KBR (KBR) risk factors, FY2024 10-K

Risks Related to Operations of Our Business

1. 01Our results of operations and cash flows depend on the award of new contracts and the timing of the performance of existing contracts
2. 02Ongoing international conflicts, and other geopolitical conditions, may adversely affect our business and results of operations
3. 03Global pandemics, epidemics, outbreaks of infectious diseases or public health crises have disrupted our business and could have a material adverse effect on our future results of operations and financial performance
4. 04If we are unable to enforce our intellectual property rights, or if our intellectual property rights are challenged or become obsolete, our competitive position could be adversely impacted
5. 05We may not properly leverage or appropriately invest in technology advancements, which could diminish any sustainable competitive advantage in our service offerings resulting in the potential loss of market share and profits
6. 06We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm and legal liability, and adversely affect our business, financial condition and results of operations
7. 07The nature of our business exposes us to potential liability claims and contract disputes that may exceed or be excluded from existing insurance coverage
8. 08Dependence on third-party subcontractors, suppliers and equipment manufacturers could adversely affect our financial performance on contracts
9. 09We use estimates in recognizing revenues, and if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected
10. 10We conduct a portion of our operations through joint ventures and partnerships, exposing us to risks and uncertainties, many of which are outside of our control
11. 11The nature of our contracts, particularly those that are fixed-price, subjects us to risks associated with cost overruns, operating cost inflation and potential claims for liquidated damages
12. 12Our backlog of unfilled orders is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of our future revenues or earnings
13. 13We have made and may continue to make business combinations as a part of our business strategy, which may present certain risks and uncertainties
14. 14International and political events may adversely affect our operations
15. 15Internal or external cybersecurity or privacy breaches, or systems and information technology interruption or failure could adversely impact our ability to operate or expose us to significant financial losses and reputational harm
16. 16An impairment of all or part of our goodwill or our intangible assets could have a material adverse impact on our net earnings and net worth
17. 17Our actual results could differ from the estimates and assumptions used to prepare our financial statements
18. 18We ship a significant amount of cargo using seagoing vessels, exposing us to certain maritime risks

Risks Related to Our Industry

1. 19Our profitability and cash flow may vary based on the mix of our contracts and programs, our performance, our ability to control costs and seasonal factors
2. 20The U.S. government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time
3. 21Heightened competition could impact our ability to obtain contracts which could reduce our market share and profits
4. 22Several of our contracts with the U.S. government are classified or subject to other security restrictions, which may limit investor insight into portions of our business
5. 23Demand for our services provided under government contracts is directly affected by spending by our customers
6. 24Fluctuations in commodity prices and outlook may affect our customers’ investment decisions which may result in existing project cancellations or delays or changes in the timing and funding of new awards

Risks Related to Financial Conditions and Markets

1. 25Current or future economic conditions, including recession or inflation, in the credit markets may negatively affect the ability to operate our or our customers’ businesses, finance working capital, implement our acquisition strategy and access our cash and short-term investments
2. 26We may be unable to obtain new contract awards if we are unable to provide our customers with letters of credit, surety bonds or other credit enhancements
3. 27Our Senior Credit Facility imposes restrictions that limit our operating flexibility and may result in additional expenses, and such facility may not be available if financial covenants are violated or if an event of default occurs
4. 28Our indebtedness and the associated covenants could materially adversely affect our ability to obtain additional financing, including for acquisitions and capital expenditures, limit our flexibility to manage our business, prevent us from fulfilling our financial obligations and restrict our use of capital
5. 29We may be required to contribute additional cash to meet any unfunded benefit obligations associated with our defined benefit plans
6. 30We are subject to foreign currency exchange risks that could adversely affect our results of operations and our ability to reinvest earnings from operations. Our ability to mitigate our foreign exchange risk through hedging transactions may be limited

Risks Related to Our Common Stock

1. 31If we need to sell or issue additional shares of common stock to refinance existing debt or to finance future acquisitions or operations, our existing shareholder ownership could be diluted
2. 32Provisions in our charter documents, Delaware law and our Senior Credit Facility may inhibit a takeover or impact operational control that could adversely affect the value of our common stock
3. 33We may change our dividend policy in the future

Risks Related to Regulations and Compliance

1. 34We could be adversely impacted if we fail to comply with international export and domestic laws, which are rigorously enforced by the U.S. government
2. 35Our effective tax rate and tax positions may vary

Risks Related to Climate

1. 36There are rapidly evolving views from stakeholders, such as investors, customers and current and future employees, with respect to global climate risks and the related emphasis on sustainability practices, which could affect our business
2. 37Climate risks and related environmental issues could have a material adverse impact on our business, financial condition and results of operations
3. 38We may be unable to achieve our sustainability commitments and targets which could result in the loss of investors and customers and damage to our reputation