Dear valued Stakeholder 2 Report/KBR...Letter from Bill Utt 3 Dear Valued Stakeholder, It is with great pride that I welcome you to share in the inaugural issue of KBR’s Sustainability

1 Letter from Bill Utt Dear valued Stakeholder 2

100 Years of Experience 2

Uncompromising Commitment 2

Sustainability 2

Corporate Philanthropy 3

Social Progress 3

2 Who We Are Ethics Training 5

Health, Safety and Environment 5

Corporate Citizenship 6

3 What We Care About and Why (Focus Areas) 9

4 How We Deliver (Sustainability) What We Care About IMPACT 13

Community Involvement 14

Education 14

Health 15

Environment 15

KBR University (KBRU) 16

KBR’s Mentor Program 16

KBR’s Wellness Program 16

KBR’s Employee Assistance Program (EAP) 17

Health and Safety 17

SAFE (Shaping Accident Free Environments 17

Climate Change 18

5 What We Deliver (In Sustainability) ISO 9001 - Quality Management Systems 21

ISO 14001 - Environmental Management Systems 22

Health and Safety Management Systems - OSHAS 18001 22

Technologies Supporting Sustainability 22

Supporting Alternative Energy Sources 24

6 Where We Deliver It (Sustainability) on Projects Aspire, UK 29

North County Waste-to-Energy 29

Escravos, Nigeria 29

Gorgon, Barrow Island 30

Christies Beach Upgrade, South Australia (SA) 30

Sydney’s Desalination Pipeline, Sydney, Australia 30

LOGCAP III, Iraq, Afghanistan and Kuwait 31

Pearl, Qatar 31

USAREUR Balakans Support Contract, Kosovo, Hungary, Croatia, 32 Macedonia and Bosnia

Tangguh, Indonesia 32

Table of Contents

Table of Contents

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Letter from Bill Utt 2

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Corporate Philanthropy Philanthropy is a very important part of our sustainable efforts at KBR. We developed a strategic philanthropic program, which includes both charitable giving and volunteerism. Contributions of time and money are given to organizations whose missions align with KBR’s designated focus areas of education, environment and health.

In 2010, KBR and its employees contributed more than $3.3 million to global charitable organizations. Our employees alone have made personal donations to charities and educational organizations of an estimated $1.5 million each year, since 2007, and KBR volunteers have donated tens of thousands of hours in service to others globally, over the last four years. We have entered into relationships with local and international environmental stewardship organizations and we are excited to continue support-ing organizations whose missions are aligned with our own.

Social Progress We recognize the importance of social progress in a global marketplace, especially in developing countries where many of our projects are executed. Those countries are now looking to stimulate the development of basic manufacturing industries by mandating an ever increasing higher level of local content – engineering, as well as procured equipment – in the projects executed in their respective country. This is a factor integral to KBR’s execution plans and includes hiring and training local

workforces, and working with local vendors, suppliers, and service providers to qualify them as suppliers for KBR. These are just a few of the many things we do as a company to ensure we leave a lasting footprint in the communities in which we work.

Sustainability demands an enduring, balanced approach to eco-nomic activity, environmental responsibility and social progress. As a global company, KBR and its employees are in a position to make a significant impact, not only as a valued service provider to our clients, but as a positive steward of the environment and a good corporate citizen to the communities in which we live and work. Throughout our rich history, we have been perfecting this strategy and are now happy to report the progress we’ve made.

Thank you.

William P. UttChairman, President and CEO

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Letter from Bill Utt 3

Dear Valued Stakeholder,

It is with great pride that I welcome you to share in the inaugural issue of KBR’s Sustainability Report. KBR’s motto for each project entrusted to us is, “We Deliver.” And, that’s what we do.

100 Years of Experience Behind that simple statement lies more than 100 years of experience as a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power and industrial markets.

Upon becoming an independent company four years ago, KBR had the unique opportunity to recreate the foundation upon which we operate. We pledged to our stakeholders to not only continue delivering high-quality products and services to the global marketplace, but also to operate under the highest levels of transparency, accountability and discipline in our business.

Uncompromising Commitment At the core of our execution lies an uncompromising commitment to quality, health, safety and the environment (QHSE). We built this commitment into our business model, as we recognized that sustainability should be an integral part of our business. Not because external pressures demand it, but because it is the right thing to do.

Sustainability is built into our Code of Business Conduct (COBC). Our QHSE policy guides our operations through a consistent risk management strategy designed to increase our business safely, protective of the environment and mindful of the impacts we may have in the countries and communities where we provide our services. All employees are required to annually refresh their training in the COBC and its policies, so that the QHSE commitment is a clear element of our company’s culture.

Sustainability In 2007, we became the first engineering, procurement and construction (EPC) company to receive global Integrated Management System (IMS) certifications in ISO 9001, ISO 14001 and OHSAS 18001; we believe we are the only company in our industry to hold these certifications companywide. KBR’s IMS ensures we remain focused on meeting client requirements, while simultaneously protecting employees and the environment.

In the projects we execute, KBR works closely with clients to consistently implement effective waste minimization and environmental protection practices. To ensure our strategy is relevant to stakeholders’ needs, KBR created a global Sustainable Development Committee with members selected from a broad cross-section of the company – from the support and administrative departments to construction, engineering and procurement. The committee provides a centralized global perspective regarding sustainability initiatives important to our clients and communities, and has proved invaluable in supporting our corporate responsibility program development.

Letter from Bill Utt

1: Mule team building roads; 2: Art station at KBR Kid’s Day on Buffalo Bayou; 3: KBR’s IPO in New York City; 4: Students with teacher in Bonny Island, Nigeria

who we are

5 Ethics Training 5 Health, Safety and Environment

6 Corporate Citizenship

WE CONDUCT OUR BUSINESS WITH ETHICS AND INTEgRITY. WE ExPECT OUR EMPlOYEES TO UNDERSTAND AND COMPlY WITH OUR CODE Of BUSINESS CONDUCT. SUSTAINABIlITY IS PART Of OUR ExPECTATIONS.Andrew farley, Executive Vice President & general Counsel

With more than 35,000 employees in 45 countries on five continents, KBR has a prominent role as an engineering, procurement and construction (EPC) company in the energy, petrochemicals, government services and civil infrastructure sectors.

We are one of the world’s largest defense services providers, supporting the U.S., United Kingdom and Australian govern-ments. However, we are more than a global company; we are a citizen and neighbor in hundreds of communities around the world.

Corporate responsibility is at the heart of who we are, what we believe and how we conduct our business. Our definition of success transcends the delivery of quality projects and services. It is our uncompro-mising commitment to live by the highest standards of business ethics; to protect health, safety and the environment; and to

be a positive force in our communities. As a company, we have aligned our internal assessment of sustainability with the Global Reporting Initiative criteria: Environmental, Human Rights, Labor Practices and Decent Work, Society, Product Responsibility, and Economic.

Ethics Training Through our ethics training we express our commitment to ensuring we educate and inform our employees on the importance of operating with ethics and integrity in everything we do. KBR’s Code of Business Conduct (COBC) is a collection of 17 corporate policies, which serves as a guide

in the standards KBR expects of every employee. All employees are required to

become familiar with the policies when they are hired and to take an annual COBC refresher course.

Health, Safety and Environment The health and safety of our customers, employees and subcontractors is a core value for KBR. We moved closer to our goal of an incident and injury-free working environment in 2010, as several significant safety milestones were reached, including two million man-hours worked without a lost-time incident on the Boeing South Carolina 787 Expansion project and 65 million incident-free man-hours worked on the Saudi Kayan Petrochemical project.

We saw safety improvements company-wide, with the number of recordable

Who We Are 5

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KBR IMPlEMENTS ITS HEAlTH, SAfETY AND ENVIRONMENT PROgRAM AT All PROjECTS, INSTIllINg THE KBR VISION Of AN INCIDENT AND INjURY-fREE WORKPlACE.Mark Williams, group President, Infrastructure, government & Power

Who We Are

KBR became the first EPC company in the world to pursue and receive an integrated certification in ISO 9001 – Quality Management, ISO 14001 – Environmental Management, and OHSAS 18001 – Occupational Health and Safety Assessment Systems. We believe KBR is the only major EPC organization certified companywide to all three standards. The significance of this is that when we execute work globally, each of our locations utilize processes that have incorporated the concepts of sustainable development and corporate responsibility. KBR’s Integrated Management System (IMS) is the framework for offices and individual projects to assess, measure and control the quality and consistency of deliverables and services to our custom-ers, and to maintain an environmental aspects register and a health and safety risk register, identifying those regional or project-specific aspects, impacts and risks to be managed and mitigated in a systematic, consistent manner.

incidents decreasing by approximately 20 percent, and the lost time incident rate decreasing by 37 percent.

KBR is committed to sustainable solutions, which are inclusive of climate change impacts and apply an enduring balanced approach to economic activity, environ-mental responsibility and social progress. Our environmental pledge is to reduce the impact of our services and operations, enabling us to operate more resourcefully.

Corporate Citizenship KBR strives to be a global industry leader in corporate citizenship by developing projects efficiently and responsibly, and by reaching out to communities through initiatives that meet their needs, as well as contributing to sustainability through jobs and training for local employees and subcontractors. Additionally, we have programs in place to develop and encourage employees to reach out and support, in an effort to improve the health, education and environmental well-being of the communities where we live and work.

We have contributed to numerous positive impacts in the communities affected by our projects, supported the efforts of our community partners worldwide, and have increased interest in employees’ volunteer-ism and support to charitable giving.

During 2010, our Board of Directors recognized the value and importance of corporate citizenship by increasing respon-sibilities in the Board of Directors’ Health, Safety and Environment (HSE) Committee to include sustainable development. Internally, we rely on a global Sustainable Development Committee, led by a Steering Committee comprised of representatives from each business unit. The Sustainable Development Committee provides a comprehensive perspective on the world view of sustainability as it pertains to where we have offices and projects, recommends sustainability initiatives, and assists in data gathering and guideline development as necessary.

KBR entered into a Broad-based Black Economic Empowerment (BBBEE)

transaction in 2010, giving us the leading BBBEE rating of any major international engineering and construction company in South Africa, and furthering our continued commitment to the transforma-tion of South Africa’s economy. We also announced the opening of operating centers in Perth, Kazakhstan and Angola and registered a proposed engineering joint venture in Saudi Arabia to address the importance of increased local content requested by customers, and to enable us to better serve our clients, while differentiating us in the marketplace.

Our social responsibility initiatives continue to grow and improve. Our Fourth Annual Charity Golf Tournament raised more than $315,000 for 12 national Houston-area non-profits, and KBR’s EcoFest – an environmental awareness and educational event for our employees, with vendors and a recycling competition – received the Houston Mayor’s Honorable Mention Award. The Building Group achieved LEED Gold certification in the build out of KBR’s new office facility in Orlando.

Who We AreWho We Are 76

fIRST AND fOREMOST, WE ARE fOCUSED ON SAfETY IN THE WORK PlACE. REgARDlESS THE lOCATION Of OUR jOBS, WE UNDERSTAND THAT lOCAl CONTENT AND ENVIRONMENTAl STEWARDSHIP ARE IMPORTANT. THESE REqUIREMENTS MUST BE PART Of THE PlANNINg AND ExECUTION Of THE jOB.David Zimmerman, President, Services

1: Safety letter to employees from Brown & Root founder; 2: Saudi Kayan Petrochemical Plant

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DIV

ERSI

TY &

DEV

ELOPMENT

COMMUNITY ENGAGEMEN

T

INNOVATION + POSITIVE IMPACTS

SUSTAINABILITYDELIVERED GLOBALLY

BUILDING OUR FUTURETOGETHER

ECONOMIC

ENVIR

ONMEN

TAL

SOCIAL

Algeria - 1

Netherlands - 3

Nigeria - 5

Puerto Rico - 14

Angola - 15

China - 27

Azerbaijan - 38

Saudi Arabia - 29

India - 63

Kazakhstan - 84

South Africa - 65

Sweden - 122 Egypt - 1

France - 1

Germany - 1

Malaysia - 1

Qatar - 1

Turkey - 1

U.S. - 12,673

Iraq - 9,428

UK - 2,447

Mexico - 1,728

Australia - 1,580

Canada - 1,089

Poland - 621

Russia - 779

Indonesia - 505

UAE - 362

Singapore - 379

Afghanistan - 324

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what we Care about and why

KBR IS A PEOPlE-ORIENTED COMPANY. WE PROVIDE SERVICES PERfORMED BY PEOPlE, SO WE MUST TAKE CARE Of OUR PEOPlE AS OUR MOST IMPORTANT ASSET. james Stewart, President, Power & Industrial

KBR’s mission is to safely deliver any project, any time, in any environment for the benefit of our customers, shareholders, employees and the communities we serve.

To achieve our mission, we hold the vision to be the world’s premier contractor, delivering projects and services to a global marketplace. To that end, our motto or creed is ‘We Deliver.’ Underpinning our mission and vision, are the values we expect all of our employees to embody. These values, integrated into our way of doing business and everything we do, form the foundation of who we are as a global corporate citizen and responsible business employer, partner and contractor. They are communicated to new employees and reiterated during our mandatory annual COBC training. Further, these values are incorporated into our annual objectives and development goals setting process to align our employees’ performance with the achievement of our business strategy. It is a continuous process focused on enhancing

performance in order to deliver excep-tional business results. Our values are:

Uncompromising commitment to •quality, health, safety and environment

An open relationship with our • employees, based on mutual trust, respect and success

Transparency, accountability and • discipline in our business

Best in class risk awareness •

Integrity in all we do•

Financial responsibility to our• stakeholders

KBR has a long and substantial legacy in supporting the communities where we live and work. The companies whose cultures molded and contributed to our culture today demonstrated decade after decade, their commitment to those communities where their employees lived and worked. An integral part of our mission continues to be giving back to communities, specifically in the areas of environment, health and education. We see these focus areas as foundational to what we are about, whether it is protecting our coastal environmental systems, improving the health and wellness of employees and their

What We Care About and Why (Focus Areas) 9

What We Care About and Why (Focus Areas)

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What We Care About and Why (Focus Areas)What We Care About and Why (Focus Areas) 1110

families, or assuring a well-educated, vital future workforce for our global offices. We believe to remain a leader in the world market, as well as develop a more sustain-able future, we must help to find solutions to the problems facing the communities where we live and work. Our employees reach out every day to engage with those people and communities in need, through our charitable initiatives, volunteer organizations and community outreach programs. Through local blood drives, disaster relief, community events and contributions, KBR is proud to support the local, national and global community.

Whether KBR is supporting global internal initiatives or a client project, we look for ways to deliver value through sustainable solutions to a global marketplace. To this end, we have developed internal programs and processes designed to facilitate our projects’ abilities to identify and integrate innovations or provide them to our customers as opportunities.

Our reputation as a global contractor capable of delivering the most complex projects to our clients’ satisfaction depends on our dedication to the highest levels of employee safety and protection of the environment. We believe safely delivering projects makes good business sense and improves our financial sustainability. It is KBR’s goal to build and sustain an incident and injury-free working environment by creating a positive health, safety and environment culture, implementing an effective management system and proactively managing health, safety and environment performance.

Over the past several years, KBR’s has received numerous awards recognizing our projects and employees around the world for our efforts toward an incident and injury-free working environment.

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1: Brown & Root workers building offshore platform; 2: Bridge over lake Ponchatrain, la.; 3: Ethyelene Cracker Plant; 4: U.S. Navy ship in the Houston Ship Channel; 5: The first fCC unit in Baton Rouge, la. in 1942; 6: Kashagan Drilling Island; 7: Hassi Berkine South Stage; 8: Tangguh lNg facility; 9: BP Atlantis Platform

ClIENTS ExPECT SAfE AND ENVIRONMENTAllY RESPONSIBlE PROjECTS PERfORMED ON THEIR fACIlITIES CONSISTENTlY. KBR DElIVERS THAT PERfORMANCE.Mark Williams, group President, Infrastructure, government & Power

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how we deliver

13 IMPACT 14 Community Involvement

14 Education

15 Health

15 Environment

16 KBR University (KBRU)

16 Mentor Program

16 Wellness Program

17 EAP

17 Health and Safety

17 S.A.f.E.

18 Climate Change

fOR 31 YEARS, KBR’S EMPlOYEE ASSISTANCE PROgRAM HAS BEEN HElPINg EMPlOYEES AND THEIR fAMIlY MEMBERS CONNECT WITH PROBlEM-SOlVINg RESOURCES, SO THEY CAN lEAD SAfE, PRODUCTIVE AND HAPPY lIVES.Klaudia Brace, Executive Vice President, Administration

KBR is committed to sustainable solutions which apply an enduring balanced approach to economic activity, environmental responsibility and social progress.

We have many opportunities to impact the environment, from the way we choose to conduct business ethically, develop our employees, collaborate with subcontractors and suppliers, promote the energy-efficient or environmentally-supportive engineer-ing designs we put forward to clients, to where we choose to put our volunteer time and charitable contributions, and our strategies for successfully expanding our business. We have aligned our volunteer organizations, community involvement and employee development programs to further these opportunities.

IMPACT Since its inception in Houston in May 2001, IMPACT – a network of developing professionals within KBR – has flourished

to represent a diverse professional workforce in more than eight countries with over 1,500 employees. IMPACT is organized and managed by its members who work diligently throughout the year to create opportunities for personal and professional development.

The organization crosses international boundaries – with groups active in Houston, Texas; Arlington, Virginia.; Birmingham, Alabama; Wilmington, Delaware; New Delhi, India; Jakarta, Indonesia; Monterrey, Mexico; Greenford, United Kingdom; Raleigh, North Carolina.; Singapore; Johannesburg, South Africa; Leatherhead, United King-dom; Dubai, United Arab Emirates; and the Australia state chapters of Queensland, Australia; New South Wales, Australia; Victoria, Australia; South Australia; Western Australia; Atyran, Kazakhstan – and covers functional expertise across the entire spectrum of our company business.While primarily intended to motivate, retain and develop professionals just entering the workforce, the program also

introduces its members to the benefits of volunteering and develops leadership skills, both in the workplace and in the community as a whole.

All IMPACT groups foster professional and leadership development through the avenues of committee chairs, such as community service, global collaboration, new-hire, recruitment, mentor program and networking. The organization also allows its members to express their ideas and concerns in a manner that is truly recognized and appreciated.

How We Deliver (Sustainability) What We Care About 13

How We Deliver (Sustainability) What We Care About

Connection Service Center, and to allow additional services for the Homeless Veteran’s Reintegration Program and Veteran’s Workforce Initiative Training Program.

At KBR, employee volunteerism provides the “heart and soul” connection to non-profits and community organizations that provide important services to help meet community needs. We recognize that each community has its own unique strengths and weaknesses. Our global volunteer organizations learn about the needs of non-profits in each respective region, and coordinate projects to best suit their community. Our IMPACT group in South Africa began volunteering for Akani Diepsloot, which helps to house, feed and educate children of the community. Once this relationship was formed in 2010, KBR began to provide funding support for the organization to further assist in these efforts.

Through our 2010 contribution programs, KBR, its and vendors donated more than $3 million to eligible charity and educational organizations worldwide. This was facilitated by our secure online giving program, Community Matters, which enables employees to donate to approved charities and educational organizations. A 100 percent match is available for employee donations to eligible educational institutions, up to $1,000 for K - 12 schools and $20,000 for higher education.

HealthWe focus on supporting health initiatives that are of concern to our employees and integral to where we do work around the world. In our Monterrey office, employees collected toiletries such as toothpaste, toothbrushes, soaps and shampoos for an institution that supports low-income patients in hospitals.

We supported Susan G. Komen on a global level, funding a total of $50,000. Our support enabled its first program in South Africa to educate indigenous people on breast cancer and health. Additionally, KBR supports cancer research through our various employee fundraisers in the UK, and in the U.S. We were the present-ing sponsor for the March of Dimes in Houston, which KBR funded at $100,000 and employees raised $146,000.

Blood drives are held in KBR offices around the globe to help save lives in our local communities. The Gulf Coast Regional Blood Center states that we have the ability to save three lives per donation, which means employees in Houston, Singapore and Jakarta saved potentially 2,562 lives through their donations.

KBR UK employees raised $36,000 through the Helping Hands program in 2010, with programs and fundraisers such as marathons and bike-a-thons. Some of the benefitting charities include: the Queen Elizabeth Foundation, Prostate Cancer Charity, Cancer Research UK and the Guilford Lions Club.

EnvironmentKBR continued its support to Restore America’s Estuaries (RAE), as lead sponsor for the 2010 Biennial Conference held in Galveston, Texas. Additionally, several papers and posters were presented by our U.S. and Australia Infrastructure & Minerals engineers. We also provided the seed funding to RAE’s research project to investigate the carbon sequestration potential of salt grass marshes. Our participation was instrumental in enabling RAE to enroll other energy and infrastruc-ture companies, as well as governmental and state agencies, to support this worthy effort.

During 2010, we began our interna-tional environmental partnership with The Nature Conservancy, supporting two projects: Oyster Reef Restoration in the U.S. Gulf Coast and the Indigenous Rangers Program, part of The Nature Conservancy’s Karrkard-Kandji Trust in Australia. Through their donation of time, money and experience, our employees are improving the lives of the less fortunate and are building better communities.

IMPACT groups around the world contribute to the success and sustainment of many charities and non-profit orga-nizations. The Houston IMPACT group supports KBR’s Annual Charity Golf Tournament and all chapters participate in KBR’s Green IMPACT Week, centered annually around World Environment Day.

During Green Week, members plan and organize initiatives to gain awareness and explore positive actions for preserving natural resources and living sustainably. This year, a number of diverse activities, ranging from lectures to community volunteer events supporting the environ-ment, took place. Daily focus topics revolved around different environmental themes, such as Ecology and Biodiversity, Water Resources, Energy Efficiency, Waste and Recycling, and Carbon Foot-printing. The Delaware chapter successfully launched an initiative with the goal of reducing per capita paper consumption by 10 percent, and the South Africa chapter distributed information about the use of biodegradable cleaning agents, water

purification at home and the important role plants play in cleaning the air.

In addition to volunteer efforts and supporting local green initiatives, IMPACT offers mentoring, training, seminars, site visits, team building, networking and community-based activities, all serving to effectively empower developing professionals by boosting their careers and providing an avenue for growth.

Community InvolvementKBR is more than a global company; it is a citizen and neighbor in hundreds of communities around the world, and our employees make many commitments to ensure the communities where we live and work are vibrant and successful.

Our employee volunteer organizations, such as the Discover Engineering Committee (DEC), IMPACT and Volunteer Councils, help to ensure we choose the right community activities and events to support. Every time the

public sees one of our volunteer T-shirts, it reinforces our reputation as a socially-responsible company when they read, “KBR... where community matters.”

In addition to supporting the develop-ment of new energy sources and successful military missions around the world, KBR provides direct social benefits to people in need. We continue to leverage our social commitment through a robust volunteer program, our employee giving program, and support of global and local non-profits. Every day, KBR employees reach out to those in need through numerous corporate charitable initiatives, volunteer organizations and community outreach programs in our charitable focus areas of education, environment and health – they are constantly working to help those in need by planning, staffing and taking part in hundreds of events.

During 2010, we streamlined our contributions within our focus areas and looked for programs and projects that would achieve measurable results in the communities. Examples include:

EducationKBR focuses on promoting education in the areas of Science, Technology, Engineering and Math (STEM). Our Science Teacher of the Year award in Houston was created to recognize excellence in the teaching of science. We strive not only to support the education of students, but also in workforce development for adults. KBR DEC members volunteered nearly 1,000 hours through participation in Engineer-Week (E-Week), science fair judging and mentor programs; Jakarta employees donated 490 books to a local elementary. Additionally, KBR donated $25,000 to expand the capacity of Goodwill’s Job

How We Deliver (Sustainability) What We Care AboutHow We Deliver (Sustainability) What We Care About 1514

1: KBR commits to helping Australia’s indigenous People, land; 2: KBR-sponsored team at the fIRST Robotics Competition; 3: March of Dimes Volunteers and Walkers; 4: galveston Bay Restoration project [source lightHawk]

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KBR Birmingham was recognized as one of the city’s Healthiest Employers by the Birmingham Business Journal. In Iraq, the KBR LOGCAP Challenge currently hosts over 600 participants who actively track their physical activity, while employees in Dubai, Australia, the UK and several U.S. offices are tracking their steps with pedometers. Through this program, nearly 50 employees in the UK reached one million steps and several others were able to attain two million.

KBR’s Employee Assistance Program (EAP)Since 1980, KBR’s Employee Assistance Program (EAP) has enhanced the company’s ability to deploy a customer-preferred workforce by:

Enhancing our employees’ ability to •work safely and productively

Helping KBR attract, recruit, develop• and retain top talent

Addressing the respective needs of all •stakeholders

Providing a positive contribution to the •company’s financial performance and marketplace image

KBR stands out in its industry because it has an internally-staffed, hands-on EAP that operates on a global level and serves our 35,000 employees worldwide,. Unlike outsourced EAP programs, KBR’s EAP is staffed by company employees, who have

intimate familiarity with the company’s culture, its structure, the specific needs of its various business units, the company’s mission and values, and the needs of KBR’s stockholders and various other stakeholders.

Health and Safety The health, safety, and well-being of our employees are of foremost importance to us and are a fundamental part of our ability to successfully conduct our business globally. We believe that a productive workplace is one where the necessary measures have been taken to safeguard our employees’ well being. Consequently, we are committed to creating an incident and injury-free work environment for our employees, contractors and clients.

To accomplish this, KBR management believes that our health safety and environmental practices can not be viewed as a priority – which can be ranked in a vertical order of importance – but must be looked upon as a value, which is inherent in every part of our operation. By holding safety as a core value and integral in our work processes, we understand that superior health safety and environmental performance can be obtained. Therefore,

we are committed to creating an incident and injury free work environment for our employees on all of our projects. This has enabled us to deliver health and safety excellence on any project, any time in any environment for the benefit of our customers, shareholders, employees and the communities we serve. As a global organization with a very diverse workforce, one of our greatest strengths is the ability to learn from each other. Our employees’ diverse ethnicities, experiences and cultural backgrounds benefit all facets of our corporation, including health, safety and environment (HS&E). This strength is tapped into during formal HS&E meetings, the appointment of safety representatives, toolbox or pre-job safety meetings and Home Office Safety Awareness Teams (HOSAT).

S.A.f.E. (Shaping Accident free Environments)Our S.A.F.E. (Shaping Accident Free Environments) program was developed to reinforce the concept of incident and injury-free work. The S.A.F.E. process is built upon the belief that in order for individuals to be responsible for safety, they must be empowered to make decisions and must be provided

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1: Present day, safety remains a priority; 2: Employees supports continuous learning and skill enhancement; 3: Workers in the 1930s display KBR’s safety commitment1

KBR University (KBRU) KBR’s success depends on supporting a diverse workforce that is committed to continuous learning and skill enhance-ment. At KBR, we help our employees maximize their performance and potential through internal workshops, self-paced e-learning modules and virtual books/reviews intended to enhance and develop the professional, leadership and manage-ment skills necessary for our employees to excel and succeed in their careers.

In 2010, 366 courses were delivered online to more than 14,000 employees, and over 4,000 employees completed one of the 33 instructor-led courses. Some examples of classes offered include: Leadership,

Management and Supervision, Effective Communication, and Finance for Non Financial Managers.

KBRU provides a flexible, cost-effective way for employees all over the world to continue their personal development. E-learning courses can be taken at any time, at no charge to the individual or their organization. Additionally, educational assistance is available for employees pursu-ing a higher education.

KBR’s Mentor ProgramKBR’s Mentor Program – organized through IMPACT – was initiated to enhance the professional development of employees by connecting them with experienced employees to provide opportunities for leadership experience exchanging and learning through knowledge transfer. The Mentor Program offers training sessions for participants and mentors that can contribute to the growth of an individual’s career, as well as to continued education and learning goals.

It is often challenging to maintain a healthy lifestyle while working long hours on complicated projects, coupled with outside stressors; however, through our various health and wellness programs around the globe, KBR assists employees in making conscious efforts to live a healthy life one day at a time.

KBR’s Wellness ProgramGlobally, KBR’s Wellness program is expanding to meet the needs of its employees by offering simple, yet effective, tools which promote a healthy lifestyle through education and preparation. Our offices host on-site health screenings where employees can take part in health assess-ments and receive nutrition information from healthcare professionals.

Employees also have the opportunity to receive seasonal flu vaccinations, as well as attend workshops and training. Our Singapore office offers a direct intervention program, in which participants commit to activities like aerobic and counseling sessions, health talks and healthier food.

MANAgEMENT IS COMMITTED TO THE gOAl Of INCIDENT-fREE WORK THROUgH THE IMPlEMENTATION Of A NUMBER Of OUR PROgRAMS SUCH AS S.A.f.E. [SHAPINg INCIDENT fREE ENVIRONMENTS] AND THE H&S COMPETENCY fRAMEWORK.Colin Elliott, President, Infrastructure & Minerals

How We Deliver (Sustainability) What We Care AboutHow We Deliver (Sustainability) What We Care About

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0.60.53

0.5

0.4

0.3

0.2

0.1

2007 2008 2009 20100

Total Recordable Incidents

Safety Incident Rates

Lost Time Incidents

Perc

ent

0.48 0.49

0.40

0.12

0.190.190.20

Significant Safety Milestones

Job Name Year Hours Type

Aspire Capital Works

Aspire Capital Works

BASF - Mc Intosh, Alabama

Black Warrior Project - Tuscaloosa, Alabama

BRNA North Africa

BRNA North Africa

Clinton Facilities - Houston, Texas

Conlog Interim

Conoco Phillips - Borger, Texas

Conoco Phillips - Sweeney, Texas

Dupont Kevlar Proj - Cooper River, South Carolina

Exxon Mobil Facilities - Houston, Texas

Exxon\Mobil Flare Gas - Beaumont, Texas

Georgia Gulf - Pasadena, Texas

Goodyear - Pasadena, Texas

International Paper - Kwidzyn, Poland

JCCI O&M Basra Cob

Kashagan PMSC OOK

Lanxess Corp - Orange, Texas

LCRA Fayette Power - LaGrange, Texas

M&E Prof Tech Rsc Pool Houston

Pearl GTL C6 Utilities

Saudi Kayan Olefins Project

Shell Bellaire - Houston, Texas

Shell Westhollow - Houston, Texas

Skikda Lng Train Project

Solvay Chemicals - Longview, Washington

Syncrude ESP 25 1 Rebuild

Texas Instr - Dallas, Texas

Texas Instr - Stafford, Texas

Zeon Chemicals - Pasadena, Texas

Zeon Chemicals - Pasadena, Texas

Since Last Lost Time Incident

Since Last Injury / Illness Incident



Without Recordable Incident




Without Lost Time Incident









Injury / Illness Free Project















6,618,769

3,871,872

1,155,319

3,988,825

2,326,549

2,074,325

1,549,842

1,420,422

1,112,613

1,190,689

1,192,156

2,009,681

1,377,757

288,383

651,688

1,385,385

1,703,406

1,380,397

1,267,256

2,062,169

501,202

40,000,000

40,000,000

2,183,221

3,705,419

15,464,406

378,195

1,070,810

568,616

1,333,936

173,890

65,342

2

1

5

2

8

6

13

2

2

2

2

18

2

10

30

1

1

6

9

2

10

0

0

29

16

1

21

2

22

19

17

10

the knowledge, skills and information necessary to make those decisions. Once these tools are provided, employees take on responsibility for their actions in safety. Most importantly, the culture fostered by this key program directly supports other important performance indicators, such as employee satisfaction, profitability, quality and social responsibility. Our S.A.F.E. program has led the way to a workplace culture; whereby, the goal of having each employee return home daily as healthy, functional and productive as they came to work, is fully realized. It also instills attitudes and practices that will cause their off-the-job environment to be as safe and healthful as the one at work.

Our projects around the world have been recognized for their safety accomplish-ments. In 2010, the KBR-led team building the utilities area of the Pearl GTL project in Ras Laffan, Qatar, celebrated 75 million man-hours without a Lost Time Incident (LTI) and KBR International Government and Defense in Leatherhead received one of the esteemed Royal Society of the Prevention of Accidents (RoSPA) Awards. Additionally, KBR received General Contractor of the Year by the Charleston Chapter of the American Subcontractor Association of the Carolinas (ASAC) on our Boeing Joint Venture project, and in April, signed a formal partnership agreement with the South Carolina Occu-pational Safety and Health Administration (SC OSHA), to create and maintain a safe and healthy environment for its workers.

Climate ChangeKBR celebrates the variety in regional and country views on climate change and recognizes that one size does not fit all when it comes to climate change initiatives or regulatory environments. We annually assess the risks and opportunities related

to potential impacts of climate change to our facilities, employees, supply chain and customers.

Our challenge as a global presence is to understand the pressures and expectations our employees, projects and regional offices have to meet our customers’ diverse expectations related to climate change response and to identify strategies to address those expectations.

New UK laws, including the Climate Change Act, are encouraging emissions reduction – KBR’s Leatherhead and Greenford offices have already achieved the Carbon Trust Standard. We are participating with our clients in the Carbon Disclosure Project which is an independent non-profit organization whose mission is to accelerate solutions to climate change by putting relevant infor-mation at the heart of business, policy and investment decisions. Our Infrastructure & Minerals business unit, with offices across Australia, achieved a 5 percent reduction in carbon emissions in 2010.

The global conversation about climate change and the forward progression of various climate change regulations and carbon regulations are generating business interest among clients and customers, to which we are responding. Activities range from providing solutions to clients on how to comply with new and antici-pated requirements, developing internal strategies to market existing licensed technologies in new ways, and evaluating alternative technologies. Increased regula-tion focused on reducing carbon emissions and diminishing certain environmental impacts provides opportunities for KBR with a number of its licensed technologies, including the Coal Gasification process TRIG TM co-developed with Southern

Company, Fluid Catalytic Cracking technology, and our CO2 capture and storage solutions.

Globally, KBR is evaluating ways to minimize its operational carbon footprint and implementing those options where it makes economic sense.

One of the strategic measures imple-mented by KBR to continue its ability to reduce emissions was the upgrade of the Data Center in our Leatherhead office. The Data Center was constructed with a focus on resilience and energy efficiency. One of the key elements of the design is the environmentally supportive and energy efficient implementation of the cooling systems. The Data Center utilizes a free-air cooling system that draws the “hot” air from the cubes up into the ceiling and passes it through a heat exchanger cooled by outside air.

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1: leatherhead Data Center; 2: TRIg Demonstration Unit; 3: Carbon Trust Standard Certificates 1

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How We Deliver (Sustainability) What We Care AboutHow We Deliver (Sustainability) What We Care About

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what we deliver

21 ISO 9001

22 ISO 14001

22 OHSAS 18001

22 Technologies Supporting Sustainability

24 Supporting Alternative Energy Sources

DURINg PROjECT ExECUTION, KBR’S HIgH HSE STANDARDS AND ITS VISION Of INCIDENT- AND INjURY-fREE PERfORMANCE COMBINED WITH ITS ExPERIENCED PROjECT AND CONSTRUCTION MANAgEMENT TEAM, ASSURE THAT THOSE ClIENT ExPECTATIONS ARE ACHIEVED. Roy Oelking, group President, Hydrocarbons

Our goal of delivering value through sustainable solutions to a global marketplace is implemented through our Integrated Management System (IMS).

Our IMS which is certified by a third party, LRQA, to ISO 9001, ISO 14001 and OHSAS 18001, is the vehicle we use to verify we deliver repeatable high-quality services and products to our employees, customers and shareholders. Our IMS covers all business processes from business development to engineering, procure-

ment, construction, operations, human resources, project management and risk management processes. By using our

IMS, projects have a standard approach in terms of processes, tools, systems and procedures, which allows us to execute projects in a cost effective manner within the specified time frames.

ISO 9001 – quality Management System The elements of ISO 9001 – Quality Management System ensure KBR’s business systems contained within our IMS are assessed, risks identified and miti-gated, and our processes are continually improved. Our IMS allows us to ensure

we are controlling the quality of the work we perform, verifying compliance with the procedures we have in place through

periodic audits, consistently producing an acceptable service or product for our employees, customers and shareholders, annually informing our CEO through the management review process, and correcting nonconforming items identified through periodic audits. The focus of ISO 9001 on customers, leadership engagement, people involvement, communications, systematic processes, and developing beneficial supplier relationships provides us a way to evaluate our success in delivering value through sustainable solutions. This is one of the avenues by

which KBR ensures competent trained and efficient employees to execute the required tasks on our projects. We also achieve

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WE HAVE PROVIDED OUR STATE-Of-THE-ART AMMONIA TECHNOlOgY TO INDIAN fERTIlIZER MANUfACTURINg COMPANIES. WE ARE WORKINg WITH COMPANIES lIKE KRIBHCO ON ITS AMMONIA PlANT REVAMP, Nfl NANgAl CONVERSION fROM fUEl OIl TO NATURAl gAS, AND THE REVAMP Of THE CHAMAl-I AMMONIA PlANT.john quinn, President, Downstream

What We Deliver (In Sustainability)


the type of technology matters, because it impacts capital, environment and safety, drives feed stock flexibility and efficiency, drives capital efficiency over time and impacts production quality. Many of KBR’s technologies are energy efficient and have low emissions.

Today, KBR is working on new technolo-gies that will be put to use in the areas of sustainable design and construction, carbon emissions calculations and engi-neering and energy efficiencies determina-tions. KBR is pursuing partnerships and licensing technologies congruent with the changing global environment and climate

change pressures such as with the VebaCombi Cracker (VCC) technology. VCC maximizes liquid fuel yields, while minimizing environmental impacts of heavy and unconventional feedstocks. In response to environmental concerns over GHG emissions, KBR offers comprehen-sive CO2 capture and storage solutions through our Carbon Capture and Storage (CCS) technologies, including cleaning CO2 from flue gas, CO2 compression and drying for transportation and sequestra-tion or for enhanced oil recovery. With our CO2 storage technology, operators can avoid penalties and fines that authorities might invoke for noncompliance and,

at the same time, address the public’s concern about releasing potential greenhouse gases.

KBR has a 60-year legacy as a leader in advanced ammonia technology. Our plants are known worldwide for their superior performance and are the cornerstone of the global fertilizer industry, which is a key industry for improved food production. Currently, KBR is working with a number of Indian companies in the fertilizer sector.

Our Coal Gasification TRIG TM technol-ogy facilitates tapping vast coal reserves in a cost effective, efficient manner, reducing adverse environmental impacts compared to previous methods, and offering a superior method or producing clean coal energy with reduced emissions. The TRIG TM technology was developed by KBR in cooperation with the Southern Company and other partners, including the U.S. Department of Energy (DOE), as part of the DOE’s Clean Coal Technology (CCT) program. The Southern Company is currently investing into the project for an Integrated Gasification Combined Cycle (IGCC) plant in Kemper County, Mississippi. It will utilize the TRIG TM technology and capture 65 percent of carbon dioxide emissions. The plant’s carbon footprint will be equivalent to a new natural gas combined cycle generation resource.

THE ADDITION Of THE VCC TECHNOlOgY TO KBR’S PORTfOlIO PROVIDES THE COMPANY WITH A UNIqUE BUSINESS ADVANTAgE, AS WE ARE NOW THE ONlY TECHNOlOgY PROVIDER TO OffER All fIVE OPTIONS fOR HYDROCARBON UPgRADINg TO ClIENTS WORlDWIDE. KBR ANTICIPATES THE TREND IN REfININg AND fUElS PRODUCTION SHIfTINg TO HYDROgEN ADDITION, ESPECIAllY IN THE fACE Of CHANgINg ENVIRONMENTAl REgUlATIONS AND THE DEMAND fOR CARBON EMISSIONS REDUCTIONS. john Derbyshire, President, Technology

What We Deliver (In Sustainability) 2322

1: M.W. Kellogg R&D laboratory; 2: KBR R&D laboratory; 3: In Salah gas Project

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consistent high quality in our subcontrac-tors, vendors and suppliers by operating within our IMS. Our systematic approach contributes to improving the opportuni-ties for the local business communities recognizing that on many projects, U.S. or international, our customers drive supplier diversity and local content in our supply chain.

We realize benefits from our quality system in our ability to consistently deliver high quality service and products to customers, manage and control a global supply chain through our best-in-class procurement system, communicate expectations and results internally and externally, and achieve our financial business goals and corporate responsibility commitments.

ISO 14001 – Environmental Management System The ISO 14001 – Environmental Manage-ment System enables us to define the impact of our business on the environ-ment, implement actions demonstrating our acceptance of our responsibility for those impacts, communicate to our employees and subcontractors our expectation of them to minimize and reduce harmful impacts, and carry our environmental accountability into the communities affected by our business.

Within our offices, globally, we are focused on managing environmental impacts including:

Increasing paperless activities and• transactions

Establishing recycling programs, either• through company initiative or in collaboration with landlords

Encouraging, and in some instances,• subsidizing ridesharing through carpools, vanpools, rail travel and company-sponsored metro rideshare programs

Implementing energy savings features• and practices

Our Leatherhead office utilizes a waste handling vendor that has enabled the office to recycle 85 - 90 percent of the waste from the facility, with the remainder going to waste-to-energy vendors, so none of the waste from the facility goes to a landfill. In the United Arab Emirates (UAE), KBR works closely with the cleaning contractor who now uses biodegradable and non-polluting cleaning products in all UAE offices. In many of KBR’s new office spaces, areas are designed to utilize the maximum amount of natural light and encourage teambuilding and collaborative environ-ments. Our Singapore office designed the office layout in a manner to utilize maximum natural light and only installs fluorescent tubes for additional energy savings – it received recognition for its efforts by obtaining Green Label Certified status from the Singapore Environment Council (SEC) in 2010.

Health and Safety Management System – OHSAS 18001 KBR reinforces the health and safety protocols and practices we employ in our business through the policies contained

within the Health and Safety Manage-ment System – OHSAS 18001. OHSAS 18001 provides a systematic process of identifying, assessing and controlling risks, ensuring and verifying employee compe-tencies, planning for emergency response, reviewing accidents and incidents, and correcting nonconforming items.

Technologies Supporting Sustainability KBR has technologies responsive to the climate change regulatory pressures and client expectation pressures in this area. While energy conservation, improving efficiency, alternate fuels, and renewable energy are all options for lowering Green-house Gas (GHG) emissions, fossil fuels will continue to be the dominant energy source for the global economy. While fossil fuels continue to remain dominant, a criti-cal aspect of contributing to a sustainable future is to find ways to extend the useful life and reduce the environmental impact of non-renewable energy sources. As stated in our COBC, we are committed to continuously evaluate the HSE aspects of our products and services, with the goal to develop and provide products and services that have no undue environmental impact and are safe in their intended use, efficient in their consumption of energy and natural resources, and can be recycled, re-used or disposed of safely. We see this tenet realized most clearly in our Technology offerings.

KBR has a legacy of investing in new technology and improving existing tech-nologies. Our commitment to innovation dates back to Morris Kellogg’s industry-first research laboratory in the mid-1920’s. While KBR takes pride in using the most advanced technologies in the industry, our engineers are constantly striving to find ways to improve efficiency. We believe that

OUR TRIO Of MANAgEMENT SYSTEMS UNDERSCORES KBR’S REPUTATION Of ExECUTION ExCEllENCE. Susan Carter, Executive Vice President, CfO

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Supporting Alternative Energy Sources The current global drive to reduce carbon emissions provides significant growth opportunities. Across our businesses, we are investing in research and development projects. We are working on projects involving bio-fuels from algae, carbon capture and storage, which are seen as long-term growth opportunities for the company. In these areas, KBR has established itself as a key participant in the UK offshore wind farm industry. Our involvement with wind power generation dates back to 1996, when we acted as con-struction manager for the Windy Standard

Wind Farm in Scotland. Currently, in South East Queensland, Australia, KBR is involved in a ground-breaking algae biofuels project designed to optimize the key drivers which underpin the development of profitable, high-efficiency microalgae production facilities.

Other key technologies and methodologies in which we are involved and support sustainability are our capabilities in green and sustainable building engineering and construction. Our experience in Green, or Sustainable, Building standards, such as LEED in the U.S., BREEAM or CEEQUAL in the UK, and Greenstar in Australia,

allow us to support clients who have made a commitment to sustainable design and construction and who see a business advantage to their doing so.

In 2010, our Building Group completed construction on six LEED certified projects and has four additional completed projects pending certification. The Building Group’s Florida Regional Office received formal notification in September, from the U.S. Green Building Council, that its office space had achieved LEED Gold Certifica-tion. Our Aspire joint venture in the UK is the largest BREEAM certification project in Europe, with more than 400 buildings

KBR STRIVES TO USE AS MANY lOCAl EMPlOYEES AND SUPPlIERS AS ARE AVAIlABlE BY HIRINg AND TRAININg lOCAl, SKIllED AND UNSKIllED CRAfT WORKERS, ADMINISTRATIVE AND SUPPORT PERSONNEl, SPONSORINg NCCER (NATIONAl CENTER fOR CONSTRUCTION EDUCATION AND RESEARCH) CRAfT TRAININg AND CERTIfICATION, AND SOURCINg MATERIAlS, lOCAllY. WE INVEST IN THE lOCAl WORKfORCE AND WHEN PROjECTS ARE COMPlETE, WE lEAVE THE lOCAl WORKfORCE IN BETTER SHAPE THAN WHEN THE PROjECT BEgAN. Danny Hicks, Senior Vice President, U.S. Construction

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WE HAVE DEVElOPED AND ARE NOW MARKETINg A NEW CATAlYTIC PROCESS fOR THE MANUfACTURE Of ETHYlENE AND PROPYlENE. THE PROCESS HAS A SIgNIfICANTlY lOWER CARBON fOOTPRINT THAN THE CONVENTIONAl PYROlYSIS ROUTES TO THESE END PRODUCTS. Dennis Calton, President, Oil & gas

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planned to achieve the grade ‘Excellent’ for new build and ‘Very Good’ for refurbishment.

Similar to our capabilities in sustainable building, we have developed a Carbon Assessment Tool (the KBR CAT) to aid in calculating carbon emissions and embodied energy associated with construction and ongoing operation of infrastructure and facilities. The KBR CAT is complimented by another tool, the KBR MAC. The KBR MAC, a Marginal Abate-ment Cost tool has been developed for projects where KBR is tasked to examine a series of engineering options. It is used to evaluate and compare emission abatement measures, including the purchase of permits from the carbon market.

1: TRIg Demonstration Unit; 2: KBR leatherhead Campus; 3: North Hoyle Offshore Wind farm

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Accreditation Employees

LEED (US) 91

Green Building Initiative (US)

Other

Green Advantage (US)

BREEAM (UK)

CEEQUAL (UK)

Greenstar (Australia)

Total

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110

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where we deliver it

29 Aspire, UK 29 North County Waste-to-Energy, U.S

29 Escravos, Nigeria

30 gorgon, Barrow Island

30 Christies Beach Upgrade, South Australia (SA)

30 Sydney’s Desalination Pipeline, Sydney, Australia 31 lOgCAP III, Iraq, Afghanistan and Kuwait

31 Pearl, qatar

26 USAREUR Balkans Support Contract, Kosovo, Hungary, Croatia, Macedonia, and Bosnia

32 Tangguh, Indonesia

lOCAl CONTENT IS IMPORTANT ON MOST Of OUR INTERNATIONAl PROjECTS. THIS YEAR, WE HAVE OPENED OffICES IN ANgOlA, SAUDI ARABIA AND KAZAKHSTAN TO ADDRESS lOCAl CONTENT REqUIREMENTS. Of THE 5,730 OR SO WORK fORCES ON ESCRAVOS, NOT MORE THAN 200 ARE fROM OUTSIDE NIgERIA.Roy Oelking, group President, Hydrocarbons

KBR is committed to seeking suppliers and contractors who add value to our company and to the customers we serve.

As part of this commitment, we con-tinually seek to provide opportunities for Minority and Women-owned Business Enterprises (MWBE’s) which offer goods, subcontracting services, and professional services on a competitive basis. Addition-ally, the company strives to promote the economic growth of the MWBE com-munity by offering technical assistance and counsel to such businesses, enabling them to qualify as suppliers to the company. In 2010, on KBR’s Boeing South Carolina 787 Expansion project, more than 27 percent of the $187 million of available trade direct volume awarded was committed to diverse firms certified as Minority Business Enterprise, Women’s Business Enterprise and Veterans Business Enterprise.

Similarly, on our international projects, local content is key to meeting client,

community and country expectations. Local content includes hiring and training of local workforces, as well as working with local vendors, suppliers and service providers, in order to qualify as them as suppliers for KBR. Our projects have created tens of thousands of jobs for local workforces and have spent millions of dollars with local businesses around the world, while providing opportunities to obtain marketable skills or improved contracting abilities and quality of products and services. One such example is our LOGCAP III contract, which by

March 2010, had spent more than $45 mil-lion on local hire payroll and local vendors

and suppliers in Iraq and Afghanistan. We provide craft skill training to our local workforces in welding, fitting and other trades, such as equipment operating and security. On our Escravos GTL project, we partnered with our client, Chevron to train 200 potential welders in a commitment to move Nigerian workers from proficiency in basic labor skills to crafts skills.

Key to KBR’s success in supplier diversity and local content is our Procurement system which enables us to deliver repeat-able high quality results for our clients

and is approved by the U.S. Government. Our over 2,300 worldwide procurement

Where We Deliver It (Sustainability) on Projects 27

INITIATIVES lIKE IRAqI fIRST AND AfgHANI fIRST STRIVE TO BUY lOCAllY, AND HIRE AND TRAIN lOCAl WORKERS, THEIR fRIENDS AND fAMIlY. THIS ENHANCES THE RElA-TIONSHIP BETWEEN THE KBR PROjECT AND THE lOCAl RESIDENTS, WHIlE BOOSTINg THEIR ECONOMY.Ted Wright, President, NAg&D

Where We Deliver It (Sustainability) on Projects

WE HAVE OPENED AND ARE ExPENDINg TECHNOlOgY OffICES IN NEW DElHI AND BEIjINg, WHICH ARE All STAffED WITH lOCAl RESIDENTS – AN IMPORTANT ASPECT Of OUR glOBAl STRATEgY.john Rose, Executive Vice President, Operations

Aspire, UK Our joint venture project Allenby/Con-naught (PAC) is the largest infrastructure Private Finance Initiative (PFI) contract ever awarded by the Ministry of Defense. The project is developing a living and working environment for nearly 19,000 military personnel based in the garrisons at Aldershot and across Salisbury Plain. Key points to note include: 97 percent of demolition waste is crushed and re-used onsite, which avoids the landfill; this project represents the largest BREEAM certification project in the UK – over 410 buildings will achieve “Excellent” (new build) or “Very Good” (refurbished) in bespoke BREEAM standards – and; over 96 percent of timber procured is certified under internationally recognized sustain-able timber schemes (FSC or PEFC).

North County Waste-to-Energy, U.S. The North County Waste-to-Energy plant is a two-boiler refuse derived fuel waste to energy facility, burning approximately 1,800 tons per day of municipal solid waste. The project consists of EPC respon-sibility for a major refurbishment of the facility to extend its service life by an ad-ditional 20 years. Considered a signal event in KBR’s community outreach, a program titled QuickTrain for Veterans culminated in August 2010, with the graduation and hiring of ten local veterans referred to by Faith*Hope*Love*Charity, Inc., a local service organization dedicated to rebuilding the lives of homeless veterans. Within the local business community, the project team has awarded over $2.3 million in contracts to 14 certified MWSBE Palm Beach County firms.

Escravos, Nigeria Escravos Gas-to-Liquids (EGTL) will convert over 300 MMCFD of gas to 34,000 BPD GTL products for our client, Chevron Nigeria LTD & NNPC. The plant is located in Escravos, Nigeria, approximately 60 miles southeast of Lagos, the second most populous city in Africa. Key to our work in Nigeria has been the development of the local workforce. Since inception, the project has amassed some 1.4 million student hours and invests almost $29 million in human capital. Most recently, we have worked with our Chevron client to set up a welding school for the local workforce.

resources and over 18,000 worldwide suppliers and subcontractors allow us to positively impact local communities and businesses globally – in 2009, we spent more than $14 billion. We have numer-ous projects around the globe where labor, suppliers, vendors and materials must meet a certain percentage of local resourcing. As a profitable and successful business, KBR must be proficient, cost effective and successful in ensuring em-ployees, contractors and suppliers drawn from the local communities are able to be productive contributors to completing our projects within budget and schedule. We have made significant investments in local contactors and suppliers, identify-ing and supporting highly motivated business owners and helping them grow their capabilities. Additionally, we have extensive experience providing basic training, skills upgrading and professional development of local workforces around the world. We have successfully employed a consistent methodology on projects in Algeria, Nigeria, Chad, China, Brazil, Chile and Indonesia, including developing

areas and remote locations where there is little pre-existing infrastructure and limited availability of skilled labor.

Experience has shown that EPC projects provide excellent opportunities for fast-paced skill development and transfer of knowledge to locally hired employees. One of the first times KBR did this on a large scale was in 1983, on the National Fertilizer Company of Nigeria (NAFCON) ammonia plant project. As EPC contrac-tor for the plant and related facilities, KBR established a methodology for recruiting, training and qualifying local technical workers, which we have continued to use on major projects. Historically, for engineers, KBR estab-lished an engineering training program for Indonesian nationals in the 1980’s as part of a large development project for a petrochemical facility. Graduate engineers received training in EPC practices and procedures at our home offices in Houston. After the project was complete, the engineers returned to Indonesia

where they formed the nucleus of a large local engineering contractor in Jakarta. The company later became our joint venture partner in the Train ‘H’ Project at Bontang, East Kalimantan, Indonesia. Similarly, in China, we established an engineering center in Chengdu, PRC with CCECC, The Chinese Design Institute, in the 1990’s. While we continue this practice today, and bring engineers in to learn the KBR Way from a number of offices – including our New Delhi, India, office established in 2009 – we continue to become more integrated with the local communities and businesses where we establish new offices, as illustrated by our transition of our South Africa office.

Sustainability activities associated with some of KBR’s projects around the world are as follows:

Where We Deliver It (Sustainability) on ProjectsWhere We Deliver It (Sustainability) on Projects 2928

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1: Boeing South Carolina 787 Expansion; 2: Dubai freight forwarder Warehouse; 3: Escravos gas-to-liquids Project; 4: Allenby/Connaught Project; 5: North County Waste-to-Energy Project

SUSTAINABIlITY IS OfTEN fUNDAMENTAl TO OUR ClIENT RElATIONSHIP MANAgEMENT. THIS IS IllUSTRATED BY OUR ASPIRE DEfENSE PROjECT WHERE THE IMPlEMENTATION Of EffECTIVE SUSTAINABIlITY MEASURES HAS SUPPORTED THE SUCCESSfUl DElIVERY Of THIS MAjOR PROjECT. Andrew Pringle, President, International government & Defence

lOgCAP III, Iraq, Afghanistan and Kuwait The Logistics Civil Augmentation Program (LOGCAP) provides the U.S. Government with immediate, responsive, and easy access to specific logistics services worldwide, supporting warfight-ers, military deployments, and natural and manmade disasters.

KBR is a leader in the government services world contingency market by providing responsive logistics support to forces deployed around the world under the LOGCAP contract. KBR constructs facilities and manages the infrastructure for U.S. Army base camps – from beds and food service to laundry, sanitation and utilities. KBR also supports the Reception, Staging, Onward Movement and Integration (RSOI) process of U.S. forces as they enter or depart their theater of operation by sea, air or rail.

We have been deeply involved in the U.S. Afghani First and Iraqi First programs, working side by side with the soldiers in

their efforts. As of March 2010, KBR em-ployed an average of 1,901 Iraqi citizens, enabling the Iraqi workforce to enhance skills within their respective trade, which includes welding, auto mechanics, motor winding, painting, plumbing, masonry, etc. In early 2010, when KBR left Af-ghanistan, we employed 5,445 Afghan workers, with a total contribution to the Afghan economy of $29.1 million though Afghan sub-contracts, local purchase and payroll.

Pearl, qatar Pearl Gas to Liquids (GTL) is the largest FEED project contract by Shell Global Solutions, located in Ras Laffan, Qatar. When constructed, it will be the largest GTL plant in the world and will produce approximately 140,000 barrel per day.

Pearl GTL’s industrial water processing plant will be the world’s largest to recover, treat, and reuse industrial process water. With a capacity to treat 280,000 barrels of water per day, Pearl GTL’s water treatment plant is comparable to a plant for a city of 140,000 people. The amount that Pearl GTL will produce makes it possible to run the plant without drawing on Qatar’s scarce natural water resources.

With an estimated 52,000 people onsite at the peak of construction, a solution to house them close to the work site was cru-cial. In early 2008, the Pearl Village was officially opened, with at least 68 different nationalities represented. KBR manages Pearl Village, including the Welfare Team, as part of its scope.

Twice yearly, the Welfare Team helps to organize and produce Safety Day – an event in which all Village residents are invited for a celebration of safety success on the project. Volunteers have at-tended and helped during beach cleanup campaigns. Charity initiatives have also benefitted local foundations, such as an auction for the benefit of Qatar Charity Foundation.

gorgon, Barrow Island As part of a joint venture, KBR is leading the design of the Liquefied Natural Gas (LNG) facility on Barrow – a remote Class A nature reserve, located 43 miles off the northwest coast of Western Australia. Core to the project’s planning and success is a meticulous and robust environmental management system. An example of minimizing impact includes development of turtle-friendly lighting on a rock groin projecting over 4,100 feet into the ocean, between two turtle nesting beaches, so as not to affect breeding or interfere with the hatchlings. The recently-completed Carbon Dioxide Seismic Baseline Survey of Barrow Island is an important step in the development of the Gorgon Project’s groundbreaking CO2 injection project.

Christies Beach Upgrade, South Australia (SA) KBR, in conjunction with United Water, is delivering the Christies Beach Upgrade Project under an EPC management contract for SA Water Corporation. The project involves the upgrade of the Christies Beach wastewater treatment plant. KBR has been involved in the project’s full life cycle, including option development, feasibility analysis, concep-tual design, detailed design, construction packaging, procurement, construction management and commissioning. The upgrade means that a series of sludge drying lagoons no longer required as part of the treatment process can be decom-missioned and converted into a storm water wetland. The Australian Institute of Project Management selected Christies Beach as Biosolids Reuse Project of the Year in the 2010 Australian Achievement Awards, and the project also received a commendation in the category of Environment and Sustainability at the 2010 South Australian Engineering Excellence Awards.

Sydney’s Desalination Pipeline, Sydney, Australia KBR undertook design and construction of nearly 5 miles of marine pipeline though areas of sensitive sea grass mead-ows in Botany Bay, and just over 6.2 miles of land-based pipeline through high-density industrial and residential areas. This project received an award from the NSW Civil Contractors Federation (CCF) Earth Awards in the category of ‘Projects over AUS $75 Million and a second from Infrastructure Partnerships Australia’s National Infrastructure Awards, winning the Government Partnership Excellence Award.

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THE PEARl PROjECT HAS OUTSTANDINg RESUlTS fOR A PROjECT THAT HAS APPROACHED 500,000,000 HOURS WITH fEW INjURIES, ESPECIAllY IN THE lAST fEW YEARS WHERE THE PROjECT WON THE SHEll CHAIRMAN AWARD TWO YEARS IN A ROW. Mitch Dauzat, President, gas Monetization

1: gorgon lNg Project; 2: Christies Beach Upgrade Project; 3: Sydney Desalination Pipeline; 4: lOgAP III Dining facility; 5: Pearl gas-to-liquids Project

Where We Deliver It (Sustainability) on ProjectsWhere We Deliver It (Sustainability) on Projects

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USAREUR Balkans Support Contract, Kosovo, Hungary, Croatia, Macedonia, and Bosnia KBR has been providing full logistics support, temporary construction and associated services, to U.S. forces deployed in the Balkans region since 1995 – support was provided for 63 sites, spread over a 27,000 square mile area. The first major breakthrough in onsite recovery of resources was the wastewater biosolids composting operation, including a land farming operation to bio-remediate petroleum contaminated soil. This operation avoids a major expense and any possible environmental liabilities of transporting a hazardous waste across international borders.

Tangguh, Indonesia The Tangguh LNG facility is a two-train grassroots, green field project, built in the remote eastern Indonesian province of Papua (Irian Jaya) nearly 1,990 miles east of the Indonesian capital of Jakarta. KBR performed the work in a joint venture with JGC Corporation of Japan, supported by a local Indonesian company, PT Pertafenikki, and staff from KBR’s Jakarta Engineering Center. Local content was extremely critical in our efforts as part of this project, as it provides opportunity for regional indigenous personnel. KBR’s peak workforce of 9,000 employees included nearly 3,000 regional (Papuan) personnel, with the remainder

of the nationals originating from more developed regions of Indonesia, resulting in a site workforce comprised of over 98.5 percent Indonesian national personnel. Overall, local Indonesian content achieved by the project exceeded a robust 40 percent against the 30 percent contractual minimum.

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1: Tangguh lNg facility; 2: Camp Bondsteel

Where We Deliver It (Sustainability) on Projects

KBR DEVElOPED AND IMPlEMENTED THE qUICKTRAIN PROgRAM AS A MEANS TO PROVIDE OPPORTUNITIES fOR PEOPlE IN ClOSE PROxIMITY TO THE SITE TO TRAIN IN PREPARATION fOR EMPlOYMENT IN KBR’S WORKfORCE. Darrell Hargrave, Senior Vice President, Industrial Services

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Dear valued Stakeholder 2 Report/KBR...Letter from Bill Utt 3 Dear Valued Stakeholder, It is with great pride that I welcome you to share in the inaugural issue of KBR’s Sustainability

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