KBR Inc

Item 1A. Risk Factors

There are no  Company is supplementing the risk factors previously disclosed in the Company's 2024 Annual Report on Form 10-K with the following risk factor below. There are no other material changes from the risk factors previously disclosed in Part I, Item 1A in our Annual Report on Form 10-K, which is incorporated herein by reference, for the year ended January 3, 2025.

We are subject to risks related to our plan to spin off our Mission Technology Solutions business into a standalone, publicly traded company.

On September 24, 2025, we announced our intent to spin off our Mission Technology Solutions business to create a separate, U.S. publicly-traded company. The planned spin-off is intended to be tax-free to us and our shareholders for U.S. federal income tax purposes and targeting completion by mid-to-late 2026. The spin-off will be subject to final approval by our Board of Directors and other customary conditions, including receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S. Internal Revenue Service with respect to the tax treatment of the transaction for U.S. federal income tax purposes, the effectiveness of a registration statement on Form 10 filed with the SEC, satisfactory completion of financing, and other regulatory approvals. We cannot assure you that we will be able to satisfy the necessary conditions or that we will successfully complete the anticipated separation in our preferred structure, on the anticipated timeline or at all. Unanticipated developments, including possible delays in obtaining various tax rulings or regulatory approvals, uncertainty or declines in the financial markets or other adverse market conditions, changes in our cash requirements, challenges in establishing the new companys organizational structure, infrastructure or processes, or adverse business performance could delay or prevent the proposed separation or cause the proposed separation to occur on terms or conditions that are less favorable and/or different than expected, including without limitation, the failure to qualify as tax-free to our shareholders (which could result in significant income tax liabilities to us and/or our shareholders), and the inability of the spun-off company to incur sufficient indebtedness to allow for a distribution to us of proceeds concurrently with the consummation of the spin-off. Expenses incurred to accomplish the proposed separation may be significantly higher than what we currently anticipate. Executing the proposed separation also requires significant time and attention from management, which could distract them from other tasks in operating our business. Even if the transaction is completed, we may not realize some or all of the anticipated benefits from the separation and we cannot assure you that the separation will yield greater benefits to KBR and its shareholders than if such transaction had not occurred. Any of these factors could negatively impact our business, financial condition, results of operations, cash flows, and the price of our common stock. Additionally, following the proposed separation, the combined value of the common stock of the two publicly-traded companies may not be equal to or greater than what the value of our common stock would have been had the separation not occurred.

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