Equity Method Investments and Variable Interest Entities

9 Months Ended

Oct. 03, 2025

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Variable Interest Entities

We conduct some of our operations through joint ventures, which operate through partnerships, corporations and undivided interests and other business forms and are principally accounted for using the equity method of accounting. Additionally, the majority of our joint ventures are VIEs. The following table presents a rollforward of our equity in and advances to unconsolidated affiliates:



	Nine Months Ended		Year ended
	October 3,		January 3,
	2025		2025
Dollars in millions
Beginning balance	$	192	$	206
Equity in earnings of unconsolidated affiliates	163		107
Distributions of earnings of unconsolidated affiliates (a)	(124)		(202)
Payments from unconsolidated affiliates, net	(10)		(9)
Return of equity method investments, net (b)	(82)		(36)

Foreign currency translation adjustments	4		(2)
Other (c)	(39)		128
Ending balance	$	104	$	192

(a)In the normal course of business, our joint ventures will declare a distribution in the current quarter that is not paid until the subsequent quarter. As such, the distributions declared during the current quarter may not agree to the distributions of earnings from unconsolidated affiliates on our condensed consolidated statements of cash flows. During the year ended January 3, 2025, a joint venture within our STS segment declared a distribution of earnings of $39 million that was not received by KBR until the nine months ended October 3, 2025.

(b)During the nine months ended October 3, 2025, we received a return of investment from BRIS of approximately $82 million. On October 6, 2025, our joint venture partner in BRIS sold its ownership interest to a third party. Prior to the closing of this sale, funds were distributed by BRIS during the nine months ended October 3, 2025 to return capital to its owners. Of the funds distributed, KBR received $79 million which has been reflected as a “return of equity method investment, net” within the Investing section of our Condensed Consolidated Statement of Cash Flows. During the year ended January 3, 2025, we received a return of investment from JKC of approximately $36 million related to our proportionate share of a tax refund.

(c)During the nine months ended October 3, 2025, Other included a reduction to the net liability position of $39 million related to a joint venture within our STS business segment. During the year ended January 3, 2025, Other included the reclassification of the net liability position of $128 million related to joint ventures within our STS business segment.

Related Party Transactions

We often provide engineering, construction management and other subcontractor services to our unconsolidated joint ventures, and our revenues include amounts related to these services. For the three and nine months ended October 3, 2025, our revenues included $172 million and $535 million, respectively, and for the three and nine months ended September 27, 2024, our revenues included $190 million and $534 million, respectively, related to the services we provided primarily to the Aspire Defence Limited joint venture within our MTS business segment and a joint venture within our STS business segment.

Amounts included in our condensed consolidated balance sheets related to services we provided to our unconsolidated joint ventures as of October 3, 2025 and January 3, 2025 are as follows:


	October 3,		January 3,
Dollars in millions	2025		2025
Accounts receivable, net of allowance for credit losses	$	74	$	96


Contract liabilities	$	52	$	68