KBR, INC.KBR
KBR, INC. Debt Disclosure
Debt and Other Credit Facilities
Our outstanding debt consisted of the following at the dates indicated:
| Dollars in millions | January 2, 2026 | January 3, 2025 | |||||||||
| Term Loan A | $ | 989 | $ | 1,006 | |||||||
| Term Loan B | 983 | 993 | |||||||||
| Senior Notes | 250 | 250 | |||||||||
| Revolver | 395 | 345 | |||||||||
| Unamortized debt issuance costs and discounts | (21) | (25) | |||||||||
| Total debt | 2,596 | 2,569 | |||||||||
| Less: current portion | 49 | 36 | |||||||||
| Total long-term debt, net of current portion | $ | 2,547 | $ | 2,533 | |||||||
Senior Credit Facility
Our existing Credit Agreement, dated as of April 25, 2018, as amended ("Credit Agreement"), consists of a $1 billion revolving credit facility (the "Revolver"), a Term Loan A ("Term Loan A") with debt tranches denominated in U.S. dollars and British pound sterling and a Term Loan B ("Term Loan B" and together with the Revolver and Term Loan A, the "Senior Credit Facility").
We had cash borrowings of $555 million on our Revolver that occurred during fiscal 2025. We had cash repayments of $505 million on our Revolver, $26 million on our Term Loan A and $10 million on our Term Loan B that occurred during fiscal 2025. The interest rates with respect to the Revolver, Term Loan A and Term Loan B are based on, at our option, the applicable adjusted reference rate plus an additional margin or base rate plus additional margin. Additionally, there is a commitment fee applicable to available amounts under the Revolver.
The applicable interest rate per annum of the Term B loan facility is term SOFR plus 2.00% (or base rate plus 1.00%). The details of the applicable margins and commitment fees under the Revolver, Term Loan A-1 and Term Loan A-3 are based on our consolidated net leverage ratio as follows:
| Revolver, Term Loan A-1 and Term Loan A-3 | ||||||||||||||||||||
| Consolidated Net Leverage Ratio | Reference Rate (a) | Base Rate | Commitment Fee | |||||||||||||||||
| Greater than or equal to 4.25 to 1.00 | 2.25 | % | 1.25 | % | 0.33 | % | ||||||||||||||
| Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | 2.00 | % | 1.00 | % | 0.30 | % | ||||||||||||||
| Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | 1.75 | % | 0.75 | % | 0.28 | % | ||||||||||||||
| Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | 1.50 | % | 0.50 | % | 0.25 | % | ||||||||||||||
| Less than 1.25 to 1.00 | 1.25 | % | 0.25 | % | 0.23 | % | ||||||||||||||
(a)The reference rate for the Revolver and the U.S. dollar tranches of Term Loan A-1 is SOFR plus 10 basis points Credit Spread Adjustment and the British pound sterling tranche of Term Loan A-3 is SONIA plus 12 basis points Credit Spread Adjustment.
The details of the applicable margins and commitment fees under Term Loan A-2 are based on our consolidated net leverage ratio as follows:
| Term Loan A-2 | ||||||||||||||||||||
| Consolidated Net Leverage Ratio | Reference Rate (a) | Base Rate | Commitment Fee | |||||||||||||||||
| Greater than or equal to 4.25 to 1.00 | 2.13 | % | 1.13 | % | 0.33 | % | ||||||||||||||
| Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | 1.88 | % | 0.88 | % | 0.30 | % | ||||||||||||||
| Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | 1.63 | % | 0.63 | % | 0.28 | % | ||||||||||||||
| Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | 1.38 | % | 0.38 | % | 0.25 | % | ||||||||||||||
| Less than 1.25 to 1.00 | 1.13 | % | 0.13 | % | 0.23 | % | ||||||||||||||
(a)The reference rate for Term Loan A-2 is SOFR.
Both Term Loan A-1 and Term Loan A-3 provide for quarterly principal payments of 0.625% of the aggregate principal amount, increasing to 1.25% starting with the quarter ending April 3, 2026. Term Loan A-2 provides for quarterly principal payments of 0.625% of the aggregate principal amount and Term Loan B provides for quarterly principal payments of $3 million. Each of Term Loan A-1, Term Loan A-3 and the Revolver matures in February 2029, Term Loan A-2 matures in August 2027 and Term Loan B matures in January 2031.
The Senior Credit Facility contains financial covenants providing for a maximum consolidated net leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the Senior Credit Facility). Our consolidated net leverage ratio as of the last day of any fiscal quarter may not exceed 4.25 to 1 in 2023, reducing to 4.00 to 1 in 2024 and thereafter. Our consolidated interest coverage ratio may not be less than 3.00 to 1 as of the last day of any fiscal quarter. As of January 2, 2026, we were in compliance with our financial covenants under our Senior Credit Facility.
Senior Notes
We have $250 million aggregate principal amount of 4.750% Senior Notes due 2028 (the "Senior Notes") pursuant to an indenture among us, the guarantors party thereto and Citibank, N.A., as trustee. The Senior Notes are senior unsecured obligations and are fully and unconditionally guaranteed by each of our existing and future domestic subsidiaries that guarantee our obligations under the Senior Credit Facility and certain other indebtedness. Interest is payable semi-annually in arrears on March 30 and September 30 of each year and the principal is due on September 30, 2028.
We have the ability to redeem all or part of the Senior Notes at our option, at the redemption prices set forth in the Senior Notes, plus accrued and unpaid interest, if any, to (but not including) the redemption date. If we undergo a change of control, we may be required to make an offer to holders of the Senior Notes to repurchase all of the Senior Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest.
Letters of credit, surety bonds and guarantees
In connection with certain projects, we are required to provide letters of credit, surety bonds or guarantees to our customers in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers and future funding commitments. As of January 2, 2026, we had a $1 billion committed line of credit on the Revolver under our Senior Credit Facility and $488 million of bilateral and uncommitted lines of credit. As of January 2, 2026, with respect to our Revolver, we had $395 million of outstanding borrowings. We also have $14 million of outstanding letters of credit on our Senior Credit Facility. With respect to our $488 million of bilateral and uncommitted lines of credit, we utilized $296 million for letters of credit as of January 2, 2026. The total remaining capacity of these committed and uncommitted lines of credit was approximately $783 million as of January 2, 2026, all of which can be used toward issuing letters of credit. Of the letters of credit outstanding under the Senior Credit Facility, none have expiry dates beyond the maturity date of the Senior Credit Facility. Of the total letters of credit outstanding under our bilateral facilities, $99 million relate to our joint venture operations where the letters of credit are posted using our capacity to support our pro-rata share of obligations under various contracts executed by joint ventures of which we are a member.
We may also guarantee that a project, once completed, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, we may incur additional costs, pay liquidated damages or be held responsible for the costs incurred by the client to achieve the required performance standards. The potential amount of future payments that we could be required to make under an outstanding performance arrangement is typically the remaining estimated cost of work to be performed by or on behalf of third parties. Amounts that may be required to be paid in excess of the estimated costs to complete contracts in progress are not estimable. For cost reimbursable contracts, amounts that may
become payable pursuant to guarantee provisions are normally recoverable from the client for work performed under the contract. For fixed-price contracts, the performance guarantee amount is the cost to complete the contracted work, less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete the project. If costs exceed the remaining amounts payable under the contract, we may have recourse to third parties, such as owners, subcontractors or vendors for claims.
In our joint venture arrangements, the liability of each partner is usually joint and several. This means that each joint venture partner may become liable for the entire risk of performance guarantees provided by each partner to the customer. Typically, each joint venture partner indemnifies the other partners for any liabilities incurred in excess of the liabilities the other party is obligated to bear under the respective joint venture agreement. We are unable to estimate the maximum potential amount of future payments that we could be required to make under outstanding performance guarantees related to joint venture projects due to a number of factors, including but not limited to the nature and extent of any contractual defaults by our joint venture partners, resource availability, potential performance delays caused by the defaults, the location of the projects and the terms of the related contracts.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 26, 2026 | Showing above |
| 2025 | Feb 25, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.