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.


Dollars in millions	January 2, 2026		January 3, 2025
Balance at beginning of fiscal year	$	192	$	206
Equity in earnings of unconsolidated affiliates	210		107
Distributions of earnings of unconsolidated affiliates (a)	(165)		(202)
Payments from unconsolidated affiliates, net	(9)		(9)
Return of equity method investments, net (b)	(82)		(36)

Foreign currency translation adjustments	4		(2)
Other (c)	(43)		128
Balance at end of fiscal year	$	107	$	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 consolidated statements of cash flows. Joint ventures within our STS segment declared a distribution of earnings of $34 million in the fourth quarter of fiscal 2025 that was not received by KBR until fiscal 2026. A joint venture within our STS segment declared a distribution of earnings of $39 million in the fourth quarter of fiscal 2024 that was not received by KBR until fiscal 2025.

(b)During fiscal 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 fiscal 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 consolidated statements of cash flows. During fiscal 2024, we received a return of investment from JKC of approximately $36 million related to our proportionate share of a tax refund.

(c)During fiscal 2025, Other included a reduction to the net liability position of $43 million related to a joint venture within our STS business segment. During fiscal 2024, Other included the reclassification of the net liability position of $128 million related to joint ventures within our STS business segment.

Brown & Root Industrial Services Joint Venture. The Brown & Root Industrial Services ("BRIS") joint venture offers engineering, construction and reliability-driven maintenance services for the refinery, petrochemical, chemical, specialty chemicals and fertilizer markets. Our interest in this venture is accounted for using the equity method and we have determined that the BRIS joint venture is not a VIE. Results from this joint venture are included in our STS business segment. Subsequent to January 2, 2026, BRIS closed on an agreement to acquire a welding and turnaround services provider. We contributed $115 million in cash to BRIS in fiscal 2026 as part of this agreement.


Dollars in millions	January 2, 2026		January 3, 2025
Current assets	$	1,624	$	3,142
Noncurrent assets	1,475		1,473
Total assets	$	3,099	$	4,615

Current liabilities	$	1,493	$	3,173
Noncurrent liabilities	1,874		1,628
Total liabilities	$	3,367	$	4,801

For the VIEs in which we participate, our maximum exposure to loss consists of our equity investment in the VIE and any amounts owed to us for services we may have provided to the VIE, reduced by any unearned revenues on the project. Our maximum exposure to loss may also include our obligation to fund our proportionate share of any future losses incurred. Where our performance and financial obligations are joint and several to the client with our joint venture partners, we may be further exposed to losses above our ownership interest in the joint venture.

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


	January 2, 2026
Dollars in millions	Total Assets		Total Liabilities
Affinity joint venture (U.K. MFTS project)	$	7	$	1
Aspire Defence Limited	$	94	$	9
JKC joint venture (Ichthys LNG project)	$	—	$	81

Plaquemines LNG project	$	—	$	35

	January 3, 2025
Dollars in millions	Total Assets		Total Liabilities
Affinity joint venture (U.K. MFTS project)	$	6	$	1
Aspire Defence Limited	$	84	$	7
JKC joint venture (Ichthys LNG project)	$	—	$	80

Plaquemines LNG project	$	48	$	94

Affinity. KBR owns a 50% interest in Affinity. In addition, KBR owns a 50% interest in the two joint ventures, Affinity Capital Works and Affinity Flying Services, which provide procurement, operations and management support services under subcontracts with Affinity. The remaining 50% interest in these entities is held by Elbit Systems. KBR has provided its proportionate share of certain limited financial and performance guarantees in support of the partners' contractual obligations. The three project-related entities are VIEs; however, KBR is not the primary beneficiary of any of these entities. We account for KBR's interests in each entity using the equity method of accounting within our MTS business segment. The project is funded through KBR and Elbit Systems provided equity, subordinated debt and non-recourse third party commercial bank debt. Our maximum exposure to loss includes our equity investments in the project entities as of January 2, 2026.

Aspire Defence project. We indirectly own a 45% interest in Aspire Defence Limited, the contracting company that is the holder of the 35-year concession contract. The project is funded through equity and subordinated debt provided by the project sponsors and the issuance of publicly-held senior bonds which are nonrecourse to KBR and the other project sponsors. The contracting company is a VIE; however, we are not the primary beneficiary of this entity. We account for our interest in Aspire Defence Limited using the equity method of accounting. Our maximum exposure to loss includes our equity investments in the project entities and amounts payable to us for services provided to these entities less unearned revenues to be provided to these entities as of January 2, 2026.

Ichthys LNG project. The Ichthys LNG project, a project to construct the Ichthys Onshore LNG Export Facility in Darwin, Australia, is being executed through two entities (collectively, "JKC"), which are VIEs, in which we own a 30% equity interest. We account for our investments using the equity method of accounting.

Plaquemines LNG project. KZJV is a joint venture with Zachry Group that performs certain design, engineering, procurement and construction-related services for a LNG facility in Plaquemines Parish, Louisiana. KBR owns a 45% interest in KZJV, which is a VIE for which we are joint and several to the client with our joint venture partner. We are not the primary beneficiary as we do not have the power to direct the activities of the VIE that most significantly impact its economic performance. The investment is accounted for within our STS business segment using the equity method of accounting.

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 years ended January 2, 2026, January 3, 2025 and December 29, 2023, our revenues included $710 million, $721 million and $567 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.

(a)Accounts receivable and contract liabilities primarily related to the Aspire Defence Limited joint venture within our MTS business segment and a joint venture within our STS business segment.

We consolidate VIEs if we determine we are the primary beneficiary of the project entity because we control the activities that most significantly impact the economic performance of the entity. The following is a summary of the significant VIE where we are the primary beneficiary:


	January 2, 2026
Dollars in millions	Total Assets		Total Liabilities

Aspire Defence subcontracting entities (Aspire Defence project)	$	338	$	149

	January 3, 2025
Dollars in millions	Total Assets		Total Liabilities

Aspire Defence subcontracting entities (Aspire Defence project)	$	372	$	197

Aspire Defence project (subcontracting entities). We assumed operational management of the Aspire Defence subcontracting entities in January 2018. These subcontracting entities exclusively provide the construction and the related support services under subcontract arrangements with Aspire Defence Limited. These entities are considered VIEs, and, because we are the primary beneficiary, they are consolidated for financial reporting purposes.