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Commitment
Integrity
Transparency
Accountability
Responsibility
GRI
> ENVIRONMENT
> PROJECTS
FINANCE
>> Economics
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Statistics
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KBRs Corporate Sustainability Report, Built on Values Our Story Continues, discloses our significant social, environmental and economic impacts to provide
our stakeholders a way to assess our commitment to corporate sustainability. Our stakeholders include shareholders, customers, employees, government and
industry 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. GRIs mission is to make
sustainability 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 and
reflects KBRs relevant and material aspects of sustainable development. Previous reports were published on a three-year basis. With this report, our third, we
are moving toward an annual publication.
If you have questions on this report please email us at Investors@kbr.com.
Commitment
We Deliver.
As a company that develops technology, designs and
builds energy infrastructure and provides services to
government clients around the world, we have the potential
to leave lasting footprints wherever we go. At KBR our
philosophy has always been to treat other peoples
communities with the same respect as our own. We
focus on Health, Safety, Security and Environment (HSSE)
because we believe in leaving a place as good as, or even
better than, we found it.
The theme of this years report Built on Values reflects our commitment
to doing the right thing for our people, our clients and partners, and the
communities and countries in which we do business.
When I joined this company as CEO in June of 2014, I knew I was coming
into an organization with a 100-year history of serving clients wherever
and whenever they needed KBR to be. Whether its providing the technology
and consulting know-how to develop our customers valuable global assets;
designing and constructing the infrastructure and facilities to develop the
worlds energy resources; providing support and services for men and
women of their countries armed forces; or navigating the intricacies of
undertaking major projects in geopolitically or culturally sensitive
environments, KBR delivers.
However, KBRs proud tradition of service and accountability is not an end.
Rather it inspires a pressing and continuing commitment to live up to the
ideals established by those who came before us and to advance those
ideals for the next generation of KBR leaders and employees.
Commitment
We Deliver.
KBRS BEHAVIORS ARE:
WE DELIVER
To do this requires the will and the courage to adapt to an ever-changing and
challenging future by understanding and meeting the needs of customers in
diverse markets without succumbing to market volatility and risk. It means
responding to the concerns and values of all of our neighbors in a respectful
and accepting manner in accordance with the customs and needs of each
community in which we operate. It means understanding that a company
thrives not just by capturing markets, but by serving the people, cities and
countries of our global community.
We are honored to have the opportunity to work with clients around the
world building the projects of the future and helping to contribute to a better
tomorrow for everyone.
Stuart Bradie,
KBR President and CEO
Integrity
Our Employees
CODE OF BUSINESS CONDUCT (COBC)
At KBR we believe that integrity is the most
important value we hold, and it must never be
sacrificed for the sake of profits. This belief is
reflected in our COBC the ethical standards and
legal principles that are the foundation of our
company. KBRs COBC influences every aspect of
our business, from how we help our customers
develop their resources, to the way we interact
with the communities where we live and work,
to how we treat our people and everyone with
whom we come into contact.
KBRs Board of Directors adopted the COBC to
establish a common set of ethical standards and
legal principles that the company expects every
employee to exhibit when dealing with clients,
communities and each other. KBR also expects
third parties working on behalf of the company
to adhere to the same ethical standards, and will
not condone any illegal or unethical actions.
KBR conducts its business in compliance with all
applicable laws and in accordance with ethical
standards. In some situations, the applicable
laws of the United States may conflict with those
of another country. In such cases, the company
will endeavor to resolve such conflicts following
the guidance of our Legal Department. Where
such a conflict cannot be resolved, the applicable
laws of the United States will be observed and
complied with.
It is the personal responsibility of each employee
to adhere to the standards and restrictions
applicable to his or her assigned duties and
responsibilities, whether imposed by applicable
laws or the COBC. Each employee must avoid any
ETHICS
The ethical principles contained in our COBC
demonstrate our commitment to perform our
mission with the highest integrity. KBR offers an
independently operated, global ethics hotline for
reporting possible violations of the KBR COBC or
applicable anti-corruptions laws.
In the United States in 2014, there were 24
discrimination claims resolved in mediation or
arbitration through KBRs Dispute Resolution
Program and one harassment claim resolved in
arbitration. Globally, in 2014, KBRs Ethics Hotline
received 465 calls, with 47 percent related to
COBC issues.
Integrity
HSSE BRANDING
CMYK
Integrity
Safety Statistics
SAFETY INCIDENTS, 2011 2014
0.37
(468)
0.40
0.38
(277)
0.35
(284)
0.35
0.30
(257)
0.30
0.25
0.20
0.15
0.10
(128)
0.10
0.09
(73)
0.07
(48)
0.04
(34)
0.05
0.00
2011
2012
Recordable Incidents
2013
On Feb. 10, employees at KBRs Corporate Headquarters gathered to sign a Zero Harm banner, a large, visible testament to each individuals
personal commitment to safety. Personnel at office facilities and sites around the globe conducted similar banner signing ceremonies.
2014
5.3%
0.4%
1.7%
4.5%
4.6%
2.9%
1.4%
7.0%
13.6%
13.0%
1.4%
8.1%
8.3%
60.3%
51.4%
44.7%
2011
North America
Middle East
5.4%
2012
Europe
Africa
56.8%
6.2%
14.1%
27.5%
43.4%
17.9%
Australia
2013
Asia
2014
Integrity
Our Employees
EMPLOYEE HEALTH AND WELLNESS
Flu Shots
WELLNESS PROGRAM
Health Screenings
Healthy Steps
Transparency
Transparency
customer relationships
skilled and experienced technical personnel. A large number of companies are competing in the markets
served by our business, including U.S.-based companies such as Bechtel Corporation, Fluor Corporation,
Jacobs Engineering Group Inc., AECOM Technology Corporation, and international-based companies
such as Amec Foster Wheeler plc, Chicago Bridge and Iron Company N.V., Chiyoda Corporation, JGC
Corporation, McDermott International, Inc., Petrofac, Saipem S.p.A., Technip S.A., Wood Group PSN
and WorleyParsons. Since the markets for our services are vast and extend across multiple geographic
regions, we cannot make a definitive estimate of the total number of our competitors.
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
Dollars in millions,
except per share amounts
2014
2013
2012
2011
2010
Revenues
$ 6,366
$ 7,214
$ 7,770
$ 9,103
$ 9,962
financial strength through liquidity, capital capacity and the ability to support warranties
(65)
417
518
640
689
163
137
151
158
137
(660)
(180)
(5)
(794)
308
299
587
609
n
n
KBR conducts business in over 70 countries. Based on the location of projects executed, our operations
in countries other than the U.S. accounted for 63% of our consolidated revenues during 2014, 66% of our
consolidated 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. The
markets we serve are highly competitive and for the most part require substantial resources and highly
Please see our 10-K filing for more information on Global Operations.
Other countries, 2%
Other countries, 3%
Africa, 8%
Europe, 10%
Africa, 21%
Europe, 8%
United States, 34%
Canada, 12%
Australia, 22%
2014
Canada, 10%
Australia, 25%
2013
Canada, 6%
Australia, 23%
2012
10
Accountability
Environment
ENVIRONMENTAL STATISTICS
KBR is committed to pursuing sustainable environmental solutions to offset human activities that may
contribute to global warming. We make efforts to
mitigate any negative contribution to this issue and
work to find ways to reduce carbon emissions. Year
after year weve been recognized by the Carbon Trust
Standard for reducing our carbon footprint.
Although the majority of our energy consumption
is by office operations, we continue to reduce the
overall usage of all natural resources.
Our employees are helping where and when they can
to reduce our greenhouse gas impacts. In 2014 KBR
U.S. offices recycled 360 short (U.S.) tons of paper.
PA P E R C O N S U M P T I O N , L B S
K B R N AT U R A L G A S C O N S U M P T I O N , t C O 2 e
120,000
1,200
100,000
328
246
80,000
325,986
230,846
1,814
80,000
281
186,522
800
246
60,000
60,000
837,756
682,021
553,360
644,816
600
1,361
40,000
40,000
808
20,000
0
740
835
45,112
47,886
36,904
41,635
2011
2012
2013
2014
20,000
2011
2012
2013
2014
10,000
78,380
44,316
35,176
31,298
2011
2012
2013
2014
K B R O F F I C E FA C I L I T Y WAT E R U S A G E , G A L L O N S
15,000,000
325,986
8,000
12,000,000
2,372
309,032
800,000
2,448
186,522
230,846
2,918,308
2,315
2,073
6,000
9,000,000
2,242,127
600,000
2,242,127
4,000
400,000
837,756
682,021
553,360
3,662
3,443
3,493
3,224
5,433,490
2,000
27,492
2011
Greenford
30,819
2012
Leatherhead
34,492
2013
6,000,000
644,816
200,000
0
1,361
680
200
1,200,000
1,000,000
1,690
400
T O TA L W E I G H T O F O F F I C E WA S T E , L B S
100,000
1,000
309,032
K B R G L O B A L T R AV E L E M M I S S I O N S , t C O 2 e
15,971
2014
Birmingham
3,053,036
2,920,157
2,999,145
3,000,000
2,802
2,448
2,315
2,073
2011
2012
2013
2014
2,854,643
4,588,845
4,165,421
3,064,966
2,216,615
2011
2012
2013
2014
Air
Hotel
11
Accountability
Environment
HUMAN RIGHTS
As an extension of our COBC, KBR adopted a
Global Human Rights Policy that acknowledges
the principles contained in the United Nations
Declarations of Human Rights. While KBR believes
it is the role of government in each country to
protect the human rights of its citizens, our
actions play an important role in upholding
equality, dignity and respect for all people in
the countries where we conduct business.
Our human rights policy serves as a powerful
guide for our employees and subcontractors. For
example, KBR has a zero-tolerance policy regarding
Trafficking in Persons compliance. We enforce
these requirements by conducting pre-award
reviews, mandating that all employees and
subcontractors deployed overseas attend a
Trafficking in Persons training program, performing
monthly inspections at subcontractor temporary
labor camps, and offering an ethics hotline for
employees to report any concerns, including
potential Trafficking in Persons violations.
VOLUNTEERING
EMPLOYEE INVOLVEMENT
Each year KBR employees contribute to the betterment of their communities, volunteering thousand of hours and raising money to
support worthy causes.
12
Accountability
Environment
COMMUNITY PROJECTS
RAISING THE BAR FOR SAFETY ACROSS QATARS
EXPRESSWAY PROGRAMME
Diversity in the workplace is one of the cornerstones that contribute to a stronger workforce.
In Canada, Aboriginal people make up a large and
growing segment of the workforce. Thats why
employees of the KBR Services Group has taken
steps to ensure that they encourage diversity by
reaching out to the local Aboriginal communities.
From hiring subcontractors and tradespeople
to work on KBR projects, to increasing Aboriginal
cultural awareness among KBR staff and establishing relationships within the communities, the
goal is to foster increased trust and openness
among KBR and the Aboriginal communities.
To this end, KBR established the Canada Aboriginal
and Local Engagement Committee designed to
increase Aboriginal awareness and inclusion
in the Canadian communities in which KBR
employees live and work.
As Qatars ambitious Expressway Programme creates the vital transportation linkages to support the countrys growth, KBRs highly
effective HSE initiatives are helping to instill a unified safety culture among the many workforces and create a safer future.
KBR Canadas Aboriginal and Local Engagement Committee is designed to foster greater understanding and engagement with this large and growing segment of the countrys workforce.
13
Accountability
Environment
KBR TEAMMATES RAISE FUNDS, AIR AMBULANCE
AWARENESS AT LEATHERHEAD
After a fellow Leatherhead, UK employees life was saved through the swift response of the regions air ambulance service,
KBR employees raised 5,000 (USD $7,543) to fund the program, which relies on charitable contributions.
14
Accountability
Environment
A key element of the contract was to provide
training and development opportunities for
local workers. KBR trained 223 participants in a
wide variety of National Center for Construction
Education and Research courses, from field and
task-specific safety training to craft skills such as
pipefitting, electrical, rigging, project supervision
and crew leadership.
KBR also recruited and trained local U.S. Military
veterans, many of them out of work and living in
transitional housing. Through our award-winning
QuickTrain program, KBRs ongoing feeder operation for entry level unskilled and semi-skilled
workers, they graduated with basic construction
skills and guaranteed jobs as helpers and laborers
on the project.
15
Responsibility
Projects
To a large extent, the scope and the boundaries
of our approach to corporate sustainability and
sustainable development is defined by who we
are as a service company and what we do for our
customers. As people, and as global corporate
citizens, we strive to make a difference in the
lives of the people who work for us, their families
and all those in the communities where we
operate. The following stories highlight some
of our achievements in 2014.
With a can-do attitude and a spirit of innovation, KBR provided a healthy environment for UK and international troops in a remote and
arid desert.
n
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Woods 16,445 m3
Cans, tins and aerosols 732 m3
Plastic bottles 734 m3
Paper and cardboard 7,300 m3
Scrap metals 455,000 kg (circa 4,460 m3)
Waste oils 372,610 liter
Waste fuel 51,860 liter
Landfill/incineration 25,681 m3
16
Responsibility
Projects
AUSTRALIAN RAIL LINE
The Regional Rail Link is a landmark AU$ 4.1 billion
(USD $2.97 billion) infrastructure project in the
Australian state of Victoria. Designed to untangle
bottlenecks, improve reliability and provide new
services from the heart of Melbourne to growth
areas in the west, the project benefits both metropolitan and regional travelers, enabling more
Victorians to use sustainable public transport.
KBR, in joint venture with Arup (KAJV) was awarded
concept design for the project, which includes
45km of new rail track, 25 bridges, five new
upgraded stations and five grade separations within the operational rail corridor. The contract was
later extended to the development of reference
designs and technical advisory support for
procurement and subsequent construction phases.
The goal of all the stakeholders was to deliver a
project with a positive legacy for communities
along the tracks. Through close collaboration
between KBR, the other contractors and the
Regional Railway Authority project team, the
project has raised the bar for innovative sustainability practices on large infrastructure projects
nationwide.
Key successes include reducing constructionphase energy and carbon by 20 percent, developing
a groundbreaking environmental rating tool
for railway stations and achieving green star
certifications for five railway stations a first
in Australia. The project also introduced
innovative practices for the recycling and reuse
of construction and demolition waste resulting
in large reductions in materials such as Portland
cement, timber and base building materials.
The project received the Infrastructure and
Buildings Award at the Premiers Sustainability
Awards 2014, which recognizes and celebrates
achievements and dedication toward building
a more environmentally sustainable future for
Victoria. More importantly, it offers tangible
proof that with a strong commitment by project
stakeholders, sustainability can be successfully
built into large-scale infrastructure projects
from inception, encouraging further innovations
throughout its operating life.
The award-winning Regional Rail Link in Victoria, Australia is becoming the model for delivering an environmentally sustainable
infrastructure project.
17
EC Economic Performance
EN Environmental Performance
HR Human Resources and Human Rights
LA Labor Practices and Decent Work
PR Product Responsibility and Compliance
SO Social Performance and Society
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
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 and
the organizations strategy for addressing sustainability.
G4
Our rate of growth and the success of our business depend upon our ability 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 such
professionals. The market for these professionals is competitive. If we are unable to attract and retain a sufficient number of
skilled personnel, our ability to pursue projects may be adversely affected, the cost of executing our existing and future projects
may 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 in
each of the countries where we transact business. The occurrence of any of the risks described below could have a material
adverse effect on our business operations and financial performance. With respect to any particular country, these risks may
include by are not limited to:
n
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n
Due to the unsettled political conditions in many oil-producing countries and other countries where we provide governmental
logistical 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 of
political 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 Arabia
where the country or location and surrounding area is suffering from political, social, economic issues, war or civil unrest. In
those locations where we have employees or operations, we have and may continue to incur substantial costs to maintain the
safety of our personnel. Despite these precautions, we have suffered the loss of employees and contractors which could expose
us 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
KBR, Inc.
G4
KBR, Inc. and its subsidiaries (collectively, KBR) is an engineering, construction and services company supporting the global
hydrocarbons and international government services market segments.
G4
G4
Report the number of countries where the organization operates, and names of countries
where either the organization has significant operations or that are specifically relevant to
the sustainability topics covered in the report.
We conduct business in over 70 countries. KBRs major operations in regards to revenue are in the following countries/regions:
U.S., Australia, Africa, Europe, Middle East, and Canada. KBRs major operations in regards to property, plant and equipment are
in the following countries: U.S., U.K. and Asia-Pacific
G4
KBR, Inc. was incorporated in Delaware on March 21, 2006 prior to an exchange offer transaction that separated us from our former
parent, Halliburton Company, which was completed on April 5, 2007. We trace our history and culture to two businesses, The
M.W. Kellogg Company (Kellogg) and Brown & Root, Inc. (Brown & Root). Kellogg dates back to a pipe fabrication business which
was founded in New York in 1901 and has been creating technology for petroleum refining and petrochemical processing since
1919. Brown & Root was founded in Houston, Texas in 1919 and built the worlds first offshore platform in 1947. Brown & Root
was acquired by Halliburton in 1962 and Kellogg was acquired by Halliburton in 1998 through its merger with Dresser Industries.
G4
Report the markets served (including geographic breakdown, sectors served, and types of
customers and beneficiaries).
Our business strategy is to provide our customers with differentiated and superior capital project delivery and services offerings
across the entire engineering, construction and operations project lifecycle. We aim to create enhanced customer satisfaction
leading 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.
19
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
G4
11
G4
12
KBRs supply management services leverage todays technologies and logistics methods to make efficient decisions which
streamline the supply management process.
We have a global track record of ensuring timely and accurate material receipt through innovative expedition and quality assurance with vendors to minimize receiving delays and errors. We optimize transportation networks, operating hand-in-hand with
global freight forwarders with dedicated assets.
We also leverage the latest supply chain technology to ensure our customers material is accurately tracked throughout its
journey 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, and
expansions;
Changes in the share capital structure and other capital formation, maintenance, and alteration
operations (for private sector organizations)
Changes in the location of suppliers, the structure of the supply chain, or in relationships with
suppliers, 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. The
sale resulted in a $3 million pre-tax gain and is recorded in gain on disposition of assets in our consolidated statements of
operations.
During the three months ended March 31, 2015, we entered into an agreement to acquire the noncontrolling interest in one of
our consolidated joint ventures for $40 million. We paid the partner previously accrued expenses of $8 million. The acquisition of
these shares was recorded as an equity transaction, with a $40 million reduction in our paid-in capital in excess of par.
G4
14
KBR acknowledges the 15th principle contained in the United Nations Rio Declaration on Environment and Development
Principles as a general standard for sustainable development concerns worldwide. KBR will continue to play a role in upholding
sustainable 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 other
initiatives 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-based
organisation providing thought leadership and policy perspectives on the economic and social issues affecting Australia. Its
expressed 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 does
business to prevent dangerous climate change and protect our natural resources.
Centers for Houston Future We support this dynamic, community based organization that works to solve our regions toughest
problems. 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 of
Leadership, Research and Solutions.
G4
16
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INDICATOR
G4
16
PROFILE DESCRIPTION
List memberships of associations (such as industry associations) and national or international
advocacy organizations in which the organization: holds a position on the governance body;
participates in projects or committees; provides substantive funding beyond routine membership dues, views membership as strategic
RESPONSE
Continue
American Society of Civil Engineers
American Society of Mechanical Engineers (ASME)
American Welding Society (AWS)
n ASIS
n Associated Builders & Contractors National Diversity Committee
n Association for Financial Professionals
n Association of Corporate Travel Executives (ACTE)
n Association of General Contractors (AGC)
n Association of the United States Army (AUSA)
n Australian Petroleum Production and Exploration Association (APPEA)
n Bayou Preservation Association
n Bi-lateral U.S. Arab Chamber of Commerce
n BIPAC
n Birmingham Business Alliance
n British Chemical Engineering Contractors Association (BCECA)
n British Safety Council
n Business Council of Alabama
n Business Council of International Understanding
n Business Roundtable Golden Triangle, Houston
n CAPS Research
n Center for Houstons Future
n Chamber of Commerce
n Committee for Economic Development of Australia
n Construction Industry Institute
n Construction Management Association of America (CMAA)
n Consult Australia National Sustainability Roundtable
n Design Build Institute of America (DBIA)
n Energy Institute
n Engineering and Construction Contracting Association (ECC)
n Engineering and Construction Risk Institute (ECRI)
n Engineering Construction Industry Training Board (ECITB)
n Engineers Australia Society for Sustainability and Environmental Engineering
n Gas Processors Association Ltd.
n Gasification Technologies Council (GTC)
n Global Business Travel Association (GBTA)
n Golden Training Business Round Table
n Greater Houston Partnership
n Gulf Coast Power Association
n Gulf Petrochemicals and Chemicals Association (GPCA)
n Houston Business Roundtable
n Houston Minority Supplier Development Council
n Institute for Supply Management
n Institute of Electrical and Electronics Engineers (IEEE)
n Institute of Materials, Materials and Mining
n Institute of Measurement and Control
n Institution of Engineering and Technology (IET)
n Institution of Structural Engineers
n International Facility Management Association (IFMA)
n IT Service Management Forum (ITSMF)
n Manufacture Alabama
n Manufacturers Alliance for Productivity and Innovation (MAPI)
n National Association of Industrial & Office Product (NAIOP) Northern Virginia
n National Association of Minority Contractors
n National Contract Management Association (NCMA)
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INDICATOR
G4
G4
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17
PROFILE DESCRIPTION
RESPONSE
Continue
List all entities included in the organizations consolidated financial statements or equivalent
documents.
KBR offers an extensive portfolio of proprietary technology and consulting services; engineering, construction, procurement and
asset maintenance services; and base operational, logistics, life support and asset management services, through our Technology
& Consulting, Engineering & Construction and Government Services business segments.
Report whether any entity included in the organizations consolidated financial statements or
equivalent documents is not covered by the report.
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We enter into joint ventures and alliances with other industry participants in order to reduce exposure and diversify risk, increase
the 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 EPC
contractors to work in teams given the size and complexity of global projects that may cost billions of dollars to complete. Our
significant joint ventures and alliances are described below. All joint venture ownership percentages presented are stated as of
December 31, 2014.
We are working with JGC and Chiyoda for the purpose of design, procurement, fabrication, construction, commissioning and
testing of the Ichthys Onshore LNG export facility in Darwin, Australia. The project is being executed using two joint ventures and
we own a 30% equity interest in each joint venture. The investments are accounted for using the equity method of accounting
and 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 Island
off the northwest coast of Western Australia. We hold a 30% interest in the joint venture which is consolidated for financial
accounting purposes and reported in our E&C business segment.
22
INDICATOR
G4
17
PROFILE DESCRIPTION
List all entities included in the organizations consolidated financial statements or equivalent
documents.
Report whether any entity included in the organizations consolidated financial statements or
equivalent documents is not covered by the report.
RESPONSE
Continue
Aspire Defence Holdings Limited (Aspire Defence) is a joint venture currently owned by KBR and two financial investors to upgrade and provide a range of services to the British Armys garrisons at Aldershot and around the Salisbury Plain in the U.K. We
own 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 and
reported in our GS business segment.
Mantenimiento Marino de Mexico (MMM) is a joint venture formed under a Partners Agreement with Grupo R affiliated entities. The principal Grupo R entity is Corporative Grupo R, S.A. de C.V. and Discoverer ASA, Ltd., a Cayman Islands company. The
Partners Agreement covers five joint venture entities executing Mexican contracts with Petrleos Mexicanos (PEMEX). MMM
was set up under Mexican maritime law in order to hold navigation permits to operate in Mexican waters. The scope of the
business is to render maintenance, repair and restoration services of offshore oil and gas platforms and provisions of quartering
in the territorial waters of Mexico. We own a 50% interest in MMM and in each of the four other joint ventures. We account for
our 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 Report
Content.
The content of this report is provide using the in accordance core to provide full disclosure of KBR managed operations; as
stated in previous reports the environmental data is provided for KBR owned facilities. Economic, social and environmental
information 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 KBRs Sustainable Development Committee which has
executive management representation.
G4
19
List all the material Aspects identified in the process for defining report content.
KBRs material aspects continues to be our Core Values of Commitment, Integrity, Transparency, Accountability and
Responsibility, in short; our Employees, Economic and Environment focus . We have not made significant changes from
our previous reports in aspect boundaries.
G4
20
For each material Aspect, report the Aspect Boundary within the organization, as follows:
G4
21
For each material Aspect, report the Aspect Boundary outside the organization, as follows:
G4
22
Report the effect of any restatements of information provided in previous reports, and the
reasons for such restatement
We have restated our Consolidated Statement of Operations for the year ended December 31, 2013. We determined the
restatement was necessary due to the materiality of the additional estimated costs to complete seven Canadian pipe fabrication
and modular assembly contracts within our Services business segment which we identified subsequent to filing our Form 10-K
on February 27, 2014. In addition, we identified a pre-tax error which resulted in an overstatement in our revenue recognition on
a 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 December31, 2013
reflects this additional expense. In addition, we have corrected several immaterial errors which resulted in an increase in net
income. These errors resulted in misstatements in our Consolidated Statement of Operations for the year ended December 31,
2013 as follows:
In KBRs 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 KBRs 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 have
been addressed in previous report.
G4
24
KBR engages with its stakeholder groups including shareholders, clients, communities, nonprofits, governments, suppliers and
employees.
23
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
26
KBR, Inc. maintains an investors hotline that allows stockholders to call. Additionally, there is an Annual Meeting of Stockholders
which 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 its
reporting. Report the stakeholder groups that raised each of the key topics and concerns.
G4
28
G4
29
KBR published its last report on April 2013; we reported in conformance with the Global Reporting Initiative (GRI) framework
using the GRI G3.1 Indicators. The report contained information for years 2011-2013.
G4
30
KBR will publish the report annually. Sustainability Report cover the 2014 calendar year, from January 1, 2014 through
December 31, 2014.
G4
31
Provide the contact point for questions regarding the report or its contents.
G4
32
G4
33
Assurance
G4
34
Report the governance structure of the organization, including committees of the highest
governance 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 directors
except for the CEO. The Chairman of the Board is independent. All directors are elected annually, with nominees standing for
election to one-year terms. 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 Social Responsibility (HSSE & SR).
The NCG Committees responsibilities include, but are not limited to:
developing, implementing and periodically reviewing KBRs corporate governance guidelines;
developing and implementing a process to assess Board and committee effectiveness;
n identifying individuals qualified to become Board members, consistent with Board-approved criteria; performing an annual
evaluation of our independent directors;
n determining the composition of the Board and its committees,including selection of the Director nominees for the next annual
meeting of stockholders; and
n 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.
n
n
The HSSE & SR Committees responsibilities include, but are not limited to:
reviewing the status of KBRs health, safety and sustainable development policies and performance, including processes
to ensure compliance with applicable laws and regulations;
n reviewing KBRs health, safety and sustainable development performance to determine consistency with policies and goals;
n reviewing and providing input to KBR on the management of current and emerging health, safety and sustainable
development issues;
n overseeing KBRs activities in managing its major risk exposures within the health, safety and sustainable development areas;
and
n reviewing KBRs political and charitable contributions and social responsibility activities.
n
G4
35
Report the process for delegating authority for economic, environmental and social topics from
the highest governance body to senior executives and other employees.
Members of the Health, Safety, Security, Environment and Social Responsibility Committee communicate with and delegate
HSSE 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 with
responsibility for economic, environmental and social topics, and whether post holders report
directly to the highest governance body.
KBR, Inc. appointed Nick Anagnostou as the global head of Health, Safety, Security, and Environment in 2014. Mr. Anagnostou
reports directly to the CEO and presents HSSE related status updates to the HSSE & SR Committee.
24
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
37
Report processes for consultation between stakeholders and the highest governance body on
economic, environmental and social topics. If consultation is delegated, describe to whom and
any feedback processes to the highest governance body.
To foster better communication with KBRs stockholders, KBR established a process for stockholders and other interested parties
to communicate with the Audit Committee and the Board. The process was approved by the Board and its Audit Committee and
is designed to meet the requirements of the NYSE and the SEC. Stockholders and other interested parties may communicate with
the 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 (fhoukbrbod@kbr.com). Information regarding these methods of communication
is 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:
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 Social
Responsibility (HSSE &SR). Each committee is comprised of independent directors. The eight independent directors and
the committees on which they serve are:
n
n
n
n
n
n
n
n
Executive or non-executive
Independence
Tenure on the governance body
Number of each individuals 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
G4
39
Report whether the Chair of the highest governance body is also an executive officer (and, if so,
his or her function within the organizations management and the reasons for this arrangement).
G4
40
Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting highest governance body members,
including:
The Board is responsible for filling vacancies on the Board. The Board has delegated to the NCG Committee the duty of selecting
and recommending prospective nominees to the Board for approval. The NCG Committee considers suggestions of candidates
for Board membership made by current Committee and Board members, KBR management, and stockholders. The Committee
may also retain an independent executive search firm to identify candidates for consideration. The NCG Committee will also
consider candidates nominated by the stockholders in accordance with KBRs Bylaws. A stockholder who wishes to recommend a
prospective candidate should notify KBRs Secretary.
When the NCG Committee identifies a prospective candidate, the Committee determines whether it will carry out a full evaluation of the candidate. This determination is based on the information provided to the Committee by the person recommending
the prospective candidate and the Committees knowledge of the candidate. This information may be supplemented by inquiries
to the person who made the recommendation or to others. The preliminary determination is based on the need for additional
Board members to fill vacancies or to expand the size of the Board, and the likelihood that the candidate will meet the Board
membership criteria listed above. The NCG Committee will determine, after discussion with the Chairman of the Board and
other Board members, whether a candidate should continue to be considered as a potential nominee. If a candidate warrants
additional consideration, the Committee may request an independent executive search firm to gather additional information
about the candidates background, experience and reputation, and to report its findings to the Committee. The NCG Committee
then evaluates the candidate and determines whether to interview the candidate. Such an interview would be carried out by one
or more members of the NCG Committee and others as appropriate. Once the evaluation and interview are completed, the NCG
Committee recommends to the Board which candidates should be nominated. The Board makes a determination of nominees
after review of the recommendation and the Committees report.
Candidates nominated for election or re-election to the Board should possess the following qualifications:
personal characteristics:
- highest personal and professional ethics, integrity and values;
- an inquiring and independent mind;
- practical wisdom and mature judgment;
n broad training and experience at the policy-making level in business, government, education or technology;
n expertise that is useful to KBR and complementary to the background and experience of other Board members, so that an
optimum balance of members on the Board can be achieved and maintained;
n willingness to devote the required amount of time to carrying out the duties and responsibilities of Board membership;
n commitment to serve on the Board for several years to develop knowledge about KBRs principal operations;
n willingness to represent the best interests of all stockholders and objectively appraise management performance; and
n involvement only in activities or interests that do not create a conflict with the Directors responsibilities to KBR and its
stockholders.
n
25
G4
INDICATOR
PROFILE DESCRIPTION
40
Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting highest governance body members,
including:
41
Continue
The NCG Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members
in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria. Diversity
in personal background, race, gender, age and nationality for the Board as a whole may be taken into account in considering
individual candidates, but KBR does not have a policy with regard to any particular aspect of diversity of its directors.
Report processes for the highest governance body to ensure conflicts of interest are avoided
and managed.
At this time, except for our CEO,all of our directors are independent, as set forth in KBRs Corporate Governance Guidelines
and outlined below.
A director will be considered independent under KBRs Corporate Governance Guidelines if he or she:
RESPONSE
n
n
n
n
Cross-board membership
Cross-shareholding with suppliers and other stakeholders
Existence of controlling shareholder
Related party disclosures
The definition of independence and compliance with this policy will be reviewed periodically by the NCG Committee. All directors complete independence questionnaires at least annually and our Board makes determinations of the independence of its
members under the listing standards of the NYSE and the SEC requirements for Audit Committee members. Our Board believes
that its membership should include no more than two directors who are also employees of KBR. While this number is not an
absolute limitation, other than the Chief Executive Officer, who should at all times be a member of the Board, employee directors
should be limited only to those officers whose positions or potential make it appropriate for them to sit on the Board.
G4
42
Report the highest governance bodys and senior executives roles in the development,
approval, and updating of the organizations purpose, value or mission statements, strategies,
policies, and goals related to economic, environmental and social impacts.
KBR Board of Directors consists of four committees that address economic, environmental and social impacts.
Those committees are:
Audit Committee
Compensation Committee
Health, Safety, Security, Environment and Social Responsibility Committee
Nominating and Corporate Governance Committee
KBR Executives present to the Board of Directors.
G4
43
Report the measures taken to develop and enhance the highest governance bodys collective
knowledge of economic, environmental and social topics.
At Board of Directors and HSSE & SR committee meetings presentations from senior executives provide the Board with economic,
environmental and social topic information. In addition, Board Members takes tours of project sites located globally to better
understand how the Boards operations influence these topics.
G4
44
Report the processes for evaluation of the highest governance bodys performance with respect
to governance of economic, environmental and social topics. Report whether such evaluation
is independent or not, and its frequency. Report whether such evaluation is a self-assessment.
Report actions taken in response to evaluation of the highest governance bodys performance
with respect to governance of economic, environmental and social topics, including, as a
minimum, changes in membership and organizational practice.
Board members completes annual self-assessment questionnaires for the Board and each committee that they sit on which
they serve.
The members also complete an annual D&O Questionnaire and a NYSE Independence questionnaire. All of the and questionnaire
results are presented and discussed at the Nominating and Corporate Governance Committee meetings.
The Nominating and Corporate Governance Committee annually reviews the Committee assignments and reassigns members
as needed.
26
INDICATOR
G4
45
PROFILE DESCRIPTION
Report the highest governance bodys role in the identification and management of economic,
environmental and social impacts, risks, and opportunities. Include the highest governance
bodys role in the implementation of due diligence processes. Report whether stakeholder
consultation is used to support the highest governance bodys identification and management
of economic, environmental and social impacts, risks, and opportunities.
RESPONSE
The KBR Board of Directors has four standing committees that address economic, environmental and social impacts.
Those committees are:
Audit Committee
Compensation Committee
Health, Safety, Security, Environment and Social Responsibility Committee
Nominating and Corporate Governance Committee
Additionally, KBR has an Annual Shareholders Meeting of Stockholders. Stockholders have an opportunity to submit items to the
agenda for review and vote.
G4
46
Report the highest governance bodys role in reviewing the effectiveness of the organizations
risk management processes for economic, environmental and social topics.
KBRs Board of Directors considers risk oversight to be an integral part of its role, and discussions regarding risks faced by the
company are part of its meetings and deliberations throughout the year. As part of the implementation of KBRs new strategy,
KBRs management is improving its enterprise risk management system to provide greater executive oversight for managing risks.
Once this update is complete, management will provide the Board regular reports regarding significant strategic, operational,
financial, and hazard risks determined by management to have a potential significant impact on the company as a whole. The risk
report involves both current and emerging risks and is the culmination of a process involving input from all business groups and
executive leadership. Managements assessment of risk will include specific strategic, operational, financial and hazard risks, the
perceived trend for each of those specific risks whether increasing, decreasing or stable and the measures being taken to
monitor and mitigate those risks.
In addition to the enterprise risk management process described above, the Board also engages in risk oversight through the
project approval process, whereby projects reaching a threshold level of expected revenues require Board approval. Fixed-price
contracts have a lower threshold level than reimbursable-type contracts because of their potential price and financial risks. In
reviewing projects, the Board is presented with managements assessment of a particular projects cost exposure associated with
operations risk, liabilities and funding risks, among others. In this manner, KBRs Board is engaged in risk oversight at the outset
of the largest projects, which could have a material effect on KBRs operations.
The Board is also engaged in risk oversight through regular reports from its Audit Committee. The Audit Committee is charged
with reviewing with management the companys major financial risk exposures, as well as other areas of risk exposure if requested to do so by the Board, and the steps management has taken to monitor and mitigate those exposures. The Audit Committee
receives periodic reports from management on these areas of potential exposure, including litigation, liquidity and capital
resources, financial reporting and disclosures, regulatory and tax risks, among others. The Audit Committee also receives reports
from management regarding compliance risks and Code of Business Conduct matters.
G4
47
Report the frequency of the highest governance bodys review of economic, environmental and
social impacts, risks, and opportunities.
The Health, Safety, Security, Environment and Social Responsibility Committee convenes at least twice a year.
G4
48
Report the highest committee or position that formally reviews and approves the organizations
sustainability report and ensures that all material Aspects are covered.
The Health, Safety, Security, Environment and Social Responsibility Committee reviews KBRs sustainability report and receives
sustainability updates at its meetings.
G4
51
Report the remuneration policies for the highest governance body and senior executives for the
below types of remuneration:
Report how performance criteria in the remuneration policy relate to the highest governance
bodys and senior executives economic, environmental and social objectives.
Our NEOs who were with KBR for the entirety of 2014 did not receive any payouts under our 2014 Short-Term Incentive Plan.
Likewise, the long-term cash performance awards payable for the three-year period ending on December 31, 2014, earned $0,
which represents 60% of our NEOs annual long-term incentive compensation opportunity. In addition, restricted stock unit and
stock option holdings, which represent 40% of our NEOs annual long-term incentive compensation, are significantly devalued
and all of our NEOs stock options granted in the last five years are currently underwater.
These results demonstrate a compensation plan designed on the principles of Pay for Performance and fully aligned with the
disappointing financial and operational results for 2014. Equally evident is the resultant challenge of ensuring retention and
forward-incentive for the existing and new members of our executive leadership team.
27
INDICATOR
G4
PROFILE DESCRIPTION
51
RESPONSE
Continue
Clawback of 2013 Compensation
Due to the restatement of our 2013 financial results, our Compensation Committee and Board of Directors implemented our clawback policy and sought and recovered from our NEOs who are current executive officers and the former CEO and chief accounting
officer the portion of their 2013 Short-Term Incentive Plan payouts that should not have been paid in light of the restatement. Our
current CEO, Mr. Bradie, was not an employee in 2013, and our current chief financial officer, Mr. Ferraioli, joined KBR on October
28, 2013, and was not eligible for a 2013 Short-Term Incentive Plan payout. Thus, neither Mr. Bradie nor Mr. Ferraioli were
subject to any clawbacks.
Changes Made to 2015 Compensation
Upon the recommendation of our CEO, based on prior year performance and peer-comparative data, our Compensation Committee approved zero 2015 base salary increases, zero 2015 short-term incentive target increases, and zero 2015 long-term incentive
target increases for all NEOs (excluding the CEO).
Based on peer-comparative data for his level of compensation, on his non-involvement (pre-hire) in the 2013 financial and operational problems, and on our Boards total satisfaction with his immediate personal engagement in formulating and leading KBRs
business transformation actions, our Compensation Committee and Board approved modest increases to our CEOs short- and
long-term incentive targets for 2015 but made no increase to his base salary. The CEOs 2015 total target compensation was kept
below the median total target compensation for our E&C Peer Group.
G4
52
Report the process for determining remuneration. Report whether remuneration consultants
are involved in determining remuneration and whether they are independent of management.
Report any other relationships which the remuneration consultants have with the organization.
The Compensation Committee uses an independent conpensation consultant, Meridian, to assist the committee with renumeration decision.
G4
53
Report how stakeholders views are sought and taken into account regarding remuneration,
including the results of votes on remuneration policies and proposals, if applicable.
Stockholders may present a proposal to be considered for inclusion in KBRs proxy material for its Annual Meeting of Stockholders
by submitting the proposal in writing to KBRs Corporate Secretary at 601 Jefferson Street, Suite 3400, Houston, Texas 77002.
KBR must receive proposals not later than the 120th day prior to the date on which KBR estimates that it will send its materials
for its Annual Meeting of Stockholders. Proposals submitted for inclusion in KBRs proxy materials must comply with Rule 14a-8
under the Exchange Act.
In order for stockholder proposals to have been properly submitted for presentation at KBRs Annual Meeting of Stockholders,
KBR must have received notice of the proposal not earlier than the 120th and 90th days, respectively, prior to the intended date
of the Annual Meeting of Stockholders. Proposals must comply with Article I, Section 9 of KBRs Bylaws.
A nomination or proposal that does not comply with the above procedures will be disregarded. Compliance with the above
procedures does not require KBR to include the proposed nominee or business in KBRs proxy solicitation materials.
G4
56
Describe the organizations values, principles, standards and norms of behavior such as codes
of conduct and codes of ethics.
KBR has built a rich heritage on a cornerstone of integrity. The COBC was developed to help you apply legal and ethical practices
to your everyday work-life and also to help you follow the law. Ethics is a vital part of who KBR is as a company. KBR has
adopted a code of ethics, as defined in Item 406(b) of Regulation S-K. KBRs code of ethics, known as its Code of Business
Conduct, applies to all directors, officers and employees of KBR, including its principal executive officer, principal financial officer,
principal accounting officer and controller, and also applies to all employees of KBR and KBRs agents. KBR has posted its Code
of Business Conduct on its website, www.kbr.com. In addition, KBR intends to satisfy the disclosure requirements regarding
any amendment to, or waiver from, a provision of the Code of Business Conduct that relates to any element of the definition of
code of ethics set forth in Item 406(b) of Regulation S-K, including the requirements of Item 5.05 of Form 8-K, by posting such
information on its website, www.kbr.com. Our ethical principles demonstrate our commitment to ensure we carry out our mission
with integrity. Our principles are contained in the COBC, which consists of the policies relating to the ethical and legal standards
of conduct to be followed by all in the conduct of our business.
G4
57
Report the internal and external mechanisms for seeking advice on ethical and lawful behavior,
and matters related to organizational integrity, such as helplines or advice lines.
Directors, Employees and Legal Agents may contact the Code of Business Conduct office to seek advice on ethical and lawful
behavior through a toll-free and online Ethics Hotline, Code of Business Conduct post office box, and contact directly to the
Director of the Code of Business Conduct, appropriate representative of the Law Department, Audit Services, Human Resources,
Health, Safety, Security & Environment or other compliance-related department, the Employees supervisor or manager, or
a member of the executive senior management.
28
G4
INDICATOR
PROFILE DESCRIPTION
RESPONSE
58
Report the internal and external mechanisms for reporting concerns about unethical or unlawful
behavior, and matters related to organizational integrity, such as escalation through line
management, whistleblowing mechanisms or hotlines.
Under the Code of Business Conduct, Directors, Employees and Legal Agents must promptly report any suspected violation of
the Code of Business Conduct to an appropriate reporting outlet, which includes the toll-free and online Ethics Hotline, Code of
Business Conduct post office box, and reports directly to the Director of the Code of Business Conduct, appropriate representative
of the Law Department, Audit Services, Human Resources, Health, Safety, Security & Environment or other compliance-related
department, the Employees supervisor or manager, or a member of the executive senior management.
Employees may exercise their legal right or duty to report possible violations of law to the appropriate governmental authorities
at any time, without reporting the matter to, or seeking prior authorization from, the Code of Business Conduct department, Legal
Department or any other internal reporting outlet.
The Company prohibits retaliation in any form for reporting, in good faith, suspected violations of the Code of Business Conduct.
Disciplinary action will be taken against anyone who retaliates directly or indirectly against any Employee who reports actual or
suspected violations. Discouraging other Employees from making a report is prohibited and could result in disciplinary action.
Additionally, stockholders and interested parties may contact the Audit Committee and the Board of Directors through a Post
Office Box, toll-free and online Ethics Hotline or by email.
G4
EC1
Report the direct economic value generated and distributed (EVG&D) on an accruals basis
including the basic components for the organizations global operations
Report the direct economic value generated and distributed (EVG&D) on an accruals basis including the basic components for
the organizations global operations:
Revenues
$6,366,000,000
$6,431,000,000
$239,000,000
($17,000,000)
$421,000,000
Community investments
($1,198,000,000)
N/A
G4
EC2
Financial implications and other risks and opportunities for the organizations activities due to
climate change
Existing or pending climate change legislation, regulations, international treaties or accords are not expected to have a shortterm material direct effect on our business, the markets that we serve or on our results of operations or financial position.
However, climate change legislation could have a direct effect on our customers or suppliers, which could impact our business.
For example, our commodity-based markets depend on the level of activity of mineral and oil and gas companies and existing or
future laws, regulations, treaties or international agreements related to climate change, including incentives to conserve energy
or use alternative energy sources, which could impact our business if such laws, regulations, treaties or international agreements
reduce the worldwide demand for minerals, oil and natural gas. We will continue to monitor developments in this area.
G4
EC3
The defined benefit section of the KBR (UK) Ltd Pension Plan is a defined benefit plan obligation where there is a fund set up to
meet the liabilities. The latest full triennial actuarial valuation of the Plan looked at the Plans position as at 1 April 2012 and
showed that the defined benefit section had a deficit of 337m, equivalent to a funding level of 73%. This valuation was based
on the ongoing scheme specific funding assessment as required under the scheme funding framework in the UK. The methodology, assumptions and results are set out in the scheme funding report for that valuation. An assessment of the deficit at the latest
triennial valuation date of 1 April 2015 is currently underway.
There is a recovery plan in place under which KBR (UK) Ltd is currently paying contributions of 28m per year into the Plan. Under
this recovery plan, the deficit was projected to be eliminated by 31 December 2023. This projection is based on the assumptions
from the actuarial valuation and future assumptions about the returns achieved on the Plans assets. The recovery plan has been
agreed by KBR (UK) Ltd and the Trustees of the Plan.
The defined benefit section of the Plan is closed to new entrants and existing members are no longer building up new benefits.
There are therefore no regular employee or employer contributions towards the cost of new benefits being paid into the Plan.
29
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
EC4
None
G4
EC7
N/A
G4
EC8
G4
EC9
N/A
G4
EN3
G4
EN5
Energy intensity
G4
EN6
G4
EN8
Water sources consist of Municipal water supplies; we do not consider usage in an office environment to be significant.
However; we take every effort to reduce usage whenever possible.
G4
EN9
Water sources consist of Municipal water supplies; we do not consider usage in an office environment to be significant.
However; we take every effort to reduce usage whenever possible.
G4
EN10
KBR does not use recycled and/or reused water for our office operations. However water is recycled and reused on projects in
some capacities for dust suppression and irrigation.
30
INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
EN11
Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high
biodiversity value outside protected areas
KBR does not own, lease, or manage any property in, or adjacent to protected areas and areas of high biodiversity value outside
protected areas.
G4
EN12
Aspire Defence Capital Works (a KBR joint venture), involves construction work at military sites on Salisbury Plain. These works
are close to sites designated as both a Special Protection Area (SPA) and Special Area of Conservation (SAC) under European
legislation, notably for the populations of stone curlew, common quail and hen harrier, and for the chalk grassland habitat, one of
the largest remaining areas of calcareous grassland in north-western Europe. The SAC is also designated for juniper formations
on heaths, semi-natural dry grassland and scrubland facies and the marsh fritillary butterfly. Much of the natural environment
is also protected through its designation as a Site of Special Scientific Interest (SSSI) for its populations of rare bumblebee
species, and many rare birds, plants and invertebrates.
A habitats regulations assessment (HRA) has concluded that no residual ecological or contamination impacts are anticipated as a
consequence of the Aspire Defence Capital Works proposals, including on the Salisbury Plain SPA, SAC and SSSI.
G4
EN13
For Aspire Defence Capital Works (a KBR joint venture), a programme of biodiversity offsetting will create habitats of equivalent
value to:
238,292 square meters of semi-improved calcareous grassland
641 square meters of unimproved grassland
n
n
Works will be undertaken in accordance with the U.K. National Planning Policy Framework and BS 42020:2013 Biodiversity - Code
of practice for planning and development. The works will be within land owned and managed by the UK Defence Infrastructure
Organisation (DIO). An independently prepared management plan has been submitted to the authorities for approval.
G4
EN14
Total number of IUCN red list species and national conservation list species with habitats in
areas affected by operations, by level of extinction risk
For Aspire Defence Capital Works (a KBR joint venture) Surveys indicate a total of 50 ICUN red list species are within 2 km of the
construction sites at Larkhill, Perham Down, Bulford and Tidworth in the U.K. In terms of status by level of extinction risk these
species comprise:
n
n
n
n
10 endangered;
19 vulnerable;
19 near threatened; and
2 least concern.
G4
EN15
G4
EN23
Recycled 46 tons of scrap metal recovered from a remediation project; 325 lbs of hazardous waste soil was sent for disposal.
G4
EN24
None
G4
EN25
Weight oif transported, imported, exported, or treated waste deemed hazardous under the
terms of the Basel Convention2 Annex 1, II, III, and VIII, and percentage of transported waste
shipped internationally
KBR did not transport, import, export or treat hazardous waste internationally.
G4
EN26
Identity, size, protected status, and biodiversity value of water bodies and related habitats
significantly affected by the organizations discharges of water and runoff
KBR is not aware of our owned office operations discharges of water and runoff significantly affecting water bodies and/or
related habitats.
G4
EN27
N/A
G4
EN29
Monetary value of significant fines and total number of non-monetary sanctions for
non-compliance with environmental laws and regulations
None
G4
EN31
G4
EN34
Number of grievances about environmental impacts filed, addressed, and resolved through
formal grievance mechanisms
None
G4
HR1
Total number and percentage of significant investment agreements and contracts that include
human rights clauses or that underwent human rights screening
Current contracts do not include Human Rights screening. Our contracts include clauses requiring compliance with the laws of
the country where project is located and compliance with the COBC and/or KBR Supplier COBC where applicable.
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INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
HR2
Total hours of employee training on human rights policies or procedures concerning aspects of
human rights that are relevant to operations, including the percentage of employees trained
All employees are to complete COBC training as a requirement of the annual review process; Human Rights procedures are
covered in this training.
G4
HR3
In the United States in 2014, there were 15 discrimination claims resolved in mediation through KBRs Dispute Resolution
Program. In 2014, KBRs Ethics Hotline received 465 calls with 47 percent related to COBC issues.
G4
HR4
Operations and suppliers identified in which the right to exercise freedom of association and
collective bargaining may be violated or at significant risk, and measures taken to support these
rights
None
G4
HR5
Operations and suppliers identified as having significant risk for incidents of child labor, and
measures taken to contribute to the effective abolition of child labor
As stated in KBRs Code of Business Conduct and supported in a letter to employees by our CEO, KBR cannot in any way accept,
condone or tolerate any instance of unethical or illegal behavior. KBR is not aware of any operations or significant suppliers as
having significant risk for incidents of child labor. Measures taken to contribute to the effective abolition of child labor include
requiring employees, subcontractors and agents to complete KBRs mandatory Code of Business Conduct (COBC) training, which
includes human rights training. The charter mission of KBRs Board of Directors CSR Committee oversees the activities of KBR in
managing our major risk exposures in regards to sustainable development, including human rights. KBR does not employ anyone,
in any capacity, under the age of 18 years except where this minimum employment age requirement is superseded by local law.
G4
HR6
Operations and significant suppliers identifiedas having significant risk for incidents of forced
or compulsory labor, and measures tocontribute to the elimination of all forms of forced or
compulsory labor.
As stated in KBRs Code of Business Conduct and supported in a letter to employees by our CEO, KBR cannot in any way accept,
condone or tolerate any instance of unethical or illegal behavior. KBR is not aware of any operations or significant suppliers
as having significant risk for incidents of forced or compulsory labor. Measures taken to contribute to the effective abolition
of forced or compulsory labor include requiring employees, subcontractors and agents to complete KBRs mandatory Code of
Business Conduct (COBC) training, which includes human rights training. The charter mission of KBRs Board of Directors CSR
Committee oversees the activities of KBR in managing our major risk exposures in regards to sustainable development, including
human rights.
G4
HR7
100% of Security personnel have received formal training in KBRs human rights policies and procedures. Ethics training, which
includes training on Human Rights, is required for all third party organizations providing security personnel.
G4
HR8
Total number of incidents of violations involving rights of indigenous peoples and actions taken
None
G4
HR9
Total number and percentage of operations that have been subject to human rights reviews or
impact assessments
None
G4
HR12
Number of grievances about human rights impacts filed, addressed, and resolved through
formal grievance mechanisms
In the United States in 2014, there were 24 discrimination claims resolved in mediation or arbitration through KBRs Dispute
Resolution Program and 1 harassment claim resolved in arbitration through KBRs Dispute Resolution Program. In 2014, 143 of
the 465 reports to the KBRs Ethics Hotline related to grievances about human rights impacts. All 143 were addressed during
the reporting period. 125 of those grievances were resolved during the reporting period. 35 grievances from the prior reporting
period were resolved during this reporting period.
G4
LA2
Benefits provided to full-time employees that are not provided to temporary or part-time
employees, by significant locations of operation
Australia
X
X
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INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
LA5
At KBR; each project location will have a formal joint management -employee health and safety committee. Committees are
responsible for implementation of the HSE Policies, Plans and Procedures for site, Training, Recording and Reporting Incidents
and Identification of Risk. Percentage of workforce participation has not been captured.
G4
LA6
Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total
number of work-related fatalities, by region and by gender
Zero Fatalities. Injury categories tracked (Slips, Caught In or Between, Strain, Strike Against Struck By)
G4
LA7
Workers with high incidence or high risk of diseases related to their occupation
KBR has more than 15,000 employees that support our clients in a petro chemical and construction industries; the industry is
high risk however our employees are protected from occupational illness by using engineering controls and proper protection
equipment when required.
G4
LA10
Programs for skills management and lifelong learning that support the continued employability
of employees and assist them in managing career endings
Educational Assistance
It is KBRs intent that every employee realizes his or her full potential in an environment that values productivity and results. To
this end, KBR provides educational opportunities that enable employees to improve their skills and/or knowledge outside the
scope of standard on-the-job informal training.
Educational assistance whenever possible should be planned and budgeted in advance, and applicable to an employees current
or projected position. All costs incurred will be applicable to the cost center where the employee resides. Additionally, eligible
employees are approved based on managerial discretion, and on the condition that studies must be completed without jeopardizing the employees work performance. Further, employees must show evidence of successful course completion at the conclusion
of the course or course of study. In addition to country-specific eligibility requirements, specific monetary limits may be imposed.
Participation in this program does not guarantee a promotion or change in job responsibilities and earnings.
Following the reimbursement payment date of educational assistance, the employee is obligated for the course of one year to
reimburse monies paid in the event of resignation or separation for cause. Upon acceptance of reimbursement, the employee
authorizes the Company to take this deduction from any monies that may be owed to the employee. Reimbursement may also be
applicable to an employee transferring from one manager to another across budgetary lines.
Internal Training Courses
KBR is committed to the continued development of its employees and believes that the employee and the Company have a
shared responsibility for career and competency development. KBR recognizes the need for employees to acquire additional
skills, knowledge and experience to meet the short-term needs of their jobs, as well as the longer-term needs of the individual
and company.
The KBR Transferable Competency model is core to The KBR Way and the creation of a culture focused on hiring the right people,
requiring them to behave in a way that is consistent with our business values and brand, and executing processes that will allow
us to win in the marketplace. The educational material contained in KBRU is to assist KBR, managers and employees globally to
be more productive, and have more meaningful and consistent conversations about performance, putting us on the path toward
creating a more enriching experience at KBR. The competency model contains seven transferable competencies and is aligned
with KBRs Mission, Vision and Values: Quality, Health, Safety & Environment Commercial Focus Leadership Business
Process Thinking Strategic Process Thinking Empowerment Communications.
G4
LA11
All employees are subjected to regular performance and career development reviewss, regardless of gender received
a performance review and career development review in 2014
G4
PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning
the health and safety impacts of products and services during their life cycle, by type of
outcomes
KBR received a total of five OSHA citations for non-compliance; corrective measures were implemented immediately where
possible and or actions were put in place to resolve incidents from reoccurring.
G4
PR7
Total number of incidents of non-compliance with regulations and voluntary codes concerning
marketing communications, including advertising, promotion, and sponsorship, by type of
outcomes
KBR did not have any incidents of non-compliance with regulations and voluntary codes concerning marketing communications,
including advertising, promotion, and sponsorship receive any complaints concerning breaches of customer privacy.
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INDICATOR
PROFILE DESCRIPTION
RESPONSE
G4
PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses
of customer data
KBR did not receive any complaints concerning breaches of customer privacy.
G4
PR9
Monetary value of significant fines for non-compliance with laws and regulations concerning
the provision and use of products and services
KBR did not receive any fines for non-compliance with laws and regulations.
G4
SO3
Total number and percentage of operations assessed for risks related to corruption and the
significant risks identified
All transactions are analyzed for risks related to corruption. KBR cannot in any way accept, condone or tolerate any instance of
unethical or illegal behavior. The charter mission of KBRs Board of Directors CSR Committee oversees the activities of KBR in
managing our major risk exposures in regards to sustainable development, including human rights.
G4
SO4
G4
SO6
In 2014, PAC receipts, or contributions from employees to KBRPAC, were $84,992 and $220,250 was contributed to candidates for
public office. Undisbursed funds are held for future elections and campaigns. fec.gov and the Center for Responsive Politics
G4
SO7
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices
and their outcomes
None
G4
SO8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations
In the United States in 2014, KBR had no adverse determinations, fines or non-monetary sanctions from the federal Equal Employment Opportunity Commission (EEOC), any state or local human rights commission, the National Labor Relations Board (NLRB), or
the Office of Federal Contract Compliance Programs (OFCCP).
G4
SO11
Number of grievances about impacts on society filed, addressed, and resolved through formal
grievance mechanisms
In 2014, 29 of the 465 reports to the KBRs Ethics Hotline related to grievances about impacts on society. All 29 matters were
addressed during the reporting period. 28 of those grievances were resolved during the reporting period. 8 grievances from the
prior period were resolved during the reporting period.
G4 GRI indicators (G4-10, G4-25, G4-49, G4-50, G4-54, G4-55, EC5,EC6, EN1, EN2, EN4, EN7, EN16, EN17, EN18, EN19, EN20, EN21, EN22, EN27, EN28, EN30, EN32, EN33, HR10, HR11, LA1, LA3, LA4, LA8, LA9, LA12, LA13, LA14, LA15, LA16, PR1, PR3, PR4, PR5,
PR6, SO1, SO2, SO5, SO9 and S10) are either not applicable or cannot be answered by our organization at this time. We anticipate being in a position to address in future reports.
.
www.kbr.com
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