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Retirement Benefits | 12 Months Ended
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Jan. 02, 2026
Retirement Benefits [Abstract] |
Retirement Benefits | Retirement Benefits Defined Contribution Retirement Plans We have elective defined contribution plans for our employees in the U.S. and retirement savings plans for our employees in the U.K., Canada and other locations. Our defined contribution plans provide retirement benefits in return for services rendered. These plans provide an individual account for each participant and have terms that specify how contributions to the participant’s account are to be determined rather than the amount of retirement benefits the participant is to receive. Contributions to these plans are based on pretax income discretionary amounts determined on an annual basis. Our expense for the defined contribution plans totaled $148 million in fiscal 2025, $131 million in fiscal 2024 and $119 million in fiscal 2023. Defined Benefit Pension Plans We have two frozen defined benefit pension plans in the U.S., one frozen and one active plan in the U.K. and one frozen plan in Germany. Substantially all of our defined benefit plans are funded pension plans, which define an amount of pension benefit to be provided, usually as a function of years of service or compensation. We used January 2, 2026 as the measurement date for all plans in fiscal 2025 and January 3, 2025 as the measurement date for all plans in fiscal 2024. Plan assets, expenses and obligations for our defined benefit pension plans are presented in the following tables.
| Overfunded |  | Underfunded
| United States |  | International |  | United States |  | International
Dollars in millions | Fiscal 2025
Change in projected benefit obligations: |  |  |  |  |  |  |
Projected benefit obligations at beginning of period | $ | 47 |  |  | $ | 1,111 |  |  | $ | 8 |  |  | $ | 4 |
Service cost | — |  |  | 1 |  |  | — |  |  | — |
Interest cost | 2 |  |  | 63 |  |  | 1 |  |  | — |
Foreign currency exchange rate changes | — |  |  | 84 |  |  | — |  |  | — |
Actuarial (gain) loss(1) | 1 |  |  | (12) |  |  | — |  |  | — |
Benefits paid | (4) |  |  | (70) |  |  | (1) |  |  | — |
Other | — |  |  | (1) |  |  | — |  |  | — |
Projected benefit obligations at end of period | $ | 46 |  |  | $ | 1,176 |  |  | $ | 8 |  |  | $ | 4 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of period | $ | 46 |  |  | $ | 1,193 |  |  | $ | 8 |  |  | $ | — |
Actual return on plan assets | 6 |  |  | 48 |  |  | 1 |  |  | — |
Employer contributions | 2 |  |  | 1 |  |  | — |  |  | — |
Foreign currency exchange rate changes | — |  |  | 91 |  |  | — |  |  | — |
Benefits paid | (4) |  |  | (70) |  |  | (1) |  |  | — |
Other | (1) |  |  | (1) |  |  | — |  |  | — |
Fair value of plan assets at end of period | $ | 49 |  |  | $ | 1,262 |  |  | $ | 8 |  |  | $ | — |
Funded status | $ | 3 |  |  | $ | 86 |  |  | $ | — |  |  | $ | (4) |
(1) Actuarial (gains) losses primarily driven by inflation.
| Overfunded |  | Underfunded
| United States |  | International |  | United States |  | International
Dollars in millions | Fiscal 2024
Change in projected benefit obligations: |  |  |  |  |  |  |
Projected benefit obligations at beginning of period | $ | — |  |  | $ | 1,301 |  |  | $ | 58 |  |  | $ | 4 |
Service cost | — |  |  | 1 |  |  | — |  |  | — |
Interest cost | — |  |  | 61 |  |  | 3 |  |  | — |
Foreign currency exchange rate changes | — |  |  | (23) |  |  | — |  |  | — |
Actuarial gain(1) | — |  |  | (162) |  |  | (1) |  |  | — |
Benefits paid | — |  |  | (67) |  |  | (5) |  |  | — |
Projected benefit obligations at end of period | $ | — |  |  | $ | 1,111 |  |  | $ | 55 |  |  | $ | 4 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of period | $ | — |  |  | $ | 1,295 |  |  | $ | 53 |  |  | $ | — |
Actual return on plan assets | — |  |  | (72) |  |  | 5 |  |  | — |
Employer contributions | — |  |  | 61 |  |  | 1 |  |  | — |
Foreign currency exchange rate changes | — |  |  | (24) |  |  | — |  |  | — |
Benefits paid | — |  |  | (67) |  |  | (5) |  |  | — |
Fair value of plan assets at end of period | $ | — |  |  | $ | 1,193 |  |  | $ | 54 |  |  | $ | — |
Funded status | $ | — |  |  | $ | 82 |  |  | $ | (1) |  |  | $ | (4) |
(1) Actuarial gains primarily driven by change in discount rates. The Accumulated Benefit Obligation ("ABO") is the present value of benefits earned to date. The ABO for our United States pension plans was $54 million and $55 million as of January 2, 2026 and January 3, 2025, respectively. The ABO for our international pension plans was $1,180 million and $1,115 million as of January 2, 2026 and January 3, 2025, respectively.
| United States |  | International |  | United States |  | International
Dollars in millions | Fiscal 2025 |  | Fiscal 2024
Amounts recognized on the consolidated balance sheets |  |  |  |  |  |  |
Pension assets | $ | 3 |  |  | $ | 86 |  |  | $ | — |  |  | $ | 82 |
Other liabilities | $ | — |  |  | $ | (4) |  |  | $ | (1) |  |  | $ | (4) |
Net periodic pension cost for our defined benefit plans included the following components:
| United States |  | International |  | United States |  | International |  | United States |  | International
Dollars in millions | Fiscal 2025 |  | Fiscal 2024 |  | Fiscal 2023
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Interest cost | 3 |  |  | 63 |  |  | 3 |  |  | 61 |  |  | 3 |  |  | 61 |
Expected return on plan assets | (3) |  |  | (112) |  |  | (3) |  |  | (113) |  |  | (3) |  |  | (102) |
Prior service cost amortization | — |  |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Recognized actuarial loss | 1 |  |  | 4 |  |  | 1 |  |  | 3 |  |  | 1 |  |  | — |
Net periodic (benefit) cost | $ | 1 |  |  | $ | (43) |  |  | $ | 1 |  |  | $ | (47) |  |  | $ | 1 |  |  | $ | (39) |
The amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost at January 2, 2026 and January 3, 2025, net of tax were as follows:
| United States |  | International |  | United States |  | International
Dollars in millions | Fiscal 2025 |  | Fiscal 2024
Unrecognized actuarial loss, net of tax of $6 and $238, $6 and $226, respectively | $ | 10 |  |  | $ | 678 |  |  | $ | 12 |  |  | $ | 643 |
Total in accumulated other comprehensive loss | $ | 10 |  |  | $ | 678 |  |  | $ | 12 |  |  | $ | 643 |
The weighted-average assumptions used to determine net periodic benefit cost were as follows:
| United States |  | International |  | United States |  | International |  | United States |  | International
| Fiscal 2025 |  | Fiscal 2024 |  | Fiscal 2023
Discount rate | 5.32 | % |  | 5.54 | % |  | 4.70 | % |  | 4.79 | % |  | 4.91 | % |  | 5.00 | %
Expected return on plan assets | 6.64 | % |  | 6.80 | % |  | 6.64 | % |  | 6.70 | % |  | 6.63 | % |  | 5.92 | %
The weighted-average assumptions used to determine benefit obligations at the measurement date were as follows:
| United States |  | International |  | United States |  | International
| Fiscal 2025 |  | Fiscal 2024
Discount rate | 4.97 | % |  | 5.60 | % |  | 5.32 | % |  | 5.54 | %
Plan fiduciaries of our retirement plans set investment policies and strategies and oversee the investment direction, which includes selecting investment managers, commissioning asset-liability studies and setting long-term strategic targets. Long-term strategic investment objectives include preserving the funded status of the plan and balancing risk and return and have diversified asset types, fund strategies and fund managers. Targeted asset allocation ranges are guidelines, not limitations and occasionally plan fiduciaries will approve allocations above or below a target range. The target asset allocation for our U.S. and International plans for fiscal 2026 is as follows:
| Fiscal 2026 Targeted
| United States |  | International
Equity funds and securities | 52 | % |  | 37 | %
Fixed income funds and securities | 39 | % |  | 46 | %
Real estate funds | 1 | % |  | 7 | %
Other | 8 | % |  | 10 | %
Total | 100 | % |  | 100 | %
The range of targeted asset allocations for our International plans for fiscal 2026 and fiscal 2025, by asset class, are as follows:
International Plans | Fiscal 2026 Targeted Percentage Range |  | Fiscal 2025 Targeted Percentage Range
| Minimum |  | Maximum |  | Minimum |  | Maximum
Equity funds and securities | 29 | % |  | 45 | % |  | 36 | % |  | 55 | %
Fixed income funds and securities | 37 | % |  | 55 | % |  | 28 | % |  | 42 | %
Real estate funds | 6 | % |  | 8 | % |  | 6 | % |  | 10 | %
Other | 8 | % |  | 12 | % |  | 10 | % |  | 15 | %
The range of targeted asset allocations for our U.S. plans for fiscal 2026 and fiscal 2025, by asset class, are as follows:
Domestic Plans | Fiscal 2026 Targeted Percentage Range |  | Fiscal 2025 Targeted Percentage Range
| Minimum |  | Maximum |  | Minimum |  | Maximum
Equity funds and securities | 41 | % |  | 62 | % |  | 41 | % |  | 62 | %
Fixed income funds and securities | 31 | % |  | 47 | % |  | 31 | % |  | 47 | %
Real estate funds | 1 | % |  | 1 | % |  | 1 | % |  | 1 | %
Other | 7 | % |  | 10 | % |  | 7 | % |  | 10 | %
ASC Topic 820 ("ASC 820"), Fair Value Measuremen t addresses fair value measurements and disclosures, defines fair value, establishes a framework for using fair value to measure assets and liabilities and expands disclosures about fair value measurements. This standard applies whenever other standards require or permit assets or liabilities to be measured at fair value. ASC 820 establishes a three-tier value hierarchy, categorizing the inputs used to measure fair value. The inputs and methodology used for valuing securities are not an indication of the risk associated with investing in those securities. Refer to Note 20. "Fair Value of Financial Instruments and Risk Management" for a description of the primary valuation methodologies and classification used for assets measured at fair value. A summary of total investments for KBR’s defined benefit pension plan assets measured at fair value is presented below.
| Fair Value Measurements at Reporting Date |  |
Dollars in millions | Total |  | Level 1 |  | Level 2 |  | Level 3 |  |
Asset Category at January 2, 2026 |  |  |  |  |  |  |  |  |
United States plan assets |  |  |  |  |  |  |  |  |
Investments measured at net asset value (a) | $ | 57 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |
Total United States plan assets | $ | 57 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |
International plan assets |  |  |  |  |  |  |  |  |
Equities | $ | 413 |  |  | $ | — |  |  | $ | 356 |  |  | $ | 57 |  |  |
Fixed income | 606 |  |  | — |  |  | 606 |  |  | — |  |  |
Real estate | 2 |  |  | — |  |  | — |  |  | 2 |  |  |
Cash and cash equivalents | 99 |  |  | 99 |  |  | — |  |  | — |  |  |
Other | 56 |  |  | — |  |  | — |  |  | 56 |  |  |
Investments measured at net asset value (a) | 86 |  |  | — |  |  | — |  |  | — |  |  |
Total international plan assets | $ | 1,262 |  |  | $ | 99 |  |  | $ | 962 |  |  | $ | 115 |  |  |
Total plan assets at January 2, 2026 | $ | 1,319 |  |  | $ | 99 |  |  | $ | 962 |  |  | $ | 115 |  |  |
| Fair Value Measurements at Reporting Date |  |
Dollars in millions | Total |  | Level 1 |  | Level 2 |  | Level 3 |  |
Asset Category at January 3, 2025 |  |  |  |  |  |  |  |  |
United States plan assets |  |  |  |  |  |  |  |  |
Investments measured at net asset value (a) | $ | 54 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |
Total United States plan assets | $ | 54 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |
International plan assets |  |  |  |  |  |  |  |  |
Equities | $ | 433 |  |  | $ | — |  |  | $ | 379 |  |  | $ | 54 |  |  |
Fixed income | 564 |  |  | — |  |  | 564 |  |  | — |  |  |
Real estate | 1 |  |  | — |  |  | — |  |  | 1 |  |  |
Cash and cash equivalents | 39 |  |  | 39 |  |  | — |  |  | — |  |  |
Other | 56 |  |  | — |  |  | — |  |  | 56 |  |  |
Investments measured at net asset value (a) | 100 |  |  | — |  |  | — |  |  | — |  |  |
Total international plan assets | $ | 1,193 |  |  | $ | 39 |  |  | $ | 943 |  |  | $ | 111 |  |  |
Total plan assets at January 3, 2025 | $ | 1,247 |  |  | $ | 39 |  |  | $ | 943 |  |  | $ | 111 |  |  |
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed each year due to the following:
Dollars in millions | Total |  | Equities |  | Fixed Income |  | Real Estate |  | Other
International plan assets |  |  |  |  |  |  |  |  |
Balance as of December 29, 2023 | $ | 114 |  |  | $ | 51 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 62 |
Return on assets held at end of year | 6 |  |  | 8 |  |  | — |  |  | — |  |  | (2) |
Purchases, sales and settlements, net | (7) |  |  | (4) |  |  | — |  |  | — |  |  | (3) |
Foreign exchange impact | (2) |  |  | (1) |  |  | — |  |  | — |  |  | (1) |
Balance as of January 3, 2025 | $ | 111 |  |  | $ | 54 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 56 |
Return on assets held at end of year | (6) |  |  | 2 |  |  | 1 |  |  | — |  |  | (9) |
Return on assets sold during the year | — |  |  | (1) |  |  | (1) |  |  | — |  |  | 2 |
Purchases, sales and settlements, net | 1 |  |  | (2) |  |  | — |  |  | — |  |  | 3 |
Foreign exchange impact | 9 |  |  | 4 |  |  | — |  |  | 1 |  |  | 4 |
Balance as of January 2, 2026 | $ | 115 |  |  | $ | 57 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 56 |
Contributions. Funding requirements for each plan are determined based on the local laws of the country where such plans reside. In certain countries the funding requirements are mandatory while in other countries they are discretionary. In 2024, the Trustee of the U.K. defined benefit pension plan commenced the triennial actuarial valuation of the plan which was finalized during the year ended January 2, 2026. At this time, we do not anticipate contributing additional funding to this plan at least until the next triennial valuation occurs. We paid no employer pension contributions in fiscal 2025 and $61 million in fiscal 2024 for our U.K. defined benefit pension plan. Benefit payments. The following table presents the expected benefit payments over the next 10 years.
| Pension Benefits
Dollars in millions | United States |  | International
Fiscal 2026 | $ | 6 |  |  | $ | 73 |
Fiscal 2027 | $ | 5 |  |  | $ | 75 |
Fiscal 2028 | $ | 5 |  |  | $ | 78 |
Fiscal 2029 | $ | 5 |  |  | $ | 80 |
Fiscal 2030 | $ | 5 |  |  | $ | 81 |
Fiscals 2031-2035 | $ | 20 |  |  | $ | 417 |
Deferred Compensation Plans Our Elective Deferral Plan is a nonqualified deferred compensation program that provides benefits payable to officers, certain key employees or their designated beneficiaries and non-employee directors at specified future dates, upon retirement, or death. The elective deferral plan is unfunded except for $7 million and $6 million of mutual funds designated for a portion of our employee deferral plan included in other assets on our consolidated balance sheets at January 2, 2026 and January 3, 2025, respectively. The mutual funds are measured at fair value using Level 1 inputs under ASC 820 and may be liquidated in the near term without restrictions. Our obligations under our employee deferred compensation plan were $80 million and $74 million as of January 2, 2026 and January 3, 2025, respectively, and are included in employee compensation and benefits in our consolidated balance sheets.

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