemicals, inorganic and specialty chemicals as well as gasification, syngas, ammonia, nitric acid and fertilizers. From early planning through scope definition, advanced technologies and project life-cycle support, our TS business segment works closely with customers to provide the optimal approach to maximize their return on investment. Energy Solutions. Our ES business segment provides full life-cycle support solutions across the upstream, midstream and downstream hydrocarbons markets. We provide comprehensive project and program delivery capabilities as well as engineering services front-end consulting and feasibility studies, sustaining capital construction, turnarounds, maintenance services, and more. Our key capabilities leverage our operational and technical excellence as a global provider of EPC and high-impact consulting and engineering services for onshore oil and gas; LNG/GTL; oil refining; petrochemicals; chemicals; fertilizers; offshore oil and gas; and floating solutions. Non-strategic Business. Our Non-strategic Business segment represents the operations or activities we determine are no longer core to our business strategy and that we have exited or intend to exit upon completion of existing contracts. All Non-strategic business projects are substantially complete. Current activities in this business segment primarily relate to final project close-out, negotiation and settlement of claims, joint venture liquidation and various other matters associated with these projects. Other. Our Other segment includes corporate expenses and selling, general and administrative expenses not allocated to the business segments above. Operations by Reportable Segment Three Months Ended March 31, 2020 2019 Dollars in millions Revenues: Government Solutions $ 955 $ 975 Technology Solutions 88 92 Energy Solutions 491 272 Subtotal 1,534 1,339 Non-strategic Business 3 1 Total revenues $ 1,537 $ 1,340 Gross profit (loss): Government Solutions $ 127 $ 90 Technology Solutions 29 27 Energy Solutions 34 36 Subtotal 190 153 Non-strategic Business (4 ) — Total gross profit $ 186 $ 153 Equity in earnings of unconsolidated affiliates 1 — Selling, general and administrative expenses (97 ) (78 ) Acquisition and integration related costs — (1 ) Goodwill impairment (62 ) — Restructuring charges and asset impairments (116 ) — Gain on disposition of assets 19 4 Operating (loss) income $ (69 ) $ 78 Interest expense $ (23 ) $ (25 ) Other non-operating income $ 7 $ 5 (Loss) income before income taxes and noncontrolling interests $ (85 ) $ 58 Changes in Project-related Estimates There are many factors that may affect the accuracy of our cost estimates and ultimately our future profitability. These include, but are not limited to, the availability and costs of resources (such as labor, materials and equipment), productivity and weather, and for unit rate and construction service contracts, the availability and detail of customer supplied engineering drawings. With a portfolio of more than one thousand contracts, we generally realize both lower and higher than expected margins on projects in any given period. We recognize revisions of revenues and costs in the period in which the revisions are known. This may result in the recognition of costs before the recognition of related revenue recovery, if any. Energy Solutions We recognized a favorable change of $16 million |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated Revenue We disaggregate our revenue from customers by geographic destination and contract type for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Government Solutions revenue earned from key U.S. government customers including U.S. DoD agencies and NASA was $727 million and $763 million for the three months ended March 31, 2020 and 2019 , respectively. Government Solutions revenue earned from non-U.S. government customers including the U.K. MoD, the Australian Defence Force and others was $228 million and $212 million for the three months ended March 31, 2020 and 2019 , respectively. Revenue by geographic destination was as follows: Three Months Ended March 31, 2020 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 513 $ 8 $ 238 $ 3 $ 762 Middle East 187 2 62 — 251 Europe 190 8 51 — 249 Australia 31 — 56 — 87 Canada — — 25 — 25 Africa 19 1 22 — 42 Asia — 67 1 — 68 Other countries 15 2 36 — 53 Total net revenue $ 955 $ 88 $ 491 $ 3 $ 1,537 Three Months Ended March 31, 2019 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 521 $ 5 $ 101 $ 1 $ 628 Middle East 198 5 44 — 247 Europe 199 14 41 — 254 Australia 21 — 53 — 74 Canada — — 2 — 2 Africa 22 5 18 — 45 Asia — 61 2 — 63 Other countries 14 2 11 — 27 Total net revenue $ 975 $ 92 $ 272 $ 1 $ 1,340 Many of our contracts contain both fixed price and cost reimbursable components. We define contract type based on the component that represents the majority of the contract. Revenue by contract type was as follows: Three Months Ended March 31, 2020 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 288 $ 86 $ 95 $ — $ 469 Cost Reimbursable 667 2 396 3 1,068 Total net revenue $ 955 $ 88 $ 491 $ 3 $ 1,537 Three Months Ended March 31, 2019 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 272 $ 91 $ 41 $ 1 $ 405 Cost Reimbursable 703 1 231 — 935 Total net revenue $ 975 $ 92 $ 272 $ 1 $ 1,340 Remaining Performance Obligations We recognized revenue from performance obligations satisfied in previous periods of $28 million , and $8 million for the three months ended March 31, 2020 and 2019 , respectively. On March 31, 2020 , we had $11.0 billion of transaction price allocated to remaining performance obligations. We expect to recognize approximately 33% of our remaining performance obligations as revenue within one year , 35% in years two through five , and 32% thereafter. Revenue associated with our remaining performance obligations to be recognized beyond one year includes performance obligations related to the Aspire Defence and Fasttrax projects, which have contract terms extending through 2041 and 2023, respectively. The balance of remaining performance obligations does not include variable consideration that was determined to be constrained as of March 31, 2020 . Contract Assets and Contract Liabilities We recognized revenue of $181 million for the three months ended March 31, 2020 , that was previously included in the contract liability balance at December 31, 2019 . Accounts Receivable March 31, December 31, Dollars in millions 2020 2019 Unbilled $ 493 $ 308 Trade & other 592 630 Accounts receivable $ 1,085 $ 938 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Scientific Management Associates (Operations) Pty Ltd On March 6, 2020 , we acquired certain assets and assumed certain liabilities related to the government defence business of Scientific Management Associates (Operations) Pty Ltd ("SMA"). The acquired business of SMA provides technical training services to the Royal Australian Navy and is reported within our GS business segment. We accounted for this transaction using the acquisition method under ASC 805, Business Combinations. The agreed-upon purchase price for the acquisition was $13 million , less $4 million of hold-backs to be settled and other adjustments resulting in net cash consideration paid of $9 million . We recognized goodwill of $11 million |
Claims and Accounts Receivable
Claims and Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Claims and Accounts Receivable | Claims and Accounts Receivable Our claims and accounts receivable balance not expected to be collected within the next 12 months was $58 million and $59 million as of March 31, 2020 and December 31, 2019 , respectively. Claims and accounts receivable primarily reflect claims filed with the U.S. government related to payments not yet received for costs incurred under various U.S. government cost reimbursable contracts within our GS business segment. These claims relate to disputed costs or contracts where our costs have exceeded the U.S. government's funded value on the task order. Included in the amount is $26 million and $28 million as of March 31, 2020 , and December 31, 2019 , respectively, related to Form 1s issued by the U.S. government questioning or objecting to costs billed to them. See Note 13 of our condensed consolidated financial statements for additional information. The amount also includes $32 million and $31 million as of March 31, 2020 and December 31, 2019 |
Unapproved Change Orders, and C
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors | 3 Months Ended |
Mar. 31, 2020 | |
Contractors [Abstract] | |
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors | Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors The amounts of unapproved change orders, and claims against clients and estimated recoveries of claims against suppliers and subcontractors included in determining the profit or loss on contracts are as follows: Dollars in millions 2020 2019 Amounts included in project estimates-at-completion at January 1, $ 978 $ 973 Increase in project estimates 2 11 Approved change orders (6 ) — Foreign currency effect (102 ) 5 Amounts included in project estimates-at-completion at March 31, $ 872 $ 989 Amounts recognized over time based on progress at March 31, $ 872 $ 965 As of March 31, 2020 and 2019 , the predominant component of the change orders, customer claims and estimated recoveries of claims against suppliers and subcontractors above relates to our 30% proportionate share of unapproved change orders and claims associated with the Ichthys LNG Project discussed below. KBR intends to vigorously pursue approval and collection of amounts still due under all unapproved change orders and claims, against the clients and recoveries from subcontractors. Further, there are additional claims that KBR believes it is entitled to recover from its client and from subcontractors which have been excluded from estimated revenues and profits at completion as appropriate under U.S. GAAP. These commercial matters may not be resolved in the near term. Our current estimates for the above unapproved change orders, client claims and estimated recoveries of claims against suppliers and subcontractors may prove inaccurate and any material change could have a material adverse effect on our results of operations, financial position and cash flows. Ichthys LNG Project Project Status We have a 30% ownership interest in the JKC joint venture, which has contracted to perform the engineering, procurement, supply, construction and commissioning of onshore LNG facilities for a client in Darwin, Australia (the "Ichthys LNG Project"). The contract between JKC and its client is a hybrid contract containing both cost-reimbursable and fixed-price (including unit-rate) scopes. The construction and commissioning of the Ichthys LNG Project is complete and all performance tests have been successfully performed. The entire facility, including two LNG liquefaction trains, cryogenic tanks and the combined cycle power generation facility, has been handed over to the client and is producing LNG. JKC is in the process of executing project close-out activities and continues to negotiate the various legal and commercial disputes with the client, suppliers and other third parties as further described below. Unapproved Change Orders and Claims Against Client Under the cost-reimbursable scope of the contract with the client, JKC has entered into commercial contracts with multiple suppliers and subcontractors to execute various scopes of work on the project. Certain of these suppliers and subcontractors have made contract claims against JKC for recovery of costs and extensions of time to progress the works under the scope of their respective contracts due to a variety of issues related to alleged changes to the scope of work, delays and lower than planned subcontractor productivity. In addition, JKC has incurred costs related to scope increases and other factors, and has made claims to its client for matters for which JKC believes it is entitled to reimbursement under the contract. JKC believes any amounts paid or payable to the suppliers and subcontractors in settlement of their contract claims related to the cost-reimbursable scope are an adjustment to the contract price, and accordingly JKC has made claims for contract price adjustments under the cost-reimbursable scope of the contract between JKC and its client. However, the client disputed some of these contract price adjustments and subsequently withheld certain payments. In order to facilitate the continuation of work under the contract while JKC worked to resolve this dispute, the client agreed to a contractual mechanism (“Funding Deed”) in 2016 providing funding in the form of an interim contract price adjustment to JKC and consented to settlement of subcontractor claims as of that date related to the cost-reimbursable scope. While the client has reserved its contractual rights under this funding mechanism, settlement funds (representing the interim contract price adjustment) have been paid by the client. JKC in turn settled these subcontractor claims which have been funded through the Funding Deed by the client. If JKC's claims against its client which were funded under the Funding Deed remain unresolved by December 31, 2020, JKC will be required to refund sums funded by the client under the terms of the Funding Deed. We, along with our joint venture partners, are jointly and severally liable to the client for any amounts required to be refunded. Our proportionate share of the total amount of the contract price adjustments under the Funding Deed included in the unapproved change orders and claims related to JKC discussed above was $140 million and $158 million as of March 31, 2020 and December 31, 2019 , respectively. In September and October 2017, additional settlements pertaining to suppliers and subcontractors under the cost-reimbursable scope of the contract were presented to the client. The client consented to these settlements and paid for them but reserved its contractual rights. In reliance, JKC in turn settled these claims with the associated suppliers and subcontractors. The formal contract price adjustments for these settlements remained pending at March 31, 2020 . However, unlike amounts funded under the Funding Deed, there is no requirement to refund these amounts to the client by a certain date. In October 2018, JKC received a favorable ruling from an arbitration tribunal related to the Funding Deeds. The ruling determined a contract interpretation in JKC's favor, to the effect that delay and disruption costs payable to subcontractors under the cost-reimbursable scope of the EPC contract are for the client's account and are reimbursable to JKC. JKC contends this ruling resolves the reimbursability of the subcontractor settlement sums under the Funding Deed and additional settlements made in September and October 2017. Pursuant to this decision, JKC has undertaken steps for a formal contract adjustment to the cost reimbursable scope of the contract for these settlement claims which are included in the recognized unapproved change orders as of March 31, 2020 . Our view is that the arbitration ruling resolves our obligations under the Funding Deeds and settlements with reimbursable subcontractors. However, the client does not agree with the impact of the arbitration award and, accordingly, we have initiated a new proceeding to obtain further determination from the arbitration tribunal. There has been deterioration of paint and insulation on certain exterior areas of the plant. The client previously requested and funded paint remediation for a portion of the facilities. JKC’s profit estimate at completion includes a portion of revenues and costs for these remediation activities. Revenue for the client-funded amounts are included in the table above. In the first quarter of 2019, the client demanded repayment of the amounts previously funded to JKC. JKC is disputing the client's demand. The client has also requested a proposal to remediate any remaining non-conforming paint and insulation, but JKC and its client have not resolved the nature and extent of the non-conformances, the method and degree of remediation that was and is required, or who is responsible. We believe the remaining remediation costs could be material given the plant is now operating and there will be several operating constraints on any such works. In addition, JKC has started proceedings against the paint manufacturer and initiated claims against the subcontractors. JKC has also made demands on insurance policies in respect of these matters. Proceedings and claims against the paint manufacturer, certain subcontractors and insurance policies are ongoing. Combined Cycle Power Plant Pursuant to JKC's fixed-price scope of its contract with its client, JKC awarded a fixed-price EPC contract to a subcontractor for the design, construction and commissioning of the Combined Cycle Power Plant (the "Power Plant"). The subcontractor was a consortium consisting of General Electric and GE Electrical International Inc. and a joint venture between UGL Infrastructure Pty Limited and CH2M Hill (collectively, the "Consortium"). On January 25, 2017, JKC received a Notice of Termination from the Consortium, and the Consortium ceased work on the Power Plant and abandoned the construction site. JKC believes the Consortium materially breached its subcontract and repudiated its obligation to complete the Power Plant, plus undertook actions making it more difficult and more costly for the works to be completed by others after the Consortium abandoned the site. Subsequently, the Consortium filed a request for arbitration with the ICC asserting that JKC repudiated the contract. The Consortium also sought an order that the Consortium validly terminated the subcontract. JKC has responded to this request, denying JKC committed any breach of its subcontract with the Consortium and restated its claim that the Consortium breached and repudiated its subcontract with JKC and is furthermore liable to JKC for all costs to complete the Power Plant. In March 2017, JKC prevailed in a legal action against the Consortium requiring the return of materials, drawings and tools following their unauthorized removal from the site by the Consortium. After taking over the work, JKC discovered incomplete and defective engineering designs, defective workmanship on the site, missing, underreported and defective materials and the improper termination of key vendors/suppliers. JKC's investigations also indicate that progress of the work claimed by the Consortium was over-reported. JKC has evaluated the cost to complete the Consortium's work, which significantly exceeds the awarded fixed-price subcontract value. JKC's cost to complete the Power Plant includes re-design efforts, additional materials and significant re-work. These costs represent estimated recoveries of claims against the Consortium and have been included in JKC's estimate to complete the Consortium's remaining obligations. JKC is pursuing recourse against the Consortium to recover all of the costs to complete the Power Plant, plus the additional interest, and/or general damages by all means inclusive of calling bank guarantees provided by the Consortium partners. In April 2018, JKC prevailed in a legal action to call bank guarantees (bonds) and received funds totaling $52 million . Each of the Consortium partners has joint and several liability with respect to all obligations under the subcontract. JKC intends to pursue recovery of all additional amounts due from the Consortium via various legal remedies available to JKC. Costs incurred to complete the Power Plant that have been determined to be probable of recovery from the Consortium under U.S. GAAP have been included as a reduction of cost in our estimate of profit at completion. The estimated recoveries exclude interest, liquidated damages and other related costs which JKC intends to pursue recovery from the Consortium. Amounts expected to be recovered from the Consortium are included in the table above. As of March 31, 2020 , JKC's claims against the Consortium were approximately $1.8 billion for recovery of JKC's costs. Hearings on the power plant arbitration are scheduled for November 2020 and March 2021 (the "Arbitration"). The previous hearing dates were vacated due to the COVID-19 outbreak. The current dates may continue to be impacted by the COVID-19 pandemic. JKC also initiated suit against the parent companies of the Consortium members to seek a declaration that the parents either had to perform and finish the work or pay for the completion of the power plant based on their payment and performance guarantees. In May 2019, the court ruled against the declaration and JKC's appeal is pending from the court. To the extent JKC is unsuccessful in prevailing in the Arbitration or the Consortium members are unable to satisfy their financial obligations in the event of a decision favorable to JKC, we would be responsible for our pro-rata portion of unrecovered costs from the Consortium. This could have a material adverse impact on the profit at completion of the overall contract and thus on our consolidated statements of operations and financial position. Ichthys Project Funding As a result of the ongoing disputes with the client and pursuit of recoveries against the Consortium through the Arbitration, we have funded our proportionate share of the working capital requirements of JKC to complete the project. We have made investment contributions to JKC of approximately $484 million on an inception-to-date basis. If we experience unfavorable outcomes associated with the various legal and commercial disputes, our total investment contributions could increase which could have a material adverse effect on our financial position and cash flows. Further, if our joint venture partner(s) in JKC do not fulfill their responsibilities under the JKC JV agreement or subcontract, we could be exposed to additional funding requirements as a result of the nature of the JKC JV agreement. As of March 31, 2020 , we had $164 million in letters of credit outstanding in support of performance and warranty guarantees provided to the client. The performance and warranty letters of credit have been extended to February 2021 to allow for the various disputes to be resolved. Other Matters JKC is entitled to an amount of profit and overhead (“TRC Fee”) which is a fixed percentage of the target reimbursable costs ("TRC") under the reimbursable component of the contract which was to be agreed by JKC and its client. At the time of the contract, JKC and its client agreed to postpone the fixing of the TRC until after a specific milestone in the project had been achieved. Although the milestone was achieved, JKC and its client have been unable to reach agreement on the TRC. This matter was taken to arbitration in 2017. A decision was issued in December 2017 concluding that the TRC should be determined based on project estimate information available at April 2014. JKC has included an estimate for the TRC Fee in its determination of profit at completion at March 31, 2020 , based on the contract provisions and the decision from the December 2017 arbitration. JKC has submitted the revised estimate of the TRC Fee to the client. The parties have not agreed to the revised estimate, and JKC has started an additional arbitration on this dispute. In late 2019, the International Chamber of Commerce consolidated the Funding Deed arbitration, TRC arbitration and certain other claims asserted by JKC along with claims asserted by its client. A hearing date for the Funding Deed arbitration has been schedule for September 2020. The client will file a detailed statement of its claim in December 2020. The arbitration panel has been constituted but a hearing date has not been scheduled. All of the Ichthys LNG project commercial matters are complex and involve multiple interests, including the client, suppliers and other third parties. Ultimate resolution may not occur in the near term. Our current estimates for resolving these matters may prove inaccurate and, if so, any material change could have a material adverse effect on our results of operations, financial position and cash flows. See Note 9 to our condensed consolidated financial statements for further discussion regarding our equity method investment in JKC. |
Restructuring Charges and Asset
Restructuring Charges and Asset Impairments | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges and Asset Impairments | Restructuring Charges During the first quarter of 2020 our management initiated and approved a broad restructuring plan in response to the recent, steep decline in oil prices which, coupled with significant adverse impacts of the COVID-19 pandemic on economic and market conditions, has resulted in dislocation of the global energy market. The restructuring plan is designed to refine our market focus, optimize costs and improve operational efficiencies. The restructuring activities and related costs approved under the plan primarily relate to rationalization of real estate and overhead across various geographies in our ES and Other segments. As part of the restructuring plan, t otal restructuring charges of approximately $47 million were recognized in "Restructuring charges and asset impairments" in our condensed consolidated statements of operations for the three months ended March 31, 2020 of which $23 million relates to our ES business segment and $24 million relates to our Other segment representing corporate and other overhead expenses. Total restructuring charges included severance of approximately $24 million and real estate lease abandonments of approximately $23 million associated with office facilities located in the U.S. and U.K. These lease-related restructuring charges represent accrued estimated non-lease components and other operating expenses associated with the fully abandoned office space. In estimating the fair value of the lease-related restructuring charges, we utilized a discounted cash flow model with Level 3 inputs including discount rates based on our incremental borrowing rate and other inputs including management assumptions regarding future estimated operating costs, office space utilization, and inflation over the remaining lease terms. We expect the restructuring activities will be substantially completed in 2020. Additional restructuring activities could be identified and approved as p art of the plan. The restructuring liability at March 31, 2020 was $46 million of which $28 million is included in "Other current liabilities" and $18 million is included in "Other liabilities." A reconciliation of the beginning and ending restructuring liability balances is provided in the following table. Dollars in millions Severance Lease Abandonment Total Balance as of January 1, 2020 $ — $ — $ — Restructuring charges accrued during the period 24 23 47 Cash payments / settlements during the period (1 ) — (1 ) Currency translation and other adjustments — — — Balance as of March 31, 2020 $ 23 — $ 23 $ 46 Asset Impairments As a result of the significant adverse economic and market conditions associated with the dislocation of the global energy market and COVID-19 pandemic, the significant drop in the price of our common shares, and the resulting restructuring plans initiated during the first quarter of 2020, we performed interim impairment tests of our long-lived assets including goodwill, intangible assets and equity investments as well as leased right-of-use and related assets. See Note 8 "Goodwill and Goodwill Impairment" for further discussion of goodwill impairment recognized in the first quarter of 2020. We determined the fair value of our long-lived assets based primarily on discounted cash flow analyses, and in the case of our equity investments, we also used a market earnings multiple approach. These determinations included significant management judgment, including short-term and long-term forecasts of operating performance, discount rates based on our weighted average cost of capital, revenue growth rates, profitability margins, capital expenditures, the timing of future cash flows based on an eventual recovery of the oil and gas industry, and in the case of long-lived assets, the remaining useful life and service potential of the asset. These impairment assessments incorporate inherent uncertainties, including projected commodity pricing, supply and demand for our services and future market conditions, which are difficult to predict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the estimated assumptions utilized in our forecasts. Leased office facilities and related assets. Management's restructuring plan included the rationalization of the certain leased real estate primarily in the U.S. and U.K. As a result, we began evaluating excess office space apart from office space we will continue to utilize. We made decisions to market certain excess office space for sublease and the remaining excess office space was abandoned along with any related leasehold improvements, furniture and fixtures. The abandoned leased facilities and related assets will not provide any substantial future economic benefit and were impaired accordingly during the quarter. We recognized lease right-of-use asset impairments of approximately $28 million and impairments of leasehold improvements, furniture and fixtures of approximately $7 million included in "Restructuring charges and asset impairments" in our condensed consolidated statements of operations for the three months ended March 31, 2020. In determining these impairments, we utilized a discounted cash flow model with Level 3 inputs including discount rates based on our incremental borrowing rate and other inputs including management assumptions regarding future cash flows over the remaining estimated useful life of the asset, office space utilization including sublease assumptions. Trade name intangibles. We recognized an impairment loss on indefinite-lived intangible assets of approximately $11 million associated with certain trade names acquired through previous business combinations. In connection with the energy market decline, management assessed the fair value of trade names utilized by certain operations within the ES business segment, concluded that they were substantially impaired and decided to cease use of those trade names. The trade names will provide no benefit to future periods and accordingly, the carrying values of these intangibles were impaired accordingly. In determination of this impairment, we estimated fair value using a relief-from-royalty income approach which utilized Level 3 fair value inputs including management estimates of contract performance, hypothetical royalty rates and our weighted average cost of capital. The loss was included in "Restructuring charges and asset impairments" in our condensed consolidated statement of operations for the three months ended March 31, 2020. Equity method investments. We evaluated significant investments and determined that two equity method investments were other-than-temporarily impaired as of March 31, 2020 including a 15% interest in a project joint venture located in the Middle East and a 50% interest in a joint venture in Latin America. We recognized total impairment losses of approximately $18 million on these investments included in "Restructuring charges and asset impairments" for the three months ended March 31, 2020, of which $13 million related to the Middle East joint venture project in our ES business segment. The fair value of this investment was determined using a blended income-based and market-based approach utilizing Level 2 fair value inputs including significant management assumptions such as projected commodity prices, operating margins, cash flows and weighted average cost of capital. We recognized an impairment loss of $5 million on the joint venture in Latin America that is reported in our Non-strategic Business segment. The impairment loss includes the write-off of a shareholder loan to the joint venture and funding of costs to dispose of the underlying joint venture assets. |
Goodwill and Goodwill Impairmen
Goodwill and Goodwill Impairment | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Goodwill Impairment | Goodwill and Goodwill Impairment In connection with our business reorganization and restructuring activities during the first quarter of 2020, we changed our internal management reporting structure which resulted in changes to the underlying reporting units within our ES business segment. Additionally, given the significant adverse economic and market conditions associated with the dislocation of the global energy market and COVID-19 pandemic as well as the significant decline in the price of our common shares during the first quarter of 2020, we performed an interim impairment test of goodwill resulting in goodwill impairmen t of $62 million for the three months ended March 31, 2020. The goodwill impairment was associated with a reporting unit in our ES business segment. We determined that none of the goodwill associated with reporting units in our TS and GS business segments was impaired. For reporting units in our ES business segment, fair value was determined using an income approach utilizing discounted cash flow models with estimated cash flows based on internal forecasts of revenues and expenses over a specified period plus a terminal value. For all other reporting units, fair values were determined using a blended approach including market earnings multiples and discounted cash flow models. Under the market approach, we estimated fair value by applying earnings and revenue market multiples to a reporting unit’s operating performance for the trailing twelve-month period. The income approach estimates fair value by discounting each reporting unit’s estimated future cash flows using a weighted-average cost of capital that reflects current market conditions and the risk profile of the reporting unit. To arrive at our future cash flows, we used estimates of economic and market assumptions, including growth rates in revenues, costs, estimates of future expected changes in operating margins, tax rates and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. The table below summarizes changes in the carrying amount of goodwill by business segment. Dollars in millions Government Solutions Technology Solutions Energy Solutions Total Balance as of January 1, 2020 $ 978 $ 50 $ 237 $ 1,265 Goodwill acquired during the period 11 — — 11 Impairment loss — — (62 ) (62 ) Foreign currency translation (3 ) — (1 ) (4 ) Balance as of March 31, 2020 $ 986 $ 50 $ 174 $ 1,210 |
Equity Method Investments and V
Equity Method Investments and Variable Interest Entities | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Variable Interest Entities | Equity Method Investments and Variable Interest Entities We conduct some of our operations through joint ventures, which operate through partnerships, corporations and undivided interests and other business forms and are principally accounted for using the equity method of accounting. Additionally, the majority of our joint ventures are VIEs. The following table presents a rollforward of our equity in and advances to unconsolidated affiliates: Three Months Ended March 31, Year Ended December 31, 2020 2019 Dollars in millions Beginning balance at January 1, $ 850 $ 724 Cumulative effect of change in accounting policy (a) — 29 Adjusted balance at January 1, 850 753 Equity in earnings of unconsolidated affiliates 1 35 Distributions of earnings of unconsolidated affiliates (4 ) (69 ) Payments from (advances to) unconsolidated affiliates, net (7 ) (10 ) Investments (b) — 146 Impairment of equity method investments (c) (16 ) — Foreign currency translation adjustments (61 ) (7 ) Other (4 ) 2 Ending balance $ 759 $ 850 (a) At January 1, 2019, we recognized a cumulative effect adjustment of $29 million as a result of the adoption of ASC 606 by our remaining unconsolidated project joint ventures. (b) Investments include $141 million in funding contributions to JKC for the period ended December 31, 2019 . (c) During the three months ended March 31, 2020, we recognized an impairment of $13 million associated with our investment in a joint venture project located in the Middle East and a $3 million related to a joint venture in Latin America. See Note 7 "Restructuring Charges and Asset Impairments" for further discussion. Unconsolidated Variable Interest Entities For the VIEs in which we participate, our maximum exposure to loss consists of our equity investment in the VIE and any amounts owed to us for services we may have provided to the VIE, reduced by any unearned revenues on the project. Our maximum exposure to loss may also include our obligation to fund our proportionate share of any future losses incurred. As of March 31, 2020 , we do not project any losses related to these joint venture projects. Where our performance and financial obligations are joint and several to the client with our joint venture partners, we may be further exposed to losses above our ownership interest in the joint venture. The following summarizes the total assets and total liabilities as reflected in our condensed consolidated balance sheets related to our unconsolidated VIEs in which we have a significant variable interest but are not the primary beneficiary. March 31, 2020 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 12 $ 10 Aspire Defence Limited $ 62 $ 5 JKC joint venture (Ichthys LNG project) $ 489 $ 30 U.K. Road project joint ventures $ 58 $ 1 Middle East Petroleum Corporation (EBIC ammonia project) $ 33 $ 1 December 31, 2019 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 14 $ 10 Aspire Defence Limited $ 67 $ 5 JKC joint venture (Ichthys LNG project) $ 546 $ 29 U.K. Road project joint ventures $ 40 $ 21 Middle East Petroleum Corporation (EBIC ammonia project) $ 47 $ 1 Related Party Transactions We often provide engineering, construction management and other subcontractor services to our unconsolidated joint ventures and our revenues include amounts related to these services. For the three months ended March 31, 2020 and 2019 , our revenues included $147 million and $175 million , respectively, related to the services we provided primarily to the Aspire Defence Limited joint venture within our GS business segment and the JKC joint venture within our ES business segment. Amounts included in our condensed consolidated balance sheets related to services we provided to our unconsolidated joint ventures as of March 31, 2020 , and December 31, 2019 are as follows: March 31, December 31, Dollars in millions 2020 2019 Accounts receivable, net of allowance for credit losses $ 53 $ 49 Contract assets (a) $ 2 $ 2 Contract liabilities (a) $ 33 $ 33 (a) Reflects contract assets and contract liabilities primarily related to joint ventures within our ES business segment. Consolidated Variable Interest Entities We consolidate VIEs if we determine we are the primary beneficiary of the project entity because we control the activities that most significantly impact the economic performance of the entity. The following is a summary of the significant VIEs where we are the primary beneficiary: Dollars in millions March 31, 2020 Total Assets Total Liabilities Fasttrax Limited (Fasttrax project) $ 46 $ 23 Aspire Defence subcontracting entities (Aspire Defence project) $ 493 $ 245 Dollars in millions December 31, 2019 Total Assets Total Liabilities Fasttrax Limited (Fasttrax project) $ 45 $ 24 Aspire Defence subcontracting entities (Aspire Defence project) $ 530 $ 283 |
Retirement Benefits
Retirement Benefits | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost related to pension benefits for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 Dollars in millions United States Int’l United States Int’l Components of net periodic benefit cost Interest cost $ 1 $ 10 $ 1 $ 13 Expected return on plan assets (1 ) (15 ) (1 ) (20 ) Recognized actuarial loss — 6 — 4 Net periodic benefit cost $ — $ 1 $ — $ (3 ) For the three months ended March 31, 2020 , we have contributed approximately $11 million of the $46 million we expect to contribute to our plans in 2020 |
Debt And Other Credit Facilitie
Debt And Other Credit Facilities | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Other Credit Facilities | Debt and Other Credit Facilities Our outstanding debt consisted of the following at the dates indicated: Dollars in millions March 31, 2020 December 31, 2019 Term Loan A $ 267 $ 176 Term Loan B 520 756 Convertible Notes 350 350 Unamortized debt issuance costs - Term Loan A (4 ) (4 ) Unamortized debt issuance costs and discount - Term Loan B (18 ) (15 ) Unamortized debt issuance costs and discount - Convertible Notes (50 ) (53 ) Total long-term debt 1,065 1,210 Less: current portion 12 27 Total long-term debt, net of current portion $ 1,053 $ 1,183 Senior Credit Facility On February 7, 2020, we amended our Senior Credit Facility to, among other things, reduce the applicable margins and commitment fees associated with the various borrowings under the facility. Simultaneous with the amendment, we used proceeds from the new facility and cash on hand to refinance our outstanding borrowings resulting in an amended senior secured credit facility ("Senior Credit Facility") that consists of a $500 million revolving credit facility ("Revolver"), a $500 million PLOC, a $275 million Loan A, ("Term Loan A") and a $520 million Term Loan B ("Term Loan B"). In addition, the amendment extended the maturity dates with respect to the Revolver, PLOC and the Term Loan A to February 2025 and Term Loan B to February 2027, and amended certain other provisions including the financial covenants. The interest rates with respect to the Revolver and Term Loan A are based on, at the Company's option, adjusted LIBOR plus an additional margin or base rate plus additional margin. The interest rate with respect to the Term Loan B is LIBOR plus 2.75% . The Senior Credit Facility provides for fees on letters of credit issued under the PLOC at varying rates, as shown below. Additionally, there is a commitment fee with respect to the Revolver and PLOC. The details of the applicable margins and commitment fees under the amended Senior Credit Facility are based on the Company's consolidated leverage ratio as follows: Revolver and Term Loan A Consolidated Leverage Ratio LIBOR Margin Base Rate Margin Performance Letter of Credit Fee Commitment Fee Greater than or equal to 3.25 to 1.00 2.25 % 1.25 % 1.35 % 0.35 % Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 2.00 % 1.00 % 1.20 % 0.30 % Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 1.75 % 0.75 % 1.05 % 0.25 % Less than 1.25 to 1.00 1.50 % 0.50 % 0.90 % 0.20 % The Term Loan A provides for quarterly principal payments of 0.625% of the aggregate principal amount commencing with the fiscal quarter ending June 30, 2020, increasing to 1.25% starting with the quarter ending June 30, 2022. The Term Loan B provides for quarterly principal payments of 0.25% of the initial aggregate principal amounts commencing with the fiscal quarter ending June 30, 2020. The Senior Credit Facility contains financial maintenance covenants of a maximum consolidated leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the Senior Credit Facility). Our consolidated leverage ratio as of the last day of any fiscal quarter may not exceed 4.25 to 1 through 2021, reducing to 4.0 0 to 1 in 2022 and 3.75 to 1 in 2023. Our consolidated interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2020 and thereafter, may not be less than 3.00 to 1. As of March 31, 2020 , we were in compliance with our financial covenants. Convertible Senior Notes On November 15, 2018 , we issued and sold $350 million of 2.50% Convertible Senior Notes due 2023 (the "Convertible Notes") pursuant to an indenture (the "Indenture") between us and Citibank, N.A., as trustee (the "Trustee"). The Convertible Notes are senior unsecured obligations. The Convertible Notes bear interest at 2.50% per year and interest is payable on May 1 and November 1 of each year. The Convertible Notes mature on November 1, 2023 and may not be redeemed by us prior to maturity. As of March 31, 2020 , the "if-converted" value of the Convertible Notes exceeded the $350 million principal amount by approximately $7 million . The net carrying value of the equity component related to the Convertible Notes was $57 million as of March 31, 2020 and December 31, 2019 . The amount of interest cost recognized relating to the contractual interest coupon was $2 million and relating to the amortization of the discount and debt issuance costs was $3 million , for the three months ended March 31, 2020 and 2019 . The effective interest rate on the liability component was 6.50% for the three months ended March 31, 2020 and 2019 . Letters of credit, surety bonds and guarantees In connection with certain projects, we are required to provide letters of credit, surety bonds or guarantees to our customers. Letters of credit are provided to certain customers and counterparties in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers and future funding commitments. We have $1 billion in a committed line of credit under the Senior Credit Facility, comprised of the $500 million Revolver and $500 million PLOC. Additionally, we have approximately $365 million of uncommitted lines of credit to support the issuance of letters of credit. Surety bonds are also posted under the terms of certain contracts to guarantee our performance. As of March 31, 2020 , with respect to our $500 million Revolver, we have no outstanding revolver borrowings and have issued $25 million of letters of credit. With respect to our PLOC, we have $100 million of outstanding letters of credit. With respect to our $365 million of uncommitted lines of credit, we have utilized $196 million for letters of credit as of March 31, 2020 . The total remaining capacity of these committed and uncommitted lines of credit is approximately $1.0 billion . Of the letters of credit outstanding under the Senior Credit Facility, none have expiry dates beyond the maturity date of the Senior Credit Facility. Of the total letters of credit outstanding, $168 million relate to our joint venture operations where the letters of credit are posted using our capacity to support our pro-rata share of obligations under various contracts executed by joint ventures of which we are a member. Nonrecourse Project Debt Fasttrax Limited, a consolidated joint venture in which we indirectly own a 50% equity interest with an unrelated partner, was awarded a concession contract in 2001 with the U.K. MoD to provide a Heavy Equipment Transporter Service to the British Army. Fasttrax Limited operates and maintains 91 HETs for a term of 22 years . The purchase of the HETs by the joint venture was financed through two series of bonds secured by the assets of Fasttrax Limited and subordinated debt from the joint venture partners. The secured bonds are an obligation of Fasttrax Limited and are not a debt obligation of KBR as they are nonrecourse to the joint venture partners. Accordingly, in the event of a default on the notes, the lenders may only look to the assets of Fasttrax Limited for repayment. The secured bonds were issued in two classes consisting of Class A 3.5% Index Linked Bonds in the amount of £56.0 million and Class B 5.9% Fixed Rate Bonds in the amount of £20.7 million . Semi-annual payments on both classes of bonds will continue through maturity in 2021. The subordinated notes payable to each of the partners initially bear interest at 11.25% increasing to 16.00% over the term of the notes until maturity in 2025. For financial reporting purposes, only our partner's portion of the subordinated notes appears in the condensed consolidated financial statements. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate was approximately 1% and 27% for the three months ended March 31, 2020 and 2019 , respectively. The effective tax rate for the three months ended March 31, 2020 , as compared to the U.S. statutory rate of 21% , was primarily impacted by several impairment and restructuring charges incurred. Excluding the tax impact of the impairment and restructuring charges, our tax rate would be 26% for the three months ended March 31, 2020 . Our estimated annual effective rate for 2020 is 26% excluding the effects of discrete items. Our estimated annual effective rate is subject to change based on the actual jurisdictions where our 2020 earnings are generated. The valuation allowance for deferred tax assets as of March 31, 2020 and December 31, 2019 was $198 million and $200 million , respectively. The changes in the valuation allowance were decreases of $2 million and $3 million for the three months ended March 31, 2020 and 2019 , respectively, due to our ability to utilize additional valued foreign tax credits during these periods resulting from changes in the amount and character of forecasted income. The valuation allowance is primarily related to foreign tax credit carryforwards and foreign and state net operating loss carryforwards that, in the judgment of management, are not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income, in the appropriate character and source, during the periods in which those temporary differences become deductible or within the remaining carryforward period. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making this assessment. Our ability to utilize the unreserved foreign tax credit carryforwards is based on our ability to generate income from foreign sources of approximately $757 million prior to their expiration whereas our ability to utilize other net deferred tax assets exclusive of those associated with indefinite-lived intangible assets is based on our ability to generate U.S. forecasted taxable income of approximately $514 million . Changes in our forecasted taxable income, in the appropriate character and source, as well as jurisdiction, could affect the ultimate realization of deferred tax assets. The provision for uncertain tax positions included in "Other liabilities" and "Deferred income taxes" on our condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019 , was $92 million and $97 million , respectively. The decrease in the reserve for uncertain tax positions primarily relates to the expiration of statute of limitations during the period ending March 31, 2020 . |
U.S. Government Matters
U.S. Government Matters | 3 Months Ended |
Mar. 31, 2020 | |
United States Government Contract Work [Abstract] | |
U.S. Government Matters | U.S. Government Matters We provide services to various U.S. governmental agencies, including the U.S. DoD, NASA, and the Department of State. We may have disagreements or experience performance issues on our U.S. government contracts. When performance issues arise under any of these contracts, the U.S. government retains the right to pursue various remedies, including challenges to expenditures, suspension of payments, fines and suspensions or debarment from future business with the U.S. government. The negotiation, administration and settlement of our contracts are subject to audit by the DCAA. The DCAA serves in an advisory role to the DCMA which is responsible for the administration of the majority of our contracts. The scope of these audits include, among other things, the validity of direct and indirect incurred costs, provisional approval of annual billing rates, approval of annual overhead rates, compliance with the FAR and CAS, compliance with certain unique contract clauses and audits of certain aspects of our internal control systems. Based on the information received to date, we do not believe any completed or ongoing government audits will have a material adverse impact on our results of operations, financial position or cash flows. Legacy U.S. Government Matters Between 2002 and 2011, we provided significant support to the U.S. Army and other U.S. government agencies in support of the war in Iraq under the LogCAP III contract. We have been in the process of closing out the LogCAP III contract since 2011, and we expect the contract closeout process to continue for at least another year. As a result of our work under LogCAP III, there are claims and disputes pending between us and the U.S. government which need to be resolved in order to close the contract. The contract closeout process includes resolving objections raised by the U.S. government through a billing dispute process referred to as Form 1s and MFRs. We continue to work with the U.S. government to resolve these issues and are engaged in efforts to reach mutually acceptable resolution of these outstanding matters. However, for certain of these matters, we have filed claims with the ASBCA or the COFC. We also have matters related to ongoing litigation or investigations involving U.S. government contracts. We anticipate billing additional labor, vendor resolution and litigation costs as we resolve the open matters in the future. Form 1s The U.S. government has issued and has outstanding Form 1s questioning $78 million of billed costs as of March 31, 2020 . They had previously paid us $52 million of the questioned costs related to our services on the LogCAP III contract. The remaining balance of $26 million as of March 31, 2020 is included on our condensed balance sheets in “Claims and accounts receivable." In addition, we have withheld $26 million from our subcontractors at March 31, 2020 related to these questioned costs, which is included in "Other current liabilities" on our condensed balance sheets. While we continue to believe that the amounts we have invoiced the U.S. government are in compliance with our contract terms and that recovery is probable, we also continue to evaluate our ability to recover these amounts as new information becomes known. As is common in the industry, negotiating and resolving these matters is often an involved and lengthy process, which sometimes necessitates the filing of claims or other legal action as discussed above. Concurrent with our continued negotiations with the U.S. government, we await the rulings on the filed claims. We are unable to predict when the rulings will be issued or when the matters will be settled or resolved with the U.S. government. As a result of the Form 1s, and claims discussed above as well as open audits, we have accrued a reserve for unallowable costs of $41 million as of March 31, 2020 and December 31, 2019 . The balance at March 31, 2020 , is recorded in "Contract liabilities" and "Other liabilities" in the amounts of $25 million and $16 million , respectively. The balance at December 31, 2019 , is recorded in "Contract liabilities" and "Other liabilities" in the amounts of $26 million and $15 million , respectively. Investigations, Qui Tams and Litigation The following matters relate to ongoing litigation or federal investigations involving U.S. government contracts. Many of these matters involve allegations of violations of the FCA, which prohibits in general terms fraudulent billings to the U.S. government. Suits brought by private individuals are called "qui tams." We believe the costs of litigation and any damages that may be awarded in the FKTC matters described below are billable under the LogCAP III. All costs billed under LogCAP III are subject to audit by the DCAA for reasonableness. First Kuwaiti Trading Company arbitration. In April 2008, FKTC, one of our LogCAP III subcontractors providing housing containers, filed for arbitration with the American Arbitration Association all its claims under various LogCAP III subcontracts. After complete hearings on all claims, the arbitration panel awarded FKTC $17 million plus interest for claims involving damages on lost or unreturned vehicles. In addition, we determined that we owe FKTC $32 million in connection with other subcontracts provided we are reimbursed for these same costs by the U.S. government. We previously paid FKTC $19 million and the remaining $30 million is recorded in "Other current liabilities" on our condensed consolidated balance sheets. As of March 31, 2020 , we believe our recorded accruals and the pay-when-paid terms in our contract with FKTC are adequate if we are unable to favorably resolve our claims and disputes against the U.S. government. See "KBR Contract Claim on FKTC containers" below. Howard qui tam. In March 2011, Geoffrey Howard and Zella Hemphill filed a complaint in the U.S. District Court for the Central District of Illinois alleging that KBR mischarged the government $628 million for unnecessary materials and equipment. In October 2014, the DOJ declined to intervene and the case was partially unsealed. Depositions of some DCMA and KBR personnel have taken place and more were expected to occur in early 2020 but have been postponed due to COVID-19. The court had initially set a deadline of July 19, 2020 as the cutoff for all fact discovery and depositions which will also be extended due to COVID-19 travel restrictions and related delays. We believe the allegations of fraud by the relators are without merit and, as of March 31, 2020 , no amounts have been accrued. DOJ False Claims Act complaint - Iraq Subcontractor. In January 2014, the DOJ filed a complaint in the U.S. District Court for the Central District of Illinois against KBR and two former KBR subcontractors, including FKTC, alleging that three former KBR employees were offered and accepted kickbacks from these subcontractors in exchange for favorable treatment in the award and performance of subcontracts to be awarded during the course of KBR's performance of the LogCAP III contract in Iraq. The complaint alleges that as a result of the kickbacks, KBR submitted invoices with inflated or unjustified subcontract prices, resulting in alleged violations of the FCA and the Anti-Kickback Act. The DOJ's investigation dates back to 2004. We self-reported most of the violations and tendered credits to the U.S. government as appropriate. On May 22, 2014, FKTC filed a motion to dismiss, which the U.S. government opposed. Following the submission of our answer in April 2014, the U.S. government was granted a Motion to Strike certain affirmative defenses in March 2015. We do not believe this limits KBR's ability to fully defend all allegations in this matter. Discovery for this complaint is now complete. On March 30, 2020, the Court granted KBR’s motion to transfer the case to the Southern District of Texas. As of March 31, 2020 , we have accrued our best estimate of probable loss related to an unfavorable settlement of this matter in "Other liabilities" on our condensed consolidated balance sheets. Other matters KBR Contract Claim on FKTC containers. KBR previously filed a claim before the ASBCA to recover the costs paid to FKTC to settle its requests for equitable adjustment. The DCMA had disallowed the majority of those costs. Those contract claims were stayed in 2013 at the request of the DOJ so that they could pursue the FCA case referenced above. Those claims were reinstated in 2016. We tried our contract appeal in September 2017. In November 2018, we received an unfavorable ruling from the ASBCA disallowing all of our costs paid to FKTC. KBR's motion for reconsideration by a senior panel of judges at the ASBCA was denied. KBR filed its brief on appeal in September 2019. Oral arguments are scheduled to occur on May 5, 2020. As of March 31, 2020 |
Other Commitments And Contingen
Other Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments and Contingencies | Other Commitments and Contingencies Unaoil Investigation. The DOJ, SEC, and the SFO are conducting investigations of Unaoil, a Monaco based company, in relation to international projects involving several global companies, including KBR, whose interactions with Unaoil are a subject of those investigations. The investigations are focused on compliance with the U.S. FCPA. KBR believes it is cooperating with the DOJ, SEC, and the SFO in their investigations, including through the voluntary submission of information and responding to formal document requests. Chadian Employee Class Action. In May 2018, former employees of our former Chadian subsidiary, Subsahara Services, Inc. (SSI), filed a class action suit claiming unpaid damages arising from the ESSO Chad Development Project for Exxon Mobil Corporation (Exxon) dating back to the early 2000s. Exxon is also named as a defendant in the case. The SSI employees previously filed two class action cases in or around 2005 and 2006 for alleged unpaid overtime and bonuses. The Chadian Labour Court ruled in favor of the SSI employees for unpaid overtime resulting in a settlement of approximately $25 million which was reimbursed by Exxon under its contract with SSI. The second case for alleged unpaid bonuses was ultimately dismissed by the Supreme Court of Chad. The current case claims $122 million in unpaid bonuses characterized as damages rather than employee bonuses to avoid the previous Supreme Court dismissal and a 5-year statute of limitations on wage-related claims. SSI’s initial defense was filed and a hearing was held in December 2018. A merits hearing was held in February 2019. In March 2019, the Labour Court issued a decision awarding the plaintiffs approximately $34 million including a $2 million provisional award. Exxon and SSI have appealed the award and requested suspension of the provisional award which was approved on April 2, 2019. Exxon and SSI filed a submission to the Court of Appeal on June 21, 2019 and filed briefs at a hearing on February 28, 2020. The plaintiffs failed to file a response on March 13, 2020 and a hearing was scheduled for April 17, 2020 but has been postponed indefinitely due to COVID-19 travel restrictions. At this time we do not believe a risk of material loss is probable related to this matter, and therefore we have not accrued any loss provisions. SSI is no longer an existing entity in Chad or the United States. Further, we believe any amounts ultimately paid to the former employees related to this adverse ruling would be reimbursable by Exxon based on the applicable contract. North West Rail Link Project. We participate in an unincorporated joint venture with two partners to provide engineering and design services in relation to the operations, trains and systems of a metro rail project in Sydney, Australia. The project commenced in 2014 and during its execution encountered delays and disputes resulting in claims and breach notices submitted to the joint venture by the client. Since November 2018, the client has submitted multiple claims alleging breach of contract and breach of duty by the joint venture in its execution of the services, claiming losses and damages of up to approximately $300 million Australian dollars. We currently believe the gross of amount of the claims significantly exceeds the client’s entitlement as well as the joint venture’s limits of liability under the contract and that the claims will be covered by project-specific professional indemnity insurance subject to deductibles. The joint venture and its client are discussing potential resolution of the claims although no specific course of action has been agreed. In August 2019, the client advised that it has filed legal proceedings in the Supreme Court of New South Wales to preserve its position with regards to statute of limitations. The joint venture was served a notice of proceedings in November 2019 and an initial hearing was expected to occur in April 2020 but was rescheduled to August 2020. KBR has a 33% participation interest in the joint venture and the partners have joint and several liability with respect to all obligations under the contract. As of March 31, 2020 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We enter into lease arrangements primarily for real estate, project equipment, transportation and information technology assets in the normal course of our business operations. Real estate leases accounted for approximately 81% of our lease obligations at March 31, 2020 . An arrangement is determined to be a lease at inception if it conveys the right to control the use of identified property and equipment for a period of time in exchange for consideration. We have elected not to recognize an ROU asset and lease liability for leases with an initial term of 12 months or less. Many of our equipment leases, primarily associated with the performance of projects for U.S. government customers, include one or more renewal option periods, with renewal terms that can extend the lease term in one year increments. The exercise of these lease renewal options is at our sole discretion and is generally dependent on the period of project performance, or extension thereof, determined by our customers. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purpose of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an index or rate. These variable lease payments are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts, are excluded from the ROU asset and lease liability, and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. We exclude these non-lease components in calculating the ROU asset and lease liability for real estate leases and expense them as incurred. For all other types of leases, non-lease components are included in calculating our ROU assets and lease liabilities. The components of lease costs for the three months ended March 31, 2020 and 2019 were as follows: March 31, March 31, Dollars in millions 2020 2019 Operating lease cost $ 13 14 Short-term lease cost 37 20 Total lease cost $ 50 $ 34 Operating lease cost for the three months ended March 31, 2020 includes operating lease ROU asset amortization of $9 million and other noncash operating lease costs of $4 million related to the accretion of operating lease liabilities and straight-line lease accounting. Total short-term lease commitments as of March 31, 2020 was approximately $90 million . Additional information related to leases was as follows: March 31, Dollars in millions 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 15 Right-of-use assets obtained in exchange for new operating lease liabilities $ 5 Weighted-average remaining lease term-operating (in years) 7.0 Weighted-average discount rate-operating leases 7.4 % The following is a maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of March 31, 2020 : Year Dollars in millions 2020 2021 2022 2023 2024 Thereafter Total Future payments - operating leases $ 38 $ 42 $ 33 $ 28 $ 19 $ 86 $ 246 Dollars in millions Operating Leases Total future payments $ 246 Less imputed interest (59 ) Present value of future lease payments $ 187 Less current portion of lease obligations (42 ) Noncurrent portion of lease obligations $ 145 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in AOCL, net of tax, by component Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2019 $ (315 ) $ (654 ) $ (18 ) $ (987 ) Other comprehensive income adjustments before reclassifications (70 ) — (23 ) (93 ) Amounts reclassified from AOCL (12 ) 5 6 (1 ) Net other comprehensive income (loss) (82 ) 5 (17 ) (94 ) Balance at March 31, 2020 $ (397 ) $ (649 ) $ (35 ) $ (1,081 ) Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2018 $ (304 ) $ (592 ) $ (14 ) $ (910 ) Other comprehensive income adjustments before reclassifications (1 ) — (3 ) (4 ) Amounts reclassified from AOCL — 3 1 4 Net other comprehensive income (loss) (1 ) 3 (2 ) — Balance at March 31, 2019 $ (305 ) $ (589 ) $ (16 ) $ (910 ) Reclassifications out of AOCL, net of tax, by component Three Months Ended March 31, Dollars in millions 2020 2019 Affected line item on the Condensed Consolidated Statements of Operations Accumulated foreign currency adjustments Reclassification of foreign currency adjustments $ 12 $ — Net income attributable to noncontrolling interests and Gain on disposition of assets and investments Tax benefit — — Provision for income taxes Net accumulated foreign currency $ 12 $ — Net of tax Accumulated pension liability adjustments Amortization of actuarial loss (a) $ (6 ) $ (4 ) See (a) below Tax benefit 1 1 Provision for income taxes Net pension and post-retirement benefits $ (5 ) $ (3 ) Net of tax Changes in fair value for derivatives Foreign currency hedge and interest rate swap settlements $ (6 ) $ (1 ) Other non-operating income Tax benefit — — Provision for income taxes Net changes in fair value of derivatives $ (6 ) $ (1 ) Net of tax (a) This item is included in the computation of net periodic pension cost. See Note 10 to our condensed consolidated financial statements for further discussion. |
Share Repurchases
Share Repurchases | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Share Repurchases | Share Repurchases Authorized Share Repurchase Program On February 25, 2014, our Board of Directors authorized a plan to repurchase up to $350 million of our outstanding shares of common stock, which replaced and terminated the August 26, 2011 share repurchase program. As of December 31, 2019, $160 million remained available under this authorization. On February 19, 2020, our Board of Directors authorized an increase of approximately $190 million of share repurchase, returning the authorization level to $350 million . The authorization does not obligate us to acquire any particular number of shares of common stock and may be commenced, suspended or discontinued without prior notice. The share repurchases are intended to be funded through our current and future cash and the authorization does not have an expiration date. Withheld to Cover Program We have in place a "withheld to cover" program, which allows us to withhold common shares from employees in connection with the settlement of income tax and related benefit withholding obligations arising from the issuance of share-based equity awards under the KBR, Inc. 2006 Stock and Incentive Plan. The table below presents information on our share repurchases activity under these programs: Three Months Ended March 31, 2020 Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 149,124 $ 25.96 $ 4 Three Months Ended March 31, 2019 Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 160,635 $ 19.77 $ 3 |
Income (loss) per Share
Income (loss) per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Income (loss) per Share | Income (loss) per Share Basic income (loss) per share is based upon the weighted average number of common shares outstanding during the period. Dilutive income (loss) per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the treasury stock method. A reconciliation of the number of shares used for the basic and diluted income per share calculations is as follows: Three Months Ended March 31, Shares in millions 2020 2019 Basic weighted average common shares outstanding 142 141 Stock options, restricted shares, and convertible debt — — Diluted weighted average common shares outstanding 142 141 For purposes of applying the two-class method in computing income (loss) per share, there was no net earnings allocated to participating securities for the three months ended March 31, 2020 . Net earnings allocated to participating securities for the three months ended March 31, 2019 was $0.3 million , or a negligible amount per share. The diluted income (loss) per share calculation did not include 1.1 million and 1.7 million antidilutive weighted average shares for the three months ended March 31, 2020 and 2019 . |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Risk Management | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Risk Management | Fair Value of Financial Instruments and Risk Management Fair value measurements. The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable, as reflected in the condensed consolidated balance sheets, approximates fair value due to the short-term maturities of these financial instruments. The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in our condensed consolidated balance sheets are provided in the following table. March 31, 2020 December 31, 2019 Dollars in millions Carrying Value Fair Value Carrying Value Fair Value Liabilities (including current maturities): Term Loan A Level 2 $ 267 $ 267 $ 176 $ 176 Term Loan B Level 2 520 468 756 764 Convertible notes Level 2 350 366 350 466 Nonrecourse project debt Level 2 17 18 18 18 See Note 11 for further discussion of our term loans, convertibles notes, and nonrecourse project debt. The following disclosures for foreign currency risk and interest rate risk includes the fair value hierarchy levels for our assets and liabilities that are measured at fair value on a recurring basis. Foreign currency risk. We conduct business globally in numerous currencies and are therefore exposed to foreign currency fluctuations. We may use derivative instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. We do not use derivative instruments for speculative trading purposes. We generally utilize foreign exchange forwards and currency option contracts to hedge exposures associated with forecasted future cash flows and to hedge exposures present on our balance sheet. As of March 31, 2020 , the gross notional value of our foreign currency exchange forwards and option contracts used to hedge balance sheet exposures was $42 million , all of which had durations of 20 days or less. We also had approximately $2 million (gross notional value) of cash flow hedges which had durations of 4 months or less. The cash flow hedges are primarily related to the British Pound. The fair value of our balance sheet and cash flow hedges included in "Other current assets" and "Other current liabilities" on our condensed consolidated balance sheets was immaterial at March 31, 2020 , and December 31, 2019 . The fair values of these derivatives are considered Level 2 under ASC 820, Fair Value Measurement, as they are based on quoted prices directly observable in active markets. The following table summarizes the recognized changes in fair value of our balance sheet hedges offset by remeasurement of balance sheet positions. These amounts are recognized in our condensed consolidated statements of operations for the periods presented. The net of our changes in fair value of hedges and the remeasurement of our assets and liabilities is included in "Other non-operating income (expense)" on our condensed consolidated statements of operations. Three Months Ended March 31, Gains (losses) dollars in millions 2020 2019 Balance Sheet Hedges - Fair Value $ 1 $ — Balance Sheet Position - Remeasurement 6 3 Net $ 7 $ 3 Interest rate risk. The Company uses interest rate swaps to reduce interest rate risk and to manage net interest expense. On October 10, 2018 we entered into interest rate swap agreements with a notional value of $500 million to manage the interest rate exposure on our variable rate loans. By entering into swap agreements, the Company converted the LIBOR rate based liability into a fixed rate liability for a four year period. Under the swap agreements, the Company receives one month LIBOR rate and pays monthly a fixed rate of 3.055% for the term of the swaps. The interest rate swaps are reported at fair value using Level 2 inputs. The fair value of the interest rate swaps at March 31, 2020 , was $41 million of which $14 million is included in "Other current liabilities" and $27 million is included "Other liabilities." The unrealized net losses on these interest rate swaps was $41 million and included in "AOCL" as of March 31, 2020 . The fair value of the interest rate swaps at December 31, 2019 was $21 million of which $8 million is included in "Other current liabilities" and $13 million is included in "Other liabilities." The unrealized net losses on these interest rate swaps was $21 million and included in "AOCL" as of December 31, 2019 . Credit Losses. We are exposed to credit losses primarily through our full life-cycle professional services, project delivery, and technologies offered in our ES and TS business segments. We do not consider our GS business segment to be at risk for credit losses as substantially all services within this segment are provided to the U.S., U.K. and Australian governments and related agencies. We determined our allowance for credit losses by using a loss-rate methodology, in which we assessed our historical write-off of receivables against our total receivables and contract asset balances over several years. From this historical loss-rate approach, we also considered the current and forecasted economic conditions expected to be in place over the life of our receivables and contract assets. We monitor our ongoing credit exposure through an active review of our customers’ receivables balance against contract terms and due dates. Our activities include timely performance of our accounts receivable reconciliations, assessment of our aging of receivables, dispute resolution and payment confirmation. We will also monitor any change in our historical write-off of receivables utilized in our loss-rate methodology and assess for any forecasted change in market conditions to adjust our credit reserve. At March 31, 2020 , our ES and TS business segments that are subject to credit risk, reported approximately $566 million of financial assets consisting primarily of accounts receivable and contract assets, net of allowances of $9 million . Although there has been an economic disruption resulting from the impact of COVID-19 and the decline in oil prices during the quarter, changes in our credit loss reserve was not material for the three months ended March 31, 2020 . Based on an aging analysis at March 31, 2020 , 90% of our accounts receivable related to these segments were outstanding less than 90 days. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New accounting pronouncements requiring implementation in future periods are discussed below. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU amends ASC 715 to add, remove and clarify certain disclosure requirements related to defined benefit pension and other post-retirement plans. ASU No. 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We do not expect the adoption of ASU No. 2018-14 to have any impact on our financial position, results of operations or cash flows. In March 2020, the FASB issues ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of the Interbank Offered Rate Transition on Financial Reporting to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued if certain criteria are met. Each of the expedients can be applied as of January 1, 2020 through December 31, 2022. For eligible hedging relationships existing as of January 1, 2020 and prospectively, we are currently in the process of assessing the optional expedient allowing an entity to assume that the hedged forecasted transaction in a cash flow hedge is probable of occurring. As reference rate reform is still an ongoing process, we will continue to evaluate the timing and potential impact of adoption for other optional expedients when deemed necessary. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of KBR, Inc. and the subsidiaries it controls, including VIEs where it is the primary beneficiary. We account for investments over which we have significant influence, but not a controlling financial interest, using the equity method of accounting. See Note 9 to our condensed consolidated financial statements for further discussion of our equity investments and VIEs. All material intercompany balances and transactions are eliminated in consolidation. |
Impact of Adoption of New Accounting Standards | Impact of Adoption of New Accounting Standards Financial Instruments - Credit Losses Effective January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, using the modified retrospective approach. This ASU replaces the incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset, including receivables, are recorded. The estimate of expected credit losses considers not only historical information, but also current and future economic conditions and events. As a result of the adoption, we recorded a cumulative effect adjustment to retained earnings of $3 million , net of tax of $1 million , on our opening condensed consolidated balance sheet as of January 1, 2020. See Note 19 "Financial Instruments and Risk Management" for further discussion related to credit losses. Other Standards Effective January 1, 2020, we adopted ASU No. 2018-18, Clarifying the Interaction Between Topic 808 and Topic 606 which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. The adoption of this standard did not have any impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities. This ASU amends the guidance for determining whether a decision-making fee is a variable interest. The adoption of this standard did not have any impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU requires customers in a hosting arrangement that is a service contract to capitalize certain implementation costs as if the arrangement was an internal-use software project. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. Effective January 1, 2020, we adopted ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This ASU amends ASC 820 to add, remove and modify certain disclosure requirements for fair value measurements. For example, public companies will now be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of other current liabilities on our condensed consolidated balance sheets | The components of "Other current liabilities" on our condensed consolidated balance sheets as of March 31, 2020 , and December 31, 2019 , are presented below: March 31, December 31, Dollars in millions 2020 2019 Current maturities of long-term debt $ 12 $ 27 Reserve for estimated losses on uncompleted contracts 9 10 Retainage payable 46 41 Income taxes payable 26 25 Restructuring reserve 28 — Value-added tax payable 34 36 Dividend payable 14 11 Other miscellaneous liabilities 59 36 Total other current liabilities $ 228 $ 186 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of operations by reportable segment | Operations by Reportable Segment Three Months Ended March 31, 2020 2019 Dollars in millions Revenues: Government Solutions $ 955 $ 975 Technology Solutions 88 92 Energy Solutions 491 272 Subtotal 1,534 1,339 Non-strategic Business 3 1 Total revenues $ 1,537 $ 1,340 Gross profit (loss): Government Solutions $ 127 $ 90 Technology Solutions 29 27 Energy Solutions 34 36 Subtotal 190 153 Non-strategic Business (4 ) — Total gross profit $ 186 $ 153 Equity in earnings of unconsolidated affiliates 1 — Selling, general and administrative expenses (97 ) (78 ) Acquisition and integration related costs — (1 ) Goodwill impairment (62 ) — Restructuring charges and asset impairments (116 ) — Gain on disposition of assets 19 4 Operating (loss) income $ (69 ) $ 78 Interest expense $ (23 ) $ (25 ) Other non-operating income $ 7 $ 5 (Loss) income before income taxes and noncontrolling interests $ (85 ) $ 58 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Revenue by geographic destination was as follows: Three Months Ended March 31, 2020 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 513 $ 8 $ 238 $ 3 $ 762 Middle East 187 2 62 — 251 Europe 190 8 51 — 249 Australia 31 — 56 — 87 Canada — — 25 — 25 Africa 19 1 22 — 42 Asia — 67 1 — 68 Other countries 15 2 36 — 53 Total net revenue $ 955 $ 88 $ 491 $ 3 $ 1,537 Three Months Ended March 31, 2019 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 521 $ 5 $ 101 $ 1 $ 628 Middle East 198 5 44 — 247 Europe 199 14 41 — 254 Australia 21 — 53 — 74 Canada — — 2 — 2 Africa 22 5 18 — 45 Asia — 61 2 — 63 Other countries 14 2 11 — 27 Total net revenue $ 975 $ 92 $ 272 $ 1 $ 1,340 Many of our contracts contain both fixed price and cost reimbursable components. We define contract type based on the component that represents the majority of the contract. Revenue by contract type was as follows: Three Months Ended March 31, 2020 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 288 $ 86 $ 95 $ — $ 469 Cost Reimbursable 667 2 396 3 1,068 Total net revenue $ 955 $ 88 $ 491 $ 3 $ 1,537 Three Months Ended March 31, 2019 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 272 $ 91 $ 41 $ 1 $ 405 Cost Reimbursable 703 1 231 — 935 Total net revenue $ 975 $ 92 $ 272 $ 1 $ 1,340 |
Components of our accounts receivable, net of allowance for doubtful accounts balance | March 31, December 31, Dollars in millions 2020 2019 Unbilled $ 493 $ 308 Trade & other 592 630 Accounts receivable $ 1,085 $ 938 |
Unapproved Change Orders, and_2
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Contractors [Abstract] | |
Schedule of unapproved claims and change orders | The amounts of unapproved change orders, and claims against clients and estimated recoveries of claims against suppliers and subcontractors included in determining the profit or loss on contracts are as follows: Dollars in millions 2020 2019 Amounts included in project estimates-at-completion at January 1, $ 978 $ 973 Increase in project estimates 2 11 Approved change orders (6 ) — Foreign currency effect (102 ) 5 Amounts included in project estimates-at-completion at March 31, $ 872 $ 989 Amounts recognized over time based on progress at March 31, $ 872 $ 965 |
Restructuring Charges and Ass_2
Restructuring Charges and Asset Impairments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Reconciliation of Beginning and Ending Restructuring Liability | A reconciliation of the beginning and ending restructuring liability balances is provided in the following table. Dollars in millions Severance Lease Abandonment Total Balance as of January 1, 2020 $ — $ — $ — Restructuring charges accrued during the period 24 23 47 Cash payments / settlements during the period (1 ) — (1 ) Currency translation and other adjustments — — — Balance as of March 31, 2020 $ 23 — $ 23 $ 46 |
Goodwill and Goodwill Impairm_2
Goodwill and Goodwill Impairment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in the Carrying Amount of Goodwill | The table below summarizes changes in the carrying amount of goodwill by business segment. Dollars in millions Government Solutions Technology Solutions Energy Solutions Total Balance as of January 1, 2020 $ 978 $ 50 $ 237 $ 1,265 Goodwill acquired during the period 11 — — 11 Impairment loss — — (62 ) (62 ) Foreign currency translation (3 ) — (1 ) (4 ) Balance as of March 31, 2020 $ 986 $ 50 $ 174 $ 1,210 |
Equity Method Investments and_2
Equity Method Investments and Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity in earnings of unconsolidated affiliates | The following table presents a rollforward of our equity in and advances to unconsolidated affiliates: Three Months Ended March 31, Year Ended December 31, 2020 2019 Dollars in millions Beginning balance at January 1, $ 850 $ 724 Cumulative effect of change in accounting policy (a) — 29 Adjusted balance at January 1, 850 753 Equity in earnings of unconsolidated affiliates 1 35 Distributions of earnings of unconsolidated affiliates (4 ) (69 ) Payments from (advances to) unconsolidated affiliates, net (7 ) (10 ) Investments (b) — 146 Impairment of equity method investments (c) (16 ) — Foreign currency translation adjustments (61 ) (7 ) Other (4 ) 2 Ending balance $ 759 $ 850 (a) At January 1, 2019, we recognized a cumulative effect adjustment of $29 million as a result of the adoption of ASC 606 by our remaining unconsolidated project joint ventures. (b) Investments include $141 million in funding contributions to JKC for the period ended December 31, 2019 . (c) During the three months ended March 31, 2020, we recognized an impairment of $13 million associated with our investment in a joint venture project located in the Middle East and a $3 million related to a joint venture in Latin America. See Note 7 "Restructuring Charges and Asset Impairments" for further discussion. |
Consolidated summarized financial information | The following summarizes the total assets and total liabilities as reflected in our condensed consolidated balance sheets related to our unconsolidated VIEs in which we have a significant variable interest but are not the primary beneficiary. March 31, 2020 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 12 $ 10 Aspire Defence Limited $ 62 $ 5 JKC joint venture (Ichthys LNG project) $ 489 $ 30 U.K. Road project joint ventures $ 58 $ 1 Middle East Petroleum Corporation (EBIC ammonia project) $ 33 $ 1 December 31, 2019 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 14 $ 10 Aspire Defence Limited $ 67 $ 5 JKC joint venture (Ichthys LNG project) $ 546 $ 29 U.K. Road project joint ventures $ 40 $ 21 Middle East Petroleum Corporation (EBIC ammonia project) $ 47 $ 1 |
Schedule of services provided to unconsolidated JV's | Amounts included in our condensed consolidated balance sheets related to services we provided to our unconsolidated joint ventures as of March 31, 2020 , and December 31, 2019 are as follows: March 31, December 31, Dollars in millions 2020 2019 Accounts receivable, net of allowance for credit losses $ 53 $ 49 Contract assets (a) $ 2 $ 2 Contract liabilities (a) $ 33 $ 33 (a) Reflects contract assets and contract liabilities primarily related to joint ventures within our ES business segment. |
Summary of the significant VIEs | The following is a summary of the significant VIEs where we are the primary beneficiary: Dollars in millions March 31, 2020 Total Assets Total Liabilities Fasttrax Limited (Fasttrax project) $ 46 $ 23 Aspire Defence subcontracting entities (Aspire Defence project) $ 493 $ 245 Dollars in millions December 31, 2019 Total Assets Total Liabilities Fasttrax Limited (Fasttrax project) $ 45 $ 24 Aspire Defence subcontracting entities (Aspire Defence project) $ 530 $ 283 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of net benefit costs | The components of net periodic benefit cost related to pension benefits for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 Dollars in millions United States Int’l United States Int’l Components of net periodic benefit cost Interest cost $ 1 $ 10 $ 1 $ 13 Expected return on plan assets (1 ) (15 ) (1 ) (20 ) Recognized actuarial loss — 6 — 4 Net periodic benefit cost $ — $ 1 $ — $ (3 ) |
Debt And Other Credit Facilit_2
Debt And Other Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt details | The details of the applicable margins and commitment fees under the amended Senior Credit Facility are based on the Company's consolidated leverage ratio as follows: Revolver and Term Loan A Consolidated Leverage Ratio LIBOR Margin Base Rate Margin Performance Letter of Credit Fee Commitment Fee Greater than or equal to 3.25 to 1.00 2.25 % 1.25 % 1.35 % 0.35 % Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 2.00 % 1.00 % 1.20 % 0.30 % Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 1.75 % 0.75 % 1.05 % 0.25 % Less than 1.25 to 1.00 1.50 % 0.50 % 0.90 % 0.20 % Our outstanding debt consisted of the following at the dates indicated: Dollars in millions March 31, 2020 December 31, 2019 Term Loan A $ 267 $ 176 Term Loan B 520 756 Convertible Notes 350 350 Unamortized debt issuance costs - Term Loan A (4 ) (4 ) Unamortized debt issuance costs and discount - Term Loan B (18 ) (15 ) Unamortized debt issuance costs and discount - Convertible Notes (50 ) (53 ) Total long-term debt 1,065 1,210 Less: current portion 12 27 Total long-term debt, net of current portion $ 1,053 $ 1,183 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Leasing Activity | The components of lease costs for the three months ended March 31, 2020 and 2019 were as follows: March 31, March 31, Dollars in millions 2020 2019 Operating lease cost $ 13 14 Short-term lease cost 37 20 Total lease cost $ 50 $ 34 Operating lease cost for the three months ended March 31, 2020 includes operating lease ROU asset amortization of $9 million and other noncash operating lease costs of $4 million related to the accretion of operating lease liabilities and straight-line lease accounting. Total short-term lease commitments as of March 31, 2020 was approximately $90 million . Additional information related to leases was as follows: March 31, Dollars in millions 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 15 Right-of-use assets obtained in exchange for new operating lease liabilities $ 5 Weighted-average remaining lease term-operating (in years) 7.0 Weighted-average discount rate-operating leases 7.4 % |
Lessee, Operating Lease, Liability, Maturity | The following is a maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of March 31, 2020 : Year Dollars in millions 2020 2021 2022 2023 2024 Thereafter Total Future payments - operating leases $ 38 $ 42 $ 33 $ 28 $ 19 $ 86 $ 246 Dollars in millions Operating Leases Total future payments $ 246 Less imputed interest (59 ) Present value of future lease payments $ 187 Less current portion of lease obligations (42 ) Noncurrent portion of lease obligations $ 145 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated other comprehensive income (loss) | Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2019 $ (315 ) $ (654 ) $ (18 ) $ (987 ) Other comprehensive income adjustments before reclassifications (70 ) — (23 ) (93 ) Amounts reclassified from AOCL (12 ) 5 6 (1 ) Net other comprehensive income (loss) (82 ) 5 (17 ) (94 ) Balance at March 31, 2020 $ (397 ) $ (649 ) $ (35 ) $ (1,081 ) Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2018 $ (304 ) $ (592 ) $ (14 ) $ (910 ) Other comprehensive income adjustments before reclassifications (1 ) — (3 ) (4 ) Amounts reclassified from AOCL — 3 1 4 Net other comprehensive income (loss) (1 ) 3 (2 ) — Balance at March 31, 2019 $ (305 ) $ (589 ) $ (16 ) $ (910 ) |
Reclassification out of accumulated other comprehensive income | Three Months Ended March 31, Dollars in millions 2020 2019 Affected line item on the Condensed Consolidated Statements of Operations Accumulated foreign currency adjustments Reclassification of foreign currency adjustments $ 12 $ — Net income attributable to noncontrolling interests and Gain on disposition of assets and investments Tax benefit — — Provision for income taxes Net accumulated foreign currency $ 12 $ — Net of tax Accumulated pension liability adjustments Amortization of actuarial loss (a) $ (6 ) $ (4 ) See (a) below Tax benefit 1 1 Provision for income taxes Net pension and post-retirement benefits $ (5 ) $ (3 ) Net of tax Changes in fair value for derivatives Foreign currency hedge and interest rate swap settlements $ (6 ) $ (1 ) Other non-operating income Tax benefit — — Provision for income taxes Net changes in fair value of derivatives $ (6 ) $ (1 ) Net of tax (a) This item is included in the computation of net periodic pension cost. See Note 10 to our condensed consolidated financial statements for further discussion. |
Share Repurchases (Tables)
Share Repurchases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of shares repurchased | The table below presents information on our share repurchases activity under these programs: Three Months Ended March 31, 2020 Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 149,124 $ 25.96 $ 4 Three Months Ended March 31, 2019 Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 160,635 $ 19.77 $ 3 |
Income (loss) per Share (Tables
Income (loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the number of shares used for the basic and diluted income per share calculations | A reconciliation of the number of shares used for the basic and diluted income per share calculations is as follows: Three Months Ended March 31, Shares in millions 2020 2019 Basic weighted average common shares outstanding 142 141 Stock options, restricted shares, and convertible debt — — Diluted weighted average common shares outstanding 142 141 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Risk Management (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying values and estimated fair values of financial instruments | The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in our condensed consolidated balance sheets are provided in the following table. March 31, 2020 December 31, 2019 Dollars in millions Carrying Value Fair Value Carrying Value Fair Value Liabilities (including current maturities): Term Loan A Level 2 $ 267 $ 267 $ 176 $ 176 Term Loan B Level 2 520 468 756 764 Convertible notes Level 2 350 366 350 466 Nonrecourse project debt Level 2 17 18 18 18 |
Schedule of derivatives instruments statements of financial performance and financial position, location | The following table summarizes the recognized changes in fair value of our balance sheet hedges offset by remeasurement of balance sheet positions. These amounts are recognized in our condensed consolidated statements of operations for the periods presented. The net of our changes in fair value of hedges and the remeasurement of our assets and liabilities is included in "Other non-operating income (expense)" on our condensed consolidated statements of operations. Three Months Ended March 31, Gains (losses) dollars in millions 2020 2019 Balance Sheet Hedges - Fair Value $ 1 $ — Balance Sheet Position - Remeasurement 6 3 Net $ 7 $ 3 |
Basis of Presentation (Impact o
Basis of Presentation (Impact of Adoption of New Accounting Standards) (Details) - ASU 2016-13 $ in Millions | Jan. 01, 2020USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of initially applying ASU as an adjustment to retained earnings | $ (3) |
Cumulative tax effect of initially applying ASU as an adjustment to retained earnings | $ 1 |
Basis of Presentation (Balance
Basis of Presentation (Balance Sheet Additional Disclosure) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Current maturities of long-term debt | $ 12 | $ 27 | |
Reserve for estimated losses on uncompleted contracts | 9 | 10 | |
Retainage payable | 46 | 41 | |
Income taxes payable | 26 | 25 | |
Restructuring reserve | 28 | $ 0 | |
Value-added tax payable | 34 | 36 | |
Dividend payable | 14 | 11 | |
Other miscellaneous liabilities | 59 | 36 | |
Total other current liabilities | $ 228 | $ 186 |
Business Segment Information (N
Business Segment Information (Narrative) (Details) contract in Thousands, $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)contractsegment | |
Segment Reporting [Abstract] | |
Core business segments, number | 3 |
Non-core business segments, number | 2 |
Number of contracts (more than) | contract | 1 |
Additional revenue and gross profit recognized | $ | $ 16 |
Business Segment Information (S
Business Segment Information (Schedule of Operations by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 1,537 | $ 1,340 |
Total gross profit | 186 | 153 |
Equity in earnings of unconsolidated affiliates | 1 | 0 |
Selling, general and administrative expenses | (97) | (78) |
Acquisition and integration related costs | 0 | (1) |
Goodwill impairment | (62) | 0 |
Restructuring charges and asset impairments | (116) | 0 |
Gain on disposition of assets | 19 | 4 |
Operating (loss) income | (69) | 78 |
Interest expense | (23) | (25) |
Other non-operating income | 7 | 5 |
(Loss) income before income taxes and noncontrolling interests | (85) | 58 |
Operating Segments | Government Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 955 | 975 |
Total gross profit | 127 | 90 |
Goodwill impairment | 0 | |
Operating Segments | Technology Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 88 | 92 |
Total gross profit | 29 | 27 |
Goodwill impairment | 0 | |
Operating Segments | Energy Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 491 | 272 |
Total gross profit | 34 | 36 |
Goodwill impairment | (62) | |
Subtotal | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,534 | 1,339 |
Total gross profit | 190 | 153 |
Non-strategic Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | 3 | 1 |
Total gross profit | $ (4) | $ 0 |
Revenue (Revenue by Geographic
Revenue (Revenue by Geographic Destination) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,537 | $ 1,340 |
Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 955 | 975 |
Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 88 | 92 |
Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 491 | 272 |
Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3 | 1 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 762 | 628 |
United States | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 513 | 521 |
United States | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8 | 5 |
United States | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 238 | 101 |
United States | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3 | 1 |
Middle East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 251 | 247 |
Middle East | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 187 | 198 |
Middle East | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2 | 5 |
Middle East | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 62 | 44 |
Middle East | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 249 | 254 |
Europe | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 190 | 199 |
Europe | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8 | 14 |
Europe | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 51 | 41 |
Europe | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Australia | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 87 | 74 |
Australia | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31 | 21 |
Australia | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Australia | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 56 | 53 |
Australia | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25 | 2 |
Canada | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Canada | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Canada | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25 | 2 |
Canada | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Africa | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 42 | 45 |
Africa | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 19 | 22 |
Africa | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1 | 5 |
Africa | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22 | 18 |
Africa | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 68 | 63 |
Asia | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Asia | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 67 | 61 |
Asia | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1 | 2 |
Asia | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Other countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 53 | 27 |
Other countries | Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 15 | 14 |
Other countries | Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2 | 2 |
Other countries | Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 36 | 11 |
Other countries | Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 | $ 0 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized from performance obligation satisfied in previous period | $ 28 | $ 8 |
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,537 | 1,340 |
Contract liability, revenue recognized | 181 | |
Government Solutions | Key U.S. Government Customers | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 727 | 763 |
Government Solutions | Non U.S. Government Customers | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 228 | $ 212 |
Revenue (Revenue by Contract Ty
Revenue (Revenue by Contract Type) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total net revenue | $ 1,537 | $ 1,340 |
Fixed Price | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 469 | 405 |
Cost Reimbursable | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 1,068 | 935 |
Operating Segments | Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 955 | 975 |
Operating Segments | Government Solutions | Fixed Price | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 288 | 272 |
Operating Segments | Government Solutions | Cost Reimbursable | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 667 | 703 |
Operating Segments | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 88 | 92 |
Operating Segments | Technology Solutions | Fixed Price | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 86 | 91 |
Operating Segments | Technology Solutions | Cost Reimbursable | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 2 | 1 |
Operating Segments | Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 491 | 272 |
Operating Segments | Energy Solutions | Fixed Price | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 95 | 41 |
Operating Segments | Energy Solutions | Cost Reimbursable | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 396 | 231 |
Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 3 | 1 |
Non-strategic Business | Fixed Price | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 0 | 1 |
Non-strategic Business | Cost Reimbursable | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | $ 3 | $ 0 |
Revenue (Remaining Performance
Revenue (Remaining Performance Obligation) (Details) $ in Billions | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 11 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction (year) | 1 year |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 33.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction (year) | 4 years |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 35.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction (year) | |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 32.00% |
Revenue (Accounts Receivable, C
Revenue (Accounts Receivable, Contract Assets and Liabilities) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from External Customer [Line Items] | ||
Accounts receivable, net of allowance for credit losses | $ 1,085 | $ 938 |
Unbilled | ||
Revenue from External Customer [Line Items] | ||
Accounts receivable, net of allowance for credit losses | 493 | 308 |
Trade & Other | ||
Revenue from External Customer [Line Items] | ||
Accounts receivable, net of allowance for credit losses | $ 592 | $ 630 |
Acquisitions (Scientific Manage
Acquisitions (Scientific Management Associates) (Details) - USD ($) $ in Millions | Mar. 13, 2020 | Mar. 06, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,210 | $ 1,265 | ||
SMA | ||||
Business Acquisition [Line Items] | ||||
Purchase price of acquisition | $ 13 | |||
Hold-backs to be settled and other adjustments | $ 4 | |||
Cash consideration paid | 9 | |||
Goodwill | $ 11 |
Claims and Accounts Receivable
Claims and Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Claims and accounts receivable | $ 58 | $ 59 |
Government Services | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Government contract receivable | 26 | 28 |
Disputed costs | $ 32 | $ 31 |
Unapproved Change Orders, and_3
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors (Rollforward) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Unapproved Change Orders [Roll Forward] | ||
Amounts included in project estimates-at-completion at January 1, | $ 978 | $ 973 |
Increase in project estimates | 2 | 11 |
Approved change orders | (6) | 0 |
Foreign currency effect | (102) | 5 |
Amounts included in project estimates-at-completion at March 31, | 872 | 989 |
Amounts recognized over time based on progress at March 31, | $ 872 | $ 965 |
Unapproved Change Orders, and_4
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Settlement claims | $ 872 | $ 989 | $ 978 | $ 973 | |
Commitments, estimated recovery | 1,800 | ||||
Ichthys LNG Project | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Letters of credit outstanding, amount | 164 | ||||
JKC Joint Venture | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Additional investments to joint venture | 484 | ||||
JKC Joint Venture | Legal Action Against the Consortium for Combined Cycle Power Plant | Settled Litigation | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Funds received from litigation settlement | $ 52 | ||||
Cost Reimbursable | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Changes in estimates at completion | $ 140 | $ 158 | |||
Ichthys LNG Project | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Ownership percentage | 30.00% | 30.00% |
Restructuring Charges and Ass_3
Restructuring Charges and Asset Impairments (Reconciliation of Restructuring Liability) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance as of January 1, 2020 | $ 0 |
Restructuring charges accrued during the period | 47 |
Cash payments / settlements during the period | (1) |
Currency translation and other adjustments | 0 |
Balance as of March 31, 2020 | 46 |
Severance | |
Restructuring Reserve [Roll Forward] | |
Balance as of January 1, 2020 | 0 |
Restructuring charges accrued during the period | 24 |
Cash payments / settlements during the period | (1) |
Currency translation and other adjustments | 0 |
Balance as of March 31, 2020 | 23 |
Lease Abandonment | |
Restructuring Reserve [Roll Forward] | |
Balance as of January 1, 2020 | 0 |
Restructuring charges accrued during the period | 23 |
Cash payments / settlements during the period | 0 |
Currency translation and other adjustments | 0 |
Balance as of March 31, 2020 | $ 23 |
Restructuring Charges and Ass_4
Restructuring Charges and Asset Impairments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 47 | |
Restructuring liability | 46 | $ 0 |
Operating lease, impairment loss | 28 | |
Impairment of equity method investments | 18 | |
Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 24 | |
Restructuring liability | 23 | 0 |
Lease Abandonment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 23 | |
Restructuring liability | 23 | $ 0 |
Operating Segments | Energy Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 23 | |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 24 | |
Leasehold improvements, furniture and fixtures | ||
Restructuring Cost and Reserve [Line Items] | ||
Asset impairment charges | 7 | |
Trade names | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment of indefinite lived intangible assets | $ 11 | |
EBIC Ammonia Project | ||
Restructuring Cost and Reserve [Line Items] | ||
Ownership percentage | 15.00% | |
Impairment of equity method investments | $ 13 | |
Latin America Joint Venture | ||
Restructuring Cost and Reserve [Line Items] | ||
Ownership percentage | 50.00% | |
Impairment of equity method investments | $ 5 | |
Other Current Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | 28 | |
Other Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | $ 18 |
Goodwill and Goodwill Impairm_3
Goodwill and Goodwill Impairment (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment | $ 62 | $ 0 |
Goodwill and Goodwill Impairm_4
Goodwill and Goodwill Impairment (Changes in the Carrying Amount of Goodwill by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 1,265 | |
Goodwill acquired during the period | 11 | |
Impairment loss | (62) | $ 0 |
Foreign currency translation | (4) | |
Goodwill, ending balance | 1,210 | |
Operating Segments | Government Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 978 | |
Goodwill acquired during the period | 11 | |
Impairment loss | 0 | |
Foreign currency translation | (3) | |
Goodwill, ending balance | 986 | |
Operating Segments | Technology Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 50 | |
Goodwill acquired during the period | 0 | |
Impairment loss | 0 | |
Foreign currency translation | 0 | |
Goodwill, ending balance | 50 | |
Operating Segments | Energy Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 237 | |
Goodwill acquired during the period | 0 | |
Impairment loss | (62) | |
Foreign currency translation | (1) | |
Goodwill, ending balance | $ 174 |
Equity Method Investments and_3
Equity Method Investments and Variable Interest Entities (Schedule of Equity in Earnings of Unconsolidated Affiliates) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 01, 2019 | Jan. 01, 2018 | |
Equity Method Investment [Roll Forward] | |||||
Investments | $ 0 | $ 70 | |||
Impairment of equity method investments | (18) | ||||
Impairment of equity method investments | 18 | ||||
Equity Method Investments | |||||
Equity Method Investment [Roll Forward] | |||||
Beginning balance at January 1, | 850 | $ 724 | $ 724 | ||
Adjusted balance | 850 | $ 753 | |||
Equity in earnings of unconsolidated affiliates | 1 | 35 | |||
Distributions of earnings of unconsolidated affiliates | (4) | (69) | |||
Payments from (advances to) unconsolidated affiliates, net | (7) | (10) | |||
Investments | 0 | 146 | |||
Impairment of equity method investments | (16) | 0 | |||
Foreign currency translation adjustments | (61) | (7) | |||
Other | (4) | 2 | |||
Ending balance | 759 | 850 | |||
Amount allocated to fund ownership venture | 141 | ||||
Impairment of equity method investments | 16 | $ 0 | |||
ASC 606 | |||||
Equity Method Investment [Roll Forward] | |||||
Cumulative effect of change in accounting policy | $ 29 | ||||
Cumulative effect of change in accounting policy | $ 29 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | ASC 606 | Equity Method Investments | |||||
Equity Method Investment [Roll Forward] | |||||
Cumulative effect of change in accounting policy | 29 | ||||
Cumulative effect of change in accounting policy | $ 29 | ||||
EBIC Ammonia Project | |||||
Equity Method Investment [Roll Forward] | |||||
Impairment of equity method investments | (13) | ||||
Impairment of equity method investments | 13 | ||||
EBIC Ammonia Project | Equity Method Investments | |||||
Equity Method Investment [Roll Forward] | |||||
Impairment of equity method investments | (13) | ||||
Impairment of equity method investments | 13 | ||||
Latin America Joint Venture | |||||
Equity Method Investment [Roll Forward] | |||||
Impairment of equity method investments | (5) | ||||
Impairment of equity method investments | 5 | ||||
Latin America Joint Venture | Equity Method Investments | |||||
Equity Method Investment [Roll Forward] | |||||
Impairment of equity method investments | (3) | ||||
Impairment of equity method investments | $ 3 |
Equity Method Investments and_4
Equity Method Investments and Variable Interest Entities (Schedule of Variable Interest Entities) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||
Assets | $ 5,104 | $ 5,364 |
Liabilities | 3,446 | 3,507 |
Variable Interest Entity, Not Primary Beneficiary | Affinity joint venture (U.K. MFTS project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 12 | 14 |
Liabilities | 10 | 10 |
Variable Interest Entity, Not Primary Beneficiary | Aspire Defence Limited | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 62 | 67 |
Liabilities | 5 | 5 |
Variable Interest Entity, Not Primary Beneficiary | JKC joint venture (Ichthys LNG project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 489 | 546 |
Liabilities | 30 | 29 |
Variable Interest Entity, Not Primary Beneficiary | U.K. Road project joint ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 58 | 40 |
Liabilities | 1 | 21 |
Variable Interest Entity, Not Primary Beneficiary | Middle East Petroleum Corporation (EBIC ammonia project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 33 | 47 |
Liabilities | 1 | 1 |
Variable Interest Entity, Primary Beneficiary | Aspire Defence Limited | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 493 | 530 |
Liabilities | 245 | 283 |
Variable Interest Entity, Primary Beneficiary | Fasttrax Limited (Fasttrax project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Assets | 46 | 45 |
Liabilities | $ 23 | $ 24 |
Equity Method Investments and_5
Equity Method Investments and Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Transactions with Related Parties | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue from related parties | $ 147 | $ 175 |
Equity Method Investments and_6
Equity Method Investments and Variable Interest Entities (Related Party Disclosures) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||
Accounts receivable, net of allowance for credit losses | $ 1,085 | $ 938 |
Contract assets | 197 | 215 |
Contract liabilities | 415 | 484 |
Transactions with Related Parties | ||
Schedule of Equity Method Investments [Line Items] | ||
Accounts receivable, net of allowance for credit losses | 53 | 49 |
Contract assets | 2 | 2 |
Contract liabilities | $ 33 | $ 33 |
Retirement Benefits (Details)
Retirement Benefits (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | $ 11 | |
Estimated future employer contributions in next fiscal year | 46 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 1 | $ 1 |
Expected return on plan assets | (1) | (1) |
Recognized actuarial loss | 0 | 0 |
Net periodic benefit cost | 0 | 0 |
Int’l | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 10 | 13 |
Expected return on plan assets | (15) | (20) |
Recognized actuarial loss | 6 | 4 |
Net periodic benefit cost | $ 1 | $ (3) |
Debt And Other Credit Facilit_3
Debt And Other Credit Facilities (Outstanding Debt Balances) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Feb. 07, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 1,065 | $ 1,210 | |
Less: current portion | 12 | 27 | |
Total long-term debt, net of current portion | 1,053 | 1,183 | |
Secured Debt | Term Loan A | |||
Debt Instrument [Line Items] | |||
Long-term debt | 267 | 176 | |
Unamortized debt issuance costs | (4) | (4) | |
Total long-term debt | $ 275 | ||
Secured Debt | Term Loan B | |||
Debt Instrument [Line Items] | |||
Long-term debt | 520 | 756 | |
Unamortized debt issuance costs | (18) | (15) | |
Total long-term debt | $ 520 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | 350 | 350 | |
Unamortized debt issuance costs | $ (50) | $ (53) |
Debt And Other Credit Facilit_4
Debt And Other Credit Facilities (Senior Credit Facility) (Details) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2020USD ($) | Jun. 30, 2022 | Jun. 30, 2020 | Feb. 07, 2020USD ($) | Dec. 31, 2019USD ($) | |
Line of Credit Facility [Line Items] | |||||
Revolving credit agreement | $ 1,065 | $ 1,210 | |||
Term Loan B | LIBOR Margin | |||||
Line of Credit Facility [Line Items] | |||||
Revolver and term loan A, interest rate | 2.75% | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Letters of credit outstanding, amount | $ 500 | ||||
Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Letters of credit outstanding, amount | 500 | ||||
Secured Debt | Term Loan A | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit agreement | 275 | ||||
Debt instrument, covenant, interest coverage ratio | 3 | ||||
Secured Debt | Term Loan A | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, covenant, leverage ratio through 2021 | 4.25 | ||||
Debt instrument, covenant, leverage ratio through 2022 | 4 | ||||
Debt instrument, covenant, leverage ratio through 2023 | 3.75 | ||||
Secured Debt | Term Loan B | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit agreement | $ 520 | ||||
Forecast | Term Loan A | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, periodic payment, percentage of aggregate principal (percentage) | 1.25% | 0.625% | |||
Forecast | Secured Debt | Term Loan B | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, periodic payment, percentage of aggregate principal (percentage) | 0.25% |
Debt And Other Credit Facilit_5
Debt And Other Credit Facilities (Schedule of Commitment Fees) (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Greater than or equal to 3.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.35% |
Greater than or equal to 3.25 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.25% |
Greater than or equal to 3.25 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.25% |
Greater than or equal to 3.25 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.35% |
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.30% |
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.00% |
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.00% |
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.20% |
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.25% |
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.75% |
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 0.75% |
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.05% |
Less than 1.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.20% |
Less than 1.25 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.50% |
Less than 1.25 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 0.50% |
Less than 1.25 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 0.90% |
Debt And Other Credit Facilit_6
Debt And Other Credit Facilities (Convertible Senior Notes) (Details) - Convertible Debt - Notes Due 2023 - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Nov. 15, 2018 | |
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 350,000,000 | $ 350,000,000 | ||
Interest rate, stated percentage | 2.50% | |||
If-converted value in excess of principal | 7,000,000 | |||
Equity method investment | 57,000,000 | $ 57,000,000 | ||
Interest cost relating to contractual interest coupon | 2,000,000 | $ 2,000,000 | ||
Interest cost relating to amortization of discount | $ 3,000,000 | $ 3,000,000 | ||
Effective percentage | 6.50% | 6.50% |
Debt And Other Credit Facilit_7
Debt And Other Credit Facilities (Letters of Credit, Surety Bonds and Guarantees) (Details) - USD ($) | Mar. 31, 2020 | Feb. 07, 2020 |
Letters Of Credit Surety Bonds And Bank Guarantees | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding relate to joint venture operations | $ 168,000,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | $ 500,000,000 | |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | 25,000,000 | |
Long-term line of credit | 0 | |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | $ 500,000,000 | |
Letter of Credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | 100,000,000 | |
Letter of Credit | Line of Credit | Committed Line Of Credit | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 1,000,000,000 | |
Letter of Credit | Line of Credit | Uncommitted Line Of Credit | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 1,000,000,000 | |
Letters of credit outstanding, amount | 196,000,000 | |
Line of credit facility, maximum borrowing capacity | $ 365,000,000 |
Debt And Other Credit Facilit_8
Debt And Other Credit Facilities (Nonrecourse Project Debt) (Details) £ in Millions | 3 Months Ended |
Mar. 31, 2020GBP (£)transporter | |
Class A 3.5% Index Linked Bond | |
Debt Instrument [Line Items] | |
Guaranteed secured bonds, percentage | 3.50% |
Class B 5.9% Fixed Rate Bonds | |
Debt Instrument [Line Items] | |
Guaranteed secured bonds, percentage | 5.90% |
Minimum | |
Debt Instrument [Line Items] | |
Subordinated notes payable, interest rate | 11.25% |
Maximum | |
Debt Instrument [Line Items] | |
Subordinated notes payable, interest rate | 16.00% |
United Kingdom, Pounds | Class A 3.5% Index Linked Bond | |
Debt Instrument [Line Items] | |
Secured bonds | £ 56 |
United Kingdom, Pounds | Class B 5.9% Fixed Rate Bonds | |
Debt Instrument [Line Items] | |
Secured bonds | £ 20.7 |
Nonrecourse Project Finance Debt | |
Debt Instrument [Line Items] | |
Ownership percentage | 50.00% |
Number of heavy equipment transporters | transporter | 91 |
Number of heavy equipment transporters term period (years) | 22 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |||
Effective tax rate on income from operations (percentage) | 1.00% | 27.00% | |
Effective income tax rate, estimated (percentage) | 26.00% | ||
Deferred tax assets, valuation allowance | $ 198 | $ 200 | |
Decrease in valuation allowance | 2 | $ 3 | |
Income from foreign sources | 757 | ||
Income from domestic sources | 514 | ||
Liabilities for uncertain tax positions | $ 92 | $ 97 | |
Pro Forma | |||
Income Tax Contingency [Line Items] | |||
Effective tax rate excluding impact of impairment and restructuring charges (percentage) | 26.00% |
U.S. Government Matters (Detail
U.S. Government Matters (Details) | 1 Months Ended | 3 Months Ended | |||
Jan. 31, 2014subcontractordefendent | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2011USD ($) | |
United States Government Contract Work [Line Items] | |||||
Cost of revenues | $ 1,351,000,000 | $ 1,187,000,000 | |||
Government Services | |||||
United States Government Contract Work [Line Items] | |||||
Outstanding Form 1's questioning | 78,000,000 | ||||
Cost of revenues | 52,000,000 | ||||
Government contract receivable | 26,000,000 | $ 28,000,000 | |||
Amount withheld from subcontractors | 26,000,000 | ||||
Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | |||||
United States Government Contract Work [Line Items] | |||||
Accrued reserve for unallowable costs | 41,000,000 | 41,000,000 | |||
First Kuwaiti Trading Company Arbitration | |||||
United States Government Contract Work [Line Items] | |||||
Damages awarded, value | 17,000,000 | ||||
Amount owed to subcontractor | 32,000,000 | ||||
Payments on contract Work | 19,000,000 | ||||
Howard qui tam | |||||
United States Government Contract Work [Line Items] | |||||
Estimate of possible loss | $ 628,000,000 | ||||
Amount accrued | 0 | ||||
DOJFCA | |||||
United States Government Contract Work [Line Items] | |||||
Number of subcontractors | subcontractor | 2 | ||||
Number of defendants | defendent | 3 | ||||
Contract Liabilities | Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | |||||
United States Government Contract Work [Line Items] | |||||
Accrued reserve for unallowable costs | 25,000,000 | 26,000,000 | |||
Other Liabilities | Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | |||||
United States Government Contract Work [Line Items] | |||||
Accrued reserve for unallowable costs | 16,000,000 | $ 15,000,000 | |||
Other Current Liabilities | Pay-When-Paid Terms | First Kuwaiti Trading Company Arbitration | |||||
United States Government Contract Work [Line Items] | |||||
Payments on contract Work | $ 30,000,000 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Details) $ in Millions, $ in Millions | 1 Months Ended | 17 Months Ended | |
Mar. 31, 2019USD ($) | May 31, 2018USD ($) | Mar. 31, 2020AUD ($) | |
Chadian Employee Class Action | |||
Loss Contingencies [Line Items] | |||
Damages awarded, value | $ 34 | $ 25 | |
Claims in unpaid bonuses | $ 122 | ||
North West Rail Link Project | |||
Loss Contingencies [Line Items] | |||
Claims in unpaid bonuses | $ 300 | ||
Ownership percentage by parent | 33.00% | ||
Provisional Award | Chadian Employee Class Action | |||
Loss Contingencies [Line Items] | |||
Damages awarded, value | $ 2 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)renewal_option | |
Operating Leased Assets [Line Items] | |
Percentage of lease obligations | 81.00% |
Term of contract | 12 months |
Renewal term increments | 1 year |
Operating lease, right-of-use asset, amortization | $ 9 |
Other noncash operating lease cost | 4 |
Short-term lease commitments | $ 90 |
Minimum | |
Operating Leased Assets [Line Items] | |
Number of renewal options | renewal_option | 1 |
Leases (Schedule of Leasing Act
Leases (Schedule of Leasing Activity) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 13 | $ 14 |
Short-term lease cost | 37 | 20 |
Total lease cost | 50 | $ 34 |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | 15 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 5 | |
Weighted-average remaining lease term-operating (in years) | 7 years | |
Weighted-average discount rate-operating leases | 7.40% |
Leases (Schedule of Lease Matur
Leases (Schedule of Lease Maturity) (Details) $ in Millions | Mar. 31, 2020USD ($) |
Future payments - operating leases | |
2020 | $ 38 |
2021 | 42 |
2022 | 33 |
2023 | 28 |
2024 | 19 |
Thereafter | 86 |
Total | $ 246 |
Leases (Reconciliation) (Detail
Leases (Reconciliation) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Total | $ 246 | |
Less imputed interest | (59) | |
Present value of future lease payments | 187 | |
Less current portion of lease obligations | (42) | $ (39) |
Noncurrent portion of lease obligations | $ 145 | $ 192 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Changes by Component) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 1,857 | $ 1,718 |
Other comprehensive income adjustments before reclassifications | (93) | (4) |
Amounts reclassified from AOCL | (1) | 4 |
Total other comprehensive loss | (94) | 0 |
Ending Balance | 1,658 | 1,802 |
Accumulated foreign currency translation adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (315) | (304) |
Other comprehensive income adjustments before reclassifications | (70) | (1) |
Amounts reclassified from AOCL | (12) | 0 |
Total other comprehensive loss | (82) | (1) |
Ending Balance | (397) | (305) |
Accumulated pension liability adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (654) | (592) |
Other comprehensive income adjustments before reclassifications | 0 | 0 |
Amounts reclassified from AOCL | 5 | 3 |
Total other comprehensive loss | 5 | 3 |
Ending Balance | (649) | (589) |
Changes in fair value of derivatives | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (18) | (14) |
Other comprehensive income adjustments before reclassifications | (23) | (3) |
Amounts reclassified from AOCL | 6 | 1 |
Total other comprehensive loss | (17) | (2) |
Ending Balance | (35) | (16) |
AOCL | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (987) | (910) |
Total other comprehensive loss | (94) | 0 |
Ending Balance | $ (1,081) | $ (910) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Reclassification out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated foreign currency adjustments | ||
Provision for income taxes | $ (1) | $ 16 |
Accumulated pension liability adjustments | ||
Net pension and post-retirement benefits | 1 | (4) |
Changes in fair value for derivatives | ||
Other non-operating income | 7 | 5 |
Net (loss) income | (84) | 42 |
Accumulated foreign currency adjustments | ||
Accumulated pension liability adjustments | ||
Net pension and post-retirement benefits | 12 | 0 |
Changes in fair value of derivatives | ||
Accumulated pension liability adjustments | ||
Net pension and post-retirement benefits | (6) | (1) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated foreign currency adjustments | ||
Accumulated foreign currency adjustments | ||
Gain on consolidation of Aspire entities | 12 | 0 |
Provision for income taxes | 0 | 0 |
Changes in fair value for derivatives | ||
Net (loss) income | 12 | 0 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated pension liability adjustments | ||
Accumulated foreign currency adjustments | ||
Provision for income taxes | 1 | 1 |
Accumulated pension liability adjustments | ||
Amortization of actuarial loss | (6) | (4) |
Net pension and post-retirement benefits | (5) | (3) |
Reclassification out of Accumulated Other Comprehensive Income | Changes in fair value of derivatives | ||
Accumulated foreign currency adjustments | ||
Provision for income taxes | 0 | 0 |
Changes in fair value for derivatives | ||
Other non-operating income | (6) | (1) |
Net (loss) income | $ (6) | $ (1) |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Feb. 19, 2020 | Dec. 31, 2019 | Feb. 25, 2014 | |
Equity [Abstract] | |||||
Stock repurchase program, authorized amount | $ 350,000,000 | $ 350,000,000 | |||
Remaining authorized repurchase amount | $ 160,000,000 | ||||
Additional amount authorized for repurchase program | $ 190,000,000 | ||||
Number of Shares (in shares) | 149,124 | 160,635 | |||
Average Price per Share (usd per share) | $ 25.96 | $ 19.77 | |||
Value of common stock repurchases | $ 4,000,000 | $ 3,000,000 |
Income (loss) per Share (Schedu
Income (loss) per Share (Schedule Of Basic And Diluted Weighted Average Common Shares Outstanding) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Basic weighted average common shares outstanding (shares) | 142 | 141 |
Stock options, restricted shares, and convertible debt (in shares) | 0 | 0 |
Diluted weighted average common shares outstanding (shares) | 142 | 141 |
Income (loss) per Share (Narrat
Income (loss) per Share (Narrative) (Details) - USD ($) shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Undistributed earnings (loss) allocated to participating securities, diluted | $ 0 | $ 300,000 |
Antidilutive weighted average shares (shares) | 1.1 | 1.7 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments and Risk Management (Carrying Value and Fair Value) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying Value | Secured Debt | Term Loan A | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | $ 267 | $ 176 |
Carrying Value | Secured Debt | Term Loan B | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 520 | 756 |
Carrying Value | Convertible Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 350 | 350 |
Fair Value | Secured Debt | Term Loan A | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 267 | 176 |
Fair Value | Secured Debt | Term Loan B | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 468 | 764 |
Fair Value | Convertible Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | $ 366 | $ 466 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments and Risk Management (Foreign Currency Risk) (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Maximum length of time hedged in balance sheet hedge | 20 days |
Maximum length of time hedged in cash flow hedge | 4 months |
Balance Sheet Hedge | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Derivative, notional amount | $ 42,000,000 |
Cash Flow Hedging | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Cash flow hedge | $ 2,000,000 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments and Risk Management (Summary of Changes in Fair Value of Balance Sheet Hedges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Balance Sheet Hedges - Fair Value | $ 1 | $ 0 |
Balance Sheet Position - Remeasurement | 6 | 3 |
Net | $ 7 | $ 3 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments and Risk Management (Interest Rate Risk) (Details) - Interest Rate Swap - USD ($) | Oct. 10, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||
Derivative, notional amount | $ 500,000,000 | ||
Derivative term | 4 years | ||
Interest rate derivatives, fair value | $ 41,000,000 | $ 21,000,000 | |
Unrealized loss on derivatives | 41,000,000 | 21,000,000 | |
LIBOR | |||
Subsequent Event [Line Items] | |||
Fixed interest rate | 3.055% | ||
Other Current Liabilities | |||
Subsequent Event [Line Items] | |||
Interest rate derivatives, fair value | 14,000,000 | 8,000,000 | |
Other Liabilities | |||
Subsequent Event [Line Items] | |||
Interest rate derivatives, fair value | $ 27,000,000 | $ 13,000,000 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments and Risk Management (Credit Losses) (Details) - ES and TS $ in Millions | Mar. 31, 2020USD ($) |
Contract with Customer, Asset, Past Due [Line Items] | |
Accounts receivable and contract assets, net of allowances | $ 566 |
Allowance for accounts receivable and contract assets | $ 9 |
Accounts receivable, percent outstanding less than 90 days | 90.00% |
Uncategorized Items - kbr033120
Label | Element | Value |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 1,854,000,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 1,768,000,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 1,438,000,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 1,285,000,000 |
Treasury Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (817,000,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (817,000,000) |
Noncontrolling Interest [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 14,000,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 20,000,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 2,190,000,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 2,206,000,000 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (910,000,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (987,000,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 29,000,000 |
Accounting Standards Update 2016-13 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,000,000) |
Accounting Standards Update 2016-13 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,000,000) |
Accounting Standards Update 2016-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 21,000,000 |
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 21,000,000 |