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Equity Method Investments and Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity In Earnings of Unconsolidated Affiliates

The following table presents a rollforward of our equity in and advances to unconsolidated affiliates:


Dollars in millions	2021		2020
Beginning balance at January 1,	$	881	$	846


Equity in earnings (losses) of unconsolidated affiliates	(170)		30
Distributions of earnings of unconsolidated affiliates (a)	(72)		(38)
Advances to (payments from) unconsolidated affiliates, net	(17)		(15)
Investments (b)	29		26
Impairment of equity method investments (c)	—		(19)
Sale of equity method investment (d)	(39)		—
Foreign currency translation adjustments	(10)		50
Other (e)	(26)		1



Balance at December 31,	$	576	$	881

(a)The Brown & Root Industrial Services joint venture declared a distribution in the fourth quarter of 2021 that was not paid to KBR until January 2022.

(b)Investments include $26 million and $24 million in funding contributions to JKC for years ended December 31, 2021, and 2020, respectively.

(c)During the year ended December 31, 2020, as a result of the significant adverse economic and market conditions associated with the dislocation of the global energy market and COVID-19 pandemic, we recognized an impairment of $13 million related to our investment in a joint venture project located in the Middle East and a $6 million impairment related to other equity method investments.

(d)During the third quarter of 2021, we sold our investment interest in the Middle East Petroleum Corporation (EBIC Ammonia project). The carrying value of our investment was $39 million. We received $43 million in cash proceeds and recorded a gain of $4 million, of which $1 million was attributable to our non-controlling interests. Subsequent to the receipt of the cash proceeds, we distributed the non-controlling interests' proportionate share of $15 million.

(e)During year ended December 31, 2021, Other included unearned income related to the Ichthys LNG project, which was previously recorded outside of the equity method investment balance and will not be realized as a result of the settlement proceedings. See Note 6 "Unapproved Change Orders and Claims Against Clients and Estimated Recoveries of Claims Against Suppliers and Subcontractors" for additional information.

Consolidated Summarized Financial Information

Summarized financial information for all jointly owned operations including VIEs that are accounted for using the equity method of accounting is as follows:

Balance Sheet


	December 31,
Dollars in millions	2021		2020
Current assets	$	2,382	$	3,216
Noncurrent assets	2,996		3,227
Total assets	$	5,378	$	6,443

Current liabilities	$	955	$	1,018
Noncurrent liabilities	2,652		2,831
Total liabilities	$	3,607	$	3,849

Statements of Operations


	Years ended December 31,
Dollars in millions	2021		2020		2019
Revenues	$	1,294	$	2,032	$	2,592

Operating income	$	(650)	$	54	$	92
Net income	$	(698)	$	28	$	48

The following summarizes the total assets and total liabilities related to our unconsolidated VIEs in which we have a significant variable interest but are not the primary beneficiary.


	December 31, 2021
Dollars in millions	Total Assets		Total Liabilities
Affinity joint venture (U.K. MFTS project)	$	10	$	7
Aspire Defence Limited	$	65	$	5
JKC joint venture (Ichthys LNG project)	$	354	$	1
U.K. Road project joint ventures	$	42	$	—
Middle East Petroleum Corporation (EBIC Ammonia project)	$	—	$	—


Dollars in millions	December 31, 2020
	Total Assets		Total Liabilities
Affinity joint venture (U.K. MFTS project)	$	11	$	9
Aspire Defence Limited	$	68	$	5
JKC joint venture (Ichthys LNG project)	$	606	$	44
U.K. Road project joint ventures	$	59	$	—
Middle East Petroleum Corporation (EBIC Ammonia project)	$	31	$	1

Schedule of Services Provided to Unconsolidated JV's

Amounts included in our consolidated balance sheets related to services we provided to our unconsolidated joint ventures and undistributed earnings for the years ended December 31, 2021 and 2020 are as follows:


	December 31,
Dollars in millions	2021		2020
Accounts receivable, net of allowance for doubtful accounts	$	35	$	83
Contract assets (a)	$	2	$	2
Other current assets	$	25	$	—
Contract liabilities (a)	$	5	$	53

(a)Reflects contract assets and contract liabilities primarily related to joint ventures within our STS business segment.

Summary of Significant VIEs

The following is a summary of the significant VIEs where we are the primary beneficiary:


Dollars in millions	December 31, 2021
	Total Assets		Total Liabilities

Fasttrax Limited (Fasttrax project)	$	23	$	8
Aspire Defence subcontracting entities (Aspire Defence project)	$	439	$	245


Dollars in millions	December 31, 2020
	Total Assets		Total Liabilities

Fasttrax Limited (Fasttrax project)	$	45	$	18
Aspire Defence subcontracting entities (Aspire Defence project)	$	448	$	205

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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