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Equity Method Investments and Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity In Earnings of Unconsolidated Affiliates

The following table presents a rollforward of our equity in and advances to unconsolidated affiliates:



Dollars in millions	2019			2018
Beginning balance at January 1,	$	724		$	365
Cumulative effect of change in accounting policy (a)	29			87
Adjusted balance at January 1,	753			452
Equity in earnings of unconsolidated affiliates	35			79
Distributions of earnings of unconsolidated affiliates	(69		)	(75		)
Payments from (advances to) unconsolidated affiliates, net	(10		)	(12		)
Investments (b)	146			344
Foreign currency translation adjustments	(7		)	(28		)
Other	2			(36		)
Balance at December 31,	$	850		$	724

(a)

At January 1, 2018, deferred construction income in the amount of $87 million previously recorded in "Equity in and advance to unconsolidated affiliates" was reversed and included in the cumulative effect adjustment as a result of the early adoption of ASC 606 by the Aspire Defence project joint ventures. At January 1, 2019, we recognized a cumulative effect adjustment of $29 million as a result of the adoption of ASC 606 by our remaining unconsolidated project joint ventures.

(b)

Investments include $141 million and $344 million in funding contributions to JKC for the years ended December 31, 2019 and 2018, respectively.

Consolidated Summarized Financial Information

Summarized financial information for all jointly owned operations including VIEs that are accounted for using the equity method of accounting is as follows:

Balance Sheets



	December 31,
Dollars in millions	2019		2018
Current assets	$	3,072	$	3,526
Noncurrent assets	3,219		3,121
Total assets	$	6,291	$	6,647

Current liabilities	$	949	$	1,277
Noncurrent liabilities	2,922		3,212
Total liabilities	$	3,871	$	4,489

Statements of Operations



	Years ended December 31,
Dollars in millions	2019		2018		2017
Revenues	$	2,592	$	3,190	$	5,781
Operating income	$	92	$	197	$	278
Net income	$	48	$	173	$	145

The following summarizes the total assets and total liabilities as reflected in our consolidated balance sheets related to our unconsolidated VIEs in which we have a significant variable interest but are not the primary beneficiary.



	December 31, 2019
Dollars in millions	Total Assets		Total Liabilities
Affinity joint venture (U.K. MFTS project)	$	14	$	10
Aspire Defence Limited	$	67	$	5
JKC joint venture (Ichthys LNG project)	$	546	$	29
U.K. Road project joint ventures	$	40	$	21
Middle East Petroleum Corporation (EBIC Ammonia project)	$	47	$	1



Dollars in millions	December 31, 2018
Dollars in millions	Total Assets		Total Liabilities
Affinity joint venture (U.K. MFTS project)	$	16	$	8
Aspire Defence Limited	$	68	$	5
JKC joint venture (Ichthys LNG project)	$	427	$	32
U.K. Road project joint ventures	$	37	$	10
Middle East Petroleum Corporation (EBIC Ammonia project)	$	51	$	1

Schedule of Services Provided to Unconsolidated JV's

Amounts included in our consolidated balance sheets related to services we provided to our unconsolidated joint ventures for the years ended December 31, 2019 and 2018 are as follows:



	December 31,
Dollars in millions	2019		2018
Accounts receivable, net of allowance for doubtful accounts	$	49	$	43
Contract assets (a)	$	2	$	1
Contract liabilities (a)	$	33	$	38
Accounts payable	$	—	$	2


(a)	Reflects contract assets and contract liabilities primarily related to joint ventures within our ES business segment.

Summary of Significant VIEs

The following is a summary of the significant VIEs where we are the primary beneficiary:



Dollars in millions	December 31, 2019
Dollars in millions	Total Assets		Total Liabilities
KJV-G joint venture (Gorgon LNG project)	$	—	$	17
Fasttrax Limited (Fasttrax project)	$	45	$	24
Aspire Defence subcontracting entities (Aspire Defence project)	$	530	$	283



Dollars in millions	December 31, 2018
Dollars in millions	Total Assets		Total Liabilities
KJV-G joint venture (Gorgon LNG project)	$	13	$	19
Fasttrax Limited (Fasttrax project)	$	49	$	34
Aspire Defence subcontracting entities (Aspire Defence project)	$	589	$	324

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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