8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 12, 2010

______________________________

KBR, INC.

(Exact name of registrant as specified in its charter)

                                                           Delaware                                            1-33146                                        20-4536774
                                              (State or other jurisdiction                      (Commission File Number)                    (IRS Employer
                                                      of incorporation)                                                                                        Identification No.)

                                                                    601 Jefferson Street
                                                                           Suite 3400

                                                                       Houston, Texas                                                      77002
                                                     (Address of principal executive offices)                                     (Zip Code)

                                                                                Registrant’s telephone number, including area code: (713) 753-3011

______________________________

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

     o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
     o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 8.01.     Other Events.

     On January 12, 2010, KBR, Inc. announced that its Mexican subsidiary, Commisa, has received an arbitration ruling against Pemex Exploration and Production (PEP), a subsidiary of PEMEX, the Mexican national oil company. The base award is in the amount of approximately $286M. The award also includes legal and administrative recovery fees as well as interest bringing the award total to an estimated amount in excess of $350M. PEP was awarded approximately $6M on counterclaims, plus interest on a portion of that sum. A copy of the press release announcing the award is attached hereto as Exhibit 99.1.
 
 

ITEM 9.01     Financial Statements and Exhibits.
 

(d)      Exhibits.

99.1     Press Release dated January 12, 2010, entitled “KBR Receives Arbitration Award Against PEMEX”

SIGNATURE
 

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                                               KBR, INC.

Date: January ___, 2010	By:	/s/ Jeffrey B. King
		Jeffrey B. King Vice President, Public Law

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE                                                                         Contact:     Heather Browne

January 12, 2010                                                                                                            Director, Communications
                                                                                                                                     713-753-3775
                                                                                                                                     heather.browne@kbr.com

Rob Kukla, Jr.
                                                                                                                                     Director, Investor Relations
                                                                                                                                     713-753-5082
                                                                                                                                     investors@kbr.com

KBR RECEIVES ARBITRATION AWARD AGAINST PEMEX

HOUSTON – KBR (NYSE: KBR) announced today its Mexican subsidiary, Commisa, has received an arbitration award against Pemex Exploration and Production (PEP), a subsidiary of PEMEX, the Mexican national oil company. The base award is in the amount of approximately $286M. The award also includes legal and administrative recovery fees as well as interest bringing the award total to in excess of $350M. PEP was awarded approximately $6M on counterclaims, plus interest on a portion of that sum.

The award arises out of a 1997 EPC contract and PEP’s resulting failure to pay Commisa fully for the construction of two large platforms, as well as the related flare and incinerator platforms, off the coast of Mexico in the Bay of Campeche.
 
The arbitration was conducted by the International Chamber of Commerce. The final arbitration hearings were conducted in December 2007, the arbitration award is dated December 16, 2009 and Commisa was notified of the award January 11, 2010.
 
“This arbitration closes the chapter on a significant legacy litigation issue for KBR,” said William P. Utt, KBR Chairman, President and Chief Executive Officer. “With this matter now resolved, the company can move forward and reinvigorate its continued efforts of being the global contractor of choice.”

This is the third recent arbitration award received by KBR subsidiaries Commisa and Combisa against PEP, all arising from works performed in the Bay of Campeche. The two prior awards have been satisfied by PEP.

KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power and industrial markets. For more information, visit www.kbr.com.