|
|
|
|
|
|
|
|
• | project revenues, costs and profits on engineering and construction contracts, including recognition of estimated losses on uncompleted contracts |
• | project revenues, award fees, costs and profits on government services contracts |
• | provisions for uncollectible receivables and client claims and recoveries of costs from subcontractors, vendors and others |
• | provisions for income taxes and related valuation allowances and tax uncertainties |
• | recoverability of goodwill |
• | recoverability of other intangibles and long-lived assets and related estimated lives |
• | recoverability of equity method and cost method investments |
• | valuation of pension obligations and pension assets |
• | accruals for estimated liabilities, including litigation accruals |
• | consolidation of VIEs |
• | valuation of share-based compensation |
• | valuation of assets and liabilities acquired in business combinations |
• | recognize on its balance sheet the funded status (measured as the difference between the fair value of plan assets and the benefit obligation) of the pension plan; |
• | recognize, through comprehensive income, certain changes in the funded status of a defined benefit plan in the year in which the changes occur; |
• | measure plan assets and benefit obligations as of the end of the employer’s fiscal year; and |
• | disclose additional information. |
Revenues from major customers: | |||||||||||
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
U.S. government | $ | 1,914 | $ | 1,090 | $ | 378 | |||||
Chevron | $ | 56 | $ | 105 | $ | 523 |
Percentages of revenues and accounts receivable from major customers: | ||||||||
Years ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. government revenues percentage | 46 | % | 26 | % | 7 | % | ||
U.S. government receivables percentage | 32 | % | 27 | % | 4 | % | ||
Chevron revenues percentage | 1 | % | 2 | % | 10 | % | ||
Chevron receivables percentage | 1 | % | 1 | % | 5 | % |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Prepaid expenses | 53 | 56 | |||||
Value-added tax receivable | 11 | 17 | |||||
Other miscellaneous assets | 29 | 30 | |||||
Total other current assets | $ | 93 | $ | 103 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Reserve for estimated losses on uncompleted contracts (a) | $ | 15 | $ | 63 | |||
Retainage payable | 30 | 47 | |||||
Income taxes payable | 17 | 55 | |||||
Restructuring reserves | 9 | 30 | |||||
Taxes payable not based on income | 11 | 14 | |||||
Value-added tax payable | 13 | 16 | |||||
Insurance payable | 9 | 14 | |||||
Dividend payable | 11 | 12 | |||||
Other miscellaneous liabilities | 42 | 41 | |||||
Total other current liabilities | $ | 157 | $ | 292 |
(a) | See Note 2 to our consolidated financial statements for further discussion on significant reserves for estimated losses on uncompleted contracts. |
|
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Revenues: | |||||||||||
Government Services | $ | 2,193 | $ | 1,359 | $ | 663 | |||||
Technology & Consulting | 326 | 347 | 324 | ||||||||
Engineering & Construction | 1,614 | 2,352 | 3,454 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 4,133 | 4,058 | 4,441 | ||||||||
Non-strategic Business | 38 | 210 | 655 | ||||||||
Total | $ | 4,171 | $ | 4,268 | $ | 5,096 | |||||
Gross profit (loss): | |||||||||||
Government Services | $ | 155 | $ | 137 | $ | (3 | ) | ||||
Technology & Consulting | 79 | 73 | 77 | ||||||||
Engineering & Construction | 108 | 7 | 224 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 342 | 217 | 298 | ||||||||
Non-strategic Business | — | (105 | ) | 27 | |||||||
Total | $ | 342 | $ | 112 | $ | 325 | |||||
Equity in earnings of unconsolidated affiliates: | |||||||||||
Government Services | $ | 43 | $ | 39 | $ | 45 | |||||
Technology & Consulting | — | — | — | ||||||||
Engineering & Construction | 29 | 52 | 104 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 72 | 91 | 149 | ||||||||
Non-strategic Business | — | — | — | ||||||||
Total | $ | 72 | $ | 91 | $ | 149 | |||||
Asset impairment and restructuring charges (Note 11): | |||||||||||
Government Services | $ | — | $ | (1 | ) | $ | — | ||||
Technology & Consulting | — | (1 | ) | (10 | ) | ||||||
Engineering & Construction | (6 | ) | (30 | ) | (34 | ) | |||||
Other | — | (7 | ) | (22 | ) | ||||||
Subtotal | (6 | ) | (39 | ) | (66 | ) | |||||
Non-strategic Business | — | — | (4 | ) | |||||||
Total | $ | (6 | ) | $ | (39 | ) | $ | (70 | ) | ||
Segment operating income (loss): | |||||||||||
Government Services | $ | 173 | $ | 152 | $ | 37 | |||||
Technology & Consulting | 76 | 66 | 62 | ||||||||
Engineering & Construction | 110 | 4 | 295 | ||||||||
Other | (93 | ) | (93 | ) | (140 | ) | |||||
Subtotal | 266 | 129 | 254 | ||||||||
Non-strategic Business | — | (101 | ) | 56 | |||||||
Total | $ | 266 | $ | 28 | $ | 310 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Capital expenditures: | |||||||||||
Government Services | $ | 4 | $ | 2 | $ | — | |||||
Technology & Consulting | — | — | — | ||||||||
Engineering & Construction | 2 | 5 | 6 | ||||||||
Other | 2 | 4 | 4 | ||||||||
Subtotal | 8 | 11 | 10 | ||||||||
Non-strategic Business | — | — | — | ||||||||
Total | $ | 8 | $ | 11 | $ | 10 | |||||
Depreciation and amortization: | |||||||||||
Government Services | $ | 27 | $ | 16 | $ | 6 | |||||
Technology & Consulting | 3 | 3 | 2 | ||||||||
Engineering & Construction | 10 | 16 | 17 | ||||||||
Other | 8 | 10 | 14 | ||||||||
Subtotal | 48 | 45 | 39 | ||||||||
Non-strategic Business | — | — | — | ||||||||
Total | $ | 48 | $ | 45 | $ | 39 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Total assets: | |||||||
Government Services | $ | 1,600 | $ | 1,646 | |||
Technology & Consulting | 247 | 219 | |||||
Engineering & Construction | 1,028 | 1,600 | |||||
Other | 792 | 666 | |||||
Subtotal | 3,667 | 4,131 | |||||
Non-strategic Business | 7 | 13 | |||||
Total | $ | 3,674 | $ | 4,144 | |||
Goodwill (Note 10): | |||||||
Government Services | $ | 679 | $ | 674 | |||
Technology & Consulting | 56 | 52 | |||||
Engineering & Construction | 233 | 233 | |||||
Other | — | — | |||||
Subtotal | 968 | 959 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 968 | $ | 959 | |||
Equity in and advances to related companies (Note 12): | |||||||
Government Services | $ | 41 | $ | 37 | |||
Technology & Consulting | — | — | |||||
Engineering & Construction | 346 | 332 | |||||
Other | — | — | |||||
Subtotal | 387 | 369 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 387 | $ | 369 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Revenues: | |||||||||||
United States | $ | 1,986 | $ | 2,111 | $ | 2,212 | |||||
Middle East | 911 | 849 | 786 | ||||||||
Europe | 480 | 498 | 495 | ||||||||
Australia | 334 | 376 | 836 | ||||||||
Canada | 224 | 145 | 185 | ||||||||
Africa | 46 | 111 | 164 | ||||||||
Other Countries | 190 | 178 | 418 | ||||||||
Total | $ | 4,171 | $ | 4,268 | $ | 5,096 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Property, plant & equipment, net: | |||||||
United States | $ | 60 | $ | 70 | |||
United Kingdom | 52 | 35 | |||||
Other | 18 | 40 | |||||
Total | $ | 130 | $ | 145 |
|
Years ended December 31, | |||||
Dollars in millions, except per share data | 2016 | 2015 | |||
(Unaudited) | |||||
Revenue | 5,129 | 6,599 | |||
Net income (loss) attributable to KBR | (23 | ) | 248 | ||
Diluted earnings per share | (0.16 | ) | 1.72 |
|
December 31, 2017 | |||||||||||
Dollars in millions | International (a) | Domestic (b) | Total | ||||||||
Operating cash and equivalents | $ | 112 | $ | 124 | $ | 236 | |||||
Short-term investments (c) | 82 | 60 | 142 | ||||||||
Cash and equivalents held in joint ventures | 59 | 2 | 61 | ||||||||
Total | $ | 253 | $ | 186 | $ | 439 |
December 31, 2016 | |||||||||||
Dollars in millions | International (a) | Domestic (b) | Total | ||||||||
Operating cash and equivalents | $ | 163 | $ | 242 | $ | 405 | |||||
Short-term investments (c) | 68 | 7 | 75 | ||||||||
Cash and equivalents held in joint ventures | 50 | 6 | 56 | ||||||||
Total | $ | 281 | $ | 255 | $ | 536 |
(a) | Includes deposits held in non-U.S. operating accounts |
(b) | Includes U.S. dollar and foreign currency deposits held in operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country |
|
December 31, 2017 | |||||||||||
Dollars in millions | Retainage | Trade & Other | Total | ||||||||
Government Services | $ | 6 | $ | 189 | $ | 195 | |||||
Technology & Consulting | — | 81 | 81 | ||||||||
Engineering & Construction | 53 | 177 | 230 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 59 | 447 | 506 | ||||||||
Non-strategic Business | 4 | — | 4 | ||||||||
Total | $ | 63 | $ | 447 | $ | 510 |
December 31, 2016 | |||||||||||
Dollars in millions | Retainage | Trade & Other | Total | ||||||||
Government Services | $ | 6 | $ | 190 | $ | 196 | |||||
Technology & Consulting | — | 52 | 52 | ||||||||
Engineering & Construction | 53 | 276 | 329 | ||||||||
Other | — | 3 | 3 | ||||||||
Subtotal | 59 | 521 | 580 | ||||||||
Non-strategic Business | 5 | 7 | 12 | ||||||||
Total | $ | 64 | $ | 528 | $ | 592 |
|
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Government Services | $ | 274 | $ | 271 | |||
Technology & Consulting | 45 | 30 | |||||
Engineering & Construction | 64 | 115 | |||||
Subtotal | 383 | 416 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 383 | $ | 416 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Government Services | $ | 85 | $ | 76 | |||
Technology & Consulting | 62 | 61 | |||||
Engineering & Construction | 213 | 388 | |||||
Subtotal | 360 | 525 | |||||
Non-strategic Business | 8 | 27 | |||||
Total | $ | 368 | $ | 552 |
|
|
Dollars in millions | 2017 | 2016 | |||||
Amounts included in project estimates-at-completion at January 1, | $ | 294 | $ | 104 | |||
Additions | 647 | 241 | |||||
Approved change orders | (17 | ) | (51 | ) | |||
Amounts included in project estimates-at-completion at December 31, | $ | 924 | $ | 294 | |||
Amounts recorded in revenues on a percentage-of-completion basis at December 31, | $ | 826 | $ | 241 |
|
Estimated Useful Lives in Years | December 31, | ||||||||
Dollars in millions | 2017 | 2016 | |||||||
Land | N/A | $ | 7 | $ | 7 | ||||
Buildings and property improvements | 1 - 35 | 118 | 124 | ||||||
Equipment and other | 1 - 25 | 334 | 338 | ||||||
Total | 459 | 469 | |||||||
Less accumulated depreciation | (329 | ) | (324 | ) | |||||
Net property, plant and equipment | $ | 130 | $ | 145 |
|
Dollars in millions | Government Services | Technology & Consulting | Engineering & Construction | Other | Subtotal | Non-strategic Business | Total | ||||||||||||||||||||
Balance as of January 1, 2016: | |||||||||||||||||||||||||||
Gross goodwill | $ | 60 | $ | 31 | $ | 526 | $ | — | $ | 617 | $ | 331 | $ | 948 | |||||||||||||
Accumulated impairment losses | — | — | (293 | ) | — | (293 | ) | (331 | ) | (624 | ) | ||||||||||||||||
Net goodwill as of January 1, 2016 | $ | 60 | $ | 31 | $ | 233 | $ | — | $ | 324 | $ | — | $ | 324 | |||||||||||||
Goodwill acquired during the period | $ | 614 | $ | 24 | $ | — | $ | — | $ | 638 | $ | — | $ | 638 | |||||||||||||
Impairment loss | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Foreign currency translation | — | (3 | ) | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||
Balances as of December 31, 2016: | |||||||||||||||||||||||||||
Gross goodwill | $ | 674 | $ | 52 | $ | 526 | $ | — | $ | 1,252 | $ | 331 | $ | 1,583 | |||||||||||||
Accumulated impairment losses | — | — | (293 | ) | — | (293 | ) | (331 | ) | (624 | ) | ||||||||||||||||
Net goodwill as of December 31, 2016 | $ | 674 | $ | 52 | $ | 233 | $ | — | $ | 959 | $ | — | $ | 959 | |||||||||||||
Goodwill acquired during the period | $ | 1 | $ | — | $ | — | $ | — | $ | 1 | $ | — | $ | 1 | |||||||||||||
Purchase price adjustment | 4 | — | — | — | 4 | — | 4 | ||||||||||||||||||||
Impairment loss | — | — | — | — | — | — | — | ||||||||||||||||||||
Foreign currency translation | — | 4 | — | — | 4 | — | 4 | ||||||||||||||||||||
Balance as of December 31, 2017: | |||||||||||||||||||||||||||
Gross goodwill | $ | 679 | $ | 56 | $ | 526 | $ | — | $ | 1,261 | $ | 331 | $ | 1,592 | |||||||||||||
Accumulated impairment losses | — | — | (293 | ) | — | (293 | ) | (331 | ) | (624 | ) | ||||||||||||||||
Net goodwill as of December 31, 2017 | $ | 679 | $ | 56 | $ | 233 | $ | — | $ | 968 | $ | — | $ | 968 |
Dollars in millions | December 31, 2017 | ||||||||||||
Weighted Average Remaining Useful Lives | Intangible Assets, Gross | Accumulated Amortization | Intangible Assets, Net | ||||||||||
Trademarks/trade names | Indefinite | $ | 61 | $ | — | $ | 61 | ||||||
Customer relationships | 17 | 206 | (57 | ) | 149 | ||||||||
Developed technologies | 17 | 45 | (33 | ) | 12 | ||||||||
Other | 13 | 49 | (32 | ) | 17 | ||||||||
Total intangible assets | $ | 361 | $ | (122 | ) | $ | 239 | ||||||
December 31, 2016 | |||||||||||||
Weighted Average Remaining Useful Lives | Intangible Assets, Gross | Accumulated Amortization | Intangible Assets, Net | ||||||||||
Trademarks/trade names | Indefinite | $ | 60 | $ | — | $ | 60 | ||||||
Customer relationships | 18 | 199 | (47 | ) | 152 | ||||||||
Developed technologies | 17 | 46 | (33 | ) | 13 | ||||||||
Other | 9 | 43 | (20 | ) | 23 | ||||||||
Total intangible assets | $ | 348 | $ | (100 | ) | $ | 248 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Intangibles amortization expense | $ | 21 | $ | 14 | $ | 4 |
Dollars in millions | Expected future intangibles amortization expense | ||
2018 | $ | 14 | |
2019 | $ | 14 | |
2020 | $ | 14 | |
2021 | $ | 10 | |
2022 | $ | 9 | |
Beyond 2022 | $ | 117 |
|
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Asset impairment: | |||||||||||
Government Services | $ | — | $ | — | $ | — | |||||
Technology & Consulting | — | — | — | ||||||||
Engineering & Construction | — | 10 | 8 | ||||||||
Other | — | 7 | 21 | ||||||||
Subtotal | — | 17 | 29 | ||||||||
Non-strategic Business | — | — | 2 | ||||||||
Total | $ | — | $ | 17 | $ | 31 | |||||
Restructuring charges: | |||||||||||
Government Services | $ | — | $ | 1 | $ | — | |||||
Technology & Consulting | — | 1 | 10 | ||||||||
Engineering & Construction | 6 | 20 | 26 | ||||||||
Other | — | — | 1 | ||||||||
Subtotal | 6 | 22 | 37 | ||||||||
Non-strategic Business | — | — | 2 | ||||||||
Total | $ | 6 | $ | 22 | $ | 39 | |||||
Asset impairment and restructuring charges: | |||||||||||
Total | $ | 6 | $ | 39 | $ | 70 |
Dollars in millions | Severance Accrual | ||
Balance at December 31, 2015 | $ | 19 | |
Charges | 18 | ||
Payments | (29 | ) | |
Balance at December 31, 2016 | $ | 8 | |
Charges | — | ||
Payments | (6 | ) | |
Non-cash settlements (a) | $ | (1 | ) |
Balance at December 31, 2017 | $ | 1 |
|
Dollars in millions | 2017 | 2016 | |||||
Balance at January 1, | $ | 369 | $ | 281 | |||
Equity in earnings of unconsolidated affiliates | 72 | 91 | |||||
Distributions of earnings of unconsolidated affiliates (a) | (62 | ) | (56 | ) | |||
Advances (receipts) | (11 | ) | 1 | ||||
Investments (b) | — | 61 | |||||
Foreign currency translation adjustments | 12 | (8 | ) | ||||
Other | 5 | (8 | ) | ||||
Balance before reclassification | 385 | 362 | |||||
Reclassification of excess distributions (a) | 11 | 12 | |||||
Recognition of excess distributions (a) | (9 | ) | (5 | ) | |||
Balance at December 31, | $ | 387 | $ | 369 |
(a) | We received cash dividends in excess of the carrying value of one of our investments. We have no obligation to return any portion of the cash dividends received. We recorded the excess dividend amount as "Deferred income from unconsolidated affiliates" on our consolidated balance sheets and recognize these dividends as earnings are generated by the investment. |
(b) | In 2016, investments included a $56 million investment in the Brown & Root Industrial Services joint venture and a $5 million investment in EPIC Piping LLC ("EPIC") joint venture. |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Current assets | $ | 3,107 | $ | 2,655 | |||
Noncurrent assets | 3,250 | 3,003 | |||||
Total assets | $ | 6,357 | $ | 5,658 | |||
Current liabilities | $ | 2,006 | $ | 1,657 | |||
Noncurrent liabilities | 3,508 | 3,148 | |||||
Total liabilities | $ | 5,514 | $ | 4,805 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Revenues | $ | 5,781 | $ | 5,877 | $ | 5,245 | |||||
Operating income | $ | 278 | $ | 365 | $ | 635 | |||||
Net income | $ | 145 | $ | 192 | $ | 476 |
December 31, 2017 | |||||||||||
Dollars in millions | Total Assets | Total Liabilities | Maximum Exposure to Loss | ||||||||
Affinity project | $ | 26 | $ | 10 | $ | 26 | |||||
Aspire Defence project | $ | 10 | $ | 125 | $ | 10 | |||||
Ichthys LNG project (see Notes 7 and 18) | $ | 145 | $ | 25 | $ | 145 | |||||
U.K. Road projects | $ | 36 | $ | 10 | $ | 36 | |||||
EBIC Ammonia plant (65% interest) | $ | 38 | $ | 1 | $ | 25 |
Dollars in millions | December 31, 2016 | ||||||||||
Total Assets | Total Liabilities | Maximum Exposure to Loss | |||||||||
Affinity project | $ | 12 | $ | 3 | $ | 12 | |||||
Aspire Defence project | $ | 14 | $ | 107 | $ | 14 | |||||
Ichthys LNG project (see Notes 7 and 18) | $ | 124 | $ | 33 | $ | 124 | |||||
U.K. Road projects | $ | 30 | $ | 9 | $ | 30 | |||||
EBIC Ammonia plant (65% interest) | $ | 34 | $ | 2 | $ | 22 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Accounts receivable (a) | $ | 28 | $ | 22 | |||
Costs and estimated earnings in excess of billings on uncompleted contracts (b) | $ | 2 | $ | 1 | |||
Billings in excess of costs and estimated earnings on uncompleted contracts (b) | $ | 27 | $ | 41 |
(a) | Includes a $4 million and $11 million net receivable from the Brown & Root Industrial Services joint venture at December 31, 2017 and 2016, respectively. |
(b) | Reflects CIE and BIE primarily related to joint ventures within our E&C business segment as discussed above. |
Dollars in millions | December 31, 2017 | ||||||
Total Assets | Total Liabilities | ||||||
Gorgon LNG project | $ | 15 | $ | 48 | |||
Escravos Gas-to-Liquids project | $ | 8 | $ | 13 | |||
Fasttrax Limited project | $ | 57 | $ | 47 |
Dollars in millions | December 31, 2016 | ||||||
Total Assets | Total Liabilities | ||||||
Gorgon LNG project | $ | 28 | $ | 60 | |||
Escravos Gas-to-Liquids project | $ | 11 | $ | 22 | |||
Fasttrax Limited project | $ | 56 | $ | 50 |
|
United States | Int’l | United States | Int’l | ||||||||||||
Dollars in millions | 2017 | 2016 | |||||||||||||
Change in projected benefit obligations: | |||||||||||||||
Projected benefit obligations at beginning of period | $ | 75 | $ | 1,970 | $ | 75 | $ | 1,849 | |||||||
Acquisitions | — | — | 12 | 3 | |||||||||||
Service cost | — | 1 | — | 1 | |||||||||||
Interest cost | 3 | 53 | 3 | 63 | |||||||||||
Foreign currency exchange rate changes | — | 186 | — | (304 | ) | ||||||||||
Actuarial (gain) loss | 3 | (78 | ) | — | 448 | ||||||||||
Other | — | (1 | ) | — | (1 | ) | |||||||||
Benefits paid | (4 | ) | (85 | ) | (15 | ) | (89 | ) | |||||||
Projected benefit obligations at end of period | $ | 77 | $ | 2,046 | $ | 75 | $ | 1,970 | |||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets at beginning of period | $ | 56 | $ | 1,463 | $ | 59 | $ | 1,532 | |||||||
Acquisitions | — | — | 8 | — | |||||||||||
Actual return on plan assets | 7 | 119 | 3 | 235 | |||||||||||
Employer contributions | 1 | 36 | 1 | 40 | |||||||||||
Foreign currency exchange rate changes | — | 141 | — | (255 | ) | ||||||||||
Benefits paid | (4 | ) | (85 | ) | (15 | ) | (89 | ) | |||||||
Other | (1 | ) | (1 | ) | — | — | |||||||||
Fair value of plan assets at end of period | $ | 59 | $ | 1,673 | $ | 56 | $ | 1,463 | |||||||
Funded status | $ | (18 | ) | $ | (373 | ) | $ | (19 | ) | $ | (507 | ) |
United States | Int’l | United States | Int’l | ||||||||||||
Dollars in millions | 2017 | 2016 | |||||||||||||
Amounts recognized on the consolidated balance sheets | |||||||||||||||
Pension obligations | $ | 18 | $ | 373 | $ | 19 | $ | 507 |
United States | Int’l | United States | Int’l | United States | Int’l | ||||||||||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||||||||||||||
Components of net periodic benefit cost | |||||||||||||||||||||||
Service cost | $ | — | $ | 1 | $ | — | $ | 1 | $ | — | $ | 2 | |||||||||||
Interest cost | 3 | 53 | 3 | 63 | 2 | 76 | |||||||||||||||||
Expected return on plan assets | (3 | ) | (77 | ) | (3 | ) | (87 | ) | (3 | ) | (97 | ) | |||||||||||
Settlements/curtailments | — | — | 1 | — | — | — | |||||||||||||||||
Recognized actuarial loss | 1 | 30 | 1 | 28 | 5 | 43 | |||||||||||||||||
Net periodic benefit cost | $ | 1 | $ | 7 | $ | 2 | $ | 5 | $ | 4 | $ | 24 |
United States | Int’l | United States | Int’l | ||||||||||||
Dollars in millions | 2017 | 2016 | |||||||||||||
Unrecognized actuarial loss, net of tax of $10 and $217, and $10 and $244, respectively | $ | 22 | $ | 638 | $ | 24 | $ | 761 | |||||||
Total in accumulated other comprehensive loss | $ | 22 | $ | 638 | $ | 24 | $ | 761 |
Dollars in millions | United States | Int’l | |||||
Actuarial loss | $ | 1 | $ | 22 | |||
Total | $ | 1 | $ | 22 |
Weighted-average assumptions used to determine net periodic benefit cost | |||||||||||||||||
United States | Int'l | United States | Int'l | United States | Int'l | ||||||||||||
2017 | 2016 | 2015 | |||||||||||||||
Discount rate | 3.73 | % | 2.60 | % | 3.42 | % | 3.75 | % | 2.89 | % | 3.65 | % | |||||
Expected return on plan assets | 6.01 | % | 5.40 | % | 5.00 | % | 6.10 | % | 4.81 | % | 6.25 | % |
Weighted-average assumptions used to determine benefit obligations at measurement date | |||||||||||
United States | Int'l | United States | Int'l | ||||||||
2017 | 2016 | ||||||||||
Discount rate | 3.33 | % | 2.50 | % | 3.73 | % | 2.60 | % |
Asset Allocation | 2018 Targeted | ||||
United States | Int'l | ||||
Equity funds and securities | 51 | % | 30 | % | |
Fixed income funds and securities | 39 | % | 50 | % | |
Hedge funds | — | % | — | % | |
Real estate funds | 1 | % | 5 | % | |
Other | 9 | % | 15 | % | |
Total | 100 | % | 100 | % |
International Plans | 2018 Targeted | 2017 Targeted | |||||||||
Percentage Range | Percentage Range | ||||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||
Equity funds and securities | — | % | 60 | % | — | % | 60 | % | |||
Fixed income funds and securities | — | % | 100 | % | — | % | 100 | % | |||
Hedge funds | — | % | 35 | % | — | % | 35 | % | |||
Real estate funds | — | % | 10 | % | — | % | 10 | % | |||
Other | — | % | 20 | % | — | % | 20 | % |
Domestic Plans | 2018 Targeted | 2017 Targeted | |||||||||
Percentage Range | Percentage Range | ||||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||
Cash and cash equivalents | — | % | — | % | — | % | — | % | |||
Equity funds and securities | 50 | % | 53 | % | 52 | % | 55 | % | |||
Fixed income funds and securities | 37 | % | 40 | % | 44 | % | 47 | % | |||
Real estate funds | 1 | % | 1 | % | 1 | % | 1 | % | |||
Other | 9 | % | 9 | % | — | % | — | % |
Fair Value Measurements at Reporting Date | |||||||||||||||
Dollars in millions | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Asset Category at December 31, 2017 | |||||||||||||||
United States plan assets | |||||||||||||||
Investments measured at net asset value (a) | $ | 59 | $ | — | $ | — | $ | — | |||||||
Total United States plan assets | $ | 59 | $ | — | $ | — | $ | — | |||||||
International plan assets | |||||||||||||||
Equities | $ | 60 | $ | 34 | $ | — | $ | 26 | |||||||
Fixed income | 5 | — | — | 5 | |||||||||||
Real estate | 3 | — | — | 3 | |||||||||||
Cash and cash equivalents | 8 | 8 | — | — | |||||||||||
Other | 40 | — | — | 40 | |||||||||||
Investments measured at net asset value (a) | 1,557 | — | — | — | |||||||||||
Total international plan assets | $ | 1,673 | $ | 42 | $ | — | $ | 74 | |||||||
Total plan assets at December 31, 2017 | $ | 1,732 | $ | 42 | $ | — | $ | 74 |
Fair Value Measurements at Reporting Date | |||||||||||||||
Dollars in millions | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Asset Category at December 31, 2016 | |||||||||||||||
United States plan assets | |||||||||||||||
Investments measured at net asset value (a) | $ | 56 | $ | — | $ | — | $ | — | |||||||
Total United States plan assets | $ | 56 | $ | — | $ | — | $ | — | |||||||
International plan assets | |||||||||||||||
Equities | $ | 76 | $ | 60 | $ | — | $ | 16 | |||||||
Fixed income | 12 | — | — | 12 | |||||||||||
Real estate | 4 | — | — | 4 | |||||||||||
Cash and cash equivalents | 8 | 8 | — | — | |||||||||||
Other | 50 | — | — | 50 | |||||||||||
Investments measured at net asset value (a) | 1,313 | — | — | — | |||||||||||
Total international plan assets | $ | 1,463 | $ | 68 | $ | — | $ | 82 | |||||||
Total plan assets at December 31, 2016 | $ | 1,519 | $ | 68 | $ | — | $ | 82 |
Dollars in millions | Total | Equities | Fixed Income | Real Estate | Other | ||||||||||||||
International plan assets | |||||||||||||||||||
Balance as of December 31, 2015 | $ | 45 | $ | 12 | $ | 14 | $ | 6 | $ | 13 | |||||||||
Return on assets held at end of year | 14 | 1 | 1 | 1 | 11 | ||||||||||||||
Purchases, sales and settlements | 32 | 5 | (1 | ) | (3 | ) | 31 | ||||||||||||
Foreign exchange impact | (9 | ) | (2 | ) | (2 | ) | — | (5 | ) | ||||||||||
Balance as of December 31, 2016 | $ | 82 | $ | 16 | $ | 12 | $ | 4 | $ | 50 | |||||||||
Return on assets held at end of year | (1 | ) | 3 | — | (1 | ) | (3 | ) | |||||||||||
Return on assets sold during the year | 3 | — | — | — | 3 | ||||||||||||||
Purchases, sales and settlements, net | (15 | ) | 5 | (8 | ) | (1 | ) | (11 | ) | ||||||||||
Foreign exchange impact | 5 | 2 | 1 | 1 | 1 | ||||||||||||||
Balance as of December 31, 2017 | $ | 74 | $ | 26 | $ | 5 | $ | 3 | $ | 40 |
Pension Benefits | |||||||
Dollars in millions | United States | Int’l | |||||
2018 | $ | 5 | $ | 56 | |||
2019 | $ | 5 | $ | 57 | |||
2020 | $ | 5 | $ | 58 | |||
2021 | $ | 5 | $ | 60 | |||
2022 | $ | 5 | $ | 61 | |||
Years 2023 – 2027 | $ | 25 | $ | 327 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Deferred compensation plans obligations | $ | 68 | $ | 70 |
|
Dollars in millions | Payments Due | ||
2018 | $ | 10 | |
2019 | $ | 10 | |
2020 | $ | 11 | |
2021 | $ | 5 | |
2022 | $ | 1 | |
Beyond 2022 | $ | 1 |
|
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
United States | $ | 84 | $ | (250 | ) | $ | (35 | ) | |||
Foreign: | |||||||||||
United Kingdom | 40 | 55 | 105 | ||||||||
Australia | (28 | ) | 38 | 32 | |||||||
Canada | 15 | (8 | ) | 87 | |||||||
Middle East | 42 | 66 | 35 | ||||||||
Africa | 20 | 76 | 34 | ||||||||
Other | 76 | 56 | 54 | ||||||||
Subtotal | 165 | 283 | 347 | ||||||||
Total | $ | 249 | $ | 33 | $ | 312 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Benefit (Provision) for income taxes | $ | 193 | $ | (84 | ) | $ | (86 | ) | |||
Shareholders' equity, foreign currency translation adjustment | 6 | (3 | ) | (3 | ) | ||||||
Shareholders' equity, pension and post-retirement benefits | (27 | ) | 45 | (22 | ) | ||||||
Total income taxes | $ | 172 | $ | (42 | ) | $ | (111 | ) |
Dollars in millions | Current | Deferred | Total | ||||||||
Year-ended December 31, 2017 | |||||||||||
Federal | $ | (6 | ) | $ | 230 | $ | 224 | ||||
Foreign | (122 | ) | 92 | (30 | ) | ||||||
State and other | (2 | ) | 1 | (1 | ) | ||||||
(Provision) benefit for income taxes | $ | (130 | ) | $ | 323 | $ | 193 | ||||
Year-ended December 31, 2016 | |||||||||||
Federal | $ | (5 | ) | $ | 9 | $ | 4 | ||||
Foreign | (61 | ) | (26 | ) | (87 | ) | |||||
State and other | — | (1 | ) | (1 | ) | ||||||
Provision for income taxes | $ | (66 | ) | $ | (18 | ) | $ | (84 | ) | ||
Year-ended December 31, 2015 | |||||||||||
Federal | $ | (17 | ) | $ | 8 | $ | (9 | ) | |||
Foreign | (55 | ) | (22 | ) | (77 | ) | |||||
State and other | — | — | — | ||||||||
Provision for income taxes | $ | (72 | ) | $ | (14 | ) | $ | (86 | ) |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
United Kingdom | $ | (7 | ) | $ | (6 | ) | $ | (15 | ) | ||
Australia | 6 | — | 16 | ||||||||
Canada | — | 1 | 3 | ||||||||
Middle East | (10 | ) | (24 | ) | (8 | ) | |||||
Africa | 1 | (22 | ) | (10 | ) | ||||||
Other | (20 | ) | (36 | ) | (63 | ) | |||||
Foreign provision for income taxes | $ | (30 | ) | $ | (87 | ) | $ | (77 | ) |
Years ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. statutory federal rate, expected (benefit) provision | 35 | % | 35 | % | 35 | % | ||
Increase (reduction) in tax rate from: | ||||||||
Rate differentials on foreign earnings | (5 | ) | (28 | ) | (10 | ) | ||
Noncontrolling interests and equity earnings | (2 | ) | (28 | ) | (8 | ) | ||
State and local income taxes, net of federal benefit | 1 | — | 2 | |||||
Other permanent differences, net | (8 | ) | 54 | — | ||||
Contingent liability accrual | (2 | ) | 41 | (1 | ) | |||
U.S. taxes on foreign unremitted earnings | — | 174 | 1 | |||||
Change in valuation allowance | (90 | ) | 3 | 6 | ||||
U.S. tax reform | (7 | ) | — | — | ||||
U.K. statutory rate change | — | 4 | 3 | |||||
Effective tax rate on income from operations | (78 | )% | 255 | % | 28 | % |
Years ended December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Deferred tax assets: | |||||||
Employee compensation and benefits | $ | 122 | $ | 166 | |||
Foreign tax credit carryforwards | 279 | 356 | |||||
Accrued foreign tax credit carryforwards | — | 93 | |||||
Loss carryforwards | 90 | 69 | |||||
Insurance accruals | 8 | 15 | |||||
Allowance for bad debt | 3 | 9 | |||||
Accrued liabilities | 30 | 49 | |||||
Construction contract accounting | 5 | — | |||||
Other | 15 | — | |||||
Total gross deferred tax assets | 552 | 757 | |||||
Valuation allowances | (217 | ) | (542 | ) | |||
Net deferred tax assets | 335 | 215 | |||||
Deferred tax liabilities: | |||||||
Construction contract accounting | — | (34 | ) | ||||
Intangible amortization | (20 | ) | (29 | ) | |||
Indefinite-lived intangible amortization | (31 | ) | (39 | ) | |||
Fixed asset depreciation | 2 | 2 | |||||
Accrued foreign tax credit carryforwards | (4 | ) | — | ||||
Unremitted foreign earnings | — | (63 | ) | ||||
Other | — | (82 | ) | ||||
Total gross deferred tax liabilities | (53 | ) | (245 | ) | |||
Deferred income tax (liabilities) assets, net | $ | 282 | $ | (30 | ) |
Dollars in millions | Net Gross Deferred Asset (Liability) | Valuation Allowance | Deferred Asset (Liability), net | ||||||||
United States | $ | 372 | $ | (178 | ) | $ | 194 | ||||
United Kingdom | 81 | — | 81 | ||||||||
Australia | 10 | (1 | ) | 9 | |||||||
Canada | 21 | (16 | ) | 5 | |||||||
Other | 15 | (22 | ) | (7 | ) | ||||||
Total | $ | 499 | $ | (217 | ) | $ | 282 |
Dollars in millions | December 31, 2017 | Expiration | |||
Foreign tax credit carryforwards | $ | 330 | 2019-2026 | ||
Foreign net operating loss carryforwards | $ | 112 | 2018-2038 | ||
Foreign net operating loss carryforwards | $ | 108 | Indefinite | ||
State net operating loss carryforwards | $ | 677 | Various |
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Balance at January 1, | $ | 261 | $ | 257 | $ | 228 | |||||
Increases related to current year tax positions | 2 | 2 | 18 | ||||||||
Increases related to tax positions from acquisitions | — | 14 | — | ||||||||
Increases related to prior year tax positions | 1 | 10 | 35 | ||||||||
Decreases related to prior year tax positions | (1 | ) | (4 | ) | (3 | ) | |||||
Settlements | (80 | ) | (10 | ) | (2 | ) | |||||
Lapse of statute of limitations | (1 | ) | (6 | ) | (16 | ) | |||||
Other, primarily due to exchange rate fluctuations affecting non-U.S. tax positions | 2 | (2 | ) | (3 | ) | ||||||
Balance at December 31, | $ | 184 | $ | 261 | $ | 257 |
|
|
Dollars in millions | Future rental payments (a) | ||
2018 | $ | 86 | |
2019 | $ | 70 | |
2020 | $ | 57 | |
2021 | $ | 48 | |
2022 | $ | 41 | |
Beyond 2022 | $ | 263 |
(a) | Amounts presented are net of subleases. |
|
|
Years ended December 31, | |||||||
Gains (losses) dollars in millions | 2017 | 2016 | |||||
Balance Sheet Hedges - Fair Value | $ | 5 | $ | (7 | ) | ||
Balance Sheet Position - Remeasurement | (16 | ) | 27 | ||||
Net | $ | (11 | ) | $ | 20 |
|
|
(Dollars in millions, except per share amounts) | First | Second | Third | Fourth | Year | ||||||||||||||
2017 | |||||||||||||||||||
Total revenues | $ | 1,106 | $ | 1,094 | $ | 1,034 | $ | 937 | $ | 4,171 | |||||||||
Gross profit | 82 | 108 | 87 | 65 | 342 | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 9 | 32 | 23 | 8 | 72 | ||||||||||||||
Operating income | 63 | 103 | 73 | 27 | 266 | ||||||||||||||
Net income (a) | 38 | 79 | 47 | 278 | 442 | ||||||||||||||
Net income attributable to noncontrolling interests | (1 | ) | (2 | ) | (2 | ) | (3 | ) | (8 | ) | |||||||||
Net income attributable to KBR (a) | 37 | 77 | 45 | 275 | 434 | ||||||||||||||
Net income attributable to KBR per share: | |||||||||||||||||||
Net income attributable to KBR per share—Basic | $ | 0.26 | $ | 0.54 | $ | 0.32 | $ | 1.94 | $ | 3.06 | |||||||||
Net income attributable to KBR per share—Diluted | $ | 0.26 | $ | 0.54 | $ | 0.32 | $ | 1.94 | $ | 3.06 | |||||||||
(Dollars in millions, except per share amounts) | First | Second | Third | Fourth | Year | ||||||||||||||
2016 | |||||||||||||||||||
Total revenues | $ | 996 | $ | 1,009 | $ | 1,073 | $ | 1,190 | $ | 4,268 | |||||||||
Gross profit (loss) (b) | 68 | 74 | (36 | ) | 6 | 112 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 29 | 33 | 19 | 10 | 91 | ||||||||||||||
Operating income (loss) (b) | 65 | 63 | (67 | ) | (33 | ) | 28 | ||||||||||||
Net income (loss) | 45 | 47 | (57 | ) | (86 | ) | (51 | ) | |||||||||||
Net income attributable to noncontrolling interests | (3 | ) | — | (6 | ) | (1 | ) | (10 | ) | ||||||||||
Net income (loss) attributable to KBR | 42 | 47 | (63 | ) | (87 | ) | (61 | ) | |||||||||||
Net income (loss) attributable to KBR per share: | |||||||||||||||||||
Net income (loss) attributable to KBR per share—Basic | $ | 0.30 | $ | 0.32 | $ | (0.44 | ) | $ | (0.61 | ) | $ | (0.43 | ) | ||||||
Net income (loss) attributable to KBR per share—Diluted | $ | 0.30 | $ | 0.32 | $ | (0.44 | ) | $ | (0.61 | ) | $ | (0.43 | ) |
(a) | Net income and Net income attributable to KBR in the fourth quarter of 2017 were favorably impacted by a release of a valuation allowance of $223 million on the basis of management's reassessment of the amount of its U.S. deferred tax assets that are more likely than not to be realized and an $18 million favorable impact related to the Tax Act. See Note 15 to our consolidated financial statements. |
|
(Dollars in Millions) | Additions | ||||||||||||||||||
Descriptions | Balance at Beginning Period | Charged to Costs and Expenses | Charged to Other Accounts | Deductions | Balance at End of Period | ||||||||||||||
Year ended December 31, 2017: | |||||||||||||||||||
Deducted from accounts and notes receivable: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 14 | $ | — | $ | — | $ | (2 | ) (a) | $ | 12 | ||||||||
Reserve for losses on uncompleted contracts | $ | 63 | $ | 4 | $ | — | $ | (52 | ) | $ | 15 | ||||||||
Reserve for potentially disallowable costs incurred under government contracts | $ | 64 | $ | 1 | $ | — | $ | (14 | ) | $ | 51 | ||||||||
Year ended December 31, 2016: | |||||||||||||||||||
Deducted from accounts and notes receivable: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 17 | $ | (2 | ) | $ | — | $ | (1 | ) (a) | $ | 14 | |||||||
Reserve for losses on uncompleted contracts | $ | 60 | $ | 331 | $ | — | $ | (328 | ) | $ | 63 | ||||||||
Reserve for potentially disallowable costs incurred under government contracts | $ | 50 | $ | 10 | $ | 6 | (b) | $ | (2 | ) | $ | 64 | |||||||
Year ended December 31, 2015: | |||||||||||||||||||
Deducted from accounts and notes receivable: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 19 | $ | 2 | $ | — | $ | (4 | ) (a) | $ | 17 | ||||||||
Reserve for losses on uncompleted contracts | $ | 159 | $ | 69 | $ | — | $ | (168 | ) | $ | 60 | ||||||||
Reserve for potentially disallowable costs incurred under government contracts | $ | 74 | $ | — | $ | 3 | (b) | $ | (27 | ) | $ | 50 |
(a) | Receivable write-offs, net of recoveries, and reclassifications. |
|
• | project revenues, costs and profits on engineering and construction contracts, including recognition of estimated losses on uncompleted contracts |
• | project revenues, award fees, costs and profits on government services contracts |
• | provisions for uncollectible receivables and client claims and recoveries of costs from subcontractors, vendors and others |
• | provisions for income taxes and related valuation allowances and tax uncertainties |
• | recoverability of goodwill |
• | recoverability of other intangibles and long-lived assets and related estimated lives |
• | recoverability of equity method and cost method investments |
• | valuation of pension obligations and pension assets |
• | accruals for estimated liabilities, including litigation accruals |
• | consolidation of VIEs |
• | valuation of share-based compensation |
• | valuation of assets and liabilities acquired in business combinations |
• | recognize on its balance sheet the funded status (measured as the difference between the fair value of plan assets and the benefit obligation) of the pension plan; |
• | recognize, through comprehensive income, certain changes in the funded status of a defined benefit plan in the year in which the changes occur; |
• | measure plan assets and benefit obligations as of the end of the employer’s fiscal year; and |
• | disclose additional information. |
|
Revenues from major customers: | |||||||||||
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
U.S. government | $ | 1,914 | $ | 1,090 | $ | 378 | |||||
Chevron | $ | 56 | $ | 105 | $ | 523 |
Percentages of revenues and accounts receivable from major customers: | ||||||||
Years ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. government revenues percentage | 46 | % | 26 | % | 7 | % | ||
U.S. government receivables percentage | 32 | % | 27 | % | 4 | % | ||
Chevron revenues percentage | 1 | % | 2 | % | 10 | % | ||
Chevron receivables percentage | 1 | % | 1 | % | 5 | % |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Prepaid expenses | 53 | 56 | |||||
Value-added tax receivable | 11 | 17 | |||||
Other miscellaneous assets | 29 | 30 | |||||
Total other current assets | $ | 93 | $ | 103 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Reserve for estimated losses on uncompleted contracts (a) | $ | 15 | $ | 63 | |||
Retainage payable | 30 | 47 | |||||
Income taxes payable | 17 | 55 | |||||
Restructuring reserves | 9 | 30 | |||||
Taxes payable not based on income | 11 | 14 | |||||
Value-added tax payable | 13 | 16 | |||||
Insurance payable | 9 | 14 | |||||
Dividend payable | 11 | 12 | |||||
Other miscellaneous liabilities | 42 | 41 | |||||
Total other current liabilities | $ | 157 | $ | 292 |
(a) | See Note 2 to our consolidated financial statements for further discussion on significant reserves for estimated losses on uncompleted contracts. |
|
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Revenues: | |||||||||||
Government Services | $ | 2,193 | $ | 1,359 | $ | 663 | |||||
Technology & Consulting | 326 | 347 | 324 | ||||||||
Engineering & Construction | 1,614 | 2,352 | 3,454 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 4,133 | 4,058 | 4,441 | ||||||||
Non-strategic Business | 38 | 210 | 655 | ||||||||
Total | $ | 4,171 | $ | 4,268 | $ | 5,096 | |||||
Gross profit (loss): | |||||||||||
Government Services | $ | 155 | $ | 137 | $ | (3 | ) | ||||
Technology & Consulting | 79 | 73 | 77 | ||||||||
Engineering & Construction | 108 | 7 | 224 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 342 | 217 | 298 | ||||||||
Non-strategic Business | — | (105 | ) | 27 | |||||||
Total | $ | 342 | $ | 112 | $ | 325 | |||||
Equity in earnings of unconsolidated affiliates: | |||||||||||
Government Services | $ | 43 | $ | 39 | $ | 45 | |||||
Technology & Consulting | — | — | — | ||||||||
Engineering & Construction | 29 | 52 | 104 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 72 | 91 | 149 | ||||||||
Non-strategic Business | — | — | — | ||||||||
Total | $ | 72 | $ | 91 | $ | 149 | |||||
Asset impairment and restructuring charges (Note 11): | |||||||||||
Government Services | $ | — | $ | (1 | ) | $ | — | ||||
Technology & Consulting | — | (1 | ) | (10 | ) | ||||||
Engineering & Construction | (6 | ) | (30 | ) | (34 | ) | |||||
Other | — | (7 | ) | (22 | ) | ||||||
Subtotal | (6 | ) | (39 | ) | (66 | ) | |||||
Non-strategic Business | — | — | (4 | ) | |||||||
Total | $ | (6 | ) | $ | (39 | ) | $ | (70 | ) | ||
Segment operating income (loss): | |||||||||||
Government Services | $ | 173 | $ | 152 | $ | 37 | |||||
Technology & Consulting | 76 | 66 | 62 | ||||||||
Engineering & Construction | 110 | 4 | 295 | ||||||||
Other | (93 | ) | (93 | ) | (140 | ) | |||||
Subtotal | 266 | 129 | 254 | ||||||||
Non-strategic Business | — | (101 | ) | 56 | |||||||
Total | $ | 266 | $ | 28 | $ | 310 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Capital expenditures: | |||||||||||
Government Services | $ | 4 | $ | 2 | $ | — | |||||
Technology & Consulting | — | — | — | ||||||||
Engineering & Construction | 2 | 5 | 6 | ||||||||
Other | 2 | 4 | 4 | ||||||||
Subtotal | 8 | 11 | 10 | ||||||||
Non-strategic Business | — | — | — | ||||||||
Total | $ | 8 | $ | 11 | $ | 10 | |||||
Depreciation and amortization: | |||||||||||
Government Services | $ | 27 | $ | 16 | $ | 6 | |||||
Technology & Consulting | 3 | 3 | 2 | ||||||||
Engineering & Construction | 10 | 16 | 17 | ||||||||
Other | 8 | 10 | 14 | ||||||||
Subtotal | 48 | 45 | 39 | ||||||||
Non-strategic Business | — | — | — | ||||||||
Total | $ | 48 | $ | 45 | $ | 39 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Total assets: | |||||||
Government Services | $ | 1,600 | $ | 1,646 | |||
Technology & Consulting | 247 | 219 | |||||
Engineering & Construction | 1,028 | 1,600 | |||||
Other | 792 | 666 | |||||
Subtotal | 3,667 | 4,131 | |||||
Non-strategic Business | 7 | 13 | |||||
Total | $ | 3,674 | $ | 4,144 | |||
Goodwill (Note 10): | |||||||
Government Services | $ | 679 | $ | 674 | |||
Technology & Consulting | 56 | 52 | |||||
Engineering & Construction | 233 | 233 | |||||
Other | — | — | |||||
Subtotal | 968 | 959 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 968 | $ | 959 | |||
Equity in and advances to related companies (Note 12): | |||||||
Government Services | $ | 41 | $ | 37 | |||
Technology & Consulting | — | — | |||||
Engineering & Construction | 346 | 332 | |||||
Other | — | — | |||||
Subtotal | 387 | 369 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 387 | $ | 369 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Revenues: | |||||||||||
United States | $ | 1,986 | $ | 2,111 | $ | 2,212 | |||||
Middle East | 911 | 849 | 786 | ||||||||
Europe | 480 | 498 | 495 | ||||||||
Australia | 334 | 376 | 836 | ||||||||
Canada | 224 | 145 | 185 | ||||||||
Africa | 46 | 111 | 164 | ||||||||
Other Countries | 190 | 178 | 418 | ||||||||
Total | $ | 4,171 | $ | 4,268 | $ | 5,096 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Property, plant & equipment, net: | |||||||
United States | $ | 60 | $ | 70 | |||
United Kingdom | 52 | 35 | |||||
Other | 18 | 40 | |||||
Total | $ | 130 | $ | 145 |
|
Years ended December 31, | |||||
Dollars in millions, except per share data | 2016 | 2015 | |||
(Unaudited) | |||||
Revenue | 5,129 | 6,599 | |||
Net income (loss) attributable to KBR | (23 | ) | 248 | ||
Diluted earnings per share | (0.16 | ) | 1.72 |
|
December 31, 2017 | |||||||||||
Dollars in millions | International (a) | Domestic (b) | Total | ||||||||
Operating cash and equivalents | $ | 112 | $ | 124 | $ | 236 | |||||
Short-term investments (c) | 82 | 60 | 142 | ||||||||
Cash and equivalents held in joint ventures | 59 | 2 | 61 | ||||||||
Total | $ | 253 | $ | 186 | $ | 439 |
December 31, 2016 | |||||||||||
Dollars in millions | International (a) | Domestic (b) | Total | ||||||||
Operating cash and equivalents | $ | 163 | $ | 242 | $ | 405 | |||||
Short-term investments (c) | 68 | 7 | 75 | ||||||||
Cash and equivalents held in joint ventures | 50 | 6 | 56 | ||||||||
Total | $ | 281 | $ | 255 | $ | 536 |
(a) | Includes deposits held in non-U.S. operating accounts |
(b) | Includes U.S. dollar and foreign currency deposits held in operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country |
|
December 31, 2017 | |||||||||||
Dollars in millions | Retainage | Trade & Other | Total | ||||||||
Government Services | $ | 6 | $ | 189 | $ | 195 | |||||
Technology & Consulting | — | 81 | 81 | ||||||||
Engineering & Construction | 53 | 177 | 230 | ||||||||
Other | — | — | — | ||||||||
Subtotal | 59 | 447 | 506 | ||||||||
Non-strategic Business | 4 | — | 4 | ||||||||
Total | $ | 63 | $ | 447 | $ | 510 |
December 31, 2016 | |||||||||||
Dollars in millions | Retainage | Trade & Other | Total | ||||||||
Government Services | $ | 6 | $ | 190 | $ | 196 | |||||
Technology & Consulting | — | 52 | 52 | ||||||||
Engineering & Construction | 53 | 276 | 329 | ||||||||
Other | — | 3 | 3 | ||||||||
Subtotal | 59 | 521 | 580 | ||||||||
Non-strategic Business | 5 | 7 | 12 | ||||||||
Total | $ | 64 | $ | 528 | $ | 592 |
|
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Government Services | $ | 274 | $ | 271 | |||
Technology & Consulting | 45 | 30 | |||||
Engineering & Construction | 64 | 115 | |||||
Subtotal | 383 | 416 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 383 | $ | 416 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Government Services | $ | 85 | $ | 76 | |||
Technology & Consulting | 62 | 61 | |||||
Engineering & Construction | 213 | 388 | |||||
Subtotal | 360 | 525 | |||||
Non-strategic Business | 8 | 27 | |||||
Total | $ | 368 | $ | 552 |
Dollars in millions | 2017 | 2016 | |||||
Amounts included in project estimates-at-completion at January 1, | $ | 294 | $ | 104 | |||
Additions | 647 | 241 | |||||
Approved change orders | (17 | ) | (51 | ) | |||
Amounts included in project estimates-at-completion at December 31, | $ | 924 | $ | 294 | |||
Amounts recorded in revenues on a percentage-of-completion basis at December 31, | $ | 826 | $ | 241 |
|
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Government Services | $ | 274 | $ | 271 | |||
Technology & Consulting | 45 | 30 | |||||
Engineering & Construction | 64 | 115 | |||||
Subtotal | 383 | 416 | |||||
Non-strategic Business | — | — | |||||
Total | $ | 383 | $ | 416 |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Government Services | $ | 85 | $ | 76 | |||
Technology & Consulting | 62 | 61 | |||||
Engineering & Construction | 213 | 388 | |||||
Subtotal | 360 | 525 | |||||
Non-strategic Business | 8 | 27 | |||||
Total | $ | 368 | $ | 552 |
Dollars in millions | 2017 | 2016 | |||||
Amounts included in project estimates-at-completion at January 1, | $ | 294 | $ | 104 | |||
Additions | 647 | 241 | |||||
Approved change orders | (17 | ) | (51 | ) | |||
Amounts included in project estimates-at-completion at December 31, | $ | 924 | $ | 294 | |||
Amounts recorded in revenues on a percentage-of-completion basis at December 31, | $ | 826 | $ | 241 |
|
Estimated Useful Lives in Years | December 31, | ||||||||
Dollars in millions | 2017 | 2016 | |||||||
Land | N/A | $ | 7 | $ | 7 | ||||
Buildings and property improvements | 1 - 35 | 118 | 124 | ||||||
Equipment and other | 1 - 25 | 334 | 338 | ||||||
Total | 459 | 469 | |||||||
Less accumulated depreciation | (329 | ) | (324 | ) | |||||
Net property, plant and equipment | $ | 130 | $ | 145 |
|
Dollars in millions | Government Services | Technology & Consulting | Engineering & Construction | Other | Subtotal | Non-strategic Business | Total | ||||||||||||||||||||
Balance as of January 1, 2016: | |||||||||||||||||||||||||||
Gross goodwill | $ | 60 | $ | 31 | $ | 526 | $ | — | $ | 617 | $ | 331 | $ | 948 | |||||||||||||
Accumulated impairment losses | — | — | (293 | ) | — | (293 | ) | (331 | ) | (624 | ) | ||||||||||||||||
Net goodwill as of January 1, 2016 | $ | 60 | $ | 31 | $ | 233 | $ | — | $ | 324 | $ | — | $ | 324 | |||||||||||||
Goodwill acquired during the period | $ | 614 | $ | 24 | $ | — | $ | — | $ | 638 | $ | — | $ | 638 | |||||||||||||
Impairment loss | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Foreign currency translation | — | (3 | ) | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||
Balances as of December 31, 2016: | |||||||||||||||||||||||||||
Gross goodwill | $ | 674 | $ | 52 | $ | 526 | $ | — | $ | 1,252 | $ | 331 | $ | 1,583 | |||||||||||||
Accumulated impairment losses | — | — | (293 | ) | — | (293 | ) | (331 | ) | (624 | ) | ||||||||||||||||
Net goodwill as of December 31, 2016 | $ | 674 | $ | 52 | $ | 233 | $ | — | $ | 959 | $ | — | $ | 959 | |||||||||||||
Goodwill acquired during the period | $ | 1 | $ | — | $ | — | $ | — | $ | 1 | $ | — | $ | 1 | |||||||||||||
Purchase price adjustment | 4 | — | — | — | 4 | — | 4 | ||||||||||||||||||||
Impairment loss | — | — | — | — | — | — | — | ||||||||||||||||||||
Foreign currency translation | — | 4 | — | — | 4 | — | 4 | ||||||||||||||||||||
Balance as of December 31, 2017: | |||||||||||||||||||||||||||
Gross goodwill | $ | 679 | $ | 56 | $ | 526 | $ | — | $ | 1,261 | $ | 331 | $ | 1,592 | |||||||||||||
Accumulated impairment losses | — | — | (293 | ) | — | (293 | ) | (331 | ) | (624 | ) | ||||||||||||||||
Net goodwill as of December 31, 2017 | $ | 679 | $ | 56 | $ | 233 | $ | — | $ | 968 | $ | — | $ | 968 |
Dollars in millions | December 31, 2017 | ||||||||||||
Weighted Average Remaining Useful Lives | Intangible Assets, Gross | Accumulated Amortization | Intangible Assets, Net | ||||||||||
Trademarks/trade names | Indefinite | $ | 61 | $ | — | $ | 61 | ||||||
Customer relationships | 17 | 206 | (57 | ) | 149 | ||||||||
Developed technologies | 17 | 45 | (33 | ) | 12 | ||||||||
Other | 13 | 49 | (32 | ) | 17 | ||||||||
Total intangible assets | $ | 361 | $ | (122 | ) | $ | 239 | ||||||
December 31, 2016 | |||||||||||||
Weighted Average Remaining Useful Lives | Intangible Assets, Gross | Accumulated Amortization | Intangible Assets, Net | ||||||||||
Trademarks/trade names | Indefinite | $ | 60 | $ | — | $ | 60 | ||||||
Customer relationships | 18 | 199 | (47 | ) | 152 | ||||||||
Developed technologies | 17 | 46 | (33 | ) | 13 | ||||||||
Other | 9 | 43 | (20 | ) | 23 | ||||||||
Total intangible assets | $ | 348 | $ | (100 | ) | $ | 248 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Intangibles amortization expense | $ | 21 | $ | 14 | $ | 4 |
Dollars in millions | Expected future intangibles amortization expense | ||
2018 | $ | 14 | |
2019 | $ | 14 | |
2020 | $ | 14 | |
2021 | $ | 10 | |
2022 | $ | 9 | |
Beyond 2022 | $ | 117 |
|
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Asset impairment: | |||||||||||
Government Services | $ | — | $ | — | $ | — | |||||
Technology & Consulting | — | — | — | ||||||||
Engineering & Construction | — | 10 | 8 | ||||||||
Other | — | 7 | 21 | ||||||||
Subtotal | — | 17 | 29 | ||||||||
Non-strategic Business | — | — | 2 | ||||||||
Total | $ | — | $ | 17 | $ | 31 | |||||
Restructuring charges: | |||||||||||
Government Services | $ | — | $ | 1 | $ | — | |||||
Technology & Consulting | — | 1 | 10 | ||||||||
Engineering & Construction | 6 | 20 | 26 | ||||||||
Other | — | — | 1 | ||||||||
Subtotal | 6 | 22 | 37 | ||||||||
Non-strategic Business | — | — | 2 | ||||||||
Total | $ | 6 | $ | 22 | $ | 39 | |||||
Asset impairment and restructuring charges: | |||||||||||
Total | $ | 6 | $ | 39 | $ | 70 |
Dollars in millions | Severance Accrual | ||
Balance at December 31, 2015 | $ | 19 | |
Charges | 18 | ||
Payments | (29 | ) | |
Balance at December 31, 2016 | $ | 8 | |
Charges | — | ||
Payments | (6 | ) | |
Non-cash settlements (a) | $ | (1 | ) |
Balance at December 31, 2017 | $ | 1 |
|
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Accounts receivable (a) | $ | 28 | $ | 22 | |||
Costs and estimated earnings in excess of billings on uncompleted contracts (b) | $ | 2 | $ | 1 | |||
Billings in excess of costs and estimated earnings on uncompleted contracts (b) | $ | 27 | $ | 41 |
(a) | Includes a $4 million and $11 million net receivable from the Brown & Root Industrial Services joint venture at December 31, 2017 and 2016, respectively. |
(b) | Reflects CIE and BIE primarily related to joint ventures within our E&C business segment as discussed above. |
Dollars in millions | 2017 | 2016 | |||||
Balance at January 1, | $ | 369 | $ | 281 | |||
Equity in earnings of unconsolidated affiliates | 72 | 91 | |||||
Distributions of earnings of unconsolidated affiliates (a) | (62 | ) | (56 | ) | |||
Advances (receipts) | (11 | ) | 1 | ||||
Investments (b) | — | 61 | |||||
Foreign currency translation adjustments | 12 | (8 | ) | ||||
Other | 5 | (8 | ) | ||||
Balance before reclassification | 385 | 362 | |||||
Reclassification of excess distributions (a) | 11 | 12 | |||||
Recognition of excess distributions (a) | (9 | ) | (5 | ) | |||
Balance at December 31, | $ | 387 | $ | 369 |
(a) | We received cash dividends in excess of the carrying value of one of our investments. We have no obligation to return any portion of the cash dividends received. We recorded the excess dividend amount as "Deferred income from unconsolidated affiliates" on our consolidated balance sheets and recognize these dividends as earnings are generated by the investment. |
(b) | In 2016, investments included a $56 million investment in the Brown & Root Industrial Services joint venture and a $5 million investment in EPIC Piping LLC ("EPIC") joint venture. |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Current assets | $ | 3,107 | $ | 2,655 | |||
Noncurrent assets | 3,250 | 3,003 | |||||
Total assets | $ | 6,357 | $ | 5,658 | |||
Current liabilities | $ | 2,006 | $ | 1,657 | |||
Noncurrent liabilities | 3,508 | 3,148 | |||||
Total liabilities | $ | 5,514 | $ | 4,805 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Revenues | $ | 5,781 | $ | 5,877 | $ | 5,245 | |||||
Operating income | $ | 278 | $ | 365 | $ | 635 | |||||
Net income | $ | 145 | $ | 192 | $ | 476 |
December 31, 2017 | |||||||||||
Dollars in millions | Total Assets | Total Liabilities | Maximum Exposure to Loss | ||||||||
Affinity project | $ | 26 | $ | 10 | $ | 26 | |||||
Aspire Defence project | $ | 10 | $ | 125 | $ | 10 | |||||
Ichthys LNG project (see Notes 7 and 18) | $ | 145 | $ | 25 | $ | 145 | |||||
U.K. Road projects | $ | 36 | $ | 10 | $ | 36 | |||||
EBIC Ammonia plant (65% interest) | $ | 38 | $ | 1 | $ | 25 |
Dollars in millions | December 31, 2016 | ||||||||||
Total Assets | Total Liabilities | Maximum Exposure to Loss | |||||||||
Affinity project | $ | 12 | $ | 3 | $ | 12 | |||||
Aspire Defence project | $ | 14 | $ | 107 | $ | 14 | |||||
Ichthys LNG project (see Notes 7 and 18) | $ | 124 | $ | 33 | $ | 124 | |||||
U.K. Road projects | $ | 30 | $ | 9 | $ | 30 | |||||
EBIC Ammonia plant (65% interest) | $ | 34 | $ | 2 | $ | 22 |
Dollars in millions | December 31, 2017 | ||||||
Total Assets | Total Liabilities | ||||||
Gorgon LNG project | $ | 15 | $ | 48 | |||
Escravos Gas-to-Liquids project | $ | 8 | $ | 13 | |||
Fasttrax Limited project | $ | 57 | $ | 47 |
Dollars in millions | December 31, 2016 | ||||||
Total Assets | Total Liabilities | ||||||
Gorgon LNG project | $ | 28 | $ | 60 | |||
Escravos Gas-to-Liquids project | $ | 11 | $ | 22 | |||
Fasttrax Limited project | $ | 56 | $ | 50 |
|
Domestic Plans | 2018 Targeted | 2017 Targeted | |||||||||
Percentage Range | Percentage Range | ||||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||
Cash and cash equivalents | — | % | — | % | — | % | — | % | |||
Equity funds and securities | 50 | % | 53 | % | 52 | % | 55 | % | |||
Fixed income funds and securities | 37 | % | 40 | % | 44 | % | 47 | % | |||
Real estate funds | 1 | % | 1 | % | 1 | % | 1 | % | |||
Other | 9 | % | 9 | % | — | % | — | % |
International Plans | 2018 Targeted | 2017 Targeted | |||||||||
Percentage Range | Percentage Range | ||||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||
Equity funds and securities | — | % | 60 | % | — | % | 60 | % | |||
Fixed income funds and securities | — | % | 100 | % | — | % | 100 | % | |||
Hedge funds | — | % | 35 | % | — | % | 35 | % | |||
Real estate funds | — | % | 10 | % | — | % | 10 | % | |||
Other | — | % | 20 | % | — | % | 20 | % |
December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Deferred compensation plans obligations | $ | 68 | $ | 70 |
United States | Int’l | United States | Int’l | ||||||||||||
Dollars in millions | 2017 | 2016 | |||||||||||||
Change in projected benefit obligations: | |||||||||||||||
Projected benefit obligations at beginning of period | $ | 75 | $ | 1,970 | $ | 75 | $ | 1,849 | |||||||
Acquisitions | — | — | 12 | 3 | |||||||||||
Service cost | — | 1 | — | 1 | |||||||||||
Interest cost | 3 | 53 | 3 | 63 | |||||||||||
Foreign currency exchange rate changes | — | 186 | — | (304 | ) | ||||||||||
Actuarial (gain) loss | 3 | (78 | ) | — | 448 | ||||||||||
Other | — | (1 | ) | — | (1 | ) | |||||||||
Benefits paid | (4 | ) | (85 | ) | (15 | ) | (89 | ) | |||||||
Projected benefit obligations at end of period | $ | 77 | $ | 2,046 | $ | 75 | $ | 1,970 | |||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets at beginning of period | $ | 56 | $ | 1,463 | $ | 59 | $ | 1,532 | |||||||
Acquisitions | — | — | 8 | — | |||||||||||
Actual return on plan assets | 7 | 119 | 3 | 235 | |||||||||||
Employer contributions | 1 | 36 | 1 | 40 | |||||||||||
Foreign currency exchange rate changes | — | 141 | — | (255 | ) | ||||||||||
Benefits paid | (4 | ) | (85 | ) | (15 | ) | (89 | ) | |||||||
Other | (1 | ) | (1 | ) | — | — | |||||||||
Fair value of plan assets at end of period | $ | 59 | $ | 1,673 | $ | 56 | $ | 1,463 | |||||||
Funded status | $ | (18 | ) | $ | (373 | ) | $ | (19 | ) | $ | (507 | ) |
United States | Int’l | United States | Int’l | ||||||||||||
Dollars in millions | 2017 | 2016 | |||||||||||||
Amounts recognized on the consolidated balance sheets | |||||||||||||||
Pension obligations | $ | 18 | $ | 373 | $ | 19 | $ | 507 |
United States | Int’l | United States | Int’l | United States | Int’l | ||||||||||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||||||||||||||
Components of net periodic benefit cost | |||||||||||||||||||||||
Service cost | $ | — | $ | 1 | $ | — | $ | 1 | $ | — | $ | 2 | |||||||||||
Interest cost | 3 | 53 | 3 | 63 | 2 | 76 | |||||||||||||||||
Expected return on plan assets | (3 | ) | (77 | ) | (3 | ) | (87 | ) | (3 | ) | (97 | ) | |||||||||||
Settlements/curtailments | — | — | 1 | — | — | — | |||||||||||||||||
Recognized actuarial loss | 1 | 30 | 1 | 28 | 5 | 43 | |||||||||||||||||
Net periodic benefit cost | $ | 1 | $ | 7 | $ | 2 | $ | 5 | $ | 4 | $ | 24 |
United States | Int’l | United States | Int’l | ||||||||||||
Dollars in millions | 2017 | 2016 | |||||||||||||
Unrecognized actuarial loss, net of tax of $10 and $217, and $10 and $244, respectively | $ | 22 | $ | 638 | $ | 24 | $ | 761 | |||||||
Total in accumulated other comprehensive loss | $ | 22 | $ | 638 | $ | 24 | $ | 761 |
Dollars in millions | United States | Int’l | |||||
Actuarial loss | $ | 1 | $ | 22 | |||
Total | $ | 1 | $ | 22 |
Weighted-average assumptions used to determine net periodic benefit cost | |||||||||||||||||
United States | Int'l | United States | Int'l | United States | Int'l | ||||||||||||
2017 | 2016 | 2015 | |||||||||||||||
Discount rate | 3.73 | % | 2.60 | % | 3.42 | % | 3.75 | % | 2.89 | % | 3.65 | % | |||||
Expected return on plan assets | 6.01 | % | 5.40 | % | 5.00 | % | 6.10 | % | 4.81 | % | 6.25 | % |
Weighted-average assumptions used to determine benefit obligations at measurement date | |||||||||||
United States | Int'l | United States | Int'l | ||||||||
2017 | 2016 | ||||||||||
Discount rate | 3.33 | % | 2.50 | % | 3.73 | % | 2.60 | % |
Asset Allocation | 2018 Targeted | ||||
United States | Int'l | ||||
Equity funds and securities | 51 | % | 30 | % | |
Fixed income funds and securities | 39 | % | 50 | % | |
Hedge funds | — | % | — | % | |
Real estate funds | 1 | % | 5 | % | |
Other | 9 | % | 15 | % | |
Total | 100 | % | 100 | % |
Fair Value Measurements at Reporting Date | |||||||||||||||
Dollars in millions | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Asset Category at December 31, 2017 | |||||||||||||||
United States plan assets | |||||||||||||||
Investments measured at net asset value (a) | $ | 59 | $ | — | $ | — | $ | — | |||||||
Total United States plan assets | $ | 59 | $ | — | $ | — | $ | — | |||||||
International plan assets | |||||||||||||||
Equities | $ | 60 | $ | 34 | $ | — | $ | 26 | |||||||
Fixed income | 5 | — | — | 5 | |||||||||||
Real estate | 3 | — | — | 3 | |||||||||||
Cash and cash equivalents | 8 | 8 | — | — | |||||||||||
Other | 40 | — | — | 40 | |||||||||||
Investments measured at net asset value (a) | 1,557 | — | — | — | |||||||||||
Total international plan assets | $ | 1,673 | $ | 42 | $ | — | $ | 74 | |||||||
Total plan assets at December 31, 2017 | $ | 1,732 | $ | 42 | $ | — | $ | 74 |
Fair Value Measurements at Reporting Date | |||||||||||||||
Dollars in millions | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Asset Category at December 31, 2016 | |||||||||||||||
United States plan assets | |||||||||||||||
Investments measured at net asset value (a) | $ | 56 | $ | — | $ | — | $ | — | |||||||
Total United States plan assets | $ | 56 | $ | — | $ | — | $ | — | |||||||
International plan assets | |||||||||||||||
Equities | $ | 76 | $ | 60 | $ | — | $ | 16 | |||||||
Fixed income | 12 | — | — | 12 | |||||||||||
Real estate | 4 | — | — | 4 | |||||||||||
Cash and cash equivalents | 8 | 8 | — | — | |||||||||||
Other | 50 | — | — | 50 | |||||||||||
Investments measured at net asset value (a) | 1,313 | — | — | — | |||||||||||
Total international plan assets | $ | 1,463 | $ | 68 | $ | — | $ | 82 | |||||||
Total plan assets at December 31, 2016 | $ | 1,519 | $ | 68 | $ | — | $ | 82 |
Pension Benefits | |||||||
Dollars in millions | United States | Int’l | |||||
2018 | $ | 5 | $ | 56 | |||
2019 | $ | 5 | $ | 57 | |||
2020 | $ | 5 | $ | 58 | |||
2021 | $ | 5 | $ | 60 | |||
2022 | $ | 5 | $ | 61 | |||
Years 2023 – 2027 | $ | 25 | $ | 327 |
Dollars in millions | Total | Equities | Fixed Income | Real Estate | Other | ||||||||||||||
International plan assets | |||||||||||||||||||
Balance as of December 31, 2015 | $ | 45 | $ | 12 | $ | 14 | $ | 6 | $ | 13 | |||||||||
Return on assets held at end of year | 14 | 1 | 1 | 1 | 11 | ||||||||||||||
Purchases, sales and settlements | 32 | 5 | (1 | ) | (3 | ) | 31 | ||||||||||||
Foreign exchange impact | (9 | ) | (2 | ) | (2 | ) | — | (5 | ) | ||||||||||
Balance as of December 31, 2016 | $ | 82 | $ | 16 | $ | 12 | $ | 4 | $ | 50 | |||||||||
Return on assets held at end of year | (1 | ) | 3 | — | (1 | ) | (3 | ) | |||||||||||
Return on assets sold during the year | 3 | — | — | — | 3 | ||||||||||||||
Purchases, sales and settlements, net | (15 | ) | 5 | (8 | ) | (1 | ) | (11 | ) | ||||||||||
Foreign exchange impact | 5 | 2 | 1 | 1 | 1 | ||||||||||||||
Balance as of December 31, 2017 | $ | 74 | $ | 26 | $ | 5 | $ | 3 | $ | 40 |
|
Dollars in millions | Payments Due | ||
2018 | $ | 10 | |
2019 | $ | 10 | |
2020 | $ | 11 | |
2021 | $ | 5 | |
2022 | $ | 1 | |
Beyond 2022 | $ | 1 |
|
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
United States | $ | 84 | $ | (250 | ) | $ | (35 | ) | |||
Foreign: | |||||||||||
United Kingdom | 40 | 55 | 105 | ||||||||
Australia | (28 | ) | 38 | 32 | |||||||
Canada | 15 | (8 | ) | 87 | |||||||
Middle East | 42 | 66 | 35 | ||||||||
Africa | 20 | 76 | 34 | ||||||||
Other | 76 | 56 | 54 | ||||||||
Subtotal | 165 | 283 | 347 | ||||||||
Total | $ | 249 | $ | 33 | $ | 312 |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Benefit (Provision) for income taxes | $ | 193 | $ | (84 | ) | $ | (86 | ) | |||
Shareholders' equity, foreign currency translation adjustment | 6 | (3 | ) | (3 | ) | ||||||
Shareholders' equity, pension and post-retirement benefits | (27 | ) | 45 | (22 | ) | ||||||
Total income taxes | $ | 172 | $ | (42 | ) | $ | (111 | ) |
Dollars in millions | Current | Deferred | Total | ||||||||
Year-ended December 31, 2017 | |||||||||||
Federal | $ | (6 | ) | $ | 230 | $ | 224 | ||||
Foreign | (122 | ) | 92 | (30 | ) | ||||||
State and other | (2 | ) | 1 | (1 | ) | ||||||
(Provision) benefit for income taxes | $ | (130 | ) | $ | 323 | $ | 193 | ||||
Year-ended December 31, 2016 | |||||||||||
Federal | $ | (5 | ) | $ | 9 | $ | 4 | ||||
Foreign | (61 | ) | (26 | ) | (87 | ) | |||||
State and other | — | (1 | ) | (1 | ) | ||||||
Provision for income taxes | $ | (66 | ) | $ | (18 | ) | $ | (84 | ) | ||
Year-ended December 31, 2015 | |||||||||||
Federal | $ | (17 | ) | $ | 8 | $ | (9 | ) | |||
Foreign | (55 | ) | (22 | ) | (77 | ) | |||||
State and other | — | — | — | ||||||||
Provision for income taxes | $ | (72 | ) | $ | (14 | ) | $ | (86 | ) |
Years ended December 31, | |||||||||||
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
United Kingdom | $ | (7 | ) | $ | (6 | ) | $ | (15 | ) | ||
Australia | 6 | — | 16 | ||||||||
Canada | — | 1 | 3 | ||||||||
Middle East | (10 | ) | (24 | ) | (8 | ) | |||||
Africa | 1 | (22 | ) | (10 | ) | ||||||
Other | (20 | ) | (36 | ) | (63 | ) | |||||
Foreign provision for income taxes | $ | (30 | ) | $ | (87 | ) | $ | (77 | ) |
Years ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. statutory federal rate, expected (benefit) provision | 35 | % | 35 | % | 35 | % | ||
Increase (reduction) in tax rate from: | ||||||||
Rate differentials on foreign earnings | (5 | ) | (28 | ) | (10 | ) | ||
Noncontrolling interests and equity earnings | (2 | ) | (28 | ) | (8 | ) | ||
State and local income taxes, net of federal benefit | 1 | — | 2 | |||||
Other permanent differences, net | (8 | ) | 54 | — | ||||
Contingent liability accrual | (2 | ) | 41 | (1 | ) | |||
U.S. taxes on foreign unremitted earnings | — | 174 | 1 | |||||
Change in valuation allowance | (90 | ) | 3 | 6 | ||||
U.S. tax reform | (7 | ) | — | — | ||||
U.K. statutory rate change | — | 4 | 3 | |||||
Effective tax rate on income from operations | (78 | )% | 255 | % | 28 | % |
Years ended December 31, | |||||||
Dollars in millions | 2017 | 2016 | |||||
Deferred tax assets: | |||||||
Employee compensation and benefits | $ | 122 | $ | 166 | |||
Foreign tax credit carryforwards | 279 | 356 | |||||
Accrued foreign tax credit carryforwards | — | 93 | |||||
Loss carryforwards | 90 | 69 | |||||
Insurance accruals | 8 | 15 | |||||
Allowance for bad debt | 3 | 9 | |||||
Accrued liabilities | 30 | 49 | |||||
Construction contract accounting | 5 | — | |||||
Other | 15 | — | |||||
Total gross deferred tax assets | 552 | 757 | |||||
Valuation allowances | (217 | ) | (542 | ) | |||
Net deferred tax assets | 335 | 215 | |||||
Deferred tax liabilities: | |||||||
Construction contract accounting | — | (34 | ) | ||||
Intangible amortization | (20 | ) | (29 | ) | |||
Indefinite-lived intangible amortization | (31 | ) | (39 | ) | |||
Fixed asset depreciation | 2 | 2 | |||||
Accrued foreign tax credit carryforwards | (4 | ) | — | ||||
Unremitted foreign earnings | — | (63 | ) | ||||
Other | — | (82 | ) | ||||
Total gross deferred tax liabilities | (53 | ) | (245 | ) | |||
Deferred income tax (liabilities) assets, net | $ | 282 | $ | (30 | ) |
Dollars in millions | Net Gross Deferred Asset (Liability) | Valuation Allowance | Deferred Asset (Liability), net | ||||||||
United States | $ | 372 | $ | (178 | ) | $ | 194 | ||||
United Kingdom | 81 | — | 81 | ||||||||
Australia | 10 | (1 | ) | 9 | |||||||
Canada | 21 | (16 | ) | 5 | |||||||
Other | 15 | (22 | ) | (7 | ) | ||||||
Total | $ | 499 | $ | (217 | ) | $ | 282 |
Dollars in millions | December 31, 2017 | Expiration | |||
Foreign tax credit carryforwards | $ | 330 | 2019-2026 | ||
Foreign net operating loss carryforwards | $ | 112 | 2018-2038 | ||
Foreign net operating loss carryforwards | $ | 108 | Indefinite | ||
State net operating loss carryforwards | $ | 677 | Various |
Dollars in millions | 2017 | 2016 | 2015 | ||||||||
Balance at January 1, | $ | 261 | $ | 257 | $ | 228 | |||||
Increases related to current year tax positions | 2 | 2 | 18 | ||||||||
Increases related to tax positions from acquisitions | — | 14 | — | ||||||||
Increases related to prior year tax positions | 1 | 10 | 35 | ||||||||
Decreases related to prior year tax positions | (1 | ) | (4 | ) | (3 | ) | |||||
Settlements | (80 | ) | (10 | ) | (2 | ) | |||||
Lapse of statute of limitations | (1 | ) | (6 | ) | (16 | ) | |||||
Other, primarily due to exchange rate fluctuations affecting non-U.S. tax positions | 2 | (2 | ) | (3 | ) | ||||||
Balance at December 31, | $ | 184 | $ | 261 | $ | 257 |
|
Dollars in millions | Future rental payments (a) | ||
2018 | $ | 86 | |
2019 | $ | 70 | |
2020 | $ | 57 | |
2021 | $ | 48 | |
2022 | $ | 41 | |
Beyond 2022 | $ | 263 |
|
Years ended December 31, | |||||||
Gains (losses) dollars in millions | 2017 | 2016 | |||||
Balance Sheet Hedges - Fair Value | $ | 5 | $ | (7 | ) | ||
Balance Sheet Position - Remeasurement | (16 | ) | 27 | ||||
Net | $ | (11 | ) | $ | 20 |
|
(Dollars in millions, except per share amounts) | First | Second | Third | Fourth | Year | ||||||||||||||
2017 | |||||||||||||||||||
Total revenues | $ | 1,106 | $ | 1,094 | $ | 1,034 | $ | 937 | $ | 4,171 | |||||||||
Gross profit | 82 | 108 | 87 | 65 | 342 | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 9 | 32 | 23 | 8 | 72 | ||||||||||||||
Operating income | 63 | 103 | 73 | 27 | 266 | ||||||||||||||
Net income (a) | 38 | 79 | 47 | 278 | 442 | ||||||||||||||
Net income attributable to noncontrolling interests | (1 | ) | (2 | ) | (2 | ) | (3 | ) | (8 | ) | |||||||||
Net income attributable to KBR (a) | 37 | 77 | 45 | 275 | 434 | ||||||||||||||
Net income attributable to KBR per share: | |||||||||||||||||||
Net income attributable to KBR per share—Basic | $ | 0.26 | $ | 0.54 | $ | 0.32 | $ | 1.94 | $ | 3.06 | |||||||||
Net income attributable to KBR per share—Diluted | $ | 0.26 | $ | 0.54 | $ | 0.32 | $ | 1.94 | $ | 3.06 | |||||||||
(Dollars in millions, except per share amounts) | First | Second | Third | Fourth | Year | ||||||||||||||
2016 | |||||||||||||||||||
Total revenues | $ | 996 | $ | 1,009 | $ | 1,073 | $ | 1,190 | $ | 4,268 | |||||||||
Gross profit (loss) (b) | 68 | 74 | (36 | ) | 6 | 112 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 29 | 33 | 19 | 10 | 91 | ||||||||||||||
Operating income (loss) (b) | 65 | 63 | (67 | ) | (33 | ) | 28 | ||||||||||||
Net income (loss) | 45 | 47 | (57 | ) | (86 | ) | (51 | ) | |||||||||||
Net income attributable to noncontrolling interests | (3 | ) | — | (6 | ) | (1 | ) | (10 | ) | ||||||||||
Net income (loss) attributable to KBR | 42 | 47 | (63 | ) | (87 | ) | (61 | ) | |||||||||||
Net income (loss) attributable to KBR per share: | |||||||||||||||||||
Net income (loss) attributable to KBR per share—Basic | $ | 0.30 | $ | 0.32 | $ | (0.44 | ) | $ | (0.61 | ) | $ | (0.43 | ) | ||||||
Net income (loss) attributable to KBR per share—Diluted | $ | 0.30 | $ | 0.32 | $ | (0.44 | ) | $ | (0.61 | ) | $ | (0.43 | ) |
(a) | Net income and Net income attributable to KBR in the fourth quarter of 2017 were favorably impacted by a release of a valuation allowance of $223 million on the basis of management's reassessment of the amount of its U.S. deferred tax assets that are more likely than not to be realized and an $18 million favorable impact related to the Tax Act. See Note 15 to our consolidated financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|