KBR (NYSE:KBR) announced today that fourth quarter 2012 net income attributable to KBR was $30 million, or $0.20 per diluted share, compared to net income attributable to KBR of $90 million, or $0.60 per diluted share, in the fourth quarter of 2011.
Consolidated revenue in the fourth quarter 2012 was $1.9 billion compared to $2.1 billion in the fourth quarter of 2011. Operating income in the fourth quarter 2012 was $69 million compared to operating income of $136 million in the prior year fourth quarter.
“2012 was, overall, a disappointing year for KBR, where issues at our Minerals and US Construction Business Units offset strong operating performance across our Hydrocarbons Business Group,” said Bill Utt, Chairman, President, and Chief Executive Officer of KBR. “As we begin 2013, we see a robust series of new opportunities across each of our Business Units. The potential opportunity set for KBR is tremendous and I am confident in KBR’s ability to successfully win and execute this work.”
(All comparisons are fourth quarter 2012 versus fourth quarter 2011, unless otherwise noted).
Hydrocarbons revenue was $943 million, down $46 million, or 5%. Hydrocarbons job income was $210 million, up $81 million, or 63%.
Infrastructure, Government and Power (IGP) Results
- Gas Monetization job income was $125 million, up $60 million, or 92%, primarily related to strong project execution, incremental progress on several LNG projects and lower estimated costs to complete one LNG project. Partially offsetting this increase was lower work volumes on a completed GTL project and on an LNG project nearing completion.
- Oil and Gas job income was $25 million, up $2 million, or 9%, primarily related to higher work volumes on the Shah Deniz project and FEED work for an FPSO in Angola, as well as several new engineering services contracts. Partially offsetting the increase was the completion or near completion of several projects.
- Downstream job income was $35 million, up $16 million, or 84%, primarily related to a $14 million gain on a favorable settlement for claims associated with the completion of the Fina Antwerp Olefins project in 2005 as well as increased profits from projects in the United States and the KBR-AMCDE entity in Saudi Arabia. Partially offsetting the increase was the completion of engineering on a refinery project in Africa.
- Technology job income was $25 million, up $3 million, or 14%, primarily related to several new ammonia projects in the United States, Bolivia and India. Partially offsetting the increase was the completion of several ammonia projects in Indonesia, Brazil and Egypt.
IGP revenue was $462 million, down $245 million, or 35%. IGP job income was $17 million, down $77 million, or 82%.
- North American Government and Logistics (NAGL) job income was $28 million, down $17 million, or 38%, primarily related to the completion of operations under the LogCAP III contract in Iraq. Partially offsetting the decrease was a favorable $8 million benefit associated with the dismissal of the False Claims Act case for the use of private security contractors during the LogCAP III program.
- International Government, Defence and Support Services (IGDSS) job income was $26 million, down $24 million, or 48%, primarily related to favorable inception-to-date margin adjustments on the Allenby & Connaught project in the fourth quarter of 2011 as well as lower work volumes on the Allenby & Connaught and Afghanistan ISP projects. Partially offsetting the decrease was income associated with the NATO Support Agency (formerly the NATO Maintenance and Supply Agency) airbase projects in Kabul and Kandahar, Afghanistan.
- Infrastructure job income was $13 million, up $1 million, or 8% primarily related to increased activity on the Doha Expressway project in Qatar.
- Power and Industrial (P&I) job income was $7 million, up $1 million, or 17%, primarily related to work performed on the newly awarded emissions control EPC projects and increased activity on a cellulosic fiber project. Partially offsetting the increase is the near completion of engineering activity on a coal gasification project.
- Minerals job loss was $57 million, down $38 million, or 200%, primarily related to $58 million in charges associated with higher estimated costs to complete two projects in Indonesia. Both projects are scheduled for completion during the third quarter of 2013.
Services revenue was $441 million, up $63 million, or 17%. Services job loss was $30 million, down $60 million, or 200%, primarily related to a $62 million charge for higher estimated costs to complete three fixed price projects in U.S. Construction. Partially offsetting the decrease was increased activity in Canada, Industrial Services and KBR’s MMM Mexican joint venture.