KBR adjusts to life outside the warzone

Company takes on more State Department work as military operations close in Iraq and Afghanistan.

After a decade of war, KBR Inc. is now helping guide the Army step down its operations by managing the logistics of withdrawals. However, reducing troops and operations in war zones continues to reduce KBR’s revenue. Now company executives are looking for new areas of business.

The Houston-based company's government business has been declining. U.S. military officials have reduced their forces in Iraq, and KBR is completing work in Afghanistan. Operations in its North American Government and Logistics division, formerly known as North American Government and Defense, decreased by $1.1 billion in 2011, compared to 2010. Much of that decrease involved one contract, the Logistics Civil Augmentation Program (LogCAP) III contract, use of which declined to $1.5 billion in 2011, from $2.8 billion in revenue in 2010.

But despite the declines the company still ranks No. 16 with $2.2 billion in prime contracts in fiscal 2011.

KBR has demobilized in the Iraqi theater of operations and the scope of KBR operations under the LogCAP III contract effectively ended in December.

“Although we have seen some U.S. troop deployments shift within the Middle East region to Afghanistan and other areas under LogCAP IV, we expect the volume of services we provide to the U.S. government in the Middle East to continue to decline over the next few years,” KBR wrote in its 2011 annual report.

Still, KBR has hope. One of its key awards in 2011 was the sustainment task order under the LogCAP IV contract. The task order encompasses support services for the U.S. embassy staff in Baghdad and other diplomatic posts throughout Iraq, as the Defense Department largely moves on.

“Our North American Government and Logistics Business Unit made a successful transition in Iraq from supporting U.S. troops to supporting the U.S. Department of State,” William Utt, KBR’s chairman, president and CEO, wrote in the report.

The company sees more LogCAP work ahead. It already offset some decreases with an increase of roughly $188 million associated with its LogCAP IV task order that began in the middle of 2010.

With past successes and the ability to provide local services through its Iraqi First program, “KBR occupies an outstanding position from which to compete for a volume of LogCAP IV work that is shaping up to be larger than initially anticipated,” according to the report.

KBR is also bringing in revenue from its continued work with the U.S. Army in Europe. It has a contract worth up to $245 million over five years, which includes base operations and support services in a region encompassing 51 countries. The contract extends KBR’s work in the Balkans that dates back to 1995.

As another major 2011 award, KBR was a winner of a multiple-award contract from the U.S. Central Command (CENTCOM). It opens the door for KBR to compete for $3.8 billion worth of work over the next five years. The current program includes design-and-build and construction projects that support the U.S. military and other government operations throughout 20 Middle Eastern countries.

As a case for past performance, KBR has carried out $620 million of work across 32 task orders under the previous CENTCOM MATOC program.

In the company report, Utt put a positive spin on the past year as he looked ahead. Excluding expected declines associated with the LogCAP work, revenue grew 4 percent. KBR’s backlog continued to strengthen, growing 4 percent during the year despite a 9 percent reduction in revenue backlog. It reflects a reduction in lower-margin legacy projects.

The approach ahead is one of calculated steps.

“We will proceed thoughtfully, reflecting our core values and our best-in-class risk awareness and management, which have driven consistent financial performance over the last five years,” Utt wrote.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.