The Bechtel Report 2016

Curtis Island LNG | Queensland, AU

Dream
Big

Dream Big: Engineering Our World

The Bechtel Report 2017

To Dream Big is to innovate with our customers, colleagues, and communities to drive change for a more sustainable future.

To Dream Big is to recognize those who create the world’s modern wonders—wonders that will deliver a safer, more efficient, and more connected tomorrow.

To Dream Big is to celebrate human ingenuity, big and small, that pushes the limits to imagine and collaborate in unexpected ways.

To Dream Big is to uncover the passion, creativity, and commitment that inspire our engineers and builders to deliver projects that bring prosperity to our customers and our communities.

Bechtel’s people Dream Big to improve the quality of life for people around our world. Together with our customers, we bring creativity, discipline, and passion to deliver the extraordinary.

Executive Letter

In 2016, as in every year since our founding in 1898, the people of Bechtel were determined to Dream Big. We achieved extraordinary results for our customers and engineered innovative solutions to some of the most pressing challenges of our time. We supported the communities where we live and work. We promoted and enhanced satisfying careers for our 50,000 colleagues worldwide. As always, we aimed to remain competitive and to deliver projects more efficiently, faster, and leaner. To that end, we directed tens of millions of dollars toward investments in innovation to realize both incremental and disruptive improvements in project delivery and cost competitiveness. This effort is not an “add-on” initiative for Bechtel. Rather, it reflects a spirit woven throughout the company. The benefits of this commitment to new ideas accrue to our customers, but they also benefit our colleagues, the company, and our communities.

We codified our enterprise-wide strategy in 2016. This strategy guides our businesses and helps colleagues better understand how their work contributes to our shared success. The strategy captures the company’s enduring principles and longer-term objectives to create a sustainable competitive advantage and deliver a consistent experience for all our customers and our people.

Our Vision, Values & Covenants define what we aspire to do, what we believe, and how we behave. We commit to hold ourselves to these standards in all our engagements with our community, our customers, our project partners, and our colleagues. These core priorities are critical to our business as we pursue new markets and new projects, and build new relationships.

During the year, the Bechtel leadership team assessed opportunities and risks across industries and regions, leading to reallocation of our most senior executive leaders to better address current customer needs and the challenges our industries face.

Carrying the successful traditions of our history into the future depends on the active engagement of our dedicated colleagues around the globe, as well as our project partners and suppliers. Together, we celebrate our commitment to safety, quality, ethics, and delivered results. We are proud to represent the organization and our colleagues, and we look forward to helping our customers and communities Dream Big and deliver extraordinary results.

Financial Performance

We are pleased to report that Bechtel had a solid year in 2016. Work-off revenue for 2016 totaled $32.9 billion, slightly above our 2015 results. Our new worked booked revenue of $15.3 billion was significantly down in comparison with 2015. As we predicted last year, the decline in commodity markets and sluggish economic growth continued to impact our opportunities for new wins. Consequently, our backlog revenue declined to $58.5 billion, from $70.2 billion the year before. Markets are beginning to show signs of improvement, and we are cautiously optimistic this will bring award announcements that have been in development for some time.

2016 Project Milestones

In 2016, we delivered historic results for our customers. We are especially proud to report our completion—on schedule and on budget—of engineering and construction for six liquefied natural gas production trains at three concurrent and side-by-side LNG megaprojects for three different customers on Curtis Island in Queensland, Australia. This was an unprecedented undertaking, as the three programs made up the largest concentration of private-capital investment in Australia’s history and Bechtel’s largest greenfield program in its history.

While this was one of the most significant of our projects under way last year, all our businesses pursued, launched, and completed important work worldwide. Among them:

  • Oil, Gas & Chemicals

    Substantial completion of Train 1 on the Sabine Pass Liquefaction project in Cameron Parish, Louisiana, clearing the way for the first new LNG export from the United States in nearly 50 years

  • Infrastructure

    Completion of track installation on the Toronto-York Spadina subway extension for the Toronto Transit Commission’s Line 1, including six new subway stations and commuter parking

  • Mining & Metals

    Completion of work on the electrical substations, high-pressure pump stations, and dual 42-inch (107-centimeter) pipelines at the Escondida Water Supply project in Chile. The pipelines will carry desalinated water from Chile’s Pacific coast, across the Atacama Desert, to the world’s largest copper mine

  • Nuclear, Security & Environmental

    Beginning of ground test operations at the Arnold Engineering Development Complex at Arnold Air Force Base in Tennessee, as well as related work at facilities in Maryland and California

  • Infrastructure

    Ongoing underground work on two lines of the Riyadh Metro project in Saudi Arabia’s capital city

  • Nuclear, Security & Environmental

    Commercial operation status for the Watts Bar Unit 2 nuclear reactor in Tennessee, the first new U.S. reactor to start up this century

  • Oil, Gas & Chemicals

    Completion of the module assembly program at the Wheatstone LNG project near Onslow, Western Australia; both plant’s storage tanks and two of four gas turbine generators are also now complete, as production nears for the first liquefied gas from one of Wheatstone’s LNG trains this year.

  • Nuclear, Security & Environmental

    Successful implementation of a massive containment arch to cover a damaged reactor at the Chernobyl Nuclear Power Plant in Ukraine; the arch is providing a safer working environment for cleanup personnel and far better containment of radioactive dust and debris, for at least 100 years

New Business

We are grateful that customers in all industries continued to entrust us with their most critical projects, including:

Industry and Colleague Recognition

We are proud of the industry recognition that our company, project teams, colleagues, and customers received for excellence, safety, diversity, sustainability, and innovation. Among them:

  • Ranked No. 1 on Engineering News-Record’s list of the Top 400 U.S. Contractors, for the 18th consecutive year; in addition, Bechtel was recognized as a top contractor on the following lists:
    • Top 20 Petroleum
    • Top 20 Transportation
    • Top 20 Industrial
    • Top 50 Contractors Working Abroad
  • Named Global Best Project Award in the power/industrial category from Engineering News-Record, for the Curtis Island LNG megaprojects
  • Awarded Construction Project of the Year from the Platts Global Energy Awards, for the Curtis Island LNG megaprojects
  • Presented the Transparency International-USA Corporate Leadership Award, for promoting transparency, combating corruption, and protecting the communities in which we work
  • Honored with the U.S. Department of Energy’s Voluntary Protection Program Star of Excellence, for worker safety achievements at the Hanford Waste Treatment Plant project
  • Awarded a Chief Learning Officer magazine gold medal award, for demonstrating the highest excellence in designing and delivering employee development programs
  • Honored NS&E President Barbara Rusinko with the 2016 Global Leadership Award, by the Society of Women Engineers
Wheatstone
Wheatstone LNG | Western Australia

Innovation, Value, and Cost Optimization

Throughout 2016, we focused on improving safety, gaining efficiencies, reducing costs, and improving customer value by pioneering ideas that set us apart from our competitors. These efforts are improving our competitiveness and enabling us to deliver great value and certainty to our customers.

Bechtel’s Future Fund totals an investment of $60 million over three years to accelerate the development of innovative ideas from our colleagues. Since the program launched in early 2016, colleagues have submitted more than 1,200 transformational ideas to improve our business and our entire industry. More than 200 ideas have already moved into the prototype or implementation phase.

Innovation also means using ideas from other industries and building on existing technological advances. For example, although we have used drones for years for aerial imagery, in 2016 we began using drones for materials tracking, giving our project teams yet another tool to improve the effectiveness of our global supply chain.

People

In 2016, we made progress in strengthening our long-term culture of ethics, integrity, accountability, and high performance. This progress was validated by improvements in employee ratings across several key categories of our 2016 employee survey, including Vision, Values & Covenants; Demonstrate Integrity; Respect; Deliver; Collaborate; and Learn It, Do It, Share It.

We have more work to do on consistently valuing the unique contributions of each of our colleagues, drawing on their diverse backgrounds and previous careers to improve our business.

A broader and deeper emphasis on diversity and inclusion has already added value to our business by enriching the diversity of our ideas and innovation, strengthening interpersonal relationships, and developing talent we need for today and tomorrow.

Looking Ahead

Our record of delivering projects against difficult odds has resulted in a legacy that we will continue to build. Working with our project partners—our customers, suppliers, and subcontractors—we envision and aim for a leaner, nimbler, and more productive approach to project delivery. We are improving our competitiveness and building new opportunities for our colleagues and for people in the communities where we work.

Through 2017 and beyond, we will continue to invest in people and ideas that have long-term potential. We will Dream Big to imagine, design, and deliver new landmarks and innovations that enable Bechtel and our customers to improve our world.

Sincerely,

Brendan Bechtel Signature Brendan Bechtel
Chairman & Chief Executive Officer
Jack Futcher Signature Jack Futcher
President & Chief Operating Officer