KBR (NYSE:KBR) announced today that income from continuing
operations was $48 million, or $0.28 per diluted share, compared to
income from continuing operations of $45 million, or $0.30 per
diluted share, in the fourth quarter of 2006. Net income was $71
million, or $0.42 per diluted share, in the fourth quarter of 2007,
which included income from discontinued operations of $23 million,
or $0.14 per diluted share, primarily due to tax benefits related
to a previously uncertain tax position associated with the 2006
sale of Production Services. This compared to net income for the
fourth quarter of 2006 of $43 million, or $0.28 per diluted share,
which included a loss from discontinued operations of $2 million,
or $0.01 per diluted share. Consolidated revenue in the fourth
quarter of 2007 was $2.4 billion, an increase of 4.3% from $2.3
billion in the fourth quarter of 2006. Consolidated operating
income was $82 million in the fourth quarter of 2007 compared to
$90 million in the fourth quarter of 2006. Operating income in the
fourth quarter of 2007 included positive contributions from various
gas monetization projects, the Services business unit, and
Iraq-related work. Operating income in the fourth quarter of 2007
was partially offset by $22 million in charges related to
potentially disallowable costs incurred under U.S. government
contracts in the Middle East for activities dating from 2003.
Income from continuing operations for the full year of 2007 was
$182 million, or $1.08 per diluted share, which represents a $128
million, or $0.69 per diluted share, increase from the prior year.
Net income in 2007 was $302 million, or $1.79 per diluted share,
compared to the 2006 net income of $168 million, or $1.20 per
diluted share. Net income in 2007 included $120 million after tax,
or $0.71 per diluted share, of income from discontinued operations
primarily related to the operations of Devonport Management Limited
(�DML�), which we sold our 51% interest in the second quarter of
2007 and the above mentioned tax benefits. Net income for 2006
included $114 million after tax, or $0.81 per diluted share, of
income from discontinued operations. �2007 was a record year for
KBR in terms of profitability and I am pleased with the on-going
performance improvement in KBR�s core businesses. We continued to
execute well on our current projects, ramped up work on several of
our new awards, and delivered solid operating results,� said Bill
Utt, Chairman, President, and Chief Executive Officer of KBR. �I am
disappointed, however, in the current period provisions in the
Government and Infrastructure business unit related to work
beginning in 2003 under the LogCAP III contract. Looking to 2008,
KBR is well positioned to capitalize on the attractive growth
opportunities before us and to better serve our customers with
market leading engineering, construction, and services offerings.�
2007 Fourth Quarter Business Unit Results Government and
Infrastructure business unit income was $53 million in the fourth
quarter of 2007 compared to business unit income of $88 million in
the fourth quarter of 2006. The decrease in business unit income
primarily relates to a fourth quarter 2007 charge of $22 million
related to potentially disallowable costs incurred under U.S.
government contracts in the Middle East for activities dating from
2003. During the fourth quarter of 2007, business unit income had
positive contributions from provision of services to the Allenby
& Connaught project and work on the CENTCOM project. Upstream
business unit income was $64 million in the fourth quarter of 2007
compared to business unit income of $67 million in the fourth
quarter of 2006. Business unit income during the fourth quarter of
2007 had positive contributions from several gas monetization
projects, including Skikda LNG, and various offshore projects,
including Kashagan. Services business unit income was $23 million
in the fourth quarter of 2007 compared to business unit income of
$18 million in the fourth quarter of 2006. Contributing to the
business unit income was $11 million and $7 million in actuarially
determined insurance adjustments in the fourth quarters of 2007 and
2006, respectively. Also contributing to the increase was work on
the Scotford Upgrader project in Canada. Downstream business unit
income was $3 million in the fourth quarter of 2007 compared to
business unit income of $5 million in the fourth quarter of 2006.
Business unit income during the fourth quarter of 2007 was
positively impacted by the Yanbu export refinery project and the
Ras Tanura program management project in Saudi Arabia and the EBIC
ammonia plant in Egypt. Technology business unit income was $1
million in the fourth quarter of 2007 compared to business unit
income of $6 million in the fourth quarter of 2006. Contributing to
the decrease was the delay and cancellation of two projects in the
fourth quarter of 2007 which were awarded in 2006. Partially
offsetting this decrease was the awarding and work performed for
the MAN Ferrostaal ammonia process project in Venezuela. Ventures
business unit loss was $3 million in the fourth quarter of 2007
compared to a business unit loss of $8 million in the fourth
quarter of 2006. The improvement was primarily related to lower
losses on the Australian rail road project and increased
profitability on the Allenby & Connaught investment in the UK.
Corporate general and administrative expense in the fourth quarter
of 2007 was $49 million compared to $78 million in the prior year
quarter. This decrease was primarily related to lower financial
systems and SAP implementation costs, lower real estate expenses,
and a $5 million restructuring charge in the fourth quarter of
2006. Interest income in the fourth quarter of 2007 included $4
million related to the Pemex EPC 22 settlement, which was partially
offset by lower interest income on cash associated with
consolidated joint ventures. Significant Achievements and Awards
KBR was awarded a Canadian construction and fabrication contract of
a gasification unit by Lurgi AG. KBR�s scope of work will include
the fabrication of nearly 100 modules and will peak at
approximately 400 personnel performing field construction and
module service work on this 30-month project. The contract has an
approximate value of $225 million (CAD). KBR was awarded a contract
by PetroSA to conduct the pre-feasibility study to build a 200,000
barrel per day crude oil refinery in Coega, Port Elizabeth. The
pre-feasibility study focuses on determining the economic optimum
configuration for the refinery including crude oil type and costs,
required product slate, prices and specifications, and capital and
operating costs. KBR subsidiary, Granherne, Inc., was awarded a
three-year engineering services contract by Petrobras America.
Granherne will provide technical support for design of the hull for
the early production system, floating production storage and
offloading system (FPSO), and later phase full field development.
The FPSO will be located in approximately 2,600 meters of water.
The Cascade/Chinook FPSO, when deployed, will be the first in the
U.S. Gulf of Mexico, and�will be the world�s deepest FPSO to date.
KBR announced that its �Eos� joint venture with WorleyParsons, was
awarded a contract option worth approximately USD$24 million for
the detailed engineering, procurement management and construction
management assistance services for Woodside�s Pluto LNG Project
offshore production platform north west of Karratha, Western
Australia. KBR was awarded a contract by MAN Ferrostaal AG (MFS) to
provide basic and detailed engineering services for an 1,800 MTPD
ammonia plant for Petroqu�mica de Venezuela, S.A. (Pequiven). The
plant will be the first in Venezuela to utilize KBR�s proprietary
KAAP� ammonia process technology. In November 2007, KBR announced
that it successfully met all contractual obligations related to the
600,000 ton/year Lanzhou ethylene plant in China. This milestone
represents the first facility in China to utilize KBR�s proprietary
SCORE (Selective Cracking Optimum REcovery) technology for both the
furnace cracking and recovery sections. In January 2008, KBR
announced that its joint venture, TSKJ Nigeria Ltd., successfully
completed the construction and commissioning phase of the Nigeria
LNG Limited (NLNG) Train 6 project on Bonny Island, Nigeria. NLNG
awarded TSKJ the lump sum engineering, procurement, and
construction contract (EPC) for LNG train six in July 2004. KBR is
a global engineering, construction and services company supporting
the energy, petrochemicals, government services, and civil
infrastructure sectors. The company offers a wide range of services
through its Downstream, Government and Infrastructure, Services,
Technology, Upstream, and Ventures business units. NOTE: The
statements in this press release that are not historical
statements, including statements regarding future financial
performance and backlog information, are forward-looking statements
within the meaning of the federal securities laws. These statements
are subject to numerous risks and uncertainties, many of which are
beyond the company's control, that could cause actual results to
differ materially from the results expressed or implied by the
statements. These risks and uncertainties include, but are not
limited to: the outcome of and the publicity surrounding audits and
investigations by domestic and foreign government agencies and
legislative bodies; potential adverse proceedings by such agencies
and potential adverse results and consequences from such
proceedings; the enforceability of the company�s indemnities from
Halliburton Company; changes in capital spending by the company�s
customers; the company�s ability to obtain contracts from existing
and new customers and perform under those contracts; structural
changes in the industries in which the company operates, escalating
costs associated with and the performance of fixed-fee projects and
the company�s ability to control its cost under its contracts;
claims negotiations and contract disputes with the company�s
customers; changes in the demand for or price of oil and/or natural
gas; protection of intellectual property rights; compliance with
environmental laws; changes in government regulations and
regulatory requirements; compliance with laws related to income
taxes; unsettled political conditions, war and the effects of
terrorism; foreign operations and foreign exchange rates and
controls; the development and installation of financial systems;
increased competition for employees; and operations of joint
ventures, including joint ventures that are not controlled by the
company. KBR's Annual Report on Form 10-K dated February 26, 2008,
subsequent Forms 10-Q and 10-Q/A, recent Current Reports on Forms
8-K, and other Securities and Exchange Commission filings discuss
some of the important risk factors that KBR has identified that may
affect the business, results of operations and financial condition.
KBR undertakes no obligation to revise or update publicly any
forward-looking statements for any reason. KBR, Inc. Condensed
Consolidated Statements of Operations (Millions of dollars and
shares except per share data) (Unaudited) � � Three Months Three
Months Ended Ended December 31 � September 30 � � 2007 � 2006 �
2007 Revenue: � Government and Infrastructure $ 1,588 $ 1,611 $
1,566 Upstream 603 531 407 Services 96 69 77 Downstream 85 69 103
Technology 18 19 26 Ventures(a) � � (1 ) � � (8 ) � � (2 ) Total
revenue � $ 2,389 � � $ 2,291 � � $ 2,177 � Business unit income
(loss): Government and Infrastructure $ 53 $ 88 $ 98 Upstream 64 67
57 Services 23 18 6 Downstream 3 5 4 Technology 1 6 5 Ventures(a) �
� (3 ) � � (8 ) � � (3 ) Total business unit income � � 141 � � �
176 � � � 167 � Unallocated costs: Labor cost absorption (10 ) (8 )
� Corporate general and administrative � � (49 ) � � (78 ) � � (65
) Total operating income � � 82 � � � 90 � � � 102 � Interest
income (expense), net 18 14 17 Foreign currency gain (loss), net 1
(1 ) (11 ) Other, net � � � � � � � � � � � � Income from
continuing operations before income taxes and minority interest 101
103 108 Provision for income taxes (45 ) (46 ) (35 ) Minority
interest in net income of subsidiaries � � (8 ) � � (12 ) � � (13 )
Income from continuing operations 48 45 60 Income (loss) from
discontinued operations, net � � 23 � � � (2 ) � � 3 � Net income �
$ 71 � � $ 43 � � $ 63 � Basic income (loss) per share(b):
Continuing operations $ 0.29 $ 0.30 $ 0.36 Discontinued operations,
net � � 0.14 � � � (0.01 ) � � 0.02 � Net income per share � $ 0.42
� � $ 0.28 � � $ 0.38 � Diluted income (loss) per share(b):
Continuing operations $ 0.28 $ 0.30 $ 0.35 Discontinued operations,
net � � 0.14 � � � (0.01 ) � � 0.02 � Net income per share � $ 0.42
� � $ 0.28 � � $ 0.37 � Basic weighted average shares
outstanding(c) 168 152 168 Diluted weighted average shares
outstanding(c) 170 152 170 � (a) � Ventures segment operations
generally relate to investments in less-than-50%-owned
unconsolidated entities which are accounted for using the equity
method. Accordingly, our revenue equals our share of the net income
or loss of these entities. � (b) Due to the effect of rounding, the
sum of the individual per share amounts may not equal the total
shown. � (c) The increase in weighted average shares outstanding
from the fourth quarter 2006 to the third quarter 2007 related to
the initial public offering of shares during November 2006. � See
Footnote Tables 1 for a list of significant items included in
operating income (loss). � KBR, Inc. Condensed Consolidated
Statements of Operations (Millions of dollars and shares except per
share data) (Unaudited) � Years Ended December 31 � � 2007 � 2006
Revenue: � Government and Infrastructure $ 6,093 $ 6,506 Upstream
1,887 1,700 Services 322 314 Downstream 361 315 Technology 90 62
Ventures(a) � � (8 ) � � (92 ) Total revenue � $ 8,745 � � $ 8,805
� Business unit income (loss): Government and Infrastructure $ 279
$ 327 Upstream 188 40 Services 56 45 Downstream 10 41 Technology 19
10 Ventures(a) � � (12 ) � � (86 ) Total business unit income � �
540 � � � 377 � Unallocated costs: Labor cost absorption (20 ) 1
Corporate general and administrative � � (226 ) � � (226 ) Total
operating income $ 294 $ 152 Interest income (expense), net 62 (9 )
Foreign currency gains (losses), net (15 ) (15 ) Other, net � � 1 �
� � - � Income from continuing operations before income taxes and
minority interest 342 128 Provision for income taxes (138 ) (94 )
Minority interest in net income (loss) of subsidiaries � � (22 ) �
� 20 � Income from continuing operations 182 54 Income from
discontinued operations, net � � 120 � � � 114 � Net income � $ 302
� � $ 168 � Basic income per share(b): Continuing operations $ 1.08
$ 0.39 Discontinued operations, net � � 0.71 � � � 0.81 � Net
income per share � $ 1.80 � � $ 1.20 � Diluted income per share(b):
Continuing operations $ 1.08 $ 0.39 Discontinued operations, net �
� 0.71 � � � 0.81 � Net income per share � $ 1.79 � � $ 1.20 �
Basic weighted average shares outstanding(c) 168 140 Diluted
weighted average shares outstanding(c) 169 140 � (a) � Ventures
segment operations generally relate to investments in
less-than-50%-owned unconsolidated entities which are accounted for
using the equity method. Accordingly, our revenue equals our share
of the net income or loss of these entities. � (b) Due to the
effect of rounding, the sum of the individual per share amounts may
not equal the total shown. � (c) The increase in weighted average
shares outstanding from the year ended December 31, 2006 to the
year ended December 31, 2007 related to the initial public offering
of shares during November 2006. � See Footnote Tables 1 for a list
of significant items included in operating income (loss). � KBR,
Inc. Condensed Consolidated Balance Sheets (In millions except
share data) (Unaudited) � � � December 31, September 30, December
31, � � 2007 � 2007 � 2006 Assets � Current assets: Cash and
equivalents $ 1,861 $ 1,795 $ 1,410 Receivables: Notes and accounts
receivable 927 988 761 Unbilled receivables on uncompleted
contracts � � 820 � � � 812 � � � 1,110 � Total receivables 1,747
1,800 1,871 Deferred income taxes 165 142 120 Due from Halliburton
- 16 - Other current assets 282 262 240 Current assets of
discontinued operations � � 1 � � � 5 � � � 257 � Total current
assets 4,056 4,020 3,898 Property, plant, and equipment, net of
accumulated depreciation of $227, $227 and $205 220 219 211
Goodwill 251 251 251 Equity in and advances to related companies
294 307 296 Noncurrent deferred income taxes 139 141 156 Unbilled
receivables on uncompleted contracts 196 195 194 Other assets 47 44
51 Noncurrent assets of discontinued operations � � - � � � - � � �
357 � Total assets � $ 5,203 � � $ 5,177 � � $ 5,414 � �
Liabilities, Minority Interest and Shareholders� Equity � Current
liabilities: Accounts payable $ 1,117 $ 1,099 $ 1,177 Due to
Halliburton, net 16 - 152 Advanced billings on uncompleted
contracts 794 865 767 Reserve for estimated contract losses 117 136
180 Employee compensation and benefits 316 293 259 Other current
liabilities 262 216 174 Current liabilities of discontinued
operations � � 1 � � � - � � � 274 � Total current liabilities
2,623 2,609 2,983 Employee compensation and benefits 79 207 221
Other liabilities 151 159 149 Income tax payable � noncurrent 78 80
- Noncurrent deferred tax liability 37 32 22 Noncurrent liabilities
of discontinued operations � � - � � � - � � � 210 � Total
liabilities � � 2,968 � � � 3,087 � � � 3,585 � Minority interest
in consolidated subsidiaries � � (32 ) � � (29 ) � � 35 �
Shareholders� equity and accumulated other comprehensive loss:
Common stock - - - Paid-in capital in excess of par value 2,070
2,074 2,058 Accumulated other comprehensive loss (122 ) (203 ) (291
) Retained earnings � � 319 � � � 248 � � � 27 � Total
shareholders� equity and accumulated other comprehensive loss � �
2,267 � � � 2,119 � � � 1,794 � Total liabilities, minority
interest, shareholders� equity and accumulated other comprehensive
income � $ 5,203 � � $ 5,177 � � $ 5,414 � � KBR, Inc. Condensed
Consolidated Statements of Cash Flows (In millions) (Unaudited) �
Year Ended December 31, � � 2007 � 2006 Cash flows from operating
activities: � Net income $ 302 $ 168 Adjustments to reconcile net
income to net cash provided by operations: Depreciation and
amortization 41 47 Equity in earnings (losses), net of
distributions from related companies (7 ) (41 ) Deferred income
taxes (27 ) 12 Gain on sale of assets, net (216 ) (126 ) Impairment
of equity method investments - 68 Other 61 48 Changes in operating
assets and liabilities: Receivables (143 ) 281 Unbilled receivables
on uncompleted contracts 264 232 Accounts payable (92 ) (187 )
Advanced billings on uncompleted contracts 11 209 Accrued Employee
compensation and benefits 57 19 Reserve for estimated contract
losses (62 ) 140 Other assets (29 ) (38 ) Other liabilities � � 88
� � � 99 � Total cash flows provided by operating activities � �
248 � � � 931 � Cash flows from investing activities: Capital
expenditures (43 ) (57 ) Sales of property, plant and equipment 3 6
Disposition of businesses, net of cash disposed 334 276 Other
investing activities � � (1 ) � � - � Total cash flows provided by
investing activities � � 293 � � � 225 � Cash flows from financing
activities: Payments to Halliburton, net (120 ) (629 ) Net
repayments of short-term borrowings - (2 ) Proceeds from long-term
borrowings - 8 Payments on long-term borrowings (7 ) (25 ) Net
proceeds from issuance of stock 6 512 Excess tax benefits from
stock-based compensation 6 - Payments of dividends to minority
shareholders � � (35 ) � � (3 ) Total cash flows used in financing
activities � � (150 ) � � (139 ) Effect of exchange rate changes �
� 9 � � � 50 � Increase in cash and equivalents 400 1,067 Cash and
equivalents at beginning of period(a) � � 1,461 � � � 394 � Cash
and equivalents at end of period � $ 1,861 � � $ 1,461 � � (a) �
The condensed consolidated statements of cash flows are not
adjusted for discontinued operations. Therefore, the cash and
equivalents at the beginning of the period for the year ended
December 31, 2007 does not agree to the cash and equivalents
reflected on the condensed consolidated balance sheet for the
corresponding period. KBR, Inc. Revenue and Operating Results by
Operating Unit (In millions) (Unaudited) � � � � Three Months Ended
Dec 31, Sep 30, Jun 30, Mar 31, � � 2007 � 2007 � 2007 � 2007
Revenue: G&I: U.S. Government � Middle East Operations $ 1,253
$ 1,217 $ 1,170 $ 1,142 U.S. Government � Americas Operations 156
192 185 188 International Operations � � 179 � � � 157 � � � 127 �
� � 127 � Total G&I � � 1,588 � � � 1,566 � � � 1,482 � � �
1,457 � Upstream: Gas Monetization 495 265 360 282 Offshore 78 92
85 83 Other � � 30 � � � 50 � � � 40 � � � 27 � Total Upstream � �
603 � � � 407 � � � 485 � � � 392 � Services 96 77 78 71 Downstream
85 103 88 85 Technology 18 26 18 28 Ventures � � (1 ) � � (2 ) � �
1 � � � (6 ) Total revenue � $ 2,389 � � $ 2,177 � � $ 2,152 � � $
2,027 � � Business unit income (loss): G&I: U.S. Government �
Middle East Operations $ 38 $ 61 $ 67 $ 65 U.S. Government �
Americas Operations 19 31 1 17 International Operations � � 34 � �
� 36 � � � 23 � � � 23 � Total job income � � 91 � � � 128 � � � 91
� � � 105 � Divisional overhead � � (38 ) � � (30 ) � � (33 ) � �
(35 ) Total G&I business unit income � � 53 � � � 98 � � � 58 �
� � 70 � Upstream: Gas Monetization 49 31 43 38 Offshore 21 15 11
12 Other � � 9 � � � 26 � � � 6 � � � (19 ) Total job income � � 79
� � � 72 � � � 60 � � � 31 � Divisional overhead � � (15 ) � � (15
) � � (13 ) � � (11 ) Total Upstream business unit income � � 64 �
� � 57 � � � 47 � � � 20 � Services: Job income 26 9 19 13
Divisional overhead � � (3 ) � � (3 ) � � (2 ) � � (3 ) Total
Services business unit income � � 23 � � � 6 � � � 17 � � � 10 �
Downstream: Job income 8 7 5 6 Divisional overhead � � (5 ) � � (3
) � � (4 ) � � (4 ) Total Downstream business unit income � � 3 � �
� 4 � � � 1 � � � 2 � Technology: Job income 6 10 7 16 Divisional
overhead � � (5 ) � � (5 ) � � (5 ) � � (5 ) Total Technology
business unit income � � 1 � � � 5 � � � 2 � � � 11 � Ventures: Job
income (loss) (2 ) (2 ) - (5 ) Divisional overhead � � (1 ) � � (1
) � � (1 ) � � - � Total Ventures business unit income (loss) � �
(3 ) � � (3 ) � � (1 ) � � (5 ) Total Business unit income � $ 141
� � $ 167 � � $ 124 � � $ 108 � � KBR, Inc. Revenue and Operating
Results by Operating Unit (In millions) (Unaudited) � Three Months
Ended Dec 31, � Sep 30, � Jun 30, � Mar 31, � � 2006 � 2006 � 2006
� 2006 Revenue: G&I: U.S. Government � Middle East Operations $
1,311 $ 1,348 $ 1,409 $ 1,194 U.S. Government � Americas Operations
195 200 211 231 International Operations � � 105 � � � 105 � � � 71
� � � 126 � Total G&I � � 1,611 � � � 1,653 � � � 1,691 � � �
1,551 � Upstream: Gas Monetization 343 282 195 192 Offshore 96 92
91 109 Other � � 92 � � � 56 � � � 64 � � � 88 � Total Upstream � �
531 � � � 430 � � � 350 � � � 389 � Services 69 66 101 78
Downstream 69 86 93 67 Technology 19 20 16 7 Ventures � � (8 ) � �
(33 ) � � (15 ) � � (36 ) Total revenue � $ 2,291 � � $ 2,222 � � $
2,236 � � $ 2,056 � � Business unit income (loss): G&I: U.S.
Government � Middle East Operations $ 92 $ 98 $ 91 $ 69 U.S.
Government � Americas Operations 16 22 25 20 International
Operations � � 20 � � � 21 � � � 18 � � � 14 � Total job income � �
128 � � � 141 � � � 134 � � � 103 � Divisional overhead � � (40 ) �
� (48 ) � � (44 ) � � (47 ) Total G&I business unit income � �
88 � � � 93 � � � 90 � � � 56 � Upstream: Gas Monetization 53 32
(123 ) 34 Offshore 20 19 19 2 Other � � 7 � � � (3 ) � � (5 ) � �
29 � Total job income (loss) � � 80 � � � 48 � � � (109 ) � � 65 �
Divisional overhead � � (13 ) � � (7 ) � � (11 ) � � (13 ) Total
Upstream business unit income (loss) � � 67 � � � 41 � � � (120 ) �
� 52 � Services: Job income (loss) 18 10 26 (4 ) Divisional
overhead � � - � � � - � � � (3 ) � � (2 ) Total Services business
unit income (loss) � � 18 � � � 10 � � � 23 � � � (6 ) Downstream:
Job income 7 15 19 13 Divisional overhead � � (2 ) � � (5 ) � � (3
) � � (3 ) Total Downstream business unit income � � 5 � � � 10 � �
� 16 � � � 10 � Technology: Job income 10 9 6 3 Divisional overhead
� � (4 ) � � (5 ) � � (5 ) � � (4 ) Total Technology business unit
income (loss) � � 6 � � � 4 � � � 1 � � � (1 ) Ventures: Job income
(loss) (7 ) (34 ) (15 ) (35 ) Gain on sale of assets - - 6 -
Divisional overhead � � (1 ) � � - � � � - � � � - � Total Ventures
business unit income (loss) � � (8 ) � � (34 ) � � (9 ) � � (35 )
Total Business unit income � $ 176 � � $ 124 � � $ 1 � � $ 76 � � �
Twelve Months Ended Dec 31, � Dec 31, � Dec 31, � � 2007 � 2006 �
2005 Revenue: G&I: U.S. Government � Middle East Operations $
4,782 $ 5,262 $ 5,880 U.S. Government � Americas Operations 721 837
1,021 International Operations � � 590 � � � 407 � � � 398 � Total
G&I � � 6,093 � � � 6,506 � � � 7,299 � Upstream: Gas
Monetization 1,402 1,012 392 Offshore 338 388 541 Other � � 147 � �
� 300 � � � 212 � Total Upstream � � 1,887 � � � 1,700 � � � 1,145
� Services 322 314 280 Downstream 361 315 523 Technology 90 62 62
Ventures � � (8 ) � � (92 ) � � (18 ) Total revenue � $ 8,745 � � $
8,805 � � $ 9,291 � � Business unit income (loss): G&I: U.S.
Government � Middle East Operations $ 231 $ 350 $ 354 U.S.
Government � Americas Operations 68 83 80 International Operations
� � 116 � � � 73 � � � 60 � Total job income � � 415 � � � 506 � �
� 494 � Divisional overhead � � (136 ) � � (179 ) � � (212 ) Total
G&I business unit income � � 279 � � � 327 � � � 282 �
Upstream: Gas Monetization 161 (4 ) 91 Offshore 59 60 93 Other � �
22 � � � 28 � � � (55 ) Total job income � � 242 � � � 84 � � � 129
� Gain on sale of assets - - (2 ) Divisional overhead � � (54 ) � �
(44 ) � � (27 ) Total Upstream business unit income � � 188 � � �
40 � � � 100 � Services: Job income 67 50 35 Gain on sale of assets
- - 10 Divisional overhead � � (11 ) � � (5 ) � � (7 ) Total
Services business unit income � � 56 � � � 45 � � � 38 �
Downstream: Job income 26 54 40 Gain on sale of assets - - 13
Divisional overhead � � (16 ) � � (13 ) � � (13 ) Total Downstream
business unit income � � 10 � � � 41 � � � 40 � Technology: Job
income 39 28 18 Divisional overhead � � (20 ) � � (18 ) � � (18 )
Total Technology business unit income � � 19 � � � 10 � � � - �
Ventures: Job income (loss) (9 ) (91 ) (5 ) Gain on sale of assets
- 6 89 Divisional overhead � � (3 ) � � (1 ) � � (2 ) Total
Ventures business unit income (loss) � � (12 ) � � (86 ) � � 82 �
Total Business unit income � $ 540 � � $ 377 � � $ 542 � � KBR,
Inc. Backlog Information(a) (Millions of dollars) (Unaudited) � � �
Dec 31, Dec 31, Dec 31, � � 2007 � 2006 � 2005 G&I: U.S.
Government - Middle East Operations $ 1,361 $ 2,969 $ 2,139 U.S.
Government - Americas Operations 548 715 936 International
Operations � � 2,339 � � 2,380 � � 337 Total G&I(b) � � 4,248 �
� 6,064 � � 3,412 Upstream: Gas Monetization 6,606 3,908 3,705
Offshore Projects 173 157 300 Other � � 118 � � 698 � � 997 Total
Upstream � � 6,897 � � 4,763 � � 5,002 Services � � 765 � � 277 � �
227 Downstream � � 313 � � 578 � � 109 Technology � � 128 � � 95 �
� 99 Ventures � � 700 � � 660 � � 435 Total backlog for continuing
operations(c) � $ 13,051 � $ 12,437 � $ 9,284 � (a) � Backlog is
presented differently depending on if the contract is consolidated
by KBR or is accounted for under the equity method of accounting.
Backlog related to consolidated projects is presented as 100% of
the expected revenue from the project. Backlog related to projects
accounted for under the equity method of accounting is presented as
KBR's share of the expected future revenue from the project. Our
backlog for projects related to unconsolidated joint ventures
totaled $3.1 billion, $4.4 billion, and $3.0 billion at December
31, 2007, December 31, 2006, and December 31, 2005, respectively.
Our backlog related to consolidated joint ventures with minority
interest totaled $3.2 billion, $2.9 billion, and $2.1 billion at
December 31, 2007, December 31, 2006, and December 31, 2005,
respectively. � As of December 31, 2007, 28% of our backlog for
continuing operations was attributable to fixed-price contracts and
72% was attributable to cost-reimbursable contracts. For contracts
that contain both fixed-price and cost-reimbursable components, we
classify the components as either fixed-price or cost-reimbursable
according to the composition of the contract except for smaller
contracts where we characterize the entire contract based on the
predominate component. � (b) The Government and Infrastructure
segment backlog from continuing operations includes backlog
attributable to firm orders in the amount of $4.0 billion, $4.0
billion, and $1.6 billion as of December 31, 2007, December 31,
2006, and December 31, 2005, respectively. Government and
Infrastructure backlog attributable to unfunded orders was $0.2
billion, $2.1 billion, and $1.8 billion as of December 31, 2007,
December 31, 2006, and December 31, 2005, respectively. � (c) This
amount represents backlog for continuing operations and does not
include backlog associated with DML, which was sold in the second
quarter of 2007 and is accounted for as discontinued operations.
Backlog for DML was $1.1 billion as of December 31, 2006. � KBR,
Inc. �Backlog Information (Millions of dollars) (Unaudited) � � � �
Dec 31, Sep 30, Jun 30, Mar 31, � � 2007 � 2007 � 2007 � 2007
G&I: U.S. Government - Middle East Operations $ 1,361 $ 1,196 $
1,525 $ 2,553 U.S. Government - Americas Operations 548 427 493 563
International Operations � � 2,339 � � 2,324 � � 2,225 � � 2,200
Total G&I � � 4,248 � � 3,947 � � 4,243 � � 5,316 Upstream: Gas
Monetization 6,606 6,170 3,446 3,549 Offshore Projects 173 217 200
176 Other � � 118 � � 99 � � 133 � � 238 Total Upstream � � 6,897 �
� 6,486 � � 3,779 � � 3,963 Services � � 765 � � 482 � � 498 � �
253 Downstream � � 313 � � 353 � � 389 � � 481 Technology � � 128 �
� 101 � � 101 � � 102 Ventures � � 700 � � 633 � � 620 � � 628
Total backlog for continuing operations � $ 13,051 � $ 12,002 � $
9,630 � $ 10,743 � � Dec 31, Sep 30, Jun 30, Mar 31, � � 2006 �
2006 � 2006 � 2006 G&I: U.S. Government - Middle East
Operations $ 2,969 $ 4,055 $ 817 $ 910 U.S. Government - Americas
Operations 715 733 725 849 International Operations � � 2,380 � �
2,108 � � 1,954 � � 393 Total G&I � � 6,064 � � 6,896 � � 3,496
� � 2,152 Upstream: Gas Monetization 3,908 4,316 3,601 3,488
Offshore Projects 157 170 180 239 Other � � 698 � � 752 � � 828 � �
963 Total Upstream � � 4,763 � � 5,238 � � 4,609 � � 4,690 Services
� � 277 � � 307 � � 340 � � 240 Downstream � � 578 � � 407 � � 368
� � 442 Technology � � 95 � � 74 � � 70 � � 57 Ventures � � 660 � �
890 � � 907 � � 445 Total backlog for continuing operations � $
12,437 � $ 13,812 � $ 9,790 � $ 8,026 FOOTNOTE TABLES 1 � KBR, Inc.
Items included in Operating Income by Operating Segment (Millions
of dollars) (Unaudited) � Three Months Ended Dec 31,2007 � Sep
30,2007 � Jun 30,2007 � Mar 31,2007 Government &
Infrastructure: � � � Potential Disallowed Costs $ (22 ) $ � $ � $
� Lease Restructuring (5 ) � � � A1D2D Claim Settlement � 6 � �
Skopje Provision (2 ) � (24 ) (1 ) � Upstream: BRC Impairment � � �
(20 ) BRC Disposal � 18 � � Escravos Conversion � � 3 � � Services:
Primary Insurance Release 11 � � � � Downstream: � � � � �
Technology: � � � � � Ventures: � � � � Three Months Ended Dec
31,2006 � Sep 30,2006 � Jun 30,2006 � Mar 31,2006 Government &
Infrastructure: Restructuring � Head Count Reduction $ (1 ) $ � $ �
$ � Skopje Provision (12 ) � � � � Upstream: Barracuda Additional
Charge (4 ) � � (15 ) BRC Bad Debt � � (6 ) � Escravos Provision (9
) � (148 ) � Restructuring � Head Count Reduction (1 ) � � � �
Services: Primary Insurance Release 7 � � � � Downstream: � � � � �
Technology: � � � � � Ventures: ASD Impairment � (32 ) � (26 ) UK
Roads Impairment � � (10 ) � FOOTNOTE TABLES 1 (continued) � KBR,
Inc. Items included in Operating Income by Operating Segment
(Millions of dollars) (Unaudited) � Twelve Months Ended Dec 31,
2007 � Dec 31, 2006 � Dec 31, 2005 Government & Infrastructure:
� � Potential Disallowed Costs $ (22 ) $ � $ � Lease Restructuring
(5 ) � � A1D2D Claim Settlement 6 � � Skopje Provision (27 ) (12 )
� Restructuring � Head Count Reduction � (1 ) � A1D2D Losses � �
(15 ) � Upstream: BRC Impairment (20 ) � � BRC Disposal 18 � �
Escravos Contract Conversion 3 � � Barracuda Additional Charge �
(19 ) (8 ) BRC Bad Debt � (6 ) � Escravos Provision � (157 ) �
Restructuring � Head Count Reduction � (1 ) � BRC Equity Adjustment
� � (43 ) In Amenas Loss � � (32 ) Hurricane Interference � � (5 )
� Services: Primary Insurance Release 11 7 21 � Downstream: � � � �
Technology: � � � � Ventures: ASD Impairment � (58 ) � UK Roads
Impairment � (10 ) � Dulles Toll Gain on Sale/ Dividend � � 96
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