Form 10-Q KBR, INC. For: Mar 31

April 28, 2022 10:51 AM EDT

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kbr-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2022
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from             to
Commission File Number: 001-33146
 
 
kbr-20220331_g1.jpg
KBR, Inc.
(Exact name of registrant as specified in its charter)
Delaware 20-4536774
(State of incorporation)
 
(I.R.S. Employer Identification No.)
601 Jefferson Street, Suite 3400HoustonTexas77002
(Address of principal executive offices)(Zip Code)

(713) 753-2000
(Registrant's telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbolName of each exchange on which registered
Common Stock, $0.001 par value KBRNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
 (Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

As of April 21, 2022, there were 139,560,024 shares of KBR, Inc. Common Stock, par value $0.001 per share, outstanding.






TABLE OF CONTENTS
 


2



Forward-Looking and Cautionary Statements

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, as amended. The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. Some of the statements contained in this Quarterly Report on Form 10-Q are forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "plan," "expect" and similar expressions are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future financial performance and results of operations.

We have based these statements on our assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such statements. While it is not possible to identify all factors, factors that could cause actual future results to differ materially include the risks and uncertainties disclosed in our latest Form 10-K and any subsequent Forms 10-Q and 8-K.

Many of these factors are beyond our ability to control or predict. Any of these factors, or a combination of these factors, could materially and adversely affect our future financial condition or results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially and adversely from those projected in the forward-looking statements. We caution against putting undue reliance on forward-looking statements or projecting any future results based on such statements or on present or prior earnings levels. In addition, each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statement.

3



Glossary of Terms
The following frequently used terms, abbreviations or acronyms are commonly used in our Quarterly Reports on Form 10-Q as defined below:
AcronymDefinition
AffinityAffinity Flying Training Services Ltd.
AOCLAccumulated other comprehensive loss
ASBCAArmed Services Board of Contract Appeals
ASCAccounting Standards Codification
ASUAccounting Standards Update
BBSYBank Bill Swap Bid Rate
C4ISRCommand, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance
COFCU.S. Court of Federal Claims
DCAADefense Contract Audit Agency
DCMADefense Contract Management Agency
DoDDepartment of Defense
DOJU.S. Department of Justice
EBICEgypt Basic Industries Corporation
EPCEngineering, procurement and construction
ESPPEmployee Stock Purchase Plan
Exchange ActSecurities Exchange Act of 1934, as amended
FARFederal Acquisition Regulation
FASBFinancial Accounting Standards Board
FCAFalse Claims Act
FKTCFirst Kuwaiti Trading Company
GSGovernment Solutions
HETsHeavy equipment transporters
ICCInternational Chamber of Commerce
JKCJKC Australia LNG, an Australian joint venture executing the Ichthys LNG Project
LIBORLondon interbank offered rate
LNGLiquefied natural gas
MD&AManagement's Discussion and Analysis of Financial Condition and Results of Operations
MFRsMemorandums for Record
MoDMinistry of Defence
NCINoncontrolling interests
OAWOperation Allies Welcome
PFIsPrivate financed initiatives and projects
PICPaid-in capital in excess of par
PPEProperty, Plant and Equipment
RPAMaster Accounts Receivable Purchase Agreement
SECU.S. Securities and Exchange Commission
SONIASterling Overnight Index Average
STSSustainable Technology Solutions
U.K.United Kingdom
U.S.United States
U.S. GAAPAccounting principles generally accepted in the United States
VIEsVariable interest entities
4



PART I. FINANCIAL INFORMATION

Item 1. Financial Information

KBR, Inc.
Condensed Consolidated Statements of Operations
(In millions, except for per share data)
(Unaudited)

Three Months Ended
March 31,
 2022
2021 (1)
Revenues$1,714 $1,461 
Cost of revenues(1,518)(1,293)
Gross profit196 168 
Equity in earnings (losses) of unconsolidated affiliates(118)12 
Selling, general and administrative expenses (107)(89)
Acquisition and integration related costs(1)(1)
Restructuring charges and asset impairments(1) 
Loss on disposition of assets and investments (1)
Operating income (loss)(31)89 
Interest expense(20)(19)
Other non-operating expense (3)
Income (loss) before income taxes(51)67 
Provision for income taxes(19)(17)
Net income (loss)(70)50 
Less: Net income attributable to noncontrolling interests1 1 
Net income (loss) attributable to KBR$(71)$49 
Net income (loss) attributable to KBR per share
Basic$(0.51)$0.35 
Diluted$(0.51)$0.33 
Basic weighted average common shares outstanding140 141 
Diluted weighted average common shares outstanding140 155 
Cash dividends declared per share$0.12 $0.11 
(1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method.
See accompanying notes to condensed consolidated financial statements.
5




KBR, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In millions)
(Unaudited)

 Three Months Ended
March 31,
2022
2021 (1)
Net income (loss)$(70)$50 
Other comprehensive income (loss):
Foreign currency translation adjustments
(19)7 
Pension and post-retirement benefits
6 9 
Changes in fair value of derivatives
24 19 
Other comprehensive income (loss) 11 35 
Income tax (expense) benefit:
Foreign currency translation adjustments
  
Pension and post-retirement benefits
(1)(2)
Changes in fair value of derivatives
(5)(4)
Income tax (expense) benefit
(6)(6)
Other comprehensive income (loss), net of tax5 29 
Comprehensive income (loss)(65)79 
Less: Comprehensive income attributable to noncontrolling interests1 1 
Comprehensive income (loss) attributable to KBR$(66)$78 
(1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method.
See accompanying notes to condensed consolidated financial statements.
6



KBR, Inc.
Condensed Consolidated Balance Sheets
(In millions, except share data)
 March 31,
December 31, (1)
 20222021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$412 $370 
Accounts receivable, net of allowance for credit losses of $13 and $13, respectively
1,035 1,411 
Contract assets211 224 
Other current assets116 147 
Total current assets1,774 2,152 
Claims and accounts receivable30 30 
Property, plant, and equipment, net of accumulated depreciation of $435 and $431 (including net PPE of $18 and $19 owned by a variable interest entity), respectively
132 136 
Operating lease right-of-use assets151 158 
Goodwill2,051 2,060 
Intangible assets, net of accumulated amortization of $302 and $291, respectively
688 708 
Equity in and advances to unconsolidated affiliates430 576 
Deferred income taxes212 231 
Other assets166 153 
Total assets$5,634 $6,204 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$630 $1,026 
Contract liabilities334 313 
Accrued salaries, wages and benefits272 317 
Operating lease liabilities43 41 
Other current liabilities182 178 
Total current liabilities1,461 1,875 
Pension obligations64 88 
Employee compensation and benefits97 111 
Income tax payable93 95 
Deferred income taxes70 70 
Nonrecourse project debt2 2 
Long-term debt1,870 1,875 
Operating lease liabilities180 188 
Other liabilities219 217 
Total liabilities4,056 4,521 
Commitments and Contingencies (Notes 6, 12 and 13)
KBR shareholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued
  
Common stock, $0.001 par value 300,000,000 shares authorized, 180,645,661 and 179,983,586 shares issued, and 139,821,173 and 139,786,136 shares outstanding, respectively
  
PIC2,216 2,206 
Retained earnings1,200 1,287 
Treasury stock, 40,824,488 shares and 40,197,450 shares, at cost, respectively
(976)(943)
AOCL(876)(881)
Total KBR shareholders’ equity1,564 1,669 
Noncontrolling interests14 14 
Total shareholders’ equity1,578 1,683 
Total liabilities and shareholders’ equity$5,634 $6,204 
(1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method.
See accompanying notes to condensed consolidated financial statements.
7



KBR, Inc.
Condensed Consolidated Statements of Shareholders' Equity
(In millions, except for per share data)
(Unaudited)
Dollars in millionsTotalPICRetained
Earnings
Treasury
Stock
AOCLNCI
Balance at December 31, 2021$1,701 $2,251 $1,260 $(943)$(881)$14 
Cumulative adjustment for the adoption of ASU 2020-06(18)(45)27 — — — 
Adjusted balance at January 1, 20221,683 2,206 1,287 (943)(881)14 
Share-based compensation5 5 — — — — 
Common stock issued upon exercise of stock options4 4 — — — — 
Dividends declared to shareholders ($0.12/share)
(17)— (17)— — — 
Repurchases of common stock(33)— — (33)— — 
Issuance of ESPP shares1 1 — — — — 
Other — 1 — — (1)
Net income (loss)(70)— (71)— — 1 
Other comprehensive income, net of tax5 — — — 5 — 
Balance at March 31, 2022$1,578 $2,216 $1,200 $(976)$(876)$14 
Dollars in millionsTotalPICRetained
Earnings
Treasury
Stock
AOCLNCI
Balance at December 31, 2020$1,609 $2,222 $1,305 $(864)$(1,083)$29 
Cumulative adjustment for the adoption of ASU 2020-06(27)(45)18 — — — 
Adjusted balance at January 1, 20211,582 2,177 1,323 (864)(1,083)29 
Share-based compensation4 4 — — — — 
Common stock issued upon exercise of stock options4 4 — — — — 
Dividends declared to shareholders ($0.11/share)
(16)— (16)— — — 
Repurchases of common stock(4)— — (4)— — 
Issuance of ESPP shares2 — — 2 — — 
Other noncontrolling interests activity(1)— — — — (1)
Net income50 — 49 — — 1 
Other comprehensive loss, net of tax29 — — — 29 — 
Balance at March 31, 2021$1,650 $2,185 $1,356 $(866)$(1,054)$29 
See accompanying notes to condensed consolidated financial statements.


8



KBR, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Three Months Ended March 31,
 2022
2021 (1)
Cash flows from operating activities:
Net income (loss)$(70)$50 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization33 38 
Equity in (earnings) losses of unconsolidated affiliates118 (12)
Deferred income tax 16 8 
Loss on disposition of assets 1 
Other12 8 
Changes in operating assets and liabilities:
Accounts receivable, net of allowance for credit losses370 24 
Contract assets14 (3)
Accounts payable(400)33 
Contract liabilities24 (62)
Accrued salaries, wages and benefits(43)9 
Payments on operating lease obligation(14)(15)
Payments from unconsolidated affiliates, net7 7 
Distributions of earnings from unconsolidated affiliates30 8 
Pension funding(11)(11)
Restructuring reserve(4)(7)
Other assets and liabilities7 (26)
Total cash flows provided by operating activities$89 $50 
Cash flows from investing activities:
Purchases of property, plant and equipment $(6)$(6)
Investments in equity method joint ventures(1)(3)
Proceeds from sale of assets or investments18  
Acquisition of technology license (7)
Other 1 (6)
Total cash flows provided by (used in) investing activities$12 $(22)
Cash flows from financing activities:
Payments on short-term and long-term borrowings(7)(7)
Payments of dividends to shareholders(15)(14)
Net proceeds from issuance of common stock4 4 
Payments to reacquire common stock(33)(4)
Other(1)(1)
Total cash flows used in financing activities$(52)$(22)
Effect of exchange rate changes on cash(7)3 
Increase in cash and cash equivalents42 9 
Cash and cash equivalents at beginning of period370 436 
Cash and cash equivalents at end of period$412 $445 
Noncash financing activities
Dividends declared$17 $16 
(1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method.

See accompanying notes to condensed consolidated financial statements.
9



KBR, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our 2021 Annual Report on Form 10-K.

The condensed consolidated financial statements include all normal and recurring adjustments necessary to present fairly our financial position as of March 31, 2022, and the results of our operations for the three months ended March 31, 2022 and 2021 and our cash flows for the three months ended March 31, 2022 and 2021. Certain amounts in prior periods have been reclassified to conform with current period presentation.

There are many factors that may affect the accuracy of our cost estimates and ultimately our future profitability. These include, but are not limited to, the availability and costs of resources (such as labor, materials and equipment), productivity and
weather. We generally realize both lower and higher than expected margins on projects in any given period. We recognize revisions of revenues and costs in the period in which the revisions are known. This may result in the recognition of costs before the recognition of related revenue recovery, if any. Our significant accounting policies are detailed in "Note 1. Significant Accounting Policies" of our 2021 Annual Report on Form 10-K.

We have evaluated all events and transactions occurring after the balance sheet date but before the financial statements were issued and have included the appropriate disclosures.
Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of KBR, Inc. and the subsidiaries it controls, including VIEs where it is the primary beneficiary (collectively, the "Company," "KBR", "we", "us" or "our"). We account for investments over which we have significant influence, but not a controlling financial interest, using the equity method of accounting. See Note 8 to our condensed consolidated financial statements for further discussion of our equity investments and VIEs. All material intercompany balances and transactions are eliminated in consolidation.

Adoption of ASU 2020-06

Effective January 1, 2022, we adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06") using the full retrospective method. Accordingly, the Company is presenting the consolidated financial statements for the year ended December 31, 2021, and the condensed consolidated financial statements for the three months ended March 31, 2021, as if ASU 2020-06 had been effective for those periods. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. As such, we no longer separate the Convertible Senior Notes into liability and equity components. The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the Convertible Senior Notes outstanding, and as a result, PIC and the related unamortized debt discount on the Convertible Senior Notes were reduced. The removal of the remaining debt discount recorded for this previous separation has the effect of increasing our net debt balance. ASU 2020-06 also eliminates the treasury stock method to calculate diluted earnings per share for certain convertible instruments and requires the use of the if-converted method. As such, we are required to apply the if-converted method to our Convertible Senior Notes when calculating diluted income (loss) per share. Under the if-converted method, the principal amount and any conversion spread of the Convertible Senior Notes, to the extent dilutive, are assumed to be converted into common stock at the beginning of the period and net income (loss) attributable to KBR is adjusted to reverse the effect of any interest expense associated with the Convertible Senior Notes.

For the years ended December 31, 2021 and 2020, the adoption of this standard did not materially impact our financial performance, financial position or cash flow, but it did result in an increase in the number of diluted weighted average shares outstanding utilized in our diluted income (loss) per share calculation in periods of net income attributable to KBR. For the year ending December 31, 2022, the adoption of this standard will not materially impact our financial performance, financial position or cash flow, but it may result in an increase in the number of diluted weighted average shares outstanding utilized in our diluted income (loss) per share calculation.
10




Select unaudited condensed consolidated balance sheet line items, which reflect the adoption of ASU 2020-06 are as follows:

December 31, 2021
Dollars in millionsAs Previously ReportedAdjustments As Adjusted
Assets:
Deferred income taxes $226 $5 $231 
Liabilities:
Long-term debt$1,852 $23 $1,875 
KBR Shareholders' Equity:
PIC$2,251 $(45)$2,206 
Retained earnings1,260 27 1,287 

Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASU 2020-06 are as follows:

Three Months Ended March 31, 2021
Dollars in millionsAs Previously ReportedAdjustments As Adjusted
Interest Expense$(22)$3 $(19)
Income before income taxes$64 $3 $67 
Provision for income taxes$(16)$(1)$(17)
Net income$48 $2 $50 
Net income attributable to KBR$47 $2 $49 
Net income attributable to KBR per share:
Basic$0.33 $0.02 $0.35 
Diluted$0.33 $ $0.33 
Basic weighted average common shares outstanding$141 $ $141 
Diluted weighted average common shares outstanding$144 $11 $155 

Select unaudited condensed consolidated statement of cash flows line items, which reflect the adoption of ASU 2020-06 are as follows:

Three Months Ended March 31, 2021
Dollars in millionsAs Previously ReportedAdjustments As Adjusted
Cash flows from operating activities:
Net Income$48 $2 $50 
Adjustments to reconcile net income to net cash provided by operating activities:
     Deferred income tax7 1 8 
     Other11 (3)8 
Total cash flows provided by operating activities$50 $ $50 


11



Impact of Adoption of Other New Accounting Standards

Effective January 1, 2022, we adopted ASU No. 2021-04. Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses measurement, treatment and recognition of a freestanding equity-classified written call option modification or exchange. The adoption of this standard did not have an impact on our financial statements.

Effective January 1, 2022, we adopted ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements and any significant terms and conditions of the agreements, including commitments and contingencies. The new standard only impacts annual financial statement footnote disclosures. Therefore, the adoption did not have a material effect on our condensed consolidated financial statements.

Additional Balance Sheet Information

Other Current Liabilities
    
The components of other current liabilities on our condensed consolidated balance sheets as of March 31, 2022, and December 31, 2021, are presented below:
 March 31,December 31,
Dollars in millions20222021
Current maturities of long-term debt$16 $16 
Reserve for estimated losses on uncompleted contracts 18 17 
Retainage payable13 13 
Restructuring reserve15 17 
Value-added tax payable49 34 
Dividend payable17 16 
Other miscellaneous liabilities54 65 
Total other current liabilities$182 $178 


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Note 2. Business Segment Information

We provide a wide range of professional services and the management of our business is heavily focused on major projects or programs within each of our reportable segments. At any given time, government programs and joint ventures represent a substantial part of our operations. We are organized into two core business segments, Government Solutions and Sustainable Technology Solutions and one non-core business segment as described below:
Government Solutions. Our Government Solutions business segment provides full life-cycle support solutions to defense, intelligence, space, aviation and other programs and missions for military and other government agencies primarily in the U.S., U.K. and Australia. KBR's services cover the full spectrum spanning research and development, advanced prototyping, acquisition support, systems engineering, C4ISR, cyber analytics, space domain awareness, test and evaluation, systems integration and program management, global supply chain management and operations readiness and support. With the acquisition of Frazer-Nash Consultancy Limited ("Frazer-Nash") on October 20, 2021 (described in Note 4 to the consolidated financial statements), our GS business segment also provides a broad range of professional advisory services to deliver high-end systems engineering, systems assurance and technology to customers across the defense, energy and critical infrastructure sectors primarily in the U.K. and Australia.

Sustainable Technology Solutions. Our Sustainable Technology Solutions business segment is anchored by our portfolio of over 70 innovative, proprietary, sustainability-focused process technologies that we license spanning four primary areas: ammonia/syngas/fertilizers, chemical/petrochemicals, clean refining and circular process/circular economy solutions. STS also includes our highly synergistic advisory and consulting practice focused on energy transition and net-zero carbon emission consulting, our high-end engineering, design and professional services offerings, as well as our technology-led industrial solutions build on our KBR INSITE® platform. KBR INSITE® is a proprietary, digital, cloud-based operations and maintenance platform that identifies opportunities for our clients to achieve sustainable improvements in production, reliability, environment impact, energy efficiency and ultimately profitability. From early planning through scope definition, advanced technologies and facility life-cycle support, our STS business segment works closely with customers to provide what we believe is the optimal approach to maximize their return on investment.
Other. Our non-core Other segment includes corporate expenses and selling, general and administrative expenses not allocated to the business segments above.








13



Operations by Reportable Segment
Three Months Ended
March 31,
2022
2021 (1)
Dollars in millions
Revenues:
Government Solutions$1,459 $1,164 
Sustainable Technology Solutions255 297 
Total revenues
$1,714 $1,461 
Gross profit:
Government Solutions$159 $116 
Sustainable Technology Solutions37 52 
Total gross profit
$196 $168 
Equity in earnings (losses) of unconsolidated affiliates:
Government Solutions$10 $7 
Sustainable Technology Solutions(128)5 
Total equity in earnings (losses) of unconsolidated affiliates$(118)$12 
Selling, general and administrative expenses:
Government Solutions$(54)$(49)
Sustainable Technology Solutions(15)(14)
Other(38)(26)
Total selling, general and administrative expenses$(107)$(89)
Acquisition and integration related costs(1)(1)
Restructuring charges and asset impairments(1) 
Loss on disposition of assets and investments (1)
Operating income (loss)$(31)$89 
Interest expense(20)(19)
Other non-operating expense (3)
Income (loss) before income taxes$(51)$67 
(1) As adjusted for the adoption of ASU 2020-06 using the full retrospective method.



14



Note 3. Revenue

Disaggregated Revenue

We disaggregate our revenue from customers by business unit, geographic destination and contract type for each of our segments as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Revenue by business unit and reportable segment was as follows:
Three Months Ended
March 31,
Dollars in millions20222021
Government Solutions
     Science & Space$253 $247 
     Defense & Intel378 351 
     Readiness & Sustainment533 329 
     International295 237 
Total Government Solutions1,459 1,164 
Sustainable Technology Solutions255 297 
Total revenue$1,714 $1,461 

Government Solutions revenue earned from key U.S. government customers includes U.S. DoD agencies and NASA, and is reported as Science & Space, Defense & Intel and Readiness & Sustainment. Government Solutions revenue earned from non-U.S. government customers primarily includes the U.K. MoD and the Australian Defence Force and is reported as International.


























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Revenue by geographic destination was as follows:

Three Months Ended March 31, 2022
Total by Countries/Regions
Dollars in millions
Government SolutionsSustainable Technology SolutionsTotal
     United States$1,011 $109 $1,120 
     Middle East39 49 88 
     Europe283 32 315 
     Australia90  90 
     Canada 2 2 
     Africa18