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Business Segment Information
 3 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
Business Segment Information
Business Segment Information
Following the completion of our strategic review, in December 2014, we reorganized our business into three segments in order to focus on core strengths in technology and consulting, engineering and construction, and government services.  We also reorganized the businesses that we intend to exit into our Non-strategic Business segment because they no longer constitute a part of our future strategic focus. Each business segment reflects a reportable segment led by a separate business segment president who reports directly to our chief operating decision maker ("CODM").  Business segment performance is evaluated by our CODM using gross profit (loss), which is defined as business segment revenues less the cost of revenues, and includes overhead directly attributable to the business segment. We have revised our business segment reporting to reflect our current management approach and recast prior periods to conform to the current business segment presentation.

Our business segments are described below.

Technology & Consulting ("T&C"). Our T&C business segment combines proprietary KBR technologies, knowledge-based services and our three specialist consulting brands, Granherne, Energo and GVA, under a single customer-facing global business.  This segment provides licensed technologies and consulting services throughout the oil and gas value chain, from wellhead to crude refining and through to specialty chemicals production.  In addition to sharing many of the same customers, these brands share the approach of early and continuous customer involvement to deliver an optimal solution to meet the customer’s objectives through early planning and scope definition, advanced technologies, and project lifecycle support.
Engineering & Construction ("E&C"). Our E&C business segment leverages our operational and technical excellence as a global provider of engineering, procurement, construction ("EPC"), commissioning and maintenance services for oil and gas, refining, petrochemicals and chemicals customers.   E&C is managed on a geographic basis in order to facilitate close proximity to our customers and our people, while utilizing a consistent global execution strategy. 
Government Services ("GS"). Our GS business segment focuses on long-term service contracts with annuity streams, particularly for the United Kingdom ("U.K."), Australian and United States ("U.S.") governments.
Non-strategic Business. Our Non-strategic Business segment represents the operations or activities that we intend to either sell to third parties or exit upon completion of existing contracts.
Other. Our Other business segment includes our corporate expenses and general and administrative expenses not allocated to the business segments above and any future activities that do not individually meet the criteria for segment presentation. 

The following table presents revenues, gross profit, equity in earnings of unconsolidated affiliates and operating income (loss) by reporting segment.
Operations by Reportable Segment
 
Three Months Ended March 31,
Dollars in millions
2015
 
2014
Revenues:
 
 
 
Technology & Consulting
$
72

 
$
91

Engineering & Construction
977

 
1,137

Government Services
155

 
186

Other
—

 
—

Subtotal
1,204

 
1,414

Non-strategic Business
232

 
219

Total Revenues
$
1,436

 
$
1,633

Gross profit (loss):
 
 
 
Technology & Consulting
$
19

 
$
15

Engineering & Construction
55

 
29

Government Services
(4
)
 
5

Other
—

 
—

Subtotal
70

 
49

Non-strategic Business
—

 
(10
)
Total Gross profit
$
70

 
$
39

Equity in earnings of unconsolidated affiliates:
 
 
 
Technology & Consulting
$
—

 
$
—

Engineering & Construction
21

 
17

Government Services
14

 
14

Other
—

 
—

Subtotal
35

 
31

Non-strategic Business
—

 
—

Total Equity in earnings of unconsolidated affiliates
$
35

 
$
31

Segment operating income (loss):
 
 
 
Technology & Consulting
$
17

 
$
15

Engineering & Construction
66

 
33

Government Services
9

 
16

Other
(28
)
 
(44
)
Subtotal
64

 
20

Non-strategic Business
—

 
(10
)
Total Segment operating income
$
64

 
$
10



Changes in Estimates

There are many factors that can affect the accuracy of our cost estimates and ultimately our future profitability, including, but not limited to, the availability and costs of resources, including labor, materials and equipment, productivity and weather, and for unit rate and construction service contracts, the availability and detail of customer supplied engineering drawings. In the past, we have realized both lower and higher than expected margins and have incurred losses as a result of unforeseen changes in our project costs. We recognize revisions of revenues and costs in the period in which the revisions are known. This may result in the recognition of costs before the recognition of related revenue recovery, if any. However, historically, our estimates have been reasonably dependable regarding the recognition of revenues and profit on percentage of completion contracts.

Significant changes in estimates periodically result in the recognition of losses on a particular contract. We generally believe that the recognition of a contract as a loss contract is a significant change in estimate. Activity in our reserve for estimated losses on uncompleted contracts, which is a component of "other current liabilities" on our condensed consolidated balance sheets, was as follows:
 
Three Months Ended March 31,
Dollars in millions
2015
 
2014
Balance at January 1,
$
159

 
$
109

Changes in estimates on loss projects
12

 
48

Change due to progress on loss projects
(53
)
 
(34
)
Balance at March 31,
$
118

 
$
123


Included in the reserve for estimated losses on uncompleted contracts is $37 million and $107 million at March 31, 2015 and 2014, respectively, related to our Canadian pipe fabrication and module assembly projects. We have completed close-out activities on three of these projects, we are continuing to negotiate closure on two and the remaining two projects should be completed during 2015. Our estimates of revenues and costs at completion on these projects have been, and may continue to be, impacted by our performance, the performance of our subcontractors, the Canadian labor market, the nature, complexity and ultimate quantities of modules and types of individual components in the modules, our contractual arrangements and our ability to accumulate information and negotiate final contract settlements with our customers. Our estimated losses as of March 31, 2015 on these projects represent our best estimate based on current information. Actual results could differ from the estimates we have used to account for these projects as of March 31, 2015.

Included in the reserve for estimated losses on uncompleted contracts is $65 million at March 31, 2015 related to two power projects in our Non-strategic Business segment, which we recognized as loss contracts at December 31, 2014. Our estimates of revenues and costs at completion for these power projects have been, and may continue to be, impacted by our performance, the performance of our subcontractors, and the U.S. labor market. Our estimated profit and losses as of March 31, 2015 on these power projects represent our best estimate based on current information. Actual results could differ from the estimates we have used to account for these power projects as of March 31, 2015.