The Bechtel Report 2016

Engineering the Extraordinary

Bechtel is one of the world’s most respected global engineering, construction, and project management companies. We have honed our expertise across thousands of complex, first-of-a-kind projects—successfully designing, delivering, and operating them for our customers.

We provide our customers with certainty of delivery in an increasingly uncertain world—made possible by some of the most experienced and high-performing teams in our industry. Since 1898, we’ve completed more than 25,000 extraordinary projects in 160 countries. We are proud of the long-term progress and economic growth our projects create around the world.

This project will play a vital role in Queensland’s economic strength for decades to come.

The Honourable Annastacia Palaszczuk Premier and Minister for the Arts, Queensland

Curtis Island LNG, Queensland:

The Australia Pacific LNG (APLNG) production trains. APLNG is the largest of the three LNG plants Bechtel is delivering on Curtis Island.

Executive Letter

Bill Dudley Chief Executive Officer

To our customers, partners, suppliers, and colleagues:

As anticipated, 2015 brought with it many changes. The record drop in oil and gas prices, the slowing economy in China, supply outpacing demand in the commodity markets, capital expenditure restraints, and persistent debt loads in the public sector impacted our customers and our industry. Our diversified portfolio continues to help us manage through industry cycles and economic volatility, allowing us to focus on delivering value for our customers and providing our colleagues with exciting opportunities to engineer the extraordinary.

Financial Performance

We had a solid year in 2015, meeting our expectations in a time of shrinking project opportunities. New awards totaled $21.5 billion, an increase of 17 percent over the same period last year. Work-off revenue totaled $32.3 billion, down 13 percent from 2014. Our resulting backlog remained strong at $70.2 billion.

Revenue in billions of U.S. dollars

  • 2015 | $32.3
  • 2014 | $37.2
  • 2013 | $39.4
  • 2012 | $37.9
  • 2011 | $32.9

New Work Booked in billions of U.S. dollars

  • 2015 | $21.5
  • 2014 | $18.4
  • 2013 | $34.0
  • 2012 | $23.9
  • 2011 | $53.0

Backlog Revenue in billions of U.S. dollars

  • 2015 | $70.2
  • 2014 | $70.5
  • 2013 | $88.2
  • 2012 | $91.8
  • 2011 | $104.4
Brendan Bechtel President &
Chief Operating Officer

2015 Project Milestones

  • Three world-class liquefied natural gas (LNG) facilities—each for a different customer—on Curtis Island, Australia. By January 2016, all three customers achieved first cargo.
  • Completion of engineering and construction of the Tennessee Valley Authority’s Watts Bar Unit 2, the first new nuclear reactor this century to receive authorization to operate in the United States. Together with Watts Bar Unit 1, the reactors will produce enough carbon-free energy to power 1.3 million homes.
  • The modernization of the Kitimat aluminum smelter in Canada. The plant is now achieving strong results for customer Rio Tinto and will boost aluminum production by 420,000 tons annually while reducing emissions by nearly 50 percent. Kitimat is considered one of the world’s lowest-cost smelters.
  • Las Bambas, the world’s largest greenfield copper project. The plant, built in the Peruvian Andes, will treat 140,000 metric tons of ore per day to produce more than 400,000 metric tons of copper per year for customer MMG Limited.
  • The Organic Growth Project 1 in Chile for Minera Escondida—Bechtel’s largest expansion project. This 152,000-metric-ton-per-day development will increase Escondida’s copper production and enhance competitiveness for customers BHP Billiton and Rio Tinto.
  • Completion of 26 miles (42 kilometers) of tunneling for Europe’s largest engineering project, London’s Crossrail. UK Prime Minister David Cameron hailed it as “an engineering triumph.”
  • The start of tunneling on the Riyadh Metro in Saudi Arabia, which will be one of the largest underground rail systems in the world.
  • Construction completion of the Blue Grass Chemical Agent-Destruction Pilot Plant in Richmond, Kentucky, for the U.S. Department of Defense. The plant will destroy 523 tons of nerve and mustard agents in rockets and artillery projectiles stored there since WWII.

Wins

We are pleased that our customers entrust us to help them advance their business strategies. Highlights include:

  • Two major natural gas-fired combined-cycle power projects in the United States that will deliver more than 1,800 megawatts of energy and power to millions of homes.
  • Two natural gas liquefaction trains on the Corpus Christi Liquefaction project—the first greenfield liquefied natural gas export facility in the United States—for a subsidiary of Cheniere Energy, Inc.
  • The Toronto-York Spadina subway extension for the Toronto Transit Commission, where we are providing engineering, procurement, and construction project management in an integrated team.
  • The Amrun bauxite mine project in Australia. Including processing and port facilities, the project will expand the output of one of the world’s premier bauxite deposits for Rio Tinto.
  • The U.S. Air Force Arnold Engineering Development Complex in Tennessee. A Bechtel-led team will run key operations for the Air Force’s most advanced ground test facility.

Throughout the year, we focused on delivering value for our customers and providing our colleagues with exciting opportunities to engineer the extraordinary.

Expertise Matters: The Strength of our Team

Our ability to deliver the extraordinary is a direct result of the expertise and commitment of our worldwide team. Our colleagues hold more than:

3,200

M.A./M.S. degrees

400

Ph.D. degrees

7,600

engineering degrees

2,900

professional licenses and certifications

We are proud that more than:

6,000

colleagues have been at Bechtel 10+ years

1,800

colleagues have been at Bechtel 25+ years

Las Bambas Mine, Peru

Select Industry Recognition

We are proud of the industry recognition that our projects, colleagues, and customers received for excellence, safety, diversity, sustainability, and innovation. Recognition includes:

  • Project of the Year status from the UK’s National Rail Awards, for Reading Station.
  • Three Employer Awards for Diversity from the UK’s Women in Science and Engineering, the Australian National Association of Women in Construction, and Legal Momentum.
  • Five sustainability awards from the U.S. Department of Energy to the Lawrence Livermore National Laboratory, the Los Alamos National Laboratory, and the Y-12 National Security Complex for driving improvements in waste management, energy and water use, and pollution prevention.
  • Three Learning In Practice Awards from Chief Learning Officer magazine for demonstrating excellence in designing and delivering employee development programs.
  • The U.S. government’s Voluntary Protection Program Star Status for excellence in safety for the Blue Grass Chemical Agent-Destruction Pilot Plant, the Los Alamos National Laboratory, the Savannah River Remediation Site, and the Hanford Waste Treatment Plant.
  • The highest grade for ethics and anti-corruption programs from Transparency International UK’s Defence Companies Anti-Corruption Index 2015.
  • Designation as one of America’s Best Employers from Forbes magazine.

Innovation, Value, and Cost Optimization

Throughout 2015, we enhanced project execution and operations to better serve our customers and continuously improve cost, delivery, and technical excellence. For example, we are:

  • Improving how we share our best practices and replicate successes. We built extensive knowledge networks that are changing how we transfer information across our business. These networks include digital supply chain, bulk materials handling, construction, welding, virtual project delivery, and sustainability.
  • Accelerating the pace of innovation. We established a Future Fund that seeks out and invests in new, game-changing ideas from colleagues, partners, suppliers, customers, and the world at large to improve engineering and construction processes, quality, and safety.
  • Further integrating big data, wearable devices, and autonomous and semi-autonomous construction equipment into our design and build practices.
  • Increasing procurement and contractual productivity by enabling a digital supply chain.
  • Improving construction productivity through ongoing testing and incubation of new ideas and technologies in our Innovation Centers.

Safety

Public and project safety is paramount. We continue to seek changes to our safety program to improve the well-being of our workforce.

While we reached more than 600 million job hours without a fatality, we mourn the tragic loss of two colleagues on our job sites this year. We believe that every incident and occupational injury is preventable, and that zero incidents is the only acceptable outcome.

2016 Priorities

Like last year, we expect that in 2016 many of our markets will remain in a down cycle. Our customers’ priorities will reflect the market conditions, and we are driven by our customers’ priorities. However, our strength is the diversity of our project portfolio, and 2016 looks like another solid year. We see growth in our North American infrastructure markets, including fossil power, transportation, and communications. Also, low prices for natural gas in the U.S. will continue to drive growth in the U.S. petrochemical market.

Throughout our long history, Bechtel has weathered every market environment. We are uniquely positioned to navigate continuing economic uncertainties and are committed to our customers’ needs and to delivering the extraordinary performance they expect.

Sincerely,

Bill Dudley

Chief Executive Officer

Brendan Bechtel

President & Chief Operating Officer