The Securities and Exchange Commission charged KBR Inc. on Monday for inflating a key performance metric known as work in backlog. KBR agreed to pay a $2.5 million penalty to settle the SEC's charges without admitting or denying the allegations. The backlog metric represented the amount of revenue that KBR expected to receive in the future from firm orders under awarded contracts. The SEC allegedly found KBR included $459 million in its publicly disclosed backlog in the second quarter of 2012 for one of seven contracts it entered into to complete pipe fabrication and modular assembly contracts in Canada, even though KBR had not received -- and the counterparty was not obligated to provide -- any orders under the contract. KBR violated its internal reporting policies and misled investors by overstating its work in backlog for almost two years. KBR was forced to restate its financial statements for the fiscal year ended December 31, 2013 and its unaudited consolidated financial statements for the third quarter of 2013 for a total negative impact of $156 million.