10-K annual report · filed Feb 26, 2019

Kbr Inc (KBR) FY2018 10-K Annual Report

Short answer

Kbr Inc (KBR) filed its fiscal 2018 10-K annual report with the SEC on Feb 26, 2019. It reported revenue of $4.9B (+17.8% year over year) and net income of $281M.

  • Top risk flagged: U.S. government contract audits by DCAA and DCMA risk payment disallowances, False Claims Act treble damages and debarment

FY2018 key financial metrics · XBRL

Revenue
$4.9B
+17.8% YoY
Net income
$281M
−35.3% YoY
Operating margin
9.6%
+3.2 pp YoY
Gross margin
9.3%
+1.1 pp YoY
EPS (diluted)
$1.99
−35.0% YoY
ROE
16.4%
−19.0 pp YoY
Operating cash flow
$165M
−14.5% YoY

Source: XBRL data from the Kbr Inc (KBR) FY2018 10-K on SEC EDGAR. USD.

Kbr Inc FY2018 10-K analysis

AI summary of each section, grounded in the filing text

Business Overview

  • Global professional-services and technology provider across government programs and hydrocarbons asset life cycles
  • SGT acquisition for $355 million plus $10 million adjustments, expanding government engineering, mission operations, scientific and IT capabilities
  • Portfolio rebalanced toward long-term, cost-reimbursable government services, following acquisitions and strategic restructuring
  • Backlog $13.5 billion, up from $10.6 billion, with 33% expected as fiscal 2019 revenue
  • Approximately 25,000 employees worldwide, with joint ventures employing an additional 11,000 people

Management Discussion & Analysis

  • Revenue $4.913B, up $742M from $4.171B, driven by Government Services growth and acquisitions
  • Government Services best performer: revenue $3.457B, up 58%; gross profit $280M, up 81%
  • Hydrocarbons Services weakest segment: revenue $1.157B, down 31%; gross profit $99M, down 11%
  • Operating cash flow $165M; investing cash use $491M, including SGT acquisition and JKC contributions
  • Dividends $44M; JKC contributions $344M, with approximately $156M projected for 2019 and Ichthys execution risk

Risk Factors

  • U.S. government contract audits by DCAA and DCMA risk payment disallowances, False Claims Act treble damages and debarment
  • Brexit uncertainty through March 2019 threatens U.K. GS revenues via sterling weakness and potential tariff or regulatory changes
  • Ichthys LNG joint venture cost increases, unapproved claims and supplier recoveries could require client refunds and additional funding
  • Intense competition from multinational engineering contractors pressures pricing, margins and recompete outcomes
  • $1.0 billion Senior Credit Facility, including $500 million revolver and $500 million letter-of-credit facility, heightens covenant and liquidity risk

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