KBR, Inc. (KBR) is an international construction, engineering, and services company supporting the energy, government, and civil infrastructure sectors. The Company operates in four segments:Hydrocarbons; Infrastructure, Government & Power ("IGP"); Services; and Other. Revenue from operations in Iraq were 29%, 35%, and 43% of revenue in 2010, 2009, and 2008 respectively, marking decreasing revenues as the war in Iraq winds down. Despite these losses, KBR is partially sheltered from the recession in the United States as a result of extensive operations abroad in countries such as Kazakhstan, Saudi Arabia, and Australia.
Almost 80% of KBR's revenue comes from operations abroad, including operations in Iraq and Afghanistan. As the wars in these two theaters come to an end, revenue will decrease. Revenue from IGP, the segment that deals with contracting in war zones, decreased by 32% between 2009 and 2010. Revenue decreased from $6.3 billion to $4.3 billion in 2009 and 2010 respectively.
Approximately half of KBR's revenues come from government contracts in war zones such as Afghanistan and Iraq. As operations in Iraq came to an end, KBR incurred a $2 billion loss as a result of decreasing U.S. military need. Furthermore, as international allies end their operations in these theaters, they will have to rely on KBR less for material support.
Revenue from international operations has increased to nearly 80% of KBR's total earnings. Though KBR is largely reliant on U.S. and Western government contracts, it has expanded into areas such as Central Asia and the Persian Gulf. These projects namely include building infrastructure for emerging nations; KBR has announced multi-billion dollar contracts to help build mines in Australia and with Rio Tinto and Hancock Prospecting.
KBR competes directly with a growing industry of government contracts that emerged to take advantage of spending in the aftermath of the terrorist attacks of 9/11, as well as traditional engineering and construction companies. These companies include: