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KBR, Kbr, Inc.

Construction & Engineering capital-intensive Serial acquirer

KBR, Inc., a Delaware corporation, delivers science, technology, engineering and logistics support solutions to the U.S. federal government, allied nations and commercial clients around the world .

We leverage dynamic teams that combine deep mission understanding, market-leading technical expertise and an unwavering operational focus to deliver solutions to solve our clients' most complex issues.

KBR delivers full life cycle support solutions to defense, intelligence, space, aviation and other programs and missions to military and other government agencies primarily in the U.S., U.K. and Australia under long-term programs with key technical, scientific or mission-specific differentiation.

Latest annual: FY2026 10-K

KBR · Kbr, Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026

$7.8B

+1.0% YoY · 6% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $7.7B 5-yr avg $7.3B

Gross margin 14% 5-yr avg 13%

Operating margin 9.8% 5-yr avg 6.7%

ROIC 14% 5-yr avg 10%

Owner-earnings margin 7% 5-yr avg 5%

Free cash flow margin 7% 5-yr avg 5%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is MTS (72%) and STS (28%).
Situation: Serial acquirer. Goodwill and acquired intangibles are 52% of assets, with meaningful acquisition spending in 5 of the record's 10 years; much of what this business is was bought, at prices the record carries.
What moves the needle: Gross margin has run about 12% and operating margin about 6.3% through the cycle, a thin spread that turns the result on volume and the cost of what it sells far more than on the price it sets. On a spread this thin the operating result swings hard on small moves in cost or volume — it has ranged from 0.7% to 10% over the years, so the cost line is where the needle moves. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 13%). By owner earnings: roughly 4% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

The largest slice of sales is MTS at 72%, but the profit engine is STS: 28% of revenue and 51% of the profitable segments' operating profit. Corporate ran a $162M operating loss.

Revenue by reportable segment, FY2026

Operating profit profitable segments only

MTS72%$5.6B49% of profit
STS28%$2.2B51% of profit
Corporate0%$0loss of $162M

By geographyUnited States55%Europe20%Middle East10%Australia7%Africa3%Other3%Asia2%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of the profitable segments' operating profit (a loss-making segment carries its loss in dollars in the legend, not a share of the bar), before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2026

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2025’25	2026’26	TTMTTMApr 2026
											Income statement
$4.3B	$4.2B	$4.9B	$5.6B	$5.8B	$7.3B	$6.6B	$7.0B	$7.7B	$7.8B	$7.7B	RevenueRevenue
3%	11%	12%	12%	12%	11%	13%	14%	14%	15%	14%	Gross marginGross mgn
3%	6%	6%	6%	6%	5%	6%	7%	7%	7%	7%	SG&A / revenueSG&A/rev
$28M	$264M	$468M	$362M	$57M	$231M	$343M	$449M	$659M	$778M	$756M	Operating incomeOp. inc.
0.7%	6.3%	9.5%	6.4%	1.0%	3.1%	5.2%	6.5%	8.5%	10.0%	9.8%	Operating marginOp. mgn
($61M)	$432M	$281M	$202M	($63M)	$27M	$190M	($265M)	$375M	$415M	$401M	Net incomeNet inc.
—	—	23%	23%	—	—	33%	—	26%	27%	28%	Effective tax rateTax rate
											Cash flow & returns
$61M	$193M	$165M	$256M	$367M	$278M	$396M	$331M	$462M	$557M	$576M	Operating cash flowOp. cash
$45M	$48M	$63M	$104M	$115M	$146M	$137M	$141M	$156M	$169M	$169M	DepreciationDeprec.
$59M	($299M)	($179M)	($50M)	$315M	$105M	$69M	$455M	($69M)	($27M)	($6M)	Working capital & otherWC & other
$11M	$8M	$17M	$20M	$20M	$30M	$71M	$62M	$52M	$42M	$52M	CapexCapex
0.3%	0.2%	0.3%	0.4%	0.3%	0.4%	1.1%	0.9%	0.7%	0.5%	0.7%	Capex / revenueCapex/rev
$50M	$185M	$148M	$236M	$347M	$248M	$325M	$269M	$410M	$515M	$524M	Owner earningsOwner earn.
1.2%	4.4%	3.0%	4.2%	6.0%	3.4%	5.0%	3.9%	5.3%	6.6%	6.8%	Owner earnings marginOE mgn
$50M	$185M	$148M	$236M	$347M	$248M	$325M	$269M	$410M	$515M	$524M	Free cash flowFCF
1.2%	4.4%	3.0%	4.2%	6.0%	3.4%	5.0%	3.9%	5.3%	6.6%	6.8%	Free cash flow marginFCF mgn
$911M	$4M	$354M	$0	$832M	$399M	$73M	$0	$738M	$14M	$14M	AcquisitionsAcquis.
$46M	$45M	$44M	$46M	$54M	$61M	$66M	$72M	$79M	$84M	$85M	Dividends paidDiv. paid
$4M	$53M	$3M	$4M	$51M	$82M	$203M	$138M	$218M	$329M	—	BuybacksBuybacks
2%	21%	16%	12%	—	4%	8%	—	13%	16%	14%	ROICROIC
-8%	35%	17%	11%	-4%	2%	12%	-19%	26%	28%	25%	Return on equityROE
−14%	31%	14%	8%	−7%	−2%	8%	−24%	20%	22%	20%	Retained to equityRetained/eq
											Balance sheet
$536M	$439M	$739M	$712M	$436M	$370M	$389M	$304M	$342M	$500M	$380M	Cash & investmentsCash+inv
$535M	$350M	$546M	$572M	$574M	$1.0B	$637M	$593M	$772M	$712M	$706M	Accounts payablePayables
$2.0B	$1.4B	$2.0B	$2.0B	$1.6B	$2.2B	$1.7B	$1.7B	$1.9B	$2.1B	$1.9B	Current assetsCur. assets
$1.6B	$1.1B	$1.4B	$1.5B	$1.5B	$1.9B	$1.8B	$1.6B	$1.8B	$1.7B	$1.7B	Current liabilitiesCur. liab.
1.3×	1.3×	1.4×	1.3×	1.1×	1.1×	1.0×	1.1×	1.1×	1.2×	1.2×	Current ratioCurr. ratio
$959M	$968M	$1.3B	$1.3B	$1.8B	$2.1B	$2.1B	$2.1B	$2.6B	$2.7B	$2.7B	GoodwillGoodwill
$4.1B	$3.7B	$5.1B	$5.4B	$5.7B	$6.2B	$5.6B	$5.6B	$6.7B	$6.6B	$6.6B	Total assetsAssets
$650M	$470M	$1.2B	$1.2B	$1.6B	$1.9B	$1.7B	$1.8B	$2.6B	$2.6B	$2.6B	Total debtDebt
$114M	$31M	$509M	$498M	$1.2B	$1.5B	$1.4B	$1.5B	$2.2B	$2.1B	$2.2B	Net debt / (cash)Net debt
2.2×	12.6×	7.1×	3.7×	0.8×	2.9×	3.9×	3.9×	4.6×	4.9×	4.9×	Interest coverageInt. cov.
$757M	$1.2B	$1.7B	$1.8B	$1.6B	$1.7B	$1.6B	$1.4B	$1.5B	$1.5B	$1.6B	Shareholders’ equityEquity
0.4%	0.3%	—	—	—	—	—	—	—	—	0.2%	Stock comp / revenueSBC/rev
											Per share
142M	141M	141M	142M	142M	141M	156M	135M	134M	129M	127M	Shares out (diluted)Shares
$30.06	$29.58	$34.84	$39.71	$40.61	$52.05	$42.08	$51.53	$57.54	$60.36	$60.56	Revenue / shareRev/sh
$-0.43	$3.06	$1.99	$1.42	$-0.44	$0.19	$1.22	$-1.96	$2.80	$3.22	$3.16	EPS (diluted)EPS
$0.35	$1.31	$1.05	$1.66	$2.44	$1.76	$2.08	$1.99	$3.06	$3.99	$4.13	Owner earnings / shareOE/sh
$0.35	$1.31	$1.05	$1.66	$2.44	$1.76	$2.08	$1.99	$3.06	$3.99	$4.13	Free cash flow / shareFCF/sh
$0.32	$0.32	$0.31	$0.32	$0.38	$0.43	$0.42	$0.53	$0.59	$0.65	$0.67	Dividends / shareDiv/sh
$0.08	$0.06	$0.12	$0.14	$0.14	$0.21	$0.46	$0.46	$0.39	$0.33	$0.41	Cap. spending / shareCapex/sh
$5.33	$8.72	$12.04	$12.95	$11.13	$11.84	$10.38	$10.24	$10.84	$11.65	$12.47	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	10-yr	5-yr
Revenue / share	+7.2%/yr	+3.0%/yr
Owner earnings / share	+27.5%/yr	+17.8%/yr
EPS	—	+75.8%/yr
Dividends / share	+7.2%/yr	+8.5%/yr
Capital spending / share	+15.4%/yr	+8.9%/yr
Book value / share	+8.1%/yr	−0.3%/yr

The record, charted

FY2016–2026

Each measure over its full record; the current point and the worst year marked.

Share count

129Mpeak FY2022

ROIC

16%low FY2016

Gross margin

15%low FY2016

Net debt ÷ owner earnings

4.1×peak FY2021

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$515Mowner earningsvs.$415Mnet incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2026

Owner-earnings bridge

FY2021–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business turned $415M of profit into $515M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$415M

Owner earnings$515M · 7% of revenue

	FY2026	FY2025	FY2023	FY2022	FY2021
Reported net income	$415M	$375M	($265M)	$190M	$27M
Depreciation & amortizationnon-cash charge added back	+$169M	+$156M	+$141M	+$137M	+$146M
Working capital & othertiming of cash in and out, other non-cash items	−$27M	−$69M	+$455M	+$69M	+$105M
Cash from operations	$557M	$462M	$331M	$396M	$278M
Capital expenditurecash put back in to keep running and to grow	−$42M	−$52M	−$62M	−$71M	−$30M
Owner earnings	$515M	$410M	$269M	$325M	$248M
Owner-earnings marginowner earnings ÷ revenue	7%	5%	4%	5%	3%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 4.9×

Adequate

Operating income $778M ÷ interest expense $158M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $2.1B · 2.7× operating profit

Meaningful net debt

Cash $500M − debt $2.6B

What this means
Netting $500M of cash and short-term investments against $2.6B of debt leaves $2.1B owed, about 2.7× a year's operating profit (3.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 12%

Solid through the cycle

8-yr median, range 2%–21%; 16% latest = NOPAT $565M ÷ invested capital $3.6B

Industry peers: median 8%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 16% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 4%

Thin through the cycle

10-yr median margin, range 1%–7%; latest $515M = operating cash $557M − maintenance capex $42M

Industry peers: median 3%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 7% of revenue this year, a 4% median across 10 years. Treating stock comp as the real expense it is (less $12M of SBC) leaves $503M.
Are earnings backed by cash? 1.34×

Cash-backed

Cash from ops $557M ÷ net income $415M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 80%

Returns about half

Dividends + buybacks $413M ÷ Owner Earnings $515M

What this means
Of $515M Owner Earnings, $413M (80%) went back to shareholders, $84M dividends, $329M buybacks. Net of $12M stock comp, the real buyback was about $317M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.25×

Harvesting

Capex $42M ÷ depreciation $169M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $7.8B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.22×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $2.6B vs $363M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 3 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −19%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.38/share (latest year $3.27), the averaged base the calculator's gate runs on, and book value is $11.85/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2026

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 7 of 10

What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 3 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 6% → 8% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 6% early to 8% lately, median 6% — pricing power intact or improving.
Reinvestment, incremental ROIC 13%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +15%/yr

What this means
Owner earnings grew about 15% a year over the record.
Worst year 2016 · 0.7% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −1.0%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Named as a competitive risk

Its FY2026 10-K names artificial intelligence as a competitive threat.

“We will also need to continue to respond to and anticipate changes resulting from disruptive technologies, including in areas of artificial intelligence and machine learning.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 3, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$1.9B

Cash & short-term investments$380M
Receivables$1.8B

Current liabilities$1.7B

Debt due within a year$49M
Accounts payable$706M
Other current liabilities$929M

Current ratio1.16×all current assets ÷ what's due · Graham looked for 2×

Quick ratio—inventory untagged this quarter, so withheld rather than shown equal to the current ratio

Cash ratio0.23×strictest: cash alone against what's due

Working capital$263Mthe cushion left after near-term bills

Debt due this year vs. cash$49M due · $380M cash covered by cash on hand, no refinancing forced · both figures from the Apr 3, 2026 balance sheet

Revenue, latest quarter vs. a year ago−4.7%the freshest read on whether the business is still growing

Current ratio, recent quarters1.1× → 1.2×

Deeper floors

Tangible book value($1.8B)equity stripped of goodwill & intangibles

Net current asset value($3.1B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$2.9B$284M of it operating leases; with finance leases, “total fixed claims” below reaches $2.9B (annual-report basis)

Deferred revenue$330Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$76M

'27$66M

'28$60M

'29$51M

'30$36M

later$67M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$76Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$356Mevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$301Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$2.6B

Lease obligations (present value)$301M

Total fixed claims on the business$2.9B

Counting the leases the way Buffett does, the fixed claims on this business come to $2.9B, of which the leases are 10%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Jan 2, 2026 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2026

Over the record, the business generated $3.1B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$333M · 11%
Dividends$597M · 19%
Buybacks$1.1B · 35%
Retained (debt / cash)$1.1B · 34%

Returned to owners$1.7B
62% of the owner earnings the business produced over the span, $597M as dividends and $1.1B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $1.9B and cash and short-term investments fell $156M.
Average price paid for buybacks$43.30
Across the years where the filing reports a share count, 25M shares were bought for $1.1B, about $43.30 each. Year to year the price paid ranged from $14.99 (2017) to $61.52 (2025); its heaviest year, 2026, paid $49.48 ($329M).
Net change in share count−10.6%
The diluted count fell from 142M to 127M, so the buybacks outran the stock issued to staff.
Dividend record$0.65/sh
Paid in 10 of the years on record, the per-share dividend growing about 8% a year. It was never cut over the span.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$3.4B52% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$3.3Bover 10 years buying other businesses, against $333M of capital spent building

$99M written down across 1 year (2020): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Bradie	$12.0M	$22.5M	$248M
2022	Mr. Bradie	$12.6M	$17.0M	$325M
2023	Mr. Bradie	$12.7M	$16.0M	$269M
2025	Mr. Bradie	$12.6M	$13.4M	$410M
2026	Mr. Bradie	$11.6M	$4.9M	$515M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership1.2%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio134:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$12M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Kbr, Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2026.

1 of the 5 tests turned up something to look into; the other 4 came back clean.

Look hereDid debt outgrow the business?$650M → $2.6B
Debt rose from $650M to $2.6B while owner earnings went from about $128M to $398M — about 5.1 years of owner earnings in debt then, about 6.5 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2026

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Acquisitions, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Construction & Engineering

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
FLRFluor Corporation	$15.5B	3%	1.2%	8%	0%
JJacobs Solutions	$12.0B	25%	4.4%	6%	5%
KBRKbr, Inc.	$7.8B	12%	6.4%	13%	4%
PRIMPrimoris Services	$7.6B	11%	4.5%	12%	2%
DYDycom Industries	$5.5B	—	6.4%	10%	3%
GVAGranite Construction	$4.4B	11%	2.2%	4%	1%
ROADConstruction Partners	$2.8B	15%	7.0%	8%	5%
STRLSterling Infrastructure	$2.5B	15%	7.6%	16%	8%
Group median	—	12%	5.4%	9%	4%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Kbr, Inc. has delivered.

Kbr, Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Kbr, Inc. earns about $336M on its 4.3% median owner-earnings margin. This year’s 6.6% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($336M) Net of stock comp (−$12M) Steady-state · maintenance capex ($534M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’26+10%/yr

Owner-earnings growth · ’16→’26+15%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’26)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $524M on 127M shares outstanding, per the 10-Q cover, as of 2026-04-22; net debt $2.2B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($52M) runs well above depreciation ($169M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $534M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh KBR against another business →

The owners of KBR: the meeting and the votes →

Cite: Owner Scorecard, "Kbr, Inc. (KBR), the owner's record," https://ownerscorecard.com/c/KBR, data as of 2026-07-09.

Manual order: ← KBH its page in the Manual KD →

Industry order: ← KAZR the Construction & Engineering chapter LGN →