Measuring Performance in a Commercial Enterprise

1. Measuring Performance in a Commercial Enterprise Ken SmithSenior Vice President September 12, 2006

2. Fluor Corporation�s Legacy Founded more than 100 years ago Executed more than 10,000 projects worldwide Consistently ranked among the �Top 3� on ENR magazine�s �Design-Build Firms� and �The Top 400 Contractors� lists One of the world�s safest contractors Maintains a global presence: Fluor Corporation is one of the world's largest, publicly owned engineering, procurement, construction, and maintenance services organizations. Over the past century, Fluor, through its operating subsidiaries, has become a trusted global business leader by providing exceptional expertise and technical knowledge across every phase of a project. Customers rely on Fluor to deliver world-class solutions that optimize customers' assets, improve their competitive position, and increase their long-term business success. Consistently rated as one of the world's safest contractors, Fluor's primary objective is to develop, execute, and maintain capital projects on schedule, within budget, and with operational excellence. The individual and collective expertise of our international work force of more than 50,000 employees provides cost-effective, intelligent solutions in a timely manner. In addition to project offices, Fluor maintains a network of offices in more than 25 countries across 6 continents. Our outstanding dependability, expertise, and safety distinguish Fluor as the preeminent leader in the global building services marketplace. Engineering News-Record (ENR) magazine consistently ranks Fluor Corporation among the top three on "The Top Design-Build Firms" list and "The Top 400 Contractors" list. Fluor Corporation is one of the world's largest, publicly owned engineering, procurement, construction, and maintenance services organizations. Over the past century, Fluor, through its operating subsidiaries, has become a trusted global business leader by providing exceptional expertise and technical knowledge across every phase of a project. Customers rely on Fluor to deliver world-class solutions that optimize customers' assets, improve their competitive position, and increase their long-term business success. Consistently rated as one of the world's safest contractors, Fluor's primary objective is to develop, execute, and maintain capital projects on schedule, within budget, and with operational excellence. The individual and collective expertise of our international work force of more than 50,000 employees provides cost-effective, intelligent solutions in a timely manner. In addition to project offices, Fluor maintains a network of offices in more than 25 countries across 6 continents. Our outstanding dependability, expertise, and safety distinguish Fluor as the preeminent leader in the global building services marketplace. Engineering News-Record (ENR) magazine consistently ranks Fluor Corporation among the top three on "The Top Design-Build Firms" list and "The Top 400 Contractors" list.

3. Fluor Industries and Clients

4. Worldwide Projects World Projects Fernald Environmental Restoration Project - Fluor Daniel Fernald is responsible for environmental restoration and HTRW management at the former DOE uranium production facility. The site encompasses 1,050 acres including a 1360acre production area contaminated with uranium, thorium, radium, cadmium, and lead. 233 buildings had to be decontaminated and demolished and more than 100,000 fifty-five gallon drums of radioactive mixed waste have been in long-term storage at the site. Due to the size of the facility and the regulatory requirements (RCRA, CERLA, and NRC), the site was divided into five operable units. Project: active. Equate Project - Scope: EPC, PM. Fluor Daniel is performing program management supervising the overall execution of a grassroots petrochemical complex and preparing the coordination procedures, specifications, plans, etc. In addition, Fluor Daniel is responsible for defining and performing the EPC for the required offsites, utilities, and infrastructure. Project is active. Eurostar (Chrysler) - New Assembly Plant to Produce Chrysler Minivans - Scope: P,PM,CM, accounting, expediting, equipment installation, and start-up assistance. Fluor Daniel provided management services required to construct the grassroots assembly plant to produce 100,000 minivans a year. Pepsi-Cola - Bottling Plant Parking, 1st Expansion. Scope: CM, M. Fluor Daniel provided construction management on the expansion, and then provided maintenance for construction clean-up. Completed 1991. Rayong Refinery Company. Scope: EPC. In August 1996, Fluor Daniel completed the EPC and commissioning for the Rayong Refinery Company fo the 145,000 BPSD project in Thailand. This complex grassroots refinery project supports the Royal Thai Government�s need for additional petroleum products for Thailand�s rapid economic expansion. Shajiao Power Station - 2 x 350 MW Coal-Fired Power Plant - Scope: M,O&M, training. Duke Fluor Daniel had total responsibility for the management, operation and maintenance, and training of the PRC staff for its first four years for operations. Completed 1990.World Projects Fernald Environmental Restoration Project - Fluor Daniel Fernald is responsible for environmental restoration and HTRW management at the former DOE uranium production facility. The site encompasses 1,050 acres including a 1360acre production area contaminated with uranium, thorium, radium, cadmium, and lead. 233 buildings had to be decontaminated and demolished and more than 100,000 fifty-five gallon drums of radioactive mixed waste have been in long-term storage at the site. Due to the size of the facility and the regulatory requirements (RCRA, CERLA, and NRC), the site was divided into five operable units. Project: active. Equate Project - Scope: EPC, PM. Fluor Daniel is performing program management supervising the overall execution of a grassroots petrochemical complex and preparing the coordination procedures, specifications, plans, etc. In addition, Fluor Daniel is responsible for defining and performing the EPC for the required offsites, utilities, and infrastructure. Project is active. Eurostar (Chrysler) - New Assembly Plant to Produce Chrysler Minivans - Scope: P,PM,CM, accounting, expediting, equipment installation, and start-up assistance. Fluor Daniel provided management services required to construct the grassroots assembly plant to produce 100,000 minivans a year. Pepsi-Cola - Bottling Plant Parking, 1st Expansion. Scope: CM, M. Fluor Daniel provided construction management on the expansion, and then provided maintenance for construction clean-up. Completed 1991. Rayong Refinery Company. Scope: EPC. In August 1996, Fluor Daniel completed the EPC and commissioning for the Rayong Refinery Company fo the 145,000 BPSD project in Thailand. This complex grassroots refinery project supports the Royal Thai Government�s need for additional petroleum products for Thailand�s rapid economic expansion. Shajiao Power Station - 2 x 350 MW Coal-Fired Power Plant - Scope: M,O&M, training. Duke Fluor Daniel had total responsibility for the management, operation and maintenance, and training of the PRC staff for its first four years for operations. Completed 1990.

5. Business Group Common Functions Safety performance and Zero IncidentsSM culture Operating System Requirements Drives commonality across all operations globally Project management Engineering Financial metrics and performance measurement Human Resources Global management focus Centralized corporate approach: Strategic planning Business Risk Management Framework (BRMF) Legal Finance / cash management / SEC reporting Public relations / government relations Security / IR / ESH Board of Directors / stakeholders Business units have autonomy to run business within their boundaries, which are established by corporationBusiness units have autonomy to run business within their boundaries, which are established by corporation

6. Safety Performance Operating in 60 countries worldwide; 40,000-employee diverse workforce (with language, educational and cultural differences) Managing and monitoring 270 million of safe work hours in 2005 Best in class performance Management commitment to annual performance improvement Fluor�s culture drives Focus on precursors to prevent significant injuries/incidents Continuous improvement Rigorous reporting Incident investigation and lessons learned Senior management expectations are Zero Incidents and safety excellence

7. Safety � Lost Workday Case Rate

8. Safety � Recordable Incident Rate

9. Commercial Background 25 years in the EPCM industry Experience includes three EPCM firms� cultures to draw upon Understand the unique differences in Commercial vs. Government client organizations Recent 3-year President of Fluor�s Manufacturing & Life Sciences group Commercial Industry differentiators Commercial industry specialization & market niches Global sales & execution platform Flexible procurement requirements Variety of commercial / contract structures Individual / flexible client drivers Business unit autonomy & internal decision making Flexible Industrial Relations / partnerships with Labor

10. Personal Operating Philosophy Focus on safety Clear roles, responsibility, authority and accountability Customers want to know three things: How smart? How much? How long? We owe our client to be the lowest cost producer for a given scope Cradle-to-Grave project execution Comprehensive risk management Baseline Centric approach Human capital management Financial performance

11. Baseline CentricSM Approach COMPONENTS of the BASELINE - Scope-of-Work Description, including deliverables - Quantity-based estimate and related budget - Basis of Estimate PFD�s, P&ID�s, Electrical One Lines, Sketches GA Drawings, Elevations, Equipment List Assumptions and exclusions - Integrated Project Schedule - Fluor Performance Metrics Formula - Work Package-Based Execution Plan - Client-defined work sequence or site access restrictions COMPONENTS of the BASELINE - Scope-of-Work Description, including deliverables - Quantity-based estimate and related budget - Basis of Estimate PFD�s, P&ID�s, Electrical One Lines, Sketches GA Drawings, Elevations, Equipment List Assumptions and exclusions - Integrated Project Schedule - Fluor Performance Metrics Formula - Work Package-Based Execution Plan - Client-defined work sequence or site access restrictions

12. Baseline Centric Tools Function FOCUSsm process Business Risk Management Framework Cost Detail quantity-based control estimates Prologtm and MaterialManagersm for procurement FDCost and ProfiToolsm for cost control FDAS / SAP for accounting Cost Summary Report for financial performance Schedule Primaveratm EZTrak MileMarker

13. Baseline Centric Deliverables Establish �A line in the sand early� Accurate estimate Detailed quantity takeoffs Qualifications and clarifications Allowances and exclusions FOCUSsm sessions Constructability reviews / alternative solutions Value engineering Manpower scheduling Business Risk Management Framework Snapshots during conceptual engineering; change management during detail design

14. Baseline Centric Flowchart

15. Safety Monitor traditional safety trends Application of Fluor�s safety alert system Client feedback Client satisfaction Percentage of repeat business Extensive client review process Cradle-to-Grave project execution Earned value management system Independent project management review teams Human capital Turnover / retention Financial performance Margins: as sold vs. actual performance Publicly traded company � stock price Performance Measurement Approaches

16. Closing Thoughts Challenge to provide commercial practices in the Government sector Project execution success is driven by upfront planning and establishing an accurate Baseline Managing people � We cannot lose sight of protecting the safety of our individual employees Tie back to personal operating philosophy. Relate to difference between Commercial and Government � what is being done differently from transition from Commercial to GovernmentTie back to personal operating philosophy. Relate to difference between Commercial and Government � what is being done differently from transition from Commercial to Government