


Sincerely, | |||
Stuart J. B. Bradie | |||
President and Chief Executive Officer | |||
KBR, Inc. | |||

Sincerely, | |||
Michael LaRouche | |||
President and Chief Executive Officer | |||
Trinzic, Inc. | |||
What is Trinzic and why is KBR separating Trinzic’s business and distributing Trinzic common stock? | Trinzic, which is currently a wholly owned subsidiary of KBR, was formed to hold KBR’s Mission Technology Solutions segment. The separation of Trinzic from KBR and the distribution of Trinzic common stock are intended to provide you with equity investments in two separate, publicly traded companies that will be able to focus on each of their respective business strategies. KBR and Trinzic believe that the separation will result in enhanced long-term performance of each business for the reasons discussed in the sections entitled “The Separation and Distribution—Background” and “The Separation and Distribution—Reasons for the Separation.” | ||
Why am I receiving this document? | KBR is delivering this document to you because you are a holder of KBR common stock. If you are a holder of KBR common stock as of the close of business on [•], 2026, the record date for the distribution, you will be entitled to receive [•] share[s] of Trinzic common stock for every [•] share[s] of KBR common stock that you held at the close of business on such date. This document will help you understand how the separation and distribution will affect your investment in KBR and your investment in Trinzic after the separation. | ||
How will the separation of Trinzic from KBR and the distribution work? | As part of the separation, and prior to the completion of the distribution, KBR and its subsidiaries expect to complete an internal reorganization in order to transfer the Mission Technology Solutions segment to Trinzic. To accomplish the distribution, KBR will distribute at least 80.1% of the outstanding shares of Trinzic common stock to KBR stockholders on a pro rata basis in a distribution intended to be tax-free for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. | ||
Why is the separation of Trinzic structured as a distribution? | KBR believes that a distribution of shares of Trinzic common stock to KBR stockholders that is intended to be tax-free for U.S. federal income tax purposes, except to the extent that cash is received in lieu of fractional shares, is an efficient way to separate the Mission Technology Solutions segment in a manner that will create long-term value for KBR and its stockholders. | ||
What is the record date for the distribution? | The record date for the distribution will be [•], 2026. | ||
When will the distribution occur? | It is expected that at least 80.1% of the shares of Trinzic common stock will be distributed by KBR on [•], 2027, to holders of record of KBR common stock at the close of business on [•], 2026, the record date for the distribution. | ||
What do stockholders need to do to participate in the distribution? | Stockholders of KBR as of the record date for the distribution will not be required to take any action to receive Trinzic common stock in the distribution, but you are urged to read this entire information statement carefully. No stockholder approval of the distribution is required. You are not being asked for a proxy. You do not need to pay any consideration, exchange or surrender your existing shares of KBR common stock, or take any other action to receive your shares of Trinzic common stock. Please do not send in your KBR stock certificates. The distribution will not affect the number of outstanding KBR shares or any | ||
rights of KBR stockholders, although it will affect the market value of each outstanding share of KBR common stock. | |||
How will shares of Trinzic common stock be issued? | You will receive shares of Trinzic common stock through the same or substantially similar channels that you currently use to hold or trade shares of KBR common stock, whether through a brokerage account or other channel. Receipt of shares of Trinzic common stock will be documented for you in substantially the same manner that you typically receive stockholder updates, such as monthly broker statements. If you own shares of KBR common stock as of the close of business on the record date for the distribution, including shares owned in certificate form, KBR, with the assistance of Equiniti Trust Company, LLC (“Equiniti”), the settlement and distribution agent, will electronically distribute shares of Trinzic common stock to you or to your brokerage firm on your behalf in book-entry form. Equiniti will mail you a book-entry account statement that reflects your shares of Trinzic common stock, or your bank or brokerage firm will credit your account for the shares. | ||
How many shares of Trinzic common stock will I receive in the distribution? | KBR will distribute to you [•] share[s] of Trinzic common stock for every [•] share[s] of KBR common stock held by you as of the record date for the distribution. Based on approximately [•] shares of KBR common stock outstanding as of [•], 2026, assuming a distribution of [•]% of the shares of Trinzic common stock and applying the distribution ratio (without accounting for cash to be distributed in lieu of fractional shares), Trinzic expects that a total of approximately [•] shares of Trinzic common stock will be distributed to KBR’s stockholders. For additional information on the distribution, see the section entitled “The Separation and Distribution.” | ||
Will Trinzic issue fractional shares of its common stock in the distribution? | No. Trinzic will not issue fractional shares of its common stock in the distribution. Fractional shares that KBR stockholders would otherwise have been entitled to receive will be aggregated into whole shares and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed pro rata (based on the fractional share such holder would otherwise be entitled to receive) to those stockholders who would otherwise have been entitled to receive fractional shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares. The receipt of cash in lieu of fractional shares will generally be taxable to the recipient stockholders for U.S. federal income tax purposes as described in the section entitled “Material U.S. Federal Income Tax Considerations.” | ||
What are the conditions to the distribution? | The distribution is subject to the satisfaction (or, to the extent permitted by applicable law, waiver by KBR in its sole discretion) of the following conditions: • the U.S. Securities and Exchange Commission (the “SEC”) will have declared effective the registration statement on Form 10 of which this information statement forms a part, no stop order relating to the registration statement will be in effect, no proceedings seeking such a stop order will be pending before or threatened by the SEC, and this information statement will have been distributed to KBR stockholders; | ||
• the shares of Trinzic common stock to be distributed will have been approved and accepted for listing by the NYSE, subject to official notice of distribution; • KBR will have received a private letter ruling from the U.S. Internal Revenue Service (the “IRS”) and opinions of Wilmer Cutler Pickering Hale and Dorr LLP and Baker & McKenzie LLP, tax counsel to KBR, regarding the qualification of the distribution, together with certain related transactions, as a reorganization under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”); • all registrations, consents, and filings required under applicable U.S. federal, U.S. state, or other securities laws will have been received or made; • no order, injunction, or decree issued by any government entity of competent jurisdiction, or other legal restraint or prohibition, preventing the consummation of the distribution or any of the related transactions will be pending, threatened, issued, or in effect, and no other event outside of KBR’s control will have occurred or failed to occur that prevents the consummation of all or any portion of the distribution or any related transactions contemplated by the separation and distribution agreement by and between KBR and Trinzic (the “separation agreement”) or by the separation plan, including the internal reorganization; • the internal reorganization will have been effectuated prior to the distribution, except for such steps (if any) as KBR in its sole discretion will have determined need not be completed or may be completed after the effective time of the distribution; • an independent appraisal or valuation firm acceptable to KBR will have delivered one or more opinions to the KBR board of directors at the times selected by the KBR board of directors confirming the solvency and adequacy of surplus under Delaware law of KBR prior to the distribution and the solvency of KBR and Trinzic after consummation of the financing transactions described in the section entitled “Description of Certain Indebtedness,” the transfer by KBR Holdings, LLC, a direct, wholly owned subsidiary of KBR (“KBR Holdings”), to KBR of an amount in cash equal to a portion of the proceeds of the financing transactions (the “Internal Cash Distribution”) and the distribution; • the KBR board of directors will have declared the distribution and approved all related transactions (and such declaration or approval will not have been withdrawn); • the agreements relating to the separation will have been duly executed and delivered by KBR and Trinzic; | |||
• the financing transactions as described in the section entitled “Description of Certain Indebtedness” will have been completed and the Internal Cash Distribution will have been paid to KBR; and • no other event or development will have occurred or exist that, in the judgment of the KBR board of directors, at its sole and absolute discretion, makes it inadvisable to effect the internal reorganization, distribution and other transactions contemplated by the separation agreement. KBR and Trinzic cannot assure you that any or all of these conditions will be met, or that the distribution will be consummated even if all of these conditions are met. KBR can decline at any time to go forward with the distribution. In addition, each of these conditions may be waived by KBR (to the extent permitted by applicable law). If the distribution is completed and the KBR board of directors waived any such condition, such waiver could have a material adverse effect on Trinzic’s business and financial statements, the trading price of Trinzic common stock, or the ability of Trinzic stockholders to sell their shares after the distribution, including, without limitation, as a result of illiquid trading due to the failure of Trinzic common stock to be accepted for listing. If KBR elects to proceed with the distribution notwithstanding that one or more of the conditions to the distribution has not been met, KBR will evaluate the applicable facts and circumstances at that time and make such additional disclosure and take such other actions as KBR determines to be necessary and appropriate in accordance with applicable law. For a complete discussion of all of the conditions to the distribution, see the section entitled “The Separation and Distribution—Conditions to the Distribution.” | |||
What is the expected date of completion of the separation and distribution? | The completion and timing of the separation and distribution are dependent upon a number of conditions. It is expected that the shares of Trinzic common stock will be distributed by KBR at [•], Eastern time, on [•], 2027 to the holders of record of shares of KBR common stock at the close of business on [•], 2026, the record date for the distribution. However, no assurance can be provided as to the timing of the separation or that all conditions to the distribution will be met. | ||
Can KBR decide to cancel the distribution of Trinzic common stock even if all the conditions have been met? | Yes. The distribution is subject to the satisfaction or waiver (to the extent permitted by applicable law) of certain conditions. See the section entitled “The Separation and Distribution—Conditions to the Distribution.” Until the distribution has occurred, KBR has the right to terminate or modify the distribution, even if all of the conditions are satisfied. | ||
What if I want to sell my KBR common stock or my Trinzic common stock? | You should consult with your financial advisors, such as your stockbroker, bank, or tax advisor. | ||
What is “regular-way” and “ex-distribution” trading of KBR stock? | Beginning on or shortly before the record date for the distribution and continuing up to and through the distribution date, it is expected that there will be two markets in KBR common stock: a “regular-way” market and an “ex-distribution” market. Shares of KBR common stock that trade in the “regular-way” market will trade with an entitlement to shares of Trinzic common stock distributed pursuant to the distribution. Shares that trade in the “ex-distribution” market will trade without an entitlement to shares of Trinzic common stock distributed pursuant to the distribution. | ||
If you decide to sell any shares of KBR common stock before the distribution date, you should make sure your stockbroker, bank, or other nominee understands whether you want to sell your KBR common stock with or without your entitlement to Trinzic common stock pursuant to the distribution. | |||
Where will I be able to trade shares of Trinzic common stock? | Trinzic intends to apply to list its common stock on the NYSE under the symbol “TZIC.” Trinzic anticipates that trading in shares of its common stock will begin on a “when-issued” basis on or shortly before the record date for the distribution and will continue up to the distribution date and that “regular-way” trading in Trinzic common stock will begin on the first trading day following the completion of the distribution. If trading begins on a “when-issued” basis, you may purchase or sell Trinzic common stock up to the distribution date, but your transaction will not settle until after the distribution date. Trinzic cannot predict the trading prices for its common stock before, on or after the distribution date. | ||
What will happen to the listing of KBR common stock? | KBR common stock will continue to trade on the NYSE after the distribution under the symbol “KBR.” | ||
Will the number of shares of KBR common stock that I own change as a result of the distribution? | No. The number of shares of KBR common stock that you own will not change as a result of the distribution. | ||
Will the distribution affect the market price of my KBR shares? | Yes. As a result of the distribution, KBR expects the trading price of shares of KBR common stock immediately following the distribution to be lower than the “regular-way” trading price of such shares immediately prior to the distribution because the trading price will no longer reflect the value of the Mission Technology Solutions segment held by Trinzic. The aggregate market value of the KBR common stock and Trinzic common stock following the separation may be higher or lower than the market value of KBR common stock if the separation did not occur. This means, for example, that the combined trading prices of one share of KBR common stock and [•] shares of Trinzic common stock after the distribution (representing the number of shares of Trinzic common stock to be received per every one share of KBR common stock in the distribution) may be equal to, greater than or less than the trading price of one share of KBR common stock before the distribution. | ||
What are the U.S. federal income tax consequences of the separation and the distribution? | KBR has submitted a request for a private letter ruling from the IRS and expects to receive opinions from Wilmer Cutler Pickering Hale and Dorr LLP and Baker & McKenzie LLP, tax counsel to KBR, regarding certain U.S. federal income tax consequences of the distribution and certain related transactions, in each case based on certain facts and representations and subject to certain qualifications and limitations. Although no assurance can be given that KBR will receive the private letter ruling, the distribution is conditioned upon, among other things, KBR’s receipt of such ruling and the opinions of tax counsel regarding the qualification of the distribution, together with certain related transactions, as a reorganization under Sections 355 and 368(a)(1)(D) of the Code. If the distribution so qualifies, then for U.S. federal income tax purposes, U.S. Holders (as defined in the section entitled “Material U.S. Federal Income Tax Considerations”) will not recognize a gain or loss or include any amount in taxable income (other | ||
than with respect to cash received in lieu of fractional shares) as a result of the distribution. See the section entitled “Material U.S. Federal Income Tax Considerations” for further information regarding the potential U.S. federal income tax considerations to KBR stockholders of the distribution, together with certain related transactions. You should consult your tax advisor as to the particular tax consequences of the separation and distribution to you, including the potential effects of any state, local, and non-U.S. tax laws. | |||
How will I determine my tax basis in the shares I receive in the distribution? | For U.S. federal income tax purposes, assuming that the distribution is tax-free to KBR stockholders, the tax basis in the KBR common stock that a KBR stockholder holds immediately prior to the distribution will be allocated between such stockholder’s shares of KBR common stock and the shares of Trinzic common stock received in the distribution (including any fractional share interest for which cash is received) in proportion to the relative fair market values of each on the distribution date. See the section entitled “Material U.S. Federal Income Tax Considerations” for a more detailed description of the effects of the distribution on KBR stockholders as it relates to the allocation of tax basis between shares of KBR common stock and Trinzic common stock. You should also consult your tax advisor regarding how your tax basis allocation will be determined based on your situation (including if your shares of KBR common stock were purchased at different times or for different amounts) and regarding any other particular tax consequences of the distribution to you, including the application of state, local, and non-U.S. tax laws. | ||
What will Trinzic’s relationship be with KBR following the separation and distribution? | Trinzic expects to enter into the separation agreement with KBR to effect the separation and provide a framework for Trinzic’s relationship with KBR after the separation and to enter into certain other agreements, including a transition services agreement, an employee matters agreement, a tax matters agreement, master services agreements, a sublease agreement, and a stockholder and registration rights agreement. These agreements will govern the separation between Trinzic and KBR of the assets, employees, liabilities, and obligations (including its investments, property, employee benefits, and tax-related assets and liabilities) of KBR and its subsidiaries attributable to periods prior to, at and after the separation and will govern certain relationships between Trinzic and KBR after the separation. Following the distribution, KBR will own up to 19.9% of the outstanding shares of Trinzic common stock. See the questions below entitled “How will KBR vote any shares of Trinzic common stock it retains?” and “What does KBR intend to do with any shares of Trinzic common stock it retains?” In addition, because of current or former positions with KBR, certain of Trinzic’s expected executive officers and directors may own equity interests in KBR, and continuing ownership of shares of KBR common stock and equity awards could create, or appear to create, potential conflicts of interest if Trinzic and KBR face decisions that could have implications for both KBR and Trinzic after the separation. For additional | ||
information regarding the separation agreement and other transaction agreements, see the sections entitled “Risk Factors—Risks Related to the Separation and our Relationship with KBR” and “Certain Relationships and Related Person Transactions.” | |||
How will KBR vote any shares of Trinzic common stock it retains? | KBR will agree to vote any shares of Trinzic common stock that it retains in proportion to the votes cast by Trinzic’s other stockholders and will grant Trinzic a proxy to vote its shares of Trinzic common stock in such proportion. For additional information on these voting arrangements, see the section entitled “Certain Relationships and Related Party Transactions—Stockholder and Registration Rights Agreement.” | ||
What is the accounting treatment of the spin-off? | As both the legal and accounting spinnee with respect to the spin-off, Trinzic will present its historical combined financial statements based on amounts historically recorded within KBR’s consolidated financial statements, and the net assets transferred in the distribution will be recorded at historical carrying values in accordance with Accounting Standards Codification (“ASC”) 505-60. In addition, KBR will derecognize the net assets of Trinzic upon distribution, with the offset recorded within equity, consistent with ASC 505-60-30. For more information regarding the accounting treatment of the spin-off, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.” | ||
What does KBR intend to do with any shares of Trinzic common stock it retains? | In the event KBR retains any shares of Trinzic common stock, the amount of such retention will not exceed 19.9% and KBR intends to dispose of all of Trinzic common stock that it retains after the distribution, including through (i) one or more subsequent exchanges of Trinzic common stock for KBR debt held by one or more investment banks, (ii) distributions of Trinzic common stock to KBR stockholders as dividends or in exchange for outstanding shares of KBR common stock and/or (iii) one or more public offerings or private sales, in each case, subject to market conditions and the relevant requirements of the private letter ruling that KBR has requested from the IRS. With respect to potential dispositions of Trinzic common stock described in clauses (i) and (ii) of the preceding sentence, KBR intends to undertake such dispositions during the [•]-month period following the distribution. To the extent KBR holds any Trinzic common stock at the end of such [•]-month period, KBR will dispose of such stock in one or more public offerings or private sales (including potentially through secondary transactions) as soon as practical, taking into account market conditions and sound business judgment, but in no event later than five years after the distribution. | ||
Who will manage Trinzic after the separation? | Trinzic benefits from having in place a management team with an extensive background in the industry in which the Mission Technology Solutions segment operates. Led by Michael LaRouche, who will be Trinzic’s Chief Executive Officer after the separation, Trinzic’s management team will possess deep knowledge of, and extensive experience in, its industry. For more information regarding Trinzic’s management, see the section entitled “Management.” | ||
Are there risks associated with owning Trinzic common stock? | Yes. Ownership of Trinzic common stock is subject to both general and specific risks, including those relating to Trinzic’s business, the industries in which it operates, its ongoing contractual relationships with KBR after | ||
the separation and its status as a separate, publicly traded company. Ownership of Trinzic common stock is also subject to risks relating to the separation. These risks are described in the section entitled “Risk Factors” beginning on page 18 of this information statement. You are encouraged to read that section carefully. | |||
Does Trinzic plan to pay dividends? | We have not yet determined the extent to which Trinzic will pay any dividends on its common stock. The payment of any dividends in the future, and the timing and amount thereof, is within the discretion of the Trinzic board of directors. The Trinzic board of directors’ decisions regarding the payment of dividends will depend on many factors, such as Trinzic’s financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in its then existing debt agreements, industry practice, legal requirements and other factors that the Trinzic board of directors deems relevant. Trinzic’s ability to pay dividends will depend on its ongoing ability to generate cash from operations and on its access to the capital markets. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if we commence paying dividends. See the section entitled “Dividend Policy.” | ||
What will govern my rights as a Trinzic stockholder? | Your rights as a Trinzic stockholder will be governed by Delaware law, as well as our amended and restated certificate of incorporation and our amended and restated bylaws. Except with respect to (i) the classified board, (ii) the requirement of stockholder supermajority vote to amend certain provisions of the certificate of incorporation and the bylaws, and (iii) the ability of stockholders to remove directors only for cause, we expect that there will be no other material differences in stockholder rights between KBR common stock and Trinzic common stock. For additional details regarding Trinzic common stock and Trinzic stockholder rights, see the section entitled “Description of Trinzic’s Capital Stock.” | ||
Will Trinzic incur any indebtedness prior to or at the time of the distribution? | Yes. Prior to the separation and distribution, Trinzic anticipates issuing senior unsecured notes with terms and a maturity to be determined, which is expected to yield proceeds of approximately $[•] million, which proceeds are expected to be used to fund a portion of the Internal Cash Distribution. In addition, prior to the separation and distribution, Trinzic intends to enter into credit facilities with lenders providing for (i) a senior secured revolving credit facility of approximately $[•] million with a five-year availability period, (ii) a senior secured term loan “A” facility of approximately $[•] million with a five-year term to maturity, and (iii) a senior secured term loan “B” facility of approximately $[•] million with a seven-year term to maturity. Trinzic anticipates drawing under the term loans prior to the separation and distribution in order to fund a portion of the Internal Cash Distribution. For more information, see the sections entitled “Description of Certain Indebtedness” and “Risk Factors—Risks Related to Our Business.” | ||
Do I have appraisal rights in connection with the separation and distribution? | No. Holders of KBR common stock are not entitled to appraisal rights in connection with the separation and distribution. | ||
Who will be the distribution agent, transfer agent, registrar, and information agent for Trinzic common stock? | The distribution agent, transfer agent, and registrar for Trinzic common stock will be Equiniti. For questions relating to the transfer or mechanics of the distribution, you should contact: Equiniti Trust Company, LLC 28 Liberty Street, 53rd Floor New York, NY 10005 United States 800-937-5449 If your shares are held by a bank, broker, or other nominee, please contact your bank, broker, or other nominee for questions relating to the transfer or mechanics of the distribution. | ||
Where can I find more information about KBR and Trinzic? | Before the distribution, if you have any questions relating to KBR’s business performance, you should contact: KBR, Inc. 601 Jefferson Street, Suite 3400 Houston, TX 77002 Attention: Investor Relations After the distribution, Trinzic stockholders who have any questions relating to Trinzic’s business performance should contact Trinzic at: [•]. We maintain an Internet website at Trinzic.com. Our website, and the information contained therein, or connected thereto, is not incorporated by reference into this information statement or the registration statement of which this information statement forms a part. | ||
• | Trusted mission expertise. We are deeply embedded in our customers’ missions, bringing deep mission expertise and partnership to deliver measurable outcomes with lasting value and impact through a differentiated, commercial, vendor-agnostic model. |
• | Technology-forward approach. We harness, adapt, and rapidly deploy advanced technologies to address critical and rapidly changing mission needs. |
• | Global presence with sovereign delivery. We serve our customers wherever their missions demand, harnessing our global presence, decades of experience developing and deploying technologies and capabilities. Our sovereign delivery capabilities provide autonomy, independence, and partnership with allied nations as well as safety, resilience, and dependability for the missions we serve. |
• | Scaled operations and stable, diversified, long-term contract base. Already operating at scale, we derive a majority of our revenue from diversified, long-term contracts that provide a high degree of revenue visibility at predictable margins and high renewal rates. |
• | Efficient cost-structure and predictable cash flows. Our stable, predictable revenue model, combined with our efficient cost structure and capital-light business model, supports strong, predictable cash flows. |
• | digital engineering and integration; |
• | mission software development; |
• | mission engineering; |
• | Artificial Intelligence (“AI”) and data analytics; |
• | rapid capability prototyping and development in virtual environments; and |
• | expeditionary logistics. |
• | Digital Engineering and Integration. We integrate complex systems-of-systems using advanced digital environments, architectures, and common data models. We leverage generative AI and machine learning to create virtual prototypes of mission systems that predict performance and execute design trades before physical development, saving customers time and money while accelerating fielding and improving interoperability. We strategically position our digital engineering facilities, equipment, and specialized tools across global locations, enabling near-real-time identification and evaluation of warfighting scenarios and modeled tactical responses that optimize resource allocation for national security and space missions. Since its inception in 2022, we have served as a key technology integrator for the Air Force’s Collaborative Combat |
• | Mission Engineering. We design mission architectures that enable systems-of-systems to operate seamlessly to achieve specific mission tasks and operational outcomes at an enterprise scale. We incorporate model-based systems engineering, advanced analytics, and AI/machine learning to inform portfolio-level decisions. Through digital modeling and simulation, we optimize system-to-system data exchanges, operational effectiveness, and lifecycle performance. We serve as lead systems integrator for the $42 billion Military Satellite Communications enterprise supporting the U.S. Space Force, providing full lifecycle systems engineering, integration, and digital solutions across the program’s diverse satellites, ground stations, and terminals, efficiently and effectively delivering operationally-relevant, mission-critical communication capability to the warfighter. In the UK, we bring expertise across the full nuclear enterprise, combining experience from major civil nuclear programs with longstanding defense nuclear and national security support. Our solutions help governments strengthen sovereign capability, modernize critical nuclear infrastructure, and support the next generation of defense nuclear programs — including those being shaped through AUKUS and wider allied nuclear partnerships — turning long-term national ambition into safe, secure, and enduring operational capability. For the Australian Department of Defence, we provide integrated solutions supporting air platform mission planning (crewed and autonomous) as well as air and space resource management, integrating U.S. Foreign Military Sales technologies with commercial tools to process and disseminate multi-source data for complex mission plans across benign to highly hostile environments. |
• | Mission Software Development. We develop and integrate open software architectures that are secure, scalable, and adaptable — supporting missions from space operations to autonomous systems and C5ISR. Our innovative aircraft mission software solutions integrate mission system code from multiple developers. We facilitate a Modular Open System Approach, which ensures government customers maintain architectural control, avoids vendor lock, enables faster innovation cycles, reduces upgrade costs, and delivers operational agility to respond to rapidly evolving threats. We anticipate this approach will expand to additional U.S. Air Force Program Executive Offices given its alignment with current DoW acquisition objectives. We empower the U.S. Navy to develop and deploy secure, interoperable multi-cloud Sensitive Compartmented Information environments across Amazon Web Services, Microsoft Azure, and Google Cloud — integrating software-defined networking, confidential computing, and zero-trust architectures to protect classified workloads while accelerating innovation. |
• | Data Analytics and Artificial Intelligence. We deliver AI-powered analytics that generate actionable insights for complex mission decisions, applying data science, machine learning, and predictive analytics to enhance situational awareness, decision-making, and system performance. We lead the prototyping and evolution of advanced web-based Common Geo-Positioning Services supporting U.S. intelligence and defense missions — enabling advanced targeting, image chain analysis, space-based sensor modeling with automated intelligence surveillance and reconnaissance. These solutions are used by over 40,000 unique users spanning the DoW, allied partners, and other government agencies. Our cloud services deliver scalability, AI-driven image analytics, and secure data environments at the leading edge of geospatial intelligence. Iron Stallion, our premier enterprise web application for space domain awareness that processes millions of data elements daily, delivers AI-enhanced decision-support capabilities enabling space operators and analysts to prioritize and respond to daily operational requirements and emerging real-world events. Our cloud-based AI and machine learning solutions have transformed national land cover intelligence for the United States Geological Survey, significantly compressing production timelines, reducing costs, and unlocking actionable insights from decades of land cover data. |
• | Rapid Capability Development. We design, integrate, and field advanced research, development, and test and evaluation capabilities. Our agile prototyping processes enable us to respond quickly to emerging threats and evolving mission needs. We deliver operational capabilities in electronic warfare and spectrum superiority — advancing, prototyping, and integrating space control systems for the warfighter, with teams deploying alongside the U.S. Army to generate mission effects and create tactical advantages across the |
• | Health and Human Performance. We are a leader in delivering health and human performance solutions to customers facing the most extreme mission conditions in warfare, space, and austere or isolated environments. We deploy leading medical, health, and wellness scientists who assess operating environments and prepare personnel for the human performance factors critical to mission success. As the flagship astronaut health and performance partner to NASA, we apply advanced biomedical research, predictive modeling, and engineering innovation to support crews for spaceflight — having supported U.S. astronauts since 1968 and now powering the Artemis moon-landing program, the International Space Station, and Commercial Crew missions through integrated health systems and digital technologies. Through the Preservation of the Force and Family program, we embed experts with U.S. Special Operations Command personnel to strengthen the physical, mental, and emotional resilience of special operations forces and their families, improving readiness and sustained performance on and off the battlefield. |
• | Global Expeditionary Logistics. We deliver rapid, scalable logistics solutions spanning national security and humanitarian deployments globally — establishing and sustaining life support, including safety, security, and health services for quick-reaction operations as well as major permanent installations. We operate and sustain major U.S. military sites globally, including Naval Support Facility Diego Garcia (Indian Ocean), Naval Support Facility Djibouti (Horn of Africa), Incirlik Air Base (Türkiye), Camp Bondsteel (southeastern Kosovo), and Mihail Kogălniceanu Air Base (Romania), maintaining critical power, water, airport, seaport, and life support operations. For commercial aerospace customers such as Honeywell Technologies, we provide integrated supply chain and production solutions to support their global operations, leveraging advanced technology, data analytics, and tailored approaches to maximize operational value and productivity. Through our UK operations, we deliver infrastructure, facilities management, logistics, and operational support to defense and government customers overseas, including the UK Naval Support Facility in Bahrain and British Embassy estates across the Middle East, sustaining operational readiness and diplomatic presence in strategically complex environments. |
• | Systems Operations and Sustainment. We deliver mission-critical operations, maintenance, and sustainment services that enhance readiness and reliability across multiple theaters worldwide. Our capabilities include mission operations analysis and decision support that empower commanders to model people, platforms, networks, and workflows. We provide Concept of Operations visualization and model-based systems engineering toolchains — enabling digital twin testing of alternatives before committing resources. We support Naval aviation readiness by migrating technical data and sustainment workflows to modern, data-centric platforms with enterprise data transport, standard data repositories, and cloud test environments serving approximately 58,000 users, driving predictive maintenance analytics, increased aircraft readiness, and lower sustainment costs. For the Royal Australian Navy, we provide AI/machine learning-powered asset management for the Amphibious Combat and Supply surface fleet, enhancing long-term maintenance planning, lifecycle cost analysis, and decision support. For NASA, we deliver end-to-end human spaceflight mission operations from vehicle design and development to mission planning, training, and 24/7 real-time flight execution and including vehicle command and control and comprehensive international partner integration to advance the future of space exploration. |
• | Transition services agreement; |
• | Employee matters agreement; |
• | Tax matters agreement; |
• | Master services agreements; |
• | Sublease agreement; and |
• | Stockholder and registration rights agreement. |
• | Enhanced strategic and management focus. KBR and Trinzic will each be pure-play, at-scale, proven, and differentiated providers of technology solutions with KBR serving energy and critical national infrastructure markets and Trinzic serving national security and space end markets. The separation at this time will enable each of KBR and Trinzic to be led by a separate, dedicated board and management team with relevant and deep expertise in its respective industry; focus on strengthening its core business; leverage its strategic objectives; and pursue distinct and targeted opportunities for long-term growth and profitability. |
• | Improved organizational agility. The separation at this time will permit each of KBR and Trinzic to be a more focused business, allowing it to effectively pursue its own distinct organizational priorities and strategies in line with each company’s specific market trends and opportunities and adapt faster to changing customer needs and industry dynamics. |
• | Elevated brand recognition. The separation at this time will allow each company to establish unique brand identities that are tailored to their business, customers, employees, and investors. Increased brand alignment and clarity directly and indirectly support more effective customer association and engagement, employee recruiting and retention, press affiliation, and alignment to investment community partitioning. |
• | Customized capital structure and capital allocation priorities. The separation at this time will enable each of KBR and Trinzic to leverage its distinct growth profile and cash flow characteristics to optimize its capital structure and capital allocation strategy. In addition, post-separation, the respective companies will no longer need to compete internally for capital and other corporate resources with the other company. |
• | Distinct and compelling investment profiles. The separation at this time will allow each company to more effectively articulate a clear investment thesis, enabling investors to separately value each of KBR and Trinzic based on its distinct investment profile. The separation is expected to attract different, long-term investor bases for each company and facilitate each company’s access to capital by providing investors with two distinct and targeted investment opportunities. With investors better suited and aligned to its business, each company will be able to pursue its industry-specific business objectives consistent with the expectations of its distinct investor base. |
• | Alignment of incentives with performance objectives. The separation at this time will allow each of KBR and Trinzic to more effectively recruit, retain, and develop talent with the appropriate skill set and expertise directly applicable to each company’s needs. In addition, the separation will enable each of KBR and Trinzic to offer equity-based and other incentive compensation arrangements that more closely reflect and align management and employee incentives with each company’s specific growth objectives, financial goals, and business performance. |
• | Loss of joint purchasing power and increased costs. As a current part of KBR, Trinzic currently benefits from KBR’s size and purchasing power in procuring certain goods, services, and technologies. After the separation, as independent companies, each of KBR and Trinzic may be unable to obtain these goods, services, and technologies at prices or on terms as favorable as those KBR obtained prior to the separation. As an independent, public company, Trinzic will also incur costs for certain corporate functions previously performed by KBR, such as accounting, tax, legal, human resources, board governance, insurance, and other general administrative functions, which may be higher than the amounts reflected in Trinzic’s historical financial statements, which could cause Trinzic’s profitability to decrease. Similarly, KBR’s profitability following the spin-off may decrease as a result of its corporate expenses needing to be absorbed by a lower revenue base. |
• | Disruptions to the business and transaction costs as a result of the separation. The actions required to separate Trinzic from KBR could disrupt Trinzic’s and KBR’s operations before the separation. In addition, KBR and Trinzic will incur substantial costs in connection with the separation and the transition to Trinzic becoming a standalone public company, which may include accounting, tax, legal, and other professional services costs, recruiting and relocation costs associated with hiring key senior management personnel who are new to Trinzic, tax costs, costs to separate information systems, and standalone corporate and governance capabilities. |
• | Increased significance of certain costs and liabilities. Certain costs and liabilities that were otherwise less significant to KBR as a whole will be more significant for KBR and Trinzic, after the separation, as stand-alone companies. |
• | Inability to realize anticipated benefits of the separation. Trinzic may not achieve the anticipated benefits of the separation for a variety of reasons, including, among others: (i) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Trinzic’s business; (ii) following the separation, Trinzic may be more susceptible to market fluctuations and other adverse events than if it were still a part of KBR; and (iii) following the separation, Trinzic’s business will be less diversified than KBR’s businesses prior to the separation. |
• | Limitations placed upon Trinzic as a result of the tax matters agreement. To preserve the intended tax-free treatment of the distribution and certain related transactions for U.S. federal income tax purposes, under the tax matters agreement that Trinzic will enter into with KBR, Trinzic will be restricted from taking any action that could jeopardize or impede such intended U.S. federal income tax treatment. These restrictions may limit Trinzic’s ability to pursue certain strategic transactions and/or engage in other transactions that might increase the value of its business. |
• | Uncertainty regarding stock prices. Neither KBR nor Trinzic can predict the effect of the separation on the trading prices of KBR or Trinzic common stock or know with certainty whether the combined market value of [•] shares of Trinzic common stock and one share of KBR common stock will be less than, equal to, or greater than the market value of one share of KBR common stock prior to the distribution. |
• | A significant portion of our revenue is generated by large contracts with certain significant customers, including the U.S. government, and any loss, cancellation, or delay in one or more of these contracts could harm our financial performance. |
• | Budget uncertainty, the potential for U.S. government shutdowns, the use of continuing resolutions, changes in budgetary priorities, and/or U.S. government spending levels can adversely affect our industry and the funding for our contracts. |
• | We depend on U.S. and foreign government agencies as our primary customers and, if our reputation or relationships with these agencies were to be harmed, it could adversely impact our financial performance. |
• | Our results of operations and cash flows depend on the award of new contracts and the timing of the performance of existing contracts. |
• | Ongoing international conflicts and other geopolitical conditions may adversely affect our business. |
• | Our business may be harmed if we are unable to properly leverage and/or appropriately invest in technology advancements. |
• | We may use AI, machine learning, data science, and similar technologies; challenges with managing such technologies could result in reputational, competitive, and other harm to our business. |
• | If we are unable to attract and retain qualified senior management and key technical professionals, our ability to pursue and compete for contracts to grow our business may be adversely affected. |
• | The nature of our contracts, particularly those that are fixed-price, subjects us to risks associated with cost overruns, operating cost inflation, and potential claims for liquidated damages. |
• | Our backlog of unfilled orders is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of our future revenue or earnings. |
• | We may make business combinations as a part of our business strategy, which may present certain risks and uncertainties over different periods of time. |
• | International and political events may adversely affect our operations. |
• | Internal or external cybersecurity or privacy breaches, and/or systems and information technology interruption or failure could adversely impact our ability to operate or expose us to significant financial losses and reputational harm. |
• | Our actual results could differ from the estimates and assumptions used to prepare our financial statements. |
• | Governments award contracts through a rigorous competitive process and our efforts to obtain future contracts from the U.S. government or other governments may be unsuccessful. |
• | Our profitability and cash flow may vary based on the mix of our contracts and programs, our performance, and/or our ability to control costs. |
• | Governments may issue or revise existing rules, regulations, and directives, adopt new contract rules and regulations or revise procurement practices in a manner adverse to us at any time. |
• | Our U.S. government contract work is regularly reviewed and audited by the U.S. government, U.S. government auditors, and others, and these reviews can lead to withholding and/or delay of payments, non-receipt of award fees, legal actions, fines, penalties, and liabilities and other remedies against us. |
• | Demand for our services provided under government contracts is directly affected by spending by our customers. |
• | Current or future economic conditions in credit markets may negatively affect the ability to operate our business, finance working capital, implement our strategy, and/or access our cash and short-term investments. |
• | We may be required to contribute additional cash to meet any unfunded benefit obligations associated with our defined benefit plans. |
• | We could be adversely impacted if we fail to comply with international export and domestic laws, which are rigorously enforced by the U.S. government. |
• | We are subject to anti-bribery laws, violations of which could result in suspension and debarment of our ability to contract with U.S. state or local governments, U.S. government agencies, the UK Ministry of Defence, or the Australia Defence Force, and/or result in other adverse consequences. |
• | Certain of our work sites are inherently dangerous and we are subject to various environmental and worker health and safety laws and regulations. |
• | Our business and operations expose us to numerous legal and regulatory requirements, and any violation of these requirements could harm our business. |
• | Investigations, audits, claims, disputes, enforcement actions, litigation, arbitration, and/or other legal proceedings could require us to pay potentially large damage awards and/or penalties and could be costly to defend, which would adversely affect our cash balances and profitability, and could damage our reputation. |
• | Trinzic has no history of operating as a separate, publicly traded company, and its historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results. |
• | As a separate, public company, Trinzic may not benefit from the same benefits that Trinzic did as a part of KBR. |
• | Potential indemnification liabilities to KBR pursuant to the separation agreement could materially and adversely affect Trinzic’s business, and the indemnity provided by KBR may be insufficient to insure Trinzic against the full amount of such liabilities. |
• | If there is a determination that the separation and/or the distribution, together with certain related transactions, is taxable for U.S. federal income tax purposes, KBR and its stockholders could incur significant U.S. federal income tax liabilities, and we could also incur significant liabilities. |
• | Trinzic may be significantly restricted, including in its ability to engage in certain corporate transactions for a two-year period after the distribution, in order to avoid triggering significant tax-related liabilities. |
• | After the distribution, certain of Trinzic’s executive officers and directors may have actual or potential conflicts of interest because of their equity interest in KBR or their prior service to KBR; in addition, it is possible that conflicts of interest between Trinzic and KBR may arise in connection with the agreements governing the separation and distribution. |
• | Trinzic may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect Trinzic’s business. |
• | Trinzic and/or KBR may fail to perform under various transaction agreements executed as part of the separation or Trinzic may fail to have necessary systems or services in place when such agreements expire. |
• | In connection with the distribution, Trinzic expects to incur indebtedness, and Trinzic may incur additional indebtedness in the future, which could adversely affect its business. |
• | Trinzic cannot be certain that an active trading market for its common stock will develop or be sustained after the separation and, following the separation, the price of Trinzic common stock may fluctuate significantly, which could cause the value of an investment to decline. |
• | A significant number of shares of Trinzic common stock may be sold by KBR or others following the distribution, which may cause Trinzic’s stock price to decline. |
• | If Trinzic is unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of Trinzic’s financial reports and the market price of Trinzic common stock may be negatively affected. |
• | The obligations associated with being a public company will require significant resources and management attention. |
• | Trinzic cannot guarantee the payment of dividends on its common stock or the timing or amount of any such dividends. |
• | An investor’s percentage ownership in Trinzic may be diluted in the future. |
Pro Forma (Unaudited) | Historical (Unaudited) | ||||||||
Six months ended | Six months ended | ||||||||
In millions, except per share data | July 3, 2026 | July 3, 2026 | July 4, 2025 | ||||||
Revenue | $2,604 | $2,604 | $2,717 | ||||||
Cost of revenue | (2,239) | (2,239) | (2,369) | ||||||
Equity in earnings of unconsolidated affiliates | 21 | 21 | 15 | ||||||
Selling, general, and administrative expenses | (173) | (173) | (178) | ||||||
Lease right-of-use asset impairment | (13) | (13) | — | ||||||
Other operating income (expense) | (3) | (3) | 1 | ||||||
Operating income | 197 | 197 | 186 | ||||||
Interest expense | (60) | (5) | (8) | ||||||
Other non-operating income | — | — | 1 | ||||||
Income from continuing operations before income taxes | 137 | 192 | 179 | ||||||
Provision for income taxes | (31) | (45) | (39) | ||||||
Net income from continuing operations | 106 | 147 | 140 | ||||||
Net loss from discontinued operations, net of tax | — | — | (54) | ||||||
Net income | 106 | 147 | 86 | ||||||
Less: Net loss attributable to noncontrolling interests included in discontinued operations | — | — | (18) | ||||||
Net income attributable to Trinzic | $106 | $147 | $104 | ||||||
Unaudited pro forma net income (loss) attributable to Company per share | |||||||||
Basic earnings (loss) per share from continuing operations | $ | ||||||||
Basic earnings (loss) per share from discontinued operations | $ | ||||||||
Earnings (loss) per share attributable to Trinzic | $ | ||||||||
Diluted earnings (loss) per share from continuing operations | $ | ||||||||
Diluted earnings (loss) per share from discontinued operations | $ | ||||||||
Diluted earnings (loss) per share attributable to Trinzic | $ | ||||||||
Unaudited pro forma basic weighted average common shares | |||||||||
Unaudited pro forma diluted weighted average common shares | |||||||||
Pro Forma (Unaudited) | Historical | |||||||||||
Year ended | Year ended | |||||||||||
In millions, except per share data | January 2, 2026 | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||||
Revenue | $5,256 | $5,256 | $5,218 | $4,822 | ||||||||
Cost of revenue | (4,572) | (4,572) | (4,582) | (4,239) | ||||||||
Equity in earnings of unconsolidated affiliates | 33 | 33 | 32 | 33 | ||||||||
Selling, general, and administrative expenses | (347) | (342) | (350) | (297) | ||||||||
Legacy legal fees and settlements | — | — | (2) | (155) | ||||||||
Other operating income (expense) | 2 | 2 | 1 | (2) | ||||||||
Operating income | 372 | 377 | 317 | 162 | ||||||||
Interest expense | (124) | (13) | (19) | (20) | ||||||||
Other non-operating expense | (1) | (1) | (2) | (10) | ||||||||
Income from continuing operations before income taxes | 247 | 363 | 296 | 132 | ||||||||
Provision for income taxes | (53) | (82) | (70) | (50) | ||||||||
Net income from continuing operations | 194 | 281 | 226 | 82 | ||||||||
Net income (loss) from discontinued operations, net of tax | (55) | (55) | 2 | (1) | ||||||||
Net income | 139 | 226 | 228 | 81 | ||||||||
Less: Net loss attributable to noncontrolling interests included in continuing operations | — | — | (1) | (1) | ||||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | (19) | (19) | 1 | — | ||||||||
Net income attributable to Trinzic | $158 | $245 | $228 | $82 | ||||||||
Diluted earnings (loss) per share from continuing operations | $ | |||||||||||
Diluted earnings (loss) per share from discontinued operations | $ | |||||||||||
Diluted earnings (loss) per share attributable to Trinzic | $ | |||||||||||
Unaudited pro forma basic weighted average common shares | ||||||||||||
Unaudited pro forma diluted weighted average common shares | ||||||||||||
Pro Forma | Historical | |||||||||||
As of | As of | |||||||||||
July 3, 2026 | July 3, 2026 | January 2, 2026 | January 3, 2025 | |||||||||
Dollars in millions | (Unaudited) | (Unaudited) | ||||||||||
Cash and cash equivalents | $147 | $147 | $167 | $143 | ||||||||
Total assets | $4,070 | $4,068 | $4,114 | $4,307 | ||||||||
Total liabilities | $2,968 | $1,290 | $1,311 | $1,434 | ||||||||
Total equity | $1,102 | $2,778 | $2,803 | $2,873 | ||||||||
• | adverse effects on macroeconomic conditions, including inflation, demand for our products and potential recessionary economic conditions; |
• | increased cyber security threats; |
• | adverse changes in trade policies, taxes, government regulations and tariffs; |
• | our ability to obtain compensation for increased costs incurred related to rising costs of equipment, materials and labor on fixed-price contracts; |
• | our ability to implement and execute our business strategy; |
• | disruptions in global supply chains; |
• | our exposure to foreign currency fluctuations; and |
• | constraints, volatility, or disruption in the capital markets. |
• | our due diligence may not identify or fully assess valuation issues, potential liabilities, or other acquisition risks; |
• | acquired entities may not achieve anticipated revenue targets, cost savings, or other synergies or benefits, or acquisitions may not result in improved operating performance, which could adversely affect our operating income or operating margins, and we may be unable to recover investments in any such acquisitions; |
• | we may have difficulty integrating acquired businesses, resulting in unforeseen difficulties, such as incompatible accounting, information management or other control systems, and greater expenses than expected; |
• | we may have difficulty entering into new markets in which we are not experienced, in an efficient and cost-effective manner while maintaining adequate standards, controls, and procedures; |
• | key personnel within an acquired organization may resign from their related positions resulting in a significant loss to our strategic and operational efficiency associated with the acquired company; |
• | the effectiveness of our daily operations may be reduced by the redirection of employees and other resources to acquisition and integration activities; |
• | we may assume liabilities of an acquired business (including litigation, tax liabilities, contingent liabilities, environmental issues), including liabilities that were unknown at the time of the acquisition, that pose future risks to our working capital needs, cash flows, and the profitability of related operations; |
• | we may assume unprofitable contracts that pose future risks to our working capital needs, cash flows, and the profitability of related operations; or |
• | business acquisitions may include substantial transactional costs to complete the acquisition that exceed the estimated financial and operational benefits. |
• | expropriation and nationalization of our assets in that country; |
• | changes in government regimes and other developments that may cause, directly or indirectly, political, and economic instability; |
• | costs to maintain the safety of our personnel and customers in high-risk locations, including but not limited to, certain parts of Africa and the Middle East, where the country or surrounding area is suffering from political, social, or economic issues, war or civil unrest; |
• | changes in trade policies affecting the markets for our services (including but not limited to retaliatory tariffs between the United States and other countries); |
• | civil unrest, acts of terrorism, war, or other armed conflict (including but not limited to potential U.S. sanctions on other countries); |
• | currency fluctuations, devaluations, and conversion restrictions; |
• | confiscatory taxation or other adverse tax policies; |
• | uncertainties related to any geopolitical, economic, and regulatory effects or changes due to recent or upcoming domestic and international elections; |
• | governmental activities or judicial actions that limit or disrupt markets, restrict payments, limit the movement of funds, result in the deprivation of contract rights or result in the inability for us to obtain or retain licenses required for operation; |
• | increased polarization of political parties, in the U.S. and abroad, which may lead to more volatility in government spending or other developments such as trade wars or changes in military priorities; or |
• | failure or refusal of foreign governments or their agencies to acknowledge or honor rights, exemptions or obligations identified in applicable status of forces agreements or treaties. |
• | policy or spending changes, or changes in enforcement priorities or resource allocation, implemented by the current administrations, war/defense departments, or other government agencies; |
• | advisory commissions created to review budgetary priorities, including efficiency initiatives, such as DOGE; |
• | increased polarization of political parties; |
• | failure to pass budget appropriations, continuing funding resolutions or other budgetary decisions, including any failure of the U.S. federal government to manage its fiscal matters or to raise or further suspend the debt ceiling; |
• | changes, delays, or cancellations of government programs or requirements; |
• | adoption of new laws, regulations, or policies, or repeal of existing laws, regulations, or policies, that affect companies providing services to the governments; |
• | reduced buying power as a result of inflation; |
• | curtailment of the governments’ outsourcing of services to private contractors; or |
• | the level of political instability due to war, conflict, or natural disasters. |
• | the evolving nature and increasing stringency of sustainability-related procurement criteria across different jurisdictions; |
• | the availability and cost of alternative fuels, renewable energy, and other materials necessary to meet applicable standards; |
• | unforeseen operational and technological difficulties in implementing sustainability measures; |
• | changes or additions to regional regulations, taxes, mandates, or requirements relating to greenhouse gas emissions or climate-related goals; and |
• | labor-related regulations that may restrict our ability to impose sustainability requirements on third-party subcontractors. |
• | Prior to the separation, Trinzic’s business has been operated by KBR as part of its broader corporate organization, rather than as a separate, publicly traded company. KBR or one of its affiliates performed various corporate functions for Trinzic such as legal, treasury, accounting, internal audit, human resources, corporate affairs, and finance. Trinzic’s historical and pro forma financial results reflect allocations of corporate expenses from KBR for such functions and are likely to be less than the expenses Trinzic would have incurred had it operated as a separate publicly traded company. Following the separation, Trinzic’s cost related to such functions previously performed by KBR may therefore increase. |
• | Currently, Trinzic’s business is integrated with the other businesses of KBR. Historically, Trinzic has shared economies of scope and scale in costs, employees, vendor relationships, and customer relationships. Although Trinzic will enter into a transition services agreement with KBR, these arrangements will be temporary and may not fully capture the benefits that Trinzic has enjoyed as a result of being integrated with KBR and may result in Trinzic paying higher charges than in the past for these services. This could adversely effect Trinzic’s business and financial statements following the completion of the separation. |
• | Generally, Trinzic’s working capital requirements and capital for its general corporate purposes, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of KBR. Following the completion of the separation, Trinzic may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships, or other arrangements. |
• | After the completion of the separation, the cost of capital for Trinzic’s business may be higher than KBR’s cost of capital prior to the separation. |
• | Trinzic’s historical financial information does not reflect any additional debt or associated interest expense that Trinzic may incur prior to the distribution. |
• | KBR and Trinzic will each be pure-play, at-scale, proven, and differentiated providers of technology solutions with KBR serving energy and critical national infrastructure markets and Trinzic serving national security and space end markets. The separation at this time will enable each of KBR and Trinzic to be led by a separate, dedicated board and management team with relevant and deep expertise in its respective industry; focus on strengthening its core business; leverage its strategic objectives; and pursue distinct and targeted opportunities for long-term growth and profitability. |
• | The separation at this time will permit each of KBR and Trinzic to be a more focused business, allowing it to effectively pursue its own distinct organizational priorities and strategies in line with each company’s specific market trends and opportunities and adapt faster to changing customer needs and industry dynamics. |
• | The separation at this time will allow each company to establish unique brand identities that are tailored to their business, customers, employees, and investors. Increased brand alignment and clarity directly and indirectly support more effective customer association and engagement, employee recruiting and retention, press affiliation, and alignment to investment community partitioning. |
• | The separation at this time will enable each of KBR and Trinzic to leverage its distinct growth profile and cash flow characteristics to optimize its capital structure and capital allocation strategy. In addition, post-separation, the respective companies will no longer need to compete internally for capital and other corporate resources with the other company. |
• | The separation at this time will allow each company to more effectively articulate a clear investment thesis, enabling investors to separately value each of KBR and Trinzic based on its distinct investment profile. The separation is expected to attract different, long-term investor bases for each company and facilitate each company’s access to capital by providing investors with two distinct and targeted investment opportunities. With investors better suited and aligned to its business, each company will be able to pursue its industry-specific business objectives consistent with the expectations of its distinct investor base. |
• | The separation at this time will allow each of KBR and Trinzic to more effectively recruit, retain, and develop talent with the appropriate skill set and expertise directly applicable to each company’s needs. In addition, the separation will enable each of KBR and Trinzic to offer equity-based and other incentive compensation arrangements that more closely reflect and align management and employee incentives with each company’s specific growth objectives, financial goals, and business performance. |
• | As a current part of KBR, Trinzic currently benefits from KBR’s size and purchasing power in procuring certain goods, services, and technologies. After the separation, as independent companies, each of KBR and Trinzic may be unable to obtain these goods, services, and technologies at prices or on terms as favorable as those KBR obtained prior to the separation. As an independent, public company, Trinzic will also incur costs for certain corporate functions previously performed by KBR, such as accounting, tax, legal, human resources, board governance, insurance, and other general administrative functions, which may be higher than the amounts reflected in Trinzic’s historical financial statements, which could cause Trinzic’s profitability to decrease. Similarly, KBR’s profitability following the spin-off may decrease as a result of its corporate expenses needing to be absorbed by a lower revenue base. |
• | The actions required to separate Trinzic from KBR could disrupt Trinzic’s and KBR’s operations before the separation. In addition, KBR and Trinzic will incur substantial costs in connection with the separation and the transition to Trinzic becoming a standalone public company, which may include accounting, tax, legal, and other professional services costs, recruiting and relocation costs associated with hiring key senior management personnel who are new to Trinzic, tax costs, costs to separate information systems, and standalone corporate and governance capabilities. |
• | Certain costs and liabilities that were otherwise less significant to KBR as a whole will be more significant for KBR and Trinzic, after the separation, as stand-alone companies. |
• | Trinzic may not achieve the anticipated benefits of the separation for a variety of reasons, including, among others: (i) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Trinzic’s business; (ii) following the separation, Trinzic may be more susceptible to market fluctuations and other adverse events than if it were still a part of KBR; and (iii) following the separation, Trinzic’s business will be less diversified than KBR’s businesses prior to the separation. |
• | To preserve the intended tax-free treatment of the distribution and certain related transactions for U.S. federal income tax purposes, under the tax matters agreement that Trinzic will enter into with KBR, Trinzic will be restricted from taking any action that could jeopardize or impede such intended U.S. federal income tax treatment. These restrictions may limit Trinzic’s ability to pursue certain strategic transactions and/or engage in other transactions that might increase the value of its business. |
• | Neither KBR nor Trinzic can predict the effect of the separation on the trading prices of KBR or Trinzic common stock or know with certainty whether the combined market value of [•] shares of Trinzic common stock and one share of KBR common stock will be less than, equal to or greater than the market value of one share of KBR common stock prior to the distribution. |
• | requiring a substantial portion of its cash flow from operations to make interest payments; |
• | making it more difficult to satisfy debt service and other obligations; |
• | increasing the risk of a future credit ratings downgrade of its debt, which could increase future debt costs and limit the future availability of debt financing; |
• | increasing its vulnerability to general adverse economic and industry conditions; |
• | reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow its business; |
• | limiting Trinzic’s flexibility in planning for, or reacting to, changes in its business and the industry; |
• | placing Trinzic at a competitive disadvantage relative to its competitors that may not be as highly leveraged; |
• | increasing Trinzic’s cost of borrowing; |
• | exposing Trinzic to the risk of increased interest rates to the extent that Trinzic’s borrowings are at variable rates of interest; |
• | requiring Trinzic to repatriate earnings to the U.S. in order to meet debt service obligations, which could cause withholding taxes to be applied, which in turn could increase Trinzic’s effective tax rate; and |
• | limiting Trinzic’s ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase ordinary shares. |
• | prepare and distribute periodic reports, proxy statements and other stockholder communications in compliance with the federal securities laws and rules; |
• | have its own board of directors and committees thereof, which comply with federal securities laws and rules and applicable stock exchange requirements; |
• | maintain an internal audit function; |
• | institute its own financial reporting and disclosure compliance functions; |
• | establish an investor relations function; |
• | establish internal policies, including those relating to trading in its securities and disclosure controls and procedures; and |
• | comply with the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Public Company Accounting Oversight Board, and the NYSE. |
• | the inability of Trinzic’s stockholders to call a special meeting; |
• | the inability of Trinzic’s stockholders to act by written consent; |
• | rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; |
• | the right of the Trinzic board of directors to issue preferred stock without stockholder approval; |
• | the division of the Trinzic board of directors into three classes of directors, with each class serving a staggered three-year term, until the conclusion of Trinzic’s fifth annual meeting of stockholders following the distribution; |
• | a provision that stockholders may only remove directors for cause; |
• | the ability of Trinzic’s directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of the board of directors) on the Trinzic board of directors; and |
• | the requirement that the affirmative vote of stockholders holding at least two-thirds of Trinzic’s voting stock is required to amend certain provisions of Trinzic’s amended and restated certificate of incorporation and amended and restated bylaws. |
• | Any derivative action or proceeding brought on behalf of Trinzic; |
• | Any action asserting a claim of breach of a fiduciary duty owed by any of Trinzic’s directors, officers, employees, or stockholders to Trinzic or its stockholders; |
• | Any action asserting a claim arising pursuant to any provision of the DGCL as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or |
• | Any action asserting a claim arising pursuant to any provision of Trinzic’s amended and restated certificate of incorporation or amended and restated bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine, |
• | Our lack of operating history as an independent, publicly traded company and unreliability of historical combined financial information as an indicator of our future results; |
• | Uncertainty, delays, or reductions in government funding, appropriations, and payments, including as a result of continuing resolution funding mechanisms, government shutdowns, or changing budget priorities; |
• | Developments and changes in government laws, regulations, and regulatory requirements and policies that may require us to pause, delay, or abandon new and existing contracts; |
• | Changes in the priorities, focus, authority, and budgets of government agencies that may impact our existing contracts and/or our ability to win new contracts; |
• | The effects of, and changes in, worldwide economic, political, regulatory, international, trade and geopolitical conditions, natural disasters, wars, military conflicts and terrorism, and other events; |
• | The impacts of U.S. tariffs and responsive non-U.S. tariffs or other changes in trade policy; |
• | Our ability to manage liquidity, any changes in capital spending by our customers and any structural changes in our industry; |
• | Potential delays, cancellations, or reversals of contract awards due to bid protests, disputes with our customers, or legal challenges; |
• | Our ability to obtain contracts from existing and new customers, and perform and manage costs under such contracts; |
• | The impact of potential cybersecurity attacks, data privacy breaches, and other operational disruptions; |
• | Our ability to compete successfully in the markets in which we operate; |
• | Failure to comply with the extensive regulations that our business is subject to (including by our employees, agents, or business partners) or significant developments or changes in U.S. laws or policies; |
• | The effects of U.S. federal income tax reform; |
• | Any failure by KBR to perform any of its obligations under the various separation agreements to be entered into in connection with the separation and distribution; |
• | The expected benefits and timing of the separation and the risk that conditions to the separation will not be satisfied and/or that the separation will not be completed within the expected time frame, on the expected terms or at all; |
• | A determination by the IRS or other tax authorities that the distribution or certain related transactions should be treated as taxable transactions; |
• | The possibility that any consents or approvals required in connection with the separation will not be received or obtained within the expected time frame, on the expected terms or at all; |
• | Expected financing transactions undertaken in connection with the separation and risks associated with additional indebtedness; |
• | The impact of the separation on our business and the risk that the separation and operating as an separate publicly traded company may be more difficult, time-consuming or costly than expected, including the impact on our resources, systems, procedures and controls, diversion of management’s attention, and the impact on relationships with customers, suppliers, employees, and other business counterparties. |
• | Certain factors discussed elsewhere in this information statement. |
• | Enhanced strategic and management focus. KBR and Trinzic will each be pure-play, at-scale, proven, and differentiated providers of technology solutions with KBR serving energy and critical national infrastructure markets and Trinzic serving national security and space end markets. The separation at this time will enable each of KBR and Trinzic to be led by a separate, dedicated board and management team with relevant and deep expertise in its respective industry; focus on strengthening its core business; leverage its strategic objectives; and pursue distinct and targeted opportunities for long-term growth and profitability. |
• | Improved organizational agility. The separation at this time will permit each of KBR and Trinzic to be a more focused business, allowing it to effectively pursue its own distinct organizational priorities and strategies in line with each company’s specific market trends and opportunities and adapt faster to changing customer needs and industry dynamics. |
• | Elevated brand recognition. The separation at this time will allow each company to establish unique brand identities that are tailored to their business, customers, employees, and investors. Increased brand alignment and clarity directly and indirectly support more effective customer association and engagement, employee recruiting and retention, press affiliation, and alignment to investment community partitioning. |
• | Customized capital structure and capital allocation priorities. The separation at this time will enable each of KBR and Trinzic to leverage its distinct growth profile and cash flow characteristics to optimize its capital structure and capital allocation strategy. In addition, post-separation, the respective companies will no longer need to compete internally for capital and other corporate resources with the other company. |
• | Distinct and compelling investment profiles. The separation at this time will allow each company to more effectively articulate a clear investment thesis, enabling investors to separately value each of KBR and Trinzic based on its distinct investment profile. The separation is expected to attract different, long-term investor bases for each company and facilitate each company’s access to capital by providing investors with two distinct and targeted investment opportunities. With investors better suited and aligned to its business, each company will be able to pursue its industry-specific business objectives consistent with the expectations of its distinct investor base. |
• | Alignment of incentives with performance objectives. The separation at this time will allow each of KBR and Trinzic to more effectively recruit, retain, and develop talent with the appropriate skill set and expertise directly applicable to each company’s needs. In addition, the separation will enable each of KBR and Trinzic to offer equity-based and other incentive compensation arrangements that more closely reflect and align management and employee incentives with each company’s specific growth objectives, financial goals, and business performance. |
• | Loss of joint purchasing power and increased costs. As a current part of KBR, Trinzic currently benefits from KBR’s size and purchasing power in procuring certain goods, services, and technologies. After the separation, as independent companies, each of KBR and Trinzic may be unable to obtain these goods, services, and technologies at prices or on terms as favorable as those KBR obtained prior to the separation. As an independent, public company, Trinzic will also incur costs for certain corporate functions previously performed by KBR, such as accounting, tax, legal, human resources, board governance, insurance, and other general administrative functions, which may be higher than the amounts reflected in Trinzic’s historical financial statements, which could cause Trinzic’s profitability to decrease. Similarly, KBR’s profitability following the spin-off may decrease as a result of its corporate expenses needing to be absorbed by a lower revenue base. |
• | Disruptions to the business and transaction costs as a result of the separation. The actions required to separate Trinzic from KBR could disrupt Trinzic’s and KBR’s operations before the separation. In addition, KBR and Trinzic will incur substantial costs in connection with the separation and the transition to Trinzic becoming a standalone public company, which may include accounting, tax, legal, and other professional services costs, recruiting and relocation costs associated with hiring key senior management personnel who are new to Trinzic, tax costs, costs to separate information systems, and standalone corporate and governance capabilities. |
• | Increased significance of certain costs and liabilities. Certain costs and liabilities that were otherwise less significant to KBR as a whole will be more significant for KBR and Trinzic, after the separation, as stand-alone companies. |
• | Inability to realize anticipated benefits of the separation. Trinzic may not achieve the anticipated benefits of the separation for a variety of reasons, including, among others: (i) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and |
• | Limitations placed upon Trinzic as a result of the tax matters agreement. To preserve the intended tax-free treatment of the distribution and certain related transactions for U.S. federal income tax purposes, under the tax matters agreement that Trinzic will enter into with KBR, Trinzic will be restricted from taking any action that could jeopardize or impede such intended U.S. federal income tax treatment. These restrictions may limit Trinzic’s ability to pursue certain strategic transactions and/or engage in other transactions that might increase the value of its business. |
• | Uncertainty regarding stock prices. Neither KBR nor Trinzic can predict the effect of the separation on the trading prices of KBR or Trinzic common stock or know with certainty whether the combined market value of [•] shares of Trinzic common stock and one share of KBR common stock will be less than, equal to, or greater than the market value of one share of KBR common stock prior to the distribution. |
• | the SEC will have declared effective the registration statement on Form 10 of which this information statement forms a part, no stop order relating to the registration statement will be in effect, no proceedings seeking such stop order will be pending before or threatened by the SEC, and this information statement will have been distributed to KBR stockholders; |
• | the shares of Trinzic common stock to be distributed will have been approved and accepted for listing by the NYSE, subject to official notice of distribution; |
• | KBR will have received a private letter ruling from the IRS and opinions of Wilmer Cutler Pickering Hale and Dorr LLP and Baker & McKenzie LLP, tax counsel to KBR, regarding the qualification of the distribution, together with certain related transactions, as a reorganization under Sections 355 and 368(a)(1)(D) of the Code; |
• | all registrations, consents, and filings required under applicable U.S. federal, U.S. state, or other securities laws will have been received or made; |
• | no order, injunction, or decree issued by any government entity of competent jurisdiction, or other legal restraint or prohibition, preventing the consummation of the distribution or any of the related transactions will be pending, threatened, issued or in effect, and no other event outside of KBR’s control will have occurred or failed to occur that prevents the consummation of all or any portion of the distribution or any related transactions contemplated by the separation agreement or by the separation plan, including the internal reorganization; |
• | the internal reorganization will have been effectuated prior to the distribution, except for such steps (if any) as KBR in its sole discretion will have determined need not be completed or may be completed after the effective time of the distribution; |
• | an independent appraisal or valuation firm acceptable to KBR will have delivered one or more opinions to the KBR board of directors at the times selected by the KBR board of directors confirming the solvency and adequacy of surplus under Delaware law of KBR prior to the distribution and the solvency of KBR and Trinzic after consummation of the financing transactions described in the section entitled “Description of Certain Indebtedness,” the transfer by KBR Holdings to KBR of the Internal Cash Distribution and the distribution; |
• | the KBR board of directors will have declared the distribution and approved all related transactions (and such declaration or approval will not have been withdrawn); |
• | the agreements relating to the separation will have been duly executed and delivered by KBR and Trinzic; |
• | the financing transactions described in the section entitled “Description of Certain Indebtedness” will have been completed and the Internal Cash Distribution will have been paid to KBR; and |
• | no other event or development will have occurred or exist that, in the judgment of the KBR board of directors, at its sole and absolute discretion, makes it inadvisable to effect the internal reorganization, distribution, and other transactions contemplated by the separation agreement. |
• | on a historical basis; and |
• | on a pro forma basis to give effect to the Pro Forma Transactions, as defined in the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.” |
As of July 3, 2026 | ||||||
Historical | Pro Forma (unaudited) | |||||
Cash and cash equivalents(1) | $147 | $147 | ||||
Capitalization: | ||||||
Total short-term debt | $8 | $39 | ||||
Total long-term debt | $108 | $1,741 | ||||
Equity: | ||||||
Common stock ($0.001 par value per share); [•] shares authorized, [•] shares issued and outstanding, pro forma | $— | $— | ||||
Paid in capital in excess of par | — | 1,913 | ||||
Net Parent investment(2) | 3,589 | — | ||||
Accumulated other comprehensive income (loss) | (807) | (807) | ||||
Noncontrolling interest | (4) | (4) | ||||
Total equity | $2,778 | $1,102 | ||||
Total capitalization | $3,041 | $3,029 | ||||
(1) | In connection with the separation, Trinzic expects to have $147 million in cash and cash equivalents as reflected on Trinzic’s unaudited pro forma condensed combined balance sheet. |
(2) | Reflects the impact to Net Parent investment as a result of the anticipated post-distribution capital structure. |
• | The contribution of assets and liabilities that comprise Trinzic, the Mission Technology Solutions segment of KBR, by KBR pursuant to the separation agreement; |
• | The anticipated post-separation capital structure, including the issuance of approximately [•] shares of Trinzic common stock to KBR, the incurrence of debt by Trinzic prior to the separation, and the allocation of related debt proceeds, a portion of which will be used to pay a cash distribution to KBR, primarily for the extinguishment of KBR debt; |
• | The impact of the tax matters agreement to be entered into with KBR in connection with the separation; |
• | The impact of the employee matters agreement and other transaction agreements (other than the transition services agreement and the master services agreements) to be entered into with KBR in connection with the separation (see the section entitled “Certain Relationships and Related Person Transactions”); |
• | Transaction and incremental income and costs expected to be incurred as an autonomous entity and specifically related to the separation; and |
• | Other adjustments described in the notes to the unaudited pro forma condensed combined financial statements. |
Dollars in millions | Historical (Unaudited) | Transaction Accounting Adjustments | Notes | Autonomous Entity Adjustments | Notes | Pro Forma | ||||||||||||
Assets | ||||||||||||||||||
Current assets: | ||||||||||||||||||
Cash and cash equivalents | $147 | $— | $— | $147 | ||||||||||||||
Accounts receivable, net of allowance for credit losses | 605 | — | — | 605 | ||||||||||||||
Contract assets | 88 | — | — | 88 | ||||||||||||||
Other current assets | 46 | — | — | 46 | ||||||||||||||
Current assets of discontinued operations | 15 | — | — | 15 | ||||||||||||||
Total current assets | 901 | — | — | 901 | ||||||||||||||
Pension assets | 110 | — | — | 110 | ||||||||||||||
Property, plant, and equipment, net of accumulated depreciation (including net PPE owned by a variable interest entity) | 145 | 2 | (h) | — | 147 | |||||||||||||
Operating lease assets right-of-use assets | 138 | — | — | 138 | ||||||||||||||
Goodwill | 2,089 | — | — | 2,089 | ||||||||||||||
Intangible assets, net of accumulated amortization | 583 | — | — | 583 | ||||||||||||||
Equity in and advances to unconsolidated affiliates | 71 | — | — | 71 | ||||||||||||||
Deferred income taxes | 5 | — | — | 5 | ||||||||||||||
Other assets | 26 | — | — | 26 | ||||||||||||||
Total assets | $4,068 | $2 | $— | $4,070 | ||||||||||||||
Liabilities and Equity | ||||||||||||||||||
Current liabilities: | ||||||||||||||||||
Accounts payable | $382 | $— | $— | $382 | ||||||||||||||
Contract liabilities | 87 | — | — | 87 | ||||||||||||||
Accrued salaries, wages, and benefits | 205 | 7 | (g) | — | 212 | |||||||||||||
Current maturities of long-term debt | 8 | 31 | (a) | — | 39 | |||||||||||||
Other current liabilities | 86 | 1 | (h) | — | 87 | |||||||||||||
Current liabilities of discontinued operations | 16 | — | — | 16 | ||||||||||||||
Total current liabilities | 784 | 39 | — | 823 | ||||||||||||||
Employee compensation and benefits | 38 | 4 | (g) | — | 42 | |||||||||||||
Deferred income taxes | 106 | — | — | 106 | ||||||||||||||
Long-term debt | 108 | 1,633 | (a) | — | 1,741 | |||||||||||||
Operating lease liabilities | 150 | — | — | 150 | ||||||||||||||
Other liabilities | 104 | 2 | (h) | — | 106 | |||||||||||||
Total liabilities | 1,290 | 1,678 | — | 2,968 | ||||||||||||||
Commitments and Contingencies (Notes 5, 10, and 11) | ||||||||||||||||||
Trinzic shareholders’ equity: | ||||||||||||||||||
Common stock | — | — | — | — | ||||||||||||||
Paid-in capital in excess of par | — | 1,913 | (c) | — | 1,913 | |||||||||||||
Net parent investment | 3,589 | (3,589) | (c) | — | — | |||||||||||||
AOCL | (807) | — | — | (807) | ||||||||||||||
Total Trinzic shareholders’ equity | 2,782 | (1,676) | — | 1,106 | ||||||||||||||
Noncontrolling interests | (4) | — | — | (4) | ||||||||||||||
Total shareholders’ equity | 2,778 | (1,676) | — | 1,102 | ||||||||||||||
Total liabilities and shareholders’ equity | $4,068 | $2 | $— | $4,070 | ||||||||||||||
In millions, except per share data | Historical (Unaudited) | Transaction Accounting Adjustments | Notes | Autonomous Entity Adjustments | Notes | Pro Forma | ||||||||||||
Revenue | $2,604 | $— | $— | $2,604 | ||||||||||||||
Cost of revenue | (2,239) | — | — | (2,239) | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 21 | — | — | 21 | ||||||||||||||
Selling, general, and administrative expenses | (173) | — | — | (173) | ||||||||||||||
Lease right-of-use asset impairment | (13) | — | — | (13) | ||||||||||||||
Other operating expense | (3) | — | — | (3) | ||||||||||||||
Operating income | 197 | — | — | 197 | ||||||||||||||
Interest expense | (5) | (55) | (a) | — | (60) | |||||||||||||
Income (loss) from continuing operations before income taxes | 192 | (55) | — | 137 | ||||||||||||||
Provision for income taxes | (45) | 14 | (b) | — | (31) | |||||||||||||
Net income (loss) from continuing operations | 147 | (41) | — | 106 | ||||||||||||||
Net income (loss) | 147 | (41) | — | 106 | ||||||||||||||
Net income (loss) attributable to Trinzic | $147 | $(41) | $— | $106 | ||||||||||||||
Unaudited pro forma net income (loss) attributable to Company per share | ||||||||||||||||||
Basic loss per share from continuing operations | $ | |||||||||||||||||
Basic loss per share from discontinued operations | $ | |||||||||||||||||
Loss per share attributable to Trinzic | $ | |||||||||||||||||
Diluted loss per share from continuing operations | $ | |||||||||||||||||
Diluted loss per share from discontinued operations | $ | |||||||||||||||||
Diluted loss per share attributable to Trinzic | $ | |||||||||||||||||
Unaudited pro forma basic weighted average common shares | ||||||||||||||||||
Unaudited pro forma diluted weighted average common shares | ||||||||||||||||||
In millions, except per share data | Historical | Transaction Accounting Adjustments | Notes | Autonomous Entity Adjustments | Notes | Pro Forma | ||||||||||||
Revenue | $5,256 | $— | $— | $5,256 | ||||||||||||||
Cost of revenue | (4,572) | — | — | (4,572) | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 33 | — | — | 33 | ||||||||||||||
Selling, general, and administrative expenses | (342) | (5) | (e),(f) | — | (347) | |||||||||||||
Other operating income | 2 | — | — | 2 | ||||||||||||||
Operating income (loss) | 377 | (5) | — | 372 | ||||||||||||||
Interest expense | (13) | (111) | (a) | — | (124) | |||||||||||||
Other non-operating expense | (1) | — | — | (1) | ||||||||||||||
Income (loss) from continuing operations before income taxes | 363 | (116) | — | 247 | ||||||||||||||
Provision for income taxes | (82) | 29 | (b) | — | (53) | |||||||||||||
Net income (loss) from continuing operations | 281 | (87) | — | 194 | ||||||||||||||
Net loss from discontinued operations, net of tax | (55) | — | — | (55) | ||||||||||||||
Net income (loss) | 226 | (87) | — | 139 | ||||||||||||||
Less: Net loss attributable to noncontrolling interests included in discontinued operations | (19) | — | — | (19) | ||||||||||||||
Net income (loss) attributable to Trinzic | $245 | $(87) | $— | $158 | ||||||||||||||
Unaudited pro forma net income (loss) attributable to Company per share | ||||||||||||||||||
Basic earnings (loss) per share from continuing operations | $ | |||||||||||||||||
Basic earnings (loss) per share from discontinued operations | $ | |||||||||||||||||
Basic earnings (loss) per share attributable to Trinzic | $ | |||||||||||||||||
Diluted earnings (loss) per share from continuing operations | $ | |||||||||||||||||
Diluted earnings (loss) per share from discontinued operations | $ | |||||||||||||||||
Diluted earnings (loss) per share attributable to Trinzic | $ | |||||||||||||||||
Unaudited pro forma basic weighted average common shares | $ | |||||||||||||||||
Unaudited pro forma diluted weighted average common shares | $ | |||||||||||||||||
(a) | Reflects indebtedness of approximately $1,800 million, which will be incurred by Trinzic in connection with the spin-off. We anticipate debt issuance costs of approximately $20 million, resulting in a net debt adjustment of $1,780 million. We plan to repay our existing debt of $116 million and distribute approximately $1,664 million of the capital raised from the issuance of debt to KBR in connection with the spin-off. The terms of this indebtedness and the distribution to KBR are subject to change and have not been finalized, and the pro forma adjustments may change accordingly. |
(b) | Reflects the tax effects of the transaction accounting adjustments at the applicable statutory income tax rates. Since the adjustments are primarily expected to be incurred in the U.S. and the UK, the statutory tax rates applied are approximately 25% and 25%, respectively. The U.S. represents a blended rate that is calculated based on the U.S. federal statutory rate of 21% and a blended state statutory rate of 4%. The effective tax rate of Trinzic could be different (either higher or lower) depending on activities subsequent to the spin-off. |
(c) | Represents the reclassification of KBR’s net investment in us, including other pro forma adjustments, into common stock, par value $[•], and paid-in capital in excess of par to reflect the number of shares of our common stock expected to be outstanding at the spin-off date based upon a distribution ratio of [•] share[s] of our common stock for every [•] share[s] of KBR common stock. |
Adjustments | Note | ($ in millions) | ||||
Cash distributed to KBR | (a) | (1,664) | ||||
Net parent investment | (c) | 3,589 | ||||
Employee related liabilities | (g) | (11) | ||||
Leases | (h) | |||||
Common stock distributed | (c) | [•] | ||||
Total adjustment | $1,913 | |||||
(d) | The total weighted-average number of shares of our common stock used to compute basic net loss per share for the six months ended July 3, 2026 and the fiscal year ended January 2, 2026 is [•] and [•], respectively, which includes the shares distributed by KBR to its shareholders on the distribution date based on a distribution ratio of [•] share[s] of Trinzic’s common stock for every [•] share[s] of KBR common stock. |
(e) | Reflects $2 million of retention bonuses related to the spin-off that will be settled primarily in shares of Trinzic common stock after the spin-off. These costs are not expected to recur after the spin-off. These costs have been reflected in selling, general, and administrative expenses in the unaudited pro forma combined statement of operations for the fiscal year ended January 2, 2026. |
(f) | Reflects $3 million of rebranding, advertising, and other nonrecurring costs related to the spin-off, which are expected to be incurred and paid by Trinzic within 12 months following the completion of the spin-off. These costs are not expected to recur after the spin-off. These costs have been reflected in selling, general, and administrative expenses in the unaudited pro forma combined statement of operations for the fiscal year ended January 2, 2026. Actual charges that will be incurred could be different from these estimates. Subject to the terms of the separation agreement, we expect that all other non-recurring costs related to the spin-off will be incurred and payable by KBR and are not reflected as pro forma adjustments. |
(g) | Reflects payroll and other employee benefits liabilities for corporate employees that will transfer with Trinzic upon completion of the spin-off. These liabilities were not recorded in our historical combined financial statements as the employees have not historically been dedicated to Trinzic. These liabilities are recorded within accrued salaries, wages and benefits, and employee compensation and benefits in the unaudited pro forma combined balance sheet. |
(h) | Reflects the finance lease asset and related liabilities for leases historically dedicated to support corporate functions that have been identified as conveying with Trinzic upon completion of the spin-off. These finance lease assets are recorded within property, plant, and equipment, net, while the related lease liabilities are recorded within other current liabilities and other liabilities in the unaudited pro forma combined balance sheet. |
• | Trusted mission expertise. We are deeply embedded in our customers’ missions, bringing deep mission expertise and partnership to deliver measurable outcomes with lasting value and impact through a differentiated, commercial, vendor-agnostic model. |
• | Technology-forward approach. We harness, adapt, and rapidly deploy advanced technologies to address critical and rapidly changing mission needs. |
• | Global presence with sovereign delivery. We serve our customers wherever their missions demand, harnessing our global presence, decades of experience developing and deploying technologies and capabilities. Our sovereign delivery capabilities provide autonomy, independence, and partnership with allied nations as well as safety, resilience, and dependability for the missions we serve. |
• | Scaled operations and stable, diversified, long-term contract base. Already operating at scale, we derive a majority of our revenue from diversified, long-term contracts that provide a high degree of revenue visibility at predictable margins and high renewal rates. |
• | Efficient cost-structure and predictable cash flows. Our stable, predictable revenue model, combined with our efficient cost structure and capital-light business model, supports strong, predictable cash flows. |
Six months ended | ||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | ||||
U.S. Government Defense and Intelligence Customers | $1,650 | $1,762 | ||||
U.S. Government Federal Civilian Customers | 516 | 554 | ||||
International Government Customers | 391 | 348 | ||||
Commercial and Infrastructure Customers | 47 | 53 | ||||
Total revenue | $2,604 | $2,717 | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
U.S. Government Defense and Intelligence Customers | $3,370 | $3,292 | $3,039 | ||||||
U.S. Government Federal Civilian Customers | 1,056 | 1,112 | 1,052 | ||||||
International Government Customers | 726 | 705 | 627 | ||||||
Commercial and Infrastructure Customers | 104 | 109 | 104 | ||||||
Total revenue | $5,256 | $5,218 | $4,822 | ||||||
Six months ended | ||||||
Dollars in millions | July 3, | July 4, | ||||
Total by Countries/Region | 2026 | 2025 | ||||
United States | $1,901 | $1,964 | ||||
Europe | 433 | 507 | ||||
Middle East | 63 | 65 | ||||
Australia | 128 | 106 | ||||
Africa | 39 | 36 | ||||
Asia | 9 | 13 | ||||
Other countries | 31 | 26 | ||||
Total revenue | $2,604 | $2,717 | ||||
Year ended | |||||||||
Dollars in millions Total by Countries/Region | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
United States | $3,770 | $3,503 | $3,096 | ||||||
Europe | 990 | 1,258 | 1,272 | ||||||
Australia | 219 | 202 | 204 | ||||||
Middle East | 123 | 110 | 105 | ||||||
Africa | 77 | 70 | 70 | ||||||
Asia | 20 | 18 | 17 | ||||||
Other countries | 57 | 57 | 58 | ||||||
Total revenue | $5,256 | $ 5,218 | $4,822 | ||||||
Year ended | ||||||||||||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||||||||||
U.S. government | $4,426 | 84% | $4,350 | 83% | $4,000 | 83% | ||||||||||||
UK government | $486 | 9% | $484 | 9% | $408 | 8% | ||||||||||||
Other government, commercial and infrastructure | $344 | 7% | $384 | 8% | $414 | 9% | ||||||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||||||||
U.S. government | $508 | 79% | $523 | 77% | ||||||||
UK government | $23 | 4% | $27 | 4% | ||||||||
Other government, commercial and infrastructure | $114 | 17% | $125 | 19% | ||||||||
• | digital engineering and integration; |
• | mission software development; |
• | mission engineering; |
• | AI and data analytics |
• | rapid capability prototyping and development in virtual environments; and |
• | expeditionary logistics. |
• | Digital Engineering and Integration. We integrate complex systems-of-systems using advanced digital environments, architectures, and common data models. We leverage generative AI and machine learning to create virtual prototypes of mission systems that predict performance and execute design trades before physical development, saving customers time and money while accelerating fielding and improving interoperability. We strategically position our digital engineering facilities, equipment, and specialized tools across global locations, enabling near-real-time identification and evaluation of warfighting scenarios and modeled tactical responses that optimize resource allocation for national security and space missions. Since its inception in 2022, we have served as a key technology integrator for the Air Force’s Collaborative Combat Aircraft program, building and operating the Government Autonomy Modeling and Simulation Environment used to evaluate third-party autonomy technologies for integration readiness. This solution uses modeling, simulation, data analytics, and edge computing to accelerate delivery of operational autonomous capability at reduced cost and compressed timelines. We also leverage digital environments to advance Integrated Air and Missile Defense, integrating advanced technologies with existing systems such as PATRIOT and THAAD to accelerate fielding new technology without vendor lock. We enable programs essential to the Golden Dome program, with advanced detection, tracking, and survivability capabilities in contested environments. |
• | Mission Engineering. We design mission architectures that enable systems-of-systems to operate seamlessly to achieve specific mission tasks and operational outcomes at an enterprise scale. We incorporate model-based systems engineering, advanced analytics, and AI/machine learning to inform portfolio-level decisions. Through digital modeling and simulation, we optimize system-to-system data exchanges, operational effectiveness, and lifecycle performance. We serve as lead systems integrator for the $42 billion Military Satellite Communications enterprise supporting the U.S. Space Force, providing full lifecycle systems engineering, integration, and digital solutions across the program’s diverse satellites, ground stations, and terminals, efficiently and effectively delivering operationally-relevant, mission-critical communication capability to the warfighter. In the UK, we bring expertise across the full nuclear enterprise, combining experience from major civil nuclear programs with longstanding defense nuclear and national security support. Our solutions help governments strengthen sovereign capability, modernize critical nuclear infrastructure, and support the next generation of defense nuclear programs — including those being shaped through AUKUS and wider allied nuclear partnerships — turning long-term national ambition into safe, secure, and enduring operational capability. For the Australian Department of Defence, we provide integrated solutions supporting air platform mission planning (crewed and autonomous) as well as air and space resource management, integrating U.S. Foreign Military Sales technologies with commercial tools to process and disseminate multi-source data for complex mission plans across benign to highly hostile environments. |
• | Mission Software Development. We develop and integrate open software architectures that are secure, scalable, and adaptable — supporting missions from space operations to autonomous systems and C5ISR. Our innovative aircraft mission software solutions integrate mission system code from multiple developers. We facilitate a Modular Open System Approach, which ensures government customers maintain architectural control, avoids vendor lock, enables faster innovation cycles, reduces upgrade costs, and delivers operational agility to respond to rapidly evolving threats. We anticipate this approach will expand to additional U.S. Air Force Program Executive Offices given its alignment with current DoW acquisition objectives. We empower the U.S. Navy to develop and deploy secure, interoperable multi-cloud Sensitive Compartmented Information environments across Amazon Web Services, Microsoft Azure, and Google Cloud — integrating software-defined networking, confidential computing, and zero-trust architectures to protect classified workloads while accelerating innovation. |
• | Data Analytics and Artificial Intelligence. We deliver AI-powered analytics that generate actionable insights for complex mission decisions, applying data science, machine learning, and predictive analytics to enhance situational awareness, decision-making, and system performance. We lead the prototyping and evolution of |
• | Rapid Capability Development. We design, integrate, and field advanced research, development, and test and evaluation capabilities. Our agile prototyping processes enable us to respond quickly to emerging threats and evolving mission needs. We deliver operational capabilities in electronic warfare and spectrum superiority — advancing, prototyping, and integrating space control systems for the warfighter, with teams deploying alongside the U.S. Army to generate mission effects and create tactical advantages across the complex spectrum battlefield. We also integrate, test, and deliver directed energy prototype platforms, including the High Energy Laser Weapon Module and other advanced technology components, with full lifecycle support encompassing maintenance and training for systems fielded domestically and deployed globally. Our high energy laser systems, at Technology Readiness Level 8, are designed for the urgent CUAS mission and have proven effective at tracking and defeating drone threats. |
• | Health and Human Performance. We are a leader in delivering health and human performance solutions to customers facing the most extreme mission conditions in warfare, space, and austere or isolated environments. We deploy leading medical, health, and wellness scientists who assess operating environments and prepare personnel for the human performance factors critical to mission success. As the flagship astronaut health and performance partner to NASA, we apply advanced biomedical research, predictive modeling, and engineering innovation to support crews for spaceflight — having supported U.S. astronauts since 1968 and now powering the Artemis moon-landing program, the International Space Station, and Commercial Crew missions through integrated health systems and digital technologies. Through the Preservation of the Force and Family program, we embed experts with U.S. Special Operations Command personnel to strengthen the physical, mental, and emotional resilience of special operations forces and their families, improving readiness and sustained performance on and off the battlefield. |
• | Global Expeditionary Logistics. We deliver rapid, scalable logistics solutions spanning national security and humanitarian deployments globally — establishing and sustaining life support, including safety, security, and health services for quick-reaction operations as well as major permanent installations. We operate and sustain major U.S. military sites globally, including Naval Support Facility Diego Garcia (Indian Ocean), Naval Support Facility Djibouti (Horn of Africa), Incirlik Air Base (Türkiye), Camp Bondsteel (southeastern Kosovo), and Mihail Kogălniceanu Air Base (Romania), maintaining critical power, water, airport, seaport, and life support operations. For commercial aerospace customers such as Honeywell Technologies, we provide integrated supply chain and production solutions to support their global operations, leveraging advanced technology, data analytics, and tailored approaches to maximize operational value and productivity. Through our UK operations, we deliver infrastructure, facilities management, logistics, and operational support to defense and government customers overseas, including the UK Naval Support Facility in Bahrain and British Embassy estates across the Middle East, sustaining operational readiness and diplomatic presence in strategically complex environments. |
• | Systems Operations and Sustainment. We deliver mission-critical operations, maintenance, and sustainment services that enhance readiness and reliability across multiple theaters worldwide. Our capabilities include mission operations analysis and decision support that empower commanders to model people, platforms, networks, and workflows. We provide Concept of Operations visualization and model-based systems engineering toolchains — enabling digital twin testing of alternatives before committing resources. We support Naval aviation readiness by migrating technical data and sustainment workflows to modern, data-centric platforms with enterprise data transport, standard data repositories, and cloud test environments serving approximately 58,000 users, driving predictive maintenance analytics, increased aircraft readiness, |
Dollars in millions | July 3, 2026 | January 2, 2026 | January 3, 2025 | ||||||
Backlog | $12,282 | $12,552 | $12,478 | ||||||
Award options | 5,192 | 6,347 | 3,975 | ||||||
Total backlog and options | $17,474 | $18,899 | $16,453 | ||||||
• | Require certification and disclosure of all cost and pricing data in connection with certain contract negotiations. |
• | Define allowable and unallowable costs and otherwise govern our right to reimbursement under various cost-type U.S. federal government contracts. |
• | Require compliance with CAS. |
• | Require reviews by the DCAA, DCMA, and other regulatory agencies for compliance with a contractor’s business systems. |
• | Restrict the use and dissemination of and require the protection of unclassified contract-related information and information classified for national security purposes and the export of certain products and technical data. |
• | Prohibit competing for work if an actual or potential organizational conflict of interest, as defined by these laws and regulations, related to such work exists and/or cannot be appropriately mitigated, neutralized, or avoided. |
Six months ended | ||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | ||||
Cost Reimbursable | $1,517 | $1,744 | ||||
Time-and-Materials | 403 | 401 | ||||
Fixed Price | 684 | 572 | ||||
Total revenue | $2,604 | $2,717 | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Cost Reimbursable | $3,304 | $3,507 | $3,287 | ||||||
Time-and-Materials | 768 | 721 | 694 | ||||||
Fixed Price | 1,184 | 990 | 841 | ||||||
Total net revenue | $5,256 | $5,218 | $4,822 | ||||||
Location | Owned/Leased | ||
North America: | |||
Houston, Texas | Leased | ||
Fulton, Maryland | Leased | ||
Columbia, Maryland | Leased | ||
Lexington Park, Maryland | Leased | ||
Arlington, Virginia | Leased | ||
Chantilly, Virginia | Leased | ||
Vienna, Virginia | Leased | ||
Herndon, Virginia | Leased | ||
Huntsville, Alabama | Leased | ||
Phoenix, Arizona | Leased | ||
El Segundo, California | Leased | ||
El Segundo, California | Owned | ||
Colorado Springs, Colorado | Leased | ||
North Charleston, South Carolina | Leased | ||
Dayton/Beavercreek, Ohio | Leased | ||
Europe, Middle East, and Africa: | |||
Leatherhead, United Kingdom | Leased | ||
Glasgow, United Kingdom | Leased | ||
Wiltshire, United Kingdom | Leased | ||
Al Khobar, Saudi Arabia | Leased | ||
Asia-Pacific: | |||
Chennai, India | Leased | ||
Majura Park, Australia | Leased | ||
Brisbane, Australia | Leased | ||
Sydney, Australia | Leased | ||
Melbourne, Australia | Leased | ||
Canberra, Australia | Leased | ||
• | Company Overview |
• | Our Business Segment |
• | Business Environment and Trends |
• | The Spin-Off from KBR |
• | Results of Operations |
• | Non-GAAP Measures |
• | Backlog of Unfilled Orders |
• | Liquidity and Capital Resources |
• | Transactions with Joint Ventures |
• | Recent Accounting Pronouncements |
• | U.S. Government Matters |
• | Legal Proceedings |
• | Critical Accounting Policies and Estimates |
• | Quantitative and Qualitative Disclosures about Market Risk |
Three months ended | Change | |||||||||||
July 3, 2026 | July 4, 2025 | 2026 vs. 2025 | ||||||||||
Dollars in millions | $ | % | ||||||||||
Revenue | $1,308 | $1,336 | $(28) | (2)% | ||||||||
Cost of revenue | (1,117) | (1,163) | (46) | (4)% | ||||||||
Equity in earnings of unconsolidated affiliates | 11 | 8 | 3 | 38% | ||||||||
Selling, general, and administrative expenses | (86) | (89) | (3) | (3)% | ||||||||
Lease right-of-use asset impairment | (13) | — | (13) | n/m | ||||||||
Other operating income (expense) | (1) | 1 | (2) | n/m | ||||||||
Operating income | 102 | 93 | 9 | 10% | ||||||||
Interest expense | (3) | (4) | (1) | (25)% | ||||||||
Other non-operating expense | — | (3) | 3 | n/m | ||||||||
Income from continuing operations before income taxes | 99 | 86 | 13 | 15% | ||||||||
Provision for income taxes | (22) | (20) | 2 | 10% | ||||||||
Net income from continuing operations | 77 | 66 | 11 | 17% | ||||||||
Net income (loss) from discontinued operations, net of tax | 2 | (48) | 50 | n/m | ||||||||
Net income | 79 | 18 | 61 | n/m | ||||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | 1 | (16) | 17 | n/m | ||||||||
Net income attributable to Trinzic | $78 | $34 | $44 | n/m | ||||||||
Six months ended | Change | |||||||||||
July 3, 2026 | July 4, 2025 | 2026 vs. 2025 | ||||||||||
Dollars in millions | $ | % | ||||||||||
Revenue | $2,604 | $2,717 | $(113) | (4)% | ||||||||
Cost of revenue | (2,239) | (2,369) | (130) | (5)% | ||||||||
Equity in earnings of unconsolidated affiliates | 21 | 15 | 6 | 40% | ||||||||
Selling, general, and administrative expenses | (173) | (178) | (5) | (3)% | ||||||||
Lease right-of-use asset impairment | (13) | — | (13) | n/m | ||||||||
Other operating income (expense) | (3) | 1 | (4) | n/m | ||||||||
Operating income | 197 | 186 | 11 | 6% | ||||||||
Interest expense | (5) | (8) | (3) | (38)% | ||||||||
Other non-operating income | — | 1 | (1) | n/m | ||||||||
Income from continuing operations before income taxes | 192 | 179 | 13 | 7% | ||||||||
Provision for income taxes | (45) | (39) | 6 | 15% | ||||||||
Net income from continuing operations | 147 | 140 | 7 | 5% | ||||||||
Net loss from discontinued operations, net of tax | — | (54) | 54 | n/m | ||||||||
Net income | 147 | 86 | 61 | 71% | ||||||||
Less: Net loss attributable to noncontrolling interests included in discontinued operations | — | (18) | 18 | n/m | ||||||||
Net income attributable to Trinzic | $147 | $104 | $43 | 41% | ||||||||
Year ended | Change | ||||||||||||||||||||
January 2, 2026 | January 3, 2025 | December 29, 2023 | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||
Dollars in millions | $ | % | $ | % | |||||||||||||||||
Revenue | $5,256 | $5,218 | $4,822 | $38 | 1% | $396 | 8% | ||||||||||||||
Cost of revenue | (4,572) | (4,582) | (4,239) | (10) | —% | 343 | 8% | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 33 | 32 | 33 | 1 | 3% | (1) | (3)% | ||||||||||||||
Selling, general, and administrative expenses | (342) | (350) | (297) | (8) | (2)% | 53 | 18% | ||||||||||||||
Legacy legal fees and settlements | — | (2) | (155) | 2 | 100% | (153) | (99)% | ||||||||||||||
Other operating income (expense) | 2 | 1 | (2) | 1 | 100% | 3 | n/m | ||||||||||||||
Operating income | 377 | 317 | 162 | 60 | 19% | 155 | 96% | ||||||||||||||
Interest expense | (13) | (19) | (20) | (6) | (32)% | (1) | (5)% | ||||||||||||||
Other non-operating expense | (1) | (2) | (10) | (1) | (50)% | (8) | (80)% | ||||||||||||||
Income from continuing operations before income taxes | 363 | 296 | 132 | 67 | 23% | 164 | 124% | ||||||||||||||
Provision for income taxes | (82) | (70) | (50) | 12 | 17% | 20 | 40% | ||||||||||||||
Net income from continuing operations | 281 | 226 | 82 | 55 | 24% | 144 | 176% | ||||||||||||||
Net income (loss) from discontinued operations, net of tax | (55) | 2 | (1) | (57) | n/m | 3 | n/m | ||||||||||||||
Net income | 226 | 228 | 81 | (2) | (1)% | 147 | 181% | ||||||||||||||
Less: Net loss attributable to noncontrolling interests included in continuing operations | — | (1) | (1) | 1 | 100% | — | —% | ||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | (19) | 1 | — | (20) | n/m | 1 | n/m | ||||||||||||||
Net income attributable to Trinzic | $245 | $228 | $82 | $17 | 7% | $146 | 178% | ||||||||||||||
Three months ended | Six months ended | |||||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||
Revenue | $1,308 | $1,336 | $2,604 | $2,717 | ||||||||
Net income attributable to Trinzic | 78 | 34 | 147 | 104 | ||||||||
Net (income) loss from discontinued operations, net of tax | (2) | 48 | — | 54 | ||||||||
Net income (loss) attributable to Trinzic included in discontinued operations | 1 | (16) | — | (18) | ||||||||
Net income attributable to Trinzic from continuing operations | 77 | 66 | 147 | 140 | ||||||||
Interest expense | 3 | 4 | 5 | 8 | ||||||||
Other non-operating (income) expense | — | 3 | — | (1) | ||||||||
Provision for income taxes | 22 | 20 | 45 | 39 | ||||||||
Depreciation and amortization | 25 | 28 | 49 | 54 | ||||||||
Net periodic pension benefit | (9) | (11) | (18) | (21) | ||||||||
Acquisition, integration, and restructuring | 4 | 2 | 4 | 5 | ||||||||
Share of JV interest, tax and D&A(1) | 3 | — | 4 | — | ||||||||
Lease right-of-use asset impairment | 13 | — | 13 | — | ||||||||
Adjusted EBITDA | $138 | $112 | $249 | $224 | ||||||||
Adjusted EBITDA Margin | 10.6% | 8.4% | 9.6% | 8.2% | ||||||||
(1) | Beginning with fiscal 2026 periods presented, Adjusted EBITDA was revised to include add-backs associated with Trinzic’s share of unconsolidated JV interest, taxes, depreciation, and amortization on a prospective basis. Management concluded that retrospective application would not provide additional meaningful information to investors and therefore did not recast historical non-GAAP results. The estimated impact was approximately 15 basis points in periods related to fiscal 2023, fiscal 2024, and fiscal 2025. |
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Revenue | $5,256 | $5,218 | $4,822 | ||||||
Net income attributable to Trinzic | $245 | $228 | $82 | ||||||
Net (income) loss from discontinued operations, net of tax | 55 | (2) | 1 | ||||||
Net income (loss) attributable to noncontrolling interests included in discontinued operations | (19) | 1 | — | ||||||
Net income attributable to Trinzic from continuing operations | $281 | $227 | $83 | ||||||
Interest expense | 13 | 19 | 20 | ||||||
Other non-operating expense | 1 | 2 | 10 | ||||||
Provision for income taxes | 82 | 70 | 50 | ||||||
Depreciation and amortization | 103 | 89 | 75 | ||||||
Net periodic pension benefit | (43) | (47) | (40) | ||||||
Acquisition, integration, and restructuring | 7 | 16 | 4 | ||||||
Legacy legal fees and settlements | — | 24 | 155 | ||||||
Adjusted EBITDA | $444 | $400 | $357 | ||||||
Adjusted EBITDA Margin | 8.4% | 7.7% | 7.4% | ||||||
Dollars in millions | July 3, 2026 | January 2, 2026 | January 3, 2025 | ||||||
Backlog | $12,282 | $12,552 | $12,478 | ||||||
Award options | 5,192 | 6,347 | 3,975 | ||||||
Total backlog and options | $17,474 | $18,899 | $16,453 | ||||||
Dollars in millions | July 3, 2026 | January 2, 2026 | January 3, 2025 | ||||||
Domestic U.S. cash | $34 | $103 | $25 | ||||||
International cash | 70 | 40 | 23 | ||||||
Joint venture and Aspire Defence contract cash | 43 | 24 | 95 | ||||||
Total | $147 | $167 | $143 | ||||||
Six months ended | ||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | ||||
Cash flows provided by operating activities - continuing operations | $196 | $176 | ||||
Cash flows used in investing activities - continuing operations | (10) | (10) | ||||
Cash flows used in financing activities - continuing operations | (204) | (158) | ||||
Total cash flows from discontinued operations | (2) | (31) | ||||
Effect of exchange rate changes on cash | (2) | 18 | ||||
Decrease in cash and cash equivalents | $(22) | $(5) | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Cash flows provided by operating activities - continuing operations | $420 | $168 | $113 | ||||||
Cash flows used in investing activities - continuing operations | (20) | (754) | (23) | ||||||
Cash flows provided by (used in) financing activities - continuing operations | (358) | 537 | (15) | ||||||
Total cash flows from discontinued operations | (33) | (13) | 12 | ||||||
Effect of exchange rate changes on cash | 12 | (4) | 8 | ||||||
Increase (decrease) in cash and cash equivalents | $21 | $(66) | $95 | ||||||
Payments Due | |||||||||||||||||||||
Dollars in millions | Fiscal 2026 | Fiscal 2027 | Fiscal 2028 | Fiscal 2029 | Fiscal 2030 | Thereafter | Total | ||||||||||||||
Debt obligations | $8 | $8 | $8 | $99 | $— | $— | $123 | ||||||||||||||
Interest(a) | 7 | 7 | 6 | — | — | — | 20 | ||||||||||||||
Operating leases | 37 | 33 | 29 | 27 | 23 | 66 | 215 | ||||||||||||||
Purchase obligations and contract-related funding(b) | 7 | 1 | 1 | 1 | — | — | 10 | ||||||||||||||
Total(c) | $59 | $49 | $44 | $127 | $23 | $66 | $368 | ||||||||||||||
(a) | Determined based on long-term debt borrowings outstanding at January 2, 2026 using the interest rates in effect for the individual borrowings as of January 2, 2026, including the effects of interest rate swaps. The payments due for interest reflect the cash interest that will be paid, which includes interest on outstanding borrowings and commitment fees. These amounts exclude the amortization of discounts or debt issuance costs. |
(b) | In the ordinary course of business, we enter into commitments to purchase software and related maintenance, materials, supplies, and similar items. The purchase obligations disclosed above do not include purchase obligations that we enter into with vendors in the normal course of business that support direct contract costs on existing contracting arrangements with our customers. We expect to recover such obligations from our customers. |
(c) | We have excluded uncertain tax positions totaling $13 million as of January 2, 2026. The ultimate timing of settlement of these obligations cannot be determined with reasonable assurance. See Note 13. “Income Taxes” to our combined financial statements for further discussion on income taxes. |
Effect on | ||||||||||||
Pretax Pension Cost in Fiscal 2026 | Pension Benefit Obligation at January 2, 2026 | |||||||||||
Dollars in millions | U.S. | UK | U.S. | UK | ||||||||
25-basis-point decrease in discount rate | $— | $— | $— | $31 | ||||||||
25-basis-point increase in discount rate | $— | $— | $— | $(30) | ||||||||
25-basis-point decrease in expected long-term rate of return | $— | $4 | N/A | N/A | ||||||||
25-basis-point increase in expected long-term rate of return | $— | $(4) | N/A | N/A | ||||||||
Dollars in millions | Notional Amount at July 3, 2026 | Pay Fixed Rate (Weighted Average) | Receive Variable Rate | Settlement and Termination | ||||||||
March 2023 Amortizing Interest Rate Swaps | £101 | 3.81% | Term SONIA | Monthly through November 2026 | ||||||||
Dollars in millions | Notional Amount at January 2, 2026 | Pay Fixed Rate (Weighted Average) | Receive Variable Rate | Settlement and Termination | ||||||||
March 2023 Amortizing Interest Rate Swaps | £104 | 3.81% | Term SONIA | Monthly through November 2026 | ||||||||
Name | Age | Position | ||||
Michael LaRouche | 61 | President and Chief Executive Officer, Director | ||||
Nicholas Veasey | 47 | Executive Vice President and Chief Financial Officer | ||||
Sonia Galindo | 58 | Executive Vice President, General Counsel and Corporate Secretary | ||||
Sam Geis | 52 | Chief People Officer | ||||
Name | Age | Position | ||||
• | reviewing and discussing with management and the independent auditors, and recommending to the Trinzic board of directors for approval, Trinzic’s annual audited financial statements, disclosures made in MD&A, Trinzic’s internal controls report, and any independent auditors’ attestation of the report in Trinzic’s annual report on Form 10-K; |
• | reviewing and discussing with management and the independent auditors Trinzic’s quarterly financial statements and MD&A disclosures in Trinzic’s quarterly reports on Form 10-Q; |
• | reviewing Trinzic’s earnings press releases and use of any non-GAAP financial measures; |
• | reviewing and discussing with management and the independent auditors any major issues and judgments regarding Trinzic’s accounting principles and financial statement presentations; |
• | reviewing and discussing with management (including the senior internal audit executive) and the independent auditors the adequacy and effectiveness of Trinzic’s disclosure controls and procedures and internal controls; |
• | reviewing Trinzic’s major financial risk exposures, including the status of the Corporation’s financial instruments; |
• | reviewing and taking appropriate action with respect to any reports concerning any material violations of securities law or breaches of fiduciary duty or similar violation; |
• | reviewing with management and the independent auditors the responsibilities, budget and staffing of the internal auditors and any recommended changes in the planned scope of the internal audit; |
• | engaging Trinzic’s independent auditing firm each year; reviewing the audit and other professional services rendered by the firm; evaluating the independent auditors’ qualifications, performance and independence; and establishing and periodically reviewing Trinzic’s hiring policies for employment of the independent auditors’ current or former personnel; |
• | confirming the regular rotation of audit partners as required by law; |
• | reviewing Trinzic’s processes for identifying related party transactions and approving related party transactions as needed; |
• | reviewing and verifying compliance with Trinzic’s Code of Business Conduct and reviewing and making recommendations to the Trinzic board of directors in connection with any requests to approve a waiver or an exception to the Code of Business Conduct; |
• | establishing procedures for the confidential and anonymous submission, receipt, retention, and treatment of complaints received by Trinzic regarding accounting, internal accounting controls, or auditing matters; |
• | overseeing Trinzic’s activities in managing its major risk exposures and reporting to the Trinzic board of directors on matters affecting Trinzic in these areas; |
• | reviewing and reporting to the Trinzic board of directors on Trinzic’s policies and processes designed to ensure Trinzic (and each of its subsidiaries’) compliance with applicable laws and regulations; |
• | reviewing with management the adequacy of Trinzic’s disclosure controls and procedures relating to cybersecurity issues; |
• | reviewing with management, including the Chief Information Officer and Chief Security Officer, Trinzic’s information technology systems (including artificial intelligence), cybersecurity and data privacy programs, emerging cybersecurity developments and threats, Trinzic’s strategy to manage cybersecurity and data privacy risks; |
• | providing oversight of Trinzic’s global data privacy and security regulations compliance program and requirements and reviewing the effectiveness of Trinzic’s related systems, controls, and procedures; |
• | reviewing with management and reporting to the Trinzic board of directors with respect to any significant cybersecurity or data privacy incident, reports to or from regulators with respect thereto, and root cause and remediation/enhancement efforts with respect thereto; |
• | reviewing and discussing with management the internal controls, processes, and disclosures relating to human capital management, in coordination with the Nominating and Corporate Governance Committee; |
• | preparing and publishing an annual Audit Committee report; and |
• | meeting periodically in separate executive sessions with management (including Trinzic’s Chief Financial Officer and General Counsel), the internal auditors, and the independent auditors and having such other direct and independent interaction with such persons from time to time as appropriate. |
• | evaluating and advising the Trinzic board of directors regarding the compensation policies applicable to Trinzic’s “executive officers,” including the specific relationship between corporate performance and executive compensation; |
• | reviewing and recommending to the Trinzic board of directors the corporate goals and objectives relevant to compensation for the Chief Executive Officer, the Chief Executive Officer’s performance in light of these established goals and objectives, and the Chief Executive Officer’s compensation package based on this evaluation, the results of the most recent Say-on-Pay Vote, and any other relevant factors; |
• | reviewing the Chief Executive Officer’s recommendations with respect to, and approving, the compensation to be paid to Trinzic’s other executive officers in accordance with the general compensation policies established by the Trinzic board of directors and having considered the results of the most recent Say-on-Pay Vote and any other relevant factors; |
• | reviewing and making recommendations to the Trinzic board of directors with respect to incentive compensation and other stock-based plans, including identifying and setting financial and/or non-financial performance-related metrics as targets; |
• | reviewing and approving the selection of comparable peer group companies for the purpose of benchmarking the Chief Executive Officer and other executive officers’ compensation; |
• | approving any plans or amendments adopted pursuant to an exemption from the stockholder approval requirements of Section 303A.08 of the NYSE Listed Company Manual; |
• | assisting the Board with respect to administering Trinzic’s incentive compensation and other stock-based plans, including the equity grant policy; |
• | reviewing and discussing with management the “Compensation Discussion and Analysis” and determining whether to recommend to the Trinzic board of directors that it be included in Trinzic’s annual proxy statement or annual report on Form 10-K; |
• | preparing and publishing an annual executive compensation report; |
• | reviewing the risk assessment of Trinzic’s compensation plans to ensure that the programs do not create risks that are reasonably likely to have a material adverse effect on Trinzic; |
• | reviewing and approving the creation or revision of any clawback policy allowing Trinzic to recoup compensation paid to employees, including Trinzic’s Procedure for the Recovery of Erroneously Awarded |
• | periodically reviewing the compensation paid to non-executive employee directors and making recommendations to the Trinzic board of directors regarding any adjustments; |
• | selecting any independent compensation consultant or other adviser to assist the committee in its work; |
• | approving disclosures and making recommendations to the Trinzic board of directors regarding the disclosures on Trinzic’s Advisory Vote on Executive Compensation and Advisory Vote on the Frequency of Advisory Votes on the Named Executive Compensation to be included in Trinzic’s annual proxy statement; and |
• | reviewing periodically and making recommendations to the Trinzic board of directors regarding stock ownership guidelines for Trinzic’s directors and executive officers, and assessing compliance with such guidelines. |
• | reviewing periodically Trinzic’s corporate governance guidelines and recommending revisions to the guidelines as appropriate; |
• | developing, recommending to the Trinzic board of directors for its approval, and overseeing an annual self-evaluation process of the Trinzic board of directors and its committees; |
• | identifying and screening candidates for board membership, consistent with approved criteria from the Trinzic board of directors, NYSE listing standards, and other applicable requirements; |
• | assessing the appropriate mix of skills and characteristics, including a candidate’s integrity, strength of character, judgment, business and other relevant experience, education, areas of expertise, and cultural and personal background, required of the Trinzic board of directors members; |
• | reviewing and periodically updating the criteria for the Trinzic board of directors membership and the composition of the Trinzic board of directors and its committees; |
• | reviewing periodically each director’s continuation on the Trinzic board of directors, independence, and membership on committees, identifying and recommending candidates to fill board or committee vacancies, and recommending annually to the Trinzic board of directors a slate of director nominees; |
• | reviewing the development and implementation of Trinzic’s human capital management policies, strategies, and goals, and discussing with management, as appropriate, their reports regarding the development, implementation, and effectiveness of Trinzic’s policies relating to human capital management; |
• | reviewing and providing general oversight of Trinzic’s compliance and plans for compliance in light of existing, new and evolving laws, regulations, rules, and policies relating to human capital management, and discussing with management any developments that may materially impact Trinzic’s related major risk exposures, in coordination with the Audit Committee; |
• | reviewing and regularly reporting to the Trinzic board of directors on succession plans and management development programs for members of executive management and the Chief Executive Officer; |
• | receiving presentations at least annually from, and providing general oversight to, Trinzic’s Chief People Officer; |
• | reviewing Trinzic’s public disclosures with respect to human capital management, including those disclosures in Trinzic’s filings and reports with the U.S. and international regulatory bodies and (in coordination with the Audit Committee) Trinzic’s disclosure controls and procedures and internal control over financial reporting relating thereto; |
• | ensuring Trinzic has policies and procedures, and periodically reviewing such policies and procedures, to: |
○ | protect Trinzic’s culture and values; |
○ | ensure fundamental human and workplace rights prohibiting all forms of forced labor and human trafficking; and |
○ | support human capital management, including recruiting, retention, career development, opportunity and advancement, and succession and employment practices; |
• | reviewing and recommending to the Trinzic board of directors the designation of Trinzic’s “executive officers” as defined in Rule 3b-7 under the Exchange Act and its “officers” as defined under Rule 16a-1 under the Exchange Act; |
• | establishing procedures for stockholders to recommend individuals for consideration as possible candidates for election to the Trinzic board of directors; |
• | establishing and maintaining the Trinzic board of directors action plan to address shareholder activism; and |
• | reviewing shareholder proposals submitted for inclusion in Trinzic’s proxy statement and recommending any responses to the Trinzic board of directors. |
• | Michael LaRouche will serve as President and Chief Executive Officer; |
• | Nicholas Veasey will serve as Executive Vice President and Chief Financial Officer; |
• | Sonia Galindo will serve as Executive Vice President, General Counsel & Corporate Secretary; and |
• | Sam Geis will serve as Chief People Officer. |
(i) | the executive’s unearned bonus under the annual cash incentive plan payable for the fiscal year in which the termination occurs, with such bonus amount determined at the end of the performance period in accordance with the plan. Any such earned amount will be prorated to the executive’s date of termination and paid in a lump sum on the normal payment date for such annual bonuses under the plan, but not later than the March 15 following the end of the performance period; |
(ii) | the executive’s unpaid bonus (if any) accrued under the annual cash incentive plan for the fiscal year that ended on or immediately before the executive’s date of termination, which shall be paid in a lump sum on the normal payment date for such bonuses, but not later than the March 15 following the end of such prior performance period; |
(iii) | the restrictions on all restricted stock, RSUs, and other equity-based awards that are not performance awards held by the executive will lapse in full on the date of termination; |
(iv) | all stock options and stock appreciation rights (“SARs”) held by the executive will become fully vested and exercisable on the date of termination and may be exercised until the earlier of the second anniversary of the date of termination (unless otherwise provided by the Compensation Committee of KBR’s board of directors (“KBR’s Compensation Committee”), in its discretion) and the remaining term of such option or SAR; |
(v) | all outstanding performance awards granted to the executive will be prorated to the date of termination, and to the extent such awards become “earned” based on actual performance results at the end of the performance period, will be paid to the executive in a lump sum on the normal payment date for such awards under the plan, but not later than the March 15 following the end of the performance period; and |
(vi) | all the executive’s account balances in all supplemental and nonqualified retirement plans of KBR and its affiliates will become fully vested on the date of termination. |
(i) | a lump-sum cash payment equal to the sum of: (i) one and a half times the executive’s annual base salary (two times for the Chief Executive Officer (“CEO”)) in effect at termination, plus (ii) one and half times the executive’s annual target bonus opportunity (two times for the CEO); |
(ii) | all vested stock options and SARs may be exercised within the one-year period following termination, but not later than the remaining term of the option or SARs; and |
(iii) | all unvested stock options, SARs, restricted stock, RSUs, and performance awards will be forfeited, unless and to the extent provided otherwise by KBR’s Compensation Committee, in its discretion, with respect to non-performance awards. |
(i) | A lump sum cash payment equal to the sum of: (i) two times (three times for the CEO) the executive’s base salary in effect at termination (or, if higher, the executive’s base salary in effect immediately prior to the change in control), plus (ii) two times (three times for the CEO) the executive’s annual target bonus opportunity; |
(ii) | the executive’s unearned bonus under the annual cash incentive plan payable for the fiscal year in which the executive’s termination occurs, with such bonus amount determined at the end of the performance period in accordance with the plan, and then such earned amount (if any) (x) prorated to the executive’s date of termination and (y) paid to the executive in a lump sum on the normal payment date for such annual bonuses, but not later than the March 15 following the end of the performance period; |
(iii) | the executive’s unpaid bonus (if any) accrued under the annual cash incentive plan for the fiscal year that ended on or immediately before the executive’s termination, which will be paid to the executive in a lump sum on the normal payment date for such bonuses, but not later than 74 days following the executive’s termination of employment; |
(iv) | all the outstanding stock options, SARs, restricted stock and restricted stock unit awards, and other equity-based awards granted by KBR to the executive that are not performance awards will become fully vested and immediately exercisable or payable in full; |
(v) | all performance award units other than those that are covered under the annual cash incentive plan will become fully vested and paid at target performance as soon as administratively feasible following the termination of employment, but not later than March 15 of the year following such termination; |
(vi) | all account balances in any supplemental and nonqualified retirement plans will become fully vested; and |
(vii) | welfare plan costs equal to two times (three times for the CEO) the total annual cost to the executive and KBR of the medical, dental, life, and disability benefits provided to the executive and the executive’s eligible dependents by KBR for the year of the executive’s termination. |
• | Pay packages align executives’ interests with KBR’s stockholders’ interests; |
• | Performance metrics are sufficiently challenging; |
• | Target pay packages reflect an appropriate mix of short-term and long-term incentives; and |
• | Total compensation, as well as each individual compensation element, is targeted near the 50th percentile of the competitive market for good performance and above the 50th percentile of the competitive market for consistent, outstanding performance, taking into consideration factors like differences in KBR’s NEOs’ respective responsibilities compared to responsibilities ascribed to their counterparts at KBR’s peers, as well as experience, retention risk, and internal pay equity. |
Performance-Based Compensation | • A majority of KBR’s NEOs’ compensation is performance-based and varies depending on the achievement of absolute and relative performance goals. | ||
Market Comparison | • KBR’s Compensation Committee benchmarks executive compensation against relevant peer groups of companies in KBR’s industry and companies of similar size and complexity. | ||
Clawbacks | • KBR adopted a clawback policy in compliance with Section 10D of the Exchange Act and the NYSE rules. Pursuant to KBR’s policy, if KBR is required to prepare an accounting restatement, KBR’s Compensation Committee must recoup any erroneously awarded incentive compensation paid to current and former executive officers of KBR. • Certain of KBR’s officers’ award agreements also include additional clawback provisions that extend beyond the requirements of Section 10D of the Exchange Act and the NYSE rules. | ||
Stock Ownership Guidelines | • KBR requires KBR’s NEOs to own a significant amount of KBR stock to align their interests with KBR’s stockholders’ interests. | ||
No Pledging | • KBR’s officers and directors may not pledge KBR stock. | ||
No Hedging | • KBR’s officers and directors may not hedge KBR stock. | ||
Equity Award Grant Practices | • KBR does not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. | ||
Double-Trigger | • The Severance and CIC Agreements require a double-trigger for a change-in-control termination (i.e., the occurrence of both a change in control and a termination of employment within two years thereafter) in order for an executive to receive change-in-control benefits. | ||
No Employment Agreements | • KBR’s NEOs do not have employment agreements. | ||
No Tax Gross-Ups | • KBR does not provide excise tax gross-up agreements. | ||
No Option Repricing | • KBR prohibits the repricing of KBR stock options. | ||
• | leadership and vision; |
• | integrity; |
• | keeping the KBR board of directors informed on matters affecting KBR and its operating units; |
• | performance of the business and achievement of financial objectives and goals; |
• | development and implementation of initiatives to provide long-term economic benefit to KBR; |
• | accomplishment of strategic objectives; and |
• | development of management. |
• | recommended performance measures, target goals, and award schedules for short-term and long-term incentive awards, and reviewed performance goals for consistency with KBR’s projected business plan; |
• | reviewed competitive market data for KBR’s Senior Executive Management positions; and |
• | developed specific recommendations regarding the amount and form of equity compensation to be awarded to KBR’s NEOs other than himself. |
• | Leadership and individual performance; |
• | Internal pay equity; |
• | Level of responsibility; |
• | Experience in current role; and |
• | External factors involving general economic conditions and marketplace compensation trends. |
Performance Metric | Weighting | Rationale | |||||||||
KBR Adjusted Earnings Per Share (“EPS”) | Diluted EPS measures net income divided by the weighted average number of fully diluted shares of KBR common stock outstanding. Adjusted EPS excludes certain amounts included in diluted EPS. | ![]() | This metric helps to align KBR’s NEOs with the interests of KBR’s stockholders because strong adjusted EPS generally increases the value of KBR’s stock. KBR considers buybacks when reviewing adjusted EPS achievement to provide for an accurate comparison against the pre-established target. | ||||||||
KBR Adjusted Consolidated Operating Cash Flow (“Adjusted OCF”) | KBR Adjusted OCF measures the amount of cash generated by KBR’s operations. | ![]() | KBR’s adjusted OCF target is based on KBR’s 2025 budgeted cash flows from operations and is aligned with KBR’s capital deployment strategy. This metric aims to ensure that KBR’s NEOs focus on cash management. | ||||||||
Key Performance Indicators (“KPIs”) | KPIs are individual performance metrics typically specific to each NEO. | ![]() | KPIs allow KBR to reward individual contributions to KBR’s key strategic focus areas. | ||||||||
KBR Zero Harm / Sustainability Performance across KBR’s Sustainability Pillars | Measures continued progress in KBR’s Zero Harm / Sustainability performance across KBR’s sustainability pillars. | ![]() | Emphasizing this metric promotes continued progress in KBR’s Zero Harm and Sustainability performance across KBR’s sustainability pillars, including KBR Health, Safety & Security, Clean Planet and Total Inclusion, which in turn promotes a sustainable business. | ||||||||
Performance Metric | Threshold - 25% | Target - 100% | Maximum - 200% | Weight | ||||||||||
KBR Adjusted EPS(1) | ![]() | ![]() | ||||||||||||
KBR Adjusted Consolidated OCF(2) | ![]() | ![]() | ||||||||||||
FINANCIAL METRICS FORMULAIC RESULT | ||||||||||||||
NEGATIVE DISCRETION(3) | ||||||||||||||
FINANCIAL METRICS PAYOUT(4) | ||||||||||||||
KPIs | Individual KPIs | ![]() | ||||||||||||
Zero Harm / Sustainability(5) | Individual Zero Harm / Sustainability metric results | ![]() | ||||||||||||
(1) | The 2025 Adjusted EPS metric result of $3.93 related to the achieved adjusted EPS for the year. |
(2) | The 2025 Adjusted OCF metric result of $557 million related to the achieved adjusted consolidated OCF for the year. |
(3) | See “Negative Discretion” below for more information on the negative discretion applied. |
(4) | The financial metrics payout percentage is not the actual payout percentage because it does not include the percentages earned with respect to the Zero Harm / Sustainability performance metric and KPIs. |
(5) | The Zero Harm / Sustainability performance metric was related to continued progress across KBR’s sustainability pillars, including KBR Health, Safety & Security (e.g., 10% increase in individual users of Courage to Care Conversation web application in 2025 over 2024), Clean Planet (e.g., 10% increase in carbon reporting of primary source data from KBR organization), and Total Inclusion (visible leadership of KBR’s employee value proposition (Belong, Connect, Grow) to support KBR’s reputation as an employer). |
• | reward consistent value creation and achievement of operating performance goals; |
• | align management’s interests with stockholders’ interests; and |
• | encourage long-term perspectives and commitment. |
• | nonqualified and incentive stock options, |
• | restricted stock/units, |
• | performance shares/units, |
• | stock appreciation rights, and |
• | stock value equivalents (also known as phantom stock). |
Group | Ownership Level | Compliance Period | |||||||||
CEO | ••••• | 5x base salary | 5 years from appointment, or adoption of new guidelines | ||||||||
Level 1 Executives (direct reports to CEO, including all the NEOs) | ••• | 3x base salary | |||||||||
Level 2 Executives (direct reports to Level 1 Executives and at least a vice president) | • | 1x base salary | |||||||||
• | certain assets relating to the Mission Technology Solutions segment, which this information statement refers to as the “Trinzic Assets,” will be retained by or transferred to Trinzic or one of Trinzic’s subsidiaries. Generally, assets that are primarily related to the Mission Technology Solutions segment at the time of the distribution will be Trinzic Assets; |
• | certain liabilities related to the Mission Technology Solutions segment or the Trinzic Assets, which this information statement refers to as the “Trinzic Liabilities,” will be retained by or transferred to Trinzic. Generally, liabilities will be Trinzic Liabilities to the extent they relate to the business, operations, and activities of the Trinzic business or any Trinzic Assets; and |
• | all assets and liabilities (whether accrued, contingent, or otherwise) of KBR and its subsidiaries (including for this purpose Trinzic and its subsidiaries) other than the Trinzic Assets or Trinzic Liabilities (referred to in this information statement as the “KBR Retained Assets” and “KBR Retained Liabilities,” respectively) will be retained by or transferred to KBR or one of its subsidiaries (other than Trinzic or one of Trinzic’s subsidiaries). |
• | the liabilities or alleged liabilities the indemnifying party assumed or retained pursuant to the separation agreement; and |
• | any breach by the indemnifying party of any provision of the separation agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein. |
• | discontinuing the active conduct of Trinzic’s trade or business; |
• | issuing or selling stock or other securities (including securities convertible into Trinzic stock but excluding certain compensatory arrangements); |
• | amending Trinzic’s certificate of incorporation (or other organization documents) or taking any other action, whether through a stockholder vote or otherwise, affecting the voting rights of Trinzic common stock; |
• | selling assets outside the ordinary course of business; and |
• | entering into any other corporate transaction which would cause Trinzic to undergo a 50% or greater change in its stock ownership. |
Common stock beneficially owned before the distribution | Common stock beneficially owned after the distribution | |||||||||||
Name and address of Beneficial Owner | Number | % | Number | % | ||||||||
5% Beneficial Owner | ||||||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
Directors and Executive Officers | ||||||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
[•] | [•] | [•] | [•] | [•] | ||||||||
All Directors and Executive Officers as a Group ([•] persons) | [•] | [•] | [•] | [•] | ||||||||
* | Represents less than 1%. |
• | an individual who is a citizen or a resident of the United States; |
• | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons has the authority to control all of its substantial decisions or (ii) it has a valid election in place under applicable Treasury Regulations to be treated as a U.S. person. |
• | dealers or traders in securities; |
• | tax-exempt entities; |
• | banks, financial institutions, or insurance companies; |
• | real estate investment trusts, regulated investment companies, or grantor trusts; |
• | persons who acquired shares of KBR common stock pursuant to the exercise of employee stock options or otherwise as compensation; |
• | persons owning shares of KBR common stock as part of a position in a straddle or as part of a hedging, conversion, constructive sale or other risk-reduction transaction for U.S. federal income tax purposes; |
• | certain former citizens or long-term residents of the United States; |
• | persons who are subject to the alternative minimum tax; |
• | a partnership or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes; |
• | persons who own shares of KBR common stock through a partnership or any other entity treated as a partnership for U.S. federal income tax purposes; |
• | persons whose functional currency is not the U.S. Dollar; |
• | persons required to accelerate the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement; or |
• | persons who hold shares of KBR common stock through a tax-qualified retirement plan. |
• | subject to the discussion below regarding Section 355(e) of the Code, KBR will not recognize gain or loss on the distribution, except for any taxable income or gain with respect to any “excess loss account” or “intercompany transaction” that may be required to be taken into account by KBR under Treasury Regulations relating to consolidated federal income tax returns; |
• | a U.S. Holder will not recognize any gain or loss, and no amount will be includable in income, for U.S. federal income tax purposes as a result of the receipt of Trinzic common stock pursuant to the distribution, except with respect to any cash received in lieu of fractional shares of Trinzic common stock (as described below); |
• | a U.S. Holder’s aggregate tax basis in its shares of KBR common stock following the distribution and in the shares of Trinzic common stock received in the distribution (including any fractional share interest in Trinzic common stock for which cash is received) will equal such stockholder’s aggregate tax basis in its shares of KBR common stock immediately before the distribution, allocated between the shares of KBR common stock and Trinzic common stock (including any fractional share interest in Trinzic common stock for which cash is received) in proportion to their relative fair market values on the distribution date; |
• | a U.S. Holder’s holding period for the shares of Trinzic common stock received in the distribution (including any fractional share interest in Trinzic common stock for which cash is received) will include the holding period for that stockholder’s shares of KBR common stock; and |
• | a U.S. Holder who receives cash in lieu of a fractional share of Trinzic common stock in the distribution will be treated as having sold such fractional share for cash, and will recognize capital gain or loss in an amount |
• | the U.S. Holder fails to furnish the U.S. Holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
• | the U.S. Holder furnishes an incorrect taxpayer identification number; |
• | the applicable withholding agent is notified by the IRS that the U.S. Holder previously failed to properly report payments of interest or dividends; or |
• | the U.S. Holder fails to certify under penalties of perjury that the U.S. Holder has furnished a correct taxpayer identification number and that the IRS has not notified the U.S. Holder that the U.S. Holder is subject to backup withholding. |
• | before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
• | upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
• | on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
• | any merger or consolidation involving the corporation and the interested stockholder; |
• | any sale, lease, transfer, pledge, or other disposition of 10% or more of the assets of the corporation to or with the interested stockholder; |
• | subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or |
• | the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges, or other financial benefits by or through the corporation. |
• | for any breach of the director’s or officers’ duty of loyalty to Trinzic or Trinzic’s stockholders; |
• | for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; |
• | for voting for or assenting to unlawful payments of dividends, stock repurchases, or other distributions; |
• | for Trinzic officers, any derivative action by or in the right of the corporation; or |
• | for any transaction from which the director or officer derived an improper personal benefit. |
Acronym | Definition | ||
Affinity | Affinity Flying Training Services Ltd. | ||
AOCL | Accumulated other comprehensive loss | ||
ASC | Accounting Standards Codification | ||
Aspire Defence | Aspire Defence Limited | ||
ASU | Accounting Standards Update | ||
CAS | Cost Accounting Standards for U.S. government contracts | ||
DCAA | Defense Contract Audit Agency | ||
DCMA | Defense Contract Management Agency | ||
DoW | Department of War | ||
EAC | Estimate at completion | ||
FAR | Federal Acquisition Regulation | ||
FASB | Financial Accounting Standards Board | ||
HomeSafe | HomeSafe Alliance | ||
NASA | National Aeronautics and Space Administration | ||
PFIs | Private financed initiatives and projects | ||
PPE | Property, plant, and equipment | ||
RPA | Master Accounts Receivable Purchase Agreement | ||
SONIA | Sterling Overnight Index Average | ||
UK | United Kingdom | ||
U.S. | United States | ||
U.S. GAAP | Accounting principles generally accepted in the United States | ||
UK MFTS | UK Military Flying Training System | ||
VIEs | Variable interest entities | ||
Year ended | |||||||||
January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||
Revenue | $5,256 | $5,218 | $4,822 | ||||||
Cost of revenue | (4,572) | (4,582) | (4,239) | ||||||
Equity in earnings of unconsolidated affiliates | 33 | 32 | 33 | ||||||
Selling, general, and administrative expenses | (342) | (350) | (297) | ||||||
Legacy legal fees and settlements | — | (2) | (155) | ||||||
Other operating income (expense) | 2 | 1 | (2) | ||||||
Operating income | 377 | 317 | 162 | ||||||
Interest expense | (13) | (19) | (20) | ||||||
Other non-operating expense | (1) | (2) | (10) | ||||||
Income from continuing operations before income taxes | 363 | 296 | 132 | ||||||
Provision for income taxes | (82) | (70) | (50) | ||||||
Net income from continuing operations | 281 | 226 | 82 | ||||||
Net income (loss) from discontinued operations, net of tax | (55) | 2 | (1) | ||||||
Net income | 226 | 228 | 81 | ||||||
Less: Net loss attributable to noncontrolling interests included in continuing operations | — | (1) | (1) | ||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | (19) | 1 | — | ||||||
Net income attributable to Trinzic | $245 | $228 | $82 | ||||||
Year ended | |||||||||
January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||
Net income | $226 | $228 | $81 | ||||||
Other comprehensive income (loss): | |||||||||
Foreign currency translation adjustments | 92 | (30) | 31 | ||||||
Pension and post-retirement benefits | (46) | (19) | (103) | ||||||
Changes in fair value of derivatives | (1) | 1 | — | ||||||
Other comprehensive income (loss) | 45 | (48) | (72) | ||||||
Income tax (expense) benefit: | |||||||||
Pension and post-retirement benefits | 12 | 5 | 26 | ||||||
Income tax benefit | 12 | 5 | 26 | ||||||
Other comprehensive income (loss), net of tax | 57 | (43) | (46) | ||||||
Comprehensive income | 283 | 185 | 35 | ||||||
Less: Comprehensive loss attributable to noncontrolling interests from continuing operations | — | (1) | (1) | ||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests from discontinued operations | (19) | 1 | — | ||||||
Comprehensive income attributable to Trinzic | $302 | $185 | $36 | ||||||
January 2, 2026 | January 3, 2025 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $167 | $143 | ||||
Accounts receivable, net of allowance for credit losses of $0 and $1, respectively | 645 | 675 | ||||
Contract assets | 56 | 68 | ||||
Other current assets | 62 | 50 | ||||
Current assets of discontinued operations | 19 | 21 | ||||
Total current assets | 949 | 957 | ||||
Pension assets | 86 | 82 | ||||
Property, plant, and equipment, net of accumulated depreciation of $205 and $180, respectively (including net PPE of $4 and $5 owned by a variable interest entity, respectively) | 147 | 140 | ||||
Operating lease right-of-use assets | 140 | 132 | ||||
Goodwill | 2,089 | 2,095 | ||||
Intangible assets, net of accumulated amortization of $340 and $280, respectively | 608 | 651 | ||||
Equity in and advances to unconsolidated affiliates | 70 | 66 | ||||
Deferred income taxes | 5 | 5 | ||||
Other assets | 20 | 101 | ||||
Non-current assets of discontinued operations | — | 78 | ||||
Total assets | $4,114 | $4,307 | ||||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $382 | $482 | ||||
Contract liabilities | 102 | 73 | ||||
Accrued salaries, wages, and benefits | 207 | 224 | ||||
Current maturities of long-term debt | 8 | 4 | ||||
Other current liabilities | 76 | 70 | ||||
Current liabilities of discontinued operations | 19 | 15 | ||||
Total current liabilities | 794 | 868 | ||||
Employee compensation and benefits | 41 | 46 | ||||
Income tax payable | — | 17 | ||||
Deferred income taxes | 99 | 111 | ||||
Long-term debt | 115 | 114 | ||||
Operating lease liabilities | 147 | 132 | ||||
Other liabilities | 115 | 77 | ||||
Non-current liabilities of discontinued operations | — | 69 | ||||
Total liabilities | 1,311 | 1,434 | ||||
Commitments and Contingencies (Notes 7, 14, and 15) | ||||||
Trinzic equity: | ||||||
Net parent investment | 3,601 | 3,721 | ||||
AOCL | (795) | (852) | ||||
Total Trinzic equity | 2,806 | 2,869 | ||||
Noncontrolling interests | (3) | 4 | ||||
Total equity | 2,803 | 2,873 | ||||
Total liabilities and equity | $4,114 | $4,307 | ||||
Dollars in millions | Total | Net Parent Investment | AOCL | Noncontrolling Interest | ||||||||
Balance at December 31, 2022 | $2,057 | $2,812 | $(763) | $8 | ||||||||
Distributions to noncontrolling interests | (2) | — | — | (2) | ||||||||
Transfers from parent, net | 5 | 5 | — | — | ||||||||
Net income (loss) | 81 | 82 | — | (1) | ||||||||
Other | 1 | — | — | 1 | ||||||||
Other comprehensive loss, net of tax | (46) | — | (46) | — | ||||||||
Balance at December 29, 2023 | $2,096 | $2,899 | $(809) | $6 | ||||||||
Acquisition of noncontrolling interests | (10) | (8) | — | (2) | ||||||||
Transfers from parent, net | 602 | 602 | — | — | ||||||||
Net income | 228 | 228 | — | — | ||||||||
Other comprehensive loss, net of tax | (43) | — | (43) | — | ||||||||
Balance at January 3, 2025 | $2,873 | $3,721 | $(852) | $4 | ||||||||
Investments by noncontrolling interests | 12 | — | — | 12 | ||||||||
Transfers to parent, net | (365) | (365) | — | — | ||||||||
Net income (loss) | 226 | 245 | — | (19) | ||||||||
Other comprehensive income, net of tax | 57 | — | 57 | — | ||||||||
Balance at January 2, 2026 | $2,803 | $3,601 | $(795) | $(3) | ||||||||
Year ended | |||||||||
January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||
Cash flows from operating activities: | |||||||||
Net income | $226 | $228 | $81 | ||||||
Net (income) loss from discontinued operations, net of tax | 55 | (2) | 1 | ||||||
Net income from continuing operations | 281 | 226 | 82 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 103 | 89 | 75 | ||||||
Equity in earnings of unconsolidated affiliates | (33) | (32) | (33) | ||||||
Deferred income tax | 11 | 15 | (9) | ||||||
Other | (15) | (40) | (12) | ||||||
Changes in operating assets and liabilities, net of acquired businesses: | |||||||||
Accounts receivable, net of allowance for credit losses | 40 | 12 | 39 | ||||||
Contract assets | 15 | (3) | 16 | ||||||
Accounts payable | (60) | 4 | (42) | ||||||
Contract liabilities | 26 | 19 | (16) | ||||||
Accrued salaries, wages, and benefits | (19) | (27) | 11 | ||||||
Payments on operating lease obligation | (43) | (34) | (29) | ||||||
Payments from unconsolidated affiliates, net | 9 | 9 | 18 | ||||||
Distributions of earnings from unconsolidated affiliates | 23 | 27 | 23 | ||||||
Pension funding | (1) | (62) | (9) | ||||||
Other assets and liabilities | 83 | (35) | (1) | ||||||
Total cash flows provided by operating activities - continuing operations | $420 | $168 | $113 | ||||||
Cash flows from investing activities: | |||||||||
Purchases of property, plant, and equipment | $(24) | $(27) | $(22) | ||||||
Acquisition of businesses, net of cash acquired | — | (738) | — | ||||||
Other | 4 | 11 | (1) | ||||||
Total cash flows used in investing activities - continuing operations | $(20) | $(754) | $(23) | ||||||
Cash flows from financing activities: | |||||||||
Payments on short-term and long-term debt | (8) | (24) | (8) | ||||||
Acquisition of noncontrolling interests | — | (10) | — | ||||||
Distributions to noncontrolling interests | — | — | (2) | ||||||
Transfers from (to) parent | (349) | 574 | (6) | ||||||
Other | (1) | (3) | 1 | ||||||
Total cash flows provided by (used in) financing activities - continuing operations | $(358) | $537 | $(15) | ||||||
Total operating cash flows from discontinued operations | (33) | 12 | 30 | ||||||
Total investing cash flows from discontinued operations | (12) | (25) | (18) | ||||||
Total financing cash flows from discontinued operations | 12 | — | — | ||||||
Total cash flows from discontinued operations | $(33) | $(13) | $12 | ||||||
Effect of exchange rate changes on cash | 12 | (4) | 8 | ||||||
Increase (decrease) in cash and cash equivalents | 21 | (66) | 95 | ||||||
Cash and cash equivalents at beginning of period | 151 | 217 | 122 | ||||||
Cash and cash equivalents at end of period | $172 | $151 | $217 | ||||||
Less: cash and cash equivalents of discontinued operations | 5 | 8 | 21 | ||||||
Cash and cash equivalents at end of period for continuing operations | $167 | $143 | $196 | ||||||
Supplemental disclosure of cash flows information: | |||||||||
Cash paid for interest | $7 | $9 | $8 | ||||||
Cash paid for income taxes (net of refunds) | $13 | $13 | $14 | ||||||
• | project revenue, costs, and profits on our contracts; |
• | award fees, costs, and profits on government contracts; |
• | client claims and recoveries of costs from subcontractors, vendors, and others; |
• | provisions for income taxes and related valuation allowances and tax uncertainties; |
• | evaluation of goodwill for impairment; |
• | evaluation of intangibles and long-lived assets for impairment; |
• | evaluation of equity method investments for impairment; |
• | valuation of pension obligations and pension assets; |
• | accruals for estimated liabilities, including litigation accruals; and |
• | valuation of assets and liabilities acquired in business combinations. |
• | recognize on its balance sheet the funded status (measured as the difference between the fair value of plan assets and the benefit obligation) of the pension plan; |
• | recognize, through comprehensive income, certain changes in the funded status of a defined benefit plan in the year in which the changes occur; |
• | measure plan assets and benefit obligations as of the end of the employer’s fiscal year; and |
• | disclose additional information. |
Year ended | ||||||||||||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||||||||||
U.S. government | $4,426 | 84% | $4,350 | 83% | $4,000 | 83% | ||||||||||||
UK government | $486 | 9% | $484 | 9% | $408 | 8% | ||||||||||||
Other government, commercial, and infrastructure | $344 | 7% | $384 | 8% | $414 | 9% | ||||||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||||||||
U.S. government | $508 | 79% | $523 | 77% | ||||||||
UK government | $23 | 4% | $27 | 4% | ||||||||
Other government, commercial, and infrastructure | $114 | 17% | $125 | 19% | ||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Prepaid expenses | $20 | $18 | ||||
Value-added tax receivable | 21 | 14 | ||||
Other miscellaneous assets | 21 | 18 | ||||
Total other current assets | $62 | $50 | ||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Operating lease liabilities | $29 | $32 | ||||
Value-added tax payable | 10 | 21 | ||||
Other miscellaneous liabilities | 37 | 17 | ||||
Total other current liabilities | $76 | $70 | ||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Property, plant, & equipment, net: | ||||||
United States | $90 | $83 | ||||
United Kingdom | 5 | 5 | ||||
Other | 52 | 52 | ||||
Total | $147 | $140 | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
U.S. Government Defense and Intelligence Clients | $3,370 | $3,292 | $3,039 | ||||||
U.S. Government Federal Civilian Clients | 1,056 | 1,112 | 1,052 | ||||||
International Government Clients | 726 | 705 | 627 | ||||||
Commercial and Infrastructure Clients | 104 | 109 | 104 | ||||||
Total revenue | $5,256 | $5,218 | $4,822 | ||||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Total by Countries/Region | |||||||||
United States | $3,770 | $3,503 | $3,096 | ||||||
Europe | 990 | 1,258 | 1,272 | ||||||
Middle East | 123 | 110 | 105 | ||||||
Australia | 219 | 202 | 204 | ||||||
Africa | 77 | 70 | 70 | ||||||
Asia | 20 | 18 | 17 | ||||||
Other countries | 57 | 57 | 58 | ||||||
Total revenue | $5,256 | $5,218 | $4,822 | ||||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Cost Reimbursable | $3,304 | $3,507 | $3,287 | ||||||
Time-and-Materials | 768 | 721 | 694 | ||||||
Fixed Price | 1,184 | 990 | 841 | ||||||
Total revenue | $5,256 | $5,218 | $4,822 | ||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Unbilled | $381 | $426 | ||||
Trade & other | 264 | 249 | ||||
Accounts receivable, net | $645 | $675 | ||||
Dollars in millions | LinQuest | ||
Fair value of total consideration paid | $749 | ||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 11 | ||
Accounts receivable | 98 | ||
Contract assets | 4 | ||
Other current assets | 4 | ||
Total current assets | 117 | ||
Property, plant, and equipment | 15 | ||
Operating lease right-of-use assets | 37 | ||
Intangible assets | 200 | ||
Equity in and advances to unconsolidated affiliates | 1 | ||
Other assets | 1 | ||
Total assets | $371 | ||
Accounts payable | $35 | ||
Contract liabilities | 7 | ||
Accrued salaries, wages, and benefits | 32 | ||
Other current liabilities | 9 | ||
Total current liabilities | 83 | ||
Deferred income taxes | 2 | ||
Operating lease liabilities | 30 | ||
Other liabilities | 23 | ||
Total liabilities | 138 | ||
Net assets acquired | 233 | ||
Goodwill | $516 | ||
Dollars in millions | Fair Value | Weighted Average Amortization Period (in years) | ||||
Contract backlog | $10 | 1 | ||||
Customer relationships | 190 | 15 | ||||
Total intangible assets | $200 | 14 | ||||
Year ended | ||||||
Dollars in millions | January 3, 2025 | December 29, 2023 | ||||
(Unaudited) | ||||||
Revenue | $5,582 | $5,299 | ||||
Net income attributable to Trinzic | $205 | $37 | ||||
January 2, 2026 | |||||||||
Dollars in millions | International(a) | Domestic(b) | Total | ||||||
Cash and cash equivalents | $40 | $103 | $143 | ||||||
Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities(c) | 24 | — | 24 | ||||||
Total | $64 | $103 | $167 | ||||||
January 3, 2025 | |||||||||
Dollars in millions | International(a) | Domestic(b) | Total | ||||||
Cash and cash equivalents | $23 | $25 | $48 | ||||||
Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities(c) | 95 | — | 95 | ||||||
Total | $118 | $25 | $143 | ||||||
(a) | Includes deposits held by non-U.S. entities with operating accounts that constitute offshore cash for tax purposes. The related tax effect associated with repatriating these foreign cash balances would not have a material impact on our projected effective tax rate. |
(b) | Includes U.S. dollar and foreign currency deposits held in U.S. entities with operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country. Includes cash and cash equivalents held by our wholly owned captive insurance company of $15 million and $12 million as of January 2, 2026 and January 3, 2025, respectively, which is not available to Trinzic to support its general operations. |
(c) | Includes short-term investments held by Aspire Defence subcontracting entities for $11 million and $83 million as of January 2, 2026 and January 3, 2025, respectively. In fiscal 2025 a contractual repayment was made by the Aspire Defence subcontracting entities. |
Dollars in millions | Fiscal 2025 | Fiscal 2024 | ||||
Amounts included in contract estimates-at-completion at beginning of fiscal year | $104 | $74 | ||||
Net increase in contract estimates | 67 | 57 | ||||
Resolution of claim | — | (27) | ||||
Approved change orders | (146) | — | ||||
Amounts included in contract related estimates-at-completion at end of fiscal year | $25 | $104 | ||||
Amounts recognized over time based on progress | $13 | $100 | ||||
Dollars in millions | Estimated Useful Lives in Years | January 2, 2026 | January 3, 2025 | ||||||
Buildings and property improvements | 1-35 | $84 | $72 | ||||||
Equipment and other | 1-25 | 268 | 248 | ||||||
Total | $352 | $320 | |||||||
Less accumulated depreciation | (205) | (180) | |||||||
Net property, plant, and equipment | $147 | $140 | |||||||
Dollars in millions | Total | ||
Balance as of December 29, 2023 | $1,566 | ||
Goodwill acquired during the period (Note 5) | 531 | ||
Foreign currency translation | (2) | ||
Balance as of January 3, 2025 | $2,095 | ||
Goodwill adjusted during the period (Note 5) | (10) | ||
Foreign currency translation | 4 | ||
Balance as of January 2, 2026 | $2,089 | ||
January 2, 2026 | ||||||||||||
Dollars in millions | Weighted Average Remaining Useful Lives | Intangible Assets, Gross | Accumulated Amortization | Intangible Assets, Net | ||||||||
Trademarks/trade names | Indefinite | $48 | $— | $48 | ||||||||
Customer relationships | 10 | 605 | (185) | 420 | ||||||||
Contract backlog | 15 | 294 | (154) | 140 | ||||||||
Other | — | 1 | (1) | — | ||||||||
Total intangible assets | $948 | $(340) | $608 | |||||||||
January 3, 2025 | ||||||||||||
Dollars in millions | Weighted Average Remaining Useful Lives | Intangible Assets, Gross | Accumulated Amortization | Intangible Assets, Net | ||||||||
Trademarks/trade names | Indefinite | $48 | $— | $48 | ||||||||
Customer relationships | 13 | 604 | (148) | 456 | ||||||||
Contract backlog | 15 | 278 | (131) | 147 | ||||||||
Other | — | 1 | (1) | — | ||||||||
Total intangible assets | $931 | $(280) | $651 | |||||||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Intangibles amortization expense | $52 | $40 | $33 | ||||||
Dollars in millions | Expected future intangibles amortization expense | ||
Fiscal 2026 | $46 | ||
Fiscal 2027 | $46 | ||
Fiscal 2028 | $46 | ||
Fiscal 2029 | $46 | ||
Fiscal 2030 | $46 | ||
Beyond Fiscal 2030 | $330 | ||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Balance at beginning of fiscal year | $66 | $69 | ||||
Equity in earnings of unconsolidated affiliates | 33 | 32 | ||||
Distributions of earnings of unconsolidated affiliates | (23) | (27) | ||||
Payments from unconsolidated affiliates, net | (9) | (9) | ||||
Foreign currency translation adjustments | 4 | — | ||||
Other | (1) | 1 | ||||
Balance at end of fiscal year | $70 | $66 | ||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Current assets | $583 | $492 | ||||
Non-current assets | 1,271 | 1,275 | ||||
Total assets | $1,854 | $1,767 | ||||
Current liabilities | $254 | $231 | ||||
Non-current liabilities | 1,563 | 1,506 | ||||
Total liabilities | $1,817 | $1,737 | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Revenue | $860 | $978 | $857 | ||||||
Operating income | $65 | $63 | $89 | ||||||
Net income | $57 | $60 | $67 | ||||||
January 2, 2026 | ||||||
Dollars in millions | Total Assets | Total Liabilities | ||||
Affinity joint venture (UK MFTS contract) | $7 | $1 | ||||
Aspire Defence Limited | $94 | $9 | ||||
January 3, 2025 | ||||||
Dollars in millions | Total Assets | Total Liabilities | ||||
Affinity joint venture (UK MFTS contract) | $6 | $1 | ||||
Aspire Defence Limited | $84 | $7 | ||||
January 2, 2026 | ||||||
Dollars in millions | Total Assets | Total Liabilities | ||||
Aspire Defence subcontracting entities (Aspire Defence contract) | $338 | $149 | ||||
January 3, 2025 | ||||||
Dollars in millions | Total Assets | Total Liabilities | ||||
Aspire Defence subcontracting entities (Aspire Defence contract) | $372 | $197 | ||||
Overfunded | Underfunded | |||||||||||
United States | International | United States | International | |||||||||
Dollars in millions | Fiscal 2025 | |||||||||||
Change in projected benefit obligations: | ||||||||||||
Projected benefit obligations at beginning of period | $— | $1,111 | $8 | $— | ||||||||
Service cost | — | 1 | — | — | ||||||||
Interest cost | — | 63 | 1 | — | ||||||||
Foreign currency exchange rate changes | — | 84 | — | — | ||||||||
Actuarial gain(1) | — | (12) | — | — | ||||||||
Other | — | (1) | — | — | ||||||||
Benefits paid | — | (70) | (1) | — | ||||||||
Projected benefit obligations at end of period | $— | $1,176 | $8 | $— | ||||||||
Change in plan assets: | ||||||||||||
Fair value of plan assets at beginning of period | $— | $1,193 | $8 | $— | ||||||||
Actual return on plan assets | — | 48 | 1 | — | ||||||||
Employer contributions | — | 1 | — | — | ||||||||
Foreign currency exchange rate changes | — | 91 | — | — | ||||||||
Benefits paid | — | (70) | (1) | — | ||||||||
Other | — | (1) | — | — | ||||||||
Fair value of plan assets at end of period | $— | $1,262 | $8 | $— | ||||||||
Funded status | $— | $86 | $— | $— | ||||||||
(1) | Actuarial gains primarily driven by inflation. |
Overfunded | Underfunded | |||||||||||
United States | International | United States | International | |||||||||
Dollars in millions | Fiscal 2024 | |||||||||||
Change in projected benefit obligations: | ||||||||||||
Projected benefit obligations at beginning of period | $— | $1,301 | $8 | $— | ||||||||
Service cost | — | 1 | — | — | ||||||||
Interest cost | — | 61 | — | — | ||||||||
Foreign currency exchange rate changes | — | (23) | — | — | ||||||||
Actuarial gain(1) | — | (162) | — | — | ||||||||
Other | — | — | 1 | — | ||||||||
Benefits paid | — | (67) | (1) | — | ||||||||
Projected benefit obligations at end of period | $— | $1,111 | $8 | $— | ||||||||
Overfunded | Underfunded | |||||||||||
United States | International | United States | International | |||||||||
Dollars in millions | Fiscal 2024 | |||||||||||
Change in plan assets: | ||||||||||||
Fair value of plan assets at beginning of period | $— | $1,295 | $7 | $— | ||||||||
Actual return on plan assets | — | (72) | 1 | — | ||||||||
Employer contributions | — | 61 | 1 | — | ||||||||
Foreign currency exchange rate changes | — | (24) | — | — | ||||||||
Benefits paid | — | (67) | (1) | — | ||||||||
Fair value of plan assets at end of period | $— | $1,193 | $8 | $— | ||||||||
Funded status | $— | $82 | $— | $— | ||||||||
(1) | Actuarial gains primarily driven by change in discount rates. |
United States | International | United States | International | |||||||||
Dollars in millions | Fiscal 2025 | Fiscal 2024 | ||||||||||
Amounts recognized on the combined balance sheets | ||||||||||||
Pension assets | $— | $86 | $— | $82 | ||||||||
United States | International | United States | International | United States | International | |||||||||||||
Dollars in millions | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||||||||||||||
Components of net periodic pension benefit | ||||||||||||||||||
Service cost | $— | $1 | $— | $1 | $— | $1 | ||||||||||||
Interest cost | 1 | 63 | — | 61 | — | 61 | ||||||||||||
Expected return on plan assets | (1) | (112) | — | (113) | — | (103) | ||||||||||||
Prior service cost amortization | — | 1 | — | 1 | — | 1 | ||||||||||||
Recognized actuarial loss | — | 4 | — | 3 | — | — | ||||||||||||
Net periodic pension benefit | $— | $(43) | $— | $(47) | $— | $(40) | ||||||||||||
United States | International | United States | International | |||||||||
Dollars in millions | Fiscal 2025 | Fiscal 2024 | ||||||||||
Unrecognized actuarial loss (gain), net of tax benefit (expense) of $(1) and $238, $(1) and $226, respectively | $(1) | $675 | $(1) | $641 | ||||||||
Total in accumulated other comprehensive loss (income) | $(1) | $675 | $(1) | $641 | ||||||||
United States | International | United States | International | United States | International | |||||||||||||
Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||||||||||||||
Discount rate | 5.47% | 5.53% | 4.99% | 4.79% | 5.32% | 4.98% | ||||||||||||
Expected return on plan assets | 6.20% | 6.80% | 6.20% | 6.70% | 6.20% | 5.92% | ||||||||||||
United States | International | United States | International | |||||||||
Fiscal 2025 | Fiscal 2024 | |||||||||||
Discount rate | 5.11% | 5.58% | 5.47% | 5.53% | ||||||||
Fiscal 2026 Targeted | ||||||
United States | International | |||||
Equity funds and securities | 42% | 37% | ||||
Fixed income funds and securities | 50% | 46% | ||||
Real estate funds | 8% | 7% | ||||
Other | —% | 10% | ||||
Total | 100% | 100% | ||||
International Plans | Fiscal 2026 Targeted Percentage Range | Fiscal 2025 Targeted Percentage Range | ||||||||||
Minimum | Maximum | Minimum | Maximum | |||||||||
Equity funds and securities | 29% | 45% | 36% | 55% | ||||||||
Fixed income funds and securities | 37% | 55% | 28% | 42% | ||||||||
Real estate funds | 6% | 8% | 6% | 10% | ||||||||
Other | 8% | 12% | 10% | 15% | ||||||||
Domestic Plans | Fiscal 2026 Targeted Percentage Range | Fiscal 2025 Targeted Percentage Range | ||||||||||
Minimum | Maximum | Minimum | Maximum | |||||||||
Equity funds and securities | 34% | 50% | 34% | 50% | ||||||||
Fixed income funds and securities | 40% | 60% | 40% | 60% | ||||||||
Real estate funds | 6% | 10% | 6% | 10% | ||||||||
Fair Value Measurements at Reporting Date | ||||||||||||
Dollars in millions | Total | Level 1 | Level 2 | Level 3 | ||||||||
Asset Category at January 2, 2026 | ||||||||||||
United States plan assets | ||||||||||||
Investments measured at net asset value(a) | $8 | $— | $— | $— | ||||||||
Total United States plan assets | $8 | $— | $— | $— | ||||||||
International plan assets | ||||||||||||
Equities | $413 | $— | $356 | $57 | ||||||||
Fixed income | 606 | — | 606 | — | ||||||||
Real estate | 2 | — | — | 2 | ||||||||
Cash and cash equivalents | 99 | 99 | — | — | ||||||||
Other | 56 | — | — | 56 | ||||||||
Investments measured at net asset value(a) | 86 | — | — | — | ||||||||
Total international plan assets | $1,262 | $99 | $962 | $115 | ||||||||
Total plan assets at January 2, 2026 | $1,270 | $99 | $962 | $115 | ||||||||
Fair Value Measurements at Reporting Date | ||||||||||||
Dollars in millions | Total | Level 1 | Level 2 | Level 3 | ||||||||
Asset Category at January 3, 2025 | ||||||||||||
United States plan assets | ||||||||||||
Investments measured at net asset value(a) | $8 | $— | $— | $— | ||||||||
Total United States plan assets | $8 | $— | $— | $— | ||||||||
International plan assets | ||||||||||||
Equities | $433 | $— | $379 | $54 | ||||||||
Fixed income | 564 | — | 564 | — | ||||||||
Real estate | 1 | — | — | 1 | ||||||||
Cash and cash equivalents | 39 | 39 | — | — | ||||||||
Other | 56 | — | — | 56 | ||||||||
Investments measured at net asset value(a) | 100 | — | — | — | ||||||||
Total international plan assets | $1,193 | $39 | $943 | $111 | ||||||||
Total plan assets at January 3, 2025 | $1,201 | $39 | $943 | $111 | ||||||||
(a) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the combined balance sheet. |
Dollars in millions | Total | Equities | Fixed Income | Real Estate | Other | ||||||||||
International plan assets | |||||||||||||||
Balance as of December 29, 2023 | $114 | $51 | $— | $1 | $62 | ||||||||||
Return on assets held at end of year | 6 | 8 | — | — | (2) | ||||||||||
Purchases, sales, and settlements, net | (7) | (4) | — | — | (3) | ||||||||||
Foreign exchange impact | (2) | (1) | — | — | (1) | ||||||||||
Balance as of January 3, 2025 | $111 | $54 | $— | $1 | $56 | ||||||||||
Return on assets held at end of year | (6) | 2 | 1 | — | (9) | ||||||||||
Return on assets sold during the year | — | (1) | (1) | — | 2 | ||||||||||
Dollars in millions | Total | Equities | Fixed Income | Real Estate | Other | ||||||||||
Purchases, sales, and settlements, net | 1 | (2) | — | — | 3 | ||||||||||
Foreign exchange impact | 9 | 4 | — | 1 | 4 | ||||||||||
Balance as of January 2, 2026 | $115 | $57 | $— | $2 | $56 | ||||||||||
Pension Benefits | ||||||
Dollars in millions | United States | International | ||||
Fiscal 2026 | $1 | $73 | ||||
Fiscal 2027 | $1 | $75 | ||||
Fiscal 2028 | $1 | $77 | ||||
Fiscal 2029 | $— | $80 | ||||
Fiscal 2030 | $1 | $80 | ||||
Fiscals 2031-2035 | $3 | $416 | ||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Term A-3 Loan | $123 | $118 | ||||
Less: current portion | 8 | 4 | ||||
Total long-term debt, net of current portion | $115 | $114 | ||||
Parent’s Consolidated Leverage Ratio | Reference Rate(a) | Base Rate | Commitment Fee | ||||||
Greater than or equal to 4.25 to 1.00 | 2.25% | 1.25% | 0.33% | ||||||
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | 2.00% | 1.00% | 0.30% | ||||||
Parent’s Consolidated Leverage Ratio | Reference Rate(a) | Base Rate | Commitment Fee | ||||||
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | 1.75% | 0.75% | 0.28% | ||||||
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | 1.50% | 0.50% | 0.25% | ||||||
Less than 1.25 to 1.00 | 1.25% | 0.25% | 0.23% | ||||||
(a) | The reference rate for the British pound sterling tranche of Term Loan is SONIA plus 12 bps Credit Spread Adjustment. |
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
United States | $193 | $125 | $(18) | ||||||
Foreign: | |||||||||
United Kingdom | 121 | 111 | 93 | ||||||
Australia | 22 | 14 | 10 | ||||||
Middle East | 10 | 19 | 19 | ||||||
Asia | 1 | 2 | 1 | ||||||
Other | 16 | 25 | 27 | ||||||
Subtotal | 170 | 171 | 150 | ||||||
Total | $363 | $296 | $132 | ||||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Provision for income taxes | $(82) | $(70) | $(50) | ||||||
Equity, pension, and post-retirement benefits | 12 | 5 | 26 | ||||||
Total income taxes | $(70) | $(65) | $(24) | ||||||
Dollars in millions | Current | Deferred | Total | ||||||
Year ended January 2, 2026 | |||||||||
Federal | $(39) | $(3) | $(42) | ||||||
Foreign | (18) | (12) | (30) | ||||||
State and Other | (14) | 4 | (10) | ||||||
Provision for income taxes | $(71) | $(11) | $(82) | ||||||
Dollars in millions | Current | Deferred | Total | ||||||
Year ended January 3, 2025 | |||||||||
Federal | $(17) | $(12) | $(29) | ||||||
Foreign | (30) | (3) | (33) | ||||||
State and Other | (8) | — | (8) | ||||||
Provision for income taxes | $(55) | $(15) | $(70) | ||||||
Year ended December 29, 2023 | |||||||||
Federal | $(26) | $— | $(26) | ||||||
Foreign | (24) | 10 | (14) | ||||||
State and Other | (9) | (1) | (10) | ||||||
(Provision) benefit for income taxes | $(59) | $9 | $(50) | ||||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
United Kingdom | $(24) | $(26) | $(13) | ||||||
Australia | (6) | (4) | (3) | ||||||
Middle East | (1) | — | — | ||||||
Other | 1 | (3) | 2 | ||||||
Foreign provision for income taxes | $(30) | $(33) | $(14) | ||||||
Year ended | |||
Dollars in millions | January 2, 2026 | ||
Federal | $(2) | ||
Foreign | |||
Germany | 1 | ||
United Kingdom | 5 | ||
Other | 1 | ||
State | |||
Alabama | 2 | ||
Maryland | 4 | ||
Other | 2 | ||
Cash paid during the period for income taxes, net of refunds | $13 | ||
Year ended | ||||||
January 2, 2026 | ||||||
Dollars in millions | $ | % | ||||
U.S. statutory federal rate | $76 | 21% | ||||
Domestic federal tax effects: | ||||||
Tax credits | (2) | —% | ||||
Nontaxable or nondeductible items | 4 | 1% | ||||
Effect of cross-border tax laws | 6 | 2% | ||||
State and local income taxes, net of federal benefit(a) | 8 | 2% | ||||
Year ended | ||||||
January 2, 2026 | ||||||
Dollars in millions | $ | % | ||||
Foreign tax effects: | ||||||
United Kingdom | ||||||
Statutory income tax rate differential | 4 | 1% | ||||
Noncontrolling interests and equity earnings | (6) | (2)% | ||||
Other jurisdictions | (3) | (1)% | ||||
Worldwide changes in unrecognized tax benefits | (5) | (1)% | ||||
Effective tax rate on income from continuing operations | $82 | 23% | ||||
(a) | State taxes in California, Maryland, and Virginia made up the majority (greater than 50%) of the tax effect in this category. |
Year ended | ||||||
January 3, 2025 | December 29, 2023 | |||||
U.S. statutory federal rate, expected (benefit) provision | 21% | 21% | ||||
Tax impact from foreign operations | 2% | 3% | ||||
Noncontrolling interests and equity earnings | (2)% | (4)% | ||||
State and local income taxes, net of federal benefit | 2% | 6% | ||||
Other permanent differences, net | 1% | —% | ||||
Contingent liability accrual | —% | (2)% | ||||
Non-Deductible portion associated with legal settlement of legacy matter | —% | 14% | ||||
Effective tax rate on income from continuing operations | 24% | 38% | ||||
Year ended | ||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Deferred tax assets: | ||||||
Employee compensation and benefits | $44 | $41 | ||||
Loss carryforwards | 4 | 4 | ||||
Insurance accruals | 4 | 3 | ||||
Lease obligation and accrued liabilities | 40 | 40 | ||||
Contract liabilities | 11 | 13 | ||||
Capitalized research expenditures | 46 | 35 | ||||
Other | 20 | 20 | ||||
Total gross deferred tax assets | 169 | 156 | ||||
Valuation allowances | — | (10) | ||||
Net deferred tax assets | 169 | 146 | ||||
Deferred tax liabilities: | ||||||
Right-of-use assets | (33) | (31) | ||||
Intangible amortization | (108) | (112) | ||||
Indefinite-lived intangible amortization | (96) | (88) | ||||
Other | (26) | (21) | ||||
Total gross deferred tax liabilities | (263) | (252) | ||||
Deferred income tax liabilities, net | $(94) | $(106) | ||||
Dollars in millions | Net Gross Deferred Asset (Liability) | Valuation Allowance | Deferred Asset (Liability), net | ||||||
United States | $(45) | $— | $(45) | ||||||
United Kingdom | (54) | — | (54) | ||||||
Australia | 2 | — | 2 | ||||||
Other | 3 | — | 3 | ||||||
Total | $(94) | $— | $(94) | ||||||
Dollars in millions | January 2, 2026 | Expiration | ||||
Foreign net operating loss carryforwards | $5 | 2025-2045 | ||||
State net operating loss carryforwards | $3 | Various | ||||
Tax credit carryforwards | $4 | Various | ||||
Dollars in millions | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||||
Balance at beginning of fiscal year | $16 | $1 | $3 | ||||||
Increases related to current year tax positions | 1 | — | — | ||||||
Increases related to tax positions from acquisitions | — | 16 | — | ||||||
Increases related to prior year tax positions | 1 | — | — | ||||||
Lapse of statute of limitations | (5) | (1) | (2) | ||||||
Balance at end of fiscal year | $13 | $16 | $1 | ||||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Operating lease cost | $40 | $35 | $25 | ||||||
Short-term lease cost | 140 | 244 | 209 | ||||||
Total lease cost | $180 | $279 | $234 | ||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Cash paid for amounts included in the measurement of lease liabilities | |||||||||
Operating cash flows from operating leases | $43 | $34 | $29 | ||||||
Financing cash flows from finance leases | $1 | $1 | $1 | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $13 | $81 | $29 | ||||||
Right-of-use assets obtained in exchange for new finance lease liabilities | $— | $1 | $— | ||||||
Weighted-average remaining lease term - operating (in years) | 7 years | 7 years | 5 years | ||||||
Weighted-average remaining lease term - finance (in years) | 1 year | 2 years | 2 years | ||||||
Weighted-average discount rate - operating leases | 2.8% | 5.8% | 5.2% | ||||||
Weighted-average discount rate - finance leases | 5.8% | 4.5% | 3.4% | ||||||
Dollars in millions | Operating Leases | ||
Fiscal 2026 | $37 | ||
Fiscal 2027 | 33 | ||
Fiscal 2028 | 29 | ||
Fiscal 2029 | 27 | ||
Fiscal 2030 | 23 | ||
Thereafter | 66 | ||
Total future payments | 215 | ||
Less imputed interest | (39) | ||
Present value of future lease payments | 176 | ||
Less current portion of lease obligations | (29) | ||
Noncurrent portion of lease obligations | $147 | ||
Dollars in millions | Accumulated foreign currency translation adjustments | Accumulated pension liability adjustments | Changes in fair value of derivatives | Total | ||||||||
Balance at December 29, 2023 | $(183) | $(626) | $— | $(809) | ||||||||
Other comprehensive income (loss) adjustments before reclassification | (30) | (17) | 2 | (45) | ||||||||
Amounts reclassified from (to) AOCL | — | 3 | (1) | 2 | ||||||||
Net other comprehensive income (loss) | (30) | (14) | 1 | (43) | ||||||||
Balance at January 3, 2025 | $(213) | $(640) | $1 | $(852) | ||||||||
Other comprehensive income (loss) adjustments before reclassification | 92 | (38) | (1) | 53 | ||||||||
Amounts reclassified from AOCL | — | 4 | — | 4 | ||||||||
Net other comprehensive income (loss) | 92 | (34) | (1) | 57 | ||||||||
Balance at January 2, 2026 | $(121) | $(674) | $— | $(795) | ||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | Affected line item on the Combined Statements of Operations | ||||||
Accumulated pension liability adjustments | |||||||||
Prior service cost amortization | $(1) | $(1) | See (a) below | ||||||
Recognized actuarial loss | (4) | (3) | See (a) below | ||||||
Tax benefit | 1 | 1 | Provision for income taxes | ||||||
Net pension and post-retirement benefits | $(4) | $(3) | Net of tax | ||||||
Changes in fair value for derivatives | |||||||||
Interest rate swap settlements | $1 | $2 | Interest Expense | ||||||
Tax benefit | (1) | (1) | Provision for income taxes | ||||||
Net changes in fair value of derivatives | $— | $1 | Net of tax | ||||||
(a) | This item is included in the computation of net periodic pension cost. See Note 11. “Retirement Benefits” to our combined financial statements for further discussion. |
January 2, 2026 | January 3, 2025 | ||||||||||||||
Dollars in millions | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Liabilities (including current maturities): | |||||||||||||||
Term Loan A-3 | Level 2 | $123 | $123 | $118 | $118 | ||||||||||
Dollars in millions | Notional Amount at January 2, 2026 | Pay Fixed Rate (Weighted Average) | Receive Variable Rate | Settlement and Termination | ||||||||
March 2023 Amortizing Interest Rate Swaps | £104 | 3.81% | Term SONIA | Monthly through November 2026 | ||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Beginning balance | $106 | $135 | ||||
Sale of receivables | 2,143 | 3,117 | ||||
Settlement of receivables | (2,184) | (3,127) | ||||
Cash collected, not yet remitted | — | (19) | ||||
Outstanding balances sold to financial institutions | $65 | $106 | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Transfer from (to) Parent as reflected in the Combined Statements of Equity | $(365) | $602 | $5 | ||||||
Settlement of VIE debt recognized to net parent investment | — | 1 | — | ||||||
Cumulative translation adjustments recognized to net parent investment | 29 | (16) | 2 | ||||||
Stock compensation expense recognized to net parent investment | (13) | (13) | (13) | ||||||
Transfer from (to) Parent as reflected in the Combined Statements of Cash Flows | $(349) | $574 | $(6) | ||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Accounts receivable, net of allowance for credit losses | $48 | $40 | ||||
Contract liabilities | $21 | $64 | ||||
Year ended | |||||||||
Dollars in millions | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||
Revenue | $67 | $32 | $— | ||||||
Cost of revenue | (83) | (28) | — | ||||||
Selling, general, and administrative expenses | (30) | (1) | (1) | ||||||
Loss on disposal(a) | (22) | — | — | ||||||
Operating income (loss) | (68) | 3 | (1) | ||||||
Income (loss) from discontinued operations before income taxes | (68) | 3 | (1) | ||||||
Provision for income taxes | 13 | (1) | — | ||||||
Net income (loss) from discontinued operations, net of tax | (55) | 2 | (1) | ||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | (19) | 1 | — | ||||||
Net income (loss) attributable to Trinzic from discontinued operations | $(36) | $1 | $(1) | ||||||
(a) | Includes $64 million of asset impairments related to property, plant, and equipment and write-offs of $30 million in other assets, offset by elimination of $72 million in other liabilities during the year ended January 2, 2026. |
Dollars in millions | January 2, 2026 | January 3, 2025 | ||||
Assets | ||||||
Cash and cash equivalents | $5 | $8 | ||||
Accounts receivable, net of allowance for credit losses | 1 | 5 | ||||
Contract assets | — | 2 | ||||
Other current assets | 13 | 6 | ||||
Total current assets of discontinued operations | $19 | $21 | ||||
Property, plant, and equipment, net of accumulated depreciation | $— | $52 | ||||
Other assets | — | 26 | ||||
Total non-current assets of discontinued operations | $— | $78 | ||||
Liabilities | ||||||
Accounts payable | $8 | $5 | ||||
Contract liabilities | 2 | 8 | ||||
Accrued salaries, wages, and benefits | 1 | 2 | ||||
Other current liabilities | 8 | — | ||||
Total current liabilities of discontinued operations | $19 | $15 | ||||
Other liabilities | $— | $69 | ||||
Total non-current liabilities of discontinued operations | $— | $69 | ||||
Three months ended | Six months ended | |||||||||||
July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | |||||||||
Revenue | $1,308 | $1,336 | $2,604 | $2,717 | ||||||||
Cost of revenue | (1,117) | (1,163) | (2,239) | (2,369) | ||||||||
Equity in earnings of unconsolidated affiliates | 11 | 8 | 21 | 15 | ||||||||
Selling, general, and administrative expenses | (86) | (89) | (173) | (178) | ||||||||
Lease right-of-use asset impairment | (13) | — | (13) | — | ||||||||
Other operating income (expense) | (1) | 1 | (3) | 1 | ||||||||
Operating income | 102 | 93 | 197 | 186 | ||||||||
Interest expense | (3) | (4) | (5) | (8) | ||||||||
Other non-operating income (expense) | — | (3) | — | 1 | ||||||||
Income from continuing operations before income taxes | 99 | 86 | 192 | 179 | ||||||||
Provision for income taxes | (22) | (20) | (45) | (39) | ||||||||
Net income from continuing operations | 77 | 66 | 147 | 140 | ||||||||
Net income (loss) from discontinued operations, net of tax | 2 | (48) | — | (54) | ||||||||
Net income | 79 | 18 | 147 | 86 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | 1 | (16) | — | (18) | ||||||||
Net income attributable to Trinzic | $78 | $34 | $147 | $104 | ||||||||
Three months ended | Six months ended | |||||||||||
July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | |||||||||
Net income | $79 | $18 | $147 | $86 | ||||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | (3) | 69 | (19) | 108 | ||||||||
Pension and post-retirement benefits | 5 | 2 | 9 | 3 | ||||||||
Changes in fair value of derivatives | — | — | — | (1) | ||||||||
Other comprehensive income (loss) | 2 | 71 | (10) | 110 | ||||||||
Income tax (expense) benefit: | ||||||||||||
Pension and post-retirement benefits | (1) | (1) | (2) | (1) | ||||||||
Income tax expense | (1) | (1) | (2) | (1) | ||||||||
Other comprehensive income (loss), net of tax | 1 | 70 | (12) | 109 | ||||||||
Comprehensive income | 80 | 88 | 135 | 195 | ||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests from discontinued operations | 1 | (16) | — | (18) | ||||||||
Comprehensive income attributable to Trinzic | $79 | $104 | $135 | $213 | ||||||||
July 3, 2026 | January 2, 2026 | |||||
(Unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $147 | $167 | ||||
Accounts receivable, net of allowance for credit losses of $0 and $0, respectively | 605 | 645 | ||||
Contract assets | 88 | 56 | ||||
Other current assets | 46 | 62 | ||||
Current assets of discontinued operations | 15 | 19 | ||||
Total current assets | 901 | 949 | ||||
Pension assets | 110 | 86 | ||||
Property, plant, and equipment, net of accumulated depreciation of $214 and $205, respectively (including net PPE of $4 and $4 owned by a variable interest entity, respectively) | 145 | 147 | ||||
Operating lease right-of-use assets | 138 | 140 | ||||
Goodwill | 2,089 | 2,089 | ||||
Intangible assets, net of accumulated amortization of $361 and $340, respectively | 583 | 608 | ||||
Equity in and advances to unconsolidated affiliates | 71 | 70 | ||||
Deferred income taxes | 5 | 5 | ||||
Other assets | 26 | 20 | ||||
Total assets | $4,068 | $4,114 | ||||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $382 | $382 | ||||
Contract liabilities | 87 | 102 | ||||
Accrued salaries, wages, and benefits | 205 | 207 | ||||
Current maturities of long-term debt | 8 | 8 | ||||
Other current liabilities | 86 | 76 | ||||
Current liabilities of discontinued operations | 16 | 19 | ||||
Total current liabilities | 784 | 794 | ||||
Employee compensation and benefits | 38 | 41 | ||||
Deferred income taxes | 106 | 99 | ||||
Long-term debt | 108 | 115 | ||||
Operating lease liabilities | 150 | 147 | ||||
Other liabilities | 104 | 115 | ||||
Total liabilities | 1,290 | 1,311 | ||||
Commitments and Contingencies (Notes 5, 10, and 11) | ||||||
Trinzic equity: | ||||||
Net parent investment | 3,589 | 3,601 | ||||
AOCL | (807) | (795) | ||||
Total Trinzic equity | 2,782 | 2,806 | ||||
Noncontrolling interests | (4) | (3) | ||||
Total equity | 2,778 | 2,803 | ||||
Total liabilities and equity | $4,068 | $4,114 | ||||
Dollars in millions | Total | Net Parent Investment | AOCL | Noncontrolling Interest | ||||||||
Balance at April 3, 2026 | $2,745 | $3,557 | $(808) | $(4) | ||||||||
Transfers to parent, net | (46) | (46) | — | — | ||||||||
Net income | 79 | 78 | — | 1 | ||||||||
Other | (1) | — | — | (1) | ||||||||
Other comprehensive income, net of tax | 1 | — | 1 | — | ||||||||
Balance at July 3, 2026 | $2,778 | $3,589 | $(807) | $(4) | ||||||||
Dollars in millions | Total | Net Parent Investment | AOCL | Noncontrolling Interest | ||||||||
Balance at January 2, 2026 | $2,803 | $3,601 | $(795) | $(3) | ||||||||
Transfers to parent, net | (159) | (159) | — | — | ||||||||
Net income | 147 | 147 | — | — | ||||||||
Other | (1) | — | — | (1) | ||||||||
Other comprehensive loss, net of tax | (12) | — | (12) | — | ||||||||
Balance at July 3, 2026 | $2,778 | $3,589 | $(807) | $(4) | ||||||||
Dollars in millions | Total | Net Parent Investment | AOCL | Noncontrolling Interest | ||||||||
Balance at April 4, 2025 | $2,957 | $3,768 | $(813) | $2 | ||||||||
Investments by noncontrolling interests | 8 | — | — | 8 | ||||||||
Transfers to parent, net | (245) | (245) | — | — | ||||||||
Net income (loss) | 18 | 34 | — | (16) | ||||||||
Other comprehensive income, net of tax | 70 | — | 70 | — | ||||||||
Balance at July 4, 2025 | $2,808 | $3,557 | $(743) | $(6) | ||||||||
Dollars in millions | Total | Net Parent Investment | AOCL | Noncontrolling Interest | ||||||||
Balance at January 3, 2025 | $2,873 | $3,721 | $(852) | $4 | ||||||||
Investments by noncontrolling interests | 8 | — | — | 8 | ||||||||
Transfers to parent, net | (268) | (268) | — | — | ||||||||
Net income (loss) | 86 | 104 | — | (18) | ||||||||
Other comprehensive income, net of tax | 109 | — | 109 | — | ||||||||
Balance at July 4, 2025 | $2,808 | $3,557 | $(743) | $(6) | ||||||||
Six months ended | ||||||
July 3, 2026 | July 4, 2025 | |||||
Cash flows from operating activities: | ||||||
Net income | $147 | $86 | ||||
Net loss from discontinued operations, net of tax | — | 54 | ||||
Net income from continuing operations | 147 | 140 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 49 | 54 | ||||
Equity in earnings of unconsolidated affiliates | (21) | (15) | ||||
Deferred income tax | 6 | 7 | ||||
Lease right-of-use asset impairment | 13 | — | ||||
Other | (10) | (2) | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable, net of allowance for credit losses | 41 | (102) | ||||
Contract assets | (31) | 5 | ||||
Accounts payable | (1) | 4 | ||||
Contract liabilities | (16) | 30 | ||||
Accrued salaries, wages, and benefits | (2) | (4) | ||||
Payments on operating lease obligation | (20) | (21) | ||||
Payments from unconsolidated affiliates, net | 5 | 5 | ||||
Distributions of earnings from unconsolidated affiliates | 14 | 10 | ||||
Other assets and liabilities | 22 | 65 | ||||
Total cash flows provided by operating activities - continuing operations | $196 | $176 | ||||
Cash flows from investing activities: | ||||||
Purchases of property, plant, and equipment | $(12) | $(10) | ||||
Other | 2 | — | ||||
Total cash flows used in investing activities - continuing operations | $(10) | $(10) | ||||
Cash flows from financing activities: | ||||||
Payments on short-term and long-term debt | $(4) | $(4) | ||||
Transfers to parent | (202) | (153) | ||||
Other | 2 | (1) | ||||
Total cash flows used in financing activities - continuing operations | $(204) | $(158) | ||||
Total operating cash flows from discontinued operations | (2) | (27) | ||||
Total investing cash flows from discontinued operations | — | (12) | ||||
Total financing cash flows from discontinued operations | — | 8 | ||||
Total cash flows from discontinued operations | $(2) | $(31) | ||||
Effect of exchange rate changes on cash | (2) | 18 | ||||
Decrease in cash and cash equivalents | (22) | (5) | ||||
Cash and cash equivalents at beginning of period | 172 | 151 | ||||
Cash and cash equivalents at end of period | $150 | $146 | ||||
Less: cash and cash equivalents at end of period for discontinued operations | 3 | 1 | ||||
Cash and cash equivalents at end of period for continuing operations | $147 | $145 | ||||
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Prepaid expenses | $13 | $20 | ||||
Value-added tax receivable | 24 | 21 | ||||
Other miscellaneous assets | 9 | 21 | ||||
Total other current assets | $46 | $62 | ||||
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Operating lease liabilities | $31 | $29 | ||||
Value-added tax payable | 33 | 10 | ||||
Other miscellaneous liabilities | 22 | 37 | ||||
Total other current liabilities | $86 | $76 | ||||
Three months ended | Six months ended | |||||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||
U.S. Government Defense and Intelligence Clients | $834 | $856 | $1,650 | $1,762 | ||||||||
U.S. Government Federal Civilian Clients | 254 | 273 | 516 | 554 | ||||||||
International Government Clients | 199 | 181 | 391 | 348 | ||||||||
Commercial and Infrastructure Clients | 21 | 26 | 47 | 53 | ||||||||
Total revenue | $1,308 | $1,336 | $2,604 | $2,717 | ||||||||
Three months ended | Six months ended | |||||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||
Total by Countries/Region | ||||||||||||
United States | $951 | $988 | $1,901 | $1,964 | ||||||||
Europe | 218 | 214 | 433 | 507 | ||||||||
Middle East | 32 | 39 | 63 | 65 | ||||||||
Australia | 65 | 56 | 128 | 106 | ||||||||
Africa | 20 | 18 | 39 | 36 | ||||||||
Asia | 5 | 10 | 9 | 13 | ||||||||
Other countries | 17 | 11 | 31 | 26 | ||||||||
Total revenue | $1,308 | $1,336 | $2,604 | $2,717 | ||||||||
Three months ended | Six months ended | |||||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||
Cost Reimbursable | $746 | $853 | $1,517 | $1,744 | ||||||||
Time-and-Materials | 203 | 194 | 403 | 401 | ||||||||
Fixed Price | 359 | 289 | 684 | 572 | ||||||||
Total revenue | $1,308 | $1,336 | $2,604 | $2,717 | ||||||||
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Unbilled | $394 | $381 | ||||
Trade & other | 211 | 264 | ||||
Accounts receivable, net | $605 | $645 | ||||
July 3, 2026 | |||||||||
Dollars in millions | International(a) | Domestic(b) | Total | ||||||
Cash and cash equivalents | $70 | $34 | $104 | ||||||
Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities(c) | 43 | — | 43 | ||||||
Total | $113 | $34 | $147 | ||||||
January 2, 2026 | |||||||||
Dollars in millions | International(a) | Domestic(b) | Total | ||||||
Cash and cash equivalents | $40 | $103 | $143 | ||||||
Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities(c) | 24 | — | 24 | ||||||
Total | $64 | $103 | $167 | ||||||
(a) | Includes deposits held by non-U.S. entities with operating accounts that constitute offshore cash for tax purposes. The related tax effect associated with repatriating these foreign cash balances would not have a material impact on our projected effective tax rate. |
(b) | Includes U.S. dollar and foreign currency deposits held in U.S. entities with operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country. Includes cash and cash equivalents held by our wholly owned captive insurance company of $10 million and $15 million as of July 3, 2026 and January 2, 2026, respectively, which is not available to Trinzic to support its general operations. |
(c) | Includes short-term investments held by Aspire Defence subcontracting entities for $26 million and $11 million as of July 3, 2026 and January 2, 2026, respectively. |
Six months ended | ||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | ||||
Amounts included in contract estimates-at-completion at beginning of fiscal year | $25 | $104 | ||||
Net increase in project estimates | 4 | 57 | ||||
Approved change orders | (10) | (128) | ||||
Ending balance of amounts included in contract estimates-at-completion | $19 | $33 | ||||
Amounts recognized over time based on progress | $10 | $31 | ||||
Six months ended | Year ended | |||||
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Beginning balance | $70 | $66 | ||||
Equity in earnings of unconsolidated affiliates | 21 | 33 | ||||
Distributions of earnings of unconsolidated affiliates | (14) | (23) | ||||
Payments from unconsolidated affiliates, net | (5) | (9) | ||||
Foreign currency translation adjustments | (1) | 4 | ||||
Other | — | (1) | ||||
Ending balance | $71 | $70 | ||||
Three months ended | Six months ended | |||||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||
Components of net periodic pension benefit | ||||||||||||
Interest cost | $15 | $15 | $31 | $30 | ||||||||
Expected return on plan assets | (28) | (28) | (57) | (54) | ||||||||
Prior service cost amortization | — | 1 | — | 1 | ||||||||
Recognized actuarial loss | 4 | 1 | 8 | 2 | ||||||||
Net periodic pension benefit | $(9) | $(11) | $(18) | $(21) | ||||||||
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Term A-3 Loan | $116 | $123 | ||||
Less: current portion | 8 | 8 | ||||
Total long-term debt, net of current portion | $108 | $115 | ||||
Parent’s Consolidated Leverage Ratio | Reference Rate(a) | Base Rate | Commitment Fee | ||||||
Greater than or equal to 4.25 to 1.00 | 2.25% | 1.25% | 0.33% | ||||||
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00 | 2.00% | 1.00% | 0.30% | ||||||
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00 | 1.75% | 0.75% | 0.28% | ||||||
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00 | 1.50% | 0.50% | 0.25% | ||||||
Less than 1.25 to 1.00 | 1.25% | 0.25% | 0.23% | ||||||
(a) | The reference rate for the British pound sterling tranche of Term Loan is SONIA plus 12 bps Credit Spread Adjustment. |
Dollars in millions | Accumulated foreign currency translation adjustments | Accumulated pension liability adjustments | Changes in fair value of derivatives | Total | ||||||||
Balance at January 2, 2026 | $(121) | $(674) | $— | $(795) | ||||||||
Other comprehensive loss adjustments before reclassification | (19) | — | — | (19) | ||||||||
Amounts reclassified from AOCL | — | 7 | — | 7 | ||||||||
Net other comprehensive income (loss) | (19) | 7 | — | (12) | ||||||||
Balance at July 3, 2026 | $(140) | $(667) | $— | $(807) | ||||||||
Dollars in millions | Accumulated foreign currency translation adjustments | Accumulated pension liability adjustments | Changes in fair value of derivatives | Total | ||||||||
Balance at January 3, 2025 | $(213) | $(640) | $1 | $(852) | ||||||||
Other comprehensive income (loss) adjustments before reclassification | 108 | — | (1) | 107 | ||||||||
Amounts reclassified from AOCL | — | 2 | — | 2 | ||||||||
Net other comprehensive income (loss) | 108 | 2 | (1) | 109 | ||||||||
Balance at July 4, 2025 | $(105) | $(638) | $— | $(743) | ||||||||
Six months ended | Affected line item on the Condensed Combined Statements of Operations | ||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | |||||||
Accumulated pension liability adjustments | |||||||||
Prior service cost amortization | $— | $(1) | See (a) below | ||||||
Recognized actuarial loss | (8) | (2) | See (a) below | ||||||
Tax benefit | 1 | 1 | Provision for income taxes | ||||||
Net pension and post-retirement benefits | $(7) | $(2) | Net of tax | ||||||
(a) | This item is included in the computation of net periodic pension benefit. See Note 7. “Retirement Benefits” to our condensed combined financial statements for further discussion. |
July 3, 2026 | January 2, 2026 | ||||||||||||||
Dollars in millions | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Liabilities (including current maturities): | |||||||||||||||
Term Loan A-3 | Level 2 | $116 | $116 | $123 | $123 | ||||||||||
Dollars in millions | Notional Amount at July 3, 2026 | Pay Fixed Rate (Weighted Average) | Receive Variable Rate | Settlement and Termination | ||||||||
March 2023 Amortizing Interest Rate Swaps | £101 | 3.81% | Term SONIA | Monthly through November 2026 | ||||||||
Six months ended | ||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | ||||
Beginning balance | $65 | $106 | ||||
Sale of receivables | 608 | 1,500 | ||||
Settlement of receivables | (608) | (1,542) | ||||
Outstanding balances sold to financial institutions | $65 | $64 | ||||
Six months ended | ||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | ||||
Transfer from (to) Parent as reflected in the Condensed Combined Statements of Equity | $(159) | $(268) | ||||
Cumulative translation adjustments recognized to net parent investment | (35) | 121 | ||||
Stock compensation expense recognized to net parent investment | (8) | (6) | ||||
Transfer from (to) Parent as reflected in the Condensed Combined Statements of Cash Flows | $(202) | $(153) | ||||
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Accounts receivable, net of allowance for credit losses | $47 | $48 | ||||
Contract liabilities | $20 | $21 | ||||
Three months ended | Six months ended | |||||||||||
Dollars in millions | July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||
Revenue | $— | $27 | $— | $64 | ||||||||
Cost of revenue | 1 | (40) | — | (79) | ||||||||
Selling, general, and administrative expenses | 1 | (22) | — | (27) | ||||||||
Loss on disposal(a) | — | (22) | — | (22) | ||||||||
Operating income (loss) | 2 | (57) | — | (64) | ||||||||
Income (loss) from discontinued operations before income taxes | 2 | (57) | — | (64) | ||||||||
Provision for income taxes | — | 9 | — | 10 | ||||||||
Net income (loss) from discontinued operations, net of tax | 2 | (48) | — | (54) | ||||||||
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | 1 | (16) | — | (18) | ||||||||
Net income (loss) attributable to Trinzic from discontinued operations | $1 | $(32) | $— | $(36) | ||||||||
(a) | Includes $64 million of asset impairments related to property, plant, and equipment and write-offs of $30 million in other assets, offset by elimination of $72 million in other liabilities during the three and six months ended July 4, 2025. |
Dollars in millions | July 3, 2026 | January 2, 2026 | ||||
Assets | ||||||
Cash and cash equivalents | $3 | $5 | ||||
Accounts receivable, net of allowance for credit losses | — | 1 | ||||
Other current assets | 12 | 13 | ||||
Total current assets of discontinued operations | $15 | $19 | ||||
Liabilities | ||||||
Accounts payable | $5 | $8 | ||||
Contract liabilities | 2 | 2 | ||||
Accrued salaries, wages, and benefits | — | 1 | ||||
Other current liabilities | 9 | 8 | ||||
Total current liabilities of discontinued operations | $16 | $19 | ||||