10-K annual report · filed Feb 24, 2017

Kbr Inc (KBR) FY2016 10-K Annual Report

Short answer

Kbr Inc (KBR) filed its fiscal 2016 10-K annual report with the SEC on Feb 24, 2017. It reported revenue of $4.3B and net income of −$61M.

  • Top risk flagged: U.S. government contract audits by DCAA and DCMA: FAR or CAS violations could trigger payment disallowances, treble damages under the False Claims Act, or termination

FY2016 key financial metrics · XBRL

Revenue
$4.3B
Net income
−$61M
Operating margin
0.7%
Gross margin
2.6%
EPS (diluted)
−$0.43
ROE
-8.1%
Operating cash flow
$61M

Source: XBRL data from the Kbr Inc (KBR) FY2016 10-K on SEC EDGAR. USD.

Kbr Inc FY2016 10-K analysis

AI summary of each section, grounded in the filing text

Business Overview

  • Global professional-services provider across government programs and hydrocarbons asset life cycles, emphasizing long-term reimbursable contracts
  • 2016 acquisitions of Wyle and Honeywell Technology Solutions for $623 million and $280 million, combined under the KBRwyle government-services brand
  • Portfolio materially rebalanced toward government services, increasing long-term, cost-reimbursable professional-services exposure
  • Backlog $10.9 billion versus $12.3 billion in 2015, with 38% expected as revenue within one year
  • Approximately 27,500 employees worldwide, plus 9,000 employees in the Brown & Root Industrial Services joint venture

Management Discussion & Analysis

  • Revenue $4.268B, down $828M, or 16% YoY, driven by Australian LNG and U.S. ammonia project declines
  • Operating loss $282M vs $310M operating loss, with gross loss $213M vs $65M gross profit
  • Best segment GS: revenue $1.359B, up 105%, gross profit $137M vs $3M loss
  • Worst segment E&C: revenue $2.352B, down 32%, gross profit $7M vs $224M
  • Operating cash flow $61M, acquisitions $911M, dividends $46M, 2017 working-capital pressure from project losses

Risk Factors

  • U.S. government contract audits by DCAA and DCMA: FAR or CAS violations could trigger payment disallowances, treble damages under the False Claims Act, or termination
  • Brexit volatility: weaker pound reduces U.S.-dollar translation of U.K. GS revenues and costs
  • Project execution reliance on local craft labor, subcontractors, and equipment manufacturers: replacement sourcing could raise costs or cause fixed-price losses
  • Competitive bidding pressure from multinational engineering and construction firms: pricing and technical competition could compress project margins
  • Acquisition-driven leverage: $1 billion Credit Agreement covenants could restrict funding and accelerate borrowings after default

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