Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer x
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Page
No.
|
PART
I.
|
FINANCIAL
INFORMATION
|
|
|
|
|
Item
1.
|
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|
|
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|
|
3
|
|
|
4
|
|
|
5
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|
6
|
|
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Item
2.
|
27
|
|
|
|
|
Item
3.
|
41
|
|
|
|
|
Item
4.
|
41
|
|
|
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|
PART
II.
|
OTHER
INFORMATION
|
|
|
|
|
Item
1.
|
42
|
|
|
|
|
Item
1A.
|
42
|
|
|
|
|
Item
2.
|
43
|
|
|
|
|
Item
3.
|
43
|
|
|
|
|
Item
4.
|
43
|
|
|
|
|
Item
5.
|
43
|
|
|
|
|
Item
6.
|
44
|
|
|
|
|
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Revenue:
|
||||||||||||||||
Services
|
$ |
2,114
|
$ |
2,228
|
$ |
4,143
|
$ |
4,308
|
||||||||
Equity
in earnings (losses) of unconsolidated affiliates, net
|
38
|
8
|
36
|
(16 | ) | |||||||||||
Total
revenue
|
2,152
|
2,236
|
4,179
|
4,292
|
||||||||||||
Operating
costs and expenses:
|
||||||||||||||||
Cost
of services
|
2,057
|
2,265
|
4,010
|
4,261
|
||||||||||||
General
and administrative
|
30
|
24
|
59
|
41
|
||||||||||||
Other
operating income
|
-
|
(6 | ) |
-
|
(6 | ) | ||||||||||
Total
operating costs and expenses
|
2,087
|
2,283
|
4,069
|
4,296
|
||||||||||||
Operating
income (loss)
|
65
|
(47 | ) |
110
|
(4 | ) | ||||||||||
Interest
expense-related party
|
-
|
(11 | ) |
-
|
(28 | ) | ||||||||||
Interest
income, net
|
14
|
2
|
27
|
5
|
||||||||||||
Foreign
currency losses, net
|
(2 | ) | (15 | ) | (5 | ) | (10 | ) | ||||||||
Other
non-operating gains, net
|
1
|
-
|
1
|
-
|
||||||||||||
Income
(loss) from continuing operations before income taxes and minority
interest
|
78
|
(71 | ) |
133
|
(37 | ) | ||||||||||
Benefit
(provision) for income taxes
|
(32 | ) |
29
|
(58 | ) |
7
|
||||||||||
Minority
interest in net earnings (losses) of subsidiaries
|
4
|
46
|
(1 | ) |
47
|
|||||||||||
Income
from continuing operations
|
50
|
4
|
74
|
17
|
||||||||||||
Income
from discontinued operations, net of tax provision of $(128), $(52),
$(133) and $(60 )
|
90
|
88
|
94
|
101
|
||||||||||||
Net
income
|
$ |
140
|
$ |
92
|
$ |
168
|
$ |
118
|
||||||||
Basic
income per share (1):
|
||||||||||||||||
Continuing
operations
|
$ |
0.30
|
$ |
0.03
|
$ |
0.44
|
$ |
0.13
|
||||||||
Discontinued
operations, net
|
0.54
|
0.65
|
0.56
|
0.74
|
||||||||||||
Net
income per share
|
$ |
0.83
|
$ |
0.68
|
$ |
1.00
|
$ |
0.87
|
||||||||
Diluted
income per share (1):
|
||||||||||||||||
Continuing
operations
|
$ |
0.30
|
$ |
0.03
|
$ |
0.44
|
$ |
0.13
|
||||||||
Discontinued
operations, net
|
0.53
|
0.65
|
0.56
|
0.74
|
||||||||||||
Net
income per share
|
$ |
0.83
|
$ |
0.68
|
$ |
0.99
|
$ |
0.87
|
||||||||
Basic
weighted average common shares outstanding
|
168
|
136
|
168
|
136
|
||||||||||||
Diluted
weighted average common shares outstanding
|
169
|
136
|
169
|
136
|
(1)
|
Due
to the effect of rounding, the sum of the individual per share
amounts may
not equal the total shown.
|
|
|
June
30,
2007
|
|
|
December
31,
2006
|
|
||
Assets
|
|
|||||||
Current
assets:
|
|
|
|
|
|
|
||
Cash
and equivalents
|
|
$
|
2,016
|
|
|
$
|
1,410
|
|
Receivables:
|
|
|
|
|
|
|
|
|
Notes
and accounts receivable (less allowance for bad debts of $76 and
$57)
|
|
|
815
|
|
|
|
761
|
|
Unbilled
receivables on uncompleted contracts
|
|
|
836
|
|
|
|
1,110
|
|
Total
receivables
|
|
|
1,651
|
|
|
|
1,871
|
|
Deferred
income taxes
|
|
|
132
|
|
|
|
120
|
|
Other
current assets
|
|
|
270
|
|
|
|
240
|
|
Current
assets of discontinued operations, net
|
|
|
11
|
|
|
|
257
|
|
Total
current assets
|
|
|
4,080
|
|
|
|
3,898
|
|
Property,
plant, and equipment, net of accumulated depreciation of $221 and
$205
|
|
|
215
|
|
|
|
211
|
|
Goodwill
|
|
|
251
|
|
|
|
251
|
|
Equity
in and advances to related companies
|
|
|
301
|
|
|
|
296
|
|
Noncurrent
deferred income taxes
|
|
|
139
|
|
|
|
156
|
|
Unbilled
receivables on uncompleted contracts
|
|
|
194
|
|
|
|
194
|
|
Other
assets
|
|
|
42
|
|
|
|
51
|
|
Noncurrent
assets of discontinued operations, net
|
|
|
-
|
|
|
|
357
|
|
Total
assets
|
|
$
|
5,222
|
|
|
$
|
5,414
|
|
Liabilities,
Minority Interest and Shareholders’ Equity
|
|
|||||||
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,056
|
|
|
$
|
1,177
|
|
Due
to Halliburton, net
|
|
|
-
|
|
|
|
152
|
|
Advanced
billings on uncompleted contracts
|
|
|
968
|
|
|
|
767
|
|
Reserve
for estimated losses on uncompleted contracts
|
|
|
150
|
|
|
|
180
|
|
Employee
compensation and benefits
|
|
|
268
|
|
|
|
259
|
|
Other
current liabilities
|
|
|
313
|
|
|
|
174
|
|
Current
liabilities of discontinued operations, net
|
|
|
-
|
|
|
|
274
|
|
Total
current liabilities
|
|
|
2,755
|
|
|
|
2,983
|
|
Noncurrent
employee compensation and benefits
|
|
|
206
|
|
|
|
221
|
|
Other
noncurrent liabilities
|
|
|
155
|
|
|
|
149
|
|
Noncurrent
income tax payable
|
65
|
|
|
|
-
|
|||
Noncurrent
deferred tax liability
|
|
|
33
|
|
|
|
44
|
|
Noncurrent
liabilities of discontinued operations, net
|
|
|
-
|
|
|
|
188
|
|
Total
liabilities
|
|
|
3,214
|
|
|
|
3,585
|
|
Minority
interest in consolidated subsidiaries (including $0 and $44 related
to
discontinued operations)
|
|
|
(33
|
)
|
|
|
35
|
|
Shareholders’
equity and accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.001 par value, 50,000,000 shares authorized, no shares
issued
and outstanding
|
|
|
-
|
|
|
|
-
|
|
Common
shares, $0.001 par value, 300,000,000 shares authorized, 168,939,043
and
167,772,410 shares issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Paid-in
capital in excess of par value
|
|
|
2,066
|
|
|
|
2,058
|
|
Accumulated
other comprehensive loss
|
|
|
(210
|
)
|
|
|
(291
|
)
|
Retained
earnings
|
|
|
185
|
|
|
|
27
|
|
Total
shareholders’ equity and accumulated other comprehensive
loss
|
|
|
2,041
|
|
|
|
1,794
|
|
Total
liabilities, minority interest, shareholders’ equity and accumulated other
comprehensive loss
|
|
$
|
5,222
|
|
|
$
|
5,414
|
|
|
|
Six
Months Ended
June
30,
|
|
|||||
|
|
2007
|
|
|
2006
|
|
||
Cash
flows from operating activities:
|
|
|
|
|
|
|
||
Net
income
|
|
$
|
168
|
|
|
$
|
118
|
|
Adjustments
to reconcile net income to cash provided by operations:
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
24
|
|
|
|
23
|
|
Distribution
from (to) related companies, net of equity in earnings (losses)
of
unconsolidated affiliates
|
|
|
(18
|
)
|
|
|
-
|
|
Deferred
income taxes
|
|
|
22
|
|
|
|
(4
|
)
|
Gain
on sale of assets, net
|
|
|
(216
|
)
|
|
|
(129
|
)
|
Impairment
of equity method investments
|
|
|
18
|
|
|
36
|
|
|
Other
|
|
|
43
|
|
|
(26
|
)
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
||
Receivables
|
|
|
(85
|
)
|
|
|
291
|
|
Unbilled
receivables on uncompleted contracts
|
|
|
242
|
|
|
(85
|
)
|
|
Accounts
payable
|
|
|
(116
|
)
|
|
|
(199
|
)
|
Advanced
billings on uncompleted contracts
|
|
|
201
|
|
|
464
|
|
|
Reserve
for estimated loss on uncompleted contracts
|
(30
|
)
|
112
|
|||||
Employee
compensation and benefits
|
|
|
9
|
|
|
(90
|
)
|
|
Other
assets
|
|
|
(60
|
)
|
|
|
(90
|
)
|
Other
liabilities
|
|
|
272
|
|
|
40
|
|
|
Total
cash flows provided by operating activities
|
|
|
474
|
|
|
461
|
||
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(23
|
)
|
|
|
(42
|
)
|
Sales
of property, plant and equipment
|
|
|
1
|
|
|
4
|
|
|
Disposition
of businesses/investments, net of cash disposed
|
334
|
|
|
276
|
||||
Other
investing activities
|
(1
|
)
|
-
|
|||||
Total
cash flows provided by investing activities
|
|
|
311
|
|
|
238
|
||
Cash
flows from financing activities:
|
|
|
|
|
|
|
||
Payments from
(to) Halliburton, net
|
|
|
(123
|
)
|
|
|
(172
|
)
|
Payments
on long-term borrowings
|
|
|
(7
|
)
|
|
|
(9
|
) |
Payments
of dividends to minority shareholders
|
|
|
(19
|
)
|
|
|
(4
|
)
|
Total
cash flows used in financing activities
|
|
|
(149
|
)
|
|
|
(185
|
)
|
Effect
of exchange rate changes
|
|
|
(81
|
)
|
|
|
22
|
|
Increase
in cash and equivalents
|
|
|
555
|
|
|
536
|
||
Cash
and equivalents at beginning of period
|
|
|
1,461
|
|
|
394
|
|
|
Cash
and equivalents at end of period
|
|
$
|
2,016
|
|
|
$
|
930
|
|
Millions
of dollars
|
|
June
30,
2007
|
|
|
December
31,
2006
|
|
||
Probable
unapproved claims
|
|
$
|
176
|
|
|
$
|
178
|
|
Probable
unapproved change orders
|
|
|
4
|
|
|
|
51
|
|
Probable
unapproved claims related to unconsolidated subsidiaries
|
|
|
78
|
|
|
|
78
|
|
Probable
unapproved change orders related to unconsolidated
subsidiaries
|
|
|
22
|
|
|
|
-
|
|
Millions
of dollars
|
|
June
30,
2007
|
|
|
December
31,
2006
|
|
||
Probable
unapproved claims
|
|
$
|
77
|
|
|
$
|
37
|
|
Probable
unapproved change orders
|
|
|
4
|
|
|
|
3
|
|
Probable
unapproved change orders related to unconsolidated
subsidiaries
|
|
|
3
|
|
|
|
3
|
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
Millions
of dollars
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Revenue:
|
||||||||||||||||
Government
and Infrastructure
|
$ |
1,482
|
$ |
1,691
|
$ |
2,939
|
$ |
3.242
|
||||||||
Energy
and Chemicals
|
669
|
560
|
1,245
|
1,101
|
||||||||||||
Ventures
|
1
|
(15 | ) | (5 | ) | (51 | ) | |||||||||
Total
|
$ |
2,152
|
$ |
2,236
|
$ |
4,179
|
$ |
4,292
|
||||||||
Operating
income (loss):
|
||||||||||||||||
Government
and Infrastructure
|
$ |
25
|
$ |
58
|
$ |
63
|
$ |
93
|
||||||||
Energy
and Chemicals
|
41
|
(97 | ) |
54
|
(53 | ) | ||||||||||
Ventures
|
(1 | ) | (8 | ) | (7 | ) | (44 | ) | ||||||||
Total
|
$ |
65
|
$ | (47 | ) | $ |
110
|
$ | (4 | ) |
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
Millions
of dollars
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Net
income
|
$ |
140
|
$ |
92
|
$ |
168
|
$ |
118
|
||||||||
Net
cumulative translation adjustments
|
(17 | ) |
23
|
(18 | ) |
17
|
||||||||||
Pension
liability adjustment
|
95
|
-
|
100
|
-
|
||||||||||||
Net
unrealized gains (losses) on investments and derivatives
|
-
|
6
|
(1 | ) |
13
|
|||||||||||
Total
comprehensive income
|
$ |
218
|
$ |
121
|
$ |
249
|
$ |
148
|
June
30,
|
December
31,
|
|||||||
Millions
of dollars
|
2007
|
2006
|
||||||
Cumulative
translation adjustments
|
$ |
25
|
$ |
43
|
||||
Pension
liability adjustments
|
(235 | ) | (335 | ) | ||||
Unrealized
gains (losses) on investments and derivatives
|
-
|
1
|
||||||
Total
accumulated other comprehensive (loss)
|
$ | (210 | ) | $ | (291 | ) |
|
Ÿ
|
the
Comprehensive Environmental
Response, Compensation and Liability
Act;
|
|
Ÿ
|
the
Resources Conservation and
Recovery Act;
|
|
Ÿ
|
the
Clean Air
Act;
|
|
Ÿ
|
the
Federal Water Pollution
Control Act; and
|
|
Ÿ
|
the
Toxic Substances Control
Act.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
Millions
of shares
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Basic
weighted average common shares outstanding
|
168
|
136
|
168
|
136
|
||||||||||||
Dilutive
effect of:
|
||||||||||||||||
Stock
options
|
1
|
—
|
1
|
—
|
||||||||||||
Restricted
shares
|
—
|
—
|
—
|
—
|
||||||||||||
Diluted
weighted average common shares
outstanding
|
169
|
136
|
169
|
136
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
Millions
of dollars
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Revenue
|
$ |
62
|
$ |
42
|
$ |
108
|
$ |
74
|
||||||||
Operating
loss
|
$ | (13 | ) | $ | (5 | ) | $ | (14 | ) | $ | (6 | ) | ||||
Net
Loss
|
$ | (7 | ) | $ | (12 | ) | $ | (19 | ) | $ | (21 | ) |
Three
Months Ended (1)
|
||||||||||||||||
June
30, 2007
|
June
30, 2006
|
|||||||||||||||
Millions
of dollars
|
United
States
|
International
|
United
States
|
International
|
||||||||||||
Components
of net periodic benefit cost:
|
||||||||||||||||
Service
cost
|
$ |
-
|
$ |
2
|
$ |
-
|
$ |
2
|
||||||||
Interest
cost
|
1
|
21
|
1
|
16
|
||||||||||||
Expected
return on plan assets
|
(1 | ) | (24 | ) | (1 | ) | (18 | ) | ||||||||
Recognized
actuarial loss
|
-
|
5
|
-
|
4
|
||||||||||||
Net
periodic benefit cost
|
$ |
-
|
$ |
4
|
$ |
-
|
$ |
4
|
Six
Months Ended (1)
|
||||||||||||||||
June
30, 2007
|
June
30, 2006
|
|||||||||||||||
Millions
of dollars
|
United
States
|
International
|
United
States
|
International
|
||||||||||||
Components
of net periodic benefit cost:
|
||||||||||||||||
Service
cost
|
$ |
-
|
$ |
5
|
$ |
-
|
$ |
4
|
||||||||
Interest
cost
|
1
|
41
|
1
|
33
|
||||||||||||
Expected
return on plan assets
|
(1 | ) | (47 | ) | (1 | ) | (37 | ) | ||||||||
Recognized
actuarial loss
|
-
|
10
|
-
|
7
|
||||||||||||
Net
periodic benefit cost
|
$ |
-
|
$ |
9
|
$ |
-
|
$ |
7
|
(1)
|
The
components of net periodic benefit cost for both the current and
prior
period exclude pension benefits associated with DML, which was
sold in the
second quarter of 2007 and is accounted for as discontinued
operations.
|
Millions
of dollars
|
||||
Proceeds,
net of direct transaction costs
|
$ |
345
|
||
Less: Net
book value of DML
|
(129 | ) | ||
Gain
on sale of DML before income tax
|
216
|
|||
Less: Income
tax
|
(119 | ) | ||
Gain
on sale of DML, net of income tax
|
$ |
97
|
June
30,
|
December
31,
|
|||||||
Millions
of dollars
|
2007
|
2006
|
||||||
Assets:
|
||||||||
Cash
and equivalents
|
$ |
-
|
$ |
51
|
||||
Accounts
receivable—related party
|
11
|
62
|
||||||
Accounts
receivable and unbilled receivables on uncompleted contracts,
net
|
-
|
112
|
||||||
Other
current assets
|
-
|
32
|
||||||
Total
current assets related to discontinued operations
|
11
|
257
|
||||||
Property,
plant, and equipment, net
|
-
|
281
|
||||||
Goodwill
|
-
|
38
|
||||||
Other
noncurrent assets
|
-
|
38
|
||||||
Total
noncurrent assets related to discontinued operations
|
-
|
357
|
||||||
Total
assets related to discontinued operations
|
$ |
11
|
$ |
614
|
||||
Liabilities:
|
||||||||
Accounts
payable
|
$ |
-
|
$ |
99
|
||||
Advance
billings on incomplete contracts
|
-
|
136
|
||||||
Other
current liabilities
|
-
|
39
|
||||||
Total
current liabilities related to discontinued operations
|
-
|
274
|
||||||
Employee
compensation and benefits
|
-
|
191
|
||||||
Long-term
debt
|
-
|
2
|
||||||
Other
long-term liabilities
|
-
|
(5 | ) | |||||
Total
noncurrent liabilities related to discontinued operations
|
-
|
188
|
||||||
Total
liabilities related to discontinued operations
|
$ |
-
|
$ |
462
|
||||
Minority
interest in consolidated subsidiaries
|
$ |
-
|
$ |
44
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
Millions
of dollars
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Revenue
|
$ |
225
|
$ |
286
|
$ |
449
|
$ |
693
|
||||||||
Operating
income
|
$ |
11
|
$ |
24
|
$ |
22
|
$ |
49
|
||||||||
Pretax
income
|
$ |
5
|
$ |
19
|
$ |
11
|
$ |
38
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
Millions
of dollars
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Revenue
|
$ |
225
|
$ |
203
|
$ |
449
|
$ |
393
|
||||||||
Operating
income
|
$ |
22
|
$ |
17
|
$ |
37
|
$ |
34
|
||||||||
Pretax
income
|
$ |
16
|
$ |
12
|
$ |
26
|
$ |
23
|
Three
Months Ended June 30,
|
||||||||||||||||
2007
|
2006
|
Increase
(Decrease)
|
Percentage
Change
|
|||||||||||||
(In
millions of dollars)
|
||||||||||||||||
Revenue:
(1)
|
||||||||||||||||
E&C—Gas
Monetization Projects
|
$ |
331
|
$ |
180
|
$ |
151
|
84 | % | ||||||||
E&C—Offshore
Projects
|
61
|
71
|
(10 | ) | (14 | )% | ||||||||||
E&C—Other
|
277
|
309
|
(32 | ) | (10 | )% | ||||||||||
Total
Energy and Chemicals
|
669
|
560
|
109
|
19 | % | |||||||||||
G&I—Middle
East Operations
|
1,170
|
1,409
|
(239 | ) | (17 | )% | ||||||||||
G&I—Other
|
312
|
282
|
30
|
11 | % | |||||||||||
Total
Government and Infrastructure
|
1,482
|
1,691
|
(209 | ) | (12 | )% | ||||||||||
Ventures
|
1
|
(15 | ) |
16
|
107 | % | ||||||||||
Total
revenue
|
$ |
2,152
|
$ |
2,236
|
$ | (84 | ) | (4 | )% | |||||||
Operating
Income (loss):
|
||||||||||||||||
E&C—Gas
Monetization Projects
|
$ |
1
|
$ | (130 | ) |
131
|
101 | % | ||||||||
E&C—Offshore
Projects
|
3
|
9
|
(6 | ) | (67 | )% | ||||||||||
E&C—Other
|
37
|
24
|
13
|
54 | % | |||||||||||
Total
Energy and Chemicals
|
41
|
(97 | ) |
138
|
142 | % | ||||||||||
G&I—Middle
East Operations
|
29
|
45
|
(16 | ) | (36 | )% | ||||||||||
G&I—Other
|
(4 | ) |
13
|
(17 | ) | (131 | )% | |||||||||
Total
Government and Infrastructure
|
25
|
58
|
(33 | ) | (57 | )% | ||||||||||
Ventures
|
(1 | ) | (8 | ) |
7
|
88 | % | |||||||||
Total
operating income (loss)
|
$ |
65
|
$ | (47 | ) | $ |
112
|
238 | % |
(1)
|
Our
revenue includes both equity
in the earnings of unconsolidated affiliates as well as revenue
from the
sales of services into the joint ventures. We often participate
on larger
projects as a joint venture partner and also provide services to
the
venture as a subcontractor. The amount included in our revenue
represents
our share of total project revenue, including equity in the earnings
from
joint ventures and revenue from services provided to joint
ventures.
|
Six
Months Ended June 30,
|
||||||||||||||||
2007
|
2006
|
Increase
(Decrease)
|
Percentage
Change
|
|||||||||||||
(In
millions of dollars)
|
||||||||||||||||
Revenue:
(1)
|
||||||||||||||||
E&C—Gas
Monetization Projects
|
$
|
588
|
$
|
345
|
$
|
243
|
70
|
%
|
||||||||
E&C—Offshore
Projects
|
122
|
160
|
(38)
|
(24
|
)%
|
|||||||||||
E&C—Other
|
535
|
596
|
(61)
|
(10
|
)%
|
|||||||||||
Total
Energy and Chemicals
|
1,245
|
1,101
|
144
|
13
|
%
|
|||||||||||
G&I—Middle
East Operations
|
2,312
|
2,603
|
(291)
|
(11
|
)%
|
|||||||||||
G&I—Other
|
627
|
639
|
(12)
|
(2)
|
%
|
|||||||||||
Total
Government and Infrastructure
|
2,939
|
3,242
|
(303)
|
(9
|
)%
|
|||||||||||
Ventures
|
(5)
|
(51)
|
46
|
90
|
%
|
|||||||||||
Total
revenue
|
$
|
4,179
|
$
|
4,292
|
$
|
(113)
|
(3)
|
%
|
||||||||
Operating
Income (loss):
|
||||||||||||||||
E&C—Gas
Monetization Projects
|
$
|
7
|
$
|
(121)
|
$
|
128
|
106
|
%
|
||||||||
E&C—Offshore
Projects
|
5
|
1
|
4
|
400
|
%
|
|||||||||||
E&C—Other
|
42
|
67
|
(25)
|
(37
|
)%
|
|||||||||||
Total
Energy and Chemicals
|
54
|
(53)
|
107
|
202
|
%
|
|||||||||||
G&I—Middle
East Operations
|
53
|
72
|
(19)
|
(26)
|
%
|
|||||||||||
G&I—Other
|
10
|
21
|
(11)
|
(52)
|
%
|
|||||||||||
Total
Government and Infrastructure
|
63
|
93
|
(30)
|
(32)
|
%
|
|||||||||||
Ventures
|
(7)
|
(44)
|
37
|
84
|
%
|
|||||||||||
Total
operating income (loss)
|
$
|
110
|
$
|
(4)
|
$
|
114
|
2,850
|
%
|
(1)
|
Our
revenue includes both equity in the earnings of unconsolidated
affiliates
as well as revenue from the sales of services into the joint ventures.
We
often participate on larger projects as a joint venture partner
and also
provide services to the venture as a subcontractor. The amount
included in
our revenue represents our share of total project revenue, including
equity in the earnings from joint ventures and revenue from services
provided to joint ventures.
|
June
30,
2007
|
December
31,
2006
|
|||||||
E&C—Gas
Monetization
|
$
|
3,438
|
$
|
3,883
|
||||
E&C—Offshore
Projects
|
173
|
130
|
||||||
E&C—Other
|
1,156
|
1,700
|
||||||
Total
E&C
|
4,767
|
5,713
|
||||||
G&I—Middle
East Operations
|
1,515
|
3,066
|
||||||
G&I—Other
|
2,728
|
2,998
|
||||||
Total
G&I
|
4,243
|
6,064
|
||||||
Ventures
|
620
|
660
|
||||||
Total
backlog for continuing operations (2)
|
$
|
9,630
|
$
|
12,437
|
(1)
|
Our
G&I and Ventures segment’s total backlog from continuing operations
attributable to firm orders was $4.1 billion and $620 million,
respectively, as of June 30, 2007 and $4.0 billion and $660 million,
respectively, as of December 31, 2006, respectively. Our G&I segment
total backlog from continuing operations attributable to unfunded
orders
was $144 million as of June 30, 2007 and $2.1 billion as of December
31,
2006.
|
(2)
|
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.
|
|
-
|
volatility
of the currency
rates;
|
|
-
|
time
horizon of the derivative
instruments;
|
|
-
|
market
cycles;
and
|
|
-
|
the
type of derivative
instruments used.
|
*
|
3.1
|
Amended
and Restated Bylaws of KBR, Inc. (filed only to show date of
adoption).
|
||
*
|
10.1+
|
KBR,
Inc. 2006 Stock and Incentive Plan (as amended June 27,
2007).
|
||
*
|
10.2+
|
Restricted
Stock Unit Agreement pursuant to KBR, Inc. 2006 Stock and Incentive
Plan.
|
||
|
||||
*
|
10.3+
|
Stock
Option Agreement pursuant to KBR, Inc. 2006 Stock and Incentive
Plan.
|
||
|
|
|||
*
|
10.4+
|
KBR
Restricted Stock Agreement pursuant to KBR, Inc. 2006 Stock and
Incentive
Plan.
|
||
|
|
|||
*
|
10.5+
|
KBR,
Inc. Transitional Stock Adjustment Plan Stock Option
Award.
|
||
|
|
|||
*
|
10.6+
|
KBR,
Inc. Transitional Stock Adjustment Plan Restricted Stock
Award.
|
||
|
|
|||
*
|
10.7
|
Agreement
relating to the sale and purchase of the entire issued share capital
of
Devonport Management Limited by and among KBR, Inc., Kellogg Brown
&
Root Holdings (U.K.) Limited, Balfour Beatty plc, The Weir Group
plc, and
Babcock International Group plc, dated May 10, 2007.
|
||
*
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
||
|
|
|||
*
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
||
|
|
|||
**
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
||
|
|
|||
**
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
||
|
|
|||
|
|
|||
*
|
Filed
with this Form 10-Q
|
|||
**
|
Furnished
with this Form 10-Q
|
|||
+
|
Management
contracts or compensatory plans or
arrangements
|
KBR,
INC.
|
|
|
|
|
|
/s/ CEDRIC
W. BURGHER
|
|
/s/ JOHN
W. GANN, JR.
|
Cedric
W. Burgher
|
|
John
W. Gann, Jr.
|
Senior
Vice President and Chief Financial Officer
|
|
Vice
President and Chief Accounting Officer
|
|
|
|
|
|
|
Date:
August 2, 2007
|
|
|
*
|
Amended
and Restated Bylaws of KBR, Inc. (filed only to show date of
adoption).
|
|||
*
|
10.1+
|
KBR,
Inc. 2006 Stock and Incentive Plan (as amended June 27,
2007).
|
||
*
|
10.2+
|
Restricted
Stock Unit Agreement pursuant to KBR, Inc. 2006 Stock and Incentive
Plan.
|
||
|
||||
*
|
10.3+
|
Stock
Option Agreement pursuant to KBR, Inc. 2006 Stock and Incentive
Plan.
|
||
|
|
|||
*
|
10.4+
|
KBR
Restricted Stock Agreement pursuant to KBR, Inc. 2006 Stock and
Incentive
Plan.
|
||
|
|
|||
*
|
10.5+
|
KBR,
Inc. Transitional Stock Adjustment Plan Stock Option
Award.
|
||
|
|
|||
*
|
10.6+
|
KBR,
Inc. Transitional Stock Adjustment Plan Restricted Stock
Award.
|
||
|
|
|||
*
|
Agreement
relating to the sale and purchase of the entire issued share capital
of
Devonport Management Limited by and among KBR, Inc., Kellogg Brown
&
Root Holdings (U.K.) Limited, Balfour Beatty plc, The Weir Group
plc, and
Babcock International Group plc, dated May 10, 2007.
|
|||
*
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|||
|
|
|||
*
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|||
|
|
|||
**
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
|||
|
|
|||
**
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
|||
|
|
|||
|
|
|||
*
|
Filed
with this Form 10-Q
|
|||
**
|
Furnished
with this Form 10-Q
|
|||
+
|
Management
contracts or compensatory plans or
arrangements
|