Acquisitions

6 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Centauri Platform Holdings, LLC

On October 1, 2020, we acquired Centauri for $830 million subject to certain working capital, net debt and other post-closing adjustments, if applicable. As of June 30, 2021, the estimated fair values of net assets acquired were preliminary, with possible updates primarily in our finalization of tax returns with the seller. The Company recognized goodwill of $576 million primarily related to future growth opportunities based on an expanded service offering from intellectual capital and a highly skilled assembled workforce and other expected synergies from the combined operations. Intangible assets of $226 million were recognized and comprised of customer relationships and backlog, which will be amortized over a weighted-average period of 13 years. For U.S. tax purposes, the transaction is treated as a stock deal. As a result, there is no step-up in tax basis and the goodwill and stepped-up acquired intangibles were not deductible for tax purposes.

During the three and six months ended June 30, 2021, the Company recognized direct, incremental costs related to this acquisition of $1 million and $2 million, respectively, which are included in "Acquisition and integration related costs" on the condensed consolidated statements of operations. The acquired Centauri business contributed $181 million and $313 million of revenues and $20 million and $37 million of gross profit for the three and six months ended June 30, 2021, respectively.

The following supplemental pro forma, combined financial information has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Centauri as though it had been acquired on January 1, 2020. Pro forma adjustments were primarily related to the amortization of intangibles, interest on borrowings related to the acquisition, significant nonrecurring transactions and acquisition related transaction costs. Accordingly, this supplemental pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the combined company would have been had the acquisition occurred on January 1, 2020, nor is it indicative of future results of operations.


	Three Months Ended		Six Months Ended
	June 30, 2020		June 30, 2020
	(Unaudited)		(Unaudited)
Revenue	$	1,524	$	3,191
Net loss attributable to KBR	$	(37)	$	(141)
Diluted earnings per share	$	(0.26)	$	(0.98)

Scientific Management Associates (Operations) Pty Ltd

On March 6, 2020, we acquired certain assets and assumed certain liabilities related to the government defense business of Scientific Management Associates (Operations) Pty Ltd ("SMA"). The acquired business of SMA provides technical training services to the Royal Australian Navy and is reported within our GS business segment. We accounted for this transaction using the acquisition method under ASC 805, Business Combinations. The agreed-upon purchase price for the acquisition was $13 million, less purchase price adjustments totaling $4 million resulting in net cash consideration paid of $9 million. We recognized goodwill of $12 million arising from the acquisition, which relates primarily to future growth opportunities to expand services provided to the Royal Australian Navy. During the first quarter of 2021, contingent consideration liability that was recorded at the time of acquisition was settled for $1 million.