To our customers, employees, partners, suppliers, and friends:

We are pleased to report that Bechtel had a strong year in 2011 despite global economic uncertainty, political turmoil in some key markets, and constrained government budgets. We expanded our business in key geographic regions; our global business units each did well with their discrete challenges; and Bechtel, overall, delivered solid project performance and financial results.

This robust performance led to an 18 percent increase in revenue, to $32.9 billion from the $27.9 billion we reported in 2010. New work booked rose to a record $53 billion, more than doubling the previous year. These extraordinary numbers reflect the hard work, commitment, and applied know-how of our 53,000 total colleagues and the trust expressed by customers in our ability to deliver that know how.

Strengthening Relationships

For all of our customers, the certainty of safety, quality, cost, and schedule that we deliver is crucial. Their view of our performance on these criteria is reflected in how often they entrust us with new and larger projects, and in the continuity and longevity of our relationships with them. Our 2011 results remind us of the importance of top performance to sustaining such long-term relationships.

Certainty of outcome will always be a key to our success. Customers continue to reward our proven performance—from multiproject arrangements with two mining customers to a new master agreement to build onshore gas plants. Last year was no exception, as existing customers awarded us new opportunities in challenging and remote locations in South America, Africa, Asia, and Australia.

Just as we strive to be an integral part of our customers’ successes, we also work to be a welcome partner in our communities. The rewards of a long-term commitment are evident in Queensland, Australia. In the almost 50 years since we were awarded our first project in Queensland, Bechtel teams have returned to build new facilities for mining, power, and oil and gas customers. In the process, we have supported local businesses and built lasting relationships. Among the more exciting developments in 2011 was the award of two additional liquefied natural gas (LNG) projects on Curtis Island, adjacent to our ongoing Queensland Curtis LNG project. To help meet the demand for skilled labor on all three of these projects, we arranged with Australia’s government to hire 400 adult apprentices, one of the largest such employment events in Australia’s history.

New Markets, New Regions

As we strengthen relationships with existing customers, we are also looking for good opportunities to reach new customers and to expand into new markets and new regions. To that end, in 2011 our Oil, Gas & Chemicals unit created a separate business line to revitalize our offshore presence. OG&C also established a technology ownership, development, and licensing group to pursue alliances like our agreement with Linde AG to build and expand ethylene cracker plants in North America. The group also manages the ThruPlus® delayed coking technology we acquired last year from ConocoPhillips.

Following the completion of several large fossil projects, Power launched a new business called Fossil Generation Services to meet customers’ needs for small engineering assignments. Meanwhile, our Transmission business expanded its work in Alberta and was selected for a second ATCO Electric project. Power’s very successful year was marked near year-end with a groundbreaking for one of the world’s largest solar photovoltaic facilities, the second major solar project for its growing Renewables business line.

Our Civil unit registered several highlights, including a strategic win in Oman to maintain our presence in the Middle East’s aviation market as we near completion of Doha’s new international airport. With longtime partner ENKA, we completed two phases of the Kosovo Motorway a year ahead of schedule and on budget. In Saudi Arabia, we continue to provide effective project management at Jubail, where we have continuously worked since the early 1980s. We have also returned to Brazil, to assist Metro Rio with delivery of rolling stock for Rio de Janeiro’s subway.

As our Mining & Metals unit’s Australian colleagues helped OG&C become part of the Queensland community—in typical “One Bechtel” fashion—it was expanding into other markets and reporting its own record for new work booked. M&M teams have returned to Peru for the first time in nearly a decade for two projects. Teams also started early work in Minnesota for a copper, nickel, and strategic metals mine, as well as in Guinea for an iron ore project.

Our government business, Bechtel Systems & Infrastructure, Inc., sought greater diversity in its traditional defense and security markets and expanded its reach outside of the United States to be more responsive to our customers’ needs—as with the nuclear waste retrieval project at Sellafield, one of two UK projects won in 2011.

Safety as a Value

Bechtel places one job requirement above all others—safety. In 2011, we redoubled our safety efforts by intensifying our focus on leadership engagement, training, hazard recognition, and field assessments.

Although these efforts drove a 20 percent reduction in our lost time and recordable incident rates during 2011, further highlighting Bechtel as one of the safest engineering and construction companies in the world, we have not given up on zero accidents as our goal.

All of our business units reported impressive safety milestones in 2011. OG&C led the way with a remarkable effort on the Angola LNG project, which achieved 23 million consecutive hours without a lost time injury. M&M saw a 50 percent reduction in lost time injury rates and a 33 percent reduction in recordable rates, led by the Antapaccay project in Peru, with zero lost time injuries. Five Bechtel National projects were recognized by the U.S. Occupational Safety & Health Administration’s VPP program, with the Ground-based Midcourse Defense program in Alaska receiving Star Status, OSHA’s highest honor. Power continued on its path toward zero accidents with a 35 percent improvement in performance metrics, its best performance in 12 years. Civil’s improvements were primarily driven by results on projects in Oman, Saudi Arabia, and the United Arab Emirates.

Numerous projects achieved zero accidents in 2011. While our performance improved, each project will continue its pursuit of zero accidents and will continue to recognize safety as its most important value.

Building a Better Bechtel

Predicting the future is as difficult as ever. But we know for sure that successful performance depends squarely on our ability to earn the satisfaction and support of both our customers and workplace colleagues. We plan for the foreseeable future to invest significant time and resources to both in order to accelerate improvement. To deliver for customers, we need top talent all around our world engaged, committed, satisfied, growing, and evermore proud to be at Bechtel. To continue to attract, retain, motivate, and nurture this top talent, we will make Bechtel a great place to work. We will do that by providing good opportunities, personal development, world-class tools, and great company culture, all supported by capable, caring, committed, and engaged leadership, to enhance all of our careers and provide the foundation for Bechtel’s future as the premier engineer-constructor.

We will focus in 2012 on excellent application of our core engineering and construction processes; related proprietary knowledge; innovative technologies; and our talented, committed people—in two words, our “applied know-how.”

Riley Bechtel Chairman & Chief Executive Officer	Bill Dudley President & Chief Operating Officer

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