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2016S U S T A I N A B I L I T Y R E P O R T

IMPACTING THE WORLD - INDIVIDUALLY & TOGETHER

ABOUT OUR REPORT

No matter the location or work performed, we aim to build a better future by leaving a positive legacy at each project site around the world.

Each year, KBR participates in some of the world’s largest, most complex projects in remote, diverse and challenging environments. With each project, KBR assumes a responsibility for safe and successful completion - while meeting client expectations and benefiting our stakeholders.

Achieving these goals also means reducing environmental impacts, enhancing energy efficiencies, minimizing lost-time incidents and injuries, and hiring and training local labor to create job opportunities and encourage the development of thriving and successful communities. KBR takes pride in working with local, indigenous, and minority and women-owned vendors and suppliers, in addition to offering the technical assistance and counsel to enable new partners to qualify as suppliers for our company.

This report, which covers business activity in calendar year January 1, 2016 to December 31, 2016, has been prepared according to GRI G4 Core guidelines and discloses KBR’s relevant and material aspects of sustainable development. It is part of our continuing effort to engage with our stakeholders and to share our own aspirations, our progress and our challenges in support of our commitment to corporate sustainability.

The content of this report is provided using the “in accordance“ core to provide full disclosure of KBR managed operations; as stated in previous reports the environmental data is provided for KBR-owned facilities. Economic, social and environmental information found in this report is also mentioned in our 2016 Annual Report, including Form 10-K and Annual Proxy Statements. This report is prepared under the direction of the VP of HSSE and KBR’s Sustainable Development Committee, which has executive management representation.

If you have questions on this report please email us at [email protected].

> ABOUT THE REPORT

> A MESSAGE FROM OUR CEO AND OUR CHAIRMAN OF THE HEALTH, SAFETY, SECURITY, ENVIRONMENT AND SOCIAL RESPONSIBILITY COMMITTEE Impacting the World - Individually & Together

> MESSAGE FROM THE VP HSSE A Year of Zero Harm

> OUR SUSTAINABILITY OUTLOOK

> ABOUT KBR

> DELIVERING A SUSTAINABLE BUSINESS MODEL

> PROVIDING OPPORTUNITIES FOR A SUSTAINABLE WORKFORCE

> NEW, EFFICIENT WORK PROCESS

> OUR TECHNOLOGY SOLUTIONS PROMOTE ENERGY EFFICIENCY

> SUPPORTING SOCIOECONOMIC DEVELOPMENT

> DELIVERING SUSTAINABLE PROJECTS

> GIVING BACK, THE HEART OF KBR EMPLOYEES

> FIRST ANNUAL ZERO HARM DAY

> DELIVERING SUSTAINABLE PERFORMANCE Sustainability by the Numbers

> Global Reporting Index 4.0

Contents2016 KBR SUSTAINABILITY REPORT 2

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KBR corporate values reflect our employees’ values - evident from the way we take personal accountability for safety through our Zero Harm commitment to the hundreds of thousands of dollars KBR employees around the world collected and donated for philanthropic organizations.

In 2016, with the downturn in the oil and gas market, it was essential to reduce overall costs, manage risk and execute on-time projects that were designed to perform with operational efficiencies across all our business offerings and within our organization. The goal was to work smarter. KBR employees rose to the challenge with value-added, customer-focused and integrated solutions crafted from some of the best minds in the business. By working together in true ONE KBR fashion - sharing ideas, solving problems and collaboration - we were able to succeed.

A sample of our key accomplishments in 2016 included:

Our Zero Harm commitment to people, the environment and property continued to deliver industry-leading results. In 2016, we held our first annual Zero Harm Day where offices and project sites around the world observed the day in their own way under the collective theme “A Day of Recognition and Reflection.”

The day’s objective was to recognize people who have visibly embraced “Courage to Care,” to recognize projects for improved safety performance and safety-related achievements and to demonstrate all the various ways that safety is core to KBR’s culture.

We made significant strides in our strategy to refocus on our core strengths by divesting non-strategic businesses and expanding our offerings. KBR marketed our consulting services, which we had been providing to key customers for decades, to help new customers improve development cycles, enhance safety and efficiency and maximize the potential of their assets. In July of 2016, KBR acquired Wyle, Inc. and launched the KBRwyle brand for our government services business. In September of 2016, we acquired Honeywell Technology Solutions, Inc., which was integrated into the KBRwyle brand. Our expanded offerings now cover the full spectrum of government mission requirements including research and development, testing, engineering, logistics, deployed operations and life-cycle sustainment.

KBR employees understand that the market demands new, efficient work process and in 2016 we found ways to help customers profit through innovation and non-traditional approaches. Our SmartSPEND work process

helps companies weigh the economic impact of the decisions they make over the entire life-cycle of a project to help ensure efficient operations and the highest economic return on their capital investments.

Our Technology & Consulting business group continued to provide reliable, innovative, commercially-proven technology solutions that improve energy efficiency and enhance productivity. In 2016, KBR’s proprietary clean coal gasification technology, Transport Integrated Gasification (TRIGTM), successfully converted lignite coal to synthesis gas, or syngas, for the first time on a commercial scale at Southern Company subsidiary Mississippi Power’s Kemper County energy facility. This was a significant achievement in the construction of the world’s most advanced clean coal plant. In addition, KBR’s Distill-Max Plus design rewarded HollyFrontier Corporation (HFC) with a column area reduction of 25% and energy savings of 30% for the grassroots Naphtha Fractionator at their El Dorado Refinery in Kansas. These are just a couple of our global accomplishments in 2016 from our technology portfolio, which also grew in 2016 through several strategic acquisitions.

Impacting the World - Individually & TogetherA MESSAGE FROM OUR CEO AND OUR CHAIRMAN OF THE HEALTH, SAFETY, SECURITY, ENVIRONMENT AND SOCIAL RESPONSIBILITY COMMITTEE

2016 KBR SUSTAINABILITY REPORT 3

The theme of our 2016 sustainability report, “Impacting the World - Individually & Together,” captures the spirit of KBR employees who work hard and go to extraordinary lengths to improve the communities where they live and work while creating a better world for future generations.

Stuart Bradie KBR President and CEO

Lester L. Lyles KBR Board Member and Chairman of the Health, Safety, Security, Environment and Social Responsibility Committee

To support economic development and local employment opportunities, our Engineering & Construction group launched in 2016 the “Camo to KBR” veteran recruitment program, which included the innovative Ft. Polk Pipefitting Program that takes our training program to the US Army base to train soon-to-be released soldiers. Upon the successful completion of the training, veterans are hired into KBR. Another example of KBR’s support of local economies includes our use of local goods, services and labor in Afghanistan for our work supporting the UK Armed Forces and NATO. This was a challenge due to the infrastructure and economic fabric being torn apart by years of conflict and instability; however, KBR has worked hard to support the reconstruction of local economies including over 20% use of local supplies and 10% in-country labor.

Going forward, Zero Harm remains our objective for our people and the environment. We will continue to execute our strategy and maintain our focus in order to meet the expectations of our customers, stakeholders and our employees. We will continue to concentrate on delivering a sustainable future through innovative work processes and technologies that help customers maximize their resources efficiently, at less cost to the environment and with fewer risks. And, most importantly, we will continue to invest in our people who are the impetus to launching creative, sustainable ideas that improve not only KBR and our customers’ projects, but also the world we live in.

Impacting the World - Individually & TogetherA MESSAGE FROM OUR CEO AND OUR CHAIRMAN OF THE HEALTH, SAFETY, SECURITY, ENVIRONMENT AND SOCIAL RESPONSIBILITY COMMITTEE


Stuart Bradie KBR President and CEO

Lester L. Lyles KBR Board Member and Chairman of the Health, Safety, Security, Environment and Social Responsibility Committee

At KBR, Health, Safety, Security & Environment (HSSE) is a core value for all employees and a key element in our Code of Business Conduct. Establishing and incorporating HSSE responsibility and accountability is a priority within our organization.

As we continue to expand our business footprint globally, we at KBR embrace our responsibility of doing no harm to people and the communities in which we live and work. This philosophy of nurturing an interdependent safety culture ensures us of maintaining safe and incident free workplaces, which creates value to our customers who rely on us to help them meet their commercial objectives, worker safety and environmental protection.

Since the introduction of our Zero Harm initiative in 2014, we have seen significant improvement in our safety performance. Our Total Recordable Incident Rate (TRIR) has improved by 43% since the inception of Zero Harm. And notably, recordable incidents are down 55%.

Support and active HSSE engagement by KBR executives has increased year over year. In 2015, we established a training program for our executive leadership team (ELT) championed by KBR CEO Stuart Bradie: “Being a Visible HSSE Leader at KBR.” In 2016, KBR had 100% participation in the training program and KBR’s senior leadership completed more than 89 Shaping Accident Free Environment (SAFE) tours at active project sites and offices, well over the targeted goal of 55 tours.

We had three focus areas as part of our 2016 Global HSSE Strategy.

• Visible Leadership and Commitment – developing and facilitating HSSE Leadership Training, ensuring all High Potential Incidents are reviewed by leadership through a structured Incident Review Board process and executive sponsorship of KBR’s 1st Annual Zero Harm Day, which occurred on February 23, 2016.

• Strengthening Our Global HSSE Communication – improving the company’s lessons learned program through the use of a robust color coded HSSE Border Alert communication system.

• Hazard and Risk Control – ensuring first line supervisory personnel are adequately HSSE trained through a set of Four Core Modules, all new hires trained in Courage to Care Conversations within sixty days of employment and ensuring all location specific safety execution plans to include local emergency plans are fit for purpose and up to date.

For KBR, safety is more than policies, procedures or rules; it is about being part of a strong, interdependent HSSE culture, all day, every day. This vision is embodied in KBR’s Zero Harm 24/7 initiative, which empowers all of our employees, customers and contractors to display the Courage to Care by looking out for one another. We also envision the KBR Zero Harm philosophy extending into the personal lives of all employees, empowering them to make positive, HSSE-conscious decisions based on personal values.

Nick Anagnostou, Vice President Health, Safety, Security and Environment

“Sustainability is about aligning KBR’s business goals with society needs while minimizing impact on the environment. We embrace the opportunity to contribute to the communities where we operate, and we must respond to that obligation in a way that demonstrates our commitment to create value for our stakeholders.”

H S S E B R A N D I N G

CMYK


Zero Harm: A Responsibility We EmbraceA MESSAGE FROM OUR VICE PRESIDENT, HSSE

CHALLENGES

The challenges outlined below are those that we believe are significant in today’s business climate, and addressing them will be instrumental to building a sustainable future.

Safety. In 2016, a KBR Joint Venture suffered two contractor fatalities in a single isolated event. We cannot state strongly enough that any loss of life is a tragedy not only for the families involved but also for all of us at KBR. The tragic loss of two of our contractors serves as a reminder that safety is personal and reinforces that we at KBR must remain diligent in our efforts to achieve Zero Harm all-day every-day.

Financial. We continue to address litigation and regulatory matters related to the Company’s restatement of its 2013 annual financial statements. We have also received requests for information and a subpoena for documents from the Securities Exchange Commission (SEC) regarding the restatement of our 2013 annual financial statements. We have been and intend to continue cooperating with the SEC.

Environmental. We are subject to numerous environmental, legal and regulatory requirements related to our operations worldwide. In addition to federal and state laws and regulations, other countries where we do business often have numerous environmental regulatory requirements by which we must abide in the normal course of our operations. These requirements apply to our business segments where we perform construction and industrial maintenance services, or operate and maintain facilities.

Remediation. We continue to monitor conditions at sites owned or previously owned, which created various environmental issues including deposits of metals, volatile and semi-volatile compounds and hydrocarbons impacting surface and subsurface soils and groundwater. These sites have been remediated, and we continue our ongoing site analysis involving the timing and techniques used to implement remediation activities.

We have been named as a potentially responsible party in various clean-up actions taken by federal and state agencies in the U.S. All of these matters have been settled or resolved and as of December 31, 2016 we have not been named in any additional matters.

GOALS

The following represents areas of focus for 2016 as we continued to integrate sustainability across our business.

Safety. Zero Harm continued to be our ambition for personal safety throughout 2016.. Our goal was to continuously improve our safety performance in 2016 and strive for consistent top quartile safety performance benchmarked against the International Association of Oil & Gas Producers (IOGP).

Environment. We worked to improve environmental awareness at our offices and project sites worldwide. Zero Harm extends to the environment with our goal of leaving each place where we operate as good as or better than we found it.

Feedback. We wanted to improve our community feedback mechanisms and reporting in order to address concerns of stakeholders in communities where we operate and assess the effectiveness of our response. We provided an Ethics Hotline for employees and contractors to report possible Code of Business Conduct violations and an investors’ hotline to enable stockholders to call with concerns. Additionally, there was an Annual Meeting of Stockholders that gave shareholders an opportunity to speak with the Board of Directors as well as the Executive Leadership Team.

Metrics. We realize the need to increase metrics to measure our environmental performance and assess our overall progress with regard to our commitment to Sustainable Development principles. At KBR, we understand the power and the opportunity of our globally connected community, and, despite areas that we still need to address, we are committed to reaching out and being part of it.


Our Sustainability Outlook

About KBR


A VALUES-DRIVEN COMPANY

KBR’s Behaviors are the principles that drive our day-to-day business activities. They are the backbone of our corporate culture and reinforce our shared mission of “We Deliver.”

KBR’S behaviors are:

WE DELIVERWe are committed to standing by our promises to deliver projects through collaboration, discipline and the KBR Way.

WE VALUE OUR PEOPLEWe value and respect our employees as people. We are committed to Zero Harm for every person. We emphasize development of each person to reach his or her full potential.

WE ARE PEOPLE OF INTEGRITYWe are people of character. We value honesty, trust, courage, prudence, and tenacity. We will not sacrifice our integrity.

WE EMPOWER OUR EMPLOYEESWe trust our employees to be independent decision makers while being held accountable to quality and delivery. We enable our employees to be proactive in their work and adaptive to change.

WE LEAD BY EXAMPLEWe own our work, individually and as a company. We have a passion to deliver high quality work and a will to succeed. We value the success of KBR over individual success. We are ONE KBR.

KBR and its subsidiaries are a global provider of differentiated, professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries. With operations in 40 countries, KBR has more than 34,000 people delivering services to customers in over 70 countries. Our major operations in regards to revenue are in the United States, Middle East, Europe,

Australia, California and Africa. KBR’s major operations with regards to property, plant and equipment are in the U.S., United Kingdom and Asia-Pacific.

We trace our history and culture to two businesses, The M.W. Kellogg Company (Kellogg) and Brown & Root, Inc. (Brown & Root). Kellogg dates back to a pipe fabrication business which was founded in New York in 1901 and has been creating technology

for petroleum refining and petrochemical processing since 1919. Brown & Root was founded in Houston, Texas in 1919 and built the world’s first offshore platform in 1947. Halliburton acquired Brown & Root in 1962 and Kellogg in 1998 through a merger with Dresser Industries. KBR became a standalone company in November of 2006.

As of December 31, 2016, KBR had approximately 34,000 employees worldwide including our joint ventures, and recorded revenues of $4,268,000,000.


KBR’s Businesses

TECHNOLOGY & CONSULTING

The Technology & Consulting (T&C) group combines KBR’s licensed technologies, knowledge-based services and three consulting brands into a global business delivering focused solutions across the oil and gas value chain – from wellhead to refining to specialty chemicals production. From early planning through scope definition, advanced technologies and project lifecycle support, KBR’s T&C group works closely with customers to provide the optimal approach to maximize the return on their investment.

Our licensed technologies, whether full units or key equipment, can be found in thousands of installations around the world. Our proprietary equipment is engineered to perform, underpinning our continued commitment to performance and quality for refining, coal gasification, petrochemicals, ammonia and syngas. In addition, our unique partnerships, joint ventures and alliances create a strong technology portfolio with industry leading technology providers such as Shell Global Solutions, BP, ExxonMobil Chemical, SK Innovation, Southern Company, SK-KBR and more.

ENGINEERING & CONSTRUCTION

KBR is one of the world’s largest and most diverse providers of engineering, procurement, construction, commissioning and start-up services to the hydrocarbons industry, including Upstream Oil & Gas; LNG/GTL; Downstream Oil & Gas, Petrochemicals and Chemicals; and differentiated EPC. Our experience spans the entire range of the energy services cycle – from feasibility studies and front end designs through global procurement and logistics, direct hire construction and construction management on some of the most demanding energy projects onshore and offshore.

GOVERNMENT SERVICES (KBRWYLE)

KBRwyle has a long history of delivering effective, integrated services to support the missions of defense and governmental agencies worldwide.

Our Government Services division serves government customers globally, including capabilities that cover the full life-cycle of defense, space, aviation and other government programs and missions from research and development, through systems engineering, test and evaluation, program management to operations, maintenance and field logistics. KBRwyle is focused on long-term service contracts with United States, United Kingdom, and Australian governments.

KBR delivers technology, value-added consulting services and integrated EPC skills through three distinct global businesses, ensuring consistent project delivery with predictable results. Our businesses are:

2016

United States, 49%

Middle East, 20%

Europe, 12%

Africa, 3%

Other countries, 4%

Australia, 9%Canada, 3%

2014

United States, 37%

Middle East, 11%

Europe, 10%

Other countries, 4%

Australia, 22%Canada, 12%

Africa, 4%

2015

United States, 43%

Middle East, 5%

Europe, 10%

Africa, 3%

Other countries, 19%

Australia, 16%

Canada, 4%

The World’s Contractor


DELIVERING THE KBR WAY

Whether it’s providing the technology and consulting know-how to develop our customers’ valuable assets; designing and constructing the infrastructure and facilities to develop energy resources in some of the world’s more remote and challenging locations; or providing highly-specialized services and mission support for men and women of their countries’ armed forces and governmental agencies, our clients depend on KBR because they know We Deliver.

40+ Countries (operations)

34,000+

Employees (including joint ventures)

70+ Countries (customers)

KBR REVENUE

By geographic location as a percentage of total revenues:

A significant portion of our revenues is derived from companies in the oil and gas industry, a cyclical industry subject to the levels and volatility of oil and gas prices.

As a global company, KBR encounters considerable risk in the process of our day-to-day activities. The markets that we serve are highly competitive and require substantial resources and highly skilled and experienced technical personnel in order to compete and succeed. A significant portion of our revenues is derived from companies in the oil and gas industry, a cyclical industry subject to the levels and volatility of oil and gas prices.

Around the world, our operations may be adversely affected by unsettled political conditions, acts of terrorism, civil unrest, force majeure, war or other armed conflict, as well as governmental actions, inflation and foreign currency exchange controls and fluctuations. We strive to manage or mitigate these risks through a variety of means including contract provisions, contingency planning, insurance schemes, hedging and other risk management activities.

Please refer to our 2016 Annual Report for more details, specifically Item 1A. Risk Factors, Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Statement of Risk


ORGANIZATIONAL CHANGES TO SUPPORT OUR STRATEGY

In December 2014 following an intensive analysis of our operations, KBR announced a strategy for growth that refocused KBR on our core strengths – Technology and Consulting, Engineering and Construction and Government Services – and simplified the corporate structure in order to maximize synergies, reduce overhead costs and create a more market-focused business.

As a key part of this strategy, we began to rebalance our business portfolio through sales of non-strategic businesses and the formation of strategic partnerships.

We had continued opportunities within our global government services business as we drove higher value and lower cost solutions to support governments’ increasing training, operation, maintenance and sustainment requirements. The acquisition of Wyle Inc. (“Wyle”) and Honeywell Technology Solutions Inc. (“HTSI”), which we converted to KBRwyle Technology Solutions, LLC (“KTS”) in the third quarter of 2016 moves KBR’s GS business into the domestic high value engineering services

industry for such clients as NASA and U.S. government military agencies. International tensions are also likely to contribute to increased demand for our international military support services.

On January 11, 2016, we acquired 100% of the outstanding common stock of three subsidiaries of Connell Chemical Industry LLC (through its subsidiary, Chematur Technologies AB): Plinke GmbH (“Plinke”), Weatherly Inc., (“Weatherly”) and Chematur Ecoplanning Oy (“Ecoplanning”). Plinke specializes in proprietary technology and specialist equipment for the purification and concentration of inorganic acids used or produced in hydrocarbon processing facilities. Weatherly provides nitric acid and ammonium nitrate proprietary technologies and services to the fertilizer market. Ecoplanning offers proprietary evaporation and crystallization technologies and specialist equipment for weak acid and base solutions. As a result of this acquisition, we can expand our technology and consulting solutions into new markets while leveraging KBR’s global sales and EPC capabilities.

2016 Business Strategy


KBR’s business strategy is to provide our customers with differentiated and superior capital project delivery and service offerings across the entire engineering, construction and operations project lifecycle.

To achieve our business strategy, KBR’s goal is to create enhanced customer satisfaction leading to repeat business through a best-in-class delivery platform. KBR projects are generally long-term in nature, and an essential feature of our global strategy is to establish local operations in locations where services demand growth is expected. Our core skills are conceptual design, front-end engineering design (“FEED”), engineering, project management, procurement, construction, construction management, logistics, commissioning, operations and maintenance.

Good governance is the hallmark of a well-run company. KBR’s board of directors adheres to a fair and honorable model of governance to guide its role as the guardian of shareholder interest. In addition to specifying the rights and responsibilities of the board, and the board committees, this general model of governance also provides the structure through which company objectives are set – as well as the means of attaining those objectives, monitoring performance and promoting fairness, transparency and accountability.

Our corporate governance guidelines are reviewed annually to reflect today’s dynamic and evolving business environment, to enhance the board’s effectiveness and to ensure compliance with new regulatory requirements enacted by the U.S. Securities and Exchange Commission, the Internal Revenue Service and others.

Board members also complete annual self-assessment questionnaires for the Board and for each committee on which they serve, along with an annual Directors’ and

Officers’ Questionnaire (D&O) and a NYSE Independence questionnaire. All questionnaire results are presented at Nominating and Corporate Governance Committee meetings.

KBR, Inc.’s Board of Directors currently comprises 10 directors. All of the directors are independent, non-executive directors except for the CEO. Directors are elected annually, with nominees standing for election to one-year terms. At this time, the Board has four standing committees to which it has delegated certain duties and responsibilities: Audit, Compensation, Health, Safety, Security, Environment and Social Responsibility (HSSE & SR) and Nominating and Corporate Governance (NCG).

The NCG committee has the responsibility of selecting and recommending prospective nominees to the Board for approval. Prospective candidates come from a variety of sources, including recommendations by current committee and board members, an independent executive search firm or nomination by stockholders in accordance with KBR’s Bylaws. Candidates are evaluated based on their background, complementary skills and reputation, as well as personal characteristics such as practical wisdom and mature judgment, an inquiring and independent mind, and the highest levels of ethics, integrity and values.

While diversity in personal background, race, gender, age and nationality for the Board as

a whole may be taken into account when considering individual candidates, KBR does not have a specific policy relating to any particular aspect of diversity. All candidates must also possess the highest personal and professional ethics, integrity and values.

KBR has established a process for stockholders and other interested parties to communicate with the Audit Committee and the Board of Directors. The process has been approved by our Board and its

Audit Committee and is designed to meet the requirements of the NYSE and the SEC. Individuals may communicate with our Board of Directors or the non-executive directors via mail (Board of Directors c/o Director of Business Conduct, KBR, Inc., P.O. Box 3406, Houston, Texas 77253-3406), telephone (1-855-231-7512 (toll-free from the U.S. or Canada) or 1-503-619-1884 (calling collect from any other country), or e-mail ([email protected]).

Governance


Pictured left to right: Mark E. Baldwin; General Lester L. Lyles, USAF (Ret.); Jeffrey E. Curtiss; Ann D. Pickard; Loren K. Carroll; James R. Blackwell; Jack B. Moore; Umberto della Sala. Not pictured: Stuart J. B. Bradie and Richard J. Slater.

The Health, Safety, Security, Environment and Social Responsibility Committee of the Board of Directors of KBR, Inc. (the “HSSE & SR Committee”) was established to assist the Board in fulfilling its responsibilities to provide global oversight and support of KBR’s health, safety, security, environmental, and social responsibility policies, programs and initiatives.

In 2016, the members of the HSSE & SR Committee were Mark E. Baldwin, Umberto della Sala, General Lester L. Lyles, USAF (Ret.), and Ann D. Pickard. The members of the HSSE & SR Committee have a broad range of experience from the government, oil and gas, engineering, procurement, and construction, and financial services industries.

General Lyles has been a member the HSSE & SR Committee since 2007 and has served as its Chairman since 2012. A retired Four-Star General of the U. S. Air Force, General Lyles served in the U.S. Air Force for over 35 years as: Commander of the Space and Missile Systems Center; Director of the Ballistic Missile Defense Organization; Vice Chief of Staff of the Headquarters of the U.S. Air Force; and Commander of the U.S. Air Force Materiel Command. General Lyles currently serves as

Chairman of the Board of Directors of the United Services Automobile Association. He is also a director of General Dynamics Corporation, where he serves on the Audit Committee, and Battelle Memorial Institute, a nonprofit organization. In addition, General Lyles is a member of the International Security Advisory Board at the U.S. Department of State and a member of the NASA Advisory Council. He has served on the Defense Science Board in the Pentagon since 2009, and he served on the President’s Intelligence Advisory Board in the White House from 2009-2013.

Mark E. Baldwin joined the HSSE & SR Committee in 2014. He served as the Executive Vice President and Chief Financial Officer of Dresser-Rand Group, Inc., from 2007 until his retirement in 2013. Prior to joining Dresser-Rand, he served as the Executive Vice President, Chief Financial Officer, and Treasurer of Veritas DGC Inc. and Operating Partner at First Reserve Corporation. Mr. Baldwin also served as Executive Vice President and Chief Financial Officer for NextiraOne and as Chairman of the Board and Chief Executive Officer for Pentacon

Inc. Earlier in his career, he served in a variety of finance and operations positions with Keystone International Inc., including Treasurer, Chief Financial Officer, and President of the Industrial Valves and Controls Group. Mr. Baldwin serves as a director of TETRA Technologies, Inc., where he is also the Chairman of the Audit Committee.

Umberto della Sala joined the HSSE & SR Committee in 2015. He has 40 years of experience in the engineering, procurement, and construction industry as he spent his entire career with Foster Wheeler AG., serving as its President and Chief Operating Officer from 2007 until his retirement in 2013. In addition to his long industry experience, Mr. della Sala has extensive experience in foreign markets. He is acting as Industrial Advisor to the Italian Strategic Fund (FSI). In this connection, he serves as Chairman of the Board of Ansaldo Energia and is a director of Trevi Finanziaria Industriale SPA and Kedrion SPA, of which FSI owns minority participations. Prior to March 1, 2016, Mr. della Sala served on the Supervisory Board of Stork Technical Services.

Sustainability Governance



Ann D. Pickard joined the HSSE & SR Committee in 2016 after she retired from Royal Dutch Shell plc (“Shell”) the same year. Ms. Pickard held numerous positions of increasing responsibility during her 15-year tenure with Shell including: Executive Vice President, Arctic; Executive Vice President of Shell’s Exploration and Production business and Country Chair of Shell in Australia; Regional Executive Vice President for Sub Saharan Africa; Director, Global Businesses and Strategy; and a member of the Shell Gas & Power Executive Committee with responsibility for Global LNG, Power, and Gas & Power Strategy. Ms. Pickard joined Shell in 2000 after an 11-year tenure with Mobil prior to its merger with Exxon. Ms. Pickard has significant business experience throughout South America, Australia, the countries of the former Soviet Union, the Middle East, and Africa. She serves on the Board of Directors of Woodside Petroleum Ltd. In addition, Ms. Pickard is a member of the Global Agenda Council on the Arctic for the World Economic Forum, the Advisory Council of the Eurasia Foundation, Catalyst, and Chief Executive Women.

The HSSE & SR Committee’s primary responsibility is to ensure KBR’s compliance with applicable health, safety, security, environmental and social responsibility policies, laws and regulations, and consistency with KBR’s policies and goals. It also provides input to KBR on managing current and emerging health, safety, security, environmental and social responsibility issues. Other activities include overseeing KBR’s activities in managing major HSSE & SR risk exposures; reviewing KBR’s political and charitable contributions and social responsibility activities; and reviewing KBR’s public sustainability report.

Sustainability Governance

KBR acknowledges the 15th principle contained in the United Nations Rio Declaration on Environment and Development Principles as a general standard for sustainable development concerns worldwide. We will continue to play a role in upholding sustainable development principles by our actions in the countries in which we do business.

At KBR, our sustainability initiatives are built on our values of uncompromising commitment to quality, health, safety and the environment.

We implement rigorous safety programs designed to keep our employees and subcontractors safe and healthy. Our commitment to Zero Harm means all workers take ownership of their own safety as well as the safety of their colleagues, even empowering employees to stop work to correct potential hazards.

We volunteer with and donate funds to charitable organizations and causes that align with our mission of improving health, education and the environment in the communities in which we live and work around the globe.

Whenever possible, we hire local workers in the countries where we operate, contributing to the

development of communities, new job creation and the growth of local businesses.

We help customers navigate the increasingly complex regulatory landscape, reduce operating costs and enhance efficiencies through the production of environmentally friendly solutions, technologies and best practices.

We strive to protect and minimize our impact on the environment wherever we operate. In this way, our commitment to our values creates tangible significance for our customers.

KBR subscribes to a number of economic, environmental and social charters, principles and organizations around the world including:

CARBON DISCLOSURE PROJECT (CDP)

KBR has participated in the CDP since 2010. CDP works to transform the way the world does business to prevent dangerous climate change and protect our natural resources.

THE CENTERS FOR HOUSTON’S FUTURE

KBR supports this community-based organization that works to solve our region’s toughest problems. The organization uses meaningful research, innovative strategies and leadership engagement to identify, measure and support Houston’s progress toward achieving a balance between the social, ecological and economic factors that will enable it to become a competitive, sustainable region for the 21st century.

Sustainability at KBR


CONTRIBUTING TO THE INDUSTRIES WE SERVE

KBR is an active participant and contributor to many professional organizations, codes and standards committees and other industry forums that promote awareness of current industry trends and provide opportunities to contribute KBR’s expertise to the industries we serve. Our involvement in these committees translates to direct benefits for our customers, helping us to implement innovations and design solutions that meet current and future requirements.

Globally KBR and its employees participated in a number of professional organizations during 2016, a sampling of which is listed below:

• Aerospace, Defence and Security Association

• American Chamber of Commerce – Australia, Azerbaijan, Brazil

• American Council of Engineering Companies of Texas (ACEC Texas)

• American Fuel & Petrochemical Manufacturers (AFPM)

• American Immigrations Lawyers Association (AILA)

• American Institute of Architects• American Institute of Certified Public

Accountants (AICPA)• American Institute of Chemical Engineers

(AIChE)

Delivering A Sustainable Business Model


CONTRIBUTING TO THE INDUSTRIES WE SERVE (con’t)

• American Institute of CPA’s• American Petroleum Institute (API)• American Society of Civil Engineers• American Society of Mechanical Engineers

(ASME)• American Welding Society (AWS)• ASIS• Associated Builders & Contractors National

Diversity Committee• Association for Financial Professionals• Association of Corporate Travel Executives

(ACTE)• Association of General Contractors (AGC)• Association of the United States Army

(AUSA)• Australian Petroleum Production and

Exploration Association (APPEA)• Bayou Preservation Association• Bi-lateral U.S. Arab Chamber of Commerce• BIPAC• Birmingham Business Alliance• Board of Certified Safety Professionals

(BCSP)• British Chemical Engineering Contractors

Association (BCECA)• British Safety Council• Business Council of Alabama• Business Council of International

Understanding• Business Roundtable – Golden Triangle,

Houston• CAPS Research • Center for Houston’s Future• Chamber of Commerce• Committee for Economic Development of

Australia• Construction Industry Institute• Construction Management Association of

America (CMAA)• Consult Australia – National Sustainability

Roundtable

CREATING SUSTAINABLE BUSINESS PRACTICES

A key feature of KBR’s strategy for growth is to eliminate silos and foster collaboration. While we have many successful business offerings, in the end we are one company and we are strongest when we work together as One KBR.

One KBR harnesses the collective genius of our company to deliver value to our stakeholder. The KBR Way is the platform for how we do our work – a consistent, unified focus grounded in a set of processes and procedures that have been honed over thousands of projects, including some of the largest on land and offshore.

Through the KBR Way we streamline, globalize and embed these lessons learned and best practices throughout the company so that any project, anywhere in the world is instantly recognized as a KBR project.

It assures our clients that they will receive a reliable project that delivers cost and schedule certainty. It also establishes sound business practices that reduce risk and ensure that we are good stewards of our shareholders’ money.

The KBR Way helps us operate efficiently and effectively in a complex, risky, highly competitive market. It enables us to continuously strengthen our work processes, remove inefficiencies and eliminate bureaucracy to ensure profits in the future as well as today.

CODE OF BUSINESS CONDUCT

At KBR, we believe that there is no value more important than integrity. Our ethical and legal obligations must never be sacrificed in the name of profits. This belief is reflected in our Code of Business Conduct – the ethical and legal foundation of our Company. As defined in Item 406(b) of Regulation S-K, KBR’s Code of Business Conduct (COBC) applies to all directors and officers, including the principal executive officer, principal financial officer, principal accounting officer and controller, and also applies to all employees of KBR and KBR’s agents.

The COBC establishes a common set of ethical standards and legal principles that all are expected to exhibit when dealing with clients, communities and each other. COBC training is mandatory for all employees each year through classroom or online sessions and available in different languages. KBR has posted its Code of Business Conduct on its website, www.kbr.com.

Any violation of the law or the Code of Business Conduct can be reported either directly or anonymously through the confidential KBR Ethics Hotline and Reporting system at EthicsPoint. The hotline is available 24 hours a day, 7 days a week.

Providing Opportunities for a Sustainable Workforce


As a company delivering services in a competitive, demanding world our people are what make the difference. Their dedication and know-how wins jobs, innovates and delivers results. We treat our employees with dignity and respect, taking responsibility for their health, safety and professional development because that is where our future lies.

TRAINING

KBR is committed to ensuring that each employee achieves his or her full potential in an environment that values productivity and results. To this end, KBR provides educational opportunities that enable employees to improve their knowledge and skills beyond the standard, informal on-the-job training.

Career development is a shared responsibility between the employee and the company. Each individual must decide their career goals, and select or create their opportunities accordingly. Employees must manage his or her performance and career, honestly assessing skills, competencies and gaps and obtaining input and feedback on their performance. KBR is responsible for providing career development strategies, resources and tools and for creating an environment where talented people will want to build their careers and share responsibility for achieving our goals and objectives.

Learning opportunities are designed to help employees meet both short-term job requirements and the longer-term needs of each individual and KBR. KBR provides blended learning for business and management skills, as well as core technical skills via its online learning management system.

Learning is mapped to KBR’s Transferable Competency model and role-based technical competencies. The model consists of eight leadership competencies grouped into four

Leadership Imperatives: Think Strategically and Grow the Business; Execute and Engage; Develop Teams and People; and Lead Courageously and Safely.

The model is core to The KBR Way and the creation of a culture focused on hiring the right people, driving our business values, and executing processes that will enable us to deliver in the marketplace.

KBR encourages and offers training to employees at all levels of the organization: professional, technician, craft, administrative, service workers and managers up to executive senior leadership.

• Design Build Institute of America (DBIA)• Energy Institute• Engineering and Construction Contracting

Association (ECC)• Engineering and Construction Risk Institute

(ECRI)• Engineering Construction Industry Training

Board (ECITB)• Engineers Australia - Society for

Sustainability and Environmental Engineering

• Gas Processors Association Ltd.• Gasification Technologies Council (GTC)• Global Business Travel Association (GBTA)• Golden Training Business Round Table• Greater Houston Partnership• Gulf Coast Power Association• Gulf Petrochemicals and Chemicals

Association (GPCA)• Houston Business Roundtable• Houston Minority Supplier Development

Council• Institute for Supply Management• Institute of Electrical and Electronics

Engineers (IEEE)• Institute of Materials, Materials and Mining• Institute of Measurement and Control• Institution of Engineering and Technology

(IET)• Institution of Structural Engineers• International Facility Management

Association (IFMA)• IT Service Management Forum (ITSMF)• Manufacture Alabama• Manufacturers Alliance for Productivity and

Innovation (MAPI)• National Association of Industrial & Office

Product (NAIOP) Northern Virginia• National Association of Minority Contractors




WORKFORCE DIVERSITY

At KBR, we recognize the value of diversity – not just in race and gender, but also in culture, religion, age, nationality and language. We understand that our sustainability as a company depends on our ability to maintain a highly skilled workforce that reflects the diversity of the countries where we operate and addresses growing local content requirements.

Our goal is to build and sustain a high-performing organization – one with an empowered, dynamic workforce that possesses the right combination of attitudes, skills, expertise and behaviors to meet our customers’ expectations and our business objectives. We know that the diversity of our workforce makes us a stronger competitor and employer.

LOCAL CONTENT

KBR has a long history and an excellent record in maximizing local content for the execution of projects in various countries in the world. We believe that by transferring valuable skills to local workers and businesses, we help create greater economic opportunities for the entire community, while helping our customers fulfill their sustainability requirements.

DEVELOPING LOCAL SUPPLY CHAINS AND WORKFORCE IN AREAS IN CONFLICT

Since 2003 KBR has been supporting the UK Armed Forced and NATO in operational theatres around the world. From Iraq to Afghanistan, KBR has proven to be the reliable partner. Key to our success has been our ability to establish

and maintain resilient supply chains. This is a challenge in countries which infrastructure and economic fabric has been torn apart by years of conflict and instability.

KBR operations in these areas have supported the reconstruction of local economies. Sourcing goods and services locally has contributed to the development of economic activity that assists in bringing economic normality to post-conflict areas

The challenge of ensuring continuity of supply in conflict areas is based on a three-fold strategy: sound demand forecast, resilient logistic routes and establishing a local supply chain as soon as the conditions on the ground allow for it.

Working in theatre shoulder-to-shoulder with army personnel enables KBR to develop sound understanding of the demands from the supply chain. This understanding of the requirements helps us to develop a sustainable supply chain, even in the most difficult situations. Planning adequate inventories contingency and planning the most suitable logistic route for planned and reactive demands has been one of the key success factors for KBR.

As operational theatres stabilize, local economies reactivate providing opportunities for KBR to contribute to local development. The goods or services available locally may be limited in post-conflict areas. Their economies may be disrupted by the conflict and require companies like KBR to adapt to the reality on the ground whilst not compromising our standards. In spite of these limitations, our commitment to source locally, where possible, is a commercial and social

responsibility. In 2016 alone, KBR over 20% of KBR’s expenditure in Afghanistan was sourced locally. The goods and services sourced in country ranged from raw materials to basic commodities and provided an additional help to the local economy.

KBR plays its part in assisting the normalization of post-conflict countries and endeavors to recruit local labour where possible. The nature of the facilities where KBR operates makes it difficult to obtain clearance for local labour. Even with this security limitation, over 10% of the workforce delivering KBR contracts in Afghanistan are locals.

• National Contract Management Association (NCMA)

• National Defense Industrial Association (NDIA)

• National Foreign Trade Council• National Petroleum Council• National Association of Minority Contractors• National Safety Council • Partners for Environmental Progress• Petroleum Federation of India (PetroFed)• Process Industry Practices• Procurement Executives Group• Professional Services Council• Program Advisory Committee (PAC) Kitimat

Valley Institute (KVI)• Project Management Institute (PMI)• Renewable UK• Restore America’s Estuaries• Roads Australia – Sustainability Chapter• Safety Institute of Australia• Simulation Australia• Society for Human Resource Management

(SHRM)• Society of American Military Engineers

(SAME)• Society of Naval Architects and marine

Engineers (SNAME)• Society of Women Engineers (SWE)• South African Institution of Chemical

Engineers• Subsea Energy Australia• Technical Association of Pulp and paper

Industry (TAPPI)• US Chamber of Commerce – Iraq Business

Initiative• US-China Energy Cooperation Program• US Green Building Council (USGBC)• Water Services Association of Australia • Women Business Enterprise Alliance• Women in Defence• Women’s Energy Network


CULTIVATING WOMEN LEADERS

ASPIRE is an Employee Resource Group with a mission to cultivate women leaders and promote diversity though a collaborative community for the benefit of all employees and KBR. ASPIRE’s vision is to make KBR an employer of choice where women are influencing, leading and learning.

CEO Stuart Bradie said ASPIRES’s mission of diversity and empowerment epitomizes KBR’s core values and key behaviors. He spoke at an ASIRE event in 2016 about his firm belief in equality and its importance saying, “It’s essential to our future that everyone – everyone – feels empowered and everyone has the resources and opportunity to realize their full potential.”

His passion for diversity and equality was inspired by his mother who was one of the first women to become Chairman of a company in Scotland. Bradie explained that from a young age, his experience watching his mother’s accomplishments taught him that there was no difference to him; that everyone is equal and deserves the same opportunities regardless of gender or background.

Bradie stressed that ASPIRE’s mission is essential to shaping and strengthening KBR’s culture. “It’s exactly what we want to be doing. We want to empower leaders. We want to see people getting equal opportunities and moving forward.”

In addition, ASPIRE is a resource that can assist KBR with the processes of talent development and management that include diversity as a key part of the discussion.

KBR’S EILEEN AKERSON MAKES LIST OF MOST POWERFUL BUSINESSWOMEN IN TEXAS IN 2016

Eileen Akerson, KBR’s Executive Vice President and General Counsel, was named in the National Diversity Council’s (NDC) 2016 Most Powerful Businesswomen in Texas list. The list recognizes women who have raised bars, broken barriers and inspired their peers – both female and male – to face all challenges head on and conquer their goals.

In naming Akerson to the list, the NDC noted her leadership philosophy that a good leader “treats everyone with respect regardless of their position within a company.”


VALUING DIVERSITY AND INCLUSION AT KBR

At KBR, we value our people and the diversity each employee brings to the workplace. Employees have helped foster the company’s culture of diversity by creating resource groups and networks to promote inclusion throughout the organization.

KBR engineer Mark McBride-Wright has taken an active role in creating a more inclusive industry for lesbian, gay, bisexual and transgender (LGBT) engineers at KBR and beyond by founding InterEngineering, an inclusive organization supporting and advocating for LGBT diversity within engineering. KBR’s Mark McBride-Wright recently won the Corporate Rising Star Award at the 2016 British LGBT Ceremony.

McBride-Wright is passionate about working to promote workplace inclusion in order to increase business productivity and provide a healthy working environment for all employees. In addition to helping provide better resources for LGBT engineers at KBR and across the industry, McBride-Wright has been active in helping promote diversity through a collaborative community for the benefit of all employees at KBR, including participating in ASPIRE, a KBR employee group with the mission of cultivating women leaders. McBride-Wright is also working with KBR’s HR department and a team of company leaders and stakeholders to create a global inclusion strategy for the company.

“At KBR we are committed to workplace inclusion and Mark has been a tremendous help as we find new and better ways to support our diverse workforce,” said Wesley Vestal, KBR’s Vice President of Talent Development. Vestal went on to explain the benefits of diversity and inclusion to an organization can result in improving financial performance, leveraging talent, reflecting the marketplace, building reputation and increasing innovation and group performance.

“I personally have found KBR a very welcoming place to work and the KBR executive team values diversity in our organization,” said McBride-Wright. “When we have role models to look up to and we can form trusting relationships and feel included, we can better channel our energy into our work and increase our productivity, unleashing the creativity, innovation and positivity required to be successful and credible leaders,” McBride-Wright said.


THE CAMO TO KBR PROGRAM VETERAN RECRUITMENT PROGRAM

In 2016, KBR launched the “Camo to KBR” Veteran Recruitment Program for our Construction group, building on programs we had been implementing for several years. This program was also the recent winner of the Construction Users Roundtable (CURT) 2017 Workforce Development Award. It is the mission of the KBR’s Veteran Recruitment Program: Camo to KBR to hire, train, develop and transition military service members into the next generation of craft professionals and leaders of KBR and the overall construction industry. Objectives include:

• Support KBR’s unique relationship with the military and honor service men and women by providing career opportunities as they transition to the civilian world.

• Address workforce shortage issues in urgently needed construction crafts by recruiting and developing veterans who bring strong self-discipline and leadership qualities to the industry.

• Train active duty soldiers and/or former soldiers and hire them into the craft workforce for continued progression, craft development and supervisory preparation.

• Target the critical craft shortage in mechanical work (i.e., pipefitting) and develop veterans in that craft.

• Address weaknesses in the front-line supervisory ranks of the industry by fast-tracking trained soldiers into supervision and leadership.

• Provide multiple career pathways for transitioning military members entering the construction industry.

• Support open communication and sharing of resources with other contractors, clients and industry stakeholders such as Associated Builders and Contractors (ABC) and National Center for Construction Education & Research (NCCER).

• Provide value and cost effectiveness to the business by growing and developing a talent pipeline that will show improved retention and reduced turnover.

2016 CAMO TO KBR PROGRAM RESULTS:

• Hired 97 veterans through our program. These are veterans personally recruited to KBR and incentivized to train by the Workforce Development department. This does NOT include routine HR recruitment of veterans in the staffing departments and other business lines in KBR.

• Sourced and hired 34 veterans through the NextOP Partnership specifically. NextOp recruits, trains, and places high-performing middle-enlisted military leaders into Industry careers.

• Thirty-eight (38) Houston-area veterans enrolled in after-hours craft training funded by KBR through the INEOS project site pipe helper recruitment program for veterans. They attended ABC’s Construction & Maintenance Education Foundation (CMEF), San Jacinto College and Lee College. Craft classes included: Pipefitting, Electrical, Welding and Instrumentation.

• Higher retention of veteran hires in training. Turnover in that population at KBR is less than 2% a month, as compared to an industry average of 6%-7% monthly for craft (and higher for critical labor markets).

• Through the Houston Area Veterans Committee, we co-sponsored and co-organized two recruitment and placement events.

• MILCON (Military Construction Summit at Fort Hood) with NextOp

• 54 registered veterans

• 35 contractors representing 27 companies

• 2 Veteran Service Organizations and 1 Institution of Higher Learning

• Warrior for Life Luncheon (with NextOp and Lonestar Veterans Association)

• 84 veterans registered and 13 industry sponsors

• 54 employer representatives from 22 companies (who brought actual job offers on the spot)

• Through the Houston Veterans Committee and the ABC Houston craft training committee, KBR sponsored two veteran employees in pipefitting training to compete in the 2017 ABC National Craft Championships.

• Twenty (20) graduates to date from our Ft. Polk Veteran Pipefitting Program all hired directly by KBR.


FT. POLK PIPEFITTING PROGRAM’S CLASS COMPETITION AND CAPSTONE PROJECTS

The Ft. Polk Pipefitting Program culminates all their training and skills into one “real world” project that helps students understand how to make critical decisions in a real work scenario. The class completion consisted of fabricating and assembling two projects based off isometric drawings (ISOs) they had not seen before. The second portion of the competition consisted of fabricating and installing a butt welded pipe spool to be installed into a specific piece of equipment. The objective of the capstone project was to install 100’ of 2” carbon steel pipe into a steel structure utilizing all the knowledge and techniques they had learned over the previous 15 weeks.

These projects allowed for the instructor to evaluate each student independently in their readiness to enter a KBR jobsite where they would be performing next to experienced and seasoned craftsmen immediately after separating from active duty military. The goal was to target a higher level of learning: application and critical thinking. This industry does not just need pipefitters who can bolt flanges, bevel pipe, or perform a series of tasks (which is what much craft training tends to reiterate). We need a cadre of critical thinkers and craft professionals who will develop a philosophy and approach to their craft. We need individuals who can look at a work package, problem-solve how to get it in the structure, and lead their crew through all the safety and quality considerations.


Veteran Recruitment Program


To maintain a highly functioning workforce, we must address the day-to-day stresses that can affect an employee’s ability to work safely and productively. KBR offers two programs that deal specifically with employee issues: the Employee Assistance Program and the Dispute Resolution Program.

EMPLOYEE ASSISTANCE PROGRAM

Valuing our people is a core value of KBR and is the reason why the Employee Assistance Program (EAP) is provided 24 hours a day, free of charge to all employees.

In Houston, EAP is staffed by trained licensed mental health professionals, including licensed clinical social workers, licensed professional counselors, licensed chemical dependency counselors and certified employee assistance professionals, who understand KBR’s corporate culture. Other regions contract with outside organizations to administer their programs, although every KBR employee around the world has access to both local and global resources.

Since it started at KBR 35 years ago, EAP has helped thousands of employees and their dependents cope with parenting, mental health concerns, drug and alcohol use, divorce, grief and mental resiliency, enabling the employee to come to work clear-eyed, clear-minded and capable of working safely and productively.

Along with individual counseling, KBR EAP provides critical incident stress management for crises that can affect an entire work

site or office, such as industrial accidents, natural disasters or the death of a co-worker. Managers also use the EAP to deal with challenges they may be facing with regards to an employee’s behavior.

EAP staff counseled employees on the project site at Ghent, Kentucky, following the death of a co-worker in September. EAP also responded when 10 workers required medical evaluation following the leak of anhydrous ammonia at a chemical plant in Borger, Texas.

By helping to support the mental health and wellbeing of the individual employee and his or her family, KBR’s EAP program benefits the employee’s coworkers, KBR clients and communities where we work.

DISPUTE RESOLUTION PROGRAM

KBR’s Dispute Resolution Program (DRP) provides employees with a process and flexible options outside formal reporting channels for raising and settling workplace disputes.

Many types of situations can be handled in this safe environment, including everyday misunderstandings between co-workers, job performance concerns, issues of fair and equal treatment or compensation, or even possible violations of legally protected rights.

Because the program includes options that are both internal and external, there are a variety of ways concerns may be addressed. The method used most frequently is through KBR’s Ombudsman’s Office, which operates under the

confidentiality, neutrality and independence standards set by the International Ombudsman Association (IOA).

An Ombudsman’s major function is to provide independent, impartial, confidential and informal assistance, but he or she takes no action without the employee’s permission in accordance with established IOA standards.

If an issue cannot be resolved internally, mediation and arbitration are also available for those issues where legal rights may have been violated. This allows the dispute to be resolved more quickly and at less expense than if it went through the judicial system.

The goal of the DRP is to resolve all issues at the lowest possible level, as early as possible. This allows relationships to be preserved, improves communication, keeps the conflict from growing larger and more complicated and helps to maintain organizational performance.

BENEFITS

KBR is committed to offering competitive wages to our employees. We routinely conduct labor surveys in order to develop a comprehensive compensation plan for wages, benefits and incentive plans designed to attract and retain skilled employees. KBR continually monitors the marketplace to establish and maintain comprehensive, competitive compensation packages that provide employees and their families with security and peace of mind.


KBR Benefits by significant locations of operations U.S. Canada UK Saudi Australia

Medical

Pharmacy

Dental

Vision

Life Insurance

Accident Insurance

Disability

Employee Assistance Program

Retirement Savings – 401(k)

Pension

Stock Purchase Program

Workers Compensation

Note: Significant locations of operations is defined as having a local headcount of 500 or more employees.


KBR understands that the market demands new, efficient work process and in 2016 we found ways to help companies profit through innovation and non-traditional approaches, both in technology and cost.

KBR SMARTSPENDSM IS THE ECONOMIC APPROACH TO PROJECT DEVELOPMENT AND EXECUTION

Our SmartSPEND work process helps companies weigh the economic impact of the decisions they make over the entire life-cycle of a project to help ensure efficient operations and the highest economic return on their capital investments. Today our customers face the challenges of tighter product margins, increasing environmental standards and higher investment evaluation thresholds. Capital expenditure decisions are made in an environment of rising costs, increasing uncertainty of budget and schedule coupled with reduced internal capabilities. KBR has concluded that the traditional approach to reducing cost will no longer result in projects that are economically viable.

KBR’s innovative new SmartSPEND work process rolled out in 2016, allows us to work collaboratively with customers to weigh the economic impacts of technical execution and commercial elements to configure a project that achieves the highest economic return on capital. Rather than use traditional cost reduction techniques, SmartSPEND’s structured process quantitatively evaluates additions to a predefined, minimized design and execution strategy. This drives critical decisions early in the project to assure maximum realization of benefits. The

result is a project configured to be the lowest Capital Expenditure (CAPEX), highest Value (NPV) project scope and execution possible for the specified requirements.

KBR’S GVA 10000 FPU DESIGN HELPS ECONOMICALLY PRODUCE MARGINAL OFFSHORE FIELDS

GVA, a KBR company and world-leading designer and provider of licensed technology for floating solutions for the offshore oil & gas markets, introduced in 2016 the GVA 10000 FPU. Specifically designed for today’s challenging market, the GVA 10000 breaks down the barriers to entry for deepwater developments, by providing a standardized semi-submersible production platform that is economic at $40 per barrel.

“It uses proven technology on both the hull and topsides and is very easy to construct and

is therefore very, very cost effective,” says Graham Hill, Executive Vice President, Business Development.

Hill described the GVA 10000 as elegant, simple, repeatable, standardized and compliant. The GVA 10000 truss deck is 67 by 46 meters with flex space to accommodate extra equipment later. The topsides can be built in a fabrication yard as a single, integrated piece and lifted as one deck.

LAUNCH OF KBR INTEGRITY MANAGEMENT

KBR launched KBR Integrity Management (KBR IM) which enables customers to safely achieve Operational Excellence throughout the asset lifecycle by providing practical, risk-based and holistic Integrity Management backed by KBR’s technical leadership.

“KBR IM is dedicated to Operational Excellence and we know that integrity management must be built in from the moment an opportunity is first evaluated until the final decommissioning is complete,” said Graham Hill, Executive Vice President, Global Business Development and Strategy. “This process ensures that operation and maintenance strategies inform decisions in every phase of the design, construction and operation.”

This approach to Operational Excellence is a continuous improvement process that views assets at a field level, assessing risk and production impacts across every system to ensure that all aspects of Integrity Management are optimized. This is based on key IM principles which KBR integrates with an operator’s core Philosophy to develop systems tailored to its specific needs.

New, Efficient Work Process to Help Customers Enhance Safety and Efficiency

We continue to deliver leading edge, cost-effective solutions to meet our customers’ pressing challenges.


ROSE®

Heavy oil, extra heavy oil, oil sands and bitumen account for about 70 percent of the world’s total oil resources; heavy oil alone accounts for 15 percent. KBR’s ROSE (Residuum Oil Supercritical Extraction) technology is a proven, simple, and cost-effective solution for upgrading low-value resid materials streams generated from heavy oil processing into high-value products, enhancing the profitability of refineries.

The ROSE process uses supercritical solvent recovery, which separates most of the solvent from the deasphalted oil (DAO) in the supercritical phase rather than using energy intensive boil-off and condensation for solvent recovery. ROSE greatly reduces energy usage associated with operation of the units by more than 60 percent over conventional solvent deasphalting.

In addition, ROSE units are designed for ease of operation, safety and high reliability, typically achieving over 95% availability and six years between turnarounds.

KBR’s ROSE technology is continuously updated and improved, with multiple flow schemes for optimum integration with either grass roots or existing refineries. In January of 2016, KBR was selected by Shell to utilize KBR’s ROSE® solvent deasphalting technology for use at their Pernis refinery in Rotterdam, the Netherlands. The ROSE® unit is expected to remove heavier fractions from crude oil, allowing the refinery to upgrade a larger proportion of its oil intake into

lighter, high-grade products and significantly enhance Shell’s Pernis’ refinery’s performance and competitiveness.

AMMONIA

KBR has been the premier partner to the fertilizer industry for over 60 years, delivering innovative process technologies and expert engineering and construction services. It was in the 1950s that KBR introduced the first large-scale ammonia plant and helped revolutionize food production. The KBR ammonia process cut production costs to less than half and increased crop production, thus contributing to an increased food supply that enabled producers to keep up with population growth.

Since then KBR has continued to pioneer new designs that lead the industry in energy efficiency, reliability, safety and economy of scale. KBR’s PurifierPlus™ ammonia process combines proven and reliable technologies from our Purifier™, KBR Reforming Exchanger System (KRES™) and Horizontal Ammonia Synthesis Converter enabling plant owners to have the most efficient,

low-cost ammonia plant with greater than 97 percent uptime and a smaller plot plan footprint, 25-35 percent less than a conventional ammonia plant. It also reduces NOx and CO2 emissions. KBR’s Distill-Max Plus design rewarded HollyFrontier Corporation (HFC) with a column area reduction of 25% and energy savings of 30% for the grassroots Naphtha Fractionator at their El Dorado Refinery, Kansas.

Owners of older ammonia plants confronting fluctuating feedstock prices, a changing regulatory landscape and competition from larger, more energy efficient plants in low-cost gas areas also benefit by revamping existing facilities using KBR ammonia technology. For plants built in the 1970-1980s, a conventional ammonia revamp can boost capacity up to 50 percent; while a reforming exchanger revamp can improve reforming capacity up to 30 percent – all while reducing natural gas consumption and energy requirements on a per-ton of product ammonia basis.

CLEAN COAL Some 60 percent of the world’s fossil energy reserves are in coal, which is located in areas where the energy demand is greatest: North America, Europe, Russia and Asia. KBR is at the center of initiatives to develop clean coal technologies for power generation.

The KBR Transport Integrated Gasification (TRIGTM), derived from our fluid catalytic cracking technology, is a simple and robust design that operates at a much lower temperature than commercially available alternatives. It effectively handles low-rank coals, including sub-bituminous coal and lignites that make up half the proven worldwide coal reserves, but which might otherwise remain uneconomical as energy sources due to high moisture and ash contents.

In traditional coal-fired plants, direct combustion of low-grade coals to eliminate the moisture burns up much of the carbonaceous energy. In the KBR process, the moisture actually constitutes a useful reactant, while the ash is recovered in solid form, contributing to higher energy efficiency and improved environmental performance.

In 2016, KBR Technology and Southern Company celebrated a major milestone when TRIGTM successfully converted lignite coal to synthesis gas, or syngas, for the first time on a commercial scale at Southern Company subsidiary Mississippi Power’s Kemper County energy facility. This is a significant achievement in the construction of the world’s most advanced coal plant.

Our Technology Solutions Promote Energy Efficiency


SUSTAINABLE SOURCING

The globalization of our business and the reality of today’s resource-constrained market are creating new and more urgent challenges to deliver products and services to our customers on time and at the right price in the most challenging environments.

KBR delivers proven procurement strategies to substantially reduce supply chain costs, control schedule and deliver the lowest total cost of ownership for our customers’ projects through our longstanding alliances and collaborative relationships with suppliers in over 109 countries. Along with an ever-expanding group of qualified high value suppliers, KBR is able to efficiently source anything our customers require from qualified sources close to our customers in every region of the world to deliver value, quality and an optimal logistics solution.

SUPPLIER DIVERSITY

At KBR, we believe that supplier diversity gives us a competitive advantage that enhances our ability to meet our customers’ needs. Wherever we operate in the world, we seek to maximize opportunities for diverse business owners.

We are committed to providing jobs to local people and fair trade opportunities to local companies. As part of this commitment, the company continually seeks to provide opportunities for local minority and women-owned business enterprises that offer goods, subcontracting services and professional services on a competitive basis.

In addition to providing value to our customers and helping them meet their local content goals, KBR believes that by transferring valuable skills to local workers and businesses, we will help create greater economic opportunities for the entire community.

SUPPLIER DEVELOPMENT

To substantially reduce supply chain costs and deliver the lowest total cost of ownership for each project, we continually seek out new suppliers and build strategic, long-term relationships to support our global projects.

KBR has established guidelines and processes to evaluate and approve suppliers. We work closely with our customers to select suppliers that match a project’s requirement and objectives. This not only involves preparing an overall project bidders list, but also includes strategic supplier alliances.

As we expand our local supplier relationships, we never lose sight of maintaining KBR’s HSSE and ethical standards. Our process for evaluating and approving subcontractors requires selected suppliers to undergo an HSE evaluation as part of the pre-selection and

post-award process. Our Procurement and HSE organizations work with our suppliers to continuously improve their performance and eliminate injuries and environmental incidents.

KBR expects its suppliers to observe the highest standards of personal and business ethics and to comply with all applicable laws and regulations. Our Supplier Code of Conduct defines KBR’s expectations of suppliers and subcontractors concerning their work with KBR, including compliance with laws, HSE, the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as human rights issues relating to discrimination and harassment, child labor and human trafficking. KBR does not condone any illegal or unethical actions on the part of its employees, directors or any supplier or sub supplier with whom KBR performs business.

Supporting Socio-economic DevelopmentKBR is frequently responsible for implementing our customers’ environmental and socio-economic management plans to protect the country’s resources and its people. In other assignments with less defined sustainability initiatives, our task is to define what sustainability issues we can influence and how our processes can make a difference. Our activities must be based on what each location needs so that we can leave the greatest lasting benefit.


TRIGTM SUCCESSFULLY CONVERTED LIGNITE COAL TO SYNTHESIS GAS

KBR Technology and Southern Company recently celebrated a major milestone when KBR’s proprietary clean coal gasification technology, Transport Integrated Gasification (TRIGTM), successfully converted lignite coal to synthesis gas, or syngas, for the first time on a commercial scale at Southern Company subsidiary Mississippi Power’s Kemper County energy facility. This is a significant achievement in the construction of the world’s most advanced coal plant.

TRIGTM is a revolutionary and innovative technology that is designed to offer a reliable method for processing low-rank coal in a resourceful way to produce clean, high-quality synthesis gas for a wide variety of energy and chemical applications. TRIGTM makes efficient use of low-rank coal which would otherwise remain under-utilized as an energy source due to its high moisture and ash contents. In the TRIGTM process, the moisture in the low-rank coal actually serves as a useful reactant and the ash is recovered in solid form, which is designed to contribute to higher energy efficiency and improved environmental performance.

“The successful conversion of low-rank coal into synthesis gas through TRIG™ clean coal gasification on such a large scale at the Kemper County energy facility demonstrates the revolutionary capabilities of this technology,” said John Derbyshire, President, KBR Technology & Consulting.

“TRIG™ brings a unique solution to the global challenge of how to efficiently create clean energy through the use of an abundant resource while helping preserve the environment,” Derbyshire continued. “Low-rank coal comprises about half of the world’s coal supply, and today TRIG™ is a global leader in efficiently and cleanly converting this plentiful and previously under-utilized resource into energy with minimal impact on the environment.”

Producing syngas from Mississippi’s own abundant natural resource – lignite – should be encouraging to our customers, communities and energy companies around the world,” said Mississippi Power President and CEO Anthony Wilson. “Kemper’s technology aims to provide a way forward for coal as we move closer to full plant operation.”

KBR is committed to expanding the use of clean coal technology and we are proud that TRIG™ has achieved this key step as the first commercial scale TRIG™ plant gets closer to completion

Delivering Sustainable Projects


AUSTRALIAN COMMUTERS ARRIVE HOME SAFER AND SOONER

In Victoria, Australia, street level rail crossings can make for dangerous and congested conditions for pedestrians and motorists. The Victorian Government has set out to remove fifty street level crossings on Melbourne’s metropolitan rail network to improve safety and efficiency for the millions of area residents and KBR is playing a key role in the program.

KBR, in an alliance with John Holland, VicRoads, Metro Trains Melbourne, Public Transport Victoria, and the Level Crossing Removal Authority, removed the first four level crossings in this program of works. The level crossings were removed by lowering the rail line below the roads and included the

design and construction of new stations, platforms and access improvements to public transport connections.

The first level crossing, at Burke Road, was successfully removed in January 2016. It was one of the city’s busiest intersections with more than 25,000 vehicles, 150 trains, and 180 trams travelling through it every day.

Commenting on the first removal project, the Victorian Minister for Public Transport, Jacinta Alan, said “Removing this level crossing is not only good news for the thousands of motorists who use Burke Road every day, it’s also great news for the local community, which is now safer and has access to a brand new train station.”

The Alliance team subsequently worked around the clock to remove a further three level crossings, undertaking the main construction works in a highly condensed 37 day period to minimize impact on commuters and local communities.

The team incorporated sustainability considerations into the design and construction of all four level crossing removals. As a result the project achieved an ‘Excellent’ Infrastructure Sustainability rating and ‘4 Star’ Green Star rating for all stations assessed by the Infrastructure Sustainability Council of Australia and Green Building Council of Australia respectively.


KBR Project Manager, Simon Hoarebury (left) joins Victorian Minister for Public Transport, Jacinta Alan, and Victorian Premier, Daniel Andrews

(centre) in celebrating the removal of the Burke Road level crossing


DESIGN ELEMENTS ON JOHAN SVERDRUP LIVING QUARTERS TOPSIDES OFFER LOW ENERGY CONSUMPTION & MINIMUM MAINTENANCE

KBR in a joint venture with Kvaerner (under the name K2JV) provided EPC services for the Johan Sverdrup Living Quarters Topsides (JSLQT). Several design choices were made to promote low energy consumption and minimal maintenance. LED lighting was chosen over conventional fluorescent and gas discharge lighting in all areas of the topsides. Longer operating life of the LED element, a reduced susceptibility to vibration and absence of internal moving parts all add up to a significantly increased lifespan, resulting in large savings on maintenance costs. LED lighting requires only 35% of the power to provide the same light levels as conventional lighting, leading to a reduction in the use of gas and diesel driven generators. Furthermore, the reduction in potentially dangerous maintenance operations and inherent increased safety of LED light fittings means that they increase the overall safety of the lighting system. There are approximately 5,500 LED light fittings in total.

In addition, the insulation design will support a 50 year life. Glass reinforced plastic (GRP) cladding is one of the main changes to usual insulation systems which usually use steel or flexible plastics for protection. GRP cladding is extremely robust and is fixed in place by bonding to itself, thus the system is waterproof, withstands heavy mechanical abuse and does not corrode. The insulation selected is Aerogel Nano technology insulation, which provides extremely high efficiency, enabling thicknesses to be reduced by up to 40%. This reduction in thickness enables more space and less insulation area to be effected by damage. Aerogel has the added benefit of being Hydrophobic and offers a further protection to water ingress, as well as being a robust but flexible material. This combination of materials will mitigate corrosion under insulation, which causes huge costs in the North Sea every year to repair and repaint surfaces and also to replace the insulation system. The project is scheduled to achieve mechanical completion in September 2018.



LANDMARK DYNO NOBEL AMMONIA PROJECT REACHED SUCCESSFUL COMPLETION

The landmark Dyno Nobel ammonia plant in Waggaman, Louisiana reached successful completion of performance tests and official handover in October of 2016. The project is the first to use an integrated KBR solution of KBR’s Purifier™ ammonia technology along with KBR’s engineering, construction and procurement (EPC) services. It is one of the first onshore ammonia plants built in the United States in the past 20 years, and the first new grassroots ammonia plant in Louisiana in over 30 years.

The facility met and exceeded all performance parameters for throughput, efficiency and environmental performance on October 13 and handover of operations and management to Dyno Nobel Louisiana Ammonia LLC, a subsidiary of Incitec Pivot Limited (IPL). The time from contract award to handover was 42 months, which is the quickest overall schedule of a major, grassroots

ammonia project undertaken in the U.S. in the last 5 years. Demonstrating KBR’s commitment to Zero Harm, the project reached this milestone with no lost time incident, while executing more than five million man hours.

As a cornerstone in the ammonia industry for more than 60 years, KBR’s plants are recognized around the world for delivering safe, low-cost, reliable performance. In all, KBR has been involved in the licensing, design, engineering and/or construction of more than 230 ammonia facilities.



KBRWYLE SUSTAINMENT ENGINEERING – EXTENDING THE LIFE OF LEGACY SYSTEMS

KBRwyle reduces lifecycle costs by extending the life of legacy systems and vehicles for Army. KBRwyle has proudly worked with the Mine Resistant Ambush Protected (MRAP) Army Project Office (APO) for the past eight years. Through diligence and perseverance, KBRwyle analysts and engineers provided recommended improvements to reduce maintenance turnaround times, increasing availability of the vehicles for Soldiers, Marines and Special Operation Forces. KBRwyle also recommended a maintenance program that streamlined maintenance procedures by eliminating unnecessary tasks, essentially making maintenance more efficient, effective and reliable for the men and women on the frontlines. Through KBRwyle’s efforts and working closely with Tank Automotive Command (TACOM), the team provided the MRAP program millions of dollars in cost avoidance and significantly reduced the man-hours required

to perform Preventative Maintenance Checks and Services (PMCS) tasks. KBRwyle engineers also pursue new solutions and initiatives for fielded systems, such as applying Condition Based Overhaul methodologies in Army depots to provide life cycle cost reduction and design changes to improve durability. These engineers provide technical expertise regarding powertrain performance to Scientific and Technology (S&T) and other introductory programs. Additionally, the team provides direct logistics support to the M-ATV and MaxxPro programs and has assisted the ILS Center in the validation of the MaxxPro technical manuals developed by Navistar.



PROVIDING EQUAL PROCUREMENT OPPORTUNITIES IN THE FACILITIES MANAGEMENT (FM) SUPPLY CHAIN FOR METROPOLITAN POLICE SERVICE (MPS)

In the UK, KBR is responsible for procuring and managing a facilities management (FM) supply chain for and on behalf of the Metropolitan Police Service (MPS) in London. With around 40,000 staff, the MPS is the largest police force in the UK and is expected to demonstrate leadership in delivering the Mayor of London’s sustainability agenda. KBR’s ability to deliver a sustainable FM supply chain is fundamental part in delivering a safer London.

KBR was tasked with procuring a FM supply chain that delivered value for money and replaced single total facilities management contracts. The new supply chain had to deliver cost effective, responsive, resilient and flexible services. There is not only an economic case for making your procurement as inclusive as possible, but also a requirement to sustainable supply chains that deliver resilience and flexibility. KBR set out to deliver this challenge by splitting services into technical streams which focus on the type of service to be delivered. We engaged with a wide section of the market and

developed an understanding of the capabilities of large, medium and small companies in the FM market in London.

The packaging of FM services for this procurement was cantered on the market and inclusiveness of all providers in the market. The services were packaged to be suitable for small and medium enterprises that were regarded as important economic contributor to the development and sustainability of local economies. Providing an equal opportunities procurement for a wider section of the market contributes to a more balanced development of the local society.

KBR continued to source and manage a supply chain for a variety of services; from general building works, to cell locksmiths or crime cleaning services. Each service has strict response and reliance requirement that KBR is committed to manage on behalf of the MPS.



EPC SERVICES CONTRACT FOR MONROE ENERGY’S ULTRA-LOW-SULFUR GASOLINE PROJECT

KBR was awarded a contract to provide Engineering, Procurement and Construction (EPC) services to Monroe Energy for the company’s Tier 3 Ultra-Low-Sulfur Gasoline (ULSG) Project at Monroe’s Refinery in Trainer, PA.

KBR will execute EPC services to relocate and reconstruct an idle 60,000 Barrels per Day SCANfining™ unit from another facility to Monroe’s Refinery.

“We are excited to be a part of this significant project and to continue to grow and maintain a substantial presence in the northeast U.S. region,” said Stuart Bradie, KBR President and CEO. “This win highlights KBR’s extensive refining capabilities and expertise and is indicative of KBR’s strategic commitment to win the right work and focus on our core strengths.”



SOLAR POWER LIGHTS BRIGHTEN CAMP REDLEG

The KBR LOGCAP IV Team at Al Minhad Airbase, Camp Redleg, United Arab Emirates brightened things up with the procurement of efficient and fit-for-purpose solar lighting. More and more companies are seeing the benefits of using solar lights to illuminate work sites and remote areas to provide added security with no installation or ongoing costs. KBR and the U.S. Military are no different.

The KBR team proposed installation of solar light sets for Camp Redleg as a way to reduce costs of fuel and service parts, protect the environment and provide a more comfortable working environment by reducing noise pollution associated with fuel burning generator light sets. Seventeen lights were purchased by KBR and delivered to Camp Redleg. William Green, KBR General Site Manager, talked about the multiple benefits of using solar lights: “The sun light is an abundant and free resource in the desert and by utilizing it we are able to save money, which everyone is looking to do these days.” Green continued, “In addition to the cost savings, there is an immediate and positive impact on the environment by going solar.”

The solar light set option provided a solid, low maintenance addition to the very austere environment of the UAE.

While weighing various options, the foremost objective of the procurement team was to purchase systems designed to “set and forget”, meaning the lights could be set to turn on and then left to run on their own. The team worked very closely with the Middle East Procurement Supply Center in Dubai, UAE, to secure the most economically feasible manufacturer to deliver the finished product.

In addition to the health and economic benefits, KBR was able to reduce costs and provide a safe alternative to the traditional fuel burning generators.



KBR SHARES EXPERTISE AT SPACE INDUSTRY CONFERENCE

KBR’s business strategy has shifted the company towards a more balanced portfolio, expanding our Government Services business, which includes a move into the space industry through our recent acquisition of two companies with a long history of working with NASA. KBR’s expanded government services business, KBRwyle, has unique capabilities as a technology and high end professional services company in the U.S. federal services sector. KBR’s long-time contracting experience, combined with KBRwyle’s technical capabilities, offer some unique opportunities for KBR and our clients. The KBR and KBRwyle team had the occasion to provide insight from our combined experience at the 2016 SpaceCom conference, an industry leading space conference in Houston, Texas.

Vernon McDonald, President of KBRwyle’s Science, Technology and Engineering (ST&E) division, facilitated a panel discussion on imaging technology which NASA pioneered to study planets and stars, but is also now used in the medical, marine and energy industries. The panel explored new possibilities for imaging capabilities and addressed the challenges and

goals ahead for imaging for space. McDonald also serves on the SpaceCom conference advisory board where he provides guidance on programs throughout the event.

KBRwyle is a founding sponsor of SpaceCom and an industry leader in space exploration, discovery and operations from Earth to orbit. Indeed, KBRwyle has supported every manned space flight since the inception of NASA. Through the combined experience of KBR and KBRwyle, the company is exceptionally equipped to find new, innovative and cost-effective approaches to help further the success of NASA’s long term goals and successful exploration of the solar system.



KBR AWARDED EXTENSION TO MANAGE QATAR’S MULTI-BILLION EXPRESSWAY PROGRAM

As one of the world’s largest transport infrastructure programs, this project is transforming Qatar and serves as a world-class road network sustaining significant social and economic development. Delivered by Qatar’s Public Works Authority, ASHGHAL, the expressway brings together approximately 50 major road projects to create new north-south and east-west connections across Qatar, in preparation for the FIFA World Cup in 2022.

KBRwyle is providing program management and engineering support for thousands of kilometres of new or upgraded roads; a new orbital highway and truck route; connecting ports and industrial areas; hundreds of major traffic interchanges; integration opportunities with passenger and freight rail networks; enhanced facilities for cyclists and pedestrians; and state-of-the-art, reliable underground utilities, including stormwater networks, electrical services, telecommunications and surveillance.

Since KBR’s initial award in 2010, Qatar’s Expressway Program has become one of the world’s largest transport infrastructure programs.

The Expressway Program has applied the following environmental and sustainability objectives into the design, construction and delivery of the projects.

• Conduct integrated design process and value engineering that reduces traffic congestion and reduces waiting time in a bid to minimise carbon emissions and improve air quality

• Provide modern public transport, pedestrian networks, cycle tracks, landscaping and vegetation

• Comprehensively assess use of resources and materials and implement efficient construc-tion techniques to attain resource efficiency and achieve positive environmental impacts.

• Transfer knowledge to Construction Contrac-tors to raise awareness on critical environ-mental and sustainability issues.

Since 2011, Expressway Program Contractors have undertaken a number of initiatives to conserve and minimize their use of Qatar’s natural resources. This includes waste recycling, vegetation protection, use of Polymer Modified Bitumen for road pavement, use of reclaimed water sourced from Dewatering works or a known Wastewater Treatment Plant.

The following three examples are representative of Ashghal and KBR’s commitment to observing the economic pillar of Qatar National Vision 2030.

P003 Lusail Expressway - Relocation of Sea Grass to Sustain Marine Wildlife

The project extends from West Bay to the Pearl, providing an efficient and vital connection between the heart of Doha and the rapidly developing Lusail City.

To build northern and southern crossings over a canal linked to the sea, the project has successfully relocated more than 2,300 square meters of sea grass to a purpose-built ‘nursery’ area, 4 km off the

coast of Qatar. The initiative will provide significant environmental benefits for marine wildlife and the people of Qatar. The entire sea grass colony has continued to regenerate over the last three years.

The presence of sea grass has encouraged the growth of local natural marine wildlife, provided another means to absorb carbon emissions and stabilized sea sediment, providing clearer water. The process for removing and relocating the sea grass took over two months to complete and was carefully achieved by divers using specialized shovels and hydrating tubs. The growth and survival of the sea grass has been carefully monitored over the past three years, with more than 23 surveys conducted.



KBR AWARDED EXTENSION TO MANAGE QATAR’S MULTI-BILLION EXPRESSWAY PROGRAM (Con’t)

New Orbital Highway – Repurpose of Waste Concrete Materials

The New Orbital Highway and Truck Route project is the longest road currently under construction on the Expressway Program. The Orbital Highway is approximately 195 km long and includes the construction of 21 new interchanges. The road will provide a backbone for Qatar to connect key business hubs and industrial areas across the country.

In 2016, the Contractor has commenced recycling its waste concrete to support local communities, repurposing the excess material into seating benches for popular public amenities. The Contractor is producing 20 to 30 benches every month and there is a systematic plan to deliver them to schools, parks, hospitals and beaches. The initiative has been praised by the local municipal council and recognized it as the first initiative of its kind to support nearby communities.

Al Sheehaniya - Leatooriya - Lijmiliya Road – Improved Construction Initiatives

The Al Sheehaniya – Leatooriya – Lijmiliya Road project has significantly enhanced road movement in rural Qatar by creating a new 29 km expressway with double the road capacity and modern safety features of the existing

highway (which is currently being converted into a cycling track).

The Contractor has exclusively utilized polymer modified bitumen (PMB) to pave the 29 km expressway, which extends between Al Sheehaniya and Lijmiliya. PMB possesses a higher resistance to deformation from high temperatures, which will help to improve road durability and minimize the likelihood of the Qatari government having to complete frequent repair works in the future.

Swales, which are an innovative concept to Qatar, create a catchment for the collection of rain run-off and pollutants. The implementation of swales on the new expressway will ensure that the local environment is better protected from chronic and accidental pollution caused by the frequent transfer of goods and materials between Al Sheehaniya, Leatooriya, Lijmiliya and Doha.

Environmental sustainability is an evolving concept and requires an ongoing commitment to designing and building road infrastructure projects that are more durable, require less maintenance works and possess only minor environmental impacts. The State of Qatar remains vigilant and receptive to implementing innovative sustainability measures to conserve and minimise its natural resources.



ASPIRE DEFENCE WINS SUSTAINABILITY AWARD

Best Water Management Project 2016 awarded to Aspire Defence Services Limited following discovery of significant water savings on Ministry of Defence (MOD) estate equivalent to 1.5 million showers

An innovative water conservation program carried out by Aspire Defence Services Limited (ADSL) on behalf of the MOD received a top award from a leading public sector sustainability magazine in 2016. KBR and Carillion, in a joint venture, operate as Aspire Defence Services Limited (ADSL) and Aspire Defence Capital Works.

ADSL was announced as the winner of the Public Sector Sustainability (PSS) Magazine “Best Water Management Project 2016,” after identifying potential water savings of 70,400 m3 per year - equivalent to over 880,000 baths or 1.5 million showers – through surveys of nearly 500 MOD buildings on Salisbury Plain.

ADSL is part of Aspire Defence – the organization contracted by the Defence Infrastructure Organisation (DIO) under the 35-year Project Allenby/Connaught (PAC). Since 2006, Aspire Defence has been making soldiers’ lives better through delivery of enhanced living and working accommodation across Salisbury Plain and at Aldershot. ADSL operates at multiple garrisons

under the PAC contract delivering a total facilities management service, from catering, cleaning and waste management to building maintenance, landscaping and helpdesk and leisure services.

Water surveys of 495 buildings across Larkhill, Bulford and Fargo were conducted by ADSL to identify and rectify issues, and help the MOD achieve its goal of reducing water wastage on garrisons. In addition, Energy Awareness Road shows were run by the DIO and ADSL to improve awareness among base personnel of how to save energy and water.

The award-winning project also supported planning applications for proposed works being delivered under the Army Basing Programme (ABP), which involves the withdrawal of the Army from Germany with the final units moving to the Salisbury Plain Training Area in 2019. Additional infrastructure investment of over £1.1 billion under PAC was announced by the Defence Secretary in November 2016, to provide domestic living and technical accommodation for the incoming troops.

Keith Westlake, PAC Mechanical & Electrical services, DIO, said, “ADSL has given an innovative, fresh approach to water saving on the estate and delivered real value to the MOD. This project demonstrates our underlying commitment to water conservation and the environment and we are now looking at extending this project to other viable sites.”



RESTORING AND SAVING HABITATS

Aspire Defence Capital Works (a KBR joint venture) involves construction work at military sites on Salisbury Plain, close to sites designated as both a Special Protection Area (SPA) and Special Area of Conservation (SAC) under European legislation. The following projects have been conducted to relocate protected wildlife.

REPTILES

The Aspire Defence Capital Works (ADCW) team successfully caught and relocated 2084 reptiles during 2016. This capture work is part of a comprehensive mitigation programme to protect wildlife in the areas where ADCW will be building in the future. Captures and relocations to nearby safe habitats have been carried out at Larkhill, Bulford, Tidworth and Perham Down. Thousands of metres of temporary, reptile fencing were used to contain reptiles into zones for capture. This worked very successfully. At Larkhill over 600 common lizards were moved to two relocation sites. An unusually high number of grass snakes were also caught at Larkhill, around 80, including some very large adults; one which measured 1.5 metres in length. At Bulford 191 slow worms were moved from the area of a former running track.

AMPHIBIANS (GREAT CRESTED NEWTS)

A complex alignment of fences and traps was installed at Perham Down in order to capture Great Crested Newts as well as reptiles. Great Crested Newts are an amphibian and European protected species. In 2016 ADCW used a relatively new technique, Environmental DNA (eDNA), to re-survey areas at Perham Down, Bulford and Tidworth where there are possible Great Crested Newt habitats. The technique which is quick and

cost effective, involving taking water samples from the ponds and sending these off to be analysed for DNA released from Great Crested Newts. The survey confirmed the presence of Great Crested Newts only at Perham Down. A Natural England licence then permitted ADCW to capture and relocate these distinctive amphibians at Perham Down. The capture programme was very successful and our team of licensed ecologists safely caught and relocated 199 Great Crested Newts and 1992 Smooth Newts. The newts were trapped in buried buckets which were checked every day over a capture period of almost 50 days.

BUILDING FOR BADGERS

In August 2016, ADCW applied to Natural England for a badger licence because our works in Larkhill garrison will disturb a badger sett. We built an artificial badger sett as part of mitigation work to support this licence. The artificial sett was completed in two days. The sett has seven chambers on different levels linked by tunnels of plastic pipe. Some of the pipes have dead ends to allow the badgers to excavate their own tunnels. The chambers were filled with hay and the whole sett covered with a mound of calcareous topsoil. To encourage the badgers into their new home special treats made from peanut butter and puffed wheat were left near the entrances.

BARN OWLS

At Larkhill inside a disused sand store at Horne Barracks which was due for demolition we found evidence that barn owls had recently nested. To compensate for the loss of this building, Aspire funded six barn owl boxes which were put up by specialists from the Larkhill and Westdown Conservation Group. On Saturday 3rd September,

new barn owl boxes were put up at locations between Larkhill and Marden Down in the north of training estate. Although the barn owl family had left the store building, its demolition was subsequently delayed because a pair of stock doves also decided to nest in the building.

THE ILLUSIVE DORMOUSE

Following a site visit carried out in May 2016, our ecologists found that part of the woodland we are planning to remove in Tidworth is a habitat suitable for supporting dormice. We then undertook a dormouse survey which followed Natural England’s Dormouse Conservation Handbook survey methods to see whether any of these cute little mammals were there. This involved installing 100 dormouse nest boxes in trees and checking them over a 3 month period. No dormice were found during the survey.


Great Crested Newt in the hands of a licensed ecologist

Artificial badger sett before burial

Dormouse survey nest box

Juvenile Stock Doves within disused sand store at Larkhill


ZERO HARM SUCCESS AT KBR PROJECT SITES

Safety is a key component of KBR’s culture and with the help of every employee, Zero Harm is achievable. Congratulations to each of these projects for demonstrating KBR’s safety values and reaching these significant safety milestones in 2016:

• Djibouti Base Operations Support Services (BOSS) Project, which provides military operational support and maintenance, and facilities management services – 10.8 Mil-lion Work-Hours without a Lost Time Injury

• USAREUR Support Contract, which provides engineering, logistics and support services to the U.S. military forces within European Theater of Operation – 7.8 Mil-lion Work-Hours without a Lost Time Injury

• AEGIS Ashore Missile Defense Project Romania – 3.2 Million Work-Hours without a Lost Time Injury

• ISA Air Base, Bahrain Project, which pro-vides military operational support – 2.87 Million Work-Hours without a Lost Time Injury

• USAREUR Support Contract II – Zero Recordable Environmental Incidents throughout all of 2016.

• LOGCAP IV, Task Order 0009, Arabian Pen-insula Contract – 1.0 Million Work-Hours without a Recordable Injury

• LOGCAP IV, Task Order 0007, Iraq – Two years without a Lost time Injury

• Koch Enid Expansion Project – Two million man-hours, or 255 days, without a record-able injury at the end of 2016 through mid-2017.

• Dyno Nobel Ammonia Plant – Five million man hours, no lost time incident.



GIVING BACK

KBR employees have a history of giving back to the communities where they live and work. Employee volunteer projects are typically local community outreach programs involving a small number of volunteers. Collectively, their efforts add up to thousands of hours of volunteer service and benefited people and organizations worldwide.

In 2016, employees worldwide built new homes, participated in walks to benefit diabetes and breast cancer research, supported orphanages, donated gallons of blood, cleaned beaches and helped all kinds of local education activities. Here are a few of those stories.

KBR’S 10TH ANNUAL CHARITY GOLF TOURNAMENT SETS NEW RECORD

The tenth annual KBR Charity Golf Tournament was a major success, raising over $600,000 – a record amount for the event. Over the last ten years, KBR’s Charity Golf Tournament has raised over $4.5 million for more than 50 local and national nonprofit organizations that align with KBR’s charitable focus areas of education and health.

HELPING KIDS WITH CANCER

KBR donated $100,000 to the Sunshine Kids Foundation in 2016, a non-profit organization that adds quality of life to children with cancer by providing them with exciting, positive group activities.

KBR President and CEO Stuart Bradie presented a check to Sunshine Kids Foundation representatives including Sunshine Kid Sophia Sereni on the field at Minute Maid Park prior to the start of a Houston Astros’ game. The Houston Astros, longtime supporters of the foundation, were hosting Sunshine Kids Day as part of their efforts to recognize Childhood Cancer Awareness Month. Former Astros player, Hall of Famer Craig Biggio, is the National Spokesperson for the Sunshine Kids.

“KBR is delighted to continue our longstanding relationship with the Sunshine Kids and we are honored to support their worthy goal of giving these children amazing life experiences,” said Bradie. “We look forward to continuing to support the Sunshine Kids both financially and through our employees who are active and enthusiastic volunteers.”

Sunshine Kids Foundation was the beneficiary of funds raised at the tenth annual KBR Charity Golf Tournament in 2016.

COMPUTERS FOR UNDERSERVED CHILDREN

Comp-U-Dopt is one organization with which KBR partnered with in 2016 to meet a practical

community need by providing computers and technology education to children in underserved communities throughout Houston, Texas. KBR’s donation of over $16,000 worth of IT equipment including almost 600 computers, printers, and monitors made up roughly a quarter of the organization’s total donations to deserving students this year. With technology becoming an indispensable component of the lives of everyday Americans, regular access

to computers and their related equipment are essential to ensuring the next generation has the best possible opportunities to succeed and KBR is glad to be able to help provide those tools to area students.

HELPING PROVIDE HEALTHCARE

In Alabama, KBRwyle employees raised money throughout 2016 and at the KBRwyle CAS Group employees annual breakfast, KBR CEO and President Stuart Bradie and KBRwyle CAS Group President John Jordan presented the KBRwyle employee donations to two Alabama community organizations: a $10,000 check to the Community Free Clinic of Huntsville and a $10,000 check to the Community Free Clinic of Decatur and Morgan County. These clinics provide quality free healthcare, education and medication to thousands of people in the surrounding communities. With these two grants, KBRwyle has given a total of $242,000 to the Community Free Clinic of Huntsville since 1999, and a total of $96,000 to the Community Free Clinic of Decatur and Morgan County since 2009.

Giving Back, The Heart of KBR Employees

In 2016, KBR employees have volunteered over 8,000 hours and KBR donated over $100,000 to global charities. KBR volunteers have also been busy overseeing the distribution of $600,000 raised by KBR’s Charity Golf Tournament benefiting multiple local and international charities.


DONATION TO HOUSTON FIRE DEPARTMENT’S TOY DRIVE

KBR partnered with the Houston Fire Department, a recipient of the KBR Charity Golf Tournament, to buy toys for children across the Houston metro area this holiday season through the Operation Stocking Stuffer toy drive. In addition to the $10,000 donation KBR made to shop for new toys, collection boxes were placed around the Houston office and employees filled them up with more than 1,300 new toys for underprivileged children. The Houston Fire Department stopped by KBR to pick up the toys to donate to thousands of needy families in the community.

EQUIPMENT DONATED TO HOUSTON FIRE DEPARTMENT (HFD)

Houston area firefighters regularly battle severe and sometimes life threatening fires to protect people and property. When KBR learned that there was a need for equipment to aid first responders, the company’s young professional group, IMPACT, which raises charitable funds through its annual charity golf tournament, made a $100,000 donation from the golf tournament proceeds to the Houston Fire Department (HFD) towards the purchase of Blitzfire nozzles, an innovative piece of safety equipment for firefighters.

The Blitzfire is designed to assist firefighters in deploying an aggressive fire attack, while allowing firefighters to remove themselves from harm’s way. Houston Fire Department trucks throughout the city have now been outfitted with the nozzle, thanks to KBR’s generous donation.

KBR and HFD held a join press conference in spring of 2016 and Stuart Bradie, KBR President and CEO, along with Houston Mayor Sylvester Turner, and Interim Fire Chief Rodney West all made remarks in front of a number of local news stations.

RAISING MONEY FOR ST. JUDE

The Wilmington IMPACT chapter hosted the 6th annual BBQ and Basket Raffle in May in support of St. Jude Children’s Research Hospital. Over 190 KBR employees purchased tickets to the BBQ which was hosted on the lawn of the KBR office.

Various KBR departments in the Wilmington office contributed to the cause by preparing the gift baskets for raffle with themes like “Fun in the Sun” which included a camping tent, fishing pole, cooler, and fire pit. Other items

like an iPad and television were also raffled off as part of electronic themed baskets.

The BBQ event and individual donations have topped $2,400 which will be sent directly to St. Jude to support their mission of finding cures and saving children from cancer and other deadly diseases.

UK EMPLOYEES PARTICIPATE IN DRAGON BOAT RACE

In the U.K., KBR employees participated in a Dragon Boat race organized by the Rotary Club in Kingston, which raised over £40,000 last year for various charities through team sponsorships. In 2016, KBR raised money for the Queen Elizabeth Foundation (QEF), a leading disability charity working with people with physical and learning disabilities to help them gain new skills and increase independence for life.

KBR has participated in this event several times, rowing against other companies and groups along the Thames. Hundreds of competitors battle it out on the river to determine who makes it into the exciting eight boat final for the Challenge Cup. Team KBR placed 11th among the 45 teams that were participating.

HELPING AFTER CHENNAI DISASTER

In December 2015, torrential rain and floods devastated Chennai, India killing and injuring hundreds of people and ravaging the area. Chennai was declared a disaster zone and thousands of people were left homeless – including a number of KBR employees. To

support our colleagues and the people in Chennai, KBR made a $10,000 donation in 2016 to AID INDIA, an organization identified by KBR’s Chennai office as one that directly helped people in Chennai, including the KBR employees in need. Many KBR employees around the world also made donations directly to AID INDIA.

With the help of KBR’s collective donations, AID INDIA was able to deliver over 20,000 food packets and 18,000 blankets to people in 175 villages. More than 100,000 people benefitted from the relief initiative which was supported by more than 1,500 active volunteers. KBR and our employees were proud to play a role in helping the people of Chennai rebuild from this terrible disaster.



QUARTERLY BLOOD DRIVES

KBR hosts a quarterly blood drive to help provide a vital resource for the 5 million Americans who will receive a blood transfusion this year.

“KBR has been a fantastic partner and supporter of the Gulf Coast Regional Blood Center for many years. With every donation, we can impact up to three lives and that is an invaluable contribution to the community,” said Lisa Hodges, Donor Recruitment Coordinator with Gulf Coast Regional Blood Center, the partner organization that operates the event.

FIRE SAFETY EVENT

KBR firefighters at Camp Lemonnier in Djibouti, along with the help of the U.S. Embassy, hosted a fire safety event at their fire station for families. Children ranging in age from toddlers to teenagers met firefighters from Ecuador, Nepal, Philippines, the United Kingdom, Turkey, Kosovo, Bosnia, and the United States. The day started with a station safety talk explaining to the parents and young people the procedures to follow in the event of an actual emergency. Following the presentation, the kids were given t-shirts and fire helmets and were taken out to the engine bays and escorted in and around the fire trucks. Firefighters spoke to the kids about fire safety as they climbed and played on the trucks.

Attendees were read a fire safety story, shown a fire safety video, followed by a puppet show, and a stop-drop and roll demonstration. Throughout the day questions were asked and answered by the firefighters. The day ended

with a party where the children were given goodie bags that included fire-safety themed footballs, shirts, helmets, coloring books, crayons, pencils, and an array of other items.

KBR SPONSORS ARMY TEN MILER

KBR was proud to once again serve as the co-lead sponsor, alongside the Association of the U.S. Army (AUSA), of the Army Ten-Miler (ATM) race in Washington, DC in 2016. The ATM is the third largest ten mile race in the U.S. and this year 35,000 runners from around the world took their place at the starting line to run this historic event.

All proceeds from the ATM go to the U.S. Army’s Morale, Welfare, and Recreation (MWR) program. The MWR program directly supports soldiers and their families worldwide by providing a variety of family, morale, welfare and recreation programs and services to enrich soldiers’ and their families’ lives culturally and creatively.

KBR and subsidiary KBRwyle work closely with the Army, Department of State and Department of Defense all of which have an active interest in the ATM and participate in great numbers.

At the race, KBR provided water stations, pre-packaged meal boxes, reunion areas where family and friends link up with runners, and the famous Hooah-Tent Zone where post-race activity showcases U.S. military commands, groups and installations from around the world, their mission, and their “Army Spirit.” KBR also provided bratwursts imported from Wisconsin that were cooked and served by Arlington’s Rockland’s BBQ restaurant.



FIRST ANNUAL ZERO HARM DAY CELEBRATED AROUND THE GLOBE

KBR hosted the first annual Zero Harm Day in 2016. Offices and project sites around the world were encouraged to find ways to observe the day in their own way under the collective theme “A Day of Recognition and Reflection.” The day’s objective was to recognize people who have visibly embraced the courage to care, to recognize projects for improved safety performance and safety-related achievements and to demonstrate all the various ways that safety is core to KBR’s culture.

From all over the world, employees submitted photographs and testimonials reflecting their personal relationship with safety and their reasons for why they work and live safely. For Barry Burt, Subcontracts Director, in Houston, safety means being safe at work so that he can enjoy his family at home. “I have nine good reasons to stay safe and healthy: my grandchildren. Reason number 10 is due to arrive on the scene in March. These little munchkins are counting on ‘Papa B’ to be there for them in the future,” said Burt. Personal accounts like this are not uncommon around KBR; the safety culture at the company has permeated the hearts and minds of all personnel with employees taking the safety values practiced on KBR job sites and KBR offices back home with them to create a safety culture within their own families as well.

Around the world, KBR offices and projects held Zero Harm Day events, meetings, small and large group gatherings and other occasions to

recognize and reflect on the vital importance of safety. KBR’s Jakarta office ran a photo competition and employees were asked to submit a photo that captured a safe act reflecting HSSE behavior or of a HSSE-related situation in the office area. The Jakarta contest

showcased the office’s enthusiasm about finding improvements to current safety measures.

In the spirit of One KBR, multiple business units joined forces in the U.K. Leatherhead office for a series of training and awareness sessions, games,

First Annual Zero Harm Day


activities and information points across the campus to support and reflect on the principle of safety, all day, every day. The Leatherhead office undertook a “Safety Rewards” program where each employee was given a card upon arriving in the office, and stamps were collected for every safety-related event or activity in which employees took part. Prizes were awarded depending on the number of stamps collected throughout the day. “We are particularly proud for our children’s poster competition, for which we received nearly 200 entries,” said Abbey Cortazzi, Communications Specialist, Government Services. “We launched the competition to get the little ones in our lives involved in keeping us, and them, safe 24/7. The aim of this competition was to raise awareness of the importance of safety both at work and home,” Cortazzi explained.

KBR’s Dubai office recognized Zero Harm Day by conducting a “Wellness Day Camp” which provided confidential health screenings to employees. The health screens included blood pressure and blood sugar checks, and height, weight, and BMI measurements for employees to determine areas needed for healthy improvement.

At KBR’s headquarters in Houston, the building lobby was decorated with employee testimonials, recognition of projects with improved safety records or key safety milestones and also children’s drawings submitted by KBR employees reflecting those

safety values within their own families. Over the lunch hour, employees had the opportunity to view all the displays, take photos with the “MyKey” mascot, and to obtain safety-related information from onsite representatives from the Houston Fire Department, Houston Police, KBR’s Benefits team and employee resources groups like ASPIRE and IMPACT.

Nick Anagnostou, Vice President, HSSE, kicked off the event and he and other KBR senior leaders spoke to employees, subcontractors, clients and vendors in attendance about the risks in our potentially hazardous industry and how everyone has a role to play in their own

personal safety as well as the safety of those around them.

KBR colleagues in Nairobi on a design and building project started an initiative last year to recognize individuals who demonstrated overall safety performance on the site and as part of the crew. As part of Zero Harm Day, the weekly award was presented and the winner got to pick from several work tools as a prize. The Nairobi award program emphasizes safety as a culture and way of life, and the safety initiative is discussed on a daily basis.



KBR has cultivated a company safety culture where employees feel a sense of ownership and care for other’s safety and wellbeing. When asked the question, “What does safety mean to you?” Tony Bondin, Vice President – Subcontracts, Global Project Organization, based in KBR’s Leatherhead office said, “Zero Harm to me means returning to my family safely every night and for all KBR employees to do the same. We are interdependent, whether in the office or on site, to ensure this happens without exception.”



One way to establish and reinforce this trust is to report accurately on metrics that connect to our overall business goals/activities and to track progress over time against these metrics.

We are committed to continued development of the internal processes necessary to support accepted sustainability reporting criteria for transparency and accountability.

EMPLOYEE SAFETY

Our most important concern is the safety of each and every one of our employees. We view safety as critical to our success and long-term sustainability, and we are committed to continuously improving our performance. Our HSE commitments are supported by KBR’s Zero Harm 24/7 Initiative, which is championed by executive leadership.

KBR’s Zero Harm initiative incorporates three dynamic components – Zero Harm, 24/7, and Courage to Care. Every week, KBR leadership hosts a teleconference with the various business units and their respective projects from around the globe to share information globally and review the previous week’s incidents to ensure that steps have been taken to prevent recurrence.

Our Total Recordable Incident Rate (TRIR) has improved by 43% since the inception of Zero Harm. And notably, recordable incidents are down 55%.

Sustainability By the Numbers – Our PerformanceTransparency and accountability are at the heart of any effective corporate sustainability culture. Stakeholders must have trust in management’s leadership to guide the organization forward and know that the success of the company is based on a strong foundation of energized employees, high quality customer service, cohesive strategic direction, innovative research/technology and vibrant communities where we work and our employees live.

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

2012 2013 2014 2015 2016

0.011

0.0520.041

0.19 0.183

0.024

0.28

0.32

0.026

0.27

Engineering & Construction

0.0

0.1

0.2

0.3

0.4

0.5

2012 2013 2014 2015 2016

0.0400.061

0.167

0.125

0.210.25

0.46

0.30

0.068

0.19

Government Services

0.00

0.02

0.04

0.06

0.08

0.10

0.12

2012 2013 2014 2015 2016

.00.00 .00.00 .00.00 .00.00

0.1140.11

Technology & Consulting

Recordable Incidents Lost Time Incidents

KBR GLOBAL 2016 SAFETY PERFORMANCE

115,224,047 Workhours

0.198 Recordable Incident Rate

0.033

Lost Time Incident Rate


ENVIRONMENTAL INITIATIVES

KBR is committed to pursuing sustainable environmental solutions to offset human activities that may contribute to global warming. We make efforts to mitigate any negative contribution to this issue and find ways to reduce carbon emissions.

Although the majority of our energy consumption is by office operations, we continue to work with our clients and suppliers to reduce the overall usage of all natural resources through recycling and other forms of waste diversion.

ISO 9001, ISO 14001 AND OHSAS 18001 COMPLIANCE

The objective of every KBR project is to deliver a product that meets our customer’s requirements and our own internal expectations, which are to ensure that all components of the project meet “built right the first time,” thus eliminating costly re-work, and making sure that budgets and schedules are maintained. To achieve this goal KBR uses an Integrated Management System certified to ISO 9001-2015, Quality Management Systems (QMS), ISO 14001-2015, Environmental

Management Systems (EMS) and OHSAS 18001-2007, Occupational Health and Safety Management Systems.

Certifying to these ISO compliance guidelines indicates a commitment by KBR to third party auditing, goal setting, corrective action, management review and documentation. In 2016, KBR had 46 ISO-certified locations in the Americas, EMEA (Europe, Middle East, Africa), APAC (Asia Pacific).

CARBON EMISSIONS REDUCTION

Although KBR is not a producer or refiner of petroleum products, we pursue efficient, energy-saving approaches to the operations, products and services we provide to our customers. KBR’s Leatherhead office has achieved the Carbon Trust Standard, a mark of excellence awarded in recognition of measuring, managing and reducing CO2 emissions.

The following highlights our carbon emission reduction at KBR offices and project sites.

Sustainability By the Numbers – Our Performance

KBR NATURAL GAS CONSUMPTION, tCO2e

0

200

400

600

800

1000

1200

2012

740 835 680

281

328

246

555 756

182

2013 2014 2015 2016

Greenford Leatherhead Birmingham

0

200000

400000

600000

800000

1000000

1200000

2012 2013 2014 2015 2016

TOTAL WEIGHT OF OFFICE WASTE, LBS

30,819 34,492 15,971

682,021 553,360 644,816 638,403 543,163

309,032

230,846186,522

PAPER CONSUMPTION, LBS

0

20000

40000

60000

80000

100000

201245,112 47,886 36,904 38,193

837,756682,021 553,360

172,344 93,619

325,986

309,032 230,846

15,774

2013 2014 2015 2016

0

2000000

4000000

6000000

8000000

10000000

12000000

4,165,421 3,064,966 2,216,615

3,053,036

2,920,157

2,999,145

2,242,127

2,242,127

2,854,643

2,567,406 2,530,768

2,908,270

1,487,817

KBR OFFICE FACILITY WATER USAGE, GALLONS

2012 2013 2014 201620150

2000

4000

6000

8000

10000

KBR ELECTRICITY CONSUMPTION, tCO2e

20122,448 2,315 2,073

3,443 3,493 3,224

2,448 2,3152,073

2,009

2,514

2,699

1,209

2013 2014 2015 2016

KBR no longer owns the Birmingham and Greenford locations previously reported. We only own one property in 2016, which is our Leatherhead office.



ZERO TO LANDFILL

Project Allenby/Connaught (PAC) is a major 35-year PFI contract let by the UK Ministry of Defence (MOD) to Aspire Defence Limited in 2006 for the upgrade and operation of the MOD’s Salisbury Plain and Aldershot Army garrisons. KBR and Carillion, operating as Aspire Defence Services Limited (ADSL) and Aspire Defence Capital Works, have provided program management, procurement, construction and total facilities management service support, enhancing the quality of life of thousands of soldiers.

When ADSL was first contracted under PAC, 10% of waste was recycled with 90% going to landfill. Through a series of initiatives, ADSL has achieved around 45% recycling for all wastes. Residual waste that cannot be recycled with existing technology is treated in two ways:

1. Energy from waste (EFW) – Mixed waste from the Aldershot garrison is taken to an energy-from-waste (EFW) facility near Slough where it is burned to produce electricity for the national grid. Residual ash is used as a component in building materials.

2. Micro biological treatment (MBT) – Mixed waste from Salisbury Plains sites is taken to the MBT facility at Westbury where it is composted for two weeks, sorted to remove metal and then processed into fuel to generate electricity in specialist power stations.

RECYCLING

Responsible management of waste is essential for the sustainable management of resources. Waste management has three components: eliminating waste where possible; minimizing waste where feasible; and reusing materials that might otherwise become waste. We continue to work with our clients and suppliers to find ways to minimize materials that will later become waste before they get to the project sites, and make every effort to reduce what we use and recycle generated material to help sustain natural resources.



DONATIONS:

DONATIONS:

• Houston Independent School District (HISD) – 18 truckloads of furniture and supplies donated throughout the year. Product valued at $30K

• Medical Bridges – Audiometric testing booths, EKG machines, Pharmacy pill counter

• Habitat for Humanity – 3 dozen folding tables plus carts

• AAR – 8 office cubes plus files

• CCSC – miscellaneous art and plants

• Project Cure – miscellaneous equipment and furniture

• Veteran Pipefitting Program – Leesville, LA (a KBR initiative) – Tables and chairs to set up the training program classroom

REUSE AT JOB SITES

• Brown & Root – Deer Park

• Freeport – YARA Project Site

• Corpus Christi – Flint Hills Project Site

• Freeport – HR Office

• Deer Park – HR Office

RECYCLED:

• Damaged metal cabinets – one dumpster load

RECYCLING

REUSE/RECYCLING – DIVERTING SIGNIFICANT AMOUNT OF USED SURPLUS FURNITURE FROM LANDFILL

KBR’s Real Estate Group donated truckloads of surplus materials to various organizations including Houston Independent School District and Habitat for Humanity Restore in addition to sending corporate furniture surplus to job sites and recycling metal when pieces are no longer serviceable.

1,576,869

112,799

POUNDS OF AIR POLLUTION PREVENTED

CUBIC YARDS OF LANDFILL SPACE

13,516 996

GALLONS OF WATER SAVED

GALLONS OF OIL SAVED

3,965 1,056,382

Together we have Successfully Recycled:

558,637Pounds of Waste!

Our Environmental Impact

TREES SAVEDkWh OF

ELECTRICITY SAVED

Successfully Recycled

58%

Landfilled42%

Diversion Rate

KBR’S HOUSTON, TEXAS CORPORATE HEADQUARTERS

Global Reporting Index 4.0 IndicatorsGeneral Standard Disclosures

DMA Disclosures on Management Approach EC Economic PerformanceEN Environmental PerformanceHR Human Resources and Human Rights LA Labor Practices and Decent WorkPR Product Responsibility and ComplianceSO Social Performance and Society

2015 KBR SUSTAINABILITY REPORT 502015 KBR SUSTAINABILITY REPORT 50Global Reporting Initiative (GRI)

INDICATOR PROFILE DESCRIPTION RESPONSE

Organizational Profile

G4-1 Statement from the most senior decision-maker of the organization. President and CEO letter, p. 3

G4-2 Description of key impacts, risks, and opportunities. About the Company, Statement of Risk, p. 10

G4-3 Report the name of the organization. KBR, Inc.

G4-4 Report the primary brands, products, and services. About the Company, p. 7

G4-5 Report the location of the organization’s headquarters. 601 Jefferson Street, Suite 3400 Houston, Texas 77002

G4-6 Countries where the organization operates, and has significant operations About KBR, p. 7

G4-7 Report the nature of ownership and legal form. 2016 Form 10-K, p. 1, 2

G4-8 Markets served. About KBR, p. 7 2016 Form 10-K, p. 4 - 6

G4-9 Scale of the organization. About KBR, p. 7 2016 Form 10-K, p. 6 - 9

G4-10 Size and demographics of the workforce. About KBR, p. 7 Complete data not available.

G4-11 Percentage of total employees covered by collective bargaining agreements. 2.4% of employees were covered by collective bargaining agreements in 2016.

G4-12 Describe the supply chain Supporting Socioeconomic Development, p. 24

G4-13 Changes during the reporting period in the organization’s size, structure or supply chain. 2016 Business Strategy, p. 11 2016 Form 10-K, pgs. 7, 8

G4-14 Report whether and how the precautionary approach or principle is addressed by the organization. Sustainability at KBR, p. 14

G4-15 List externally developed economic, environmental and social charters, principles, or other initiatives.

Sustainability at KBR, p. 15 - 17

G4-16 List memberships of industry associations and national or international advocacy organizations. About KBR, Contributing to the Industries We Serve, p. 15-18

Identified Material Aspects and Boundaries

G4-17 Entities in the consolidated financial statements and entities in the consolidated financial state-ments not covered by the report.

2016 Form 10-K, pgs. 7, 8

G4-18 Process for defining the report content and Aspect Boundaries and how the Reporting Principles are implemented.

Sustainability Governance, p. 13. The content of this report is provide using the “in accordance “core to provide full disclosure of KBR managed operations; as stated in previous reports the environmental data is provided for KBR owned facilities of which we only own one facility at this time. Economic, social and environmental information found in this report is also mentioned in our 2016 Annual Report, including Form 10-K and Annual Proxy Statements. This report is prepared under the direction of the VP of HSSE.

G4-19 Material Aspects identified in the process for defining report content. KBR’s material aspects continues to be our Core Values of Commitment, Integrity, Transparency, Accountability and Responsibility and our Corporate Behaviors outlines on P6. In short, our Employees and an Economic and Environment focus . We have not made significant changes from our previous reports in aspect boundaries.

G4-20 Aspect Boundary for each material aspect in the organization. All aspects identified in G4-19 are material within our organization.

G4-21 Aspect Boundary for each material aspect outside the organization. We are not engaged with aspect boundaries outside of our organization.

2016 KBR SUSTAINABILITY REPORT 502016 KBR SUSTAINABILITY REPORT 50

2015 KBR SUSTAINABILITY REPORT 512015 KBR SUSTAINABILITY REPORT 51Global Reporting Initiative (GRI) 2016 KBR SUSTAINABILITY REPORT 512016 KBR SUSTAINABILITY REPORT 51

G4-22 Effect of any restatements of information in previous reports, and the reasons for restatement. 2016 Form 10-K, pg. 105

Please view KBR 2013 10-K/A for more information.

G4-23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries. The 2014 Sustainability Report followed GRI 3.1. This report provides information on GRI indicators that may not have been addressed in previous reports.

Stakeholder Engagement

G4-24 Stakeholder groups engaged by the organization. KBR engages with a broad range of stakeholder groups including shareholders, clients, communities, nonprofit organizations, governments, suppliers and employees.

G4-25 Basis for identification and selection of stakeholders. KBR views stakeholders as those individuals and entities who can affect or be affected by the actions of our business.

G4-26 Organization’s approach to stakeholder engagement and frequency of engagement. KBR’s approach depends on the stakeholder group. Our shareholders can contact us through an investors’ hotline and the Annual Meeting of Stockholders.

G4-27 Key topics and concerns raised through stakeholder engagement, and how the organization has responded.

No key topics reported for 2016.

Report Profile

G4-28 Reporting period (fiscal or calendar year. January 1, 2016 through December 31, 2016

G4-29 Date of most recent report. December 2015

G4-30 Reporting cycle. Annual

G4-31 Contact point for questions regarding the report or its contents. [email protected]

G4-32 Report the GRI Content Index and “in accordance” option chosen by the organization. About Our Report, p. 2

G4-33 Policy and practice for seeking external assurance for the report. This report was not third party verified.

Governance

G4-34 Governance structure, including any committees responsible for decision-making on economic, environmental and social impacts.

About KBR, p. 13

G4-35 Process for delegating authority for economic, environmental and social topics from the highest governance body to senior executives and other employees.

Sustainability Governance, p. 14

G4-36 Report where the organization appointed an executive-level position with responsibility for economic, environmental and social topics and reporting structure.


G4-37 Processes for consultation between stakeholders and the highest governance body on econom-ic, environmental and social topics.


G4-38 Composition of the highest governance body and its committees. Governance, p. 12

G4-39 Report if Chair of the highest governance body is also an executive. The Chairman of the Board is an independent, non-executive director.

G4-40 Nomination and selection processes for the highest governance body and its committees, and the criteria used.

About KBR, Governance, p. 12

G4-41 Processes for the highest governance body to ensure conflicts of interest are avoided and managed and if conflicts of interest are disclosed.

At this time, except for the CEO, all of our directors are independent, as set forth in KBR’s Corporate Governance Guidelines. Access at: https://kbr.com/about/our-company/corporate-governance


G4-42 Roles of the highest governance body and senior executives in the development, approval, and updating of the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts.

All of KBR’s four Board committees review economic, environmental and social impacts. Those committees are: Audit Committee, Compensation Committee, Health, Safety, Security, Environment and Social Responsibility Committee, Nominating and Corporate Governance Committee. Governance, p. 12 Proxy Statement, p. 23, 24, 25

G4-43 Measures taken to develop and enhance the highest governance body’s knowledge of econom-ic, environmental and social topics.

Presentations to the Board of Directors and the HSSE & SR Committees from senior executives provide the Board with economic, environmental, and social topic information. In addition, Board members tour project sites around the world to better understand how the Company’s operations influence these topics. Board members also participate in HSSE & SR-related activities that are available to employees such as training, seminars and Zero Harm Day.

G4-44 Processes for evaluating the highest governance body’s performance with respect to economic, environmental and social governance.

Governance, p. 12

G4-45 The highest governance body’s role in the identification and management of economic, environ-mental and social impacts, risks, and opportunities.

Sustainability Governance, p. 14 Proxy Statement, p. 20, 21

G4-46 The highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social topics.


G4-47 Frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities.


G4-48 The highest committee or position that formally reviews and approves the organization’s sustainability report and ensures that all material Aspects are covered.


G4-49 Process for communicating critical concerns to the highest governance body. Governance, p. 12

G4-50 Nature and total number of critical concerns that were communicated to the highest gover-nance body and the mechanism(s) used to address and resolve them.

Critical matters were brought to the attention of the Board in accordance with KBR policies and procedures. Please refer to our 2016 Proxy Statement for roles of the Board.

Remuneration and Incentives

G4-51 Report the remuneration policies for the highest governance body and senior executives. Proxy Statement, Compensation Discussion & Analysis, p. 26-40

G4-52 Report the process for determining remuneration. Proxy Statement, Compensation Discussion & Analysis, p. 26-40

G4-53 Report how stakeholders’ views are sought and taken into account regarding remuneration. Stockholders may present a proposal to be considered for inclusion in KBR’s proxy material for its Annual Meeting of Stockholders by submitting the proposal in writing to KBR’s Corporate Secretary at 601 Jefferson Street, Suite 3400, Houston, Texas 77002. KBR must receive proposals not later than the 120th day prior to the date on which KBR estimates that it will send its materials for its Annual Meeting of Stockholders. Proposals submitted for inclusion in KBR’s proxy materials must comply with Rule 14a-8 under the Exchange Act.

G4-54 Ratio of annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total for all employees.

KBR does not track this information and is not able to report this information at this time.

G4-55 Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median percentage increase in annual compensation for all employees.

KBR does not track this information and is not able to report this information at this time.



Ethics and Integrity

G4-56 Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.

Code of Business Conduct, p. 17

G4-57 Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters.

Directors, Employees and Legal Agents may contact the Code of Business Conduct office to seek advice on ethical and lawful behavior through a toll-free and online Ethics Hotline, Code of Business Conduct post office box, and contact directly to the Director of the Code of Business Conduct, appropriate representative of the Law Department, Audit Services, Human Resources, Health, Safety, Security & Environment or other compliance-related department, the Employee’s supervisor or manager, or a member of the executive senior management.

G4-58 Internal and external mechanisms for seeking advice on ethical and lawful behavior, such as helplines or advice lines.

Individuals may seek advice by contacting KBR’s confidential Ethics Hotline either through a toll-free phone call or online. Other avenues include KBR’s Director of the Code of Business Conduct or an appropriate representative of the legal department, audit services, human resources, health, safety & environment or other compliance-related department. Employees are also encour-aged to speak with their supervisor or manager, or a member of the executive senior management.

Disclosures on Management Approach

G4-DMA Report how the organization manages the material Aspect or its impacts. KBR’s material aspects continues to be our Core Values of Commitment, Integrity, Transparency, Accountability and Responsibility and our Corporate Behaviors outlines on P6. In short, our Employees and an Economic and Environment focus. We have not made significant changes from our previous reports in aspect boundaries.

The Board of Directors (the “Board”) of KBR, Inc. (the “Corporation”) believes that the primary responsibility of the Directors of the Corporation is to provide effective governance over the Corporation’s affairs for the benefit of its stockholders. That responsibility includes:

n Evaluating the performance of the Chief Executive Officer and taking appropriate action, including removal, when warranted;n Reviewing, by its independent directors, the Chief Executive Officer’s compensation for the next year based upon the

determination of the Compensation Committee;n Selecting, evaluating and fixing the compensation of executive management of the Corporation and establishing policies

regarding the compensation and benefits for the Corporation and other members of management;n Reviewing succession plans and management development programs for members of executive management;n Reviewing and approving periodically long-term strategic and business plans and monitoring corporate performance against

such plans;n Adopting policies of corporate conduct, including compliance with applicable laws and regulations and maintenance of

accounting, financial, disclosure and other controls, and reviewing the adequacy of compliance systems and controls;n Evaluating annually the overall effectiveness of the Board;n Evaluating the Corporation’s overall risk profile and ensuring that a robust process of oversight of such risks is maintained by

the Board and its committees, and by executive management; andn Reviewing matters of corporate governance.n The Board has adopted these Corporate Governance Guidelines (these “Guidelines”) to assist it in the exercise of its

responsibilities. These Guidelines are reviewed periodically and revised as appropriate to reflect the dynamic and evolving processes relating to the operation of the Board.

Corporate Officers

KBR’s corporate officers oversee the daily operations of one of the world’s largest and most dynamic engineering, construction and services companies. They provide support and direction to more than 34,000 employees on five different continents. They are led by Stuart J. B. Bradie - President and Chief Executive Officer. Stuart J. B. Bradie assumed the role of President and Chief Executive Officer for KBR, Inc., on June 2, 2014.

Code of Business Conduct - KBR is committed to conducting its business safely, honestly and with integrity. KBR’s Code of Business Conduct sets out the ethical and legal standards of conduct to be followed by all employees of the Company.


Aspect: Economic Performance

G4-EC1 Direct economic value generated and distributed (EVG&D) on an accruals basis including the basic components for the organization’s global operations.

Revenues: $4,268,000,000

Costs of revenues: $4,156,000,000

General and Administrative: $143,000,000

Other Non-operating income: $5,000,000

Provision for taxes: $84,000,000

Net income attributable to KBR: $61,000,000

Corporate giving: $133,260.00

Employee giving and corporate matching: KBR did not have a corporate match program in 2016

G4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change.

2016 Form 10-K, p. 21, 106

G4-EC3 Coverage of the organization’s defined benefit plan obligations. None

G4-EC4 Financial assistance received from government. None

Aspect: Market Presence

G4-EC5 Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation.

KBR does not track this information.

G4-EC6 Proportion of senior management hired from the local community at significant locations of operation.


Aspect: Indirect Economic Impacts

G4-EC7 Development and impact of infrastructure investments and services supported. N/A



G4-EC8 Significant indirect economic impacts, including the extent of impacts. Changing the productivity of organizations, sectors, or the whole economyn KBR found ways to help companies profit through innovation and non-traditional approaches, both in technology and cost.

Our SmartSPEND work process helps customers weigh the economic impact of the decisions they make over the entire life-cycle of a project to help ensure efficient operations and the highest economic return on their capital investments. We also designed the GVA 10,000 semi-submersible, which breaks down the barriers to entry for deepwater developments, by providing a standardized semi-submersible production platform that is economic at $40 per barrel. Lastly, our Consulting Services helped customers work more productively and efficiently, which saved money in operations costs that could be spent potentially on other projects.

Economic development in areas of high povertyn KBR offices in Luanda, Delhi, Chennai, Jakarta and Monterrey provide professional and clerical employment, as well as

multiplier effects in which living conditions are improving but are not yet fully developed.n Higher crop yield using fertilizers derived from KBR ammonia technology increases the availability of food and exports for

growing populations.n KBR work to encourage the use of local suppliers in the countries where are projects are located, including war torn areas,

and our help to educate them on how to navigate the supply chain opened up new opportunity within their countries.

Economic impact of improving or deteriorating social or environmental conditionsn KBR’s knowledge and project management skills help countries convert natural gas to a transportable liquid, enabling wider

use of a cleaner fuel for heating, electricity and other energy requirements.n KBR technology and EPC capabilities used in construction of natural gas powered facilities that replace existing and incre-

mental coal-fired or oil-fired energy facilities resulting in reduced SOX, NOX, particulate and other emissions.

Enhancing skills and knowledge amongst a professional community or in a geographical regionn KBR provides professional engineering jobs and associated training in areas where we had active projects in 2016.n Thousands of jobs provided through KBR’s global network sub-contractors, equipment vendors and OEM manufacturers

supporting the construction of world-class processing plants.

Stimulating, enabling, or limiting foreign direct investmentn Enabling costumers with competitive designs, schedules and pricing along with capable project management in LNG, refining,

petrochemicals and ammonia.

Economic impact of change in location of operations or activitiesn KBR’s increasing presence in India provides professional and clerical job opportunities to a growing market.

Aspect: Procurement Practices

G4-EC9 Proportion of spending on local suppliers at significant locations of operation. N/A

ENVIRONMENTAL

Aspect: Materials

G4-EN1 Materials used by weight or volume. KBR does not manufacture products.

G4-EN2 Percentage of materials used that are recycled input materials. KBR does not manufacture products.

Aspect: Energy

G4-EN3 Energy consumption within the organization. Sustainability by the numbers, p. 45

G4-EN4 Energy consumption outside of the organization. N/A

G4-EN5 Energy intensity. Sustainability by the numbers, p. 46

G4-EN6 Reduction of energy consumption. Sustainability by the numbers, p. 46

G4-EN7 Reductions in energy requirements of products and services. N/A

G4-EN8 Total water withdrawal by source. Water sources consist of municipal water supplies; we do not consider usage in an office environment to be significant. However; we take every effort to reduce usage whenever possible.


G4-EN9 Water sources significantly affected by withdrawal of water. Water sources consist of municipal water supplies; we do not consider usage in an office environment to be significant. However; we take every effort to reduce usage whenever possible.

G4-EN10 Percentage and total volume of water recycled and reused. KBR does not use recycled and/or reused water for our office operations. However water is recycled and reused on projects in some capacities for dust suppression and irrigation.

Aspect: Biodiversity

G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

KBR does not own, lease, or manage any property in, or adjacent to protected areas and areas of high biodiversity value outside protected areas.

G4-EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

Aspire Defence Capital Works (a KBR joint venture), involves construction work at military sites on Salisbury Plain, close to sites designated as both a Special Protection Area (SPA) and Special Area of Conservation (SAC) under European legislation. An environmental appraisal and habitats regulations assessment (HRA) have concluded that no residual significant adverse ecological or contamination impacts are anticipated as a consequence of the Aspire Defence Capital Works proposals within and adjacent to the protected areas.

G4-EN13 Habitats protected or restored. N/A

G4-EN14 Total number of IUCN red list species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

Aspire Defence Capital Works (a KBR joint venture) surveys indicate a total of 50 ICUN red list species are within 2km of the construction sites at Larkhill, Perham Down, Bulford and Tidworth in the UK. In terms of status by level of extinction risk these species comprise:

n 10 endangered;n 19 vulnerable;n 19 near threatened; andn 2 least concern.

Aspect: Biodiversity

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1). Sustainability by the numbers, p. 46

G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2). Sustainability by the numbers, p. 46

G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3). Sustainability by the numbers, p. 46

G4-EN18 Greenhouse gas (GHG) emissions intensity. Sustainability by the numbers, p. 46

G4-EN19 Reduction of greenhouse gas (GHG) emissions. Sustainability by the numbers, p. 46

G4-EN20 Emissions of ozone-depleting substances (ODS). Sustainability by the numbers, p. 46

G4-EN21 NOx, SOx and other air emissions. Sustainability by the numbers, p. 46

Aspects: Affluents and Waste

G4-EN22 Total water discharge by quality and destination. Sustainability by the numbers, p. 46

G4-EN23 Total weight of waste by type and disposal method. Sustainability by the numbers, p. 46

G4-EN24 Total number and volume of significant spills. None.

G4-EN25 Weight of transported, imported, exported or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III and VIII.

KBR did not transport, import, export or treat hazardous waste internationally.

G4-EN26 Identity, size, protected status and biodiversity value of water bodies and related habitats significantly affected by the organization's discharges of water and runoff.

KBR is not aware of our owned office operations' discharges of water and runoff significantly affecting water bodies and/or related habitats.

Aspect: Products and Services

G4-EN27 Extent of impact mitigation of environmental impacts of products and services. KBR does not manufacture products.

G4-EN28 Percentage of products sold and their packaging materials that are reclaimed by category. KBR does not manufacture products.



Aspect: Compliance

G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compli-ance with environmental laws and regulations.

Form 10-K, p. 106

Aspect: Transport

G4-EN30 Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce.

KBR does not collect this data.

Aspect: Overall

G4-EN31 Total environmental protection expenditures and investments by type. N/A

Aspect: Supplier Environmental Assessment

G4-EN32 Percentage of new suppliers that were screened using environmental criteria. Supporting Socioeconomic Development, p. 25

G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken.


Aspect: Environmental Grievance Mechanisms

G4-EN34 Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms.

None.

G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region.

KBR does not report this data.

G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part- time employees, by significant locations of operation.

Providing Opportunities for a Sustainable Workforce, Benefits, p. 25

G4-LA3 Return to work and retention rates after parental leave, by gender. KBR does not track this information.

Aspect: Labor/Management Relations

G4-LA4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements.

N/A

Aspect: Occupational Health and Safety

G4-LA5 Percentage of total workforce represented in formal joint management–worker health and safe-ty committees that help monitor and advise on occupational health and safety programs.

Each KBR project location will have a formal joint management -employee health and safety committee. Committees are responsible for implementation of the HSE policies, plans and procedures for site, training, recording and reporting incidents and identification of risk. Percentage of workforce participation has not been captured.

G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender.

Please see Page 45 for KBR’s Recordable Incidents and Lost Time Incidents. In addition, we report the following information on type of injury for 2016.

Cause of Injury-Category

Cut, Puncture, Scrape 27 Struck By 20 Burn Or Scald 3 Foreign Body 2

Caught In Or Between 25 Strain 6 Sprain 2 Animal Or Insect 1

Fall Or Slip Injury 21 Striking Against 5 Inhalation / Absorption 2

In 2016, a KBR Joint Venture suffered two contractor fatalities in a single isolated event. We cannot state strongly enough that any loss of life is a tragedy not only for the families involved but also for all of us at KBR. The tragic loss of two of our contractors serves as a reminder that safety is personal and reinforces that we at KBR must remain diligent in our efforts to achieve Zero Harm all-day every-day.


G4-LA7 Workers with high incidence or high risk of diseases related to their occupation KBR has more than 15,000 employees that support our clients in a petro chemical and construction industries; the industry is high risk however our employees are protected from occupational illness through engineering controls and proper protection equipment.

G4-LA8 Health and safety topics covered in formal agreements with trade unions. KBR has a very small percentage of union employees (less than 3%) in one office and they are subject to the rigorous safety practices of our firm.

Aspect: Training and Education

G4-LA9 Average hours of training per year per employee by gender, and by employee category. KBR does not track data by gender.

G4-LA10 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Providing Opportunities for a Sustainable Workforce, Training, p. 17

G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category.

All employees regardless of gender received a performance review and career development review in 2016.

Aspect: Diversity and Equal Opportunity

G4-LA12 Composition of governance bodies and breakdown of employees per employee category accord-ing to gender, age group, minority group membership, and other indicators of diversity.

Globally in 2016, KBR had over 18% female employees. The other data is not tracked a this time.

Providing Opportunities for a Sustainable Workforce, Cultivating Women Leaders, p. 19

Aspect: Equal Remuneration for Women and Men

G4-LA13 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation.

KBR is committed to promoting equality of pay and opportunity for all employees. 2016 Proxy Statement, p. 26

Aspect: Supplier Assessment for Labor Practices

G4-LA14 Percentage of new suppliers that were screened using labor practices criteria. Current contracts do not include labor practices screening. Our contracts include clauses requiring compliance with the laws of the country where project is located and compliance with the COBC and/or KBR Supplier COBC where applicable. Subcontractors and agents are required to complete KBR's Code of Business Conduct (COBC) training, which includes human rights training.

G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken.

KBR does not report this information.

Aspect: Labor Practices Grievance Mechanisms

G4-LA16 Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms.

None.

SOCIAL: HUMAN RIGHTS

Aspect: Investment

G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening.

Current contracts do not include Human Rights screening. Our contracts include clauses requiring compliance with the laws of the country where project is located and compliance with the COBC and/or KBR Supplier COBC where applicable.

G4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

All employees are to complete COBC training as a requirement of the annual review process; Human Rights procedures are covered in this training.

Aspect: Non-discrimination



G4-HR3 Total number of incidents of discrimination and corrective actions taken. In 2016 in the United States, there were twelve formal claims filed involving allegations of discrimination through KBR’s Dispute Resolution Program or litigation. Also in 2016, KBR’s Code of Business Conduct department received 519 matters with 34% percent related to Code of Business Conduct issues. Matters are received through a Hotline reporting system, an e-mailbox, a physical mailbox and e-mail sent directly to the department. In 2016, 38 Code of Business Conduct matters alleged some type of discrimination. A claim or report of discrimination is not confirmation that an incident of discrimination occurred. Each matter is investigated thoroughly and action taken as appropriate.

Aspect: Freedom of Association and Collective Bargaining

G4-HR4 Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights.

None.

Aspect: Child Labor

G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor.

KBR is not aware of any operations or significant suppliers as having significant risk for incidents of child labor. We require all employees, subcontractors and agents to complete KBR's Code of Business Conduct (COBC) training, which includes human rights training. KBR’s Board of Directors’ CSR Committee oversees the activities of KBR in managing our major risk exposures in regards to sustainable development, including human rights. KBR does not employ anyone, in any capacity, under the age of 18 years except where this minimum employment age requirement is superseded by local law.

Aspect: Forced or Compulsory Labor

G4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compul-sory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor.

KBR is not aware of any operations or significant suppliers as having significant risk for incidents of forced or compulsory labor. Measures taken to contribute to the effective abolition of forced or compulsory labor include requiring employees, subcontractors and agents to complete KBR's mandatory Code of Business Conduct (COBC) training, which includes human rights training. KBR’s Board of Directors’ CSR Committee oversees the activities of KBR in managing our major risk exposures in regards to sustainable development, including human rights.

Aspect: Security Practices

G4-HR7 Percentage of security personnel trained in the organization’s human rights policies or proce-dures that are relevant to operations.

100% of Security personnel have received formal training in KBR’s human rights policies and procedures. Ethics training, which includes training on Human Rights, is required for all third party organizations providing security personnel.

Aspect: Indigenous Rights

G4-HR8 Total number of incidents of violations involving rights of indigenous peoples and actions taken. None.

Aspect: Assessment

G4-HR9 Total number and percentage of operations that have been subject to human rights reviews or impact assessments.

None.

Aspect: Supplier Human Rights Assessment

G4-HR10 Percentage of new suppliers that were screened using human rights criteria. Current contracts do not include Human Rights screening. Our contracts include clauses requiring compliance with the laws of the country where project is located and compliance with the COBC and/or KBR Supplier COBC where applicable.

G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken.

None.


Aspect: Human Rights Grievance Mechanisms

G4-HR12 Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms.

In 2016 in the United States, there were twelve formal claims filed involving allegations of discrimination through KBR’s Dispute Resolution Program or litigation. Also in 2016, KBR’s Code of Business Conduct department received 519 matters with 34% percent related to Code of Business Conduct issues. Matters are received through a Hotline reporting system, an e-mailbox, a physical mailbox and e-mail sent directly to the department. In 2016, 38 Code of Business Conduct matters alleged some type of discrimination. A claim or report of discrimination is not confirmation that an incident of discrimination occurred. Each matter is investigated thoroughly and action taken as appropriate.

SOCIETY

Aspect: Local Communities

G4-SO1 Percentage of operations with implemented local community engagement, impact assess-ments, and development programs.

None.

G4-SO2 Operations with significant actual and potential negative impacts on local communities. None.

Aspect: Anti-corruption

G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified.

All transactions are analyzed for risks related to corruption. KBR does not accept, condone or tolerate any instance of unethical or illegal behavior.

G4-SO4 Communication and training on anti-corruption policies and procedures. All employees are required to complete anti-corruption training as part of Ethics training.

G4-SO5 Confirmed incidents of corruption and actions taken. None.

Aspect: Public Policy

G4-SO6 Total value of political contributions by country and recipient/beneficiary. In 2016, PAC receipts, or contributions from employees to KBRPAC, were $41,163 and 38,000 was contributed to candidates for public office. Undisbursed funds are held for future elections and campaigns.

Aspect: Anti-competitive Behavior

G4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.

None.

Aspect: Compliance

G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compli-ance with laws and regulations.

In the US, KBR had no adverse determinations, fines or non-monetary sanctions from the federal Equal Employment Opportunity Commission (EEOC), any state or local human rights commission, the National Labor Relations Board (NLRB), or the Office of Federal Contract Compliance Programs (OFCCP).

Aspect: Supplier Assessment for Impacts on Society

G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society. Current contracts do not include impacts on society screening. Our contracts include clauses requiring compliance with the laws of the country where project is located and compliance with the COBC and/or KBR Supplier COBC where applicable.

G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken.

KBR does not collect this data.



www.kbr.com

Aspect: Grievance Mechanisms for Impacts on Society

G4-SO11 Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms.

In 2016, KBR’s Code of Business Conduct department received 519 matters with 34% percent related to Code of Business Conduct issues. Matters are received through a Hotline reporting system, an e-mailbox, a physical mailbox and e-mail sent directly to the department. In 2016, 38 Code of Business Conduct matters alleged some type of discrimination. Each matter was investigated thoroughly and action taken as appropriate.

PRODUCT RESPONSIBILITY

Aspect: Customer Health & Safety

G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement.

KBR does not manufacture products.

G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes.

None.

Aspect: Product and Service Labeling

G4-PR3 Type of product and service information required by the organization’s procedures for product and service information and labeling, and percentage of significant product and service catego-ries subject to such information requirements.


G4-PR4 Total number of incidents of non- compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.


G4-PR5 Results of surveys measuring customer satisfaction. KBR does not manufacture products.

Aspect: Marketing Communications

G4-PR6 Sale of banned or disputed products. KBR does not manufacture products.

G4-PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes.


Aspect: Customer Privacy

G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.

KBR did not receive any complaints concerning breaches of customer privacy.

Aspect: Compliance

G4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

KBR did not receive any complaints concerning breaches of customer privacy.

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