kbr sustainability report 2014

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    Built on Values

    Our Story ContinuesS U S T A I N A B I L I T Y R E P O R T 2 0 1 4

    http://www.kbr.com/

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    ABOUT OUR REPORT

    KBR’s Corporate Sustainability Report, “Built on Values – Our Story Continues”, discloses our significant social, environmental and economic impacts to provideour stakeholders a way to assess our commitment to corporate sustainability. Our stakeholders include shareholders, customers, employees, government andindustry partners, and the communities we serve.

    The Global Reporting Initiative (GRI) promotes the use of sustainability reporting as a way for organizations to become more transparent. GRI’s mission is to makesustainability reporting standard practice.

    This report, which covers business activity in calendar year January 1, 2014 to December 31, 2014, has been prepared according to GRI G4 Core guidelines andreflects KBR’s relevant and material aspects of sustainable development. Previous reports were published on a three-year basis. With this report, our third, weare moving toward an annual publication.

    If you have questions on this report please email us at [email protected].

    Commitment

    >  ABOUT OUR REPORT

    > LETTER FROM

    THE CEO

    Integrity

    >  OUR EMPLOYEES

    >> Code of Business

    Conduct / Ethics

    >> Zero Harm

    >> Message from

    VP HSSE

    >>  Safety Statistics

    >> Health and Wellness

    >>  EAP

    Transparency

    > ECONOMICS AND

    FINANCE

    >> Economics

    >>  Finance

    Accountability

    >  ENVIRONMENT

    >>  Environmental

    Statistics

    >> Human Rights

    >>  Volunteering

    >> Community Projects

    Responsibility

    >  PROJECTS

    GRI

    > GLOBAL REPORTING

    INDEX 4.0 INDICATORS

    2 5 9 11 16 18

    Contents

    2014 KBR SUSTAINABILITY REPORT 2

    Click here for more information on our website

    https://www.kbr.com/about/responsibilityhttps://www.kbr.com/about/responsibility

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    As a company that develops technology, designs andbuilds energy infrastructure and provides services togovernment clients around the world, we have the potentialto leave lasting footprints wherever we go. At KBR ourphilosophy has always been to treat other people’scommunities with the same respect as our own. Wefocus on Health, Safety, Security and Environment (HSSE)because we believe in leaving a place as good as, or evenbetter than, we found it.

    The theme of this year’s report – “Built on Values” – reflects our commitmentto doing the right thing for our people, our clients and partners, and thecommunities and countries in which we do business.

    When I joined this company as CEO in June of 2014, I knew I was cominginto an organization with a 100-year history of serving clients whereverand whenever they needed KBR to be. Whether it’s providing the technologyand consulting know-how to develop our customers’ valuable global assets;designing and constructing the infrastructure and facilities to develop theworld’s energy resources; providing support and services for men andwomen of their countries’ armed forces; or navigating the intricacies ofundertaking major projects in geopolitically or culturally sensitive

    environments, KBR delivers.

    However, KBR’s proud tradition of service and accountability is not an end.Rather it inspires a pressing and continuing commitment to live up to theideals established by those who came before us and to advance thoseideals for the next generation of KBR leaders and employees.

    In 2014 we took steps to move our company toward a more sustainablefuture.

      Safety has been a core value of KBR since 1961 when Brown & Rootfounder Herman Brown distributed a letter to each employee thatbecame the basis for our safety programs. In August we appointed a VicePresident of Health, Safety, Security and Environment (HSSE) and for thefirst time established a direct line of HSSE reporting to the office of theCEO, emphasizing our commitment to Zero Harm starting at the highestlevels of KBR and continuing throughout the organization.

      In November we introduced our Zero Harm safety program. More than

    merely an initiative, Zero Harm is a vision. It establishes a culture ofsafety where safe execution is non-negotiable and no incidents aretolerated. With an emphasis on training, personal responsibility andaccountability, Zero Harm underscores the belief that all incidents arepreventable and empowers everyone in the organization to avoid anysituation that could put our employees, subcontractors or clients at risk.

      As part of our commitment to economic sustainability we conducted amajor strategic review of our operations and in December announced amajor business transformation creating a new KBR focused on our corestrengths in consulting, technology, engineering and construction, andgovernment services and structured along delivery lines that will enableus to meet the expectations of our customers and other stakeholders.

    This, combined with reduced complexity, will provide a more robustbalance sheet, greater accountability and empowerment for our people,and position KBR to meet the challenges of the future.

      In an effort to encourage greater communication and transparency,KBR’s Executive Leadership Team began seeking opinions throughoutthe organization including from the KBR IMPACT Group – the globalnetwork for KBR’s future leaders – on how to bring alive the actions thatultimately demonstrate our values and drive our day-to-day businessactivities. Together we defined a collection of core behaviors that formthe backbone of our corporate culture and reinforce our shared missionof We Deliver.

    We Deliver.

    A MESSAGE FROM OUR PRESIDENT AND CEO

    2014 KBR SUSTAINABILITY REPORT 3Commitment

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    KBR is a company of people, more than 25,000 employees doing business in70 countries, and it is to our people who we owe our best effort. We conductbusiness ethics training and have a robust code of conduct that applies to allemployees and reflects how highly we value principled business practices.We believe that every employee has the right to expect a safe, healthy work-place and so we begin meetings with a safety moment, discussing specificon-the-job risks and how to mitigate them. Our Zero Harm culture underscoresand supports our safety commitments.

    In addition to providing training, skill-enhancing and developmentopportunities to employees in our offices and worksites, we also workwith local community colleges to identify needed job training courses in order

    to help build and maintain the workforce of the future. We’re providing jobs tolocal people, fair trade opportunities to local companies and support tolocal communities.

    In turn, KBR employees commit thousands of hours to their communities –supporting schools, cleaning parks, funding playgrounds, planting trees andproviding much needed supplies and assistance to those in the communitieswho need it most. We also give hundreds of thousands of dollars to charitableorganizations around the globe to help support worthy causes aimed atproviding more educational opportunities, increased health or preventionbenefits, and environmental improvements in the communities in whichwe live and work.

    At KBR we understand that building a sustainable future – one that is builton values – is a never-ending process. In today’s global society, the role ofa corporation goes beyond providing returns to shareholders, wages toemployees, and products and services to its immediate customers. Webelieve we have a responsibility to also make our world a better placeand we embrace that responsibility.

    To do this requires the will and the courage to adapt to an ever-changing andchallenging future by understanding and meeting the needs of customers indiverse markets without succumbing to market volatility and risk. It meansresponding to the concerns and values of all of our neighbors in a respectfuland accepting manner in accordance with the customs and needs of eachcommunity in which we operate. It means understanding that a companythrives not just by capturing markets, but by serving the people, cities andcountries of our global community.

    We are honored to have the opportunity to work with clients around theworld building the projects of the future and helping to contribute to a bettertomorrow for everyone.

    Stuart Bradie,KBR President and CEO

    KBR’S BEHAVIORS ARE:

     WE DELIVER

    We are committed to standing by our promisesto deliver projects through collaboration, disci-pline, and the KBR Way.

     WE VALUE OUR PEO PLE

    We value and respect our employees as people.We are committed to Zero Harm for every person.We emphasize development of each person to

    reach his or her full potential.

     WE ARE PEOPLE O F INTEGRITY

    We are people of character. We value honesty,trust, courage, prudence, and tenacity. We willnot sacrifice our integrity.

     WE EMPOWER OUR EMPLOYEES

    We trust our employees to be independentdecision makers while being held accountable toquality and delivery. We enable our employeesto be proactive in their work and adaptive tochange.

     WE LEAD BY EXA MPLE

    We own our work, individually and as acompany. We have a passion to deliver highquality work and a will to succeed. We value thesuccess of KBR over individual success. We areONE KBR.

    2014 KBR SUSTAINABILITY REPORT 4Commitment

    We Deliver.

    A MESSAGE FROM OUR PRESIDENT AND CEO

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    CODE OF BUSINESS CONDUCT (COBC) 

    At KBR we believe that integrity is the mostimportant value we hold, and it must never besacrificed for the sake of profits. This belief isreflected in our COBC – the ethical standards andlegal principles that are the foundation of ourcompany. KBR’s COBC influences every aspect ofour business, from how we help our customersdevelop their resources, to the way we interactwith the communities where we live and work,to how we treat our people and everyone withwhom we come into contact.

    KBR’s Board of Directors adopted the COBC toestablish a common set of ethical standards andlegal principles that the company expects everyemployee to exhibit when dealing with clients,communities and each other. KBR also expectsthird parties working on behalf of the companyto adhere to the same ethical standards, and willnot condone any illegal or unethical actions.

    KBR conducts its business in compliance with allapplicable laws and in accordance with ethicalstandards. In some situations, the applicable

    laws of the United States may conflict with thoseof another country. In such cases, the companywill endeavor to resolve such conflicts followingthe guidance of our Legal Department. Wheresuch a conflict cannot be resolved, the applicablelaws of the United States will be observed andcomplied with.

    It is the personal responsibility of each employeeto adhere to the standards and restrictionsapplicable to his or her assigned duties andresponsibilities, whether imposed by applicablelaws or the COBC. Each employee must avoid any

    activities that would involve the company in anypractice that is not in compliance with the COBC.Any employee who does not adhere to suchstandards and restrictions is acting outside thescope of his or her employment, responsibilitiesor agency.

    Beyond legal compliance, all employees areexpected to observe high standards of businessand personal ethics in the discharge of their as-signed duties and responsibilities. This requiresthe practice of fair dealing, honesty and integrity

    by employees in every aspect of engaging withcompany employees, the public, the businesscommunity, shareholders, customers, suppliers,partners, competitors and governmental andregulatory authorities. Employees, when actingon behalf of the company, will not take unfairadvantage through manipulation, concealment,abuse of privileged information, misrepresenta-tion of material facts, or other unfair practices.

    Employees have the responsibility to read,understand, and comply with the COBC andto participate in company-mandated COBC

    training. Any employee who compromises orviolates the provisions of the COBC may besubject to disciplinary action includingtermination and, if applicable, criminal orcivil proceedings.

    Examples of conduct that may result indisciplinary action include violating COBCpolicy, requesting others violate COBC policy,or failing to promptly report a known orsuspected COBC violation.

    When in doubt about the propriety of a particularcourse of action, employees are encouraged tocontact the Ethics Hotline or any member of theLaw Department.

    Full disclosure of our COBC can be found athttps://www.kbr.com/Documents/COBC_English.pdf

    ETHICS

    The ethical principles contained in our COBC

    demonstrate our commitment to perform ourmission with the highest integrity. KBR offers anindependently operated, global ethics hotline forreporting possible violations of the KBR COBC orapplicable anti-corruptions laws.

    In the United States in 2014, there were 24discrimination claims resolved in mediation orarbitration through KBR’s Dispute ResolutionProgram and one harassment claim resolved inarbitration. Globally, in 2014, KBR’s Ethics Hotlinereceived 465 calls, with 47 percent related toCOBC issues.

    Our Employees

    2014 KBR SUSTAINABILITY REPORT 5Integrity

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    The nature of KBR’s business requires

    our people to meet challenges anddeadlines every day, safely andresponsibly. In 2014, KBR employeesworked more than 172,000,000 hours at over 600 facilities around theworld with a resulting recordableinjury rate of 0.30. 

    While many consider this recordable injury ratean admirable achievement, KBR views it as thenext threshold on which we must improve. Theonly way to maintain this level of commitmentto continuous improvement is with a matchingcommitment to the health and safety of ourpeople and to the environment.

    At KBR, HSSE is highly integrated into our training,facility and project planning, and a corporateculture that values and believes in each person’sability to achieve complete HSSE success. Thatsuccess begins with being a safe and healthyindividual who mitigates safety risks at work andhome, and also has the courage and feeling ofempowerment to intervene when he or she seesothers at risk.

    We have reinvigorated our safety program througha series of campaigns aimed at realignment andrefocus our efforts by creating a step change thatmakes a good program greater.

    The KBR Zero Harm initiative was launched in late2014 with key components specifically designedto engage employees with our overarching themethat zero incidents are achievable. Central tothis are our seven fundamental HSSE Absolutes,each of which contain elements that support ourcompany and HSSE program vision. These are:

      Total Safety Task Instructions: The KBRpre-task risk assessment and mitigationconducted prior to task commencement.Employees work together to identify taskrelated hazards reinforcing not only safetytraining but also teamwork.

      Courage to Care Conversations: TheCourage to Care Conversation process is abehavioral and observational based safetyprogram that empowers employees to inter-vene with co-workers when unsafe acts areobserved in addition to reinforcing positivebehaviors. Employees are encouraged toexercise the Courage to Care Conversationprocess in their personal lives in an effort toextend a safety mentality all day, every day.

      MyKey Stop Work Authority: MyKeyrepresents each employee’s right to stop anytask if there is a perceived danger or risk,regardless of that employee’s position or levelof authority.

      Safety Energy: Safety Energy is the KBRleading indicator program that is a proven

    best practice. Safety Energy continuously

    measures and tracks the level of engagementthat project leadership expends towardssafety initiatives.

      Keys to Life: The KBR Keys to Life are fieldrelated activities that have been identified ashaving the highest potential to cause seriousinjury. The keys are diligently managed at allfield locations where they establish a clearset of injury mitigationstandards in an effort to trigger robustemployee engagement.

      Key Office Behaviors: The KBR Key OfficeBehaviors are safe office behaviors that areactively managed in all office locations. TheKey Office Behaviors provide a high level ofengagement in an environment that is typicallymore introverted in nature.

      Incident Review Board: The IncidentReview Board provides a method for incidentsto be reviewed through a fair, consistent,and equitable process. The Incident ReviewBoard ensures all high potential incidents arethoroughly reviewed by business segmentleadership as well as serves as a globallessons learned communications platform. 

    Implementing and highlighting these HSSEAbsolutes within our business has provensuccessful based on our incident rates. But atKBR we view incident rates as a representationof someone – a person, a family member, a friend– who suffered as a result of an unsafe act orcondition. It is for this reason that we strive tomake continual improvements to our programs.Zero Harm is about learning from our past tomake today successful and creating a sustainablefuture for our employees and operations.

    Te KBR Zero Harm Program

    Message from HSSE Vice President

    “Sustainability plays a vital role in the future of our business. Te demand for

    businesses to contribute to the communitieswhere they operate is here, and we must

    respond to that demand in a way thatdemonstrates our commitment to create

    value for our stakeholders. We have madesignificant progress in our sustainability

    efforts, from compliance initiatives thatensure continuous improvement in our

    safety, environmental and quality man-agement systems to project pre-planning

    efforts that incorporate programs designedto serve the communities in which we are

    engaged in. Sustainability is integratedinto all areas of our operations, and KBR

    continues to be willing and capable of in-corporating these sustainable development

    activities for the benefit of the community,our operations, and our clients.” 

    Nick Anagnostou, Vice PresidentHealth, Safety, Security and Environment

     

    2014 KBR SUSTAINABILITY REPORT 6Integrity

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    North America Middle East Europe Africa Australia Asia

    2014

    56.8%

    5.4%

    6.2%

    17.9%

    13.6%

    2013

    60.3%

    14.1%

    8.3%

    1.4%

    13.0%

    2.9%

    2012

    51.4%

    27.5%

    8.1%

    7.0%

    4.6% 1.4%

    RECORDABLE INCIDENTS BY REGION, 2011 – 2014

    2011

    44.7%

    43.4%

    4.5%

    1.7%

    0.4%   5.3%

    0.00

    0.05

    0.10

    0.15

    0.20

    0.25

    0.30

    0.35

    0.40

    Recordable Incidents

    Safety incident numbers include subcontractors and joint ventures

    Lost Time Incidents

    2011 2012 2013 2014

    0.10(128)   0.09

    (73)   0.07(48) 0.04

    (34)

    0.37(468)   0.35

    (284)

    0.38(277)

    0.30(257)

    SAFETY INCIDENTS, 2011 – 2014

    Safety Statistics

    2014 KBR SUSTAINABILITY REPORT 7Integrity

    On Feb. 10, employees at KBR’s Corporate Headquarters gathered to sign a Zero Harm banner, a large, visible testament to each individual’spersonal commitment to safety. Personnel at office facilities and sites around the globe conducted similar banner signing ceremonies.

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    EMPLOYEE HEALTH AND WELLNESS

    KBR people are known for their hard work,dedication and drive to deliver innovativesolutions to every challenge – from creating safe,efficient technology that helps customers developtheir resources, to designing and constructing thefacilities and infrastructure that power our world,to providing support for militaries and governmentsaround the globe. To attract such people, wemust offer rewarding careers, opportunitiesfor professional and personal development,equality of opportunity, flexible compensation,

    fair treatment and the expectation that they willbe treated with dignity and respect.

     WELLNESS PROGRA M

    The most successful and productive employeesare usually the healthiest. Understanding themany stressors and obligations that exist in ouremployees’ lives and the challenges involved inmaintaining wellness with so many competingdemands in today’s world, KBR makes the healthof our employees a top priority. Through our manyhealth-focused programs, we demonstrate to our

    employees that we care and want to retain themas valued, long-term team members.

    IN THE U.S.

    Health Screenings

    In 2014, 1,570 employees across the U.S.participated in free on-site health screenings.Screenings include a blood pressure, body fatand body mass index measurement; a cholesteroltest (glucose, HDL/LDL and triglycerides); anda waist-circumference measurement. At thescreening, participants may discuss their test

    results and options for improving their healthwith a health coach.

    Flu Shots

    In 2014, 1,617 employees received free flu shotsat seven KBR offices throughout the U.S. Wealso provided flu shot vouchers for use at localpharmacies to employees who work at locationswhere it is not feasible to provide on-sitevaccinations.

    Healthy Steps

    This wellness program rewards U.S. employeesfinancially for taking specific measures toprotect and improve their health. KBR employeeshad the opportunity to participate in the HealthScreenings. If employees’ screening results werewithin healthy ranges, they automatically earneda premium discount for 2015. If employees’screening results fell below the healthy ranges,they were required to either participate in healthcoaching or improve their numbers on their ownto receive the premium discount. For 2014, 1,151employees received the discount on their 2015medical premium.

    GLOBALLY 

    In the U.K. and Australia, flu shots and voucherswere offered to employees. Employees in SouthAfrica take advantage of a cash back benefitfrom their medical plan that reimburses costsassociated with purchasing healthy foods, fitnessclothing and gym memberships. In the UAE,health checks were carried out for the first timein 2014. Singapore employees participated innumerous organized wellness activities includingteam sports and family days while also takingadvantage of on-site health screenings. Indonesiaconducted flu shots and sponsored severalemployee sports activities.

    In addition to these wellness programs, KBRoffers other initiatives to help employees stayhealthy including on-site health fairs, coachingfor lifestyle and chronic conditions, on-site chairmassages and discounts for fitness facilities,weight-loss programs and retailers that offerhealthy food options.

    EMPLOYEE ASSISTANCE PROGRAM (EAP)

    As an integral part of our ONE KBR and Zero Harmculture, KBR’s EAP provides confidential,

    professional mental health counseling andrelated services free of charge to employeesand their dependents. This helps to ensurethat KBR employees are emotionally healthy,safe and productive and able to meet ourcustomers’ requirements.

    KBR’s EAP organization is staffed internally in theU.S. by a range of licensed mental health profes-sionals, including licensed clinical social workers,licensed professional counselors, licensedchemical dependency counselors and certifiedemployee assistance professionals.

    EAP offers 24-hour crisis intervention, stressmanagement for critical events and individualconsultations covering a wide variety of issuesincluding marital troubles, substance abuse, childrearing, elder care and mental issues.

    Additionally, EAP counselors routinely consultwith supervisors and managers on issues thatinclude workplace crisis intervention, addressingemployee performance problems, as well assupervisory topics involving change management,human relations, communications, and emotional

    resiliency. EAP tools and resources are available

    to help our employees and their supervisors reachtheir full potential so they can be independentbut accountable decision makers, proactive intheir work and responsive to the needs ofKBR’s customers.

    Our Employees

    2014 KBR SUSTAINABILITY REPORT 8Integrity

    Employees attend the annual benefit fair sponsored byWellness@KBR where they receive free flu shots. The fair ispart of KBR’s commitment to ensuring the health and well beingof every employee.

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    Economic sustainability for KBR means creatinga company that will last for generations to come.In 2014, we strengthened our commitment todeliver superior returns to our shareholders andbacked it with sustainable business practicesthat ensure profits today and in the future. Wefocused on our core strengths in consulting,technology, engineering construction, and govern-ment services; restructured the organization tobetter meet the expectations of our customersand other stakeholders; and improved our capitaland operational efficiency.

    Ensuring a sustainable company means creatingour own future rather than reacting to whateveris happening in the marketplace. It means lookingbeyond short-term gains and quick profits to cre-ating opportunities for long-term financial valueand being valued by our customers.

    ECONOMICS

    Good governance is the hallmark of a well-run,economically sustainable company. KBR’s Boardof Directors adheres to a fair and honorable model

    of governance to guide its role as the guardianof shareholder interests. KBR’s Board has fourstanding committees to which it has delegatedcertain duties and responsibilities: Audit,Compensation, Nominating and CorporateGovernance (“NCG”), and Health, Safety,Security, Environment and Social Responsibility(“HSSE&SR”).

    The NCG Committee’s responsibilities include,but are not limited to:

      developing, implementing and periodicallyreviewing KBR’s corporate governanceguidelines;

      developing and implementing a process toassess board and committee effectiveness;

      identifying individuals qualified to becomeboard members, consistent with board-approved criteria; and

      determining the composition of the boardand its committees, including selection ofdirector nominees for the next annual meetingof stockholders.

    The HSSE&SR Committee’s responsibilitiesinclude, but are not limited to:

      reviewing the status of KBR’s health,safety, security, environmental, and socialresponsibility policies and performance,including processes to ensure compliance

    with applicable laws and regulations;

      reviewing KBR’s health, safety, security,environmental, and social responsibilityperformance to determine consistency withpolicies and goals;

      reviewing and providing input to KBR on themanagement of current and emerging health,safety, security, environmental, and socialresponsibility issues;

      overseeing KBR’s activities in managingits major risk exposures within the health,security, environmental, and socialresponsibility areas; and

      reviewing KBR’s political and charitablecontributions and social responsibilityactivities.

    Economics and Finance

    2014 KBR SUSTAINABILITY REPORT 9Transparency

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    FINANCE

    KBR operates in highly competitive markets throughout the world. We believe we offera competitive advantage in the following ways:

      market-leading health, safety and environmental standards and sustainable practices

      customer relationships

      successful prior execution of large projects in difficult locations

      technical excellence and differentiation

      high value in delivered projects and services measured by performance, quality, operability and cost

      service delivery, including the ability to deliver personnel, processes, systems and technology on an

    “as needed, where needed and when needed” basis with the required local content and presence  consistent superior service quality

      financial strength through liquidity, capital capacity and the ability to support warranties

      breadth of proprietary technology, know-how and technical solutions and

      robust risk awareness and management processes.

    KBR conducts business in over 70 countries. Based on the location of projects executed, our operationsin countries other than the U.S. accounted for 63% of our consolidated revenues during 2014, 66% of ourconsolidated revenues during 2013 and 73% of our consolidated revenues during 2012.

    We market substantially all of our project and service offerings through our business segments. Themarkets we serve are highly competitive and for the most part require substantial resources and highly

    skilled and experienced technical personnel. A large number of companies are competing in the marketsserved by our business, including U.S.-based companies such as Bechtel Corporation, Fluor Corporation,Jacobs Engineering Group Inc., AECOM Technology Corporation, and international-based companiessuch as Amec Foster Wheeler plc, Chicago Bridge and Iron Company N.V., Chiyoda Corporation, JGCCorporation, McDermott International, Inc., Petrofac, Saipem S.p.A., Technip S.A., Wood Group PSNand WorleyParsons. Since the markets for our services are vast and extend across multiple geographicregions, we cannot make a definitive estimate of the total number of our competitors.

    Years ended December 31

    Dollars in millions,except per share amounts

    2014 2013 2012 2011 2010

    Statement of Operation Data:

    Revenues $ 6,366 $ 7,214 $ 7,770 $ 9,103 $ 9,962

    Gross profit (loss) (65) 417 518 640 689

    Equity in earnings of unconsolidatedaffiliates

    163 137 151 158 137

    Impairment of goodwill, asset impairmentsand restructuring charges (a)

    (660) — (180) — (5)

    Operating income (loss) (794) 308 299 587 609

    Please see our 10-K filing for more information on Global Operations. 

    Economics and Finance

    2014 KBR SUSTAINABILITY REPORT 10Transparency

    KBR revenue by geographic location as a percentage of total revenues:

    United States, 37%

    Middle East, 11%

    Europe, 10%

    Africa, 4%

    Other countries, 4%

    Australia, 22%Canada, 12%

    2014   2013

    United States, 34%

    Middle East, 13%

    Europe, 8%

    Africa, 8%

    Other countries, 2%

    Australia, 25%Canada, 10%

    2012

    United States, 27%

    Middle East, 13%

    Europe, 7%

    Africa, 21%

    Other countries, 3%

    Australia, 23%Canada, 6%

    http://investors.kbr.com/investors/sec-filings/sec-filings-details/default.aspx?FilingId=10919159http://investors.kbr.com/investors/sec-filings/sec-filings-details/default.aspx?FilingId=10919159http://investors.kbr.com/investors/sec-filings/sec-filings-details/default.aspx?FilingId=10919159

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    Greenford Leatherhead Birmingham Air Hotel

    KBR ELECTRICITY CONSUMPTION, tCO2e

    0

    2,000

    4,000

    6,000

    8,000

    10,000

    2011

    2,802 2,448 2,315 2,073

    3,662 3,443 3,493 3,224

    2,372

    2,4482,315

    2,073

    2012 2013 2014

    KBR NATURAL GAS CONSUMPTION, tCO2e

    0

    200

    400

    600

    800

    1,000

    1,200

    2011

    808 740 835 680

    246 281

    328

    246

    2012 2013 2014

    TOTAL WEIGHT OF OFFICE WASTE, LBS

    0

    200,000

    400,000

    600,000

    800,000

    1,000,000

    1,200,000

    2011

    27,492   30,819   34,492 15,971

    83 7, 756 6 82, 02 1 55 3, 360 6 44 ,8 16

    325,986

    309,032

    230,846

    186,522

    2012 2013 2014

    PAPER CONSUMPTION, LBS

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    2011

    45,112 47,886 36,904 41,635

    8 37, 75 6 68 2, 021 5 53, 36 0 64 4, 816

    325,986

    309,032

    230,846186,522

    2012 2013 2014

    0

    3,000,000

    6,000,000

    9,000,000

    12,000,000

    15,000,000

    2011

    4 ,5 88 ,8 45 4 ,1 65 ,4 21 3 ,0 64 ,9 66 2 ,2 16 ,6 15

    5,433,490 3,053,0362,920,157

    2,999,145

    2,918,308

    2,242,127

    2,242,1272,854,643

    2012 2013 2014

    KBR OFFICE FACILITY WATER USAGE, GALLONS

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    2011

    78,380 44,316 35,176 31,298

    1,814

    1,361

    1,6901,361

    2012 2013 2014

    KBR GLOBAL TRAVEL EMMISSIONS, tCO2eENVIRONMENTAL STATISTICS

    KBR is committed to pursuing sustainable environ-mental solutions to offset human activities that maycontribute to global warming. We make efforts tomitigate any negative contribution to this issue andwork to find ways to reduce carbon emissions. Yearafter year we’ve been recognized by the Carbon TrustStandard for reducing our carbon footprint.

    Although the majority of our energy consumptionis by office operations, we continue to reduce the

    overall usage of all natural resources.

    Our employees are helping where and when they canto reduce our greenhouse gas impacts. In 2014 KBRU.S. offices recycled 360 short (U.S.) tons of paper.

    We continue to work with our clients and suppliers tofind ways to minimize materials that will later becomewaste before they get to the project sites. We makeevery effort to recycle materials. Containers used totransport materials to site are used on return tripsto deliver collected and segregated items to recyclers.

    We make every effort to reduce what we use and

    recycle generated material as a method to helpsustain natural resources.

    Environment

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    Each year KBR employees contribute to the betterment of their communities, volunteering thousand of hours and raising money tosupport worthy causes.

    HUMAN RIGHTS

    As an extension of our COBC, KBR adopted aGlobal Human Rights Policy that acknowledgesthe principles contained in the United NationsDeclarations of Human Rights. While KBR believesit is the role of government in each country toprotect the human rights of its citizens, ouractions play an important role in upholdingequality, dignity and respect for all people inthe countries where we conduct business.

    Our human rights policy serves as a powerfulguide for our employees and subcontractors. Forexample, KBR has a zero-tolerance policy regardingTrafficking in Persons compliance. We enforcethese requirements by conducting pre-awardreviews, mandating that all employees andsubcontractors deployed overseas attend aTrafficking in Persons training program, performingmonthly inspections at subcontractor temporarylabor camps, and offering an ethics hotline foremployees to report any concerns, includingpotential Trafficking in Persons violations.

    VOLUNTEERING

    EMPLOYEE INVOLVEMENT

    KBR employees routinely solve problems and findsolutions for our customers. That’s the founda-tion of our We Deliver commitment. It’s also aquality that extends to our employees’ volunteeractivities. Around the world, KBR employeescontribute many hours to the betterment of theircommunities. At times, it involves small localprojects – planting trees; cleaning parks; adopt-ing schools and repairing playground equipment;

    and lending assistance to the ill, the elderly andthe disadvantaged. While these projects andcauses might seem small in nature, they are onesfor which employees have a real passion. Collec-tively, their efforts add up to thousands of hoursof volunteer service in hundreds of communities.Community outreach in the form of volunteeringor cash donations is further encouraged andfacilitated through KBR’s corporate matchingdonations and the KBR Cares volunteer program,the company’s vehicle for organizing volunteeractivities and raising employee awareness ofcommunity needs. A few examples of employeeinvolvement in 2014:

    Bowling for dollars

    One of the highlights of the year for KBR’s Houstonvolunteers is the Junior Achievement Bowl-a-Thon.Each year KBR employees volunteer as teamcaptains and bowlers/fundraisers competing toraise the most money both within the companyand among other companies in the Houston area.It’s a hotly contested event, with teams vyingto outdo each other in fund raising, costumes

    and team spirit. KBR bowlers raised a total of$21,476.58 in 2014 to provide financial literacytraining and experiences to America’s futurebusiness professionals.

    Lighting up

    Hamilton is a small community in northernMississippi with a population of 631 and one localschool for grades K-12. For the past two yearsKBR has provided maintenance and small capitalservices to Tronox Limited’s titanium dioxidemanufacturing operation, which has been part of

    the town for more than 50 years. After making dowith an aging manual scoreboard for many years,the school’s sports teams raised the money topurchase a new electronic lighted scoreboard fortheir baseball field. Unfortunately, the scoreboardcost more than expected, leaving them without

    the funds to have it installed. Hearing of theirpredicament, KBR reached out to the schooland asked if they could help. Each day, schedulepermitting, KBR employees would load a forklift,a manlift and other equipment onto trailers and,accompanied by a police escort, drive two milesto the school’s baseball field to work on the project.It took five days to get the new scoreboard inplace but KBR met the students’ goal to haveit up and working for the Lady Lions baseballteam’s first game of the season. Once again KBRDelivers – safely, on time and on budget!

    Giving from the heart

    KBR’s corporate matching donations programhelps employees make contributions to thelocal or national charities that are closet to theirhearts. KBR absorbs all of the administrativecosts of the program and adds a 50 percent

    matching donation for employee contributionsover $50.00. Employees may donate to one ormore organizations, either through a one-timecontribution or payroll deductions. In 2014, KBRemployee contributions helped fund parks, preserveestuaries, and provide much needed financialsupport to non-profit organizations involved ineducation, health and welfare, civic programs,arts and culture. KBR employee payroll deductionsof approximately $350,000 to various organiza-tions were supplemented with KBR corporatedollars, for a total of $523,500 in contributions toworthy causes.

    Environment

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    As Qatar’s ambitious Expressway Programme creates the vital transportation linkages to support the country’s growth, KBR’s highlyeffective HSE initiatives are helping to instill a unified safety culture among the many workforces and create a safer future.

    KBR Canada’s Aboriginal and Local Engagement Committee is designed to foster greater under- standing and engagement with this large and growing segment of the country’s workforce.

    COMMUNITY PROJECTS

    RAISING THE BAR FOR SAFETY ACROSS QATAR’S

    EXPRESSWAY PROGRAMME

    It’s the safety superhighway. As ProgrammeManagement Consultant for Qatar’s extensiveExpressway Programme, KBR has 18 projectsin construction, and safety is the driving valueacross all project sites. Throughout, KBR’shealth, safety and environment team has guidedconsultants and contractors in implementinghighly effective safety initiatives that empowerthe project’s many workforces across Qatar. Amongthe initiatives are health, safety and environmenttoolbox talks and stand downs, weekly manage-ment walk throughs, issuing of first aid pouchesfor all workers and the use of safety report cards.

    The focus is paying off. In 2014, numerousExpressway Programme projects celebratednotable safety milestones:

      Dukhan Highway Central, with a workforceof more than 3,000 people, achieved 25 millionhours without a lost time incident (LTI).

      Lusail Expressway, achieved 10 million work-hours without a LTI.

      F-Ring Road, demonstrating a commitmentto an incident and injury-free workplace,achieved four million work-hours without a LTI.

    As more Expressway Programme projects moveinto construction, the safety focus is expandingto include road users driving through and aroundproject sites. In a Qatar first, crash cushions havebeen installed along temporary diversion roads.

    Traffic mounted attenuator vehicles are alsobeing used to guide traffic to make journeys evensafer for road users.

    By achieving project safety milestones andexpanding safety awareness into the community,KBR and its program partners are helping toshape an improved safety culture for constructionprojects across Qatar.

    KBR REACHES OUT TO CANADA’S ABORIGINAL

    COMMUNITIES

    Diversity in the workplace is one of the corner-stones that contribute to a stronger workforce.In Canada, Aboriginal people make up a large andgrowing segment of the workforce. That’s whyemployees of the KBR Services Group has takensteps to ensure that they encourage diversity byreaching out to the local Aboriginal communities.From hiring subcontractors and tradespeopleto work on KBR projects, to increasing Aboriginal

    cultural awareness among KBR staff and estab-lishing relationships within the communities, thegoal is to foster increased trust and opennessamong KBR and the Aboriginal communities.

    To this end, KBR established the Canada Aboriginaland Local Engagement Committee designed toincrease Aboriginal awareness and inclusionin the Canadian communities in which KBRemployees live and work.

    Since most of Canada is governed by treatieswith the indigenous people, industry in Canadahas a duty to consult with Aboriginal people,whose treaty and traditional rights may beaffected by oil and gas projects. But KBR wantedto do more – honoring our client requirementswhile also being proactive and developing ourown long-term relationships with First Nationsand Metis people.

    Not only does it make for a better, more diverseworkforce for KBR projects, it also furthers our

    sustainable development commitments to developprojects efficiently and responsibly, reach out tocommunities through initiatives that meet theirneeds and create greater economic opportunitiesfor the entire region.

    Environment

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    After a fellow Leatherhead, UK employee’s life was saved through the swift response of the region’s air ambulance service,KBR employees raised £5,000 (USD $7,543) to fund the program, which relies on charitable contributio ns.

    KBR TEAMMATES RAISE FUNDS, AIR AMBULANCE

    AWARENESS AT LEATHERHEAD

    When an employee in KBR’s Leatherhead, U.K.,office suffered a serious medical crisis while onthe job, his colleagues responded swiftly to helphim, contacting the emergency response serviceto dispatch an air ambulance (helicopter) to thecampus, ensuring a successful outcome.

    One of the biggest surprises for most KBRemployees that day was the fact that the air

    ambulance service was not funded throughthe U.K. National Health Service, but isa registered charity that relies on fundraisingto survive. It costs £6 million (USD $9.7 million)a year to fund the service, which covers theEnglish counties of Kent, Surrey and Sussex.The single visit to the KBR campus costabout £2,500 (USD $3,771).

    To say thank you, Leatherhead employees decidedto raise money for the service. As part of dressdown Friday, all members of the project wereinvited to wear the shirt of their favorite team,whatever the sport, and pay a fee for the privilege.The event, along with KBR fund matching, raisedmore than £5,000 (USD $7,543) for the air ambu-lance service. The fundraising had a ripple effect;KBR employees later ran in a local half marathonsponsoring the air ambulance.

    CONVERTING TRASH TO ENERGY – SOLID WASTE

    AUTHORITY OF PALM BEACH COUNTY

    Converting municipal solid waste (MSW), ortrash, into energy is not a new process but newand emerging technologies are making the processcleaner and more economical than ever before.KBR provided engineering, procurement andconstruction (EPC) services for the Solid WasteAuthority of Palm Beach County’s RenewableEnergy Facility 2, the most advanced and cleanestwaste-to-energy power plant in North America.

    The facility is designed to transform 3,000 trashper day of MSW into 100 megawatts of cleanenergy, providing power for an estimated 40,000homes and businesses, while reducing the locallandfill deposit rate by up to 90 percent.

    Since the project was awarded in 2011, KBRwas embedded in the community, employing 259local direct hire workers during peak constructionin December 2014 and contracting with 21local subcontractors for engineering, concreteconstruction, electrical work, roofing, landscaping,plumbing, painting and other services. A total of

    $136,943,953 was paid to Palm Beach Countyfirms, including $22,693,474 to small businessenterprises. KBR exceeded its local hirecommitment by 5% for skilled employees and10% for unskilled employees.

    Environment

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    Through an innovative redevelopment and remediation program,KBR transformed the 136-acre brownfield site of its originalClinton Drive campus into a greenspace for urban development.

    The City of Palm Beach’s state-of-the-art waste-to-energypower plant designed and built by KBR will provide power foran estimated 40,000 homes and businesses while reducinglandfill use.

    A key element of the contract was to providetraining and development opportunities forlocal workers. KBR trained 223 participants in awide variety of National Center for ConstructionEducation and Research courses, from field andtask-specific safety training to craft skills such aspipefitting, electrical, rigging, project supervisionand crew leadership.

    KBR also recruited and trained local U.S. Militaryveterans, many of them out of work and living intransitional housing. Through our award-winning

    QuickTrain program, KBR’s ongoing feeder oper-ation for entry level unskilled and semi-skilledworkers, they graduated with basic constructionskills and guaranteed jobs as helpers and laborerson the project.

    KBR RECEIVES FINAL ENVIRONMENTAL

    CERTIFICATION FOR FORMER CORPORATE

    HEADQUARTERS PROPERTY

    When KBR decided to sell the original Brown& Root headquarters at 4100 Clinton Drive,Houston, Texas, the company knew that extensiveremediation would be needed to make it readyfor future development. After more than 100 yearsof industrial activity both with Brown & Root andprevious owners, the site contained residualchemicals and other contaminants.

    The KBR team knew that transforming the 136-acrebrownfield site for more productive use would beno small feat. It took five years and multiple KBRdepartments and teammates working togetherwith civic and local elected officials to completethe remediation process. Approximately 36,000cubic yards of soil was removed and recycledfor use in commercial/industrial projects,enabling KBR to reduce the carbon footprint,lessen resource consumption and lower the costof soil disposal.

    KBR also applied for a Municipal Setting

    Designation (MSD), a tool that is used tostreamline and facilitate urban redevelopmentin Houston.

    An MSD creates an area within a municipalitywhere current and future property owners areprohibited from using the groundwater for potablepurposes such as drinking, bathing, cooking orirrigating crops. Since City of Houston water issupplied by a closed system from surface waterbodies such as Lake Houston rather than shallowgroundwater, this prohibition is merely a formality.By designating a property as being located withinan MSD, owners are not required to clean up thegroundwater to drinking water standards, therebyshortening the remediation process and savingsignificant sums of money. The Clinton Drive siteis the largest tract approved thus far for an MSD.

    KBR received the final certificate of completionfrom the Texas Commission on EnvironmentalQuality in September 2014. In the process itturned a large, historically impacted, limited-usesite into a greenspace that is ready for newlife as a vibrant residential or commercialdevelopment in the heart of Houston.

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    With a can-do attitude and a spirit of innovation, KBR provided a healthy environment for UK and international troops in a remote andarid desert.

    To a large extent, the scope and the boundariesof our approach to corporate sustainability andsustainable development is defined by who weare as a service company and what we do for ourcustomers. As people, and as global corporatecitizens, we strive to make a difference in thelives of the people who work for us, their familiesand all those in the communities where weoperate. The following stories highlight someof our achievements in 2014.

    CAMP BASTION (AFGHANISTAN)

    Located northwest of Lashkar Gah, the capital ofAfghanistan’s Helmand Province, Camp Bastionis a solitary fortress in the middle of an arid,treeless, empty desert. Between 2005 and 2014it was the logistics hub for International SecurityAssistance Force operations in Helmand duringthe War in Afghanistan and Operation Herrickand was capable of accommodating over32,000 people.

    KBR arrived at Camp Bastion in 2007 under theCONLOG (Contractor Logistics) contract with

    Britain’s Ministry of Defence. At peak, more than1,500 KBR staff worked at the base.

    Operating in a remote desert with extremeweather conditions, KBR faced many challengesin performing its mission. But through broadexperience, a can-do spirit and sheer necessity,(the mother of innovation), KBR successfullynavigated every challenge.

    POTABLE DRINKING WATER

    With summer temperatures exceeding 40ºC

    (104ºF), each soldier needed on average, up to10 liters per day of drinking water. Rather thanrelying on road convoys to deliver bottled drinking

    water, KBR designed, constructed and operatedan industrial water bottling plant at the camp.Every day the plant produced 36,000 liters ofwater — a total of 72.5 million bottles from2008 through 2014, containing enough water tofill 29 Olympic swimming pools. KBR not only metthe needs of each soldier, we also:

      Saved the equivalent of 6,400 trucksdeliveries by transporting empty bottlesand preforms, which are 3% of the weightand 9% of the volume of commerciallybottled water.

    Delivered approximately £25 million(USD $37 million) cost savings to the Britishtaxpayers – transport of bottled water intoHelmand being 60% more expensive thanthe Bastion-produced product.

    Reduced the carbon footprint by eliminating

    repeated water delivery trips to and fromthe camp.

    Prevented human death and injury byreducing the need for convoys througha remote and hostile region.

    FULL REGENERATION CAPABILITY

    KBR designed, constructed and operated a majorworkshop repair facility for routine maintenance and

    overhaul programs, extending equipment servicelives, reducing equipment rotation and backloadingto the UK, reducing transportation emissions andgreen footprint and saving a total of £120 million(USD $181 million).

    TACTICAL BASE ABLUTION UNIT

    KBR piloted the KBR TAU, a lightweight, economicand robust yet easily transportable ablutionsystem that improved camp hygiene and livingconditions. With this system, 100% of grey waterwas filtered and cleaned for re-use, requiring thewater tank to be replenished every two weeksunder normal conditions. Black water from toiletflushing was transferred to a holding tank and

    incinerated, with only minimal ash as a by-product.An on-demand battery reduced generator useand delivered an efficiency rating greater than90%. The KBR TAU is now being used in militaryexercises worldwide.

    SUSTAINABLE WASTE MANAGEMENT SYSTEM

    Built in 2013, the waste transfer systemprovided on-site sorting/segregation of wasteinto different streams, resulting in more than a50% reduction in the use of landfill/incineration

    through recycling.

    Woods – 16,445 m3

    Cans, tins and aerosols – 732 m3

    Plastic bottles – 734 m3

    Paper and cardboard – 7,300 m3

    Scrap metals – 455,000 kg (circa 4,460 m3) Waste oils – 372,610 liter Waste fuel – 51,860 liter Landfill/incineration – 25,681 m3

    DEVELOPING LOCAL SKILLS

    With a commitment to contributing to future

    stability, reconstruction and sustainabledevelopment in Afghanistan, KBR maximizedlocal recruitment and procurement by employing,training and developing Locally Recruited Workers.Maintaining a constant dialogue with theemployed “Mullah” or village headman as thekey point of contact for all health, safety, welfare,and cultural issues, KBR employed and trainedthousands of Afghans to the highest standardsof quality and safety. Qualified as electricians,plumbers, air con technicians, generator mechanicsand chefs, they now have skills to contribute totheir nation’s development.

    Projects

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    The award-winning Regional Rail Link in Victoria, Australia is becoming the model for delivering an environmentally sustainableinfrastructure project.

    AUSTRALIAN RAIL LINE

    The Regional Rail Link is a landmark AU$ 4.1 billion(USD $2.97 billion) infrastructure project in theAustralian state of Victoria. Designed to untanglebottlenecks, improve reliability and provide newservices from the heart of Melbourne to growthareas in the west, the project benefits both met-ropolitan and regional travelers, enabling moreVictorians to use sustainable public transport.

    KBR, in joint venture with Arup (KAJV) was awardedconcept design for the project, which includes45km of new rail track, 25 bridges, five newupgraded stations and five grade separations with-in the operational rail corridor. The contract waslater extended to the development of referencedesigns and technical advisory support forprocurement and subsequent construction phases.

    The goal of all the stakeholders was to deliver aproject with a positive legacy for communitiesalong the tracks. Through close collaborationbetween KBR, the other contractors and theRegional Railway Authority project team, theproject has raised the bar for innovative sustain-ability practices on large infrastructure projectsnationwide.

    Key successes include reducing construction-phase energy and carbon by 20 percent, developinga groundbreaking environmental rating toolfor railway stations and achieving green starcertifications for five railway stations – a firstin Australia. The project also introducedinnovative practices for the recycling and reuseof construction and demolition waste resultingin large reductions in materials such as Portlandcement, timber and base building materials.

    The project received the Infrastructure and

    Buildings Award at the Premier’s SustainabilityAwards 2014, which recognizes and celebratesachievements and dedication toward buildinga more environmentally sustainable future forVictoria. More importantly, it offers tangibleproof that with a strong commitment by projectstakeholders, sustainability can be successfullybuilt into large-scale infrastructure projectsfrom inception, encouraging further innovationsthroughout its operating life.

    Projects

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    Global Reporting Index 4.0 IndicatorsGeneral Standard Disclosures

    EC Economic PerformanceEN Environmental PerformanceHR Human Resources and Human Rights

    LA Labor Practices and Decent WorkPR Product Responsibili ty and ComplianceSO Social Performance and Society

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    INDICATOR PROFILE DESCRIPTION RESPONSE

    G4 1  Provide a statement from the most senior decision-maker of the organization (such as CEO,chair, or equivalent senior position) about the relevance of sustainability to the organization andthe organization’s strategy for addressing sustainability.

    See CEO’s statement in our report content.

    G4 2 Provide a description of key impacts, risks, and opportunities. Our rate of growth and the success of our business depend upon our abil ity to attract, develop and retain a sufficient number

    of affordable trained engineers and other skilled workers either through direct hire or acquisition of other firms employing suchprofessionals. The market for these professionals is competitive. If we are unable to attract and retain a sufficient number ofskilled personnel, our ability to pursue projects may be adversely affected, the cost of executing our existing and future projectsmay increase, and our financial performance may decline.

    A significant portion of our revenue is derived from foreign operations, which exposes us to risks inherent in doing business ineach of the countries where we transact business. The occurrence of any of the risks described below could have a materialadverse effect on our business operations and financial performance. With respect to any particular country, these risks mayinclude by are not limited to:

      Expropriation and nationalization of our assets in that country;  Political and economic instability;  Civil unrest, acts of terrorism, force majeure, war or other armed conflict;  Currency fluctuations, devaluations and conversion restrictions;  Confiscatory taxation or other adverse tax policies;  Governmental activities or judicial actions that limit or disrupt markets, restrict payments, limit the movement of funds, result

    in the deprivation of contract rights or result in the inability for us to obtain or retain licenses required for operation.

    Due to the unsettled political conditions in many oil-producing countries and other countries where we provide governmentallogistical support, our financial performance is subject to the adverse consequences of war, the effects of terrorism, civil unrest,strikes, currency controls and governmental actions. Our operations are conducted in areas that have significant amounts ofpolitical risk. In addition, military action or continued unrest in the Middle Ease could impact the supply and price of oil and gas,disrupt our operations in the region and elsewhere and increase our costs related to security worldwide.

    Some of our services are performed in high-risk locations, such as Iraq, Afghanistan, Nigeria, Algeria, Egypt and Saudi Arabiawhere the country or location and surrounding area is suffering from political, social, economic issues, war or civil unrest. Inthose locations where we have employees or operations, we have and may continue to incur substantial costs to maintain thesafety of our personnel. Despite these precautions, we have suffered the loss of employees and contractors which could exposeus to claims and litigation. In the future, the safety of our personnel in these and other locations may continue to be at risk,exposing us to the potential loss of additional employees and contractors. For more information, please view our Annual Report.

    G4 3 Report the name of the organization. KBR, Inc.

    G4 4 R ep or t t he pr im ar y b ra nd s, pr odu ct s, and se rv ic es. K BR , In c. an d i ts su bs idi ar ie s ( co ll ec ti ve ly, “K BR” ) is an eng in ee ri ng, con st ruc ti on an d s er vi ce s c om pan y s upp or ti ng th e g lo ba lhydrocarbons and international government services market segments.

    G4 5 Report the location of the organization’s headquarters. 601 Jefferson Street, Suite 3400 Houston, Texas 77002

    G4 6 Report the number of countries where the organization operates, and names of countrieswhere either the organization has significant operations or that are specifically relevant tothe sustainability topics covered in the report.

    We conduct business in over 70 countries. KBR’s major operations in regards to revenue are in the following countries/regions:U.S., Australia, Africa, Europe, Middle East, and Canada. KBR’s major operations in regards to property, plant and equipment arein the following countries: U.S., U.K. and Asia-Pacific

    G4 7  R ep or t t he na tu re of own er sh ip an d l eg al fo rm. K BR , Inc. wa s i nco rpo ra te d in De la war e o n M ar ch 21 , 2 006 pr ior to an excha nge of fer tra nsact ion th at sep ar at ed us fr om ou r fo rm erparent, Halliburton Company, which was completed on April 5, 2007. We trace our history and culture to two businesses, TheM.W. Kellogg Company (Kellogg) and Brown & Root, Inc. (Brown & Root). Kellogg dates back to a pipe fabrication business whichwas founded in New York in 1901 and has been creating technology for petroleum refining and petrochemical processing since1919. Brown & Root was founded in Houston, Texas in 1919 and built the world’s first offshore platform in 1947. Brown & Rootwas acquired by Halliburton in 1962 and Kellogg was acquired by Halliburton in 1998 through its merger with Dresser Industries.

    G4 8 Report the markets served (including geographic breakdown, sectors served, and types ofcustomers and beneficiaries).

    Our business strategy is to provide our customers with differentiated and superior capital project delivery and services offeringsacross the entire engineering, construction and operations project lifecycle. We aim to create enhanced customer satisfactionleading to repeat business through a best-in-class delivery platform. Our projects are generally long-term in nature and an

    essential feature of our global strategy is to establish local operations in locations where services demand growth is expected.Our core skills are conceptual design, front-end engineering design (“FEED”), engineering, project management, procurement,construction, construction management, logistics, commissioning, operations and maintenance.

    2015 KBR SUSTAINABILITY REPORT 192014 KBR SUSTAINABILITY REPORT 19Global Reporting Initiative (GRI)

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    2015 KBR SUSTAINABILITY REPORT 202014 KBR SUSTAINABILITY REPORT 20

    INDICATOR PROFILE DESCRIPTION RESPONSE

    G4 9 Report the scale of the organization, including: As of December 31, 2014, we had approximately 25,000 employees.See G4-6$6,366,000,000N/A - Not a private sector organizationN/A - KBR does not sell specific products. We are an engineering and construction company that provides support on specific

    projects.

    G4 11 Report the percentage of total employees covered by collective bargaining agreements. 887 employees are covered by collective bargaining agreements.

    G4 12 D escribe t he organizat ion’s supply chain. KBR’s supply management ser vices leverage today’s technologies and logistics methods to make efficient decisions whichstreamline the supply management process.

    We have a global track record of ensuring timely and accurate material receipt through innovative expedition and quality assur-ance with vendors to minimize receiving delays and errors. We optimize transportation networks, operating hand-in-hand withglobal freight forwarders with dedicated assets.

    We also leverage the latest supply chain technology to ensure our customers’ material is accurately tracked throughout itsjourney to its destination and installation.

    Proportion of spending on local suppliers at significant locations of operation.

    G4 13 Changes in the location of, or changes in, operations, including facility openings, closings, andexpansions;

    Changes in the share capital structure and other capital formation, maintenance, and alterationoperations (for private sector organizations)

    Changes in the location of suppliers, the structure of the supply chain, or in relationships withsuppliers, including selection and termination

    In November 2013, we closed on the sale of a portion of a subsidiary, Allstates Technical Services, for $10 million in cash. Thesale resulted in a $3 million pre-tax gain and is recorded in “gain on disposition of assets” in our consolidated statements ofoperations.

    During the three months ended March 31, 2015, we entered into an agreement to acquire the noncontrolling interest in one ofour consolidated joint ventures for $40 million. We paid the partner previously accrued expenses of $8 million. The acquisition ofthese shares was recorded as an equity transaction, with a $40 million reduction in our paid-in capital in excess of par.

    G4 14 Report whether and how the precautionary approach or principle is addressed bythe organization.

    KBR acknowledges the 15th principle contained in the United Nations Rio Declaration on Environment and DevelopmentPrinciples as a general standard for sustainable development concerns worldwide. KBR will continue to play a role in upholdingsustainable development principles by our actions in the countries in which we do business.

    G4 15 List externally developed economic, environmental and social charters, principles, or otherinitiatives to which the organization subscribes or which it endorses.

    Committee for Economic Development of Australia – The (CEDA) is a bipartisan, non-profit, national, independent, member-basedorganisation providing thought leadership and policy perspectives on the economic and social issues affecting Australia. Itsexpressed aim is to “promote national economic development in a sustainable and socially balanced way.

    Carbon Disclosure Project – We have participated in the CDP since 2010. CDP works to transform the way the world doesbusiness to prevent dangerous climate change and protect our natural resources.

    Centers for Houston Future – We support t his dynamic, community based organization that works to solve our region’s toughestproblems. This organization accomplishes this goal by providing meaningful research, defining innovative strategies, and

    engaging diverse leaders. The overarching benefit to the community is that of an independent and respected source ofLeadership, Research and Solutions.

    G4 16 List memberships of associations (such as industry associations) and national or internationaladvocacy organizations in which the organization: holds a position on the governance body;participates in projects or committees; provides substantive funding beyond routine member-ship dues, views membership as strategic

    KBR and its employees participated in the following during 2014:

      Aerospace, Defence and Security Association  American Chamber of Commerce – Australia, Azerbaijan, Brazil  American Council of Engineering Companies of Texas (ACEC Texas)  American Fuel & Petrochemical Manufacturers (AFPM)  American Immigrations Lawyers Association (AILA)  American Institute of Architects  American Institute of Certified Public Accountants (AICPA)  American Institute of Chemical Engineers (AIChE)  American Institute of CPA’s  American Petroleum Institute (API)

    Global Reporting Initiative (GRI)

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    INDICATOR PROFILE DESCRIPTION RESPONSE

    G4 16 List memberships of associations (such as industry associations) and national or internationaladvocacy organizations in which the organization: holds a position on the governance body;participates in projects or committees; provides substantive funding beyond routine member-ship dues, views membership as strategic

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      American Society of Civil Engineers  American Society of Mechanical Engineers (ASME)  American Welding Society (AWS)  ASIS  Associated Builders & Contractors National Diversity Committee  Association for Financial Professionals  Association of Corporate Travel Executives (ACTE)  Association of General Contractors (AGC)  Association of the United States Army (AUSA)  Australian Petroleum Production and Exploration Association (APPEA)  Bayou Preservation Association  Bi-lateral U.S. Arab Chamber of Commerce  BIPAC  Birmingham Business Alliance  British Chemical Engineering Contractors Association (BCECA)  British Safety Council  Business Council of Alabama  Business Council of International Understanding  Business Roundtable – Golden Triangle, Houston  CAPS Research

      Center for Houston’s Future  Chamber of Commerce  Committee for Economic Development of Australia  Construction Industry Institute  Construction Management Association of America (CMAA)  Consult Australia – National Sustainability Roundtable  Design Build Institute of America (DBIA)  Energy Institute  Engineering and Construction Contracting Association (ECC)  Engineering and Construction Risk Institute (ECRI)  Engineering Construction Industry Training Board (ECITB)  Engineers Australia – Society for Sustainability and Environmental Engineering  Gas Processors Association Ltd.  Gasification Technologies Council (GTC)  Global Business Travel Association (GBTA)  Golden Training Business Round Table  Greater Houston Partnership  Gulf Coast Power Association  Gulf Petrochemicals and Chemicals Association (GPCA)  Houston Business Roundtable  Houston Minority Supplier Development Council  Institute for Supply Management  Institute of Electrical and Electronics Engineers (IEEE)  Institute of Materials, Materials and Mining  Institute of Measurement and Control  Institution of Engineering and Technology (IET)  Institution of Structural Engineers  International Facility Management Association (IFMA)  IT Service Management Forum (ITSMF)  Manufacture Alabama  Manufacturers Alliance for Productivity and Innovation (MAPI)  National Association of Industrial & Office Product (NAIOP) Northern Virginia  National Association of Minority Contractors  National Contract Management Association (NCMA)

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    G4 16 List memberships of associations (such as industry associations) and national or internationaladvocacy organizations in which the organization: holds a position on the governance body;participates in projects or committees; provides substantive funding beyond routine member-ship dues, views membership as strategic

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      National Defense Industrial Association (NDIA)  National Foreign Trade Council  National Petroleum Council  National Association of Minority Contractors  Partners for Environmental Progress  Petroleum Federation of India (PetroFed)  Process Industry Practices  Procurement Executives Group  Professional Services Council  Program Advisory Committee (PAC) Kitimat Valley Institute (KVI)  Project Management Institute (PMI)  Renewable UK  Restore America’s Estuaries  Roads Australia – Sustainability Chapter  Safety Institute of Australia  Simulation Australia  Society for Human Resource Management (SHRM)  Society of American Military Engineers (SAME)  Society of Naval Architects and marine Engineers (SNAME)  Society of Women Engineers (SWE)  South African Institution of Chemical Engineers  Subsea Energy Australia  Technical Association of Pulp and paper Industry (TAPPI)  US Chamber of Commerce – Iraq Business Initiative  US-China Energy Cooperation Program  US Green Building Council (USGBC)  Water Services Association of Australia  Women Business Enterprise Alliance  Women in Defence  Women’s Energy Network

    G4 17 List all entities included in the organization’s consolidated financial statements or equivalentdocuments.

    Report whether any entity included in the organization’s consolidated financial statements orequivalent documents is not covered by the report.

    KBR offers an extensive portfolio of proprietary technology and consulting services; engineering, construction, procurement andasset maintenance services; and base operational, logistics, life support and asset management services, through our Technology& Consulting, Engineering & Construction and Government Services business segments.

    We enter into joint ventures and alliances with other industry participants in order to reduce exposure and diversify risk, increasethe number of opportunities that can be pursued, capitalize on the strengths of each party and provide greater flexibility in

    delivering our services based on cost and geographical efficiency. Clients of our E&C business segment frequently require EPCcontractors to work in teams given the size and complexity of global projects that may cost billions of dollars to complete. Oursignificant joint ventures and alliances are described below. All joint venture ownership percentages presented are stated as ofDecember 31, 2014.

    We are working with JGC and Chiyoda for the purpose of design, procurement, fabrication, construction, commissioning andtesting of the Ichthys Onshore LNG export facility in Darwin, Australia. The project is being executed using two joint ventures andwe own a 30% equity interest in each joint venture. The investments are accounted for using the equity method of accountingand reported in our E&C business segment.

    KJVG is a joint venture consisting of JGC, Hatch Associates, Clough Projects Australia and KBR for the purpose of design,procurement, fabrication, construction, commissioning and testing of the Gorgon onshore LNG project located on Barrow Islandoff the northwest coast of Western Australia. We hold a 30% interest in the joint venture which is consolidated for financialaccounting purposes and reported in our E&C business segment.

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    G4 17 List all entities included in the organization’s consolidated financial statements or equivalentdocuments.

    Report whether any entity included in the organization’s consolidated financial statements orequivalent documents is not covered by the report.

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    Aspire Defence Holdings Limited (“Aspire Defence”) is a joint venture currently owned by KBR and two financial investors to up-grade and provide a range of services to the British Army’s garrisons at Aldershot and around the Salisbury Plain in the U.K. Weown a 45% interest in Aspire Defence and we own a 50% interest in each of the two joint ventures that provide the construction

    and related support services to Aspire Defence. The investments are accounted for using the equity method of accounting andreported in our GS business segment.

    Mantenimiento Marino de Mexico (“MMM”) is a joint venture formed under a Partners Agreement with Grupo R affiliated enti-ties. The principal Grupo R entity is Corporative Grupo R, S.A. de C.V. and Discoverer ASA, Ltd., a Cayman Islands company. ThePartners Agreement covers five joint venture entities executing Mexican contracts with Petróleos Mexicanos (“PEMEX”). MMMwas set up under Mexican maritime law in order to hold navigation permits to operate in Mexican waters. The scope of thebusiness is to render maintenance, repair and restoration services of offshore oil and gas platforms and provisions of quarteringin the territorial waters of Mexico. We own a 50% interest in MMM and in each of the four other joint ventures. We account forour investment in these entities using the equity method of accounting and report them in our E&C business segment.

    G4 18 Explain the process for defining the report content and the Aspect Boundaries.

    Explain how the organization has implemented the Reporting Principles for Defining ReportContent.

    The content of this report is provide using the “in accordance “core to provide full disclosure of KBR managed operations; asstated in previous reports the environmental data is provided for KBR owned facilities. Economic, social and environmentalinformation found in this report is also mentioned in our 2014 Annual Report, including Form 10-K and Annual Proxy Statements.This report is prepared under the direction of the VP of HSSE and KBR’s Sustainable Development Committee which hasexecutive management representation.

    G4 19 List all the material Aspects identified in the process for defining report content. KBR’s material aspects continues to be our Core Values of Commitment, Integrity, Transparency, Accountability andResponsibility, in short; our Employees, Economic and Environment focus . We have not made significant changes fromour previous reports in aspect boundaries. 

    G4 20 For each material Aspect, report the Aspect Boundary within the organization, as follows: All aspects identified in G4-19 are material within our organization.

    G4 21 For each material Aspect, report the Aspect Boundary outside the organization, as follows: Not engaged with aspect boundaries outside of our organization.

    G4 22 Report the effect of any restatements of information provided in previous reports, and thereasons for such restatement

    We have restated our Consolidated Statement of Operations for the year ended December 31, 2013. We determined therestatement was necessary due to the materiality of the additional estimated costs to complete seven Canadian pipe fabricationand modular assembly contracts within our Services business segment which we identified subsequent to filing our Form 10-Kon February 27, 2014. In addition, we identified a pre-tax error which resulted in an overstatement in our revenue recognition ona long-term construction project. We also identified an error which resulted in an understatement of our income tax provision.The adjustment to “provision for income taxes” on the consolidated statements of income for the year ended December 31, 2013reflects this additional expense. In addition, we have corrected several immaterial errors which resulted in an increase in netincome. These errors resulted in misstatements in our Consolidated Statement of Operations for the year ended December 31,2013 as follows:

    In KBR’s Restated Consolidated Statement of Operations from 2013:

    Net Income Attributable to KBR was $75,000,000 USD.

    Services Revenue was $7,214,000,000 USD.

    Cost of Services was $6,797,000,000 USD.

    General and Administrative was $248,000,000 USD.

    Provision for Income Taxes was $129,000,000 USD.

    In KBR’s Consolidated Balance Sheets, Retained Earnings were $1,748,000,000 USD.

    Please view KBR 2013 10-K/A for more information.

    G4 23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries. The 2011-2013 Sustainability Report followed GRI 3.1. This report will provide information on GRIs indicators that may not havebeen addressed in previous report.

    G4 24 Provide a list of stakeholder groups engaged by the organization. KBR engages with its stakeholder groups including shareholders, cl ients, communities, nonprofits, governments, suppliers and

    employees.

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    G4 26 Report the organization’s approach to stakeholder engagement, including frequency ofengagement by type and by stakeholder group, and an indication of whether any of theengagement was undertaken

    KBR, Inc. maintains an investors hotline that allows stockholders to call. Additionally, there is an Annual Meeting of Stockholderswhich gives shareholders an opportunity to speak with the Board of Directors as well as the Executive Leadership Team.

    G4 27 Report key topics and concerns that have been raised through stakeholder engagement, and

    how the organization has responded to those key topics and concerns, including through itsreporting. Report the stakeholder groups that raised each of the key topics and concerns.

    No key topics reported for 2014.

    G4 28 Reporting period (such as fiscal or ca lendar year ) for in fo rmat ion p rovided. January 1, 2014 th rough December 31, 2014

    G4 29 D ate of most recent previous report (if any). KBR published its last report on Apr il 2013; we reported in confor mance with the Global Reporting Initiative (GRI) frameworkusing the GRI G3.1 Indicators. The report contained information for years 2011-2013.

    G4 30 Repor ting cycle (such as annual, biennial). KBR will publish the report annually. Sustainability Report cover the 2014 calendar year, from January 1, 2014 throughDecember 31, 2014.

    G4 31 Provide the contac t point for ques tions regarding the report o r i ts contents . P lease contact us a t [email protected]

    G4 32 GRI Context Index “In accordance” – Core has been chosen by the organization.

    G4 33 Assurance This report was not third party verified.

    G4 34 Report the governance structure of the organization, including committees of the highestgovernance body. Identify any committees responsible for decision-making on economic,environmental and social impacts.

    KBR, Inc.’s Board of Directors is currently comprised of nine directors All of teh directors are independent , non-executive directorsexcept for the CEO. The Chairman of the Board is independent. All directors are elected annually, with nominees standing forelection to one-year terms. At this time, the Board has four standing committees to which it has delegated certain duties andresponsibilities: Audit, Compensation, Nominating and Corporate Governance (“NCG”), and Health, Safety, Security, Environmentand Social Responsibility (“HSSE & SR”).

    The NCG Committee’s responsibilities include, but are not limited to:

      developing, implementing and periodically reviewing KBR’s corporate governance guidelines;  developing and implementing a process to assess Board and committee effectiveness;  identifying individuals qualified to become Board members, consistent with Board-approved criteria; performing an annual

    evaluation of our independent directors;  determining the composition of the Board and its committees,including selection of the Director nominees for the next annual

    meeting of stockholders; and  periodically reviewing the compensation paid to non-employee directors (including Board and committee chairpersons) in the

    form of annual retainers and meeting fees, if any, and making recommendations to the Board regarding any adjustments.

    The HSSE & SR Committee’s responsibilities include, but are not limited to:

      reviewing the status of KBR’s health, safety and sustainable development policies and performance, including processesto ensure compliance with applicable laws and regulations;

      reviewing KBR’s health, safety and sustainable development performance to determine consistency with policies and goals;  reviewing and providing input to KBR on the management of current and emerging health, safety and sustainable

    development issues;  overseeing KBR’s activities in managing its major risk exposures within the health, safety and sustainable development areas;

    and  reviewing KBR’s political and charitable contributions and social responsibility activities.

    G4 35 Report the process for delegating authority for economic, environmental and social topics fromthe highest governance body to senior executives and other employees.

    Members of the Health, Safety, Security, Environment and Social Responsibility Committee communicate with and delegateHSSE and SR related tasks to senior executives and other employees during and outside of committee meetings.

    G4 36 Report whether the organization has appointed an executive-level position or positions withresponsibility for economic, environmental and social topics, and whether post holders reportdirectly to the highest governance body.

    KBR, Inc. appointed Nick Anagnostou as the global head of Health, Safety, Security, and Environment in 2014. Mr. Anagnostoureports directly to the CEO and presents HSSE related status updates to the HSSE & SR Committee.

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    G4 37 Report processes for consultation between stakeholders and the highest governance body oneconomic, environmental and social topics. If consultation is delegated, describe to whom andany feedback processes to the highest governance body.

    To foster better communication with KBR’s stockholders, KBR established a process for stockholders and other interested partiesto communicate with the Audit Committee and the Board. The process was approved by the Board and its Audit Committee andis designed to meet the requirements of the NYSE and the SEC. Stockholders and other interested parties may communicate withthe Board or the independent/non-executive directors via mail (Board of Directors c/o Director of Business Conduct, KBR, Inc.,P.O. Box 3406, Houston, Texas 77253-3406), telephone (1-855-231-7512 (toll-free from the U.S. or Canada) or 1-503-619-1884

    (calling collect from any other country)), or e-mail ([email protected]). Information regarding these methods of communicationis also on the KBR website, www.kbr.com, under “Corporate Governance.”

    G4 38 Report the composition of the highest governance body and its committees by:

      Executive or non-executive  Independence  Tenure on the governance body  Number of each individual’s other significant positions and commitments, and the nature of

    the commitments  Gender  Membership of under-represented social groups  Competences relating to economic, environmental and social impacts  Stakeholder representation

    At this time, the Board has four standing committees to which it has delegated certain duties and responsibilities: Audit,Compensation, Nominating and Corporate Governance (“NCG”), and Health, Safety, Security, Environment and SocialResponsibility (“HSSE &SR”). Each committee is comprised of independent directors. The eight independent directors andthe committees on which they serve are:

    Mark E. Baldwin, 61 (Audit and HSSE & SR)James R. Blackwell, 56 (Audit and HSSE & SR)Loren K. Carroll, 71 (Chairman of the Board)Jeffrey E. Curtiss, 66 (Audit Chairman and NCG)Umberto della Sala, 66 (Compensation and HSSE & SR)Lester L. Lyles, 68 (HSSE & SR Chairman and Audit)Jack B. Moore, 61 (Compensation Chairman and NCG)Richard J. Slater, 6