Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 23, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Entity Central Index Key | 0001357615 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-33146 | |
Entity Registrant Name | KBR, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-4536774 | |
Entity Address, Address Line One | 601 Jefferson Street, Suite 3400 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77002 | |
City Area Code | 713 | |
Local Phone Number | 753-2000 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | KBR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 141,714,130 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,425 | $ 1,278 | $ 4,187 | $ 3,583 |
Cost of revenues | (1,256) | (1,129) | (3,705) | (3,156) |
Gross profit | 169 | 149 | 482 | 427 |
Equity in earnings of unconsolidated affiliates | 9 | 17 | 24 | 50 |
Selling, general and administrative expenses | (75) | (64) | (241) | (207) |
Acquisition and integration related costs | 0 | (1) | (2) | (5) |
Gain on disposition of assets and investments | 1 | 0 | 11 | 0 |
Gain on consolidation of Aspire subcontracting entities | 0 | (2) | 0 | 113 |
Operating income | 104 | 99 | 274 | 378 |
Interest expense | (25) | (20) | (76) | (43) |
Other non-operating income (loss) | 3 | (1) | 10 | (4) |
Income before income taxes and noncontrolling interests | 82 | 78 | 208 | 331 |
Provision for income taxes | (24) | (22) | (58) | (74) |
Net income | 58 | 56 | 150 | 257 |
Net income attributable to noncontrolling interests | (2) | (2) | (6) | (23) |
Net income attributable to KBR | $ 56 | $ 54 | $ 144 | $ 234 |
Net income attributable to KBR per share: | ||||
Basic (usd per share) | $ 0.39 | $ 0.38 | $ 1.01 | $ 1.66 |
Diluted (usd per share) | $ 0.39 | $ 0.38 | $ 1.01 | $ 1.66 |
Basic weighted average common shares outstanding (shares) | 141 | 141 | 141 | 140 |
Diluted weighted average common shares outstanding (shares) | 142 | 141 | 141 | 141 |
Cash dividends declared per share (usd per share) | $ 0.08 | $ 0.08 | $ 0.24 | $ 0.24 |
Net income | $ 58 | $ 56 | $ 150 | $ 257 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments, net of taxes of $(1), $0, $(1) and $(3) | (34) | (9) | (48) | (29) |
Pension and post-retirement benefits, net of taxes of $(1), $(1), $(3) and $(3) | 4 | 5 | 11 | 18 |
Changes in fair value of derivatives, net of taxes of $3 and $3 | 2 | (7) | ||
Changes in fair value of derivatives, net of taxes of $0 and $0 before 2017-12 adoption | 0 | (5) | ||
Total other comprehensive loss | (28) | (4) | (44) | (16) |
Comprehensive income | 30 | 52 | 106 | 241 |
Less: Comprehensive income attributable to noncontrolling interests | (2) | (2) | (6) | (23) |
Comprehensive income attributable to KBR | $ 28 | $ 50 | $ 100 | $ 218 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Foreign currency translation, taxes | $ (1) | $ 0 | $ (1) | $ (3) |
Pension and post-retirement benefits, taxes | (1) | (1) | (3) | (3) |
Changes in fair value of derivatives | $ 3 | $ 3 | ||
Changes in fair value of derivatives, taxes before 2017-12 | $ 0 | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and equivalents | $ 681 | $ 739 |
Accounts receivable, net of allowance for doubtful accounts of $12 and $9 | 1,038 | 927 |
Contract assets | 235 | 185 |
Other current assets | 153 | 108 |
Total current assets | 2,107 | 1,959 |
Claims and accounts receivable | 104 | 98 |
Property, plant, and equipment, net of accumulated depreciation of $375 and $355 (including net PPE of $29 and $35 owned by a variable interest entity) | 109 | 121 |
Operating lease right-of-use assets | 183 | 0 |
Goodwill | 1,261 | 1,265 |
Intangible assets, net of accumulated amortization of $174 and $151 | 489 | 516 |
Equity in and advances to unconsolidated affiliates | 793 | 724 |
Deferred income taxes | 220 | 222 |
Other assets | 136 | 147 |
Total assets | 5,402 | 5,052 |
Current liabilities: | ||
Accounts payable | 624 | 546 |
Contract liabilities | 536 | 463 |
Accrued salaries, wages and benefits | 249 | 221 |
Nonrecourse project debt | 10 | 10 |
Operating lease liabilities | 42 | 0 |
Other current liabilities | 191 | 179 |
Total current liabilities | 1,652 | 1,419 |
Pension obligations | 192 | 250 |
Employee compensation and benefits | 108 | 109 |
Income tax payable | 85 | 84 |
Deferred income taxes | 29 | 27 |
Nonrecourse project debt | 11 | 17 |
Long-term debt | 1,185 | 1,226 |
Operating lease liabilities | 201 | 0 |
Other liabilities | 122 | 202 |
Total liabilities | 3,585 | 3,334 |
KBR shareholders’ equity: | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.001 par value 300,000,000 shares authorized, 178,244,609 and 177,383,302 shares issued, and 141,706,294 and 140,900,032 shares outstanding, respectively | 0 | 0 |
PIC | 2,202 | 2,190 |
Retained earnings | 1,366 | 1,235 |
Treasury stock, 36,538,315 shares and 36,483,270 shares, at cost, respectively | (817) | (817) |
AOCL | (954) | (910) |
Total KBR shareholders’ equity | 1,797 | 1,698 |
Noncontrolling interests | 20 | 20 |
Total shareholders’ equity | 1,817 | 1,718 |
Total liabilities and shareholders’ equity | $ 5,402 | $ 5,052 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 12 | $ 9 |
Accumulated depreciation, PP&E | 375 | 355 |
PP&E owned by a VIE, net | 29 | 35 |
Accumulated amortization, Intangibles | $ 174 | $ 151 |
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 178,244,609 | 177,383,302 |
Common stock, shares outstanding (shares) | 141,706,294 | 140,900,032 |
Treasury stock, shares (shares) | 36,538,315 | 36,483,270 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||
Net income | $ 58 | $ 56 | $ 150 | $ 257 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 76 | 47 | |||
Equity in earnings of unconsolidated affiliates | (9) | (17) | (24) | (50) | |
Deferred income tax expense | 0 | 29 | |||
Gain on disposition of assets and investments | (1) | 0 | (11) | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | 2 | 0 | (113) | |
Other | 20 | 13 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable, net of allowance for doubtful accounts | (123) | (144) | |||
Contract assets | (52) | (4) | |||
Accounts payable | 83 | 72 | |||
Contract liabilities | 82 | (63) | |||
Accrued salaries, wages and benefits | 31 | 18 | |||
Payments from unconsolidated affiliates, net | 9 | 7 | |||
Distributions of earnings from unconsolidated affiliates | 64 | 16 | |||
Pension funding | (31) | (30) | |||
Other assets and liabilities | (75) | (19) | |||
Total cash flows provided by operating activities | 199 | 36 | |||
Cash flows from investing activities: | |||||
Purchases of property, plant and equipment | (10) | (15) | |||
Proceeds from disposition of assets and investments | 8 | 1 | |||
Investments in equity method joint ventures | (146) | (257) | |||
Acquisition of businesses, net of cash acquired | 0 | (354) | |||
Adjustments to cash due to consolidation of Aspire subcontracting entities | 0 | 197 | |||
Total cash flows used in investing activities | (148) | (428) | |||
Cash flows from financing activities: | |||||
Payments to reacquire common stock | (4) | (3) | |||
Acquisition of remaining ownership interest in joint ventures | 0 | (56) | |||
Distributions to noncontrolling interests | (6) | 0 | |||
Payments of dividends to shareholders | (34) | (34) | |||
Net proceeds from issuance of common stock | 3 | 2 | |||
Borrowings on revolving credit agreements | 0 | 250 | |||
Borrowings on long-term debt | 0 | 1,052 | |||
Payments on revolving credit agreements | 0 | (605) | |||
Payments on short-term and long-term borrowings | (54) | (7) | |||
Debt issuance costs | 0 | (47) | |||
Other | (2) | 0 | |||
Total cash flows (used in) provided by financing activities | (97) | 552 | |||
Effect of exchange rate changes on cash | (12) | (18) | |||
(Decrease) increase in cash and equivalents | (58) | 142 | |||
Cash and equivalents at beginning of period | 739 | 439 | $ 439 | ||
Cash and equivalents at end of period | 681 | 581 | 681 | 581 | $ 739 |
Supplemental disclosure of cash flows information: | |||||
Cash paid for interest | 54 | 34 | |||
Cash paid for income taxes (net of refunds) | 47 | 20 | |||
Noncash financing activities | |||||
Dividends declared | $ 11 | $ 11 | $ 11 | $ 11 |
Description of Company And Sign
Description of Company And Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Description of Company and Significant Accounting Policies | Description of Company and Significant Accounting Policies KBR, Inc., a Delaware corporation, was formed on March 21, 2006, and is headquartered in Houston, Texas. KBR, Inc. and its wholly owned and majority-owned subsidiaries (collectively referred to herein as "KBR", the "Company", "we", "us" or "our") is a global provider of differentiated, professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries. Our capabilities include research and development, feasibility and solutions development, specialized technical consulting, systems integration, engineering and design service, process technologies, program management, construction services, commissioning and startup services, highly specialized mission and logistics support solutions, and asset operations and maintenance services and other support services to a diverse customer base, including government and military organizations of the U.S., U.K. and Australia and a wide range of customers across the hydrocarbons value chain. The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by general accepted accounting principles for annual financial statements and should be read together with our 2018 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 September 30, 2019 and the results of our operations for the three and nine months ended September 30, 2019 and 2018 , and our cash flows for the nine months ended September 30, 2019 and 2018 . Our significant accounting policies are detailed in "Note 1 . Description of Company and Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2018 . 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 Our condensed consolidated financial statements include the accounts of KBR and our wholly owned and majority-owned subsidiaries and VIEs of which we are the primary beneficiary. We account for investments over which we have significant influence but not a controlling financial interest using the equity method of accounting. See Note 10 to our condensed consolidated financial statements for further discussion on our equity investments and VIEs. The cost method is used when we do not have the ability to exert significant influence. All material intercompany transactions are eliminated in consolidation. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated statements of operations. We have elected to classify certain indirect costs incurred as overhead (included in "Cost of revenues") or general administrative expenses for U.S. GAAP reporting purposes in the same manner as such costs are defined in our disclosure statements under CAS. Effective January 1, 2019, we established a new CAS structure and revised our disclosure statements accordingly to reflect the related cost accounting practice changes. Consequently, for the three and nine months ended September 30, 2018 , $27 million and $94 million , respectively, was reclassified from "Cost of revenues" to "Selling, general and administrative expenses" on our condensed consolidated statement of operations. Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Dollars in millions As Reported As Previously Reported As Reported As Previously Reported Statement of Operations Cost of revenues $ (1,129 ) $ (1,156 ) $ (3,156 ) $ (3,250 ) Selling, general and administrative expenses (64 ) (37 ) (207 ) (113 ) Business Reorganization Effective January 1, 2019, we changed the name of our Government Services segment to "Government Solutions", our Technology segment to "Technology Solutions" and our Hydrocarbons Services segment to "Energy Solutions". The change did not have an impact on our reportable segments. As of January 1, 2019, our segments consist of the following five reportable segments: • Government Solutions • Technology Solutions • Energy Solutions • Non-strategic Business • Other See Note 2 to our condensed consolidated financial statements for further discussion on our segments. We have presented our segment results reflecting these changes for all periods presented. In conjunction with the change in segments, we evaluated goodwill associated with each of our reporting units using Level 3 fair value inputs, and no impairment indicators were identified. Impact of Adoption of New Accounting Standards Effective January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842) and related ASUs using the modified retrospective transition approach. The modified retrospective transition approach provides for an “effective date” method for recording leases that existed or were entered into on or after January 1, 2019, without restating prior-period information. Our unconsolidated joint ventures anticipate adopting the new lease standard effective January 1, 2020. ASC Topic 842 provided several optional practical expedients for use in transition. We elected to use the package of practical expedients which allowed us to not reassess our previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. We did not elect the practical expedient pertaining to the use of hindsight. The most significant effects of the new standard on our consolidated financial statements are the recognition of new operating lease right-of-use ("ROU") assets and operating lease liabilities on our consolidated balance sheet for operating leases as well as significant new disclosures about our leasing activities as further discussed in Note 16 . On January 1, 2019, we recorded “Operating lease liabilities” of approximately $253 million based on the present value of the remaining lease payments over the lease term. Additionally, we reclassified current and noncurrent deferred rent of $68 million associated with straight-line accounting and tenant incentives related to existing real estate leases against the initial "Operating lease right-of-use assets" as of January 1, 2019. The adoption of the new standard did not have a material impact on our results of operations or cash flows. As a result of the adoption, we recorded a cumulative-effect adjustment to retained earnings of $21 million , net of deferred taxes of $7 million , representing the unamortized portion of a deferred gain previously recorded in conjunction with the 2012 sale and leaseback of the office building in Houston, Texas where our corporate headquarters is located. We concluded the transaction resulted in the transfer of control of the office building to the buyer-lessor at market terms and therefore would have qualified as a sale under ASC Topic 842 with gain recognition in the period in which the sale was recognized. We recognized the cumulative effect of initially applying ASC Topic 842 as an adjustment to our assets and liabilities in our consolidated balance sheet as of January 1, 2019, as follows: Balance at Adjustments Due to Balance at Dollars in millions December 31, 2018 ASC 842 January 1, 2019 Assets Operating lease right-of-use asset $ — $ 185 $ 185 Other current assets 108 (1 ) 107 Deferred income taxes 222 (7 ) 215 Liabilities Operating lease liabilities — 40 40 Other current liabilities 179 (5 ) 174 Operating lease liabilities (noncurrent) — 213 213 Other liabilities (noncurrent) 202 (92 ) 110 Shareholders' equity Retained Earnings 1,235 21 1,256 Effective January 1, 2019, we adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedge Activities, using the modified retrospective approach. This ASU is intended to improve and simplify accounting rules related to hedge accounting. The adoption of this ASU did not have a material impact to our financial statements. Effective January 1, 2019, we adopted ASU No. 2018-16, Inclusion of the Secured Overnight Financing Rate Overnight Index Swap Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. As a result, entities may designate changes in this rate as the hedged risk in hedges of interest rate risk for fixed-rate financial instruments. The adoption of ASU 2018-16 did not have any impact on our financial position, results of operations or cash flows. Effective January 1, 2019, we adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). Under the new standard, we did not elect to reclassify the income tax effects stranded in AOCL to retained earnings as a result of the enactment of comprehensive tax legislation, commonly referred to as the Tax Cuts and Jobs Act of 2017. Therefore, the adoption of this ASU had no impact on financial statements. In August 2018, the SEC adopted the final rules under SEC Release No. 33-10532, Disclosure Update and Simplification. The final rules amend the interim financial statement requirements to require a reconciliation of changes in stockholders’ equity in the notes or as a separate statement. The analysis should reconcile the beginning and ending balances of each caption in stockholders’ equity for each period in which an income statement is presented. The final rules were effective on November 5, 2018. See Note 17 for the reconciliation of shareholders’ equity. Additional Balance Sheet Information Other Current Liabilities The components of "Other current liabilities" on our condensed consolidated balance sheets as of September 30, 2019 , and December 31, 2018 , are presented below: September 30, December 31, Dollars in millions 2019 2018 Current maturities of long-term debt $ 27 $ 22 Retainage payable 37 33 Income taxes payable 28 30 Value-added tax payable 47 33 Dividend payable 11 11 Other miscellaneous liabilities 41 50 Total other current liabilities $ 191 $ 179 Other Liabilities "Other liabilities" on our condensed consolidated balance sheet as of December 31, 2018 included deferred rent primarily related to real-estate leases as well as the unamortized portion of a deferred gain related to a 2012 sale-leaseback real-estate transaction totaling $92 million . See above under " Impact of Adoption of New Accounting Standards " for further discussion. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We are organized into three core business segments Government Solutions, Technology Solutions, and Energy Solutions and two non-core business segments as described below: Government Solutions. Our GS business segment provides full life-cycle support solutions to defense, space, aviation and other programs and missions for military and other government agencies in the U.S., U.K. and Australia. As program management integrator, KBR covers the full spectrum of defense, space, aviation and other government programs and missions from research and development; through systems engineering, test and evaluation, systems integration and program management; to operations support, maintenance and field logistics. Our acquisitions as described in Note 4 to our condensed consolidated financial statements have been combined with our existing operations within this business segment. Technology Solutions. Our TS business segment combines KBR's proprietary technologies, equipment and catalyst supply and associated knowledge-based services into a global business for refining, petrochemicals, inorganic and specialty chemicals as well as gasification, syngas, ammonia, nitric acid and fertilizers. From early planning through scope definition, advanced technologies and project life-cycle support, our TS business segment works closely with customers to provide the optimal approach to maximize their return on investment. Energy Solutions. Our ES business segment provides comprehensive project and program delivery capability globally. Our key capabilities leverage our operational and technical excellence as a global provider of EPC for onshore oil and gas; LNG/GTL; oil refining; petrochemicals; chemicals; fertilizers; offshore oil and gas (shallow-water, deep-water and subsea); floating solutions (FPUs, FPSO, FLNG & FSRU); maintenance services; and consulting services. Non-strategic Business. Our Non-strategic Business segment represents the operations or activities we determine are no longer core to our business strategy and that we have exited or intend to exit upon completion of existing contracts. All Non-Strategic Business projects are substantially complete. Current activities in this business segment primarily relate to final project close-out, negotiation and settlement of claims, joint venture liquidation and various other matters associated with these projects. Effective for the quarter ended September 30, 2019, we reported the results of joint venture operations related to a project in Latin America within our Non-strategic Business segment. The reclassification results from our decision during the quarter to wind down the operating activities of the joint venture and exit the business. Equity in earnings of unconsolidated affiliates related to this joint venture were previously reported in our Energy Solutions business segment and were $0 million and a loss of $13 million for the three and nine months ended September 30, 2019 , respectively, and income of $2 million and a loss of $4 million for the three and nine months ended September 30, 2018 , respectively. Other. Our Other segment includes corporate expenses and selling, general and administrative expenses not allocated to the business segments above. The following table presents revenues, gross profit (loss), equity in earnings of unconsolidated affiliates, selling, general and administrative expenses, acquisition and integration related costs, gain on disposition of assets, gain of consolidation of Aspire entities, and operating income (loss) by reporting segment. Operations by Reportable Segment Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Dollars in millions Revenues: Government Solutions $ 978 $ 928 $ 2,986 $ 2,473 Technology Solutions 96 81 281 215 Energy Solutions 351 268 919 894 Subtotal 1,425 1,277 4,186 3,582 Non-strategic Business — 1 1 1 Total revenues $ 1,425 $ 1,278 $ 4,187 $ 3,583 Gross profit (loss): Government Solutions $ 110 $ 98 $ 312 $ 253 Technology Solutions 30 29 83 77 Energy Solutions 22 27 80 102 Subtotal 162 154 475 432 Non-strategic Business 7 (5 ) 7 (5 ) Total gross profit $ 169 $ 149 $ 482 $ 427 Equity in earnings of unconsolidated affiliates: Government Solutions $ 7 $ 8 $ 21 $ 22 Energy Solutions 2 7 16 32 Subtotal 9 15 37 54 Non-strategic Business — 2 (13 ) (4 ) Total equity in earnings of unconsolidated affiliates $ 9 $ 17 $ 24 $ 50 Selling, general and administrative expenses: Government Solutions $ (28 ) $ (30 ) $ (93 ) $ (79 ) Technology Solutions (7 ) (6 ) (21 ) (18 ) Energy Solutions (15 ) (10 ) (47 ) (50 ) Other (25 ) (18 ) (80 ) (60 ) Subtotal (75 ) (64 ) (241 ) (207 ) Non-strategic Business — — — — Total selling, general and administrative expenses $ (75 ) $ (64 ) $ (241 ) $ (207 ) Acquisition and integration related costs: Government Solutions $ — $ (1 ) $ (2 ) $ (5 ) Technology Solutions — — — — Energy Solutions — — — — Other — — — — Subtotal — (1 ) (2 ) (5 ) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Dollars in millions Non-strategic Business — — — — Total acquisition and integration related costs $ — $ (1 ) $ (2 ) $ (5 ) Gain on disposition of assets: Government Solutions $ — $ — $ 11 $ — Technology Solutions — — — — Energy Solutions — — — — Other 1 — — — Subtotal 1 — 11 — Non-strategic Business — — — — Total gain on disposition of assets $ 1 $ — $ 11 $ — Gain on consolidation of Aspire entities: Government Solutions $ — $ (2 ) $ — $ 118 Technology Solutions — — — — Energy Solutions — — — — Other — — — (5 ) Subtotal — (2 ) — 113 Non-strategic Business — — — — Total gain on consolidation of Aspire entities $ — $ (2 ) $ — $ 113 Segment operating income (loss): Government Solutions $ 89 $ 73 $ 249 $ 309 Technology Solutions 23 23 62 59 Energy Solutions 9 23 49 84 Other (24 ) (17 ) (80 ) (65 ) Subtotal 97 102 280 387 Non-strategic Business 7 (3 ) (6 ) (9 ) Total segment operating income (loss) $ 104 $ 99 $ 274 $ 378 Changes in Project-related Estimates There are many factors that may affect the accuracy of our cost estimates and ultimately our future profitability. These include, but are not limited to, the availability and costs of resources (such as labor, materials and equipment), productivity and weather, and for unit rate and construction service contracts, the availability and detail of customer supplied engineering drawings. With a portfolio of more than one thousand |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue We disaggregate our revenue from customers by type of service, 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 Service/Product line and reportable segment was as follows: Three Months Ended Nine Months Ended September 30, September 30, Dollars in millions 2019 2018 2019 2018 By Service / Product Types Government Solutions Space and Mission Solutions $ 228 $ 206 $ 650 $ 453 Engineering 293 292 887 846 Logistics 457 430 1,449 1,174 Total Government Solutions 978 928 2,986 2,473 Technology Solutions 96 81 281 215 Energy Solutions EPC Delivery Projects 113 86 267 344 Services and Consulting 238 182 652 550 Total Energy Solutions 351 268 919 894 Non-strategic business — 1 1 1 Total net revenue $ 1,425 $ 1,278 $ 4,187 $ 3,583 Government Solutions revenue earned from key U.S. government customers including U.S. DoD agencies and NASA was $745 million and $717 million for the three months ended September 30, 2019 and 2018 , respectively, and $2.3 billion and $1.8 billion for the nine months ended September 30, 2019 and 2018 , respectively. Government Solutions revenue earned from non-U.S. government customers including the U.K. MoD, the Australian Defence Force and others was $233 million and $211 million for the three months ended September 30, 2019 and 2018 , respectively, and $670 million and $627 million for the nine months ended September 30, 2019 and 2018 , respectively. Revenue by geographic destination was as follows: Three Months Ended September 30, 2019 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 561 $ 19 $ 146 $ — $ 726 Middle East 159 3 61 — 223 Europe 205 17 50 — 272 Australia 23 1 50 — 74 Canada 1 1 12 — 14 Africa 17 7 22 — 46 Asia — 48 2 — 50 Other countries 12 — 8 — 20 Total net revenue $ 978 $ 96 $ 351 $ — $ 1,425 Three Months Ended September 30, 2018 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 484 $ 2 $ 113 $ 1 $ 600 Middle East 200 1 36 — 237 Europe 197 13 39 — 249 Australia 16 — 54 — 70 Canada — — 2 — 2 Africa 20 8 10 — 38 Asia — 54 5 — 59 Other countries 11 3 9 — 23 Total net revenue $ 928 $ 81 $ 268 $ 1 $ 1,278 Nine Months Ended September 30, 2019 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 1,635 $ 29 $ 357 $ 1 $ 2,022 Middle East 598 11 163 — 772 Europe 586 51 138 — 775 Australia 67 1 149 — 217 Canada 1 1 19 — 21 Africa 57 25 59 — 141 Asia — 161 5 — 166 Other countries 42 2 29 — 73 Total net revenue $ 2,986 $ 281 $ 919 $ 1 $ 4,187 Nine Months Ended September 30, 2018 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 1,229 $ 12 $ 364 $ 1 $ 1,606 Middle East 548 12 97 — 657 Europe 561 34 137 — 732 Australia 44 1 221 — 266 Canada — 2 17 — 19 Africa 58 20 16 — 94 Asia — 129 11 — 140 Other countries 33 5 31 — 69 Total net revenue $ 2,473 $ 215 $ 894 $ 1 $ 3,583 Many of our contracts contain both fixed price and cost reimbursable components. We define contract type based on the component that represents the majority of the contract. Revenue by contract type was as follows: Three Months Ended September 30, 2019 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 286 $ 93 $ 83 $ — $ 462 Cost Reimbursable 692 3 268 — 963 Total net revenue $ 978 $ 96 $ 351 $ — $ 1,425 Three Months Ended September 30, 2018 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 268 $ 80 $ 38 $ 1 $ 387 Cost Reimbursable 660 1 230 — 891 Total net revenue $ 928 $ 81 $ 268 $ 1 $ 1,278 Nine Months Ended September 30, 2019 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 842 $ 276 $ 171 $ 1 $ 1,290 Cost Reimbursable 2,144 5 748 — 2,897 Total net revenue $ 2,986 $ 281 $ 919 $ 1 $ 4,187 Nine Months Ended September 30, 2018 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 769 $ 207 $ 142 $ 1 $ 1,119 Cost Reimbursable 1,704 8 752 — 2,464 Total net revenue $ 2,473 $ 215 $ 894 $ 1 $ 3,583 We recognized revenue from performance obligations satisfied in previous periods of $1 million and $23 million for the three months ended September 30, 2019 and 2018 , respectively, and $14 million , and $54 million for the nine months ended September 30, 2019 and 2018 , respectively. On September 30, 2019 , we had $11.2 billion of transaction price allocated to remaining performance obligations. We expect to recognize approximately 36% of our remaining performance obligations as revenue within one year , 33% in years two through five , and 31% thereafter. Revenue associated with our remaining performance obligations to be recognized beyond one year includes performance obligations related to Aspire Defence and Fasttrax projects, which have contract terms extending through 2041 and 2023, respectively. The balance of remaining performance obligations does not include variable consideration that was determined to be constrained as of September 30, 2019 . We adopted ASU No. 2014-09 (ASC Topic 606), Revenue from Contracts with Customers and related ASUs in the first quarter of 2018. See the 2018 10-K for a further discussion of the adoption and the impact on our financial statements. In accordance with ASU No. 2017-13, certain of our unconsolidated joint ventures will adopt ASC Topic 606 in the fourth quarter of 2019. Currently, we are evaluating the impact of this adoption by performing a detailed review of representative contracts and comparing the historical accounting policies and practices of our unconsolidated joint ventures to the new standard. While we are still evaluating the potential impact, we currently believe the areas that may impact our joint ventures the most include determining which goods and services are distinct and represent separate performance obligations, accounting for variable consideration, and the manner in which the unit of account for projects are determined. These concepts, as well as other aspects of the guidance, may change the method and/or timing of revenue recognition by our unconsolidated joint ventures which in turn could impact our results recognized for these investments under the equity method of accounting. In the fourth quarter of 2019, we will recognize the impact of the adoption of the new standard by our unconsolidated joint ventures effective January 1, 2019. Our intent is to apply the modified retrospective method of adoption with the cumulative effect of adoption recognized at the date of initial application for uncompleted contracts. |
Acquisitions, Dispositions and
Acquisitions, Dispositions and Other Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions, Dispositions and Other Transactions | Acquisitions, Dispositions and Other Transactions Stinger Ghaffarian Technologies Acquisition On April 25, 2018, we acquired 100% of the outstanding stock of SGT. SGT is a leading provider of high-value engineering, mission operations, scientific and IT software solutions in the government services market. We accounted for this transaction using the acquisition method under ASC 805, Business Combinations . The acquisition is reported within our GS business segment. Aggregate base consideration for the acquisition was $355 million , plus $10 million of working capital and other purchase price adjustments set forth in the purchase agreement. We recognized goodwill of $257 million arising from the acquisition. We recognized direct, incremental costs related to this acquisition of $0 million and $2 million during the three and nine months ended September 30, 2019 , respectively, and $1 million and $4 million during the three and nine months ended September 30, 2018 , respectively. These costs are included in "Acquisition and integration related costs" on the condensed consolidated statements of operations. The acquired SGT business contributed $122 million and $365 million of revenues, and $15 million and $35 million of gross profit for the three and nine months ended September 30, 2019 , respectively. For the three and nine months ended September 30, 2018 , the SGT business contributed $126 million and $216 million of revenues, and $12 million and $19 million of gross profit, respectively. Consolidation of Aspire Defence Subcontracting Entities On January 15, 2018, Carillion, our U.K. partner in the joint ventures that provide the construction and related support services to Aspire Defence Limited, entered into compulsory liquidation and ceased performing services for the project. In accordance with the commercial arrangements of the project company and its lenders, Carillion was excluded from future business and benefit from its interest in the project and we assumed operational management and control of the subcontracting entities. As a result of Carillion's compulsory liquidation, KBR was deemed the primary beneficiary as it has the power to direct activities having the most significant impact on the economic performance of the subcontracting entities. Consequently, KBR began consolidating these entities in its financial statements effective January 15, 2018. We accounted for these transactions under the acquisition method of accounting for business combinations in accordance ASC 805 and recognized a gain of approximately $113 million included in "Gain on consolidation of Aspire subcontracting entities" as a result of remeasuring our equity interests in each of the subcontracting entities to fair value. We also recognized goodwill of approximately $42 million . On April 18, 2018, we completed the acquisition of Carillion's interests in the subcontracting entities for $50 million pursuant to a share and business purchase agreement and approval by Aspire Defence Limited, the Aspire Defence Limited project lenders and the MoD. We accounted for the change in KBR's interest as an equity transaction. The difference between the noncontrolling interests of $124 million in the subcontracting entities at the date of acquisition and the cash consideration paid to Carillion was recognized as a net increase to "PIC" of $74 million . We incurred acquisition-related costs of $0 million and $1 million for the three and nine months ended September 30, 2018 , which were recorded in "Acquisition and integration related costs" on our condensed consolidated statements of operations. No acquisition-related costs were recorded for the three and nine months ended September 30, 2019 . The results of operations of the subcontracting entities have been included in our condensed consolidated statements of operations for periods subsequent to assuming control on January 15, 2018. The acquired subcontracting entities contributed $138 million and $405 million of revenues, and $17 million and $49 million of gross profit for the three and nine months ended September 30, 2019 , respectively, and contributed $138 million and $387 million of revenues and $14 million and $42 million of gross profit for the three and nine months ended September 30, 2018 , respectively, within our GS business segment. The following supplemental pro forma condensed consolidated results of operations assume that SGT and the Aspire Defence subcontracting entities had been acquired as of January 1, 2017. The supplemental pro forma information was prepared based on the historical financial information of SGT and the Aspire Defence subcontracting entities and has been adjusted to give effect to pro forma adjustments that are both directly attributable to the transaction and factually supportable. Pro forma adjustments were primarily related to the amortization of intangibles, interest on borrowings related to the acquisitions, and the reclassification of the gain on consolidation of the Aspire entities to January 1, 2017. 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 acquisitions occurred on January 1, 2017, nor is it indication of future results of operations. Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 Dollars in millions Revenue $ 1,278 $ 3,730 Net income attributable to KBR 58 144 Diluted earnings per share $ 0.41 $ 1.01 |
Cash and Equivalents
Cash and Equivalents | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Equivalents | Cash and Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and 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 equivalents balance are as follows: September 30, 2019 Dollars in millions International (a) Domestic (b) Total Operating cash and equivalents $ 120 $ 133 $ 253 Short-term investments (c) 15 89 104 Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 322 2 324 Total $ 457 $ 224 $ 681 December 31, 2018 Dollars in millions International (a) Domestic (b) Total Operating cash and equivalents $ 123 $ 104 $ 227 Short-term investments (c) 87 107 194 Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 315 3 318 Total $ 525 $ 214 $ 739 (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. (c) Includes time deposits, money market funds, and other highly liquid short-term investments. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable The components of our accounts receivable, net of allowance for doubtful accounts balance, are as follows: September 30, 2019 Dollars in millions Unbilled Trade & Other Total Government Solutions $ 302 $ 304 $ 606 Technology Solutions 4 61 65 Energy Solutions 118 247 365 Subtotal 424 612 1,036 Non-strategic Business — 2 2 Total $ 424 $ 614 $ 1,038 December 31, 2018 Dollars in millions Unbilled Trade & Other Total Government Solutions $ 266 $ 334 $ 600 Technology Solutions 11 62 73 Energy Solutions 69 185 254 Subtotal 346 581 927 Non-strategic Business — — — Total $ 346 $ 581 $ 927 |
Contract Assets and Contract Li
Contract Assets and Contract Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract Assets and Contract Liabilities | Contract Assets and Contract Liabilities Our contract assets by business segment are as follows: September 30, December 31, Dollars in millions 2019 2018 Government Solutions $ 121 $ 123 Technology Solutions 49 19 Energy Solutions 65 43 Subtotal 235 185 Non-strategic Business — — Total $ 235 $ 185 Our contract liabilities by business segment are as follows: September 30, December 31, Dollars in millions 2019 2018 Government Solutions $ 296 $ 261 Technology Solutions 82 98 Energy Solutions 156 100 Subtotal 534 459 Non-strategic Business 2 4 Total $ 536 $ 463 We recognized revenue of $194 million for the nine months ended September 30, 2019 , that was previously included in the contract liability balance at December 31, 2018 . |
Claims and Accounts Receivable
Claims and Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
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 $104 million and $98 million as of September 30, 2019 and December 31, 2018 , respectively. Claims and accounts receivable primarily reflect claims filed with the U.S. government related to payments not yet received for costs incurred under various U.S. government cost reimbursable contracts within our GS business segment. These claims relate to disputed costs or contracts where our costs have exceeded the U.S. government's funded value on the task order. Included in the amount is $72 million and $73 million as of September 30, 2019 , and December 31, 2018 , respectively, related to Form 1s issued by the U.S. government questioning or objecting to costs billed to them. See Note 14 of our condensed consolidated financial statements for additional information. The amount also includes $32 million and $25 million as of September 30, 2019 , and December 31, 2018 |
Unapproved Change Orders, and C
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors | 9 Months Ended |
Sep. 30, 2019 | |
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 2019 2018 Amounts included in project estimates-at-completion at January 1, $ 973 $ 924 (Decrease) increase, including foreign currency effect (21 ) 39 Approved change orders, net of foreign currency effect (7 ) (4 ) Amounts included in project estimates-at-completion at September 30, $ 945 $ 959 Amounts recognized over time based on progress at September 30, $ 938 $ 922 As of September 30, 2019 , the predominant component of the change orders, customer claims and estimated recoveries of claims against suppliers and subcontractors above relates to our 30% proportionate share of unapproved change orders and claims associated with the Ichthys LNG Project discussed below. KBR intends to vigorously pursue approval and collection of amounts still due under all unapproved change orders and claims, against the clients and recoveries from subcontractors. Further, there are additional claims that KBR believes it is entitled to recover from its client and from subcontractors which have been excluded from estimated revenues and profits at completion as appropriate under U.S. GAAP. These commercial matters may not be resolved in the near term. Our current estimates for the above unapproved change orders, client claims and estimated recoveries of claims against suppliers and subcontractors may prove inaccurate and any material change could have a material adverse effect on our results of operations, financial position and cash flows. Ichthys LNG Project Project Status We have a 30% ownership interest in the JKC joint venture, which has contracted to perform the engineering, procurement, supply, construction and commissioning of onshore LNG facilities for a client in Darwin, Australia (the "Ichthys LNG Project"). The contract between JKC and its client is a hybrid contract containing both cost-reimbursable and fixed-price (including unit-rate) scopes. The construction and commissioning of the Ichthys LNG Project is complete and all performance tests have been successfully performed. The entire facility, including two LNG liquefaction trains, cryogenic tanks and the combined cycle power generation facility, has been handed over to the client and is producing LNG. JKC is in the process of executing project close-out activities and continues to negotiate the various legal and commercial disputes with the client, suppliers and other third parties as further described below. Unapproved Change Orders and Claims Against Client Under the cost-reimbursable scope of the contract with the client, JKC has entered into commercial contracts with multiple suppliers and subcontractors to execute various scopes of work on the project. Certain of these suppliers and subcontractors have made contract claims against JKC for recovery of costs and extensions of time to progress the works under the scope of their respective contracts due to a variety of issues related to alleged changes to the scope of work, delays and lower than planned subcontractor productivity. In addition, JKC has incurred costs related to scope increases and other factors, and has made claims to its client for matters for which JKC believes it is entitled to reimbursement under the contract. JKC believes any amounts paid or payable to the suppliers and subcontractors in settlement of their contract claims related to the cost-reimbursable scope are an adjustment to the contract price, and accordingly JKC has made claims for contract price adjustments under the cost-reimbursable scope of the contract between JKC and its client. However, the client disputed some of these contract price adjustments and subsequently withheld certain payments. In order to facilitate the continuation of work under the contract while JKC worked to resolve this dispute, the client agreed to a contractual mechanism (“Funding Deed”) in 2016 providing funding in the form of an interim contract price adjustment to JKC and consented to settlement of subcontractor claims as of that date related to the cost-reimbursable scope. While the client has reserved its contractual rights under this funding mechanism, settlement funds (representing the interim contract price adjustment) have been paid by the client. JKC in turn settled these subcontractor claims which have been funded through the Funding Deed by the client. If JKC's claims against its client which were funded under the Funding Deed remain unresolved by December 31, 2020, JKC will be required to refund sums funded by the client under the terms of the Funding Deed. We, along with our joint venture partners, are jointly and severally liable to the client for any amounts required to be refunded. Our proportionate share of the total amount of the contract price adjustments under the Funding Deed included in the unapproved change orders and claims related to JKC discussed above was $153 million as of September 30, 2019 and December 31, 2018 . In September and October 2017, additional settlements pertaining to suppliers and subcontractors under the cost-reimbursable scope of the contract were presented to the client. The client consented to these settlements and paid for them but reserved its contractual rights. In reliance, JKC in turn settled these claims with the associated suppliers and subcontractors. The formal contract price adjustments for these settlements remained pending at September 30, 2019 . However, unlike amounts funded under the Funding Deed, there is no requirement to refund these amounts to the client by a certain date. In October 2018, JKC received a favorable ruling from an arbitration tribunal. The ruling determined a contract interpretation in JKC's favor, to the effect that delay and disruption costs payable to subcontractors under the cost-reimbursable scope of the EPC contract are for the client's account and are reimbursable to JKC. JKC contends this ruling resolves the reimbursability of the subcontractor settlement sums under the Funding Deed and additional settlements made in September and October 2017. Pursuant to this decision, JKC is undertaking steps for a formal contract adjustment to the cost-reimbursable scope of the contract for these settlement claims which are included in the recognized unapproved change orders as of September 30, 2019 . Our view is that the arbitration ruling resolves our obligations under the Funding Deeds and settlements with reimbursable subcontractors. However, the client does not agree with the impact of the arbitration award and, accordingly, we have initiated a new proceeding to obtain further determination from the arbitration tribunal. The arbitration tribunal has scheduled a hearing on the Funding Deed matter for September 2020. There has been deterioration of paint and insulation on certain exterior areas of the plant. The client previously requested and funded, paint remediation for a portion of the facilities. JKC’s profit estimate at completion includes a portion of revenues and costs for these remediation activities. Revenue for the client-funded amounts are included in the table above. In the first quarter of 2019, the client demanded repayment of the amounts previously funded to JKC. JKC is disputing the client's demand. The client has also requested a proposal to remediate any remaining non-conforming paint and insulation, but JKC and its client have not resolved the nature and extent of the non-conformances, the method and degree of remediation that was and is required, or who is responsible. We believe the remaining remediation costs could be material given the plant is now operating and there will be several operating constraints on any such works. In addition, JKC has started proceedings against the paint manufacturer and initiated claims against the subcontractors. JKC has also made demands on insurance policies in respect of these matters. Proceedings and claims against the paint manufacturer, certain subcontractors and insurance policies are ongoing. Combined Cycle Power Plant Pursuant to JKC's fixed-price scope of its contract with its client, JKC awarded a fixed-price EPC contract to a subcontractor for the design, construction and commissioning of the Power Plant. The subcontractor was a consortium consisting of General Electric and GE Electrical International Inc. and a joint venture between UGL Infrastructure Pty Limited and CH2M Hill (collectively, the "Consortium"). On January 25, 2017, JKC received a Notice of Termination from the Consortium, and the Consortium ceased work on the Power Plant and abandoned the construction site. JKC believes the Consortium materially breached its subcontract and repudiated its obligation to complete the Power Plant, plus undertook actions making it more difficult and more costly for the works to be completed by others after the Consortium abandoned the site. Subsequently, the Consortium filed a request for arbitration with the ICC asserting that JKC repudiated the contract. The Consortium also sought an order that the Consortium validly terminated the subcontract. JKC has responded to this request, denying JKC committed any breach of its subcontract with the Consortium and restated its claim that the Consortium breached and repudiated its subcontract with JKC and is furthermore liable to JKC for all costs to complete the Power Plant. In March 2017, JKC prevailed in a legal action against the Consortium requiring the return of materials, drawings and tools following their unauthorized removal from the site by the Consortium. After taking over the work, JKC discovered incomplete and defective engineering designs, defective workmanship on the site, missing, underreported and defective materials; and the improper termination of key vendors/suppliers. JKC's investigations also indicate that progress of the work claimed by the Consortium was over-reported. JKC has evaluated the cost to complete the Consortium's work, which significantly exceeds the awarded fixed-price subcontract value. JKC's cost to complete the Power Plant includes re-design efforts, additional materials and significant re-work. These costs represent estimated recoveries of claims against the Consortium and have been included in JKC's estimate to complete the Consortium's remaining obligations. JKC is pursuing recourse against the Consortium to recover all of the costs to complete the Power Plant, plus the additional interest, and/or general damages by all means inclusive of calling bank guarantees provided by the Consortium partners. In April 2018, JKC prevailed in a legal action to call bank guarantees (bonds) and received funds totaling $52 million . Each of the Consortium partners has joint and several liability with respect to all obligations under the subcontract. JKC intends to pursue recovery of all additional amounts due from the Consortium via various legal remedies available to JKC. Costs incurred to complete the Power Plant that have been determined to be probable of recovery from the Consortium under U.S. GAAP have been included as a reduction of cost in our estimate of profit at completion. The estimated recoveries exclude interest, liquidated damages and other related costs which JKC intends to pursue recovery from the Consortium. Amounts expected to be recovered from the Consortium are included in the table above. As of September 30, 2019 , JKC claims against the Consortium were approximately $1.9 billion for recovery of JKC's costs. An arbitration hearing against the Consortium is scheduled in the first half of 2020 (the "Arbitration"). JKC also initiated suit against the parent companies of the Consortium members to seek a declaration that the parents either had to perform and finish the work or pay for the completion of the power plant based on their payment and performance guarantees. In May 2019, the court ruled against the declaration and JKC's appeal is pending from the court. To the extent JKC is unsuccessful in prevailing in the Arbitration or the Consortium members are unable to satisfy their financial obligations in the event of a decision favorable to JKC, we would be responsible for our pro-rata portion of unrecovered costs from the Consortium. This could have a material adverse impact on the profit at completion of the overall contract and thus on our consolidated statements of operations and financial position. Ichthys Project Funding As a result of the ongoing disputes with the client and pursuit of recoveries against the Consortium through the Arbitration, we have funded our proportionate share of the working capital requirements of JKC to complete the project. During the year ended December 31, 2018, we made investment contributions to JKC of approximately $344 million to fund the ongoing project execution activities. During the nine months ended September 30, 2019 , we made additional investment contributions to JKC of approximately $141 million to fund the ongoing project execution activities. The project execution activities have now been completed and were within our forecasted contributions of $500 million . If we experience unfavorable outcomes associated with the various legal and commercial disputes, our total investment contributions could increase which could have a material adverse effect on our financial position and cash flows. Further, if our joint venture partner(s) in JKC do not fulfill their responsibilities under the JKC JV agreement or subcontract, we could be exposed to additional funding requirements as a result of the nature of the JKC JV agreement. As of September 30, 2019 , we had $164 million in letters of credit outstanding in support of performance and warranty guarantees provided to the client. The performance and warranty letters of credit have been extended to February 2021 to allow for the various disputes to be resolved. Other Matters JKC is entitled to an amount of profit and overhead (“TRC Fee”) which is a fixed percentage of the target reimbursable costs ("TRC") under the reimbursable component of the contract which was to be agreed by JKC and its client. At the time of the contract, JKC and its client agreed to postpone the fixing of the TRC until after a specific milestone in the project had been achieved. Although the milestone was achieved, JKC and its client have been unable to reach agreement on the TRC. This matter was taken to arbitration in 2017. A decision was issued in December 2017 concluding that the TRC should be determined based on project estimate information available at April 2014. JKC has included an estimate for the TRC Fee in its determination of profit at completion at September 30, 2019 , based on the contract provisions and the decision from the December 2017 arbitration. JKC has submitted the revised estimate of the TRC Fee to the client. The parties have not agreed to the revised estimate, and JKC has started an additional arbitration on this dispute. The arbitration panel has been constituted but a hearing date has not been scheduled. All of the Ichthys LNG project commercial matters are complex and involve multiple interests, including the client, suppliers and other third parties. Ultimate resolution may not occur in the near term. Our current estimates for resolving these matters may prove inaccurate and, if so, any material change could have a material adverse effect on our results of operations, financial position and cash flows. See Note 10 to our condensed consolidated financial statements for further discussion regarding our equity method investment in JKC. |
Equity Method Investments and V
Equity Method Investments and Variable Interest Entities | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Variable Interest Entities | Equity Method Investments and Variable Interest Entities We conduct some of our operations through joint ventures, which operate through partnership, corporation, undivided interest 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: Nine Months Ended September 30, Year Ended December 31, 2019 2018 Dollars in millions Beginning balance at January 1, $ 724 $ 365 Cumulative effect of change in accounting policy (a) — 87 Adjusted balance at January 1, 724 452 Equity in earnings of unconsolidated affiliates 24 79 Distributions of earnings of unconsolidated affiliates (64 ) (75 ) Payments from (advances to) unconsolidated affiliates, net (9 ) (12 ) Investments (b) 146 344 Foreign currency translation adjustments (28 ) (28 ) Other — (36 ) Ending balance $ 793 $ 724 (a) Deferred construction income in the amount of $87 million previously recorded in "Equity in and advance to unconsolidated affiliates" was reversed and included in the cumulative effect adjustment as a result of the adoption of ASC 606 by the Aspire Defence project joint ventures. (b) For the nine months ended September 30, 2019 , investments include a $141 million investment to fund JKC. In 2018, the total amount of investments were made to fund JKC. Unconsolidated Variable Interest Entities For the VIEs in which we participate, our maximum exposure to loss consists of our equity investment in the VIE and any amounts owed to us for services we may have provided to the VIE, reduced by any unearned revenues on the project. Our maximum exposure to loss may also include our obligation to fund our proportionate share of any future losses incurred. As of September 30, 2019 , we do not project any losses related to these joint venture projects. Where our performance and financial obligations are joint and several to the client with our joint venture partners, we may be further exposed to losses above our ownership interest in the joint venture. The following summarizes the total assets and total liabilities as reflected in our condensed consolidated balance sheets related to our unconsolidated VIEs in which we have a significant variable interest but are not the primary beneficiary. September 30, 2019 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 15 $ 9 Aspire Defence Limited $ 58 $ 5 JKC joint venture (Ichthys LNG project) $ 534 $ 31 U.K. Road project joint ventures $ 37 $ 9 Middle East Petroleum Corporation (EBIC Ammonia project) $ 47 $ 1 December 31, 2018 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 16 $ 8 Aspire Defence Limited $ 68 $ 5 JKC joint venture (Ichthys LNG project) $ 427 $ 32 U.K. Road project joint ventures $ 37 $ 10 Middle East Petroleum Corporation (EBIC Ammonia project) $ 51 $ 1 Related Party Transactions We often provide engineering, construction management and other subcontractor services to our joint ventures and our revenues include amounts related to these services. For the nine months ended September 30, 2019 and 2018 , our revenues included $525 million and $531 million , respectively, related to the services we provided to our unconsolidated joint ventures, primarily the Aspire Defence Limited joint venture within our GS business segment and the JKC joint venture within our ES business segment. Amounts included in our condensed consolidated balance sheets related to services we provided to our unconsolidated joint ventures as of September 30, 2019 , and December 31, 2018 are as follows: September 30, December 31, Dollars in millions 2019 2018 Accounts receivable, net of allowance for doubtful accounts $ 33 $ 43 Contract assets (a) $ 5 $ 1 Contract liabilities (a) $ 37 $ 38 Accounts payable $ — $ 2 (a) Reflects contract assets and contract liabilities primarily related to joint ventures within our ES business segment. Consolidated Variable Interest Entities We consolidate VIEs if we determine we are the primary beneficiary of the project entity because we control the activities that most significantly impact the economic performance of the entity. The following is a summary of the significant VIEs where we are the primary beneficiary: Dollars in millions September 30, 2019 Total Assets Total Liabilities KJV-G joint venture (Gorgon LNG project) $ 12 $ 17 Fasttrax Limited (Fasttrax project) $ 46 $ 27 Aspire Defence subcontracting entities (Aspire Defence project) $ 536 $ 306 Dollars in millions December 31, 2018 Total Assets Total Liabilities KJV-G joint venture (Gorgon LNG project) $ 13 $ 19 Fasttrax Limited (Fasttrax project) $ 49 $ 34 Aspire Defence subcontracting entities (Aspire Defence project) $ 589 $ 324 |
Pension Plans
Pension Plans | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Pension Plans | Pension Plans The components of net periodic benefit cost related to pension benefits for the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended September 30, 2019 2018 Dollars in millions United States Int’l United States Int’l Components of net periodic benefit cost Service cost $ — $ — $ — $ 1 Interest cost 1 12 1 12 Expected return on plan assets (1 ) (18 ) (1 ) (20 ) Amortization of prior service cost — — — — Recognized actuarial loss — 4 — 6 Net periodic benefit cost $ — $ (2 ) $ — $ (1 ) Nine Months Ended September 30, 2019 2018 Dollars in millions United States Int’l United States Int’l Components of net periodic benefit cost Service cost $ — $ — $ — $ 1 Interest cost 2 37 2 38 Expected return on plan assets (2 ) (57 ) (3 ) (61 ) Amortization of prior service cost — 1 — — Recognized actuarial loss 1 12 1 20 Net periodic benefit cost $ 1 $ (7 ) $ — $ (2 ) For the nine months ended September 30, 2019 , we have contributed approximately $31 million of the $44 million we expect to contribute to our plans in 2019 |
Debt And Other Credit Facilitie
Debt And Other Credit Facilities | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 December 31, 2018 Term Loan A $ 181 $ 190 Term Loan B 758 796 Convertible Notes 350 350 Unamortized debt issuance costs - Term Loan A (5 ) (5 ) Unamortized debt issuance costs and discount - Term Loan B (16 ) (18 ) Unamortized debt issuance costs and discount - Convertible Notes (56 ) (65 ) Total long-term debt 1,212 1,248 Less: current portion 27 22 Total long-term debt, net of current portion $ 1,185 $ 1,226 Senior Credit Facility The senior secured credit facility ("Senior Credit Facility") consists of a $500 million revolving credit facility ("Revolver"), a $500 million PLOC, a $350 million Delayed Draw Term Loan A, ("Term Loan A") and an $800 million Term Loan B ("Term Loan B"). The Revolver, PLOC and Term Loan A mature in April 2023 and the Term Loan B matures in April 2025. Additional borrowings are no longer available under the Term Loan A. Borrowings under the Term Loan A were used to fund investment contributions in JKC. See Note 9 to our condensed consolidated financial statements for a discussion on JKC. The interest rates with respect to the Revolver and Term Loan A are based on, at the Company's option, adjusted LIBOR plus an additional margin or base rate plus additional margin. The interest rate with respect to the Term Loan B is LIBOR plus 3.75% . The Senior Credit Facility provides for fees on letters of credit issued under the PLOC at varying rates, as shown below. Additionally, there is a commitment fee with respect to the Revolver, PLOC and Term Loan A. The details of the applicable margins and commitment fees are based on the Company's consolidated leverage ratio as follows: Revolver and Term Loan A Consolidated Leverage Ratio LIBOR Margin Base Rate Margin Performance Letter of Credit Fee Commitment Fee Greater than or equal to 4.00 to 1.00 3.25 % 2.25 % 1.95 % 0.450 % Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 3.00 % 2.00 % 1.80 % 0.400 % Less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 2.75 % 1.75 % 1.65 % 0.375 % Less than 2.00 to 1.00 2.50 % 1.50 % 1.50 % 0.350 % The Term Loan A provides for quarterly principal payments of 2.50% of the aggregate principal amount commencing with the fiscal quarter ending June 30, 2019. The Term Loan B provides for quarterly principal payments of 0.25% of the initial aggregate principal amounts commencing with the fiscal quarter ending September 30, 2018. The Senior Credit Facility contains financial maintenance covenants of a maximum consolidated leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the Senior Credit Facility). Our consolidated leverage ratio as of the last day of any fiscal quarter may not exceed 4.50 to 1 and reducing gradually during 2019 and 2020 to 3.50 to 1. Our consolidated interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2018 and thereafter, may not be less than 3.00 to 1. As of September 30, 2019 , we were in compliance with our financial covenants. 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 (the "Indenture") between us and Citibank, N.A., as trustee (the "Trustee"). The Convertible Notes are senior unsecured obligations. The Convertible Notes bear interest at 2.50% per year and interest is payable on May 1 and November 1 of each year. The Convertible Notes mature on November 1, 2023 and may not be redeemed by us prior to maturity. The effective interest rate on the liability component for the period is 6.50% . The amount of interest cost recognized relating to the contractual interest coupon was $2 million and $6 million for the three and nine months ended September 30, 2019 , respectively, and relating to the amortization of the discount on the liability was $3 million and $8 million for the three and nine months ended September 30, 2019 , respectively. 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 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. Letters of credit, surety bonds and guarantees In connection with certain projects, we are required to provide letters of credit, surety bonds or guarantees to our customers. Letters of credit are provided to certain customers and counterparties in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers and future funding commitments. We have $1 billion in a committed line of credit under the Senior Credit Facility, comprised of the $500 million Revolver and $500 million PLOC. Additionally, we have approximately $368 million of uncommitted lines of credit to support the issuance of letters of credit. Surety bonds are also posted under the terms of certain contracts to guarantee our performance. As of September 30, 2019 , with respect to our $500 million Revolver, we have no outstanding revolver borrowings and have issued $26 million of letters of credit. With respect to our PLOC, we have $91 million of outstanding letters of credit. With respect to our $368 million of uncommitted lines of credit, we have utilized $200 million for letters of credit as of September 30, 2019 . The total remaining capacity of these committed and uncommitted lines of credit is approximately $1.1 billion . Of the letters of credit outstanding under the Senior Credit Facility, none have expiry dates beyond the maturity date of the Senior Credit Facility. Of the total letters of credit outstanding, $169 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 ÂŁ56.0 million and Class B 5.9% Fixed Rate Bonds in the amount of ÂŁ20.7 million . Semi-annual payments on both classes of bonds will continue through maturity in 2021. The subordinated notes payable to each of the partners initially bear interest at 11.25% increasing to 16.00% over the term of the notes until maturity in 2025. For financial reporting purposes, only our partner's portion of the subordinated notes appears in the condensed consolidated financial statements. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate was approximately 30% and 28% for the three and nine months ended September 30, 2019 , respectively. The effective tax rate was approximately 28% and 22% for the three and nine months ended September 30, 2018 , respectively. The effective tax rate for the nine months ended September 30, 2019 , as compared to the U.S. statutory rate of 21% , was primarily impacted by the rate differential on our foreign earnings including equity losses for which no tax benefit is available. The effective tax rate for the nine months ending September 30, 2018 was impacted by a discrete tax expense as a result of obtaining control of the Aspire Defence project subcontracting joint ventures, which was recorded at a lower rate than our estimated annual tax rate for 2018 . Our estimated annual effective rate for 2019 is 27% excluding the effects of discrete items. Our estimated annual effective rate is subject to change based on the actual jurisdictions where our 2019 earnings are generated. The valuation allowance for deferred tax assets as of September 30, 2019 , and December 31, 2018 , was $197 million and $207 million , respectively. The changes in the valuation allowance were decreases of $2 million and $10 million for the three and nine months ended September 30, 2019 , respectively, and decreases of $4 million and $72 million for the three and nine months ended September 30, 2018 , respectively. The valuation allowance is primarily related to foreign tax credit carryforwards and foreign and state net operating loss carryforwards that, in the judgment of management, are not more likely than not to be realized. The decrease in the valuation allowance for the three and nine months ended September 30, 2018 primarily related to changes in foreign tax credit carryforwards due to the refinement of provisional impacts recorded related to the Deemed Repatriation Transition Tax. 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 provision for uncertain tax positions included in "Other liabilities" and "Deferred income taxes" on our condensed consolidated balance sheets as of September 30, 2019 , and December 31, 2018 , was $88 million and $90 million , respectively. |
U.S. Government Matters
U.S. Government Matters | 9 Months Ended |
Sep. 30, 2019 | |
United States Government Contract Work [Abstract] | |
U.S. Government Matters | U.S. Government Matters We provide services to various U.S. governmental agencies, including the U.S. DoD, NASA, and the Department of State. We may have disagreements or experience performance issues on our U.S. government contracts. When performance issues arise under any of these contracts, the U.S. government retains the right to pursue various remedies, including challenges to expenditures, suspension of payments, fines and suspensions or debarment from future business with the U.S. government. The negotiation, administration and settlement of our contracts are subject to audit by the DCAA. The DCAA serves in an advisory role to the DCMA, and the DCMA is responsible for the administration of the majority of our contracts. The scope of these audits include, among other things, the validity of direct and indirect incurred costs, provisional approval of annual billing rates, approval of annual overhead rates, compliance with the FAR and CAS, compliance with certain unique contract clauses and audits of certain aspects of our internal control systems. Based on the information received to date, we do not believe the completed or ongoing government audits will have a material adverse impact on our results of operations, financial position or cash flows. Legacy U.S. Government Matters Between 2002 and 2011, we provided significant support to the U.S. Army and other U.S. government agencies in support of the war in Iraq under the LogCAP III contract. We have been in the process of closing out the LogCAP III contract since 2011, and we expect the contract closeout process to continue for at least another year. As a result of our work under LogCAP III, there are claims and disputes pending between us and the U.S. government which need to be resolved in order to close the contract. The contract closeout process includes resolving objections raised by the U.S. government through a billing dispute process referred to as Form 1s and MFRs. We continue to work with the U.S. government to resolve these issues and are engaged in efforts to reach mutually acceptable resolution of these outstanding matters. However, for certain of these matters, we have filed claims with the ASBCA or the COFC. We also have matters related to ongoing litigation or investigations involving U.S. government contracts. We anticipate billing additional labor, vendor resolution and litigation costs as we resolve the open matters. Form 1s The U.S. government has issued Form 1s questioning or objecting to costs we billed to them under cost reimbursable contracts primarily related to our use of private security and our provision of containerized housing under the LogCAP III contract discussed below. As a consequence of the issuance of the Form 1s, the U.S. government has withheld payment to us on outstanding invoices, pending resolution of these matters. The U.S. government has issued and has outstanding Form 1s questioning $134 million of billed costs as of September 30, 2019 . They had previously paid us $62 million of the questioned costs related to our services on these contracts. The remaining balance of $72 million as of September 30, 2019 , is included on our condensed balance sheets in “Claims and accounts receivable". In addition, we have withheld $26 million from our subcontractors at September 30, 2019 , related to these questioned costs, which is included in "Other current liabilities" on our condensed balance sheets. While we continue to believe that the amounts we have invoiced the U.S. government are in compliance with our contract terms and that recovery is probable, we also continue to evaluate our ability to recover these amounts as new information becomes known. As is common in the industry, negotiating and resolving these matters is often an involved and lengthy process, which sometimes necessitates the filing of claims or other legal action as discussed above. Concurrent with our continued negotiations with the U.S. government, we await the rulings on the filed claims. We are unable to predict when the rulings will be issued or when the matters will be settled or resolved with the U.S. government. As a result of the Form 1s, and claims discussed above as well as open audits, we have accrued a reserve for unallowable costs of $41 million as of September 30, 2019 , and December 31, 2018 . The balance at September 30, 2019 , is recorded in "Contract liabilities" and "Other liabilities" in the amounts of $25 million and $16 million , respectively. The balance at December 31, 2018 , is recorded in "Contract liabilities" and "Other liabilities" in the amounts of $26 million and $15 million , respectively. Private Security Contractors. Starting in February 2007, we received a series of Form 1s from the DCAA informing us of the U.S. government's intent to deny reimbursement to us under the LogCAP III cost reimbursable contract for amounts related to the use of PSCs by KBR and a subcontractor in connection with its work for KBR providing dining facility services in Iraq between 2003 and 2006. The government challenged $56 million in billings. The government had previously paid $11 million and has withheld payments of $45 million , which as of September 30, 2019 , we have recorded as due from the government related to this matter in "Claims and accounts receivable" on our condensed consolidated balance sheets. On June 16, 2014, we received a decision from the ASBCA which agreed with KBR's position (i) that the LogCAP III contract did not prohibit the use of PSCs to provide force protection to KBR or subcontractor personnel, (ii) that there was a need for force protection and (iii) that the costs were reasonable. The ASBCA also found that the U.S. Army breached its obligation to provide force protection. The U.S. Army appealed the decision. On June 12, 2017, we received a second ruling from the ASBCA that we are entitled to recover the withheld costs in the approximate amount of $45 million plus interest related to the use of PSCs. The U.S. Army filed a notice of appeal on October 12, 2017. On July 9, 2019 the Court of Appeals for the Federal Circuit upheld the ASBCA decision confirming the entire award including interest. Accordingly, we believe that we are entitled to reimbursement by the U.S. Army for the amounts charged by our subcontractors, even if they incurred costs for PSCs. We believe the likelihood that we will incur a loss related to this matter is remote, and therefore we have not accrued any loss provisions related to this matter. Investigations, Qui Tams and Litigation The following matters relate to ongoing litigation or federal investigations involving U.S. government contracts. Many of these matters involve allegations of violations of the FCA, which prohibits in general terms fraudulent billings to the U.S. government. Suits brought by private individuals are called "qui tams." We believe the costs of litigation and any damages that may be awarded in the FKTC matters described below are billable under the LogCAP III. All costs billed under LogCAP III are subject to audit by the DCAA for reasonableness. First Kuwaiti Trading Company arbitration. In April 2008, FKTC, one of our LogCAP III subcontractors providing housing containers, filed for arbitration with the American Arbitration Association all its claims under various LogCAP III subcontracts. After complete hearings on all claims, the arbitration panel awarded FKTC $17 million plus interest for claims involving damages on lost or unreturned vehicles. In addition, we determined that we owe FKTC $32 million in connection with other subcontracts provided we are reimbursed for these same costs by the U.S. government. We previously paid FKTC $19 million and the remaining $30 million is recorded in "Other current liabilities" on our condensed consolidated balance sheets with pay-when-paid terms in the contract. As of September 30, 2019 , we believe our recorded accruals and the pay-when-paid terms in our contract with FKTC are adequate if we are unable to favorably resolve our claims and disputes against the U.S. government. See "KBR Contract Claim on FKTC containers" below. Howard qui tam. In March 2011, Geoffrey Howard and Zella Hemphill filed a complaint in the U.S. District Court for the Central District of Illinois alleging that KBR mischarged the government $628 million for unnecessary materials and equipment. In October 2014, the DOJ declined to intervene and the case was partially unsealed. Discovery is ongoing in this case and is expected to continue into 2020. We believe the allegations of fraud by the relators are without merit and, as of September 30, 2019 , no amounts have been accrued. DOJ False Claims Act complaint - Iraq Subcontractor. In January 2014, the DOJ filed a complaint in the U.S. District Court for the Central District of Illinois against KBR and two former KBR subcontractors, including FKTC, alleging that three former KBR employees were offered and accepted kickbacks from these subcontractors in exchange for favorable treatment in the award and performance of subcontracts to be awarded during the course of KBR's performance of the LogCAP III contract in Iraq. The complaint alleges that as a result of the kickbacks, KBR submitted invoices with inflated or unjustified subcontract prices, resulting in alleged violations of the FCA and the Anti-Kickback Act. The DOJ's investigation dates back to 2004. We self-reported most of the violations and tendered credits to the U.S. government as appropriate. On May 22, 2014, FKTC filed a motion to dismiss, which the U.S. government opposed. Following the submission of our answer in April 2014, the U.S. government was granted a Motion to Strike certain affirmative defenses in March 2015. We do not believe this limits KBR's ability to fully defend all allegations in this matter. Discovery for this complaint is now complete. The Court has yet to rule on various motions filed in early 2019 that would affect the scope and venue of the case. The court will set hearing and trial dates after addressing the pending motions which we expect will occur in 2020. As of September 30, 2019 , we have accrued our best estimate of probable loss related to an unfavorable settlement of this matter in "Other liabilities" on our condensed consolidated balance sheets. Other matters KBR Contract Claim on FKTC containers. KBR previously filed a claim before the ASBCA to recover the costs paid to FKTC to settle its requests for equitable adjustment. The DCMA had disallowed the majority of those costs. Those contract claims were stayed in 2013 at the request of the DOJ so that they could pursue the FCA case referenced above. Those claims were reinstated in 2016. We tried our contract appeal in September 2017. In November 2018, we received an unfavorable ruling from the ASBCA disallowing all of our costs paid to FKTC. KBR's motion for reconsideration by a senior panel of judges at the ASBCA was denied. KBR filed its brief on appeal in September 2019. We expect oral arguments will take place in 2020. As of September 30, 2019 |
Other Commitments And Contingen
Other Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments and Contingencies | Other Commitments and Contingencies Unaoil Investigation. The DOJ, SEC, and the SFO are conducting investigations of Unaoil, a Monaco based company, in relation to international projects involving several global companies, including KBR, whose interactions with Unaoil are a subject of those investigations. KBR believes it is cooperating with the DOJ, SEC, and the SFO in their investigations, including through the voluntary submission of information and responding to formal document requests. Chadian Employee Class Action. In May 2018, former employees of our former Chadian subsidiary, Subsahara Services, Inc. (SSI), filed a class action suit claiming unpaid damages arising from the ESSO Chad Development Project for Exxon Mobil Corporation (Exxon) dating back to the early 2000’s. Exxon is also named as a defendant in the case. The SSI employees previously filed two class action cases in or around 2005 and 2006 for alleged unpaid overtime and bonuses. The Chadian Labour Court ruled in favor of the SSI employees for unpaid overtime resulting in a settlement of approximately $25 million which was reimbursed by Exxon under its contract with SSI. The second case for alleged unpaid bonuses was ultimately dismissed by the Supreme Court of Chad. The current case claims $122 million in unpaid bonuses characterized as damages rather than employee bonuses to avoid the previous Supreme Court dismissal and a 5-year statute of limitations on wage-related claims. SSI’s initial defense was filed and a hearing was held in December 2018. A merits hearing was held in February 2019. In March 2019, the Labour Court issued a decision awarding the plaintiffs approximately $34 million including a $2 million provisional award. SSI and Exxon 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. The plaintiffs have not yet filed a submission to the Court of Appeals. At this time we do not believe a risk of material loss is probable related to this matter, and therefore we have not accrued any loss provisions. SSI is no longer an existing entity in Chad or the United States. Further, we believe any amounts ultimately paid to the former employees related to this adverse ruling would be reimbursable by Exxon based on the applicable contract. North West Rail Link Project. We participate in an unincorporated joint venture with two partners to provide engineering and design services in relation to the operations, trains and systems of a metro rail project in Sydney, Australia. The project commenced in 2014 and during its execution, encountered delays and disputes resulting in claims and breach notices submitted to the joint venture by the client. Since November 2018, the client has submitted multiple claims alleging breach of contract and breach of duty by the joint venture in its execution of the services claiming losses and damages of up to approximately $300 million Australian dollars. We currently believe the gross of amount of the claims significantly exceeds the client’s entitlement as well as the joint venture’s limits of liability under the contract and that the claims will be covered by project-specific professional indemnity insurance subject to deductibles. The joint venture and its client are discussing potential resolution of the claims although no specific course of action has been agreed. In August 2019, the client advised that it has filed legal proceedings in the Supreme Court of New South Wales to preserve its position with regards to statute of limitations. However, the joint venture has yet to be served. KBR has a 33% |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We enter into lease arrangements primarily for real estate, project equipment, transportation and information technology assets in the normal course of our business operations. Real estate leases accounted for approximately 91% of our lease obligations at September 30, 2019 . An arrangement is determined to be a lease at inception if it conveys the right to control the use of identified property and equipment for a period of time in exchange for consideration. We have elected not to recognize an ROU asset and lease liability for leases with an initial term of 12 months or less. Many of our equipment leases, primarily associated with the performance of projects for U.S. government customers, include one or more renewal option periods, with renewal terms that can extend the lease term in one year increments. The exercise of these lease renewal options is at our sole discretion and is generally dependent on the period of project performance, or extension thereof, determined by our customers. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purpose of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an index or rate. These variable lease payments are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts, are excluded from the ROU asset and lease liability, and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. We exclude these non-lease components in calculating the ROU asset and lease liability for real estate leases and expense them as incurred. For all other types of leases, non-lease components are included in calculating our ROU assets and lease liabilities. The components of lease costs for the nine months ended September 30, 2019 were as follows: September 30, Dollars in millions 2019 Operating lease cost $ 44 Short-term lease cost 83 Total lease cost $ 127 Operating lease cost for the nine months ended September 30, 2019 includes operating lease ROU asset amortization of $27 million and other noncash operating lease costs of $17 million related to the accretion of operating lease liabilities and straight-line lease accounting. Total short-term lease commitments as of September 30, 2019 was approximately $89 million . Additional information related to leases was as follows: September 30, Dollars in millions 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 44 Right-of-use assets obtained in exchange for new operating lease liabilities $ 23 Weighted-average remaining lease term-operating (in years) 8.0 Weighted-average discount rate-operating leases 7.6 % The following is a maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of September 30, 2019 : Year Dollars in millions 2019 2020 2021 2022 2023 Thereafter Total Future payments - operating leases $ 13 $ 56 $ 46 $ 37 $ 33 $ 144 $ 329 Dollars in millions Operating Leases Total future payments $ 329 Less imputed interest (86 ) Present value of future lease payments $ 243 Less current portion of lease obligations (42 ) Noncurrent portion of lease obligations $ 201 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity The following tables summarize our activity in shareholders’ equity: Dollars in millions Total PIC Retained Earnings Treasury Stock AOCL NCI Balance at June 30, 2019 $ 1,794 $ 2,197 $ 1,321 $ (818 ) $ (926 ) 20 Share-based compensation 4 4 — — — — Common stock issued upon exercise of stock options 1 1 — — — — Dividends declared to shareholders (11 ) — (11 ) — — — Repurchases of common stock (1 ) — — (1 ) — — Issuance of ESPP shares 2 — — 2 — — Distributions to noncontrolling interests (2 ) — — — — (2 ) Net income 58 — 56 — — 2 Other comprehensive loss, net of tax (28 ) — — — (28 ) — Balance at September 30, 2019 $ 1,817 $ 2,202 $ 1,366 $ (817 ) $ (954 ) $ 20 Dollars in millions Total PIC Retained Earnings Treasury Stock AOCL NCI Balance at December 31, 2018 $ 1,718 $ 2,190 $ 1,235 $ (817 ) $ (910 ) $ 20 Cumulative adjustment for the adoption of ASC 842 21 — 21 — — — Adjusted balance at January 1, 2019 1,739 2,190 1,256 (817 ) (910 ) 20 Share-based compensation 9 9 — — — — Common stock issued upon exercise of stock options 3 3 — — — — Dividends declared to shareholders (34 ) — (34 ) — — — Repurchases of common stock (4 ) — — (4 ) — — Issuance of ESPP shares 4 — — 4 — — Distributions to noncontrolling interests (6 ) — — — — (6 ) Net income 150 — 144 — — 6 Other comprehensive loss, net of tax (44 ) — — — (44 ) — Balance at September 30, 2019 $ 1,817 $ 2,202 $ 1,366 $ (817 ) $ (954 ) $ 20 Dollars in millions Total PIC Retained Treasury AOCL NCI Balance at June 30, 2018 $ 1,588 $ 2,171 $ 1,156 $ (819 ) $ (934 ) $ 14 Share-based compensation 2 2 — — — — Common stock issued upon exercise of stock options 2 2 — — — — Dividends declared to shareholders (11 ) — (11 ) — — — Repurchases of common stock — — — — — — Issuance of ESPP shares 2 — — 2 — — Other noncontrolling interests activity (1 ) — — — — (1 ) Net income 56 — 54 — — 2 Other comprehensive loss, net of tax (4 ) — — — (4 ) — Balance at September 30, 2018 $ 1,634 $ 2,175 $ 1,199 $ (817 ) $ (938 ) $ 15 Dollars in millions Total PIC Retained Treasury AOCL NCI Balance at December 31, 2017 $ 1,197 $ 2,091 $ 854 $ (818 ) $ (922 ) $ (8 ) Cumulative effect of change in accounting policy, net of tax of $6 144 — 144 — — — Adjusted balance at January 1, 2018 1,341 2,091 998 (818 ) (922 ) (8 ) Consolidation and acquisition of noncontrolling interests in Aspire entities 74 74 — — — — Share-based compensation 8 8 — — — — Common stock issued upon exercise of stock options 2 2 — — — — Dividends declared to shareholders (33 ) — (33 ) — — — Repurchases of common stock (3 ) — — (3 ) — — Issuance of ESPP shares 4 — — 4 — — Other noncontrolling interests activity — — — — — — Net income 257 — 234 — — 23 Other comprehensive loss, net of tax (16 ) — — — (16 ) — Balance at September 30, 2018 $ 1,634 $ 2,175 $ 1,199 $ (817 ) $ (938 ) $ 15 AOCL, net of tax September 30, Dollars in millions 2019 2018 Accumulated foreign currency translation adjustments, net of tax of $1 and $1 $ (352 ) $ (288 ) Pension and post-retirement benefits, net of tax of $210 and $224 (581 ) (642 ) Fair value of derivatives, net of tax of $6 and $0 (21 ) (8 ) Total AOCL $ (954 ) $ (938 ) 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, 2018 $ (304 ) $ (592 ) $ (14 ) $ (910 ) Other comprehensive income adjustments before reclassifications (48 ) — (17 ) (65 ) Amounts reclassified from AOCL — 11 10 21 Net other comprehensive income (loss) (48 ) 11 (7 ) (44 ) Balance at September 30, 2019 $ (352 ) $ (581 ) $ (21 ) $ (954 ) Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2017 $ (259 ) $ (660 ) $ (3 ) $ (922 ) Other comprehensive income adjustments before reclassifications (34 ) — (8 ) (42 ) Amounts reclassified from AOCL 5 18 3 26 Net other comprehensive income (loss) (29 ) 18 (5 ) (16 ) Balance at September 30, 2018 $ (288 ) $ (642 ) $ (8 ) $ (938 ) Reclassifications out of AOCL, net of tax, by component Nine Months Ended September 30, Dollars in millions 2019 2018 Affected line item on the Condensed Consolidated Statements of Operations Accumulated foreign currency adjustments Reclassification of foreign currency adjustments $ — $ (5 ) Gain on consolidation of Aspire entities Tax benefit — — Provision for income taxes Net accumulated foreign currency $ — $ (5 ) Net of tax Accumulated pension liability adjustments Amortization of actuarial loss (a) $ (13 ) $ (21 ) See (a) below Tax benefit 2 3 Provision for income taxes Net pension and post-retirement benefits $ (11 ) $ (18 ) Net of tax Changes in fair value for derivatives Foreign currency hedge and interest rate swap settlements $ (10 ) $ (3 ) Other non-operation income (expense) Tax benefit — — Provision for income taxes Net changes in fair value of derivatives $ (10 ) $ (3 ) Net of tax (a) This item is included in the computation of net periodic pension cost. See Note 11 to our condensed consolidated financial statements for further discussion. As a result of the Tax Cuts and Jobs Act of 2017, certain income tax effects related to items in AOCL have been stranded in AOCL, and we did not elect to reclassify these stranded tax effects to retained earnings. The tax effects remaining in AOCL are released only when all related units of account are liquidated, sold or extinguished. |
Share Repurchases
Share Repurchases | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Share Repurchases | Share Repurchases 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 Nine Months Ended September 30, 2019 September 30, 2019 Number of Shares Average Price per Share Dollars in Millions Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 16,534 $ 25.62 1 190,402 $ 20.47 $ 4 Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Number of Shares Average Price per Share Dollars in Millions Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 924 $ 19.37 — 171,530 $ 15.71 $ 3 |
Income per Share
Income per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Income per Share | Income per Share Basic income per share is based upon the weighted average number of common shares outstanding during the period. Dilutive income per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the treasury stock method. A reconciliation of the number of shares used for the basic and diluted income per share calculations is as follows: Three Months Ended September 30, Nine Months Ended September 30, Shares in millions 2019 2018 2019 2018 Basic weighted average common shares outstanding 141 141 141 140 Stock options and restricted shares 1 — — 1 Diluted weighted average common shares outstanding 142 141 141 141 For purposes of applying the two-class method in computing income per share, there were $0.4 million and $1.1 million net earnings allocated to participating securities, or a negligible amount per share and $0.01 per share, for the three and nine months ended September 30, 2019 , respectively. Net earnings allocated to participating securities for the three and nine months ended September 30, 2018 were $0.4 million and $1.5 million , or a negligible amount per share and $0.01 per share, respectively. The diluted income per share calculation did not include 1.0 million and 1.3 million antidilutive weighted average shares for the three and nine months ended September 30, 2019 , respectively. The diluted income per share calculation did not include 1.4 million and 1.6 million antidilutive weighted average shares for the three and nine months ended September 30, 2018 , respectively. |
Financial Instruments and Risk
Financial Instruments and Risk Management | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Risk Management | Financial Instruments and Risk Management 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 September 30, 2019 , the gross notional value of our foreign currency exchange forwards and option contracts used to hedge balance sheet exposures was $59 million , all of which had durations of 21 days or less. We also had approximately $4 million (gross notional value) of cash flow hedges which had durations of 10 months or less. The cash flow hedges are primarily related to the British Pound. The fair value of our balance sheet and cash flow hedges included in "Other current assets" and "Other current liabilities" on our condensed consolidated balance sheets was immaterial at September 30, 2019 , and December 31, 2018 . The fair values of these derivatives are considered Level 2 under ASC 820, Fair Value Measurement, as they are based on quoted prices directly observable in active markets. The following table summarizes the recognized changes in fair value of our balance sheet hedges offset by remeasurement of balance sheet positions. These amounts are recognized in our condensed consolidated statements of operations for the periods presented. The net of our changes in fair value of hedges and the remeasurement of our assets and liabilities is included in "Other non-operating income (expense)" on our condensed consolidated statements of operations. Three Months Ended Nine Months Ended September 30, September 30, Gains (losses) dollars in millions 2019 2018 2019 2018 Balance Sheet Hedges - Fair Value $ — $ (1 ) $ — $ — Balance Sheet Position - Remeasurement 3 (1 ) 8 (7 ) Net $ 3 $ (2 ) $ 8 $ (7 ) Interest rate risk. The Company uses interest rate swaps to reduce interest rate risk and to manage net interest expense. On October 10, 2018 we entered into interest rate swap agreements with a notional value of $500 million to manage the interest rate exposure on our variable rate loans. By entering into swap agreements, the Company converted the LIBOR rate based liability into a fixed rate liability for a four year period. Under the swap agreements, the Company receives one month LIBOR rate and pays monthly a fixed rate of 3.055% for the term of the swaps. The fair value of the interest rate swaps at September 30, 2019 , was $25 million of which $7 million is included in "Other current liabilities" and $18 million is included "Other liabilities". The unrealized net losses on these interest rate swaps was $25 million and included in "AOCL" as of September 30, 2019 . The fair value of the interest rate swaps at December 31, 2018 was $12 million of which $3 million is included in "Other current liabilities" and $9 million is included in "Other liabilities". The unrealized net losses on these interest rate swaps was $12 million and included in "AOCL" as of December 31, 2018 . |
Impact on Previously Issued Fin
Impact on Previously Issued Financial Statements for the Correction of an Error | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact on Previously Issued Financial Statements for the Correction of an Error | Impact on Previously Issued Financial Statements for the Correction of an Error During the second quarter ended June 30, 2019, we identified and corrected immaterial errors affecting previously issued financial statements related to the historical recognition of equity earnings associated with our interest in an unconsolidated joint venture in our ES business segment. These errors were primarily due to the impact of improperly calculated gains and losses on foreign currency transactions from 2013 through the first quarter of 2019. As of March 31, 2019, the cumulative error for all periods previously reported was an overstatement of net income of approximately $23 million impacting “Equity in and advances to unconsolidated affiliates” in our consolidated balance sheets and “Equity in earnings of unconsolidated affiliates” in our consolidated statements of operations. The errors had no impact on our previously reported cash flows. We assessed the materiality, both quantitatively and qualitatively, in accordance with the SEC’s SAB No. 99 and SAB No. 108, and concluded these errors were not material to any of our previously issued quarterly or annual financial statements. In order to correctly present the errors noted above, previously issued financials statements have been revised and are presented as “As Corrected” in the tables below. The effect of the above corrections on the consolidated statement of operations for three and nine months ended September 30, 2018 are as follow: Three Months Ended September 30, 2018 Revised Consolidated Statement of Operations Amounts: As Previously Reported Adjustments As Corrected Equity in earnings of unconsolidated affiliates $ 21 $ (4 ) $ 17 Operating income $ 103 $ (4 ) $ 99 Income before income taxes and noncontrolling interests $ 82 $ (4 ) $ 78 Net income $ 60 $ (4 ) $ 56 Net income attributable to KBR $ 58 $ (4 ) $ 54 Net income attributable to KBR per share: Basic $ 0.41 $ (0.03 ) $ 0.38 Diluted $ 0.41 $ (0.03 ) $ 0.38 Other Comprehensive Income (loss), net of tax Foreign currency translation adjustments $ (9 ) $ — $ (9 ) Change in fair value of derivatives $ (1 ) $ 1 $ — Other comprehensive income (loss), net of tax $ (5 ) $ 1 $ (4 ) Comprehensive income $ 55 $ (3 ) $ 52 Comprehensive income attributable to KBR $ 53 $ (3 ) $ 50 Nine Months Ended September 30, 2018 Revised Consolidated Statement of Operations Amounts: As Previously Reported Adjustments As Corrected Equity in earnings of unconsolidated affiliates $ 54 $ (4 ) $ 50 Operating income $ 382 $ (4 ) $ 378 Income before income taxes and noncontrolling interests $ 335 $ (4 ) $ 331 Net income $ 261 $ (4 ) $ 257 Net income attributable to KBR $ 238 $ (4 ) $ 234 Net income attributable to KBR per share: Basic $ 1.68 $ (0.02 ) $ 1.66 Diluted $ 1.68 $ (0.02 ) $ 1.66 Other Comprehensive Income (loss), net of tax Foreign currency translation adjustments $ (32 ) $ 3 $ (29 ) Change in fair value of derivatives $ (5 ) $ — $ (5 ) Other comprehensive income (loss), net of tax $ (19 ) $ 3 $ (16 ) Comprehensive income $ 242 $ (1 ) $ 241 Comprehensive income attributable to KBR $ 219 $ (1 ) $ 218 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New accounting pronouncements requiring implementation in future periods are discussed below. In November 2018, the FASB issued ASU No. 2018-18, Clarifying the Interaction Between Topic 808 and Topic 606 which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. ASU No. 2018-18 is effective for interim and annual reporting periods beginning after December 15, 2019. We do not expect the adoption of ASU No. 2018-18 to have a material impact on our financial position, results of operations or cash flows. In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities. This ASU amends the guidance for determining whether a decision-making fee is a variable interest. ASU No. 2018-17 is effective for interim and annual reporting periods beginning after December 15, 2019. We do not expect the adoption of ASU No. 2018-17 to have a material impact on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU requires customers in a hosting arrangement that is a service contract to capitalize certain implementation costs as if the arrangement was an internal-use software project. ASU No. 2018-15 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We do not expect the adoption of ASU No. 2018-15 to have a material impact on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU amends ASC 715 to add, remove and clarify certain disclosure requirements related to defined benefit pension and other postretirement plans. ASU No. 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We do not expect the adoption of ASU No. 2018-14 to have any impact on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This ASU amends ASC 820 to add, remove and modify certain disclosure requirements for fair value measurements. For example, public companies will now be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU No. 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We do not expect the adoption of ASU No. 2018-13 to have any impact on our financial position, results of operations or cash flows. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted, for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect adoption of this ASU to be material to our ongoing financial reporting or on known trends, demands, uncertainties and events in our business. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable supportable forecast and is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods after December 15, 2018, including interim periods within those annual periods. We are currently in the process of assessing the impact of this ASU on our financial statements. We have not yet determined the effect of the standard on our ongoing financial reporting or the future impact of adoption on known trends, demands, uncertainties and events in our business. |
Description of Company And Si_2
Description of Company And Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation Our condensed consolidated financial statements include the accounts of KBR and our wholly owned and majority-owned subsidiaries and VIEs of which we are the primary beneficiary. We account for investments over which we have significant influence but not a controlling financial interest using the equity method of accounting. See Note 10 to our condensed consolidated financial statements for further discussion on our equity investments and VIEs. The cost method is used when we do not have the ability to exert significant influence. All material intercompany transactions are eliminated in consolidation. |
Reclassifications | Reclassifications |
Impact of Adoption of New Accounting Standards | Effective January 1, 2019, we adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedge Activities, using the modified retrospective approach. This ASU is intended to improve and simplify accounting rules related to hedge accounting. The adoption of this ASU did not have a material impact to our financial statements. Effective January 1, 2019, we adopted ASU No. 2018-16, Inclusion of the Secured Overnight Financing Rate Overnight Index Swap Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. As a result, entities may designate changes in this rate as the hedged risk in hedges of interest rate risk for fixed-rate financial instruments. The adoption of ASU 2018-16 did not have any impact on our financial position, results of operations or cash flows. Effective January 1, 2019, we adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). Under the new standard, we did not elect to reclassify the income tax effects stranded in AOCL to retained earnings as a result of the enactment of comprehensive tax legislation, commonly referred to as the Tax Cuts and Jobs Act of 2017. Therefore, the adoption of this ASU had no impact on financial statements. In August 2018, the SEC adopted the final rules under SEC Release No. 33-10532, Disclosure Update and Simplification. The final rules amend the interim financial statement requirements to require a reconciliation of changes in stockholders’ equity in the notes or as a separate statement. The analysis should reconcile the beginning and ending balances of each caption in stockholders’ equity for each period in which an income statement is presented. The final rules were effective on November 5, 2018. See Note 17 for the reconciliation of shareholders’ equity. Other Liabilities "Other liabilities" on our condensed consolidated balance sheet as of December 31, 2018 included deferred rent primarily related to real-estate leases as well as the unamortized portion of a deferred gain related to a 2012 sale-leaseback real-estate transaction totaling $92 million . See above under " Impact of Adoption of New Accounting Standards " for further discussion. Impact of Adoption of New Accounting Standards Effective January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842) and related ASUs using the modified retrospective transition approach. The modified retrospective transition approach provides for an “effective date” method for recording leases that existed or were entered into on or after January 1, 2019, without restating prior-period information. Our unconsolidated joint ventures anticipate adopting the new lease standard effective January 1, 2020. ASC Topic 842 provided several optional practical expedients for use in transition. We elected to use the package of practical expedients which allowed us to not reassess our previous conclusions about lease identification, lease classification and the accounting treatment for initial direct costs. We did not elect the practical expedient pertaining to the use of hindsight. The most significant effects of the new standard on our consolidated financial statements are the recognition of new operating lease right-of-use ("ROU") assets and operating lease liabilities on our consolidated balance sheet for operating leases as well as significant new disclosures about our leasing activities as further discussed in Note 16 . On January 1, 2019, we recorded “Operating lease liabilities” of approximately $253 million based on the present value of the remaining lease payments over the lease term. Additionally, we reclassified current and noncurrent deferred rent of $68 million associated with straight-line accounting and tenant incentives related to existing real estate leases against the initial "Operating lease right-of-use assets" as of January 1, 2019. The adoption of the new standard did not have a material impact on our results of operations or cash flows. As a result of the adoption, we recorded a cumulative-effect adjustment to retained earnings of $21 million , net of deferred taxes of $7 million , representing the unamortized portion of a deferred gain previously recorded in conjunction with the 2012 sale and leaseback of the office building in Houston, Texas where our corporate headquarters is located. We concluded the transaction resulted in the transfer of control of the office building to the buyer-lessor at market terms and therefore would have qualified as a sale under ASC Topic 842 with gain recognition in the period in which the sale was recognized. |
Description of Company And Si_3
Description of Company And Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of financial statement line items affected by business reorganization | Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Dollars in millions As Reported As Previously Reported As Reported As Previously Reported Statement of Operations Cost of revenues $ (1,129 ) $ (1,156 ) $ (3,156 ) $ (3,250 ) Selling, general and administrative expenses (64 ) (37 ) (207 ) (113 ) |
Schedule of impact of new accounting pronouncements | We recognized the cumulative effect of initially applying ASC Topic 842 as an adjustment to our assets and liabilities in our consolidated balance sheet as of January 1, 2019, as follows: Balance at Adjustments Due to Balance at Dollars in millions December 31, 2018 ASC 842 January 1, 2019 Assets Operating lease right-of-use asset $ — $ 185 $ 185 Other current assets 108 (1 ) 107 Deferred income taxes 222 (7 ) 215 Liabilities Operating lease liabilities — 40 40 Other current liabilities 179 (5 ) 174 Operating lease liabilities (noncurrent) — 213 213 Other liabilities (noncurrent) 202 (92 ) 110 Shareholders' equity Retained Earnings 1,235 21 1,256 |
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 September 30, 2019 , and December 31, 2018 , are presented below: September 30, December 31, Dollars in millions 2019 2018 Current maturities of long-term debt $ 27 $ 22 Retainage payable 37 33 Income taxes payable 28 30 Value-added tax payable 47 33 Dividend payable 11 11 Other miscellaneous liabilities 41 50 Total other current liabilities $ 191 $ 179 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of operations by reportable segment | The following table presents revenues, gross profit (loss), equity in earnings of unconsolidated affiliates, selling, general and administrative expenses, acquisition and integration related costs, gain on disposition of assets, gain of consolidation of Aspire entities, and operating income (loss) by reporting segment. Operations by Reportable Segment Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Dollars in millions Revenues: Government Solutions $ 978 $ 928 $ 2,986 $ 2,473 Technology Solutions 96 81 281 215 Energy Solutions 351 268 919 894 Subtotal 1,425 1,277 4,186 3,582 Non-strategic Business — 1 1 1 Total revenues $ 1,425 $ 1,278 $ 4,187 $ 3,583 Gross profit (loss): Government Solutions $ 110 $ 98 $ 312 $ 253 Technology Solutions 30 29 83 77 Energy Solutions 22 27 80 102 Subtotal 162 154 475 432 Non-strategic Business 7 (5 ) 7 (5 ) Total gross profit $ 169 $ 149 $ 482 $ 427 Equity in earnings of unconsolidated affiliates: Government Solutions $ 7 $ 8 $ 21 $ 22 Energy Solutions 2 7 16 32 Subtotal 9 15 37 54 Non-strategic Business — 2 (13 ) (4 ) Total equity in earnings of unconsolidated affiliates $ 9 $ 17 $ 24 $ 50 Selling, general and administrative expenses: Government Solutions $ (28 ) $ (30 ) $ (93 ) $ (79 ) Technology Solutions (7 ) (6 ) (21 ) (18 ) Energy Solutions (15 ) (10 ) (47 ) (50 ) Other (25 ) (18 ) (80 ) (60 ) Subtotal (75 ) (64 ) (241 ) (207 ) Non-strategic Business — — — — Total selling, general and administrative expenses $ (75 ) $ (64 ) $ (241 ) $ (207 ) Acquisition and integration related costs: Government Solutions $ — $ (1 ) $ (2 ) $ (5 ) Technology Solutions — — — — Energy Solutions — — — — Other — — — — Subtotal — (1 ) (2 ) (5 ) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Dollars in millions Non-strategic Business — — — — Total acquisition and integration related costs $ — $ (1 ) $ (2 ) $ (5 ) Gain on disposition of assets: Government Solutions $ — $ — $ 11 $ — Technology Solutions — — — — Energy Solutions — — — — Other 1 — — — Subtotal 1 — 11 — Non-strategic Business — — — — Total gain on disposition of assets $ 1 $ — $ 11 $ — Gain on consolidation of Aspire entities: Government Solutions $ — $ (2 ) $ — $ 118 Technology Solutions — — — — Energy Solutions — — — — Other — — — (5 ) Subtotal — (2 ) — 113 Non-strategic Business — — — — Total gain on consolidation of Aspire entities $ — $ (2 ) $ — $ 113 Segment operating income (loss): Government Solutions $ 89 $ 73 $ 249 $ 309 Technology Solutions 23 23 62 59 Energy Solutions 9 23 49 84 Other (24 ) (17 ) (80 ) (65 ) Subtotal 97 102 280 387 Non-strategic Business 7 (3 ) (6 ) (9 ) Total segment operating income (loss) $ 104 $ 99 $ 274 $ 378 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Revenue by Service/Product line and reportable segment was as follows: Three Months Ended Nine Months Ended September 30, September 30, Dollars in millions 2019 2018 2019 2018 By Service / Product Types Government Solutions Space and Mission Solutions $ 228 $ 206 $ 650 $ 453 Engineering 293 292 887 846 Logistics 457 430 1,449 1,174 Total Government Solutions 978 928 2,986 2,473 Technology Solutions 96 81 281 215 Energy Solutions EPC Delivery Projects 113 86 267 344 Services and Consulting 238 182 652 550 Total Energy Solutions 351 268 919 894 Non-strategic business — 1 1 1 Total net revenue $ 1,425 $ 1,278 $ 4,187 $ 3,583 Revenue by geographic destination was as follows: Three Months Ended September 30, 2019 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 561 $ 19 $ 146 $ — $ 726 Middle East 159 3 61 — 223 Europe 205 17 50 — 272 Australia 23 1 50 — 74 Canada 1 1 12 — 14 Africa 17 7 22 — 46 Asia — 48 2 — 50 Other countries 12 — 8 — 20 Total net revenue $ 978 $ 96 $ 351 $ — $ 1,425 Three Months Ended September 30, 2018 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 484 $ 2 $ 113 $ 1 $ 600 Middle East 200 1 36 — 237 Europe 197 13 39 — 249 Australia 16 — 54 — 70 Canada — — 2 — 2 Africa 20 8 10 — 38 Asia — 54 5 — 59 Other countries 11 3 9 — 23 Total net revenue $ 928 $ 81 $ 268 $ 1 $ 1,278 Nine Months Ended September 30, 2019 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 1,635 $ 29 $ 357 $ 1 $ 2,022 Middle East 598 11 163 — 772 Europe 586 51 138 — 775 Australia 67 1 149 — 217 Canada 1 1 19 — 21 Africa 57 25 59 — 141 Asia — 161 5 — 166 Other countries 42 2 29 — 73 Total net revenue $ 2,986 $ 281 $ 919 $ 1 $ 4,187 Nine Months Ended September 30, 2018 Total by Countries/Regions Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total United States $ 1,229 $ 12 $ 364 $ 1 $ 1,606 Middle East 548 12 97 — 657 Europe 561 34 137 — 732 Australia 44 1 221 — 266 Canada — 2 17 — 19 Africa 58 20 16 — 94 Asia — 129 11 — 140 Other countries 33 5 31 — 69 Total net revenue $ 2,473 $ 215 $ 894 $ 1 $ 3,583 Many of our contracts contain both fixed price and cost reimbursable components. We define contract type based on the component that represents the majority of the contract. Revenue by contract type was as follows: Three Months Ended September 30, 2019 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 286 $ 93 $ 83 $ — $ 462 Cost Reimbursable 692 3 268 — 963 Total net revenue $ 978 $ 96 $ 351 $ — $ 1,425 Three Months Ended September 30, 2018 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 268 $ 80 $ 38 $ 1 $ 387 Cost Reimbursable 660 1 230 — 891 Total net revenue $ 928 $ 81 $ 268 $ 1 $ 1,278 Nine Months Ended September 30, 2019 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 842 $ 276 $ 171 $ 1 $ 1,290 Cost Reimbursable 2,144 5 748 — 2,897 Total net revenue $ 2,986 $ 281 $ 919 $ 1 $ 4,187 Nine Months Ended September 30, 2018 Dollars in millions Government Solutions Technology Solutions Energy Solutions Non-strategic Business Total Fixed Price $ 769 $ 207 $ 142 $ 1 $ 1,119 Cost Reimbursable 1,704 8 752 — 2,464 Total net revenue $ 2,473 $ 215 $ 894 $ 1 $ 3,583 |
Acquisitions, Dispositions an_2
Acquisitions, Dispositions and Other Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of pro forma information | The following supplemental pro forma condensed consolidated results of operations assume that SGT and the Aspire Defence subcontracting entities had been acquired as of January 1, 2017. The supplemental pro forma information was prepared based on the historical financial information of SGT and the Aspire Defence subcontracting entities and has been adjusted to give effect to pro forma adjustments that are both directly attributable to the transaction and factually supportable. Pro forma adjustments were primarily related to the amortization of intangibles, interest on borrowings related to the acquisitions, and the reclassification of the gain on consolidation of the Aspire entities to January 1, 2017. 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 acquisitions occurred on January 1, 2017, nor is it indication of future results of operations. Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 Dollars in millions Revenue $ 1,278 $ 3,730 Net income attributable to KBR 58 144 Diluted earnings per share $ 0.41 $ 1.01 |
Cash and Equivalents (Tables)
Cash and Equivalents (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Components of our cash and equivalents balance | The components of our cash and equivalents balance are as follows: September 30, 2019 Dollars in millions International (a) Domestic (b) Total Operating cash and equivalents $ 120 $ 133 $ 253 Short-term investments (c) 15 89 104 Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 322 2 324 Total $ 457 $ 224 $ 681 December 31, 2018 Dollars in millions International (a) Domestic (b) Total Operating cash and equivalents $ 123 $ 104 $ 227 Short-term investments (c) 87 107 194 Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities 315 3 318 Total $ 525 $ 214 $ 739 (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. (c) Includes time deposits, money market funds, and other highly liquid short-term investments. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Components of our accounts receivable, net of allowance for doubtful accounts balance | The components of our accounts receivable, net of allowance for doubtful accounts balance, are as follows: September 30, 2019 Dollars in millions Unbilled Trade & Other Total Government Solutions $ 302 $ 304 $ 606 Technology Solutions 4 61 65 Energy Solutions 118 247 365 Subtotal 424 612 1,036 Non-strategic Business — 2 2 Total $ 424 $ 614 $ 1,038 December 31, 2018 Dollars in millions Unbilled Trade & Other Total Government Solutions $ 266 $ 334 $ 600 Technology Solutions 11 62 73 Energy Solutions 69 185 254 Subtotal 346 581 927 Non-strategic Business — — — Total $ 346 $ 581 $ 927 |
Contract Assets and Contract _2
Contract Assets and Contract Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of contact assets and liabilities | Our contract assets by business segment are as follows: September 30, December 31, Dollars in millions 2019 2018 Government Solutions $ 121 $ 123 Technology Solutions 49 19 Energy Solutions 65 43 Subtotal 235 185 Non-strategic Business — — Total $ 235 $ 185 Our contract liabilities by business segment are as follows: September 30, December 31, Dollars in millions 2019 2018 Government Solutions $ 296 $ 261 Technology Solutions 82 98 Energy Solutions 156 100 Subtotal 534 459 Non-strategic Business 2 4 Total $ 536 $ 463 |
Unapproved Change Orders, and_2
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 2019 2018 Amounts included in project estimates-at-completion at January 1, $ 973 $ 924 (Decrease) increase, including foreign currency effect (21 ) 39 Approved change orders, net of foreign currency effect (7 ) (4 ) Amounts included in project estimates-at-completion at September 30, $ 945 $ 959 Amounts recognized over time based on progress at September 30, $ 938 $ 922 |
Equity Method Investments and_2
Equity Method Investments and Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity in earnings of unconsolidated affiliates | The following table presents a rollforward of our equity in and advances to unconsolidated affiliates: Nine Months Ended September 30, Year Ended December 31, 2019 2018 Dollars in millions Beginning balance at January 1, $ 724 $ 365 Cumulative effect of change in accounting policy (a) — 87 Adjusted balance at January 1, 724 452 Equity in earnings of unconsolidated affiliates 24 79 Distributions of earnings of unconsolidated affiliates (64 ) (75 ) Payments from (advances to) unconsolidated affiliates, net (9 ) (12 ) Investments (b) 146 344 Foreign currency translation adjustments (28 ) (28 ) Other — (36 ) Ending balance $ 793 $ 724 (a) Deferred construction income in the amount of $87 million previously recorded in "Equity in and advance to unconsolidated affiliates" was reversed and included in the cumulative effect adjustment as a result of the adoption of ASC 606 by the Aspire Defence project joint ventures. (b) For the nine months ended September 30, 2019 , investments include a $141 million investment to fund JKC. In 2018, the total amount of investments were made to fund JKC. |
Consolidated summarized financial information | The following summarizes the total assets and total liabilities as reflected in our condensed consolidated balance sheets related to our unconsolidated VIEs in which we have a significant variable interest but are not the primary beneficiary. September 30, 2019 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 15 $ 9 Aspire Defence Limited $ 58 $ 5 JKC joint venture (Ichthys LNG project) $ 534 $ 31 U.K. Road project joint ventures $ 37 $ 9 Middle East Petroleum Corporation (EBIC Ammonia project) $ 47 $ 1 December 31, 2018 Dollars in millions Total Assets Total Liabilities Affinity joint venture (U.K. MFTS project) $ 16 $ 8 Aspire Defence Limited $ 68 $ 5 JKC joint venture (Ichthys LNG project) $ 427 $ 32 U.K. Road project joint ventures $ 37 $ 10 Middle East Petroleum Corporation (EBIC Ammonia project) $ 51 $ 1 |
Schedule of services provided to unconsolidated JV's | Amounts included in our condensed consolidated balance sheets related to services we provided to our unconsolidated joint ventures as of September 30, 2019 , and December 31, 2018 are as follows: September 30, December 31, Dollars in millions 2019 2018 Accounts receivable, net of allowance for doubtful accounts $ 33 $ 43 Contract assets (a) $ 5 $ 1 Contract liabilities (a) $ 37 $ 38 Accounts payable $ — $ 2 (a) Reflects contract assets and contract liabilities primarily related to joint ventures within our ES business segment. |
Summary of the significant VIEs | The following is a summary of the significant VIEs where we are the primary beneficiary: Dollars in millions September 30, 2019 Total Assets Total Liabilities KJV-G joint venture (Gorgon LNG project) $ 12 $ 17 Fasttrax Limited (Fasttrax project) $ 46 $ 27 Aspire Defence subcontracting entities (Aspire Defence project) $ 536 $ 306 Dollars in millions December 31, 2018 Total Assets Total Liabilities KJV-G joint venture (Gorgon LNG project) $ 13 $ 19 Fasttrax Limited (Fasttrax project) $ 49 $ 34 Aspire Defence subcontracting entities (Aspire Defence project) $ 589 $ 324 |
Pension Plans (Tables)
Pension Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of net benefit costs | The components of net periodic benefit cost related to pension benefits for the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended September 30, 2019 2018 Dollars in millions United States Int’l United States Int’l Components of net periodic benefit cost Service cost $ — $ — $ — $ 1 Interest cost 1 12 1 12 Expected return on plan assets (1 ) (18 ) (1 ) (20 ) Amortization of prior service cost — — — — Recognized actuarial loss — 4 — 6 Net periodic benefit cost $ — $ (2 ) $ — $ (1 ) Nine Months Ended September 30, 2019 2018 Dollars in millions United States Int’l United States Int’l Components of net periodic benefit cost Service cost $ — $ — $ — $ 1 Interest cost 2 37 2 38 Expected return on plan assets (2 ) (57 ) (3 ) (61 ) Amortization of prior service cost — 1 — — Recognized actuarial loss 1 12 1 20 Net periodic benefit cost $ 1 $ (7 ) $ — $ (2 ) |
Debt And Other Credit Facilit_2
Debt And Other Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt details | The details of the applicable margins and commitment fees are based on the Company's consolidated leverage ratio as follows: Revolver and Term Loan A Consolidated Leverage Ratio LIBOR Margin Base Rate Margin Performance Letter of Credit Fee Commitment Fee Greater than or equal to 4.00 to 1.00 3.25 % 2.25 % 1.95 % 0.450 % Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 3.00 % 2.00 % 1.80 % 0.400 % Less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 2.75 % 1.75 % 1.65 % 0.375 % Less than 2.00 to 1.00 2.50 % 1.50 % 1.50 % 0.350 % Our outstanding debt consisted of the following at the dates indicated: Dollars in millions September 30, 2019 December 31, 2018 Term Loan A $ 181 $ 190 Term Loan B 758 796 Convertible Notes 350 350 Unamortized debt issuance costs - Term Loan A (5 ) (5 ) Unamortized debt issuance costs and discount - Term Loan B (16 ) (18 ) Unamortized debt issuance costs and discount - Convertible Notes (56 ) (65 ) Total long-term debt 1,212 1,248 Less: current portion 27 22 Total long-term debt, net of current portion $ 1,185 $ 1,226 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Leasing Activity | The components of lease costs for the nine months ended September 30, 2019 were as follows: September 30, Dollars in millions 2019 Operating lease cost $ 44 Short-term lease cost 83 Total lease cost $ 127 Operating lease cost for the nine months ended September 30, 2019 includes operating lease ROU asset amortization of $27 million and other noncash operating lease costs of $17 million related to the accretion of operating lease liabilities and straight-line lease accounting. Total short-term lease commitments as of September 30, 2019 was approximately $89 million . Additional information related to leases was as follows: September 30, Dollars in millions 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 44 Right-of-use assets obtained in exchange for new operating lease liabilities $ 23 Weighted-average remaining lease term-operating (in years) 8.0 Weighted-average discount rate-operating leases 7.6 % |
Lessee, Operating Lease, Liability, Maturity | The following is a maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of September 30, 2019 : Year Dollars in millions 2019 2020 2021 2022 2023 Thereafter Total Future payments - operating leases $ 13 $ 56 $ 46 $ 37 $ 33 $ 144 $ 329 Dollars in millions Operating Leases Total future payments $ 329 Less imputed interest (86 ) Present value of future lease payments $ 243 Less current portion of lease obligations (42 ) Noncurrent portion of lease obligations $ 201 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' equity activities | The following tables summarize our activity in shareholders’ equity: Dollars in millions Total PIC Retained Earnings Treasury Stock AOCL NCI Balance at June 30, 2019 $ 1,794 $ 2,197 $ 1,321 $ (818 ) $ (926 ) 20 Share-based compensation 4 4 — — — — Common stock issued upon exercise of stock options 1 1 — — — — Dividends declared to shareholders (11 ) — (11 ) — — — Repurchases of common stock (1 ) — — (1 ) — — Issuance of ESPP shares 2 — — 2 — — Distributions to noncontrolling interests (2 ) — — — — (2 ) Net income 58 — 56 — — 2 Other comprehensive loss, net of tax (28 ) — — — (28 ) — Balance at September 30, 2019 $ 1,817 $ 2,202 $ 1,366 $ (817 ) $ (954 ) $ 20 Dollars in millions Total PIC Retained Earnings Treasury Stock AOCL NCI Balance at December 31, 2018 $ 1,718 $ 2,190 $ 1,235 $ (817 ) $ (910 ) $ 20 Cumulative adjustment for the adoption of ASC 842 21 — 21 — — — Adjusted balance at January 1, 2019 1,739 2,190 1,256 (817 ) (910 ) 20 Share-based compensation 9 9 — — — — Common stock issued upon exercise of stock options 3 3 — — — — Dividends declared to shareholders (34 ) — (34 ) — — — Repurchases of common stock (4 ) — — (4 ) — — Issuance of ESPP shares 4 — — 4 — — Distributions to noncontrolling interests (6 ) — — — — (6 ) Net income 150 — 144 — — 6 Other comprehensive loss, net of tax (44 ) — — — (44 ) — Balance at September 30, 2019 $ 1,817 $ 2,202 $ 1,366 $ (817 ) $ (954 ) $ 20 Dollars in millions Total PIC Retained Treasury AOCL NCI Balance at June 30, 2018 $ 1,588 $ 2,171 $ 1,156 $ (819 ) $ (934 ) $ 14 Share-based compensation 2 2 — — — — Common stock issued upon exercise of stock options 2 2 — — — — Dividends declared to shareholders (11 ) — (11 ) — — — Repurchases of common stock — — — — — — Issuance of ESPP shares 2 — — 2 — — Other noncontrolling interests activity (1 ) — — — — (1 ) Net income 56 — 54 — — 2 Other comprehensive loss, net of tax (4 ) — — — (4 ) — Balance at September 30, 2018 $ 1,634 $ 2,175 $ 1,199 $ (817 ) $ (938 ) $ 15 Dollars in millions Total PIC Retained Treasury AOCL NCI Balance at December 31, 2017 $ 1,197 $ 2,091 $ 854 $ (818 ) $ (922 ) $ (8 ) Cumulative effect of change in accounting policy, net of tax of $6 144 — 144 — — — Adjusted balance at January 1, 2018 1,341 2,091 998 (818 ) (922 ) (8 ) Consolidation and acquisition of noncontrolling interests in Aspire entities 74 74 — — — — Share-based compensation 8 8 — — — — Common stock issued upon exercise of stock options 2 2 — — — — Dividends declared to shareholders (33 ) — (33 ) — — — Repurchases of common stock (3 ) — — (3 ) — — Issuance of ESPP shares 4 — — 4 — — Other noncontrolling interests activity — — — — — — Net income 257 — 234 — — 23 Other comprehensive loss, net of tax (16 ) — — — (16 ) — Balance at September 30, 2018 $ 1,634 $ 2,175 $ 1,199 $ (817 ) $ (938 ) $ 15 |
Accumulated other comprehensive income (loss) | AOCL, net of tax September 30, Dollars in millions 2019 2018 Accumulated foreign currency translation adjustments, net of tax of $1 and $1 $ (352 ) $ (288 ) Pension and post-retirement benefits, net of tax of $210 and $224 (581 ) (642 ) Fair value of derivatives, net of tax of $6 and $0 (21 ) (8 ) Total AOCL $ (954 ) $ (938 ) 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, 2018 $ (304 ) $ (592 ) $ (14 ) $ (910 ) Other comprehensive income adjustments before reclassifications (48 ) — (17 ) (65 ) Amounts reclassified from AOCL — 11 10 21 Net other comprehensive income (loss) (48 ) 11 (7 ) (44 ) Balance at September 30, 2019 $ (352 ) $ (581 ) $ (21 ) $ (954 ) Dollars in millions Accumulated foreign currency translation adjustments Accumulated pension liability adjustments Changes in fair value of derivatives Total Balance at December 31, 2017 $ (259 ) $ (660 ) $ (3 ) $ (922 ) Other comprehensive income adjustments before reclassifications (34 ) — (8 ) (42 ) Amounts reclassified from AOCL 5 18 3 26 Net other comprehensive income (loss) (29 ) 18 (5 ) (16 ) Balance at September 30, 2018 $ (288 ) $ (642 ) $ (8 ) $ (938 ) |
Reclassification out of accumulated other comprehensive income | Nine Months Ended September 30, Dollars in millions 2019 2018 Affected line item on the Condensed Consolidated Statements of Operations Accumulated foreign currency adjustments Reclassification of foreign currency adjustments $ — $ (5 ) Gain on consolidation of Aspire entities Tax benefit — — Provision for income taxes Net accumulated foreign currency $ — $ (5 ) Net of tax Accumulated pension liability adjustments Amortization of actuarial loss (a) $ (13 ) $ (21 ) See (a) below Tax benefit 2 3 Provision for income taxes Net pension and post-retirement benefits $ (11 ) $ (18 ) Net of tax Changes in fair value for derivatives Foreign currency hedge and interest rate swap settlements $ (10 ) $ (3 ) Other non-operation income (expense) Tax benefit — — Provision for income taxes Net changes in fair value of derivatives $ (10 ) $ (3 ) Net of tax (a) This item is included in the computation of net periodic pension cost. See Note 11 to our condensed consolidated financial statements for further discussion. |
Share Repurchases (Tables)
Share Repurchases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of shares repurchased | The table below presents information on our share repurchases activity under these programs: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Number of Shares Average Price per Share Dollars in Millions Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 16,534 $ 25.62 1 190,402 $ 20.47 $ 4 Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Number of Shares Average Price per Share Dollars in Millions Number of Shares Average Price per Share Dollars in Millions Withheld to cover shares 924 $ 19.37 — 171,530 $ 15.71 $ 3 |
Income Per Share (Tables)
Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, Nine Months Ended September 30, Shares in millions 2019 2018 2019 2018 Basic weighted average common shares outstanding 141 141 141 140 Stock options and restricted shares 1 — — 1 Diluted weighted average common shares outstanding 142 141 141 141 |
Financial Instruments and Ris_2
Financial Instruments and Risk Management (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of derivatives instruments statements of financial performance and financial position, location | The following table summarizes the recognized changes in fair value of our balance sheet hedges offset by remeasurement of balance sheet positions. These amounts are recognized in our condensed consolidated statements of operations for the periods presented. The net of our changes in fair value of hedges and the remeasurement of our assets and liabilities is included in "Other non-operating income (expense)" on our condensed consolidated statements of operations. Three Months Ended Nine Months Ended September 30, September 30, Gains (losses) dollars in millions 2019 2018 2019 2018 Balance Sheet Hedges - Fair Value $ — $ (1 ) $ — $ — Balance Sheet Position - Remeasurement 3 (1 ) 8 (7 ) Net $ 3 $ (2 ) $ 8 $ (7 ) |
Impact on Previously Issued F_2
Impact on Previously Issued Financial Statements for the Correction of an Error (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of error corrections and prior period adjustments | The effect of the above corrections on the consolidated statement of operations for three and nine months ended September 30, 2018 are as follow: Three Months Ended September 30, 2018 Revised Consolidated Statement of Operations Amounts: As Previously Reported Adjustments As Corrected Equity in earnings of unconsolidated affiliates $ 21 $ (4 ) $ 17 Operating income $ 103 $ (4 ) $ 99 Income before income taxes and noncontrolling interests $ 82 $ (4 ) $ 78 Net income $ 60 $ (4 ) $ 56 Net income attributable to KBR $ 58 $ (4 ) $ 54 Net income attributable to KBR per share: Basic $ 0.41 $ (0.03 ) $ 0.38 Diluted $ 0.41 $ (0.03 ) $ 0.38 Other Comprehensive Income (loss), net of tax Foreign currency translation adjustments $ (9 ) $ — $ (9 ) Change in fair value of derivatives $ (1 ) $ 1 $ — Other comprehensive income (loss), net of tax $ (5 ) $ 1 $ (4 ) Comprehensive income $ 55 $ (3 ) $ 52 Comprehensive income attributable to KBR $ 53 $ (3 ) $ 50 Nine Months Ended September 30, 2018 Revised Consolidated Statement of Operations Amounts: As Previously Reported Adjustments As Corrected Equity in earnings of unconsolidated affiliates $ 54 $ (4 ) $ 50 Operating income $ 382 $ (4 ) $ 378 Income before income taxes and noncontrolling interests $ 335 $ (4 ) $ 331 Net income $ 261 $ (4 ) $ 257 Net income attributable to KBR $ 238 $ (4 ) $ 234 Net income attributable to KBR per share: Basic $ 1.68 $ (0.02 ) $ 1.66 Diluted $ 1.68 $ (0.02 ) $ 1.66 Other Comprehensive Income (loss), net of tax Foreign currency translation adjustments $ (32 ) $ 3 $ (29 ) Change in fair value of derivatives $ (5 ) $ — $ (5 ) Other comprehensive income (loss), net of tax $ (19 ) $ 3 $ (16 ) Comprehensive income $ 242 $ (1 ) $ 241 Comprehensive income attributable to KBR $ 219 $ (1 ) $ 218 |
Description of Company And Si_4
Description of Company And Significant Accounting Policies (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2018USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Amount reclassified from cost of revenues to selling, general and administrative expense | $ 27 | $ 94 | ||||
Number of reportable segments | segment | 5 | |||||
Operating lease right-of-use assets | $ 183 | $ 185 | $ 0 | |||
Operating lease, liability | $ 243 | |||||
Deferred rent | 92 | |||||
Cumulative effect of change in accounting policy | 21 | $ 144 | ||||
Deferred income taxes | 215 | 222 | ||||
Accounting Standards Update 2016-02 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Operating lease right-of-use assets | 253 | 185 | ||||
Operating lease, liability | 253 | |||||
Deferred rent | (68) | |||||
Deferred income taxes | $ (7) | |||||
Retained Earnings | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Cumulative effect of change in accounting policy | 21 | $ 144 | ||||
Retained Earnings | Accounting Standards Update 2016-02 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Cumulative effect of change in accounting policy | $ 21 |
Description of Company And Si_5
Description of Company And Significant Accounting Policies (Schedule of Business Reorganization) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of revenues | $ (1,256) | $ (1,129) | $ (3,705) | $ (3,156) |
Selling, general and administrative expenses | (64) | (207) | ||
As Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of revenues | (1,156) | (3,250) | ||
Selling, general and administrative expenses | $ (37) | $ (113) |
Description of Company And Si_6
Description of Company And Significant Accounting Policies (Schedule of Operating and Finance Lease Liability) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Operating lease right-of-use asset | $ 183 | $ 185 | $ 0 |
Other current assets | 107 | 108 | |
Deferred income taxes | 215 | 222 | |
Liabilities | |||
Operating lease liabilities | 42 | 40 | 0 |
Other current liabilities | 191 | 174 | 179 |
Operating lease liabilities (noncurrent) | 201 | 213 | 0 |
Other liabilities (noncurrent) | 122 | 110 | 202 |
Shareholders' equity | |||
Retained earnings | $ 1,366 | 1,256 | 1,235 |
Adjustments due to Topic 842 | |||
Assets | |||
Operating lease right-of-use asset | $ 253 | 185 | |
Other current assets | (1) | ||
Deferred income taxes | (7) | ||
Liabilities | |||
Operating lease liabilities | 40 | ||
Other current liabilities | (5) | ||
Operating lease liabilities (noncurrent) | 213 | ||
Other liabilities (noncurrent) | (92) | ||
Shareholders' equity | |||
Retained earnings | $ 21 |
Description of Company And Si_7
Description of Company And Significant Accounting Policies (Balance Sheet Additional Disclosure) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Current maturities of long-term debt | $ 27 | $ 22 | |
Retainage payable | 37 | 33 | |
Income taxes payable | 28 | 30 | |
Value-added tax payable | 47 | 33 | |
Dividend payable | 11 | 11 | |
Other miscellaneous liabilities | 41 | 50 | |
Total other current liabilities | $ 191 | $ 174 | $ 179 |
Business Segment Information (N
Business Segment Information (Narrative) (Details) contract in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)contractsegment | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)contractsegment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Core business segments, number | 3 | 3 | ||
Non-core business segments, number | 2 | 2 | ||
Number of contracts (more than) | contract | 1 | 1 | ||
MMM Joint Venture | ||||
Segment Reporting Information [Line Items] | ||||
Equity in earnings (loss) of unconsolidated affiliates | $ | $ 0 | $ 2 | $ (13) | $ (4) |
Business Segment Information (S
Business Segment Information (Schedule of Operations by Reportable Segment) (Details) - USD ($) $ in Millions | Jan. 15, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 1,425 | $ 1,278 | $ 4,187 | $ 3,583 | |
Total gross profit | 169 | 149 | 482 | 427 | |
Total equity in earnings of unconsolidated affiliates | 9 | 17 | 24 | 50 | |
Total selling, general and administrative expenses | (75) | (64) | (241) | (207) | |
Total acquisition and integration related costs | 0 | (1) | (2) | (5) | |
Total gain on disposition of assets | 1 | 0 | 11 | 0 | |
Gain on consolidation of Aspire subcontracting entities | $ 113 | 0 | (2) | 0 | 113 |
Total segment operating income (loss) | 104 | 99 | 274 | 378 | |
Subtotal | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,425 | 1,277 | 4,186 | 3,582 | |
Total gross profit | 162 | 154 | 475 | 432 | |
Total equity in earnings of unconsolidated affiliates | 9 | 15 | 37 | 54 | |
Total selling, general and administrative expenses | (75) | (64) | (241) | (207) | |
Total acquisition and integration related costs | 0 | (1) | (2) | (5) | |
Total gain on disposition of assets | 1 | 0 | 11 | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | (2) | 0 | 113 | |
Total segment operating income (loss) | 97 | 102 | 280 | 387 | |
Government Solutions | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 978 | 928 | 2,986 | 2,473 | |
Total gross profit | 110 | 98 | 312 | 253 | |
Total equity in earnings of unconsolidated affiliates | 7 | 8 | 21 | 22 | |
Total selling, general and administrative expenses | (28) | (30) | (93) | (79) | |
Total acquisition and integration related costs | 0 | (1) | (2) | (5) | |
Total gain on disposition of assets | 0 | 0 | 11 | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | (2) | 0 | 118 | |
Total segment operating income (loss) | 89 | 73 | 249 | 309 | |
Technology Solutions | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 96 | 81 | 281 | 215 | |
Total gross profit | 30 | 29 | 83 | 77 | |
Total selling, general and administrative expenses | (7) | (6) | (21) | (18) | |
Total acquisition and integration related costs | 0 | 0 | 0 | 0 | |
Total gain on disposition of assets | 0 | 0 | 0 | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | 0 | 0 | 0 | |
Total segment operating income (loss) | 23 | 23 | 62 | 59 | |
Energy Solutions | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 351 | 268 | 919 | 894 | |
Total gross profit | 22 | 27 | 80 | 102 | |
Total equity in earnings of unconsolidated affiliates | 2 | 7 | 16 | 32 | |
Total selling, general and administrative expenses | (15) | (10) | (47) | (50) | |
Total acquisition and integration related costs | 0 | 0 | 0 | 0 | |
Total gain on disposition of assets | 0 | 0 | 0 | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | 0 | 0 | 0 | |
Total segment operating income (loss) | 9 | 23 | 49 | 84 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Total selling, general and administrative expenses | (25) | (18) | (80) | (60) | |
Total acquisition and integration related costs | 0 | 0 | 0 | 0 | |
Total gain on disposition of assets | 1 | 0 | 0 | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | 0 | 0 | (5) | |
Total segment operating income (loss) | (24) | (17) | (80) | (65) | |
Non-strategic Business | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 1 | 1 | 1 | |
Total gross profit | 7 | (5) | 7 | (5) | |
Total equity in earnings of unconsolidated affiliates | 0 | 2 | (13) | (4) | |
Total selling, general and administrative expenses | 0 | 0 | 0 | 0 | |
Total acquisition and integration related costs | 0 | 0 | 0 | 0 | |
Total gain on disposition of assets | 0 | 0 | 0 | 0 | |
Gain on consolidation of Aspire subcontracting entities | 0 | 0 | 0 | 0 | |
Total segment operating income (loss) | $ 7 | $ (3) | $ (6) | $ (9) |
Revenue (Revenue by Product Lin
Revenue (Revenue by Product Line) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,425 | $ 1,278 | $ 4,187 | $ 3,583 |
Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 978 | 928 | 2,986 | 2,473 |
Government Solutions | Space and Mission Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 228 | 206 | 650 | 453 |
Government Solutions | Engineering | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 293 | 292 | 887 | 846 |
Government Solutions | Logistics | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 457 | 430 | 1,449 | 1,174 |
Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 96 | 81 | 281 | 215 |
Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 351 | 268 | 919 | 894 |
Energy Solutions | EPC Delivery Projects | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 113 | 86 | 267 | 344 |
Energy Solutions | Services and Consulting | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 238 | 182 | 652 | 550 |
Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 1 | $ 1 | $ 1 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenue recognized from performance obligation satisfied in previous period | $ 1 | $ 23 | $ 14 | $ 54 |
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,425 | 1,278 | 4,187 | 3,583 |
Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 978 | 928 | 2,986 | 2,473 |
Government Solutions | Key U.S. Government Customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 745 | 717 | 2,300 | 1,800 |
Government Solutions | Non U.S. Government Customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 233 | $ 211 | $ 670 | $ 627 |
Revenue (Revenue by Contract Ty
Revenue (Revenue by Contract Type) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 1,425 | $ 1,278 | $ 4,187 | $ 3,583 |
Fixed Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 462 | 387 | 1,290 | 1,119 |
Cost Reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 963 | 891 | 2,897 | 2,464 |
Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 978 | 928 | 2,986 | 2,473 |
Government Solutions | Fixed Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 286 | 268 | 842 | 769 |
Government Solutions | Cost Reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 692 | 660 | 2,144 | 1,704 |
Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 96 | 81 | 281 | 215 |
Technology Solutions | Fixed Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 93 | 80 | 276 | 207 |
Technology Solutions | Cost Reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 3 | 1 | 5 | 8 |
Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 351 | 268 | 919 | 894 |
Energy Solutions | Fixed Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 83 | 38 | 171 | 142 |
Energy Solutions | Cost Reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 268 | 230 | 748 | 752 |
Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 1 | 1 | 1 |
Non-strategic Business | Fixed Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 1 | 1 | 1 |
Non-strategic Business | Cost Reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 726 | 600 | 2,022 | 1,606 |
United States | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 561 | 484 | 1,635 | 1,229 |
United States | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 19 | 2 | 29 | 12 |
United States | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 146 | 113 | 357 | 364 |
United States | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 1 | 1 | 1 |
Middle East | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 223 | 237 | 772 | 657 |
Middle East | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 159 | 200 | 598 | 548 |
Middle East | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 3 | 1 | 11 | 12 |
Middle East | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 61 | 36 | 163 | 97 |
Middle East | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 272 | 249 | 775 | 732 |
Europe | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 205 | 197 | 586 | 561 |
Europe | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 17 | 13 | 51 | 34 |
Europe | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 50 | 39 | 138 | 137 |
Europe | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 74 | 70 | 217 | 266 |
Australia | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 23 | 16 | 67 | 44 |
Australia | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 1 | 0 | 1 | 1 |
Australia | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 50 | 54 | 149 | 221 |
Australia | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 14 | 2 | 21 | 19 |
Canada | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 1 | 0 | 1 | 0 |
Canada | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 1 | 0 | 1 | 2 |
Canada | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 12 | 2 | 19 | 17 |
Canada | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 46 | 38 | 141 | 94 |
Africa | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 17 | 20 | 57 | 58 |
Africa | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 7 | 8 | 25 | 20 |
Africa | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 22 | 10 | 59 | 16 |
Africa | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 50 | 59 | 166 | 140 |
Asia | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Asia | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 48 | 54 | 161 | 129 |
Asia | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 2 | 5 | 5 | 11 |
Asia | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 0 | 0 | 0 |
Other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 20 | 23 | 73 | 69 |
Other countries | Government Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 12 | 11 | 42 | 33 |
Other countries | Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 0 | 3 | 2 | 5 |
Other countries | Energy Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 8 | 9 | 29 | 31 |
Other countries | Non-strategic Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue (Remaining Performance
Revenue (Remaining Performance Obligation) (Details) $ in Billions | Sep. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 11.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction (year) | 1 year |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 36.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction (year) | 4 years |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 33.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction (year) | |
Revenue, remaining performance obligation, expected to be satisfied in one year, percentage | 31.00% |
Acquisitions, Dispositions an_3
Acquisitions, Dispositions and Other Transactions (Stinger Ghaffarian Technologies Acquisition (SGT)) (Details) - USD ($) $ in Millions | Apr. 25, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 1,261 | $ 1,261 | $ 1,265 | |||
Acquisition related costs | 0 | $ 1 | 2 | $ 5 | ||
SGT | ||||||
Business Acquisition [Line Items] | ||||||
Voting interests acquired (percentage) | 100.00% | |||||
Aggregate base consideration | $ 355 | |||||
Adjustments to consideration transferred | 10 | |||||
Goodwill | $ 257 | |||||
Acquisition related costs | 0 | 1 | 2 | 4 | ||
Revenues contributed by acquiree | 122 | 126 | 365 | 216 | ||
Gross profit contributed by acquiree | $ 15 | $ 12 | $ 35 | $ 19 |
Acquisitions, Dispositions an_4
Acquisitions, Dispositions and Other Transactions (Aspire Defence Subcontracting Joint Ventures) (Details) - USD ($) | Apr. 18, 2018 | Jan. 15, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||
Gain on consolidation of Aspire subcontracting entities | $ 113,000,000 | $ 0 | $ (2,000,000) | $ 0 | $ 113,000,000 | ||
Goodwill | 1,261,000,000 | 1,261,000,000 | $ 1,265,000,000 | ||||
Acquisition related costs | 0 | 1,000,000 | 2,000,000 | 5,000,000 | |||
Aspire | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 42,000,000 | ||||||
Fair value of total consideration transferred | $ 50,000,000 | ||||||
Adjustment to noncontrolling interests | 124,000,000 | ||||||
Net increase to PIC | $ 74,000,000 | ||||||
Acquisition related costs | 0 | 0 | 0 | 1,000,000 | |||
Revenues contributed by acquiree | 138,000,000 | 138,000,000 | 405,000,000 | 387,000,000 | |||
Gross profit contributed by acquiree | $ 17,000,000 | $ 14,000,000 | $ 49,000,000 | $ 42,000,000 |
Acquisitions, Dispositions an_5
Acquisitions, Dispositions and Other Transactions (Pro Forma Information) (Details) - SGT and the Aspire Defence - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||
Revenue | $ 1,278 | $ 3,730 |
Net income attributable to KBR | $ 58 | $ 144 |
Diluted earnings per share (usd per share) | $ 0.41 | $ 1.01 |
Cash and Equivalents (Details)
Cash and Equivalents (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | $ 681 | $ 739 |
Operating cash and equivalents | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 253 | 227 |
Short-term investments | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 104 | 194 |
Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 324 | 318 |
International | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 457 | 525 |
International | Operating cash and equivalents | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 120 | 123 |
International | Short-term investments | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 15 | 87 |
International | Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 322 | 315 |
Domestic | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 224 | 214 |
Domestic | Operating cash and equivalents | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 133 | 104 |
Domestic | Short-term investments | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 89 | 107 |
Domestic | Cash and equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | $ 2 | $ 3 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 1,038 | $ 927 |
Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 424 | 346 |
Trade & Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 614 | 581 |
Subtotal | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 1,036 | 927 |
Subtotal | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 424 | 346 |
Subtotal | Trade & Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 612 | 581 |
Government Solutions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 606 | 600 |
Government Solutions | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 302 | 266 |
Government Solutions | Trade & Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 304 | 334 |
Technology Solutions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 65 | 73 |
Technology Solutions | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 4 | 11 |
Technology Solutions | Trade & Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 61 | 62 |
Energy Solutions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 365 | 254 |
Energy Solutions | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 118 | 69 |
Energy Solutions | Trade & Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 247 | 185 |
Non-strategic Business | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 2 | 0 |
Non-strategic Business | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 0 | 0 |
Non-strategic Business | Trade & Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 2 | $ 0 |
Contract Assets and Contract _3
Contract Assets and Contract Liabilities (Contract Asset) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 235 | $ 185 |
Subtotal | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 235 | 185 |
Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 121 | 123 |
Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 49 | 19 |
Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 65 | 43 |
Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 0 | $ 0 |
Contract Assets and Contract _4
Contract Assets and Contract Liabilities (Contract Liability) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 536 | $ 463 |
Subtotal | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 534 | 459 |
Government Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 296 | 261 |
Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 82 | 98 |
Energy Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 156 | 100 |
Non-strategic Business | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 2 | $ 4 |
Contract Assets and Contract _5
Contract Assets and Contract Liabilities (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Contract liability, revenue recognized | $ 194 |
Claims and Accounts Receivable
Claims and Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Claims and accounts receivable | $ 104 | $ 98 |
Government Services | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Government contract receivable | 72 | 73 |
Disputed costs | $ 32 | $ 25 |
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 | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Unapproved Change Orders [Roll Forward] | ||
Amounts included in project estimates-at-completion at January 1, | $ 973 | $ 924 |
(Decrease) increase, including foreign currency effect | (21) | 39 |
Approved change orders, net of foreign currency effect | (7) | (4) |
Amounts included in project estimates-at-completion at September 30, | 945 | 959 |
Amounts recognized over time based on progress at September 30, | $ 938 | $ 922 |
Unapproved Change Orders, and_4
Unapproved Change Orders, and Claims, Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 30, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Settlement claims | $ 945 | $ 973 | $ 959 | $ 924 | |
Commitments, estimated recovery | 1,900 | ||||
Ichthys LNG Project | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Increase in estimated additional investment contributions | (141) | ||||
Estimated projected contributions in joint venture | 500 | ||||
Letters of credit outstanding, amount | 164 | ||||
JKC Joint Venture | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Additional investments to joint venture | (344) | ||||
JKC Joint Venture | Legal Action Against the Consortium for Combined Cycle Power Plant | Settled Litigation | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Funds received from litigation settlement | $ 52 | ||||
Cost Reimbursable | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Changes in estimates at completion | $ 153 | $ 153 | |||
Ichthys LNG Project | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Ownership percentage | 30.00% | ||||
JKC Joint Venture | |||||
Increases in Unapproved Change Orders and Claims [Line Items] | |||||
Ownership percentage | 30.00% |
Equity Method Investments and_3
Equity Method Investments and Variable Interest Entities (Schedule of Equity in Earnings of Unconsolidated Affiliates) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | |
Equity Method Investment [Roll Forward] | ||||||
Cumulative effect of change in accounting policy | $ 21 | $ 144 | ||||
Distributions of earnings of unconsolidated affiliates | $ (64) | $ (16) | ||||
Investments | 146 | 257 | ||||
Equity in and advances to unconsolidated affiliates | 793 | $ 724 | ||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Equity Method Investment [Roll Forward] | ||||||
Equity in and advances to unconsolidated affiliates | 87 | |||||
Equity Method Investments | ||||||
Equity Method Investment [Roll Forward] | ||||||
Beginning balance at January 1, | 724 | $ 365 | 365 | |||
Cumulative effect of change in accounting policy | $ 87 | |||||
Adjusted balance | 724 | $ 452 | ||||
Equity in earnings of unconsolidated affiliates | 24 | 79 | ||||
Distributions of earnings of unconsolidated affiliates | (64) | (75) | ||||
Payments from (advances to) unconsolidated affiliates, net | (9) | (12) | ||||
Investments | 146 | 344 | ||||
Foreign currency translation adjustments | (28) | (28) | ||||
Other | 0 | (36) | ||||
Ending balance | 793 | $ 724 | ||||
Amount allocated to fund ownership venture | $ 141 |
Equity Method Investments and_4
Equity Method Investments and Variable Interest Entities (Schedule of Variable Interest Entities) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Variable Interest Entity, Not Primary Beneficiary | Affinity joint venture (U.K. MFTS project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Unconsolidated VIEs, Total assets | $ 15 | $ 16 |
Unconsolidated VIEs, Total liabilities | 9 | 8 |
Variable Interest Entity, Not Primary Beneficiary | Aspire Defence Limited | ||
Schedule of Equity Method Investments [Line Items] | ||
Unconsolidated VIEs, Total assets | 58 | 68 |
Unconsolidated VIEs, Total liabilities | 5 | 5 |
Variable Interest Entity, Not Primary Beneficiary | JKC joint venture (Ichthys LNG project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Unconsolidated VIEs, Total assets | 534 | 427 |
Unconsolidated VIEs, Total liabilities | 31 | 32 |
Variable Interest Entity, Not Primary Beneficiary | U.K. Road project joint ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Unconsolidated VIEs, Total assets | 37 | 37 |
Unconsolidated VIEs, Total liabilities | 9 | 10 |
Variable Interest Entity, Not Primary Beneficiary | Middle East Petroleum Corporation (EBIC Ammonia project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Unconsolidated VIEs, Total assets | 47 | 51 |
Unconsolidated VIEs, Total liabilities | 1 | 1 |
Variable Interest Entity, Primary Beneficiary | Aspire Defence Limited | ||
Schedule of Equity Method Investments [Line Items] | ||
Consolidated VIEs, Total assets | 536 | 589 |
Consolidated VIEs, Total liabilities | 306 | 324 |
Variable Interest Entity, Primary Beneficiary | KJV-G joint venture (Gorgon LNG project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Consolidated VIEs, Total assets | 12 | 13 |
Consolidated VIEs, Total liabilities | 17 | 19 |
Variable Interest Entity, Primary Beneficiary | Fasttrax Limited (Fasttrax project) | ||
Schedule of Equity Method Investments [Line Items] | ||
Consolidated VIEs, Total assets | 46 | 49 |
Consolidated VIEs, Total liabilities | $ 27 | $ 34 |
Equity Method Investments and_5
Equity Method Investments and Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Transactions with Related Parties | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue from related parties | $ 525 | $ 531 |
Equity Method Investments and_6
Equity Method Investments and Variable Interest Entities (Related Party Disclosures) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 1,038 | $ 927 |
Contract assets | 235 | 185 |
Contract liabilities | 536 | 463 |
Accounts payable | 624 | 546 |
Transactions with Related Parties | ||
Schedule of Equity Method Investments [Line Items] | ||
Accounts receivable, net of allowance for doubtful accounts | 33 | 43 |
Contract assets | 5 | 1 |
Contract liabilities | 37 | 38 |
Accounts payable | $ 0 | $ 2 |
Pension Plans (Details)
Pension Plans (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions by employer | $ 31 | |||
Estimated future employer contributions in next fiscal year | $ 44 | 44 | ||
United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | $ 0 | 0 | $ 0 |
Interest cost | 1 | 1 | 2 | 2 |
Expected return on plan assets | (1) | (1) | (2) | (3) |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Recognized actuarial loss | 0 | 0 | 1 | 1 |
Net periodic benefit cost | 0 | 0 | 1 | 0 |
Int’l | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 1 | 0 | 1 |
Interest cost | 12 | 12 | 37 | 38 |
Expected return on plan assets | (18) | (20) | (57) | (61) |
Amortization of prior service cost | 0 | 0 | 1 | 0 |
Recognized actuarial loss | 4 | 6 | 12 | 20 |
Net periodic benefit cost | $ (2) | $ (1) | $ (7) | $ (2) |
Debt And Other Credit Facilit_3
Debt And Other Credit Facilities (Outstanding Debt Balances) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 1,212 | $ 1,248 |
Less: current portion | 27 | 22 |
Total long-term debt, net of current portion | 1,185 | 1,226 |
Term Loan A | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (5) | (5) |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (16) | (18) |
Secured Debt | Term Loan A | ||
Debt Instrument [Line Items] | ||
Long-term debt | 181 | 190 |
Total long-term debt | 350 | |
Secured Debt | Term Loan B | ||
Debt Instrument [Line Items] | ||
Long-term debt | 758 | 796 |
Total long-term debt | 800 | |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 350 | 350 |
Unamortized debt issuance costs | $ (56) | $ (65) |
Debt And Other Credit Facilit_4
Debt And Other Credit Facilities (Senior Credit Facilities) (Details) | Apr. 25, 2018 | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019 | Dec. 31, 2018USD ($) | Nov. 15, 2018USD ($)$ / shares | Sep. 30, 2018 |
Line of Credit Facility [Line Items] | |||||||
Revolving credit agreement | $ 1,212,000,000 | $ 1,212,000,000 | $ 1,248,000,000 | ||||
Term Loan A | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument, periodic payment, percentage of aggregate principal (percentage) | 2.50% | ||||||
Term Loan B | LIBOR Margin | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolver and term loan A | 3.75% | ||||||
Letters Of Credit Surety Bonds And Bank Guarantees | |||||||
Line of Credit Facility [Line Items] | |||||||
Letters of credit outstanding relate to joint venture operations | 169,000,000 | 169,000,000 | |||||
Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Letters of credit outstanding, amount | 500,000,000 | 500,000,000 | |||||
Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Letters of credit outstanding, amount | 500,000,000 | 500,000,000 | |||||
Secured Debt | Term Loan A | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit agreement | $ 350,000,000 | $ 350,000,000 | |||||
Debt instrument, covenant, leverage ratio | 3.50 | 3.50 | |||||
Debt instrument, covenant, interest coverage ratio | 3 | 3 | |||||
Secured Debt | Term Loan A | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument, covenant, leverage ratio | 4.50 | 4.50 | |||||
Secured Debt | Term Loan B | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit agreement | $ 800,000,000 | $ 800,000,000 | |||||
Debt instrument, periodic payment, percentage of aggregate principal (percentage) | 0.25% | ||||||
Convertible Debt | |||||||
Line of Credit Facility [Line Items] | |||||||
Conversion price (in dollars per share) | $ / shares | $ 0.0391961 | ||||||
Convertible Debt | Notes Due 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument, face amount | $ 350,000,000 | ||||||
Interest rate, stated percentage | 2.50% | ||||||
Effective percentage | 6.50% | ||||||
Interest cost relating to contractual interest coupon | 2,000,000 | 6,000,000 | |||||
Interest cost relating to amortization of discount | 3,000,000 | 8,000,000 | |||||
Conversion price (in dollars per share) | $ / shares | $ 0.02551 | ||||||
Line of Credit | Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Letters of credit outstanding, amount | 26,000,000 | 26,000,000 | |||||
Long-term line of credit | 0 | 0 | |||||
Line of Credit | Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Letters of credit outstanding, amount | 91,000,000 | 91,000,000 | |||||
Line of Credit | Letter of Credit | Committed Line Of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument, face amount | 1,000,000,000 | 1,000,000,000 | |||||
Line of Credit | Letter of Credit | Uncommitted Line Of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Letters of credit outstanding, amount | 200,000,000 | 200,000,000 | |||||
Debt instrument, face amount | 1,100,000,000 | 1,100,000,000 | |||||
Line of credit facility, maximum borrowing capacity | $ 368,000,000 | $ 368,000,000 |
Debt And Other Credit Facilit_5
Debt And Other Credit Facilities (Schedule of Commitment Fees) (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Greater than or equal to 4.00 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.45% |
Greater than or equal to 4.00 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 3.25% |
Greater than or equal to 4.00 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.25% |
Greater than or equal to 4.00 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.95% |
Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.40% |
Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 3.00% |
Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.00% |
Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.80% |
Less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.375% |
Less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.75% |
Less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.75% |
Less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.65% |
Less than 2.00 to 1.00 | |
Debt Instrument [Line Items] | |
Commitment Fee | 0.35% |
Less than 2.00 to 1.00 | Line of Credit and Secured Debt | LIBOR Margin | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 2.50% |
Less than 2.00 to 1.00 | Line of Credit and Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Revolver and Term Loan A | 1.50% |
Less than 2.00 to 1.00 | Letter of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Performance Letter of Credit Fee | 1.50% |
Debt And Other Credit Facilit_6
Debt And Other Credit Facilities (Nonrecourse Project Debt) (Details) ÂŁ in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2019USD ($)transporter | Sep. 30, 2019GBP (ÂŁ) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ | $ 1,212 | $ 1,248 | |
Class A 3.5% Index Linked Bond | |||
Debt Instrument [Line Items] | |||
Guaranteed secured bonds, percentage | 3.50% | 3.50% | |
Class B 5.9% Fixed Rate Bonds | |||
Debt Instrument [Line Items] | |||
Guaranteed secured bonds, percentage | 5.90% | 5.90% | |
Minimum | |||
Debt Instrument [Line Items] | |||
Subordinated notes payable, interest rate | 11.25% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Subordinated notes payable, interest rate | 16.00% | ||
United Kingdom, Pounds | Class A 3.5% Index Linked Bond | |||
Debt Instrument [Line Items] | |||
Secured bonds | ÂŁ 56 | ||
United Kingdom, Pounds | Class B 5.9% Fixed Rate Bonds | |||
Debt Instrument [Line Items] | |||
Secured bonds | ÂŁ 20.7 | ||
Nonrecourse Project Finance Debt | |||
Debt Instrument [Line Items] | |||
Ownership percentage | 50.00% | 50.00% | |
Number of heavy equipment transporters | transporter | 91 | ||
Number of heavy equipment transporters term period (years) | 22 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate on income from operations (percentage) | 30.00% | 28.00% | 28.00% | 22.00% | |
Effective income tax rate, estimated (percentage) | 27.00% | ||||
Deferred tax assets, valuation allowance | $ 197 | $ 197 | $ 207 | ||
Change in valuation allowance | (2) | $ (4) | (10) | $ (72) | |
Liabilities for uncertain tax positions | $ 88 | $ 88 | $ 90 |
U.S. Government Matters (Detail
U.S. Government Matters (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jan. 31, 2014subcontractordefendent | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Jun. 12, 2017USD ($) | Mar. 31, 2011USD ($) | |
United States Government Contract Work [Line Items] | ||||||||
Cost of revenues | $ 1,256,000,000 | $ 1,129,000,000 | $ 3,705,000,000 | $ 3,156,000,000 | ||||
Government Services | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Outstanding Form 1's questioning | 134,000,000 | 134,000,000 | ||||||
Cost of revenues | 62,000,000 | |||||||
Government contract receivable | 72,000,000 | 72,000,000 | $ 73,000,000 | |||||
Amount withheld from subcontractors | 26,000,000 | 26,000,000 | ||||||
Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Accrued reserve for unallowable costs | 41,000,000 | 41,000,000 | 41,000,000 | |||||
Private Security | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Outstanding Form 1's questioning | 56,000,000 | 56,000,000 | ||||||
Cost of revenues | 11,000,000 | |||||||
Government contract receivable | 45,000,000 | 45,000,000 | $ 45,000,000 | |||||
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 | 32,000,000 | ||||||
Payments on contract Work | 19,000,000 | |||||||
Howard qui tam | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Estimate of possible loss | $ 628,000,000 | |||||||
Amount accrued | 0 | 0 | ||||||
DOJFCA | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Number of subcontractors | subcontractor | 2 | |||||||
Number of defendants | defendent | 3 | |||||||
Pay-When-Paid Terms | First Kuwaiti Trading Company Arbitration | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Payments on contract Work | 30,000,000 | |||||||
Contract Liabilities | Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Accrued reserve for unallowable costs | 25,000,000 | 25,000,000 | 26,000,000 | |||||
Other Liabilities | Reserve For Potentially Disallowable Costs Incurred Under Government Contracts | ||||||||
United States Government Contract Work [Line Items] | ||||||||
Accrued reserve for unallowable costs | $ 16,000,000 | $ 16,000,000 | $ 15,000,000 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Details) $ in Millions, $ in Millions | 1 Months Ended | 11 Months Ended | |
Mar. 31, 2019USD ($) | May 31, 2018USD ($) | Sep. 30, 2019AUD ($) | |
Chadian Employee Class Action | |||
Loss Contingencies [Line Items] | |||
Damages awarded, value | $ 34 | $ 25 | |
Claims in unpaid bonuses | $ 122 | ||
North West Rail Link Project | |||
Loss Contingencies [Line Items] | |||
Claims in unpaid bonuses | $ 300 | ||
Ownership percentage by parent | 33.00% | ||
Provisional Award | Chadian Employee Class Action | |||
Loss Contingencies [Line Items] | |||
Damages awarded, value | $ 2 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)renewal_option | |
Operating Leased Assets [Line Items] | |
Percentage of lease obligations | 91.00% |
Term of contract | 12 months |
Renewal term increments | 1 year |
Operating lease, right-of-use asset, amortization | $ 27 |
Other noncash operating lease cost | 17 |
Short-term lease commitments | $ 89 |
Minimum | |
Operating Leased Assets [Line Items] | |
Number of renewal options | renewal_option | 1 |
Leases (Schedule of Leasing Act
Leases (Schedule of Leasing Activity) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 44 |
Short-term lease cost | 83 |
Total lease cost | 127 |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | 44 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 23 |
Weighted-average remaining lease term-operating (in years) | 8 years |
Weighted-average discount rate-operating leases | 7.60% |
Leases (Schedule of Lease Matur
Leases (Schedule of Lease Maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Future payments - operating leases | |||
2019 | $ 13 | ||
2020 | 56 | ||
2021 | 46 | ||
2022 | 37 | ||
2023 | 33 | ||
Thereafter | 144 | ||
Total | 329 | ||
Operating Leases | |||
Less imputed interest | (86) | ||
Present value of future lease payments | 243 | ||
Less current portion of lease obligations | (42) | $ (40) | $ 0 |
Noncurrent portion of lease obligations | $ 201 | $ 213 | $ 0 |
Shareholders' Equity (Sharehold
Shareholders' Equity (Shareholders' Equity Activities) (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | $ 1,197 | $ 1,794 | $ 1,588 | $ 1,718 | $ 1,197 | |
Cumulative adjustment for the adoption of ASC 842 | 144 | $ 21 | ||||
Adjusted balance | 1,341 | 1,739 | ||||
Consolidation and acquisition of noncontrolling interests in Aspire entities | 74 | |||||
Share-based compensation | 4 | 2 | 9 | 8 | ||
Common stock issued upon exercise of stock options | 1 | 2 | 3 | 2 | ||
Dividends declared to shareholders | (11) | (11) | (34) | (33) | ||
Repurchases of common stock | (1) | 0 | (4) | (3) | ||
Issuance of ESPP shares | 2 | 2 | 4 | 4 | ||
Distributions to noncontrolling interests | (2) | (6) | ||||
Other noncontrolling interests activity | (1) | 0 | ||||
Net income | 58 | 56 | 150 | 257 | ||
Other comprehensive loss, net of tax | (28) | (4) | (44) | (16) | ||
Ending Balance | 1,817 | 1,634 | 1,817 | 1,634 | ||
Cumulative effect of change in accounting policy, net of tax | 6 | |||||
PIC | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | 2,091 | 2,197 | 2,171 | 2,190 | 2,091 | |
Adjusted balance | 2,091 | 2,190 | ||||
Consolidation and acquisition of noncontrolling interests in Aspire entities | 74 | |||||
Share-based compensation | 4 | 2 | 9 | 8 | ||
Common stock issued upon exercise of stock options | 1 | 2 | 3 | 2 | ||
Ending Balance | 2,202 | 2,175 | 2,202 | 2,175 | ||
Retained Earnings | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | 854 | 1,321 | 1,156 | 1,235 | 854 | |
Cumulative adjustment for the adoption of ASC 842 | 144 | 21 | ||||
Adjusted balance | 998 | 1,256 | ||||
Dividends declared to shareholders | (11) | (11) | (34) | (33) | ||
Net income | 56 | 54 | 144 | 234 | ||
Ending Balance | 1,366 | 1,199 | 1,366 | 1,199 | ||
Treasury Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | (818) | (818) | (819) | (817) | (818) | |
Adjusted balance | (818) | (817) | ||||
Repurchases of common stock | (1) | (4) | (3) | |||
Issuance of ESPP shares | 2 | 2 | 4 | 4 | ||
Ending Balance | (817) | (817) | (817) | (817) | ||
AOCL | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | (922) | (926) | (934) | (910) | (922) | |
Adjusted balance | (922) | (910) | ||||
Other comprehensive loss, net of tax | (28) | (4) | (44) | (16) | ||
Ending Balance | (954) | (938) | (954) | (938) | ||
NCI | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | (8) | 20 | 14 | 20 | (8) | |
Adjusted balance | $ (8) | $ 20 | ||||
Distributions to noncontrolling interests | (2) | (6) | ||||
Other noncontrolling interests activity | (1) | |||||
Net income | 2 | 2 | 6 | 23 | ||
Ending Balance | $ 20 | $ 15 | $ 20 | $ 15 |
Shareholders' Equity (Accumulat
Shareholders' Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total AOCL | $ (954) | $ (938) | $ (954) | $ (938) | $ (910) |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Beginning Balance | 1,794 | 1,588 | 1,718 | 1,197 | |
Other comprehensive income adjustments before reclassifications | (65) | (42) | |||
Amounts reclassified from AOCL | 21 | 26 | |||
Other comprehensive loss, net of tax | (28) | (4) | (44) | (16) | |
Ending Balance | 1,817 | 1,634 | 1,817 | 1,634 | |
Accumulated foreign currency translation adjustments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total AOCL | (352) | (288) | (352) | (288) | |
Other comprehensive loss, tax | 1 | 1 | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Beginning Balance | (304) | (259) | |||
Other comprehensive income adjustments before reclassifications | (48) | (34) | |||
Amounts reclassified from AOCL | 0 | 5 | |||
Other comprehensive loss, net of tax | (48) | (29) | |||
Ending Balance | (352) | (288) | (352) | (288) | |
Accumulated pension liability adjustments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total AOCL | (581) | (642) | (581) | (642) | |
Other comprehensive loss, tax | 210 | 224 | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Beginning Balance | (592) | (660) | |||
Other comprehensive income adjustments before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 11 | 18 | |||
Other comprehensive loss, net of tax | 11 | 18 | |||
Ending Balance | (581) | (642) | (581) | (642) | |
Changes in fair value of derivatives | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total AOCL | (21) | (8) | (21) | (8) | |
Other comprehensive loss, tax | 6 | 0 | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Beginning Balance | (14) | (3) | |||
Other comprehensive income adjustments before reclassifications | (17) | (8) | |||
Amounts reclassified from AOCL | 10 | 3 | |||
Other comprehensive loss, net of tax | (7) | (5) | |||
Ending Balance | (21) | (8) | (21) | (8) | |
AOCI Attributable to Parent | |||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||
Beginning Balance | (926) | (934) | (910) | (922) | |
Other comprehensive loss, net of tax | (28) | (4) | (44) | (16) | |
Ending Balance | $ (954) | $ (938) | $ (954) | $ (938) |
Shareholders' Equity (Reclassif
Shareholders' Equity (Reclassification out of AOCI) (Details) - USD ($) $ in Millions | Jan. 15, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Accumulated foreign currency adjustments | |||||
Gain on consolidation of Aspire entities | $ 113 | $ 0 | $ (2) | $ 0 | $ 113 |
Provision for income taxes | 24 | 22 | 58 | 74 | |
Accumulated pension liability adjustments | |||||
Net pension and post-retirement benefits | (21) | (26) | |||
Changes in fair value for derivatives | |||||
Revenues | 1,425 | 1,278 | 4,187 | 3,583 | |
Net income | $ 58 | $ 56 | 150 | 257 | |
Accumulated foreign currency adjustments | |||||
Accumulated pension liability adjustments | |||||
Net pension and post-retirement benefits | 0 | (5) | |||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated foreign currency adjustments | |||||
Accumulated foreign currency adjustments | |||||
Gain on consolidation of Aspire entities | 0 | (5) | |||
Provision for income taxes | 0 | 0 | |||
Changes in fair value for derivatives | |||||
Net income | 0 | (5) | |||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated pension liability adjustments | |||||
Accumulated foreign currency adjustments | |||||
Provision for income taxes | 2 | 3 | |||
Accumulated pension liability adjustments | |||||
Amortization of actuarial loss | (13) | (21) | |||
Net pension and post-retirement benefits | (11) | (18) | |||
Reclassification out of Accumulated Other Comprehensive Income | Changes in fair value for derivatives | |||||
Accumulated foreign currency adjustments | |||||
Provision for income taxes | 0 | 0 | |||
Changes in fair value for derivatives | |||||
Revenues | (10) | (3) | |||
Net income | $ (10) | $ (3) |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Equity [Abstract] | ||||
Number of Shares (in shares) | 16,534 | 924 | 190,402 | 171,530 |
Average Price per Share (usd per share) | $ 25.62 | $ 19.37 | $ 20.47 | $ 15.71 |
Value of common stock repurchases | $ 1 | $ 0 | $ 4 | $ 3 |
Income Per Share (Schedule Of B
Income Per Share (Schedule Of Basic And Diluted Weighted Average Common Shares Outstanding) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (shares) | 141 | 141 | 141 | 140 |
Stock options and restricted shares (shares) | 1 | 0 | 0 | 1 |
Diluted weighted average common shares outstanding (shares) | 142 | 141 | 141 | 141 |
Income per Share (Narrative) (D
Income per Share (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Undistributed earnings (loss) allocated to participating securities, diluted | $ 0.4 | $ 0.4 | $ 1.1 | $ 1.5 |
Undistributed earnings (loss) allocated to participating securities, diluted (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Antidilutive weighted average shares (shares) | 1 | 1.4 | 1.3 | 1.6 |
Financial Instruments and Ris_3
Financial Instruments and Risk Management (Foreign Currency Risk) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Maximum length of time hedged in balance sheet hedge | 21 days |
Maximum length of time hedged in cash flow hedge | 10 months |
Balance Sheet Hedge | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Derivative, notional amount | $ 59,000,000 |
Cash Flow Hedging | |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | |
Cash flow hedge | $ 4,000,000 |
Financial Instruments and Ris_4
Financial Instruments and Risk Management (Summary of Changes in Fair Value of Balance Sheet Hedges) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Balance Sheet Hedges - Fair Value | $ 0 | $ (1) | $ 0 | $ 0 |
Balance Sheet Position - Remeasurement | 3 | (1) | 8 | (7) |
Net | $ 3 | $ (2) | $ 8 | $ (7) |
Financial Instruments and Ris_5
Financial Instruments and Risk Management (Interest Rate Risk) (Details) - Interest Rate Swap - USD ($) $ in Millions | Oct. 10, 2018 | Sep. 30, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||
Derivative, notional amount | $ 500 | ||
Derivative term | 4 years | ||
Interest rate derivatives, fair value | $ 25 | $ 12 | |
Unrealized loss on derivatives | 25 | 12 | |
LIBOR | |||
Subsequent Event [Line Items] | |||
Fixed interest rate | 3.055% | ||
Other Current Liabilities | |||
Subsequent Event [Line Items] | |||
Interest rate derivatives, fair value | 7 | 3 | |
Other Liabilities | |||
Subsequent Event [Line Items] | |||
Interest rate derivatives, fair value | $ 18 | $ 9 |
Impact on Previously Issued F_3
Impact on Previously Issued Financial Statements for the Correction of an Error - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Accounting Changes and Error Corrections [Abstract] | |
Cumulative effect on retained earnings | $ 23 |
Impact on Previously Issued F_4
Impact on Previously Issued Financial Statements for the Correction of an Error - Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Equity in earnings of unconsolidated affiliates | $ 9 | $ 17 | $ 24 | $ 50 |
Operating income | 104 | 99 | 274 | 378 |
Income before income taxes and noncontrolling interests | 82 | 78 | 208 | 331 |
Net income | 58 | 56 | 150 | 257 |
Net income attributable to KBR | $ 56 | $ 54 | $ 144 | $ 234 |
Net income attributable to KBR per share: | ||||
Basic (usd per share) | $ 0.39 | $ 0.38 | $ 1.01 | $ 1.66 |
Diluted (usd per share) | $ 0.39 | $ 0.38 | $ 1.01 | $ 1.66 |
Other Comprehensive Income (loss), net of tax | ||||
Foreign currency translation adjustments, net of tax | $ (34) | $ (9) | $ (48) | $ (29) |
Change in fair value of derivatives | 0 | (5) | ||
Other comprehensive loss, net of tax | (28) | (4) | (44) | (16) |
Comprehensive income | 30 | 52 | 106 | 241 |
Comprehensive income attributable to KBR | $ 28 | 50 | $ 100 | 218 |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Equity in earnings of unconsolidated affiliates | 21 | 54 | ||
Operating income | 103 | 382 | ||
Income before income taxes and noncontrolling interests | 82 | 335 | ||
Net income | 60 | 261 | ||
Net income attributable to KBR | $ 58 | $ 238 | ||
Net income attributable to KBR per share: | ||||
Basic (usd per share) | $ 0.41 | $ 1.68 | ||
Diluted (usd per share) | $ 0.41 | $ 1.68 | ||
Other Comprehensive Income (loss), net of tax | ||||
Foreign currency translation adjustments, net of tax | $ (9) | $ (32) | ||
Change in fair value of derivatives | (1) | (5) | ||
Other comprehensive loss, net of tax | (5) | (19) | ||
Comprehensive income | 55 | 242 | ||
Comprehensive income attributable to KBR | 53 | 219 | ||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Equity in earnings of unconsolidated affiliates | (4) | (4) | ||
Operating income | (4) | (4) | ||
Income before income taxes and noncontrolling interests | (4) | (4) | ||
Net income | (4) | (4) | ||
Net income attributable to KBR | $ (4) | $ (4) | ||
Net income attributable to KBR per share: | ||||
Basic (usd per share) | $ (0.03) | $ (0.02) | ||
Diluted (usd per share) | $ (0.03) | $ (0.02) | ||
Other Comprehensive Income (loss), net of tax | ||||
Foreign currency translation adjustments, net of tax | $ 0 | $ 3 | ||
Change in fair value of derivatives | 1 | 0 | ||
Other comprehensive loss, net of tax | 1 | 3 | ||
Comprehensive income | (3) | (1) | ||
Comprehensive income attributable to KBR | $ (3) | $ (1) |