Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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, $0.001 par value | |
Trading Symbol | KBR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 139,560,024 | |
Amendment Flag | false | |
Entity Central Index Key | 0001357615 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Income Statement [Abstract] | |||
Revenues | $ 1,714 | $ 1,461 | [1] |
Cost of revenues | (1,518) | (1,293) | [1] |
Gross profit | 196 | 168 | [1] |
Equity in earnings (losses) of unconsolidated affiliates | (118) | 12 | [1] |
Selling, general and administrative expenses | (107) | (89) | [1] |
Acquisition and integration related costs | (1) | (1) | [1] |
Restructuring charges and asset impairments | (1) | 0 | [1] |
Loss on disposition of assets and investments | 0 | (1) | [1] |
Operating income (loss) | (31) | 89 | [1] |
Interest expense | (20) | (19) | [1] |
Other non-operating expense | 0 | (3) | [1] |
Income (loss) before income taxes | (51) | 67 | [1] |
Provision for income taxes | (19) | (17) | [1] |
Net income (loss) | (70) | 50 | [2] |
Less: Net income attributable to noncontrolling interests | 1 | 1 | [1] |
Net income (loss) attributable to KBR | $ (71) | $ 49 | [1] |
Net income (loss) attributable to KBR per share | |||
Basic (in usd per share) | $ (0.51) | $ 0.35 | [1] |
Diluted (in usd per share) | $ (0.51) | $ 0.33 | [1] |
Basic weighted average common shares outstanding (in shares) | 140 | 141 | [1] |
Diluted weighted average common shares outstanding (in shares) | 140 | 155 | [1] |
Cash dividends declared per share (in usd per share) | $ 0.12 | $ 0.11 | [1] |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | [1] | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (70) | $ 50 | |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (19) | 7 | |
Pension and post-retirement benefits | 6 | 9 | |
Changes in fair value of derivatives | 24 | 19 | |
Other comprehensive income (loss) | 11 | 35 | |
Income tax (expense) benefit: | |||
Foreign currency translation adjustments | 0 | 0 | |
Pension and post-retirement benefits | (1) | (2) | |
Changes in fair value of derivatives | (5) | (4) | |
Income tax (expense) benefit | (6) | (6) | |
Other comprehensive income (loss), net of tax | 5 | 29 | |
Comprehensive income (loss) | (65) | 79 | |
Less: Comprehensive income attributable to noncontrolling interests | 1 | 1 | |
Comprehensive income (loss) attributable to KBR | $ (66) | $ 78 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 412 | $ 370 | |
Accounts receivable, net of allowance for credit losses of $13 and $13, respectively | 1,035 | 1,411 | |
Contract assets | 211 | 224 | |
Other current assets | 116 | 147 | |
Total current assets | 1,774 | 2,152 | |
Claims and accounts receivable | 30 | 30 | |
Property, plant, and equipment, net of accumulated depreciation of $435 and $431 (including net PPE of $18 and $19 owned by a variable interest entity), respectively | 132 | 136 | |
Operating lease right-of-use assets | 151 | 158 | |
Goodwill | 2,051 | 2,060 | |
Intangible assets, net of accumulated amortization of $302 and $291, respectively | 688 | 708 | |
Equity in and advances to unconsolidated affiliates | 430 | 576 | |
Deferred income taxes | 212 | 231 | |
Other assets | 166 | 153 | |
Total assets | 5,634 | 6,204 | |
Current liabilities: | |||
Accounts payable | 630 | 1,026 | |
Contract liabilities | 334 | 313 | |
Accrued salaries, wages and benefits | 272 | 317 | |
Operating lease liabilities | 43 | 41 | |
Other current liabilities | 182 | 178 | |
Total current liabilities | 1,461 | 1,875 | |
Pension obligations | 64 | 88 | |
Employee compensation and benefits | 97 | 111 | |
Income tax payable | 93 | 95 | |
Deferred income taxes | 70 | 70 | |
Nonrecourse project debt | 2 | 2 | |
Long-term debt | 1,870 | 1,875 | |
Operating lease liabilities | 180 | 188 | |
Other liabilities | 219 | 217 | |
Total liabilities | 4,056 | 4,521 | |
Commitments and Contingencies (Notes 6, 12 and 13) | |||
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, 180,645,661 and 179,983,586 shares issued, and 139,821,173 and 139,786,136 shares outstanding, respectively | 0 | 0 | |
PIC | 2,216 | 2,206 | |
Retained earnings | 1,200 | 1,287 | |
Treasury stock, 40,824,488 shares and 40,197,450 shares, at cost, respectively | (976) | (943) | |
AOCL | (876) | (881) | |
Total KBR shareholders’ equity | 1,564 | 1,669 | |
Noncontrolling interests | 14 | 14 | |
Total shareholders’ equity | 1,578 | 1,683 | |
Total liabilities and shareholders’ equity | $ 5,634 | $ 6,204 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 13 | $ 13 |
Accumulated depreciation, PP&E | 435 | 431 |
PP&E owned by a VIE, net | 18 | 19 |
Accumulated amortization, Intangibles | $ 302 | $ 291 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 180,645,661 | 179,983,586 |
Common stock, shares outstanding (in shares) | 139,821,173 | 139,786,136 |
Treasury stock, shares (in shares) | 40,824,488 | 40,197,450 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | As Previously Reported | Adjustment | Adjusted balance | PIC | PICAs Previously Reported | PICAdjustment | PICAdjusted balance | Retained Earnings | Retained EarningsAs Previously Reported | Retained EarningsAdjustment | Retained EarningsAdjusted balance | Treasury Stock | Treasury StockAs Previously Reported | Treasury StockAdjusted balance | AOCL | AOCLAs Previously Reported | AOCLAdjusted balance | NCI | NCIAs Previously Reported | NCIAdjusted balance | |
Beginning balance at Dec. 31, 2020 | $ 1,609 | $ (27) | $ 1,582 | $ 2,222 | $ (45) | $ 2,177 | $ 1,305 | $ 18 | $ 1,323 | $ (864) | $ (864) | $ (1,083) | $ (1,083) | $ 29 | $ 29 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Share-based compensation | $ 4 | $ 4 | ||||||||||||||||||||
Common stock issued upon exercise of stock options | 4 | 4 | ||||||||||||||||||||
Dividends declared to shareholders | (16) | $ (16) | ||||||||||||||||||||
Repurchases of common stock | (4) | $ (4) | ||||||||||||||||||||
Issuance of ESPP shares | 2 | 2 | ||||||||||||||||||||
Other noncontrolling interests activity | (1) | $ (1) | ||||||||||||||||||||
Net income (loss) | 50 | [1] | 48 | 49 | 1 | |||||||||||||||||
Other comprehensive income (loss), net of tax | 29 | [1] | $ 29 | |||||||||||||||||||
Ending balance at Mar. 31, 2021 | 1,650 | 2,185 | 1,356 | (866) | (1,054) | 29 | ||||||||||||||||
Beginning balance at Dec. 31, 2020 | 1,609 | (27) | 1,582 | 2,222 | (45) | 2,177 | 1,305 | 18 | 1,323 | (864) | (864) | (1,083) | (1,083) | 29 | 29 | |||||||
Ending balance at Dec. 31, 2021 | $ 1,683 | [2] | $ 1,701 | $ (18) | $ 1,683 | $ 2,251 | $ (45) | $ 2,206 | $ 1,260 | $ 27 | $ 1,287 | $ (943) | $ (943) | $ (881) | $ (881) | $ 14 | $ 14 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 | |||||||||||||||||||||
Share-based compensation | $ 5 | 5 | ||||||||||||||||||||
Common stock issued upon exercise of stock options | 4 | 4 | ||||||||||||||||||||
Dividends declared to shareholders | (17) | (17) | ||||||||||||||||||||
Repurchases of common stock | (33) | (33) | ||||||||||||||||||||
Issuance of ESPP shares | 1 | 1 | ||||||||||||||||||||
Other | 0 | 1 | (1) | |||||||||||||||||||
Net income (loss) | (70) | (71) | 1 | |||||||||||||||||||
Other comprehensive income (loss), net of tax | 5 | 5 | ||||||||||||||||||||
Ending balance at Mar. 31, 2022 | $ 1,578 | $ 2,216 | $ 1,200 | $ (976) | $ (876) | $ 14 | ||||||||||||||||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | |||||||||||||||||||||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per share (in usd per share) | $ 0.12 | $ 0.11 | [1] |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |||
Cash flows from operating activities: | |||||
Net income (loss) | $ (70) | $ 50 | [1] | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Depreciation and amortization | 33 | 38 | [2] | ||
Equity in (earnings) losses of unconsolidated affiliates | 118 | (12) | [3] | ||
Deferred income tax | 16 | 8 | [2] | ||
Loss on disposition of assets | 0 | 1 | [3] | ||
Other | 12 | 8 | [2] | ||
Changes in operating assets and liabilities: | |||||
Accounts receivable, net of allowance for credit losses | 370 | 24 | [2] | ||
Contract assets | 14 | (3) | [2] | ||
Accounts payable | (400) | 33 | [2] | ||
Contract liabilities | 24 | (62) | [2] | ||
Accrued salaries, wages and benefits | (43) | 9 | [2] | ||
Payments on operating lease obligation | (14) | (15) | [2] | ||
Payments from unconsolidated affiliates, net | 7 | 7 | [2] | ||
Distributions of earnings from unconsolidated affiliates | 30 | 8 | [2] | ||
Pension funding | (11) | (11) | [2] | ||
Restructuring reserve | (4) | (7) | [2] | ||
Other assets and liabilities | 7 | (26) | [2] | ||
Total cash flows provided by operating activities | 89 | 50 | [2] | ||
Cash flows from investing activities: | |||||
Purchases of property, plant and equipment | (6) | (6) | [2] | ||
Investments in equity method joint ventures | (1) | (3) | [2] | ||
Proceeds from sale of assets or investments | 18 | 0 | [2] | ||
Acquisition of technology license | 0 | (7) | [2] | ||
Other | 1 | (6) | [2] | ||
Total cash flows provided by (used in) investing activities | 12 | (22) | [2] | ||
Cash flows from financing activities: | |||||
Payments on short-term and long-term borrowings | (7) | (7) | [2] | ||
Payments of dividends to shareholders | (15) | (14) | [2] | ||
Net proceeds from issuance of common stock | 4 | 4 | [2] | ||
Payments to reacquire common stock | (33) | (4) | [2] | ||
Other | (1) | (1) | [2] | ||
Total cash flows used in financing activities | (52) | (22) | [2] | ||
Effect of exchange rate changes on cash | (7) | 3 | [2] | ||
Increase in cash and cash equivalents | 42 | 9 | [2] | ||
Cash and cash equivalents at beginning of period | 370 | 436 | [2] | $ 436 | [2] |
Cash and cash equivalents at end of period | 412 | 445 | [2] | $ 370 | |
Noncash financing activities | |||||
Dividends declared | $ 17 | $ 16 | [2] | ||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||||
[3] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
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 generally accepted accounting principles for annual financial statements and should be read together with our 2021 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, 2022, and the results of our operations for the three months ended March 31, 2022 and 2021 and our cash flows for the three months ended March 31, 2022 and 2021. Certain amounts in prior periods have been reclassified to conform with current period presentation. 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. 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. Our significant accounting policies are detailed in "Note 1. Significant Accounting Policies" of our 2021 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 (collectively, the "Company," "KBR", "we", "us" or "our"). We account for investments over which we have significant influence, but not a controlling financial interest, using the equity method of accounting. See Note 8 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. Adoption of ASU 2020-06 Effective January 1, 2022, we adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06") using the full retrospective method. Accordingly, the Company is presenting the consolidated financial statements for the year ended December 31, 2021, and the condensed consolidated financial statements for the three months ended March 31, 2021, as if ASU 2020-06 had been effective for those periods. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. As such, we no longer separate the Convertible Senior Notes into liability and equity components. The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the Convertible Senior Notes outstanding, and as a result, PIC and the related unamortized debt discount on the Convertible Senior Notes were reduced. The removal of the remaining debt discount recorded for this previous separation has the effect of increasing our net debt balance. ASU 2020-06 also eliminates the treasury stock method to calculate diluted earnings per share for certain convertible instruments and requires the use of the if-converted method. As such, we are required to apply the if-converted method to our Convertible Senior Notes when calculating diluted income (loss) per share. Under the if-converted method, the principal amount and any conversion spread of the Convertible Senior Notes, to the extent dilutive, are assumed to be converted into common stock at the beginning of the period and net income (loss) attributable to KBR is adjusted to reverse the effect of any interest expense associated with the Convertible Senior Notes. For the years ended December 31, 2021 and 2020, the adoption of this standard did not materially impact our financial performance, financial position or cash flow, but it did result in an increase in the number of diluted weighted average shares outstanding utilized in our diluted income (loss) per share calculation in periods of net income attributable to KBR. For the year ending December 31, 2022, the adoption of this standard will not materially impact our financial performance, financial position or cash flow, but it may result in an increase in the number of diluted weighted average shares outstanding utilized in our diluted income (loss) per share calculation. Select unaudited condensed consolidated balance sheet line items, which reflect the adoption of ASU 2020-06 are as follows: December 31, 2021 Dollars in millions As Previously Reported Adjustments As Adjusted Assets: Deferred income taxes $ 226 $ 5 $ 231 Liabilities: Long-term debt $ 1,852 $ 23 $ 1,875 KBR Shareholders' Equity: PIC $ 2,251 $ (45) $ 2,206 Retained earnings 1,260 27 1,287 Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASU 2020-06 are as follows: Three Months Ended March 31, 2021 Dollars in millions As Previously Reported Adjustments As Adjusted Interest Expense $ (22) $ 3 $ (19) Income before income taxes $ 64 $ 3 $ 67 Provision for income taxes $ (16) $ (1) $ (17) Net income $ 48 $ 2 $ 50 Net income attributable to KBR $ 47 $ 2 $ 49 Net income attributable to KBR per share: Basic $ 0.33 $ 0.02 $ 0.35 Diluted $ 0.33 $ — $ 0.33 Basic weighted average common shares outstanding $ 141 $ — $ 141 Diluted weighted average common shares outstanding $ 144 $ 11 $ 155 Select unaudited condensed consolidated statement of cash flows line items, which reflect the adoption of ASU 2020-06 are as follows: Three Months Ended March 31, 2021 Dollars in millions As Previously Reported Adjustments As Adjusted Cash flows from operating activities: Net Income $ 48 $ 2 $ 50 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax 7 1 8 Other 11 (3) 8 Total cash flows provided by operating activities $ 50 $ — $ 50 Impact of Adoption of Other New Accounting Standards Effective January 1, 2022, we adopted ASU No. 2021-04. Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses measurement, treatment and recognition of a freestanding equity-classified written call option modification or exchange. The adoption of this standard did not have an impact on our financial statements. Effective January 1, 2022, we adopted ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements and any significant terms and conditions of the agreements, including commitments and contingencies. The new standard only impacts annual financial statement footnote disclosures. Therefore, the adoption did not have a material effect on our condensed consolidated financial statements. Additional Balance Sheet Information Other Current Liabilities The components of other current liabilities on our condensed consolidated balance sheets as of March 31, 2022, and December 31, 2021, are presented below: March 31, December 31, Dollars in millions 2022 2021 Current maturities of long-term debt $ 16 $ 16 Reserve for estimated losses on uncompleted contracts 18 17 Retainage payable 13 13 Restructuring reserve 15 17 Value-added tax payable 49 34 Dividend payable 17 16 Other miscellaneous liabilities 54 65 Total other current liabilities $ 182 $ 178 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
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, government programs and joint ventures represent a substantial part of our operations. We are organized into two core business segments, Government Solutions and Sustainable Technology Solutions and one non-core business segment as described below: Government Solutions. Our Government Solutions business segment provides full life-cycle support solutions to defense, intelligence, space, aviation and other programs and missions for military and other government agencies primarily in the U.S., U.K. and Australia. KBR's services cover the full spectrum spanning research and development, advanced prototyping, acquisition support, systems engineering, C4ISR, cyber analytics, space domain awareness, test and evaluation, systems integration and program management, global supply chain management and operations readiness and support. With the acquisition of Frazer-Nash Consultancy Limited ("Frazer-Nash") on October 20, 2021 (described in Note 4 to the consolidated financial statements), our GS business segment also provides a broad range of professional advisory services to deliver high-end systems engineering, systems assurance and technology to customers across the defense, energy and critical infrastructure sectors primarily in the U.K. and Australia. Sustainable Technology Solutions. Our Sustainable Technology Solutions business segment is anchored by our portfolio of over 70 innovative, proprietary, sustainability-focused process technologies that we license spanning four primary areas: ammonia/syngas/fertilizers, chemical/petrochemicals, clean refining and circular process/circular economy solutions. STS also includes our highly synergistic advisory and consulting practice focused on energy transition and net-zero carbon emission consulting, our high-end engineering, design and professional services offerings, as well as our technology-led industrial solutions build on our KBR INSITE ® platform. KBR INSITE ® is a proprietary, digital, cloud-based operations and maintenance platform that identifies opportunities for our clients to achieve sustainable improvements in production, reliability, environment impact, energy efficiency and ultimately profitability. From early planning through scope definition, advanced technologies and facility life-cycle support, our STS business segment works closely with customers to provide what we believe is the optimal approach to maximize their return on investment. Other. Our non-core 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, 2022 2021 (1) Dollars in millions Revenues: Government Solutions $ 1,459 $ 1,164 Sustainable Technology Solutions 255 297 Total revenues $ 1,714 $ 1,461 Gross profit: Government Solutions $ 159 $ 116 Sustainable Technology Solutions 37 52 Total gross profit $ 196 $ 168 Equity in earnings (losses) of unconsolidated affiliates: Government Solutions $ 10 $ 7 Sustainable Technology Solutions (128) 5 Total equity in earnings (losses) of unconsolidated affiliates $ (118) $ 12 Selling, general and administrative expenses: Government Solutions $ (54) $ (49) Sustainable Technology Solutions (15) (14) Other (38) (26) Total selling, general and administrative expenses $ (107) $ (89) Acquisition and integration related costs (1) (1) Restructuring charges and asset impairments (1) — Loss on disposition of assets and investments — (1) Operating income (loss) $ (31) $ 89 Interest expense (20) (19) Other non-operating expense — (3) Income (loss) before income taxes $ (51) $ 67 |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated Revenue We disaggregate our revenue from customers by business unit, 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. Revenue by business unit and reportable segment was as follows: Three Months Ended March 31, Dollars in millions 2022 2021 Government Solutions Science & Space $ 253 $ 247 Defense & Intel 378 351 Readiness & Sustainment 533 329 International 295 237 Total Government Solutions 1,459 1,164 Sustainable Technology Solutions 255 297 Total revenue $ 1,714 $ 1,461 Government Solutions revenue earned from key U.S. government customers includes U.S. DoD agencies and NASA, and is reported as Science & Space, Defense & Intel and Readiness & Sustainment. Government Solutions revenue earned from non-U.S. government customers primarily includes the U.K. MoD and the Australian Defence Force and is reported as International. Revenue by geographic destination was as follows: Three Months Ended March 31, 2022 Total by Countries/Regions Dollars in millions Government Solutions Sustainable Technology Solutions Total United States $ 1,011 $ 109 $ 1,120 Middle East 39 49 88 Europe 283 32 315 Australia 90 — 90 Canada — 2 2 Africa 18 17 35 Asia 3 42 45 Other countries 15 4 19 Total revenue $ 1,459 $ 255 $ 1,714 Three Months Ended March 31, 2021 Total by Countries/Regions Dollars in millions Government Solutions Sustainable Technology Solutions Total United States $ 749 $ 113 $ 862 Middle East 133 44 177 Europe 173 44 217 Australia 77 5 82 Canada — — — Africa 19 20 39 Asia — 51 51 Other countries 13 20 33 Total revenue $ 1,164 $ 297 $ 1,461 Many of our contracts contain cost reimbursable, time-and-materials and fixed price 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, 2022 Dollars in millions Government Solutions Sustainable Technology Solutions Total Cost Reimbursable $ 955 $ — $ 955 Time-and-Materials 235 175 410 Fixed Price 269 80 349 Total revenue $ 1,459 $ 255 $ 1,714 Three Months Ended March 31, 2021 Dollars in millions Government Solutions Sustainable Technology Solutions Total Cost Reimbursable $ 689 $ — $ 689 Time-and-Materials 212 190 402 Fixed Price 263 107 370 Total revenue $ 1,164 $ 297 $ 1,461 Performance Obligations and Contract Liabilities We recognized revenue from performance obligations satisfied in previous periods of $18 million for the three months ended March 31, 2021. On March 31, 2022, we had $10.9 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, 33% in years two through five and 34% thereafter. Revenue associated with our remaining performance obligations to be recognized beyond one year includes performance obligations related to the Aspire Defence project, which has contract terms extending through 2041. Remaining performance obligations do not include variable consideration that was determined to be constrained as of March 31, 2022. We recognized revenue of $82 million and $107 million for the three months ended March 31, 2022 and 2021, respectively, which was previously included in the contract liability balance at the beginning of each period. Accounts Receivable March 31, December 31, Dollars in millions 2022 2021 Unbilled $ 496 $ 698 Trade & other 539 713 Accounts receivable $ 1,035 $ 1,411 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Frazer-Nash Consultancy Limited On October 20, 2021, we acquired Frazer-Nash in accordance with an agreement with Babcock International Group PLC, a leading UK based provider of specialist systems, engineering and technology solutions. The aggregate consideration paid was approximately $392 million in cash, subject to other post-closing adjustments. As of March 31, 2022, the estimated fair values of net assets acquired were preliminary, with possible updates primarily in our finalization of tax returns. The Company recognized goodwill of approximately $293 million primarily related to future growth opportunities based on an expanded service offering from intellectual capital and a highly skilled assembled workforce and other expected synergies from the combined operations. Intangible assets of $89 million were recognized and comprised of customer relationships and backlog, which will be amortized over a weighted-average period of 14 years. For U.S. tax purposes, the transaction is treated as a stock deal. As a result, there is no step-up in tax basis in the individual assets and liabilities acquired and the goodwill recognized is not deductible for tax purposes. The following supplemental pro forma, combined financial information has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Frazer-Nash as though it had been acquired on January 1, 2021. Pro forma adjustments were primarily related to the amortization of intangibles, interest on borrowings related to the acquisition, significant nonrecurring transactions and acquisition related transaction costs. Accordingly, this supplemental pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the combined company would have been had the acquisition occurred on January 1, 2021, nor is it indicative of future results of operations. Three Months Ended Dollars in millions March 31, 2021 (Unaudited) Revenue $ 1,506 Net income attributable to KBR $ 52 Diluted earnings per share $ 0.35 Harmonic Limited On July 1, 2021, we acquired certain assets and assumed certain liabilities of Harmonic Limited ("Harmonic"). The acquired business of Harmonic provides transformation and delivery consultancy project services to UK businesses and is reported within our GS business segment. We accounted for this transaction as an acquisition of a business using the acquisition method under ASC 805, Business Combinations. The agreed-upon purchase price for the acquisition was $19 million, which consisted of cash paid at closing of $17 million, funded from cash on hand, and contingent consideration with an estimated fair value of $2 million that is contingent upon the achievement of certain performance targets over the period from closing through March 31, 2024. We recognized $2 million as an intangible backlog asset, $3 million in net working capital, and goodwill of $14 million arising from the acquisition, which relates primarily to future growth opportunities. The goodwill recognized is not deductible for tax purposes. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash balances held by our wholly owned subsidiaries as well as cash held by joint ventures that we consolidate. Joint venture and the Aspire project cash balances are limited to specific project activities and are not available for other projects, general cash needs or distribution to us without approval of the board of directors of the respective entities. We expect to use this cash for project costs and distributions of earnings. The components of our cash and cash equivalents balance are as follows: March 31, 2022 Dollars in millions International (a) Domestic (b) Total Operating cash and cash equivalents $ 232 $ 52 $ 284 Short-term investments (c) 6 — 6 Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 122 — 122 Total $ 360 $ 52 $ 412 December 31, 2021 Dollars in millions International (a) Domestic (b) Total Operating cash and cash equivalents $ 218 $ 34 $ 252 Short-term investments (c) 2 — 2 Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 116 — 116 Total $ 336 $ 34 $ 370 (a) Includes deposits held by non-U.S. entities with operating accounts that constitute offshore cash for tax purposes. (b) Includes U.S. dollar and foreign currency deposits held in U.S. entities with operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country. (c) Includes time deposits, money market funds and other highly liquid short-term investments. |
Unapproved Change Orders and Cl
Unapproved Change Orders and Claims Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 March 31, 2021 Amounts included in project estimates-at-completion at January 1, $ 426 $ 1,048 (Decrease) increase in project estimates (117) (9) Approved change orders (271) (11) Foreign currency impact 7 5 Amounts included in project estimates-at-completion at March 31,* $ 45 $ 1,033 (*) As of March 31, 2022, the balance above reflects the Settlement Agreement with Combined Cycle Power Plant Subcontractor Consortium signed in April 2022. The balance as of March 31, 2022 primarily relates to projects in our Government Solutions segment. Ichthys LNG Project We have a 30% ownership interest in the JKC joint venture ("JKC"), which was 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 construction and commissioning of the Ichthys LNG Project is complete, and the facility has been handed over to the client and is producing LNG. Settlement Agreement with the Client In October 2021, JKC entered into a binding settlement agreement (the “Settlement Agreement”) that resolved the outstanding claims and disputes between JKC and its client, Ichthys LNG Pty, Ltd (collectively, “the Parties”). As a result of the Settlement Agreement, the Parties agreed to withdraw all claims and terminate all ongoing arbitration and court proceedings between the Parties. As part of the Settlement Agreement, KBR’s letters of credit were also reduced to $82 million from $164 million. Paint and Insulation Claims Against Insurer and Paint Manufacturer There has been deterioration of paint and insulation on certain exterior areas of the plant. As part of the Settlement Agreement, the Parties agreed to consult in good faith and to cooperate to seek maximum recovery from the insurance policies and paint manufacturer for the paint and insulation matters. The Parties agreed to collectively pursue claims against the paint manufacturer, and JKC has assigned claims under the insurance policy regarding the paint and insulation matters to the client. Under the Settlement Agreement, the parties have agreed that if, at the date of final resolution of the above proceedings and claims with respect to the paint and insulation matters, the recovered amount from the paint manufacturer and insurance claim is less than the stipulated ceiling amount in the Settlement Agreement, JKC will pay the client the difference between the stipulated ceiling amount and the recovered amount. JKC has provided for and continues to maintain its contingent liability. Settlement Agreement with the Combined Cycle Power Plant Subcontractor Consortium 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 pursued recourse against the Consortium to recover all of the costs to complete the Power Plant, plus the additional interest and/or general damages. Each of the Consortium partners has joint and several liability with respect to all obligations under the subcontract. As of March 31, 2022, JKC's claims against the Consortium were approximately $1.7 billion (net of subcontractor bonds and remaining original lump sum subcontract value) for recovery of JKC's costs. Subsequently, in April 2022, JKC entered into a settlement agreement (the “Subcontractor Settlement Agreement”) to resolve outstanding claims and disputes between JKC and the Consortium. As a result of the Subcontractor Settlement Agreement, KBR expects to receive approximately $271 million of cash in two payments for our proportionate share of the settlement amount. The first payment of $203 million was paid to JKC in April 2022. The second payment for approximately $68 million is expected to be paid to JKC in March 2023, at prevailing exchange rates. KBR recorded a non-cash charge to equity in earnings (losses) of unconsolidated affiliates in the amount of $137 million during the quarter ended March 31, 2022, which reflected KBR’s proportionate share of its claims against the Consortium. KBR's Senior Credit Facility contains certain defined provisions under an 'Ichthys Recovery Event', including requiring JKC to make distributions to the JV partners for their proportionate share of the net cash proceeds. Upon receiving such distribution from JKC, KBR is required to use commercially reasonable efforts to make mandatory prepayments under Term Loan A within three business days of receipt using the net settlement proceeds. KBR is in current communication with JKC to distribute the first payment imminently. See Note 8 "Equity Method Investments and Variable Interest Entities" to our condensed consolidated financial statements for further discussion regarding our equity method investment in JKC. 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, weather and ongoing resolution of legacy projects and legal matters. 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. During the three months ended March 31, 2022 within our STS business segment, we recognized a non-cash charge to equity in earnings of unconsolidated affiliates of $137 million as a result of changes in estimates on the Ichthys LNG Project in connection with the Subcontractor Settlement Agreement discussed above. Additionally, due to the ongoing conflict between Russia and Ukraine, sanctions and trade control measures were implemented against Russia. This may have an impact on our ability to operate in the ordinary course of business as we wind down our business operations in Russia and may result in changes in estimates on our projects as we continue to assess revisions to these estimates when known. The duration and extent to which the trade sanctions against Russia effect our business will depend on future developments which still remain uncertain. As a result, during the quarter, we recognized an unfavorable change of $12 million in gross profit and incurred $4 million in severance and asset impairments costs associated with our intent to exit commercial projects in Russia. |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring ChargesDuring 2020, our management initiated and approved a broad restructuring plan in response to the dislocation of the global energy market resulting from the decline in oil prices and the COVID-19 pandemic. As part of the plan, management approved strategic business restructuring activities and decided to discontinue pursuing certain projects, principally lump-sum EPC and commoditized construction services. The restructuring plan was designed to refine our market focus, optimize costs, and improve operational efficiencies. The restructuring charges were substantially completed in the year ended December 31, 2020. The restructuring liability at March 31, 2022, was $61 million, of which $15 million is included in other current liabilities and $46 million is included in other liabilities. The restructuring liability at December 31, 2021, was $66 million, of which $17 million is included in other current liabilities and $49 million is included in other liabilities. |
Equity Method Investments and V
Equity Method Investments and Variable Interest Entities | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Variable Interest Entities | Equity Method Investments and Variable Interest EntitiesWe 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, 2022 2021 Dollars in millions Beginning balance at January 1, $ 576 $ 881 Equity in earnings (losses) of unconsolidated affiliates (118) (170) Distributions of earnings of unconsolidated affiliates (a) (5) (72) Advances to (payments from) unconsolidated affiliates, net (7) (17) Investments (b) 1 29 Sale of equity method investment (c) (22) (39) Foreign currency translation adjustments 3 (10) Other (d) 2 (26) Ending balance $ 430 $ 576 (a) The Brown & Root Industrial Services joint venture declared a distribution in the fourth quarter of 2021 that was paid to KBR during the three months ended March 31, 2022. (b) Investments include $1 million and $26 million in funding contributions to JKC for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively. (c) During the three months ended March 31, 2022, we sold two of our three U.K. Road projects. The carrying value of our investment was $22 million. We received $18 million in cash proceeds and the purchaser agreed to assume the $4 million of consortium relief. In the second quarter of 2022, we sold the one remaining U.K. Road project and recorded a gain of approximately $16 million. During the third quarter of 2021, we sold our investment interest in the Middle East Petroleum Corporation (EBIC Ammonia project). The carrying value of our investment was $39 million. We received $43 million in cash proceeds and recorded a gain of $4 million, of which $1 million was attributable to our non-controlling interests. Subsequent to the receipt of the cash proceeds, we distributed the non-controlling interests' proportionate share of $15 million. (d) During the year ended December 31, 2021, Other included unearned income related to the Ichthys LNG Project, which was previously recorded outside of the equity method investment balance and will not be realized as a result of the settlement proceedings. See Note 6 "Unapproved Change Orders and Claims Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors" for additional information. 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, 2022 and 2021, our revenues included $104 million and $79 million, respectively, related to the services we provided primarily to the Aspire Defence Limited joint venture within our GS business segment and two other joint ventures within our STS business segment. Amounts included in our condensed consolidated balance sheets related to services we provided to our unconsolidated joint ventures as of March 31, 2022, and December 31, 2021 are as follows: March 31, December 31, Dollars in millions 2022 2021 Accounts receivable, net of allowance for credit losses $ 42 $ 35 Contract assets $ 1 $ 2 Other current assets $ — $ 25 Contract liabilities $ 6 $ 5 |
Retirement Benefits
Retirement Benefits | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic pension cost (benefit) related to pension benefits for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 2021 Dollars in millions United States Int’l United States Int’l Components of net periodic pension benefit Interest cost $ 1 $ 9 $ — $ 8 Expected return on plan assets (1) (22) (1) (21) Recognized actuarial loss — 6 1 8 Net periodic pension benefit $ — $ (7) $ — $ (5) |
Debt and Other Credit Facilitie
Debt and Other Credit Facilities | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 December 31, 2021 (1) Term Loan A $ 438 $ 441 Term Loan B 510 511 Convertible Senior Notes 350 350 Senior Notes 250 250 Senior Credit Facility 362 364 Unamortized debt issuance costs - Term Loan A (4) (4) Unamortized debt issuance costs and discount - Term Loan B (12) (13) Unamortized debt issuance costs and discount - Convertible Senior Notes (4) (4) Unamortized debt issuance costs and discount - Senior Notes (4) (4) Total debt 1,886 1,891 Less: current portion 16 16 Total long-term debt, net of current portion $ 1,870 $ 1,875 (1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method. Senior Credit Facility On November 18, 2021, we entered into Amendment No. 5 under our existing Credit Agreement, dated as of April 25, 2018 ("Pro Rata Facilities"), consisting of a $1 billion revolving credit facility (the "Revolver"), a $442 million Term Loan A, ("Term Loan A") with debt tranches denominated in US dollars, Australian dollars and British pound sterling and a $512 million Term Loan B ("Term Loan B"), with an aggregate capacity of $1.954 billion ("Senior Credit Facility"). The Amendment, among other things, (i) established an additional tranche of £122.1 million in Term Loan A incurred by Kellogg Brown & Root Limited, a wholly owned indirect subsidiary of KBR, Inc., organized under the laws of England and Wales, (ii) increased capacity and flexibility under certain negative covenants, (iii) permits the netting of unrestricted cash up to a specified cap for purposes of calculating the leverage ratio and (iv) reduced the interest rate payable for applicable margins and commitment fees and extended the maturity dates to November 2026 for Term Loan A and the Revolver. The maturity date of Term Loan B remained unchanged maturing February 2027. The interest rates with respect to the Revolver and Term Loan A are based on, at the Company's option, the respective adjusted reference rate 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%. Additionally, there is a commitment fee with respect to the Revolver. The details of the applicable margins and commitment fees under the amended Senior Credit Facility are based on the Company's consolidated net leverage ratio as follows: Revolver and Term Loan A Consolidated Net Leverage Ratio Reference Rate (a) Base Rate Commitment Fee Greater than or equal to 4.25 to 1.00 2.25 % 1.25 % 0.33 % Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 2.00 % 1.00 % 0.30 % Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 1.75 % 0.75 % 0.28 % Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 1.50 % 0.50 % 0.25 % Less than 1.25 to 1.00 1.25 % 0.25 % 0.23 % (a) The reference rate for the Revolver and the U.S. dollar tranche is LIBOR, the Australian dollar tranche is BBSY and the British pound sterling tranche is SONIA. Term Loan A provides for quarterly principal payments of 0.625% of the aggregate principal amount commencing with the fiscal quarter ending March 31, 2022, increasing to 1.25% starting with the quarter ending March 31, 2024. 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 covenants of a maximum consolidated net leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the Senior Credit Facility). Our consolidated net leverage ratio as of the last day of any fiscal quarter may not exceed 4.50 to 1 through 2022, reducing to 4.25 to 1 in 2023 and 4.00 to 1 in 2024 and thereafter. Our consolidated interest coverage ratio may not be less than 3.00 to 1 as of the last day of any fiscal quarter. As of March 31, 2022, we were in compliance with our financial covenants related to our debt agreements. Convertible Senior Notes 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 between us and Citibank, N.A., as trustee. The Convertible Notes are senior unsecured obligations and 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. The Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. It is our current intent and policy to settle the principal balance of the Convertible Notes in cash at our election, and any excess value upon conversion in shares of our common stock. The initial conversion price of the Convertible Notes is approximately $25.51 (subject to adjustment in certain circumstances), based on the initial conversion rate of 39.1961 Common Shares per $1,000 principal amount of Convertible Notes. Prior to May 1, 2023, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date. On February 18, 2022, we declared a quarterly cash dividend of $0.12 per Common Share, which exceeded our per share dividend threshold and adjusted the conversion rate to 39.4809 at a strike price of $25.33. Convertible Notes Call Spread Overlay. Concurrent with the issuance of the Convertible Notes, we entered into privately negotiated convertible note hedge transactions (the "Note Hedge Transactions") and warrant transactions (the "Warrant Transactions") with the option counterparties. These transactions represent a call spread overlay, whereby the cost of the Note Hedge Transactions we purchased to cover the cash outlay upon conversion of the Convertible Notes was reduced by the sales price of the Warrant Transactions. Each of these transactions is described below. The Note Hedge Transactions cost an aggregate of $62 million and are expected generally to reduce the potential dilution of common stock and/or offset the cash payments we are required to make in excess of the principal amount upon conversion of the Convertible Notes in the event that the market price of our common stock is greater than the strike price of the Note Hedge Transactions, which was initially $25.51 (subject to adjustment), corresponding approximately to the initial conversion price of the Convertible Notes. The Note Hedge Transactions were accounted for by recording the cost as a reduction to PIC based on the Note Hedge Transactions meeting certain scope exceptions provided under ASC Topic 815. We received proceeds of $22 million for the Warrant Transactions, in which we sold net-share-settled warrants to the option counterparties in an amount equal to the number of shares of our common stock initially underlying the Convertible Notes, subject to customary anti-dilution adjustments. The original strike price of the warrants was $40.02 per share. The updated strike price as of March 31, 2022 was $39.73. The Warrant Transactions have been accounted for by recording the proceeds received as PIC. The Note Hedge Transactions and the Warrant Transactions are separate transactions, in each case entered into by us with the option counterparties, and are not part of the terms of the Convertible Notes and will not affect any holder's rights under the Convertible Notes. As of March 31, 2022, the if-converted value of the Convertible Notes based on the closing share price exceeded the $350 million principal amount by approximately $406 million. The incremental value over the principal amount would be fully offset by the shares we are allowed to purchase under the Note Hedge Transaction. However, the counterparties holding the warrants would have the right to purchase the same number of shares we would receive at a strike price of $39.73 resulting in value of $207 million that would have been delivered to the counterparties as of March 31, 2022. Senior Notes On September 30, 2020, we issued and sold $250 million aggregate principal amount of 4.750% Senior Notes due 2028 (the "Senior Notes") pursuant to an indenture among us, the guarantors party thereto and Citibank, N.A., as trustee. The Senior Notes are senior unsecured obligations and are fully and unconditionally guaranteed by each of our existing and future domestic subsidiaries that guarantee our obligations under the Senior Credit Facility and certain other indebtedness. The net proceeds from the offering were approximately $245 million, after deducting fees and estimated offering expenses and were used to finance a portion of the purchase price for the acquisition of Centauri and pay related fees and expenses. Interest is payable semi-annually in arrears on March 30 and September 30 of each year, beginning on March 30, 2021, and the principal is due on September 30, 2028. At any time prior to September 30, 2023, we may redeem all or part of the Senior Notes at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus accrued and unpaid interest, if any, to (but not including) the redemption date, plus a specified “make-whole premium.” On or after September 30, 2023, we may redeem all or part of the Senior Notes at our option, at the redemption prices set forth in the Senior Notes, plus accrued and unpaid interest, if any, to (but not including) the redemption date. At any time prior to September 30, 2023, we may redeem up to 35% of the original aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 104.750% of the principal amount of the Senior Notes, together with accrued and unpaid interest, if any, to (but not including) the redemption date. If we undergo a change of control, we may be required to make an offer to holders of the Senior Notes to repurchase all of the Senior Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. 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 in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers and future funding commitments. As of March 31, 2022, we had $1 billion in a committed line of credit under the Senior Credit Facility and $521 million of uncommitted lines of credit to support the issuance of letters of credit. As of March 31, 2022, with respect to our Senior Credit Facility, we had $362 million of outstanding borrowings previously issued to fund the acquisitions of Centauri and Frazer-Nash and $49 million of outstanding letters of credit. With respect to our $521 million of uncommitted lines of credit, we had utilized $215 million for letters of credit as of March 31, 2022. The total remaining capacity of these committed and uncommitted lines of credit was approximately $895 million. 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 under our bilateral facilities, $85 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 continued through maturity in March 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, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate was approximately (37)% and 25% for the three months ended March 31, 2022 and 2021, respectively. The effective tax rate for the three months ended March 31, 2022, as compared to the U.S. statutory rate of 21%, was primarily impacted by an equity adjustment on an LNG project. An equity adjustment was recorded on an entity in which KBR is a JV partner in the first quarter of 2022. Since the tax impact for this adjustment was taxed at the JV level, KBR will not receive a tax benefit. Excluding the tax impact of discrete items, our tax rate would be 25% for the three months ended March 31, 2022. Our estimated annual effective rate for 2022 is 25% excluding the effects of discrete items. Our estimated annual effective rate is subject to change based on the actual jurisdictions where our 2022 earnings are generated. The valuation allowance for deferred tax assets as of March 31, 2022 and December 31, 2021 was $201 million and $204 million, respectively. The remaining 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. The utilization of the unreserved foreign tax credit carryforwards is based on our ability to generate income from foreign sources of approximately $538 million prior to their expiration. The utilization of other net deferred tax assets, excluding those associated with indefinite-lived intangible assets, is based on our ability to generate U.S. forecasted taxable income of approximately $619 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, 2022 and December 31, 2021 was $89 million. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are a party to litigation and other proceedings that arise in the ordinary course of our business, including matters arising under provisions relating to the protection of the environment. These types of matters could result in fines, penalties, cost reimbursements or contributions, compensatory or treble damages or non-monetary sanctions or relief. We believe the probability is remote that the outcome of any individual matter, including the matters described below, will have a material adverse effect on the corporation as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings and cash flows in any particular reporting period. Among the factors that we consider in this assessment are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if estimable), the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar cases and the experience of other companies, the facts available to us at the time of assessment and how we intend to respond to the proceeding or claim. Our assessment of these factors may change over time as individual proceedings or claims progress. Although we cannot predict the outcome of legal or other proceedings with certainty, when it is probable that a loss has been incurred and the amount is reasonably estimable, U.S. GAAP requires us to accrue an estimate of the probable loss or range of loss or make a statement that such an estimate cannot be made. We follow a thorough process in which we seek to estimate the reasonably possible loss or range of loss, and only if we are unable to make such an estimate do we conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in our discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated. 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 in the unpaid overtime case 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 Chadian 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. The hearing was postponed due to COVID-19 but took place on September 18, 2020. On October 9, 2020 the appellate court of Moundou awarded the plaintiffs approximately $19 million. SSI filed an appeal of this decision to the Chadian Supreme Court on December 28, 2020. SSI’s request for suspension on the enforceability of the award from the Chadian Supreme Court was granted on January 4, 2021. A hearing took place on December 21, 2021, and while a decision was not issued at the hearing, the Reporting Judge of the Chadian Supreme Court indicated, with regard to the fourth plea concerning the unicity of judicial matters, that this ground alone justified quashing the decision. On February 9, 2022, the Chadian Supreme Court issued an abstract of their forthcoming decision upholding the lower court’s ruling. We are still awaiting a full decision by the Chadian Supreme Court. Regardless, at this time, based on our assessment of existing law and precedent, the opinions of legal counsel and other advisers, and the facts available to us at the time of assessment, we do not believe a risk of material loss is probable related to this matter. 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 paid by Exxon based on the applicable contract and past actions by Exxon with respect to costs and awards related to this matter. 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 $301 million Australian dollars. 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. We believe the gross 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. As of March 31, 2022, we have accrued a probable and reasonably estimable potential loss in an amount that is immaterial. At this time, fact discovery and expert review are still ongoing. The joint venture, joint venture insurers and client continue to be engaged in discussions concerning potential resolution of the claims. |
U.S. Government Matters
U.S. Government Matters | 3 Months Ended |
Mar. 31, 2022 | |
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. 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 includes, 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. The U.S. government also retains the right to pursue various remedies under any of these contracts which could result in challenges to expenditures, suspension of payments, fines and suspensions or debarment from future business with the U.S. government. The Company accrued for probable and reasonably estimable unallowable costs associated with open government matters related to our GS business in the amounts of $86 million as of March 31, 2022 and $76 million as of December 31, 2021, which are recorded in other liabilities on our consolidated balance sheets. 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 that 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 resolutions 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. Investigations, Qui Tams and Litigation The following matters relate to ongoing litigation or federal investigations involving U.S. government contracts. Several 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." In the event we prevail in defending these allegations, a majority of our defense costs will be billable under the LogCAP III contract. 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 lost our claims against the government and have exercised our offset or clawback rights as against FKTC in the arbitration. FKTC does not agree with our right of offset and a final hearing will be needed to resolve this issue and our other counterclaims against FKTC. A hearing was held on January 31 - February 1, 2022. Post-heard briefs have now been filed and we await a decision by the Tribunal, which we anticipate in the second quarter of 2022. Management accrued a probable and reasonably estimable loss amount, which is included in other liabilities on our condensed consolidated balance sheets, to cover either liability as determined by the panel or a negotiated settlement with FKTC on this matter. 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 which were expected to occur in early 2020 were postponed due to COVID-19 but resumed in 2021. KBR and the relators filed various motions including a motion to dismiss by KBR. Although KBR's motion to dismiss was not granted it remains an option on appeal. Fact discovery has been completed and expert discovery is expected to continue through July 2022. We believe the allegations of fraud by the relators are without merit and, based on our assessment of existing law and precedent, the opinions or views of legal counsel and the facts available to us as of March 31, 2022, we are not able to estimate a reasonably possible loss and accordingly, 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. |
Claims and Accounts Receivable
Claims and Accounts Receivable | 3 Months Ended |
Mar. 31, 2022 | |
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 $30 million as of March 31, 2022, and December 31, 2021. 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. As of March 31, 2022 and December 31, 2021, $29 million of the total claims and accounts receivable balance relate to contracts where our reimbursable costs have exceeded the U.S. government's funded values on the underlying task orders or task orders where the U.S. government has not authorized us to bill. The remaining $1 million as of March 31, 2022, and December 31, 2021 relate to Form 1s issued by the U.S. government questioning or objecting to costs billed to them. We believe the remaining disputed costs will be resolved in our favor, at which time the U.S. government will be required to obligate funds from appropriations for the year in which resolution occurs. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021 $ (296) $ (581) $ (4) $ (881) Other comprehensive income adjustments before reclassifications (19) — 17 (2) Amounts reclassified from AOCL — 5 2 7 Net other comprehensive income (loss) (19) 5 19 5 Balance at March 31, 2022 $ (315) $ (576) $ 15 $ (876) Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2020 $ (291) $ (764) $ (28) $ (1,083) Other comprehensive income adjustments before reclassifications 6 — 12 18 Amounts reclassified from AOCL 1 7 3 11 Net other comprehensive income (loss) 7 7 15 29 Balance at March 31, 2021 $ (284) $ (757) $ (13) $ (1,054) Reclassifications out of AOCL, net of tax, by component Three Months Ended March 31, Dollars in millions 2022 2021 Affected line item on the Condensed Consolidated Statements of Operations Accumulated foreign currency adjustments Reclassification of foreign currency adjustments $ — $ (1) Net income attributable to noncontrolling interests and Gain on disposition of assets and investments Tax benefit — — Provision for income taxes Net accumulated foreign currency $ — $ (1) Net of tax Accumulated pension liability adjustments Amortization of actuarial loss (a) $ (6) $ (8) See (a) below Tax benefit 1 1 Provision for income taxes Net pension and post-retirement benefits $ (5) $ (7) Net of tax Changes in fair value for derivatives Foreign currency hedge and interest rate swap settlements $ (3) $ (4) Other non-operating expense Tax benefit 1 1 Provision for income taxes Net changes in fair value of derivatives $ (2) $ (3) Net of tax (a) This item is included in the computation of net periodic pension cost. See Note 9 "Retirement Benefits" to our condensed consolidated financial statements for further discussion. |
Share Repurchases
Share Repurchases | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Share Repurchases | Share Repurchases Authorized Share Repurchase Program On February 25, 2014, the 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, the Board of Directors authorized an increase of approximately $190 million to our share repurchase program, returning the authorization level to $350 million. As of March 31, 2022, $200 million remains available for repurchase under this authorization. The authorization does not obligate the Company 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 the Company's current and future cash flows 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, 2022 Number of Shares Average Price per Share Dollars in Millions Repurchases under the $350 million authorized share repurchase program 519,332 $ 48.12 $ 25 Withheld to cover shares 170,939 $ 48.70 $ 8 Total 690,271 $ 48.26 $ 33 Three Months Ended March 31, 2021 Number of Shares Average Price per Share Dollars in Millions Repurchases under the $350 million authorized share repurchase program — $ — $ — Withheld to cover shares 129,376 $ 31.07 $ 4 Total 129,376 $ 31.07 $ 4 |
Income (loss) per Share
Income (loss) per Share | 3 Months Ended |
Mar. 31, 2022 | |
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 if-converted method for Convertible Debt and the treasury stock method for all other instruments. 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 2022 2021 (1) Basic weighted average common shares outstanding 140 141 Stock options, restricted shares, and convertible debt (a) — 14 Diluted weighted average common shares outstanding (b) 140 155 (1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method. (a) For the three months ended March 31, 2021, there was a diluted impact primarily related to our Convertible Debt. (b) In periods for which we report a net loss attributable to KBR, basic net loss per share and diluted net loss per share are identical as the effect of all potential common shares is anti-dilutive and therefore excluded. Upon our full retrospective adoption of ASU 2020-06 on January 1, 2022, we are required to apply the if-converted method to our Convertible Debt when calculating diluted income (loss) per share. Under the if-converted method, the principal amount and any conversion spread of the Convertible Debt, to the extent dilutive, are assumed to be converted into common stock at the beginning of the period and net income (loss) attributable to KBR is adjusted to reverse the effect of any interest expense associated with the Convertible Debt. For the three months ended March 31, 2022, the Convertible Notes did not impact the calculation of diluted income (loss) per share as they were anti-dilutive. For the three months ended March 31, 2021, the Convertible Notes impacted the calculation of diluted income (loss) per share as the average price of our common stock exceeded the conversion price of $25.40. Additionally, diluted net income (loss) per share did not include any effect from the Warrant Transactions (as defined in Note 10, "Debt and Other Credit Facilities", to our condensed consolidated financial statements) for the three months ended March 31, 2022 as they were anti-dilutive. For the three months ended March 31, 2021, the Warrant Transactions did not impact diluted net income (loss) per share as the average price of our common stock did not exceed the exercise price of $39.85. The Warrant Transactions may have a dilutive effect on diluted net income (loss) per share in the year ending December 31, 2022 in periods for which we report net income attributable to KBR and the average price of our common stock exceeds the applicable exercise price. 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, 2022 and $0.3 million net earnings allocated to participating securities, or a negligible amount per share, for the three months ended March 31, 2021. For the three months ended March 31, 2022, the diluted income (loss) per share calculation excluded the following weighted-average potential common shares because their inclusion would have been anti-dilutive: 13.8 million related to the Convertible Debt, 13.8 million related to the Warrant Transactions and 0.8 million related to our stock options and restricted stock awards. For the three months ended March 31, 2021, the diluted income (loss) per share calculation excluded the following weighted-average potential common shares because their inclusion would have been anti-dilutive: 13.8 million related to the Warrant Transactions and 1.1 million related to our stock options and restricted stock awards. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Risk Management | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 December 31, 2021 Dollars in millions Carrying Value Fair Value Carrying Value Fair Value Liabilities (including current maturities): Term Loan A Level 2 $ 438 $ 438 $ 441 $ 441 Term Loan B Level 2 510 509 511 514 Convertible Notes Level 2 350 767 350 669 Senior Notes Level 2 250 244 250 256 Senior Credit Facility Level 2 ` 362 362 364 364 Nonrecourse project debt Level 2 2 2 2 2 See Note 10 "Debt and Other Credit Facilities" 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, 2022, the gross notional value of our foreign currency exchange forwards and option contracts used to hedge balance sheet exposures was $81 million, all of which had durations of 19 days or less. We also had approximately $8 million (gross notional value) of cash flow hedges which had durations of 26 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 are included in other current assets and other current liabilities on our condensed consolidated balance sheets at March 31, 2022, and December 31, 2021. 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 expense on our condensed consolidated statements of operations. Three Months Ended March 31, Dollars in millions 2022 2021 Balance Sheet Hedges - Fair Value $ — $ — Balance Sheet Position - Remeasurement — (6) Net loss $ — $ (6) Interest rate risk. We use interest rate swaps to reduce interest rate risk and to manage net interest expense by converting our LIBOR based loans into fixed-rate loans. In October 2018, we entered into interest rate swap agreements with a notional value of $500 million, which are effective beginning October 2018 and mature in September 2022. Under the October 2018 swap agreements, we receive one-month LIBOR and pay a monthly fixed rate of 3.055% for the term of the swaps. In March 2020, we entered into additional swap agreements with a notional value of $400 million, which are effective beginning October 2022 and mature in January 2027. Under the March 2020 swap agreements, we will receive one-month LIBOR and pay a monthly fixed rate of 0.965% for the term of the swaps. Our interest rate swaps are reported at fair value using Level 2 inputs. The fair value of the interest rate swaps at March 31, 2022, was a $19 million net asset, of which $22 million is included in other assets, $2 million is included in other current assets and $5 million is included in other current liabilities. The unrealized net gain on these interest rate swaps was $19 million and is included in AOCL as of March 31, 2022. The fair value of the interest rate swaps at December 31, 2021, was a $3 million liability, of which $10 million is included in other current liabilities and $7 million is included in other assets. The unrealized net losses on these interest rate swaps was $3 million and included in AOCL as of December 31, 2021. Credit Losses. We are exposed to credit losses primarily related to our professional services, project delivery and technologies offered in our STS business segment. We do not consider our GS business segment to be at risk for credit losses because substantially all services within this segment are provided to agencies of the U.S., U.K. and Australian governments. 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 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, 2022, our STS business segment that is subject to credit risk reported approximately $357 million of financial assets consisting primarily of accounts receivable and contract assets, net of allowance for credit losses of $13 million. Based on an aging analysis at March 31, 2022, 87% of our accounts receivable related to this segment was outstanding for less than 90 days. Sales of Receivables. From time to time, we sell certain receivables to unrelated third-party financial institutions under various accounts receivable monetization programs. One such program is with MUFG Bank, Ltd. (“MUFG”) under a Master Accounts Receivable Purchase Agreement (the “RPA”), which provides the sale to MUFG of certain of our designated eligible receivables, with a significant portion of such receivables being owed by the U.S. government. The receivables sold under the agreements do not allow for recourse for any credit risk related to our customers if such receivables are not collected by the third-party financial institutions. The Company accounts for these receivable transfers as a sale under ASC Topic 860, Transfers and Servicing, as the receivables have been legally isolated from the Company, the financial institution has the right to pledge or exchange the assets received and we do not maintain effective control over the transferred accounts receivable. Our only continuing involvement with the transferred financial assets is as the collection and servicing agent. As a result, the accounts receivable balance on the condensed consolidated balance sheets is presented net of the transferred amount. During the three months ended March 31, 2022, the Company has derecognized $1,287 million of accounts receivables from the balance sheet under these agreements, of which certain receivables totaling $1,278 million were sold under the MUFG RPA. The fair value of the sold receivables approximated their book value due to their short-term nature. The fees incurred are presented in other non-operating expense on the condensed consolidated statements of operations. Activity for third-party financial institutions consisted of the following: Three Months Ended Three Months Ended Dollars in millions March 31, 2022 March 31, 2021 Beginning balance $ 481 112 Sale of receivables 1,287 602 Settlement of receivables (1,649) (597) Cash collected, not yet remitted (1) — Outstanding balances sold to financial institutions $ 118 $ 117 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New accounting pronouncements requiring implementation in future periods are discussed below. In 2017, the United Kingdom's Financial Conduct Authority (FCA) announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR), which have been widely used as reference rates for various securities and financial contracts, including loans, debts and derivatives. This announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. Subsequently in March 2021, the FCA announced some USD LIBOR tenors (overnight, 1-month, 3-month, 6-month and 12-month) will continue to be published until June 30, 2023. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR) for USD LIBOR. Currently, our Senior Credit Facility and certain of our derivative instruments reference LIBOR base rates. Our Senior Credit Facility contains provisions to transition into alternative reference rates including calculations to be employed when LIBOR ceases to be available as a benchmark. We have adhered to the ISDA 2020 IBOR Fallbacks Protocol, which will govern our derivatives upon the final termination of USD LIBOR index benchmark. ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended, helps limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022. We do not expect a significant impact to our financial results, financial position or cash flows from the transition from LIBOR to alternative reference rates, but we will continue to monitor the impact of this transition until it is completed. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the future impact of adoption of this standard. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of ConsolidationThe 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 (collectively, the "Company," "KBR", "we", "us" or "our"). We account for investments over which we have significant influence, but not a controlling financial interest, using the equity method of accounting. See Note 8 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 and Recent Accounting Pronouncements | Adoption of ASU 2020-06 Effective January 1, 2022, we adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06") using the full retrospective method. Accordingly, the Company is presenting the consolidated financial statements for the year ended December 31, 2021, and the condensed consolidated financial statements for the three months ended March 31, 2021, as if ASU 2020-06 had been effective for those periods. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. As such, we no longer separate the Convertible Senior Notes into liability and equity components. The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the Convertible Senior Notes outstanding, and as a result, PIC and the related unamortized debt discount on the Convertible Senior Notes were reduced. The removal of the remaining debt discount recorded for this previous separation has the effect of increasing our net debt balance. ASU 2020-06 also eliminates the treasury stock method to calculate diluted earnings per share for certain convertible instruments and requires the use of the if-converted method. As such, we are required to apply the if-converted method to our Convertible Senior Notes when calculating diluted income (loss) per share. Under the if-converted method, the principal amount and any conversion spread of the Convertible Senior Notes, to the extent dilutive, are assumed to be converted into common stock at the beginning of the period and net income (loss) attributable to KBR is adjusted to reverse the effect of any interest expense associated with the Convertible Senior Notes. For the years ended December 31, 2021 and 2020, the adoption of this standard did not materially impact our financial performance, financial position or cash flow, but it did result in an increase in the number of diluted weighted average shares outstanding utilized in our diluted income (loss) per share calculation in periods of net income attributable to KBR. For the year ending December 31, 2022, the adoption of this standard will not materially impact our financial performance, financial position or cash flow, but it may result in an increase in the number of diluted weighted average shares outstanding utilized in our diluted income (loss) per share calculation. Impact of Adoption of Other New Accounting Standards Effective January 1, 2022, we adopted ASU No. 2021-04. Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses measurement, treatment and recognition of a freestanding equity-classified written call option modification or exchange. The adoption of this standard did not have an impact on our financial statements. Effective January 1, 2022, we adopted ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements and any significant terms and conditions of the agreements, including commitments and contingencies. The new standard only impacts annual financial statement footnote disclosures. Therefore, the adoption did not have a material effect on our condensed consolidated financial statements. New accounting pronouncements requiring implementation in future periods are discussed below. In 2017, the United Kingdom's Financial Conduct Authority (FCA) announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR), which have been widely used as reference rates for various securities and financial contracts, including loans, debts and derivatives. This announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. Subsequently in March 2021, the FCA announced some USD LIBOR tenors (overnight, 1-month, 3-month, 6-month and 12-month) will continue to be published until June 30, 2023. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR) for USD LIBOR. Currently, our Senior Credit Facility and certain of our derivative instruments reference LIBOR base rates. Our Senior Credit Facility contains provisions to transition into alternative reference rates including calculations to be employed when LIBOR ceases to be available as a benchmark. We have adhered to the ISDA 2020 IBOR Fallbacks Protocol, which will govern our derivatives upon the final termination of USD LIBOR index benchmark. ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended, helps limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022. We do not expect a significant impact to our financial results, financial position or cash flows from the transition from LIBOR to alternative reference rates, but we will continue to monitor the impact of this transition until it is completed. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the future impact of adoption of this standard. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022, and December 31, 2021, are presented below: March 31, December 31, Dollars in millions 2022 2021 Current maturities of long-term debt $ 16 $ 16 Reserve for estimated losses on uncompleted contracts 18 17 Retainage payable 13 13 Restructuring reserve 15 17 Value-added tax payable 49 34 Dividend payable 17 16 Other miscellaneous liabilities 54 65 Total other current liabilities $ 182 $ 178 |
Schedule of Impact of New Accounting Pronouncements | Select unaudited condensed consolidated balance sheet line items, which reflect the adoption of ASU 2020-06 are as follows: December 31, 2021 Dollars in millions As Previously Reported Adjustments As Adjusted Assets: Deferred income taxes $ 226 $ 5 $ 231 Liabilities: Long-term debt $ 1,852 $ 23 $ 1,875 KBR Shareholders' Equity: PIC $ 2,251 $ (45) $ 2,206 Retained earnings 1,260 27 1,287 Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASU 2020-06 are as follows: Three Months Ended March 31, 2021 Dollars in millions As Previously Reported Adjustments As Adjusted Interest Expense $ (22) $ 3 $ (19) Income before income taxes $ 64 $ 3 $ 67 Provision for income taxes $ (16) $ (1) $ (17) Net income $ 48 $ 2 $ 50 Net income attributable to KBR $ 47 $ 2 $ 49 Net income attributable to KBR per share: Basic $ 0.33 $ 0.02 $ 0.35 Diluted $ 0.33 $ — $ 0.33 Basic weighted average common shares outstanding $ 141 $ — $ 141 Diluted weighted average common shares outstanding $ 144 $ 11 $ 155 Select unaudited condensed consolidated statement of cash flows line items, which reflect the adoption of ASU 2020-06 are as follows: Three Months Ended March 31, 2021 Dollars in millions As Previously Reported Adjustments As Adjusted Cash flows from operating activities: Net Income $ 48 $ 2 $ 50 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax 7 1 8 Other 11 (3) 8 Total cash flows provided by operating activities $ 50 $ — $ 50 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of operations by reportable segment | Operations by Reportable Segment Three Months Ended March 31, 2022 2021 (1) Dollars in millions Revenues: Government Solutions $ 1,459 $ 1,164 Sustainable Technology Solutions 255 297 Total revenues $ 1,714 $ 1,461 Gross profit: Government Solutions $ 159 $ 116 Sustainable Technology Solutions 37 52 Total gross profit $ 196 $ 168 Equity in earnings (losses) of unconsolidated affiliates: Government Solutions $ 10 $ 7 Sustainable Technology Solutions (128) 5 Total equity in earnings (losses) of unconsolidated affiliates $ (118) $ 12 Selling, general and administrative expenses: Government Solutions $ (54) $ (49) Sustainable Technology Solutions (15) (14) Other (38) (26) Total selling, general and administrative expenses $ (107) $ (89) Acquisition and integration related costs (1) (1) Restructuring charges and asset impairments (1) — Loss on disposition of assets and investments — (1) Operating income (loss) $ (31) $ 89 Interest expense (20) (19) Other non-operating expense — (3) Income (loss) before income taxes $ (51) $ 67 (1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Revenue by business unit and reportable segment was as follows: Three Months Ended March 31, Dollars in millions 2022 2021 Government Solutions Science & Space $ 253 $ 247 Defense & Intel 378 351 Readiness & Sustainment 533 329 International 295 237 Total Government Solutions 1,459 1,164 Sustainable Technology Solutions 255 297 Total revenue $ 1,714 $ 1,461 Revenue by geographic destination was as follows: Three Months Ended March 31, 2022 Total by Countries/Regions Dollars in millions Government Solutions Sustainable Technology Solutions Total United States $ 1,011 $ 109 $ 1,120 Middle East 39 49 88 Europe 283 32 315 Australia 90 — 90 Canada — 2 2 Africa 18 17 35 Asia 3 42 45 Other countries 15 4 19 Total revenue $ 1,459 $ 255 $ 1,714 Three Months Ended March 31, 2021 Total by Countries/Regions Dollars in millions Government Solutions Sustainable Technology Solutions Total United States $ 749 $ 113 $ 862 Middle East 133 44 177 Europe 173 44 217 Australia 77 5 82 Canada — — — Africa 19 20 39 Asia — 51 51 Other countries 13 20 33 Total revenue $ 1,164 $ 297 $ 1,461 Many of our contracts contain cost reimbursable, time-and-materials and fixed price 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, 2022 Dollars in millions Government Solutions Sustainable Technology Solutions Total Cost Reimbursable $ 955 $ — $ 955 Time-and-Materials 235 175 410 Fixed Price 269 80 349 Total revenue $ 1,459 $ 255 $ 1,714 Three Months Ended March 31, 2021 Dollars in millions Government Solutions Sustainable Technology Solutions Total Cost Reimbursable $ 689 $ — $ 689 Time-and-Materials 212 190 402 Fixed Price 263 107 370 Total revenue $ 1,164 $ 297 $ 1,461 |
Schedule of accounts receivable | March 31, December 31, Dollars in millions 2022 2021 Unbilled $ 496 $ 698 Trade & other 539 713 Accounts receivable $ 1,035 $ 1,411 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Pro Forma Information | The following supplemental pro forma, combined financial information has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Frazer-Nash as though it had been acquired on January 1, 2021. Pro forma adjustments were primarily related to the amortization of intangibles, interest on borrowings related to the acquisition, significant nonrecurring transactions and acquisition related transaction costs. Accordingly, this supplemental pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the combined company would have been had the acquisition occurred on January 1, 2021, nor is it indicative of future results of operations. Three Months Ended Dollars in millions March 31, 2021 (Unaudited) Revenue $ 1,506 Net income attributable to KBR $ 52 Diluted earnings per share $ 0.35 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of components of our cash and equivalents balance | The components of our cash and cash equivalents balance are as follows: March 31, 2022 Dollars in millions International (a) Domestic (b) Total Operating cash and cash equivalents $ 232 $ 52 $ 284 Short-term investments (c) 6 — 6 Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 122 — 122 Total $ 360 $ 52 $ 412 December 31, 2021 Dollars in millions International (a) Domestic (b) Total Operating cash and cash equivalents $ 218 $ 34 $ 252 Short-term investments (c) 2 — 2 Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 116 — 116 Total $ 336 $ 34 $ 370 (a) Includes deposits held by non-U.S. entities with operating accounts that constitute offshore cash for tax purposes. (b) Includes U.S. dollar and foreign currency deposits held in U.S. entities with operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country. (c) Includes time deposits, money market funds and other highly liquid short-term investments. |
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, 2022 | |
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 March 31, 2022 March 31, 2021 Amounts included in project estimates-at-completion at January 1, $ 426 $ 1,048 (Decrease) increase in project estimates (117) (9) Approved change orders (271) (11) Foreign currency impact 7 5 Amounts included in project estimates-at-completion at March 31,* $ 45 $ 1,033 |
Equity Method Investments and_2
Equity Method Investments and Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of 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, 2022 2021 Dollars in millions Beginning balance at January 1, $ 576 $ 881 Equity in earnings (losses) of unconsolidated affiliates (118) (170) Distributions of earnings of unconsolidated affiliates (a) (5) (72) Advances to (payments from) unconsolidated affiliates, net (7) (17) Investments (b) 1 29 Sale of equity method investment (c) (22) (39) Foreign currency translation adjustments 3 (10) Other (d) 2 (26) Ending balance $ 430 $ 576 (a) The Brown & Root Industrial Services joint venture declared a distribution in the fourth quarter of 2021 that was paid to KBR during the three months ended March 31, 2022. (b) Investments include $1 million and $26 million in funding contributions to JKC for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively. (c) During the three months ended March 31, 2022, we sold two of our three U.K. Road projects. The carrying value of our investment was $22 million. We received $18 million in cash proceeds and the purchaser agreed to assume the $4 million of consortium relief. In the second quarter of 2022, we sold the one remaining U.K. Road project and recorded a gain of approximately $16 million. During the third quarter of 2021, we sold our investment interest in the Middle East Petroleum Corporation (EBIC Ammonia project). The carrying value of our investment was $39 million. We received $43 million in cash proceeds and recorded a gain of $4 million, of which $1 million was attributable to our non-controlling interests. Subsequent to the receipt of the cash proceeds, we distributed the non-controlling interests' proportionate share of $15 million. (d) During the year ended December 31, 2021, Other included unearned income related to the Ichthys LNG Project, which was previously recorded outside of the equity method investment balance and will not be realized as a result of the settlement proceedings. See Note 6 "Unapproved Change Orders and Claims Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors" for additional information. |
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, 2022, and December 31, 2021 are as follows: March 31, December 31, Dollars in millions 2022 2021 Accounts receivable, net of allowance for credit losses $ 42 $ 35 Contract assets $ 1 $ 2 Other current assets $ — $ 25 Contract liabilities $ 6 $ 5 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic benefit costs | The components of net periodic pension cost (benefit) related to pension benefits for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 2021 Dollars in millions United States Int’l United States Int’l Components of net periodic pension benefit Interest cost $ 1 $ 9 $ — $ 8 Expected return on plan assets (1) (22) (1) (21) Recognized actuarial loss — 6 1 8 Net periodic pension benefit $ — $ (7) $ — $ (5) |
Debt and Other Credit Facilit_2
Debt and Other Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding debt | Our outstanding debt consisted of the following at the dates indicated: Dollars in millions March 31, 2022 December 31, 2021 (1) Term Loan A $ 438 $ 441 Term Loan B 510 511 Convertible Senior Notes 350 350 Senior Notes 250 250 Senior Credit Facility 362 364 Unamortized debt issuance costs - Term Loan A (4) (4) Unamortized debt issuance costs and discount - Term Loan B (12) (13) Unamortized debt issuance costs and discount - Convertible Senior Notes (4) (4) Unamortized debt issuance costs and discount - Senior Notes (4) (4) Total debt 1,886 1,891 Less: current portion 16 16 Total long-term debt, net of current portion $ 1,870 $ 1,875 (1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method. The details of the applicable margins and commitment fees under the amended Senior Credit Facility are based on the Company's consolidated net leverage ratio as follows: Revolver and Term Loan A Consolidated Net Leverage Ratio Reference Rate (a) Base Rate Commitment Fee Greater than or equal to 4.25 to 1.00 2.25 % 1.25 % 0.33 % Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 2.00 % 1.00 % 0.30 % Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 1.75 % 0.75 % 0.28 % Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 1.50 % 0.50 % 0.25 % Less than 1.25 to 1.00 1.25 % 0.25 % 0.23 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (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, 2021 $ (296) $ (581) $ (4) $ (881) Other comprehensive income adjustments before reclassifications (19) — 17 (2) Amounts reclassified from AOCL — 5 2 7 Net other comprehensive income (loss) (19) 5 19 5 Balance at March 31, 2022 $ (315) $ (576) $ 15 $ (876) Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2020 $ (291) $ (764) $ (28) $ (1,083) Other comprehensive income adjustments before reclassifications 6 — 12 18 Amounts reclassified from AOCL 1 7 3 11 Net other comprehensive income (loss) 7 7 15 29 Balance at March 31, 2021 $ (284) $ (757) $ (13) $ (1,054) |
Schedule of reclassification out of accumulated other comprehensive income | Reclassifications out of AOCL, net of tax, by component Three Months Ended March 31, Dollars in millions 2022 2021 Affected line item on the Condensed Consolidated Statements of Operations Accumulated foreign currency adjustments Reclassification of foreign currency adjustments $ — $ (1) Net income attributable to noncontrolling interests and Gain on disposition of assets and investments Tax benefit — — Provision for income taxes Net accumulated foreign currency $ — $ (1) Net of tax Accumulated pension liability adjustments Amortization of actuarial loss (a) $ (6) $ (8) See (a) below Tax benefit 1 1 Provision for income taxes Net pension and post-retirement benefits $ (5) $ (7) Net of tax Changes in fair value for derivatives Foreign currency hedge and interest rate swap settlements $ (3) $ (4) Other non-operating expense Tax benefit 1 1 Provision for income taxes Net changes in fair value of derivatives $ (2) $ (3) Net of tax (a) This item is included in the computation of net periodic pension cost. See Note 9 "Retirement Benefits" to our condensed consolidated financial statements for further discussion. |
Share Repurchases (Tables)
Share Repurchases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of shares repurchased | The table below presents information on our share repurchases activity under these programs: Three Months Ended March 31, 2022 Number of Shares Average Price per Share Dollars in Millions Repurchases under the $350 million authorized share repurchase program 519,332 $ 48.12 $ 25 Withheld to cover shares 170,939 $ 48.70 $ 8 Total 690,271 $ 48.26 $ 33 Three Months Ended March 31, 2021 Number of Shares Average Price per Share Dollars in Millions Repurchases under the $350 million authorized share repurchase program — $ — $ — Withheld to cover shares 129,376 $ 31.07 $ 4 Total 129,376 $ 31.07 $ 4 |
Income (loss) per Share (Tables
Income (loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 2022 2021 (1) Basic weighted average common shares outstanding 140 141 Stock options, restricted shares, and convertible debt (a) — 14 Diluted weighted average common shares outstanding (b) 140 155 (1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method. (a) For the three months ended March 31, 2021, there was a diluted impact primarily related to our Convertible Debt. (b) In periods for which we report a net loss attributable to KBR, basic net loss per share and diluted net loss per share are identical as the effect of all potential common shares is anti-dilutive and therefore excluded. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Risk Management (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of 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, 2022 December 31, 2021 Dollars in millions Carrying Value Fair Value Carrying Value Fair Value Liabilities (including current maturities): Term Loan A Level 2 $ 438 $ 438 $ 441 $ 441 Term Loan B Level 2 510 509 511 514 Convertible Notes Level 2 350 767 350 669 Senior Notes Level 2 250 244 250 256 Senior Credit Facility Level 2 ` 362 362 364 364 Nonrecourse project debt Level 2 2 2 2 2 |
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 expense on our condensed consolidated statements of operations. Three Months Ended March 31, Dollars in millions 2022 2021 Balance Sheet Hedges - Fair Value $ — $ — Balance Sheet Position - Remeasurement — (6) Net loss $ — $ (6) |
Schedule of sale of receivables activity | Activity for third-party financial institutions consisted of the following: Three Months Ended Three Months Ended Dollars in millions March 31, 2022 March 31, 2021 Beginning balance $ 481 112 Sale of receivables 1,287 602 Settlement of receivables (1,649) (597) Cash collected, not yet remitted (1) — Outstanding balances sold to financial institutions $ 118 $ 117 |
Basis of Presentation (Balance
Basis of Presentation (Balance Sheet) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets: | |||
Deferred income taxes | $ 212 | $ 231 | [1] |
Liabilities: | |||
Long-term debt | 1,870 | 1,875 | [1] |
KBR Shareholders' Equity: | |||
PIC | 2,216 | 2,206 | [1] |
Retained earnings | $ 1,200 | 1,287 | [1] |
As Previously Reported | |||
Assets: | |||
Deferred income taxes | 226 | ||
Liabilities: | |||
Long-term debt | 1,852 | ||
KBR Shareholders' Equity: | |||
PIC | 2,251 | ||
Retained earnings | 1,260 | ||
Accounting Standards Update 2020-06 | Adjustments | |||
Assets: | |||
Deferred income taxes | 5 | ||
Liabilities: | |||
Long-term debt | 23 | ||
KBR Shareholders' Equity: | |||
PIC | (45) | ||
Retained earnings | $ 27 | ||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Basis of Presentation (Income S
Basis of Presentation (Income Statement) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Interest Expense | $ (20) | $ (19) | [1] |
Income (loss) before income taxes | (51) | 67 | [1] |
Provision for income taxes | (19) | (17) | [1] |
Net income (loss) | (70) | 50 | [2] |
Net income (loss) attributable to KBR | $ (71) | $ 49 | [1] |
Net income attributable to KBR per share: | |||
Basic (in usd per share) | $ (0.51) | $ 0.35 | [1] |
Diluted (in usd per share) | $ (0.51) | $ 0.33 | [1] |
Basic weighted average common shares outstanding (in shares) | 140 | 141 | [1] |
Diluted weighted average common shares outstanding (in shares) | 140 | 155 | [1] |
As Previously Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Interest Expense | $ (22) | ||
Income (loss) before income taxes | 64 | ||
Provision for income taxes | (16) | ||
Net income (loss) | 48 | ||
Net income (loss) attributable to KBR | $ 47 | ||
Net income attributable to KBR per share: | |||
Basic (in usd per share) | $ 0.33 | ||
Diluted (in usd per share) | $ 0.33 | ||
Basic weighted average common shares outstanding (in shares) | 141 | ||
Diluted weighted average common shares outstanding (in shares) | 144 | ||
Adjustments | Accounting Standards Update 2020-06 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Interest Expense | $ 3 | ||
Income (loss) before income taxes | 3 | ||
Provision for income taxes | (1) | ||
Net income (loss) | 2 | ||
Net income (loss) attributable to KBR | $ 2 | ||
Net income attributable to KBR per share: | |||
Basic (in usd per share) | $ 0.02 | ||
Diluted (in usd per share) | $ 0 | ||
Basic weighted average common shares outstanding (in shares) | 0 | ||
Diluted weighted average common shares outstanding (in shares) | 11 | ||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Basis of Presentation (Cash Flo
Basis of Presentation (Cash Flows) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Cash flows from operating activities: | |||
Net Income | $ (70) | $ 50 | [1] |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income tax | 16 | 8 | [2] |
Other | 12 | 8 | [2] |
Total cash flows provided by operating activities | $ 89 | 50 | [2] |
As Previously Reported | |||
Cash flows from operating activities: | |||
Net Income | 48 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income tax | 7 | ||
Other | 11 | ||
Total cash flows provided by operating activities | 50 | ||
Adjustments | Accounting Standards Update 2020-06 | |||
Cash flows from operating activities: | |||
Net Income | 2 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income tax | 1 | ||
Other | (3) | ||
Total cash flows provided by operating activities | $ 0 | ||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Basis of Presentation (Balanc_2
Basis of Presentation (Balance Sheet Additional Disclosure) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Current maturities of long-term debt | $ 16 | $ 16 | |
Reserve for estimated losses on uncompleted contracts | 18 | 17 | |
Retainage payable | 13 | 13 | |
Restructuring reserve | 15 | 17 | |
Value-added tax payable | 49 | 34 | |
Dividend payable | 17 | 16 | |
Other miscellaneous liabilities | 54 | 65 | |
Total other current liabilities | $ 182 | $ 178 | [1] |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Business Segment Information (N
Business Segment Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022segmentareaprocess_technology | |
Segment Reporting Information [Line Items] | |
Core business segments, number | 2 |
Non-core business segments, number | 1 |
Sustainable Technology Solutions | |
Segment Reporting Information [Line Items] | |
Number of process technologies (over) | process_technology | 70 |
Number of primary areas | area | 4 |
Business Segment Information (S
Business Segment Information (Schedule of Operations by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 1,714 | $ 1,461 | [1] |
Total gross profit | 196 | 168 | [1] |
Total equity in earnings (losses) of unconsolidated affiliates | (118) | 12 | [1] |
Total selling, general and administrative expenses | (107) | (89) | [1] |
Acquisition and integration related costs | (1) | (1) | [1] |
Restructuring charges and asset impairments | (1) | 0 | [1] |
Loss on disposition of assets and investments | 0 | (1) | [1] |
Operating income (loss) | (31) | 89 | [1] |
Interest expense | (20) | (19) | [1] |
Other non-operating expense | 0 | (3) | [1] |
Income (loss) before income taxes | (51) | 67 | [1] |
Government Solutions | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,459 | 1,164 | |
Total gross profit | 159 | 116 | |
Total equity in earnings (losses) of unconsolidated affiliates | 10 | 7 | |
Total selling, general and administrative expenses | (54) | (49) | |
Sustainable Technology Solutions | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 255 | 297 | |
Total gross profit | 37 | 52 | |
Total equity in earnings (losses) of unconsolidated affiliates | (128) | 5 | |
Total selling, general and administrative expenses | (15) | (14) | |
Other | |||
Segment Reporting Information [Line Items] | |||
Total selling, general and administrative expenses | $ (38) | $ (26) | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Revenue (Revenue by Geographic
Revenue (Revenue by Geographic Destination) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 1,714 | $ 1,461 | [1] |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,120 | 862 | |
Middle East | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 88 | 177 | |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 315 | 217 | |
Australia | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 90 | 82 | |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2 | 0 | |
Africa | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 35 | 39 | |
Asia | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 45 | 51 | |
Other countries | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 19 | 33 | |
Government Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,459 | 1,164 | |
Government Solutions | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,011 | 749 | |
Government Solutions | Middle East | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 39 | 133 | |
Government Solutions | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 283 | 173 | |
Government Solutions | Australia | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 90 | 77 | |
Government Solutions | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | |
Government Solutions | Africa | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 18 | 19 | |
Government Solutions | Asia | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3 | 0 | |
Government Solutions | Other countries | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 15 | 13 | |
Sustainable Technology Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 255 | 297 | |
Sustainable Technology Solutions | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 109 | 113 | |
Sustainable Technology Solutions | Middle East | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 49 | 44 | |
Sustainable Technology Solutions | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 32 | 44 | |
Sustainable Technology Solutions | Australia | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 5 | |
Sustainable Technology Solutions | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2 | 0 | |
Sustainable Technology Solutions | Africa | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 17 | 20 | |
Sustainable Technology Solutions | Asia | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 42 | 51 | |
Sustainable Technology Solutions | Other countries | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 4 | 20 | |
Science & Space | Government Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 253 | 247 | |
Defense & Intel | Government Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 378 | 351 | |
Readiness & Sustainment | Government Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 533 | 329 | |
International | Government Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 295 | $ 237 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Revenue (Revenue by Contract Ty
Revenue (Revenue by Contract Type) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 1,714 | $ 1,461 | [1] |
Cost Reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 955 | 689 | |
Time-and-Materials | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 410 | 402 | |
Fixed Price | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 349 | 370 | |
Government Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 1,459 | 1,164 | |
Government Solutions | Cost Reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 955 | 689 | |
Government Solutions | Time-and-Materials | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 235 | 212 | |
Government Solutions | Fixed Price | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 269 | 263 | |
Sustainable Technology Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 255 | 297 | |
Sustainable Technology Solutions | Cost Reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 0 | 0 | |
Sustainable Technology Solutions | Time-and-Materials | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 175 | 190 | |
Sustainable Technology Solutions | Fixed Price | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 80 | $ 107 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized from performance obligation satisfied in previous period | $ 18 | |
Contract liability, revenue recognized | $ 82 | $ 107 |
Revenue (Remaining Performance
Revenue (Remaining Performance Obligation) (Details) $ in Billions | Mar. 31, 2022USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 10.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 33.00% |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 33.00% |
Revenue, remaining performance obligation, expected timing of satisfaction | 4 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 34.00% |
Revenue, remaining performance obligation, expected timing of satisfaction |
Revenue (Accounts Receivable, C
Revenue (Accounts Receivable, Contract Assets and Liabilities) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | |||
Accounts receivable | $ 1,035 | $ 1,411 | [1] |
Unbilled | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable | 496 | 698 | |
Trade & other | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable | $ 539 | $ 713 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Acquisitions (Frazer-Nash Consu
Acquisitions (Frazer-Nash Consultancy Limited) (Details) - USD ($) $ in Millions | Oct. 20, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | [1] |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,051 | $ 2,060 | ||
Frazer-Nash Consultancy Limited | ||||
Business Acquisition [Line Items] | ||||
Cash consideration paid | $ 392 | |||
Goodwill | 293 | |||
Assets acquired | $ 89 | |||
Weighted average useful life | 14 years | |||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Acquisitions (Pro Forma Informa
Acquisitions (Pro Forma Information) (Details) - Frazer-Nash Consultancy Limited $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Revenue | $ 1,506 |
Net income attributable to KBR | $ 52 |
Diluted earnings per share (usd per share) | $ / shares | $ 0.35 |
Acquisitions (Harmonic Limited)
Acquisitions (Harmonic Limited) (Details) - Harmonic Limited | Jul. 01, 2021USD ($) |
Business Acquisition [Line Items] | |
Purchase price of acquisition | $ 19,000,000 |
Cash consideration paid | 17,000,000 |
Contingent consideration | 2,000,000 |
Net working capital | 3,000,000 |
Goodwill acquired during period | 14,000,000 |
Tax deductible amount | 0 |
Backlog Assets | |
Business Acquisition [Line Items] | |
Assets acquired | $ 2,000,000 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 412 | $ 370 | [1] |
Operating cash and cash equivalents | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 284 | 252 | |
Short-term investments | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 6 | 2 | |
Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 122 | 116 | |
International | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 360 | 336 | |
International | Operating cash and cash equivalents | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 232 | 218 | |
International | Short-term investments | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 6 | 2 | |
International | Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 122 | 116 | |
Domestic | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 52 | 34 | |
Domestic | Operating cash and cash equivalents | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 52 | 34 | |
Domestic | Short-term investments | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Domestic | Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 0 | $ 0 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
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, 2022 | Mar. 31, 2021 | |
Unapproved Change Orders [Roll Forward] | ||
Amounts included in project estimates-at-completion at January 1, | $ 426 | $ 1,048 |
(Decrease) increase in project estimates | (117) | (9) |
Approved change orders | (271) | (11) |
Foreign currency impact | 7 | 5 |
Amounts included in project estimates-at-completion at March 31, | $ 45 | $ 1,033 |
Unapproved Change Orders and _4
Unapproved Change Orders and Claims Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors (Narrative) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Apr. 28, 2022USD ($)Payment | Mar. 31, 2022USD ($)business_day | Mar. 31, 2021USD ($) | Oct. 31, 2021USD ($) | Sep. 30, 2021USD ($) | ||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Equity in earnings (losses) of unconsolidated affiliates | $ (118) | $ 12 | [1] | |||
Gross profit | 196 | 168 | [1] | |||
Sustainable Technology Solutions | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Equity in earnings (losses) of unconsolidated affiliates | (128) | 5 | ||||
Gross profit | 37 | $ 52 | ||||
Ichthys LNG Project | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Letters of credit outstanding, amount | $ 82 | $ 164 | ||||
EPC Project | Sustainable Technology Solutions | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Gross profit | 12 | |||||
Severance and asset impairment costs | 4 | |||||
Power Plant Subcontractor Consortium | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Commitments, estimated recovery | 1,700 | |||||
Power Plant Subcontractor Consortium | Subsequent Event | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Subcontractor settlement | $ 271 | |||||
Number of payment | Payment | 2 | |||||
Subcontractor settlement first payment | $ 203 | |||||
Amount to be paid for second settlement payment | $ 68 | |||||
Power Plant Subcontractor Consortium | Sustainable Technology Solutions | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Equity in earnings (losses) of unconsolidated affiliates | $ (137) | |||||
Debt instrument, number of business days granted to make mandatory prepayment | business_day | 3 | |||||
JKC Joint Venture | ||||||
Increases in Unapproved Change Orders and Claims [Line Items] | ||||||
Ownership percentage | 30.00% | |||||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | $ 61 | $ 66 |
Other Current Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | 15 | 17 |
Other Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | $ 46 | $ 49 |
Equity Method Investments and_3
Equity Method Investments and Variable Interest Entities (Schedule of Equity in Earnings of Unconsolidated Affiliates) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Apr. 28, 2022USD ($)project | Mar. 31, 2022USD ($)project | Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | ||||
Equity Method Investment [Roll Forward] | ||||||||
Beginning balance at January 1, | $ 430 | $ 576 | [1] | |||||
Equity in earnings (losses) of unconsolidated affiliates | (118) | $ 12 | [2] | |||||
Distributions of earnings of unconsolidated affiliates | (30) | (8) | [3] | |||||
Investments | 1 | 3 | [3] | |||||
Ending balance | 430 | $ 576 | [1] | |||||
EBIC Ammonia Project | ||||||||
Equity Method Investment [Roll Forward] | ||||||||
Sale of equity method investment | $ (39) | |||||||
Equity method investments | 39 | |||||||
Cash proceeds | 43 | |||||||
Gain (loss) on disposal | 4 | |||||||
Payment of proportionate share of sale of equity method investment to noncontrolling interest | 15 | |||||||
EBIC Ammonia Project | Noncontrolling Interest | ||||||||
Equity Method Investment [Roll Forward] | ||||||||
Portion of gain attributable to noncontrolling interest | $ 1 | |||||||
U K Road Projects | ||||||||
Equity Method Investment [Roll Forward] | ||||||||
Sale of equity method investment | $ (22) | |||||||
Number of projects to be sold | project | 2 | |||||||
Number of projects | project | 3 | |||||||
Equity method investments | $ 22 | |||||||
Cash proceeds | 18 | |||||||
Gain (loss) on disposal | (4) | |||||||
U K Road Projects | Subsequent Event | ||||||||
Equity Method Investment [Roll Forward] | ||||||||
Number of projects to be sold | project | 1 | |||||||
Equity Method Investments | ||||||||
Equity Method Investment [Roll Forward] | ||||||||
Beginning balance at January 1, | $ 430 | 576 | $ 881 | 881 | ||||
Equity in earnings (losses) of unconsolidated affiliates | (118) | (170) | ||||||
Distributions of earnings of unconsolidated affiliates | (5) | (72) | ||||||
Advances to (payments from) unconsolidated affiliates, net | (7) | (17) | ||||||
Investments | 1 | 29 | ||||||
Sale of equity method investment | (22) | (39) | ||||||
Foreign currency translation adjustments | 3 | (10) | ||||||
Other | 2 | (26) | ||||||
Ending balance | 430 | 576 | ||||||
Amount allocated to fund ownership venture | 1 | 26 | ||||||
Equity method investments | $ 22 | $ 39 | ||||||
Equity Method Investments | Subsequent Event | ||||||||
Equity Method Investment [Roll Forward] | ||||||||
Gain (loss) on disposal | $ 16 | |||||||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | |||||||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | |||||||
[3] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Equity Method Investments and_4
Equity Method Investments and Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Transactions with Related Parties | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue from related parties | $ 104 | $ 79 |
Equity Method Investments and_5
Equity Method Investments and Variable Interest Entities (Related Party Disclosures) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Accounts receivable, net of allowance for credit losses | $ 1,035 | $ 1,411 | [1] |
Contract assets | 211 | 224 | [1] |
Other current assets | 116 | 147 | [1] |
Contract liabilities | 334 | 313 | [1] |
Transactions with Related Parties | |||
Schedule of Equity Method Investments [Line Items] | |||
Accounts receivable, net of allowance for credit losses | 42 | 35 | |
Contract assets | 1 | 2 | |
Other current assets | 0 | 25 | |
Contract liabilities | $ 6 | $ 5 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Retirement Benefits (Details)
Retirement Benefits (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | $ 11 | |
Estimated future employer contributions in next fiscal year | 45 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 1 | $ 0 |
Expected return on plan assets | (1) | (1) |
Recognized actuarial loss | 0 | 1 |
Net periodic pension benefit | 0 | 0 |
Int’l | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 9 | 8 |
Expected return on plan assets | (22) | (21) |
Recognized actuarial loss | 6 | 8 |
Net periodic pension benefit | $ (7) | $ (5) |
Debt and Other Credit Facilit_3
Debt and Other Credit Facilities (Outstanding Debt Balances) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Nov. 18, 2021 |
Debt Instrument [Line Items] | |||
Total debt | $ 1,886 | $ 1,891 | |
Less: current portion | 16 | 16 | |
Total long-term debt, net of current portion | 1,870 | 1,875 | |
Secured Debt | Term Loan A | |||
Debt Instrument [Line Items] | |||
Long-term debt | 438 | 441 | |
Unamortized debt issuance costs | (4) | (4) | |
Total debt | $ 442 | ||
Secured Debt | Term Loan B | |||
Debt Instrument [Line Items] | |||
Long-term debt | 510 | 511 | |
Unamortized debt issuance costs | (12) | (13) | |
Total debt | $ 512 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | 350 | 350 | |
Unamortized debt issuance costs | (4) | (4) | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 250 | 250 | |
Unamortized debt issuance costs | (4) | (4) | |
Senior Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 362 | $ 364 |
Debt and Other Credit Facilit_4
Debt and Other Credit Facilities (Senior Credit Facility) (Details) £ in Millions | 3 Months Ended | |||||
Mar. 31, 2022USD ($) | Mar. 31, 2024 | Dec. 31, 2021USD ($) | Nov. 18, 2021USD ($) | Nov. 18, 2021GBP (£) | Jun. 30, 2020 | |
Line of Credit Facility [Line Items] | ||||||
Revolving credit agreement | $ 1,886,000,000 | $ 1,891,000,000 | ||||
Line of credit facility, maximum borrowing capacity | $ 1,954,000,000 | |||||
Secured Debt | Term Loan A | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit agreement | 442,000,000 | |||||
Debt instrument, periodic payment, percentage of aggregate principal | 0.625% | |||||
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 2022 | 4.50 | |||||
Debt instrument, covenant, leverage ratio through 2023 | 4.25 | |||||
Debt instrument, covenant, leverage ratio through 2024 | 4 | |||||
Secured Debt | Term Loan A | Forecast | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, periodic payment, percentage of aggregate principal | 1.25% | |||||
Secured Debt | Term Loan A | Subsidiaries | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit agreement | £ | £ 122.1 | |||||
Secured Debt | Term Loan B | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit agreement | 512,000,000 | |||||
Debt instrument, periodic payment, percentage of aggregate principal | 0.25% | |||||
Secured Debt | Term Loan B | Reference Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolver and term loan A, interest rate | 2.75% | |||||
Revolving Credit Facility | Performance Letter of Credit Fee | ||||||
Line of Credit Facility [Line Items] | ||||||
Letters of credit outstanding, amount | $ 49,000,000 | $ 1,000,000,000 |
Debt and Other Credit Facilit_5
Debt and Other Credit Facilities (Schedule of Commitment Fees) (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Greater than or equal to 4.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.33% |
Greater than or equal to 4.25 to 1.00 | Revolver and Term Loan A | Reference Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.25% |
Greater than or equal to 4.25 to 1.00 | Revolver and Term Loan A | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.25% |
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.30% |
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | Revolver and Term Loan A | Reference Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.00% |
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | Revolver and Term Loan A | 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 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.28% |
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | Revolver and Term Loan A | Reference Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.75% |
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | Revolver and Term Loan A | 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 | |
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 | Revolver and Term Loan A | Reference Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.50% |
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | Revolver and Term Loan A | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 0.50% |
Less than 1.25 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.23% |
Less than 1.25 to 1.00 | Revolver and Term Loan A | Reference Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.25% |
Less than 1.25 to 1.00 | Revolver and Term Loan A | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 0.25% |
Debt and Other Credit Facilit_6
Debt and Other Credit Facilities (Convertible Senior Notes) (Details) | Feb. 18, 2022$ / shares | Nov. 15, 2018USD ($)$ / shares | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021$ / shares | Dec. 31, 2021USD ($) | [2] | |
Debt Instrument [Line Items] | |||||||
Cash dividends declared per share (in usd per share) | $ 0.12 | $ 0.11 | [1] | ||||
Nonrecourse project debt | $ | $ 62,000,000 | $ 2,000,000 | $ 2,000,000 | ||||
Proceeds from sale of warrants | $ | $ 22,000,000 | ||||||
Exercise price (usd per share) | $ 40.02 | $ 39.73 | $ 39.85 | ||||
Convertible Debt | Notes Due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ | $ 350,000,000 | $ 350,000,000 | |||||
Interest rate, stated percentage | 2.50% | ||||||
Conversion price (usd per share) | $ 25.51 | $ 25.40 | |||||
Conversion rate | 0.0394809 | 0.0391961 | |||||
Cash dividends declared per share (in usd per share) | $ 0.12 | ||||||
Convertible stock price (usd per share) | $ 25.33 | ||||||
Exercise price (usd per share) | $ 39.73 | ||||||
If-converted value in excess of principal | $ | $ 406,000,000 | ||||||
Carrying value of the equity component | $ | $ 207,000,000 | ||||||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||||||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Debt and Other Credit Facilit_7
Debt and Other Credit Facilities (Senior Notes) (Details) - Senior Notes - Notes Due 2028 | Sep. 30, 2020USD ($) |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 250,000,000 |
Interest rate, stated percentage | 4.75% |
Net proceeds from offering fee | $ 245,000,000 |
Interest rate, stated redeem percentage | 35.00% |
Prior to September 30, 2023 | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 100.00% |
On or after September 30, 2023 | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 104.75% |
Change of control | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 101.00% |
Debt and Other Credit Facilit_8
Debt and Other Credit Facilities (Letters of Credit, Surety Bonds and Guarantees) (Details) - USD ($) | Mar. 31, 2022 | Nov. 18, 2021 |
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 1,954,000,000 | |
Letters Of Credit Surety Bonds And Bank Guarantees | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding relate to joint venture operations | $ 85,000,000 | |
Performance Letter of Credit Fee | Letter of Credit | ||
Debt Instrument [Line Items] | ||
Long-term line of credit | 895,000,000 | |
Performance Letter of Credit Fee | Letter of Credit | Committed Line Of Credit | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount | 1,000,000,000 | |
Performance Letter of Credit Fee | Letter of Credit | Uncommitted Line Of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 521,000,000 | |
Letters of credit outstanding, amount | 215,000,000 | |
Performance Letter of Credit Fee | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term line of credit | 362,000,000 | |
Letters of credit outstanding, amount | $ 49,000,000 | $ 1,000,000,000 |
Debt and Other Credit Facilit_9
Debt and Other Credit Facilities (Nonrecourse Project Debt) (Details) £ in Millions | 3 Months Ended |
Mar. 31, 2022GBP (£)transporter | |
Minimum | |
Debt Instrument [Line Items] | |
Subordinated notes payable, interest rate | 11.25% |
Maximum | |
Debt Instrument [Line Items] | |
Subordinated notes payable, interest rate | 16.00% |
Class A 3.5% Index Linked Bond | |
Debt Instrument [Line Items] | |
Guaranteed secured bonds, percentage | 3.50% |
Class A 3.5% Index Linked Bond | United Kingdom, Pounds | |
Debt Instrument [Line Items] | |
Secured bonds | £ 56 |
Class B 5.9% Fixed Rate Bonds | |
Debt Instrument [Line Items] | |
Guaranteed secured bonds, percentage | 5.90% |
Class B 5.9% Fixed Rate Bonds | United Kingdom, Pounds | |
Debt Instrument [Line Items] | |
Secured bonds | £ 20.7 |
Nonrecourse Project Finance Debt | |
Debt Instrument [Line Items] | |
Number of heavy equipment transporters | transporter | 91 |
Number of heavy equipment transporters term period (years) | 22 years |
Fasttrax Limited | Nonrecourse Project Finance Debt | |
Debt Instrument [Line Items] | |
Ownership percentage | 50.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate on income from operations | (37.00%) | 25.00% | |
Effective tax rate excluding impact of equity adjustment | 25.00% | ||
Effective income tax rate, estimated | 25.00% | ||
Deferred tax assets, valuation allowance | $ 201 | $ 204 | |
Income from foreign sources | 538 | ||
Income from domestic sources | 619 | ||
Liabilities for uncertain tax positions | $ 89 | $ 89 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions, $ in Millions | Oct. 09, 2020USD ($) | May 28, 2020AUD ($) | Mar. 31, 2019USD ($) | May 31, 2018USD ($)lawsuit | Mar. 31, 2022 |
Chadian Employee Class Action | |||||
Loss Contingencies [Line Items] | |||||
Number of class action cases | lawsuit | 2 | ||||
Damages awarded, value | $ 19 | $ 34 | $ 25 | ||
Claims in unpaid bonuses | $ 122 | ||||
Chadian Employee Class Action | Provisional Award | |||||
Loss Contingencies [Line Items] | |||||
Damages awarded, value | $ 2 | ||||
North West Rail Link Project | |||||
Loss Contingencies [Line Items] | |||||
Claims in unpaid bonuses | $ 301 | ||||
North West Rail Link Project | Unincorporated Joint Venture | |||||
Loss Contingencies [Line Items] | |||||
Ownership percentage | 33.00% |
U.S. Government Matters (Detail
U.S. Government Matters (Details) | 1 Months Ended | |||||
Jan. 31, 2014subcontractordefendant | Apr. 30, 2008USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2021motion | Mar. 31, 2011USD ($) | |
Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | ||||||
United States Government Contract Work [Line Items] | ||||||
Accrued reserve for unallowable costs | $ 86,000,000 | $ 76,000,000 | ||||
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 | |||||
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 | defendant | 3 | |||||
Number of motions filed | motion | 2 |
Claims and Accounts Receivable
Claims and Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Claims and accounts receivable | $ 30 | $ 30 | [1] |
Government Services | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Government contract receivable | 29 | 29 | |
Form 1 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Government contract receivable | $ 1 | $ 1 | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Changes by Component) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | [1] | $ 1,683 | ||
Other comprehensive income adjustments before reclassifications | (2) | $ 18 | ||
Amounts reclassified from AOCL | 7 | 11 | ||
Other comprehensive income (loss), net of tax | 5 | 29 | [2] | |
Ending balance | 1,578 | 1,650 | ||
Accumulated foreign currency translation adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (296) | (291) | ||
Other comprehensive income adjustments before reclassifications | (19) | 6 | ||
Amounts reclassified from AOCL | 0 | 1 | ||
Other comprehensive income (loss), net of tax | (19) | 7 | ||
Ending balance | (315) | (284) | ||
Accumulated pension liability adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (581) | (764) | ||
Other comprehensive income adjustments before reclassifications | 0 | 0 | ||
Amounts reclassified from AOCL | 5 | 7 | ||
Other comprehensive income (loss), net of tax | 5 | 7 | ||
Ending balance | (576) | (757) | ||
Changes in fair value of derivatives | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (4) | (28) | ||
Other comprehensive income adjustments before reclassifications | 17 | 12 | ||
Amounts reclassified from AOCL | 2 | 3 | ||
Other comprehensive income (loss), net of tax | 19 | 15 | ||
Ending balance | 15 | (13) | ||
AOCL | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (881) | (1,083) | ||
Ending balance | $ (876) | $ (1,054) | ||
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | |||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Reclassification out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax benefit | $ (19) | $ (17) | [1] |
Foreign currency hedge and interest rate swap settlements | 0 | (3) | [1] |
Net income (loss) | (70) | 50 | [2] |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated foreign currency adjustments | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification of foreign currency adjustments | 0 | (1) | |
Tax benefit | 0 | 0 | |
Net income (loss) | 0 | (1) | |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated pension liability adjustments | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax benefit | 1 | 1 | |
Amortization of actuarial loss | (6) | (8) | |
Net income (loss) | (5) | (7) | |
Reclassification out of Accumulated Other Comprehensive Income | Changes in fair value for derivatives | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax benefit | 1 | 1 | |
Foreign currency hedge and interest rate swap settlements | (3) | (4) | |
Net income (loss) | $ (2) | $ (3) | |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. | ||
[2] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Share Repurchases (Narrative) (
Share Repurchases (Narrative) (Details) - USD ($) | Mar. 31, 2022 | 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 | $ 200,000,000 | $ 160,000,000 | ||
Additional amount authorized for repurchase program | $ 190,000,000 |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 19, 2020 | Feb. 25, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Value of common stock repurchases | $ 33,000,000 | $ 4,000,000 | ||
Number of shares (in shares) | 170,939 | 129,376 | ||
Average price per share (in usd per share) | $ 48.70 | $ 31.07 | ||
Value of common stock repurchases | $ 8,000,000 | $ 4,000,000 | ||
Number of shares (in shares) | 690,271 | 129,376 | ||
Average price per share (in usd per share) | $ 48.26 | $ 31.07 | ||
Value of common stock repurchases | $ 33,000,000 | $ 4,000,000 | ||
Stock repurchase program, authorized amount | $ 350,000,000 | $ 350,000,000 | ||
Share Repurchase Program Twenty Fourteen | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Number of Shares (in shares) | 519,332 | 0 | ||
Average Price per Share (in usd per share) | $ 48.12 | $ 0 | ||
Value of common stock repurchases | $ 25,000,000 | $ 0 |
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, 2022 | Mar. 31, 2021 | ||
Earnings Per Share [Abstract] | |||
Basic weighted average common shares outstanding (in shares) | 140 | 141 | [1] |
Stock options, restricted shares, and convertible debt (in shares) | 0 | 14 | |
Diluted weighted average common shares outstanding (in shares) | 140 | 155 | [1] |
[1] | As adjusted for the adoption of ASU 2020-06 using the full retrospective method. |
Income (loss) per Share (Narrat
Income (loss) per Share (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Nov. 15, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Exercise price (usd per share) | $ 39.73 | $ 39.85 | $ 40.02 |
Undistributed earnings (loss) allocated to participating securities, diluted | $ 0 | $ 300,000 | |
Antidilutive conversion of debt (in shares) | 13.8 | ||
Warrant transactions (in shares) | 13.8 | 13.8 | |
Stock options and restricted stock awards (in shares) | 0.8 | 1.1 | |
Notes Due 2023 | Convertible Debt | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Conversion price (usd per share) | $ 25.40 | $ 25.51 | |
Exercise price (usd per share) | $ 39.73 |
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, 2022 | Dec. 31, 2021 |
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 | $ 438 | $ 441 |
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 | 510 | 511 |
Carrying Value | Convertible Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 350 | 350 |
Carrying Value | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 250 | 250 |
Carrying Value | Senior Credit Facility | Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 362 | 364 |
Carrying Value | Nonrecourse project debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 2 | 2 |
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 | 438 | 441 |
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 | 509 | 514 |
Fair Value | Convertible Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 767 | 669 |
Fair Value | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 244 | 256 |
Fair Value | Senior Credit Facility | Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | 362 | 364 |
Fair Value | Nonrecourse project debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, fair value disclosure | $ 2 | $ 2 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments and Risk Management (Foreign Currency Risk) (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Maximum length of time hedged in balance sheet hedge | 19 days |
Maximum length of time hedged in cash flow hedge | 26 months |
Balance Sheet Hedge | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Derivative, notional amount | $ 81,000,000 |
Cash Flow Hedging | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Cash flow hedge | $ 8,000,000 |
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, 2022 | Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Balance Sheet Hedges - Fair Value | $ 0 | $ 0 |
Balance Sheet Position - Remeasurement | 0 | (6) |
Net loss | $ 0 | $ (6) |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments and Risk Management (Interest Rate Risk) (Details) - Interest Rate Swap - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2020 | Oct. 31, 2018 | |
Derivatives, Fair Value [Line Items] | |||||
Derivative, notional amount | $ 400,000,000 | $ 500,000,000 | |||
Interest rate derivative assets (liabilities), net | $ 19,000,000 | $ (3,000,000) | |||
Unrealized gain (loss) on derivatives | 19,000,000 | $ (3,000,000) | |||
Other Assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate derivative assets (liabilities), net | 22,000,000 | 7,000,000 | |||
Other Current Assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate derivative assets (liabilities), net | 2,000,000 | ||||
Other Current Liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate derivative assets (liabilities), net | $ (5,000,000) | $ (10,000,000) | |||
LIBOR | |||||
Derivatives, Fair Value [Line Items] | |||||
Fixed interest rate | 0.965% | 3.055% |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments and Risk Management (Credit Losses) (Details) - Sustainable Technology Solutions $ in Millions | Mar. 31, 2022USD ($) |
Contract with Customer, Asset, Past Due [Line Items] | |
Accounts receivable and contract assets, net of allowances | $ 357 |
Allowance for accounts receivable and contract assets | $ 13 |
Accounts receivable, percent outstanding less than 90 days | 87.00% |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments and Risk Management (Sale of Receivables) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value Disclosures [Abstract] | |
Sale of receivables | $ 1,287 |
Receivables sold | $ 1,278 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments and Risk Management (Sale of Receivables - Third-party Financial Institutions) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Transfer of Financial Assets Accounted for as Sales [Roll Forward] | ||
Beginning balance | $ 481 | $ 112 |
Sale of receivables | 1,287 | 602 |
Settlement of receivables | (1,649) | (597) |
Cash collected, not yet remitted | (1) | 0 |
Outstanding balances sold to financial institutions | $ 118 | $ 117 |
Uncategorized Items - kbr-20220
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |