Court Reduces Award in Final Judgment in Associated Construction Company WLL Case Against KBR.

HOUSTON -- KBR (NYSE:KBR) announced today that a judgment has been entered in the Associated Construction Company WLL (ASCO) case. ASCO was a subcontractor to KBR in Iraq and performed work under the LOGCAP III contract. The total judgment is just over $27 million, which includes damages, attorney's fees, and interest. KBR previously accrued approximately $40 million representing the probable estimate of the jury award.

KBR believes there are additional errors in the verdict and judgment, and the company is evaluating its options on appeal. KBR also believes that the remaining jury award for extra work would be properly billable to the government once the issues are finally resolved.

KBR is a global engineering, construction and services company supporting the energy, petrochemicals, government services and civil infrastructure sectors. The company offers a wide range of services through its Downstream, Government and Infrastructure, Services, Technology, Upstream and Ventures business segments. For more information, visit www.kbr.com.

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