Flu or Sustainability Report 2008

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EVERYTHING WE BUILD STARTSWITH A SOLID FOUNDATION .

SUSTAINABILITY REPORT 2008


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ENVIRONMENTAL SAVINGS*

The printing of this report employed energy-e cient methods using power from a 100% wind-powered utility provider that saved our environmentapproximately 3.8 metric tons of carbon dioxide gasses. In addition, the use of recycled paper saved water and oxygen-producing trees whilereducing the amount of air emissions and new solid waste. Overall, the sustainable printing practices used saved roughly the equivalent of:

CO 2 CO 2


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Safety. Integrity. Teamwork. Excellence.

Four simple yet profound words. Foralmost a century, theyve been thefoundation of our success. Thesevalues that have led us in the past areguiding us into a future that ghtscorruption; champions community and

social services; advances and protectsour employees; and takes care of theenvironment in which we work.


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FLUOR PRESENTS ITS FIRST ANNUALSUSTAINABILITY REPORT.

About the Report.

TABLE OF CONTENTS

About the Report . . . . . page 2

About the Company . . . . . page 4

A Message from the CEO . . . . page 6

Stakeholder Engagement . . . . page 10

Ethics & Compliance . . . . . page 12

Employees & Workplace . . . . page 21

Health, Safety & Environmental . . . page 32

Community & Social Service . . . . page 46

Governance . . . . . . page 54

GRI Index . . . . . . page 56

GRI Appendix . . . . . . page 61

Fluor is pleased to present itsrst annual Sustainability Report,covering the calendar year 2008.

While the company has over the past four years issued reportsfocusing on health, safety & environmental activities, thiscomplete Sustainability Report was developed using the GlobalReporting Initiatives G3 Sustainability Reporting Guidelines topromote transparency and accountability. By using this widely

recognized standard of reporting, Fluor will enable its sustainability performance to be measured and improved annually, while alsomaking it comparable to those of other corporations.

While written to address the Global Reporting Initiativesguidelines, this report also was developed to reect Fluors corevalues of Safety, Integrity, Teamwork and Excellence, whichare the foundation of Fluors business operations. ese valuespermeate the companys strategies and drive the actions of ourglobal workforce. And while our core values are enduring, we

leverage them to address the worlds evolving sustainability challenges and opportunities. It is these underlying core valuethat have supported Fluors success to date and will inuence itssustainability practices for a better tomorrow.

Fluors report covers all of its business groups, wholly-ownedsubsidiaries and majority-owned joint ventures worldwide andtheir material economic, environmental and social impacts.

It was developed for the interest and bene t of Fluor clients,employees, shareholders, lenders, nancial analysts, ratingagencies, suppliers and subcontractors, non-governmentalorganizations, media and the communities in which thecompany operates.

Materiality of content included in this 2008 Sustainability Repand its prioritization were assessed and determined by FluorsSustainability Committee, which has representation from seniexecutive management; Compliance & Ethics; Corporate A airs;

2 FLUORSUSTAINABILITYREPORT2008


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FLUORSUSTAINABILITYREPORT2008 3

Corporate Development; Government Relations; Health, Safety & Environmental; Human Resources; InvestorRelations; Law; Project Development & Investments; Public A airs; and Sales & Strategic Planning.

In this document, Fluor reports on only those G3 indicators that were relevant to its business operations andmeasurable in 2008. In the context of Fluors carbon footprint, this Sustainability Report represents emissionsproduced within the dened boundary and excludes emissions produced at client sites. However, all health,safety, environmental, economic, stakeholder engagement, governance, human rights, labor practices,philanthropy and community service data included in this report cover all Fluor employees wherever they work

and all subcontractors for which Fluor is contractually responsible.

is inaugural Sustainability Report has not been audited by a third party. However, Fluor does recognize theimportance of independent external assurance to enhance the credibility of its reports; therefore, the company will examine options to obtain third-party review of future reports.

For more informationabout Fluors globalsustainability e ortsand to share yourthoughts about thisreport, please contact:

Lee TashjianVice President of Corporate A airsFluor Corporation6700 Las Colinas Blvd.Irving, TX 75039lee.tashjian@ uor.com(469) 398-7625

Located o thenorthwest coast of Trinidad in 530 feet of water, the 4,267-tonPoinsettia platform is thelargest ever constructedby local labor and

installed in these waters.Built for BG Trinidad &Tobago Ltd., it extractsnatural gas from theocean oor and servesas an excellent source of clean-burning energy.



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Headquartered in Irving, TX, Fluor Corporation (NYSE: FLR) isone of the worlds leading and largest publicly traded engineering,procurement, construction, maintenance and project managementservices companies. For nearly 100 years, Fluor employees havedesigned, built and maintained many of the worlds most complexand challenging industrial projects in ways that increase their clientscompetitiveness and long-term business success.

Consistently rated as one of the worlds safest contractors, Fluorsprimary objective is to develop, execute and maintain capitalprojects on schedule, within budget and with operational excellence.

With more than 40 major global oces, the company operatesin more than 60 countries, executing more than 1,000 projectsannually. e company serves clients in the petrochemicals;oil and gas; commercial and institutional; government; lifesciences; manufacturing; microelectronics; mining; power;telecommunications; and transportation infrastructure industries.

Fluor has ve business groups, which include:

Oil & Gas

Industrial & Infrastructure

Global Services

Power

Government

Fluors backlog distribution by region at year end was:

United States

Europe/Africa/Middle East

The Americas

Asia Pacic

Fluors market capitalization on December 31, 2008, was $8.1 billion.For 2008, revenues were $22.3 billion with net earnings of $720.5million. Cash and marketable securities at December 31, 2008, were$2.1 billion. Total assets were $6.4 billion, and debt was $151.3million. Total shareholders equity was $2.7 billion. Fluor experiencedno material changes in size and structure during 2008, although somedevelopments are outlined in the Appendix on page 61.

In 2008, more than 42,000 employees 28,000 salaried and 14,000craft/hourly performed over 87 million hours of work for Fluorsglobal client base. More than 60 percent of these employees arelocated in the United States; 20 percent in the Europe, Africa andMiddle East region; and 10 percent each in Asia Pacic and North

and South America (excluding the United States).

BUILDING OUR FUTURE ISAN ONGOING PROJECT.

About the Company.



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Fluor, in jointpartnership withAirtricity, is designingand building the worldslargest o shore windfarm project o thecoast of the UnitedKingdom, which willprovide carbon-neutral,renewable electricityfor more than 415,000homes. Wind farms likethe one pictured here,a completed Airtricityproject, represent just one facet of ourcompanys strategyto make meaningfulreductions in carbonemissions and providesigni cant amountsof new, clean andrenewable energy.

At its core, Fluor has always been passionate about doing the right thing. Based on these traditions andcommitments, weve evolved as a company both in recognizing our role in the world and in the day-to-dayactions we take while pursuing and executing our projects. A core part of our business model is to makedecisions and execute strategies that proactively identify and address relevant sustainability issues andchallenges. Our Sustainability Committee ensures we never lose sight of the importance of our companyssocial, economic and environmental stewardship.

Steve DobbsSenior Group President, Fluor and Chair,

Fluor Sustainability Committee



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With more than 42,000 employees working across six continents, we at Fluor Corporationhave the extraordinary opportunity to see and touch many facets of the global community.Our employees work with governments and the leading corporations of vital industriesto build the worlds largest and most technically challenging projects projects that fuelglobal commerce, stimulate economic development and improve the quality of life formillions of people around the world.

We have seen rsthand the benets and challenges of our worlds industrial progress. While sustainability is a relatively new word in the common vocabulary, actively engaging in issues that impact the world is not a new concept at Fluor. For nearly 100years, the sustainable practices of our employees have been a natural part of our buildersculture and integral to our companys strategies, daily operations and success. Helpingclients in ways that also serve the greater good is another long-held tradition. Every day, Fluor helps clients safeguard the environment, conserve energy, protect lives andstrengthen the economies and social structures of the communities where we work globally.

For us, sustainability begins with our core values of Safety, Integrity, Teamwork and Excellence, and for this reason, it is the them

inaugural annual global Sustainability Report one that mirrors the Global Reporting Initiatives G3 Sustainability Reporting Guese values are prominent throughout our corporate culture and are the starting point for every action of a Fluor employee.ey have drivour superior performance through many decades and serve as the touchstone for all of our sustainability e orts. In the search for excellencacross our operational activities, we never forget that sustainability is an ongoing process of self-examination and improvement. IIm pleased to describe the many signicant contributions Fluor has made to sustainable endeavors, address the areas where we believhave a greater impact and outline our plans to do so.

Always Looking Toward Tomorrow

We recognize that our e orts so far, as impressive as they may be, are therst strides on a long and continuous road. eres still much morto be done. Todays environment o ers as many, if not more, challenges as it does opportunities. As a global community, we need tosustainable construction e orts; improve energy eciency and develop more alternative energy sources; mitigate environmental damaaddress climate change; conserve and sustain the use of renewable natural resources to ensure regenerative capacity; reduce waste

recycling; improve human rights issues; increase the security of our resources (energy, food, water); develop technologies to solveimprove safety; reduce foreseeable risks; and restore endangered environments. And we need to do all this at a time when economthe world are su ering from the worstnancial and credit crises seen in eight decades. While our corporate responsibility e orts over thepast several decades have required considerable investments, we believe they have also had a favorable net impact on operating coproductivity. ey not only benet our stakeholders and the public at large but help us identify risks and new areas for business. Forreasons and many others, we remain wholly committed to maintaining these e orts on an ongoing basis.

Today, we are operating in a global context that has increased our interdependence and need for collaboration. Developing countries reto raise standards of living; cities need to provide infrastructure that will enhance quality of life; and the demand for cleaner, more ecient fuelshas never been greater. e challenges of sustainable development are many, and companies like Fluor have not only a responsibility butgreat ability to exert positive change on such conditions. We often go beyond legal requirements and traditional practices to do busineeconomically and environmentally responsible ways. Our focus on sustainability drives our decisions and is the foundation upon whic

A MESSAGE FROM THE CEO.

Dear Valued Stakeholder,

Alan L. BoeckmannChairman & Chief Executive O cer



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In 2009, we will raise the bar even higher on our goals, expectations and performance to support the global economys critical needfor commercial growth and success, while also continuing to honor our ethical values and respect for people, support for communitiesand protection of the natural environment. I invite you to read this Sustainability Report, to learn how Fluor has signicantly contributed to economic advancement in ways that protect and sustain future generations, and to hold us to a higher level of excellence in all of our operations.

I spend a considerable amount of time with our clients around the world and with non-governmental organizations like TransparencyInternational and the World Economic Forum, which like me believe that change is possible. Each and every day, we at Fluor wi

strive to set a benchmark for excellence in our business and project operations and to serve as a model of corporate citizenship andsustainability for other companies to emulate. We will continue to judiciously manage our business operations to safeguard Fluorsreputation and to retain the respect of all those associated with us.

In the end, it all comes down to commitment, perseverance and leadership. Our commitment to a sustainable future is deeply embeddin our long-standing company values of Safety, Integrity, Teamwork and Excellence, as well as in our Code of Conduct. As builders worlds infrastructure, the employees of Fluor know the importance of the work they do. Beginning with me and extending to everyemployee in Fluor, we are leveraging our strengths and practicing sustainability in all aspects of our work. We are proud of our dedito sustainability and look forward to even greater achievements in 2009.

By practicing our values and having straight dialogue every day about our impact, we step closer to the goal of a better future we allachieve in this journey we collectively share.

Sincerely,

Alan L. BoeckmannChairman & Chief Executive Ocer

FOR NEARLY 100 YEARS, THE SUSTAINABLE PRACTICESOF OUR EMPLOYEES HAVE BEEN A NATURAL PART OF OURBUILDERS CULTURE.



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2008 HIGHLIGHTSFluor is proud of its work in 2008 and well positioned to further strengthen our performance across a variety of economic, environmand social arenas in 2009. is is due, in part, to the companys unprecedented nancial success in 2008 and its continued advancemetechnologies and operating practices that better protect human and physical assets. Over the past year, our company has made signistrides across several areas.

Winning several keyprojectawardsfor responsible energy:

e Fluor-led$4 billion environmental management,operations and remediationpartnership for the Department of EnergysSavannah River Nuclear Site in South Carolina.

e $1.8 billion design and construction contract for the worlds largest offshorewind farm project off the coastof the UnitedKingdom, which will provide carbon-neutral, renewable electricity for more than 415,000 homes.

e formation of a strategic partnership with E.ON Energie AG for the development of a retrotted pilot plant in Germany,using Fluors proprietary and commercially proven Econamine FG+SM carbon capture technology, which creates a secure,affordable and dependable low-carbon power generation solution using coal as a fuel source.

e expansion and retrot of several U.S. reneries for Marathon Oil and Total to increase the production of lower-emissiontransportation fuels.

e contract to develop Renewable Energy Corporations new solar panel manufacturing complex in Singapore, which willproduce wafers, cells and modules for the growing solar value chain market.

e installation of state-of-the-art nitrogen oxide emission controls at Luminants Sandow Power Plant in Texas toimprove air quality.

e $1 billion engineering, procurement and construction contract to build USECs American Centrifuge Plant in Ohio, which will assist our client in providing dependable, long-term U.S.-owned nuclear fuel production capacity needed tosupport the countrys existing nuclear plants, as well as those expected to be built in the future.

As well as achieving other signicant milestones that are equally valuable to us:

Being named one of the Worlds Most Ethical Companies by Ethisphere Magazine .

Earning the #1 position in the engineering & construction category onFORTUNE magazines Worlds Most AdmiredCompanies listing.

Being selected in the top 10 Most Trustworthy Companies in America by Forbes magazine.

Receiving the Energy and Environmental Excellence Award, which honors signicant contributions made toward meetingglobal energy challenges through innovation and technology, given by Hart Energy Publishing.

Being selected by the Occupational Safety and Health Administration as one of only seven U.S. companies to participatein its Voluntary Protection Programs Corporate Pilot that recognizes companies for their strong commitment toemployee health and safety.

Earning several nuclear certicates of accreditation and authorization from the American Society of Mechanical Engineersto develop safe nuclear projects that produce clean energy.

Establishing a Sustainability Committee, with representation from the highest levels of the company, to actively manageFluors endeavors in economic, social and environmental areas.

Assessing Fluors carbon footprint, a critical building block of our climate-change strategy, with data collected from ouroffices in more than 25 countries.

Supporting efforts in our officesand atproject sites worldwide to increase energy efficiency and implement waste-managementand recycling programs.

Supporting the continued growth of the Partnering Against Corruption Initiative, the only business-driven, multi-industry anti-corruption effort worldwide one of many that Fluor is involved in with the World Economic Forum.

Contributing $138 million to organizations around the globe through the Fluor Foundation and corporate resources, sincethe establishment of the Foundation in 1952.

8 FLUORSUSTAINABILITYR EPORT2008


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WE NEVER FORGET THAT SUSTAINABILITY IS AN ONGOING

PROCESS OF SELF EXAMINATION AND IMPROVEMENT.

TS Power Plant inNevada is an excellentexample of thefuture of the modernpulverized coal plantdesign. Fluor completedthe engineering,procurement andconstruction of the242-megawatt projectduring 2008, deliveringan innovative design andworld-class technologywithin budget, aheadof schedule and with astellar safety record of 3 million hours withouta lost-time accident.



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WERE ALL IN ITTOGETHER.

Stakeholder Engagement.

Earning the trust of our stakeholders is a priority at Fluor. Supporting and collaborating with our stakeholders increases the compaopportunities for success. We take a proactive approach to fully understand our stakeholders needs and determine how we can apexpertise to meet them. Gaining this kind of knowledge and insight calls for genuine dialogue, active listening and open-minded inot only at the beginning of a stakeholder relationship but on an ongoing basis.

Developing engagement plans for varying stakeholder groups that are most impacted by Fluors global operations is the responsibiof respective business and functional leaders within the company. Engagement with stakeholders is a point of discussion during smanagement meetings.

Fluor engages with its stakeholders in a variety of frequent formal and informal contexts, all carried out to promote an active exchof information and viewpoints.

In the execution of our clients projects, we work closely with them, often times as more than just their contractor but as business pto ensure the best project outcomes. At the end of projects, we conduct formal client review surveys to assess their perception of operformance and quality and identify ways to improve our service o ering and their customer satisfaction. Similar surveys and methodof communication are also conducted among subcontractors and suppliers.

Likewise, the company places a high priority on continual and candid communication with its global workforce.is is achieved througha variety of media, including electronic (intranet and email), face-to-face meetings and, of course, day-to-day interactions. Supervperiodically provided with communication toolkits to help facilitate and guide their discussions with employees on important matt

the company. While many of these activities provide opportunities for two-way dialogue, the company also obtains feedback on eperceptions through a comprehensive Employee Engagement Survey, which is conducted every few years.

Communication also occurs on a regular basis with the companys shareholders and other members of thenancial community. is involvquarterly conference calls to review earnings performance; presentations at analyst conferences; meetings with bankers, rating agnancial analysts throughout the course of the year; and an ongoing dialogue telephonically.

At the inception of and throughout the life of a construction project, the company customarily takes an active approach to engagemcommunity stakeholders. e purpose of this is to listen to their concerns, understand what our impacts are and what matters most tand ultimately involve them in the decision making of the projects execution plan. Such communication takes place in a variety osuch as meetings with community leaders, advisory panels and community panels as well as town hall events with the public, focunewsletters and other ways. We also take a lead role in investing our resources to ensure local economic development and social bts to thcommunity.

Other endeavors include a robust and timely website, www.uor.com, to communicate with the public at large, as well as employeeinvolvement in a variety of societal institutions, including the World Economic Forum, Transparency International, Basel InstituteGovernance and World Bank; community organizations, including United Way; and industry associations, such as the American PInstitute. All of the engagement e orts described above are long-standing and have been proven successful.

Because of Fluors active and ongoing engagement with its stakeholders, the company is able to proactively address issues and achoutcomes across its global operations that benet these constituencies. While there are many e orts that have resulted from our stakeholdengagement, four examples of activities from 2008 are detailed on page 11.



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Clients

rough our formal client review surveys and ongoing dialogue,Fluor has advanced its e orts to address the increasing challengesbeing faced by businesses today. e credit and nancial crisesthat unfolded in the second half of 2008 have put increasingpressure on clients to lower their operating costs and identify greatere ciencies throughout their capital programs. We continue to

introduce new technologies to our clients that make their projectsand facilities more cost competitive. Our employees are encouragedto be innovative and bring ideas forward to save our clients money through structured Value Awareness Programs. For example, in2008 we helped a major industrial client realize signicant savings by recommending new work processes for the more ecient operationof boilers and chillers in its plant. is is just one of many examplesin which Fluor is engaging with its clients and responding to makethem more competitive and successful in their markets.

Employees

Based on feedback from Fluors global Employee Engagement Survey,

teams were assigned to make changes that would raise employeeengagement ratings across multiple dimensions (corporate, businessgroups, functions, locations,eld sta , etc.). At the corporate level,four teams worked to develop a four-day Fluor Leadership Summitto enhance employees leadership skills and business acumen; todesign and implement a new, globally consistent Performance

Appraisal System; to produce a modied framework for GlobalFunctional Tracks, which incorporated more than 50 improvementsuggestions; and to upgrade technology and enhance design of the companys electronic employee communications systems.Furthermore and equally important, the company also madeconsiderable investments last year to increase its training o eringsthrough a new and comprehensive program called Fluor University.

Shareholders

During 2008, based on frequent dialogue with shareholders, ourInvestor Relations department continued to provide additionalenhancements to serve their needs, including the development ofspreadsheet with current and historicalnancial information andsupplemental slides for the quarterly earnings conference calls.addition, the company began implementation of Notice & Acces

a program that allows us to reduce the printed quantity of annuareports and proxy statements by directing the shareholder to viewthe materials and vote online.

Communities

In locations where Fluor establishes a major professional presencfor the purpose of serving its clients, the company also establisha relationship with local leaders in order to have a valuable impaon the lives of people in those communities. A good example ofthis is found in the rural communities of northwest England, thelocation of a nuclear decommissioning site. Fluors CommunityRelations leaders met with community representatives to assess

best ways in which the company could support the local commuLearning that the Cumbria Community Foundation is the leadingrant-making organization in the region knowledgeable of localneeds, Fluor launched an annual Fluor Cumbria Fund managedby the Foundation. Fluors donations aided many social serviceorganizations as well as youth and educational programs in the lcoastal towns. Fluor introduced our Building Futures project athree schools, providing 500 rucksackslled with school suppliesand rain jackets and boots to the students. e rst two years we

were in the community, Fluor also put its support into the GreatNorth Air Ambulance after learning that the nearest large traumcenter for people in this region is a 2 -hour drive away. Knownlocally as the Pride of Cumbria, the operationies approximately 200 missions every six months, bringing life-saving support in 2minutes to injured hikers, boaters and automobile accident victim



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WEVE BUILT POWER PLANTS,BRIDGES, REFINERIESAND A SPOTLESS REPUTATION.

Ethics & Compliance:A Clear Business Imperative.

Of the many public policy issues impacting global corporationstoday, few a ect Fluor and its operations more profoundly thanthat of corruption. With projects and operations in more than60 countries spanning six continents, we confront the devastatingimpact of bribery and corruption on an almost daily basis.

Respected institutions such as the World Bank have estimatedthat the total volume of bribes paid annually among allindustries is well over $1 trillion, more than 5 percent of theglobal GDP. More recently, a study among CEOs conducted by PricewaterhouseCoopers LLC found that 45 percent of respondentshad not entered a market or pursued a specic opportunity becauseof corruption risks. Moreover, four in 10 reported losing a bidbecause of corrupt ocials, and that competitors had paid bribes.Transparency International has identied the global constructionindustry as one of the worlds most corrupt. Clearly, corruption isan issue for many companies but, in particular, a signicant issue forengineering and constructionrms worldwide.

Whether losing competitions for projects to those who utilize

bribery as a business strategy, or paying a small amount toget something through Customs, we believe it is not only possible to address such activities, but that it has become abusiness imperative to do so. e need for a level playing eld,particularly in our industry, has never been greater.

Through my travels representing Fluor, Ive seenrsthand how corruption, particularly in developing countries,

hurts companies, countries and their citizens. Monies squanderedin such illegitimate payo s are funds diverted from much-neededpublic projects, resulting in roads not built, dams not erected andschools and hospitals not constructed. While much has been doneby governments and NGOs to ght corruption, global businessmust get involved. I believe we have a real opportunity to make ameaningful and positive impact.

David SeatonSenior Group President, Fluor

To this end, we have chosen to pursue two key strategies.First, we believe strongly in the notion of collective action whereprincipled companies join together in the common purposeof taking a stand against corruption. Second, we are rmly committed to building upon our culture of ethics underpinnedby our core value of Integrity, a value that has been at the centerof how we do business throughout our history.

ThePower of Collective Action

Fluor believes that taking collective action has substantialbene ts. Among them, collective action helps create a levelplaying eld; improves public trust in business; in uencesfuture laws and regulations; and decreases the likelihood of future bribe demand. Moreover, the money formerly paid asbribes or used to conduct investigations can instead be invested

into infrastructure improvements.

e principles introduced that year covered the full spectrumof supply-side corruption issues from political contributionsto facilitating payments. Adoption requires a CEO signaturecon rming the companys commitment to a zero-toleranceapproach toward corruption, as well as agreement to implemena company-wide anti-corruption program that meets the agreedupon principles. Starting with 19 signatory companies, thee ort has expanded within the Forum to include a number of industries with more than 140 signatory companies, includingsuch rms as e Coca-Cola Corp., Merck & Co. Inc., MicrosoCorp., Royal Dutch Shell plc and Duke Energy Corp. Now known as the Partnering Against Corruption Initiative (PACI),

has become the worlds foremost private sector initiative focuson the supply side of the global anti-corruption movement. Itroutinely cooperates and coordinates programs and activities

with Transparency International, the International Chamber of Commerce, and the U.N. Global Compact.

In addition to PACI, Fluor is a founding member of the BusinesEthics Leadership Alliance. rough this alliance, we will be working with others to establish e Global Ethics Pact, an e odesigned for companies across all industries for the purposeof improving business ethics.


At the 2003 annual meeting of the World Economic Forum inDavos, Switzerland, Fluor Chairman and CEO Alan Boeckmanurged counterparts in the engineering and construction sectorto develop and adopt a set of anti-corruption principles for thepurpose of helping to eradicate bribery. Over the next year,Boeckmann chaired an e ort that was facilitated by senioro cials of Transparency International and the Basel Instituteon Governance with the goal of developing a set of principlesthat could be introduced and embraced at the Forums 2004meeting in Davos.


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Fluor is building a world-class polysilicon facilityin China for LDK Solar,which is expected toproduce 15,000 metrictons of high-puritypolysilicon annuallyfor photovoltaic solarpanels that will harnessthe suns energy andreduce dependenceon other conventionalenergy sources.



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This is an issue were absolutely passionate about.Corruption has a corrosive impact on market opportunities andthe general business climate. It deters investment, curbs economicgrowth and sustainable development, distorts prices andundermines legal and judicial systems. Regrettably, this situationis endemic in many areas of the world. It is our responsibility andobligation to our stakeholders and the global community to dowhat we can to mitigate this challenge.

Fluor rmly believes that these forms of collective action, together with governmental action, are making a di erence in turning thetide of global bribery and corruption in a more favorable direction.

A Culture of Ethics

In a recent survey of global clients, ethical was one of three termscited most frequently as being associated with Fluor. To us, this is notsurprising. roughout our history we have made ethical conducta priority. We believe this is largely due to the fact that Integrity

has been one of the companys four enduring values. Setting theright tone has yielded policies and practices that clearly dene whatis expected of all Fluor employees. And throughout these many years, these policies and practices have been continually revised andstrengthened through the companys improvement processes. Today,

we like where we are. But we know that in the future, our programsand practices will be even betteras they should be.

Our Standards, Monitoring & Reporting

Fluors anti-corruption program is extensive. While our employeesare especially vigilant when dealing with public sector ocials,Fluor prohibits all forms of commercial bribery as well.is allows

for clear standards that employees can easily understand no matter what the business environment or context may be.

While we strongly discourage the use of facilitating payments, wedo permit them if they are allowed under local country laws andpreapproved by the companys Law Department. If a facilitatingpayment is made, it is specically accounted for as outlined inthe PACI Principles. We continuously reevaluate our ledger of facilitating payments to conrm compliance and to determine how they can be reduced going forward.

Fluor also limits the number of third-party agents by relyingprimarily on our internal sales sta . We do not have a commissiobased sales structure, which contributes greatly to the manageof corruption risks. If local laws require the use of a third par

we perform thorough due diligence and training and are vigilain looking for red ags. We also limit the employees who arepermitted to have contact with third-party agents.

Fluor incorporates anti-corruption along with a range of otherand compliance standards into our risk management program.both Fluor and its clients, the task of managing risk begins whthe project is still a prospect. Risk takes on a variety of formscountry, site-specic, contract, nancial, political and regulatorytechnology, schedule, plant performance guarantees and partnsubcontractors. In addition, currency, corruption, legal systemhuman resource risks are considered as well. Our best approais to seek out the root causes of what can go wrong during proexecution and subsequently identify risk mitigation strategies.

Fluors Business Risk Management Framework is a formalized

systematic process for assessing, managing and monitoring busrisks for every project we consider or execute. Before we beginof new project opportunities, we employ this framework to asseprojects potential risks and protability. Bid/No Bid decisions contract pursuits are made based on the analysis of a projects ple

is evaluation contains many questions focused on corruption,such as: What is the location of the project? What is the busineculture? And, what third parties are locally required? AdditionFluors Internal Audit team reviews our adherence to anti-corrustandards through its regular and special audits throughout the w

Compliance & Ethics: Our Approach

Research continues to show that if the ethical climate in compdecreases, observed misconduct increases.e costs associated wcompliance failures have never been greater, with increased coof regulatory nes and lawsuits, decreased stock value, impairereputations and distracted management. However, a strongcompliance and ethics program increases a companys ethicalculture and reduces ethical risks, which, in turn, mitigates legnancial and reputational risk and generally improves corpora

management; protects the value of the corporate brand and cusgoodwill; increases employee morale, productivity and retentireduces cost of capital while potentially increasing shareholdeand creates the foundation for long-term corporate sustainabili


Alan L. BoeckmannChairman & CEO, Fluor


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Our Code & Expectations

Fluor works to ensure that all employees have thetools and resources they need to maintain the highestethical standards. Our Code of Business Conductand Ethics is the centerpiece of our commitmentto conduct business with the highest standards of integrity. Fluor provides company-wide training on

our Code, with special emphasis on certain key risk areas such as anti-corruption, conicts of interestand insider trading. At the end of 2008, more than26,000 employees had been trained on our Code.

We also provide other training depending on theapplicable risks and a ected employees. For example,in 2008, approximately 400 sales and marketing,project management,eld operations, procurementand other employees received live anti-corruptiontraining. To date, a total of approximately 1,900employees in 26 oces in 16 countries have receivedthis training since the programs inception in 2007.

Additionally, we have a company-wide annual EthicsCerti cation program. All salaried employees mustcertify that they understand and accept the Code andare provided this additional medium to disclose any integrity concerns or potential conicts of interest.

Reporting

Fluor values open and transparent communication.Our management constantly reinforces our responsibility to do the right thing. Managements messages are notnecessarily scripted as part of our program, but simply re ect how we run our company.

When concerns about integrity arise, we encourageemployees to go to their managers, supervisors or localHuman Resources managers. If concerns are still notresolved, they can go to an expert in Corporate Security,Human Resources, Law, Internal Audit, Health, Safety & Environmental or Corporate Compliance. If theirintegrity concerns are still not resolved, or they do not

Fluor provides onlinecompany-wide trainingand certi cation onour Code, with specialemphasis on certain keyrisk areas such as anti-corruption, con ictsof interest and insidertrading.



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feel comfortable discussing them with anyone withinthe company, they can anonymously call the FluorCompliance and Ethics Hotline, which is operated by anindependent third party. Employees can anonymously make reports or ask questions in more than 150languages, seven days a week, 24 hours a day. Fluorstrictly prohibits retaliation against anyone who makes agood faith report.

In 2008, the Compliance and Ethics Hotline received306 calls, all of which were investigated. Reportsto our Hotline have increased since we expandedour Compliance and Ethics program. We want ouremployees and other stakeholders to raise concernsand ask questions. During 2009, we will roll outa Speaking Up campaign to further emphasize theimportance of raising compliance and ethics concernsand questions and, as a result, we expect a furtherincrease in reports and questions in 2009. We arealso adding new Hotline web solutions and additional

toll-free numbers for countries where we maintain ourlargest presence.

RECOGNITION ANDAWARDS

Worlds MostEthical Companiesrecognition byEthisphere Institute.Fluor was the onlyengineering &construction companynamed on therecognition list.GovernmentContractor EthicsProgram 2008Rankings byEthisphere Institute:

Ranked Number 9 onForbes magazineslist of AmericasMost TrustworthyCompanies.One of Americas andthe worlds MostAdmired Companiesby FORTUNE magazine

Fluor captured thenumber-one spoton the global list inthe engineering andconstruction categoryin 2008 and came inthird in the Americalisting.

2008 HotlineReports by Category

HR/ER Issues

Health/Safety/Environmental

Substance Abuse

Theft/Bribes/Kickbacks

Conict of Interest

Financial/Internal Controls

Miscellaneous

Request for Guidance



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GETTING THINGS RIGHT.

Procurement Policy.

e increasing global emphasis on sustainability inuences the way Fluor makes procurement decisions.e terms and conditions of ourprocurement contracts require our suppliers and contractors to adhere to the local laws and regulations of the countries where they arfor us. In addition, our suppliers and contractors must also adhere to the specic requirements of Fluor policies and procedures on safety,health and the environment, as well as our Code of Business Conduct and Ethics.

Fluor plans to implement our Expectations of Business Conduct and Ethics for Suppliers and Contractors during 2009.ese expectations will supplement the various contractual requirements that our suppliers and contractors must undertake, to further emphasize the higintegrity standards we expect.

In uencing Sustainability Through the Supply Chain

Increasingly, our procurement experts look for innovative approaches to secure goods and services in remote locations.

In countries around the world, Fluor supports local communities by actively sourcing goods and services from local businesses. Witglobal spending for goods and services reaching almost $14 billion in 2008 (more than $52 million for each working day), our opporengage small, woman-owned and diverse suppliers whose goods and services meet our clients requirements is substantial.is considerableprocurement leverage also allows us to inuence our suppliers fulllment of social, legal and ethical responsibilities. Furthermore, wecomplete evaluations for safety, compliance, quality, environmental and anti-bribery performance on all suppliers and subcontractor

whom we contract over $500,000 of business.

Fluors supplier outreach tool, SCORE!SM (Supplier and Contractor Online Registry E-version), is a vital resource for identifying and ensuppliers globally. To support supplier sustainability, Fluor is strongly committed to extending opportunities to grow businesses throa proactive U.S. Supplier Diversity Program. In 2008, this program achieved a spend level of $458 million with small, woman-ownediverse suppliers, or approximately 10 percent of the $4.7 billion spent with U.S.-based suppliers and contractors last year. By usingbusinesses, Fluor creates employment opportunities for many in the local communities.

Fluor is a corporate member of the National Minority Supplier Development Council (NMSDC) and the Womens Business EnterprisNational Council (WBENC), and actively participates in many of their aliated regional councils. In 2008, Fluor supported regional

councils of both NMSDC and WBENC and, with our corporate sponsorships of events, has helped increase the growth of small, divand woman-owned business enterprises. Fluor was recognized as a Sustaining Member of the Womens Business Council Southwesrepresentation on its Board of Directors. Fluor also supports the Dallas/Fort Worth (TX) Minority Business Council, the Houston MBusiness Council and the Womens Enterprise Alliance Council by serving on corporate committees and contributing to scholarshipbusiness events targeting diverse and woman-owned business enterprises.

FLUOR SUSTAINABILITY REPORT2008 17

e companys Code also supports our commitment to human rights. We hold ourselves accountable to our corporate expectations oncompliance practices, and we require that subcontractors, workers, consultants, agents, suppliers and other third parties observe similastandards and act in a manner consistent with the Code and adhere to all applicable laws.ese parties are subject to audit to determinecompliance with contract terms and conditions.


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WERE FIGHTING CORRUPTIONWITH A SCRIPT,ACTORS AND A CAMERA.

Anti-Corruption Education and Training Initiative.

On a dusty rural road, a eld engineer charged with delivering heavy equipment to a construction site is stymied when road workea one way sign and demand compensation for allowing the equipment to pass. What should she do?

e eld engineer, in this case, is a professional actor, as are her adversaries. But the situation is based on one that actually occuthe question posed by her predicament is one faced by countless employees in the engineering and construction industry every dquandary, and her solution, are among many featured in a new lm and accompanying training materials, which are core elements o

Anti-Corruption Education and Training (ACET) initiative, funded in part by a leadership grant from Fluor.e lm, titled Ethicana,spotlights actual ethical dilemmas woven into actional story set on a mythical island and forms the foundation for substantive disaround a very serious industry problem with devastating implications.

Each year billions of dollars are lost through bribery and corruption, says the American Society of Civil Engineers (ASCE) Mproject manager for the ACET initiative. Bribery and corruptioncompromise projects and put the public at risk. And they happenall over the world.

ats why Fluor agreed not only to donate $100,000 for the creationof training and education materials but also to endorse the industry-

wide initiative and provide its corporate headquarters as an on-sitelocation for lming a scene in Ethicana. Subtitled in 27 languages,the lm will be combined with a discussion guide and other materials

and distributed free of charge to supporting corporations, engineeringschools and professional organizations. Additional copies will beavailable for purchase by companies, governmental bodies and othersinterested in and a ected by this issue.

At the national ASCE Convention in November 2008, a group of 50 industry professionals previewed thelm and participated in amoderated discussion afterward.

Scenes from the ctionallm Ethicana.



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When viewers expressed opinions in that discussion, it became clear they didnt really know or understand the types and magnitudeof corruption going on, says Bob Crist, chair of ASCEs Global Principles of Professional Conduct Committee. Unethical behaviorcan be so subtle sometimes, Crist continues, and everyone in the system, from lawyers toeld engineers to government o cialsto administrative assistants, can be involved. Awareness is our biggest problem; even individuals with the best intentions can makedecisions that lead them down the wrong road. Previous training materials on ethics have focused on corporations. With Ethicana,

we are focused on the entire spectrum and especially on individuals.

Fluors donations, combined with those of several other organizations and individuals, have created more than concrete materials.ey havesparked the proverbial ah ha! moment for many in the preview audience. e comment I heard from viewers was, I now understand

whats going on and I didnt before.ats the rst step toward needed change in our industry.

ETHICANA SPOTLIGHTS ETHICAL DILEMMAS ENCOUNTEREDON ENGINEERING & CONSTRUCTION PROJECTS AND FORMS THEFOUNDATION FOR SUBSTANTIVE DISCUSSIONS AROUND A VERYSERIOUS INDUSTRY PROBLEM WITH DEVASTATING IMPLICATIONS.



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ETHICS IN ACTION.

e BlackBerry vibrated across the desk as it always does when a new message arrives, but there was nothingcommon about this message. It contained an o er that would tempt and derail the integrity of many.

Working for Fluor for less than a year, this employee had heard about conict-of-interest situations thatprocurement personnel in the engineering and construction industry frequently face. But when he read the o erbeing made by a senior manager of a major product supplier abroad, it became clear to him that ethics is indeedthe commodity in jeopardy these days.

e o er was the equivalent of a winning lottery ticket and was simple in design. All the Fluor employee had todo was ensure the managers company was awarded a purchase order regardless of Fluors competitive-biddingprocess. In exchange, the supplier would pay the employee 2 percent of the purchase orders gross value, whichamounted to several million dollars.

Fluors Procurement employee recognized immediately that accepting this bribe was wrong. He had taken web-basedtraining on Fluors Code of Business Conduct and Ethics and the specially designed live course on anti-corruption.

What he learned guided his decision. I knew that no matter how tempting the money was, he said, theght againstbribery and its damaging e ects on society must be won. Reporting this o er was simply the right thing to do.

His decisive response to the attempted bribery led to the supplier being put on a probationary status with regardto doing future business with Fluor and disciplinary action for the suppliers senior manager who made the o er.In addition, after notication, Fluors client for the project agreed that the situation was managed appropriately and thanked Fluor for its professionalism and proactive commitment to ethics.

And as for the Fluor employee who was o ered the bribe, he received commendation for his integrity from thecompanys most senior leaders. Not only did he keep himself and the company out of trouble, he had set a trueexample for others to emulate.

e employees and vendor involved in this actual case study have intentionally not been disclosed.



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OF THE BILLIONS OF ASSETS FLUOR HASOUR PEOPLE ARE THE MOST VALUED.

Employees & Workplace.

Our People

Across six continents, Fluors 42,000 employees design,build and maintain complex industrial facilitiesand solve problems ranging from the routine to theextraordinary. Over the past century, our employeeshave been instrumental in developing the tools andsystems used today to execute these challenging

projects safely, smartly and with the highest quality.Fluor employees are skilled, dedicated people diligently working to achieve excellence for our clients.ey are thekey drivers of Fluors record-setting 2008 performance.

Building a World-Class Workplace

Recruiting and retaining people with relevant skillscontinued as a thematic challenge for Fluor, which,like all companies in the engineering and constructionindustry, faced ongoing labor shortages. Ensuring theconstant availability of pools of talent with the necessary

abilities and experience needed to successfully lead athigher, more responsible levels within the organization was the focus of Fluors succession planning.

People desire careers at Fluor because our employees work on some of the worlds biggest and mostdistinctive projects. In 2008, we added more than2,100 new salaried employees to our overall workforce.

And, in response to a trend of record backlog andrecord new awards, we have added 10,000 salariedemployees over the past three years. Even so, we havea good balance of new and tenured employees. A largenumber of employees have 10 or more years of service,a demonstration of who we are and a testament toemployee satisfaction with the work environment andopportunities provided within the company.

Recruitment

Fluor maintains long-term strategic relationships with select universities and technical colleges aroundthe world. Executive sponsors from Fluor overseeand nurture these relationships by supporting theinstitution and academic community throughteaching courses, serving as members of college

advisory boards, providing students with real-world

experience through internships and coaching studentson speci c career-related skills. ese e orts work in conjunction with the Fluor Foundation, whichprovides grants to fund university engineering,construction and procurement programs, as well asstudent scholarships, associations and career centers.

Around the world, strategies are in place to sourcediverse pools of talent. In the United States, thatincludes attending minority-focused nationaltechnical conferences. In 2008, those conferences

were the Black Engineer of the Year, theNational Society of Black Engineers, the Society of Women Engineers, the Society of HispanicProfessional Engineers, the American Indian Scienceand Engineering Society, and the Asian AmericanEngineer of the Year.

Successful Onboarding Is Key to Retention

e large number of new hires and the desire for aglobally consistent execution platform led to Fluorsglobal Onboarding Program, which includes new hireprocessing; buddy assignments; specic courses inhealth, safety & environmental; ethics and execution;diversity and inclusion; and a detailed functionalonboarding curriculum with aprescribed supervisorand functional leadership meetings.

New college graduates who come to work at Fluorare supported during theirrst years through theGraduates Advancing to ProfessionalismSM program,a management-sponsored global network that serves

to facilitate the transition from academic life totheir careers at Fluor through social networking,community philanthropy, access to senior executivesand career guidance in order to increase employeesknowledge of the company.

Because Fluors business is global and requiresmobility, in 2008 we redesigned our International

Assignment Policy to promote employee mobility,simplify assignment administration and foster a oneteam approach at project sites. e policy changesresponded to demographic trends in the workforce,

changing attitudes toward relocation and the need for

KEY 2008FOCUS AREAS

RecruitingRetentionDiversity & InclusionTalent Development



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EmployeeCompositionover PastFive Years

Employee Composition(byBusinessGroup) for 2008

e following table sets forth the number of employees of Fluor and itssubsidiaries engaged in our business segments as of December 31, 2008:

e number of craft and hourly employees, who provide supportthroughout the various business segments, varies in relation to thenumber and size of projects we have in process at any particular time.

Salaried Craft

0 10,000 20,000 30,000 40,000 50,000

2004

2005

2006

2007

2008 27,958 14,161

15,418

15,482

17,041

17,455

25,842

22,078

17,795

17,344

Salaried Employees:

Oil & Gas 13,961

Industrial & Infrastructure 3,285

Government 2,175

Global Services 4,081

Power 793

Other 3,663

Total Salaried 27,958

Craft and Hourly Employees14,161

Total 42,119


a global, rather than U.S.-centric, approach.

Fluors employees have the opportunity to truly see and experiethe world by taking on international assignments and working our o ces and project sites across six continents. In fact, more2,000 of our employees are currently on international assignme46 countries a bona de re ection of our workforces mobility acommitment to serving our clients around the world.

Planning a Successful Future

A successful future depends greatly upon building a cadre of capleaders by employing a planned, thoughtfully managed successiprocess. Our company has been engaged in leadership developmfor decades, using a network of forums and management participthat has not fundamentally changed in 30 years. It is, therefore,embedded within our operating process and culture, and a naturaextension of what we do every day. Fluors approach consists ofinterwoven and coordinated elements designed to identify indivi

with high leadership potential for our succession talent pools andsupport the development needs of future Fluor leaders.

We have specic programs that are designed to accelerate thedevelopment of leadership skills and competencies for both genand project management career paths. ese programs have beenvery successful in providing the company with a pool of vettedquali ed leaders. is helps support our succession strategy andestablishes cross-generational role models.

We also maintain a continuous focus on developing globally divleaders and monitoring retirement and turnover trends to ensureare developing leaders today to meet the needs of tomorrow.

Employee and Talent Development Among our e orts to help employees maximize their performance potential, in 2008 we launched an even more robust career developrocess and a toolkit that highlights development opportunities anresources. Among the tools are Functional Development Framewthat outline specic courses, experiences and competencies requirefor advancement in all functional levels of the company fromengineering, estimating, project controls and project managementnance, management/leadership, human resources and informatio

technology. Whether an employee is interested in excelling andadvancing in his or her owneld or pursuing another career path atFluor, our Frameworks, Job Descriptions and Career DevelopmentGuides provide a starting point for any career development plan adesigned to help employees and their managers focus on areas tha


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employee interests with company requirements.e courses highlighted in each Functional

Development Framework are provided by FluorUniversity, the companys global training anddevelopment organization. e establishmentof Fluor University was a multi-year e ort anda carefully articulated response to feedback employees provided in the companys most recentglobal Employee Engagement Survey.

Fluor University provides more than 1,000 onlinecourses, more than 200 instructor-led courses, andmany other educational programs and resourcesto help employees enhance their performance anddevelop their careers.

Online courses provide Fluor employees around the world with easy 24/7 access to interactive learningopportunities in everything from diversity andinclusion, ethics, supervision, communications,

team building, computer skills and timemanagement, to nance, project management, salesand strategic planning. By minimizing travel andfacility requirements, online learning is a cost-e ective solution that also helps manage carbonemissions. Employees completed more than138,000 hours of online learning in 2008.

Fluors instructor-led classes provide additionalin-depth learning opportunities. For example:

In our three-day Project and Business Controlsfor Project Managers class, participants are led

through a mock project where they encounter avariety of challenges that require them to makedecisions that drive superior results for both theclient and the company.

e one-day Fluor Business Simulationclass uses a Fluor-proprietary board gameto enhance participants understanding of

nancial concepts and metrics, Fluors businessdrivers and the connection between humanand nancial capital.

Fluors two-week Construction Academyprovides newly hired college graduatesin-depth instruction in all aspects of construction execution.

Courses are o ered according to demand andbusiness need. In 2008, approximately 532,000student hours of training were completed inour locations around the world. ese includedtechnical, functional and project execution, as wellas business and professional training.

Employees also are encouraged to pursue external job-related learning opportunities throughprofessional organizations and colleges oruniversities. Approximately 1,000 employees arepursuing degrees or additional training through thecompanys tuition-reimbursement program.

LeadershipDevelopment

Fluors leadership development programs range fromcoordinated stretch assignments and coaching acrossbusiness lines and functions to specialized programsthat include 360-degree assessments, feedback,experiential learning, problem solving and individualaction plans. For example:

rough the ve-day Fluor ManagementInstitute program, employees increase theirunderstanding of cultural issues impactingproject execution, enhance their analytical andproblem-solving abilities and strengthen theirability to collaborate and lead cross-functionally.

MISSION:

To provide an integratedframework for deliveringthe technical, functional,business and leadershipdevelopment that drivesFluors success.

Among Fluors manytalent developmentprograms is FluorBusiness Simulation,a one-day course thatuses a proprietaryboard game simulatingreal-life situationson Fluor projects.



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rough the four-day Fluor Leadership Summit, experiencedleaders such as department managers and project leads deepentheir business andnancial acumen; assess their own behavioralstrengths and areas of development; improve their ability torecognize and leverage the personality, preferences and behaviorpatterns of others; enhance communication skills; learn how to turn con ict into collaboration; and establish measurabledevelopment goals and action plans.

Fluors Corporate Leadership Development Curriculum consistsof ve programs corresponding to di erent stages in a leadersdevelopment. More than 500 employees have participated in theseprograms over the last two years.

Fluor supports craft leadership through onboarding and trainingprocesses to ensure that leaders in theeld have the skills andabilities to e ectively administer the tasks associated with projectconstruction and eld management.

In 2008, Fluor implemented a Field Supervisor Orientation, where eld leaders learn about Fluors policies and sitesupervisory administrative processes.Fluor revised and upgraded its Site Supervisory Training programin 2008. is eight-hour course provides instruction on key eld leadership abilities, including delegating, coaching, setting

expectations and providing feedback.

Valuing and supporting leadership training across all sectors of theorganization is central to Fluors talent development program. Ensuring

we have leaders who can guide and direct daily business operations is anessential component of our strategy for execution excellence.

Accelerating Technical Development

Aligned with our growth expectations, we also have specialized accelerateddevelopment programs to ensure we continue to have the best pipeline of technical, management and craft talent to deploy on projects. For example:

Accelerating Skills to Advance Projects (ASAP) is a comprehensivedevelopment program established in 2008 in which selectemployees from Fluors engineering, procurement, constructionand support functions receive accelerated training and experiencesthat will help them to develop enhanced execution managementskills and project management capability. Accelerateddevelopment rotations in project controls, contracts/constructionand project management, combined with coursework and

coaching, provide key learning and experience over an eigh18-month period, depending on the employees level.

XLR8is a program started at our Houston oce to acceleratdevelopment of new engineers and designers. As a suppleto Fluor University coursework, program participants workthrough various project-based experiences outside of theirdiscipline over an eight-month period to increase theirunderstanding of project roles and execution issues, strengtheir business acumen and improve their understanding ofmany potential career paths available at Fluor.

We also o er global accelerated training programs for craft workers to attain skills to support project start-ups. For exain preparation for working on a gold-mining project in theDominican Republic in 2009, a new Fluor-developed crafttraining center in Cotu is training hundreds of local workeon behalf of the client in various crafts, such as welding anpipe tting, as well as health, safety & environmental matteOur training e orts not only help to ensure the highest standof safety and performance on our projects but also leave a llegacy of people who have enhanced skills and knowledgecontinue to bene t the community long after our projects arecomplete. Over the last 30 years, Fluor has trained approxi250,000 craft personnel around the world from KazakhstaSouth Africa to Indonesia to Chile to the United States.

Fluor o ers pre-employment welder training programs inGreenville, SC, and Houston, TX. e program focuses on welder training, blending both hands-on lab experiences aclassroom teaching. In August 2008, an advanced weldetraining program was launched in Greenville, specically geared toward experienced welders who work during the wSince its inception, more than 500 pipe welders have beentrained and placed on Fluor construction and maintenancethroughout the United States.Fluors Trades Certication and Validation Plan provides amechanism for evaluating and verifying a craft candidatecerti cation, education, training and work experience.isprogram has proven essential in meeting the stringent emquali cation requirements of the United States Armys LoCivil Augmentation Plan IV contract.In the Philippines, Fluors Asia Placement and Training C works in conjunction with technical and vocational schooteach craft curricula, preparing workers for local Fluor pras well as for projects abroad.



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Sharing Knowledge and Inspiring Excellence

Fluors learning culture extends far beyond formal course work. In fact, the majority of employee developmentcomes from coaching and on-the-job experiences.

At Fluor, coaching goes beyond annual performanceassessments. It is a collaborative process that

provides feedback, guidance and encouragement tohelp employees maximize their potential and drivesuperior company performance. To develop an evenstronger learning and coaching culture at Fluor, weare launching a comprehensive coaching trainingprogram with toolkits for our leaders in 2009. is will expand to include peer coaching. Our goal is tocreate an even more robust learning culture whereeveryone is a coach, and coaching is for everyone.

Feedback from the companys Employee EngagementSurvey and Employer-of-Choice Workshopssurfaced both executive visibility/accessibility andmore mentoring processes as areas of focus for ourcompany. As a result, we developed and implementeda Mentoring Circles Program that allows us toimpact both of these areas. With the aid of continualemployee feedback, the program has grown overthe years since its inception in 2003. In 2008, 12locations hosted more than 150 Mentoring Circles

with more than 1,200 employees participating in whathas become an award-winning program.

As a global engineering, procurement, construction,maintenance and project management company,knowledge management is especially criticaldue to a constantly evolving project mix.

New college graduatesat Fluor are supportedduring their rstyears through theGraduates Advancing toProfessionalism program,a management-sponsored globalnetwork that facilitatesthe transition fromacademic life to Fluorcareers.



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26 FLUORSUSTAINABILITY REPORT 2008

Knowledge Onlineis Fluors proprietary web-basedtool that facilitates the exchange and archiving of best practices, information and solutions acrossthe company. Employees have at theirngertipseverything from specications checklists for oil and gasprojects and analytical tools for estimators to concrete-testing procedures for construction and cross-sellingtoolboxes for sales. Employees also can eciently leverage the vast knowledge of Fluor experts aroundthe world by submitting questions to the appropriateonline forum. In addition, Fluors expertise insustainability is highlighted in its ProfessionalPublications & Presentations Program (P4SM), a forumfor employees who author and present articles inindustry trade media and at professional conferences.

Performance Assessment

At Fluor, we focus on employee opportunity anddevelopment, supported by a global employee

assessment process that is transferable as employeesmove across business lines.

Based on employee feedback provided throughthe companys most recent global EmployeeEngagement Survey, Fluor addressed a key engagement driver through the development of astandardized process of annual performance anddevelopment feedback. e new Fluor Performance

Assessment Program was rolled out in June 2008and became mandatory for supervisors to use withtheir salaried employees by the end of 2009.

e program, which has been tested against bestpractices in the business community, provides aglobally consistent set of criteria and tools toaddressfundamental performance objectives,such as Fluorvalues and general business attributes, as well as tofacilitate more in-depth discussions between theemployee and supervisor. Its streamlined design ensuresthat every salaried employee receives documentedfeedback on his or her performance each year.

Total Compensation

Fluor rewards hard work, knowledge and commitment.e companys benets and human resources programs

are designed to attract and retain a diverse workforceof the best talent. Innovation and entrepreneurialthinking are important aspects of Fluors culture, andour bene t plans and policies encourage growth for

both the company and employees.Maintaining an equitable means of compensatingemployees is a key component of our philosophy.

e company pays competitive base salaries to attractand retain qualied employees. Salaries reect jobduties and individual job performance as measuredby annual performance appraisals and are based onprevailing economic and market conditions.

Fluor ensures that all elements of pay are competitive with the best companies in the locations in which weoperate. We review this each year to maintain ourcompetitive position in the global markets.

Executive compensation is reviewed by theOrganization and Compensation Committee of theBoard of Directors, which consists solely of non-employee directors. It determines compensationlevels for the chairman and chief executive ocer,as well as his direct reports, based on an assessmentof competitive data from Fluors CompensationPeer Group as detailed in our 2008 CompensationDiscussion and Analysis, which is included in Fluors

Bene ts

Around the world, we design and implementcompetitive health and welfare programs, along withretirement plans as appropriate, for our employees.

e few de ned bene t plans in existence at Fluor areconsistent with industry standards and are fundedin accordance with government regulations in thelocations where we work.

MENTORING CIRCLESAROUND THE WORLD

CanadaChinaPolandSingaporeSpainThe NetherlandsThe PhilippinesUnited StatesUnited Arab Emirates

26 FLUORSUSTAINABILITY REPORT 2008

Proxy Statement.


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WHAT BEGAN AS A WAY TO MEET A BASIC BUSINESS NEEDFOR A POOL OF SKILLED LOCAL WORKERS TO COMPLETECLIENT PROJECTS GREW INTO A LARGESCALE EDUCATION ANDTRAINING EFFORT THAT HAS ENDURED TIME AND REMAINS THE

CORNERSTONE OF FLUORS ONGOING OPERATIONS.

In 2009, Fluor will conduct a global inventory of employee benets to understand ongoingcompetitiveness from a local country perspective.

Maintaining work/life balance is another importantaspect of Fluors benets. O ces and job sites aroundthe world employ customized approaches to helpemployees achieve appropriate work/life balance oppor-tunities that are reective of both local and individualneeds and business demands. Each facility can tailorthe time o policy toward serving the needs of itsparticular employee population and business demands.

In the United States, Fluor also provides an Employee Assistance Program to help employees address a widerange of work/life issues, from daily concerns to thoseof a more serious nature. Some of these servicesmight include basic counseling,nancial planning,legal advice and family mediation.

Diversity & Inclusion

Fluors goal is to sustain a diverse workforce by leveraging the knowledge and talents of every employee.Fluors policies and practices are built around thepremise that all employees should have opportunities toexcel in their chosen professions. Equal opportunity at Fluor means that no one is disadvantaged because of di erences. It is company policy to base employmentdecisions that involve hiring, training, testing,promotions, transfers, compensation, reductionsin force, leaves of absence, terminations and otheremployment actions upon job-related criteria and notto unlawfully discriminate on the basis of race, color,age, sex, sexual orientation, religion, national origin,disability, veteran status, genetic information or any other criteria protected by law.

Diversity and inclusion are embedded in our corevalue of Teamwork. e company expects thatevery employee proactively maintains a positive

work environment free from any form of unlawfuldiscrimination or harassment and promotes an inclusive

workplace where divergent ideas are leveraged to promptthe highest possible level of innovation and excellence.

Diversity and inclusion are essential componentsof all human resources processes, helping drivethe fundamental attributes of teamwork into ourglobal operations. For example, we place a highpriority on diversity and inclusion throughout ourtalent development initiatives. Specic diversity and inclusion-related behaviors are woven intorequired competencies within Fluors FunctionalDevelopment Frameworks and Career DevelopmentGuides. In addition, skill-building activities thathelp people understand how to create an inclusiveenvironment are incorporated into both ourleadership and technical training courses.

Specialized diversity and inclusion training iso ered through our nine-course, online curriculumthat is available to employees worldwide. esecourses address how diversity inuences daily business operations and provide suggestionsabout working inclusively within Fluors global

environment. Every employee completes the twomandatory courses during orientation. In 2008,employees from more than 50 locations completednearly 10,000 courses.

Fluor also provides a Global Diversity andInclusion Resource Center on the companysintranet. e purpose of this site is to provide acentral location for employees to nd a wide variety of tools and information that will increase theirknowledge about diversity and inclusion.

e goal is to provide a context for why this isimportant to us and to help open minds to di erentperspectives and cultures. e Resource Centeris divided into 12 focus areas, including a sectiondescribing our business case for diversity andinclusion, a listing of books that deal with specicrelated topics and links to a global discussionforum. Information is updated monthly, featuringnews, articles, book reviews and additionalresources. Also included are leadership messagesthat give leaders an opportunity to express theirviewpoints about the bene ts of diversity and theimportance of cultivating an inclusive workplacegrounded in e ective teamwork.

WOMEN HOLD UPHALF THE SKY.

Chinese proverb

Nowhere is this moreevident than in FluorChina, where out of 850employees, 45 percentare women from 15di erent nationalities,with roles in engineering,procurement andcontracts, humanresources andadministration and

nance.



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Human Rights

Our belief that all individuals should be treated with dignity and respect isrmly rooted in our corevalue of Integrity. Fluor is committed to fostering anenvironment that recognizes and supports all aspectsand dimensions of human rights.

Elimination of Forced, Compulsory and Child Labore companys Code of Business Conduct and Ethics

supports our commitment to human rights.

Fluor does not utilize forced or compulsory labor.ecompany recruits employees and provides workingconditions, including payment of wages and benets,that comply with applicable laws and regulations. NoFluor operations have been identied as having a signi-cant risk of forced or compulsory labor. All of Fluorsemployees are above the legal employment age in thecountry in which they are employed. Fluor supports

the use of legitimate workplace apprenticeships,internships and similar programs that comply with alllaws and regulations applicable to such programs.

Regrettably, we recognize that in some parts of the world, child and forced labor exist. We haveemphatically stated that we do not condone theuse of child or forced labor by Fluor or any of oursuppliers, clients or partners.

We take measures to provide working conditions thatcomply with applicable laws and regulations, includingthose applying to wages and benets. As part of Fluorsbusiness risk assessment process, we evaluate industrialrelations risks that could include any compulsory orforced labor issues that might exist in a particularcountry or job location and analyze any necessary actions the company would need to take in order tomitigate those risks.

In uencing Change

Furthermore, we believe our business presence canand should have a positive inuence on the treatmentof people in the communities in which we operate.

While our core business is centered on engineering,procurement, construction and maintenance, weview providing service to the communities in whichFluors employees live and work as a privilege, and thecompany works diligently to improve the rights of indigenous people. Fluor has no reportable incidentsof violations involving rights of indigenous people.

Fluor has a long history in South Africa. Ourpresence there dates back to 1960 with the awardof the Sasol Styrene Butadiene project and theconstruction of the Caltex Renery in Cape Town.Fluor continued operations in South Africa duringthe highly turbulent times of the 1980s. Duringthose years, Fluor trained nearly 6,000 local peopleas semi-skilled and skilled craft workers and hiredthem to work on projects at a time when there wasno classication to pay nonwhite supervisors on thecountrys pay scale system.

Fluor was among a myriad of multinational Americancompanies listed in a multibillion-dollar lawsuit claimingexploitation of workers in apartheid-era South Africa. Inlate 2008, Fluor was dropped from the litigation and allplainti s con rmed that there is no current intention toinvolve the company in any of the actions.

What began as a way to meet a basic business needfor a pool of skilled local workers to complete clientprojects grew into a large-scale education and traininge ort that has endured time and remains the corner-stone of Fluors ongoing operations in South Africa.

We maintain an active presence through our ocein Sandton, where Fluor coordinates operations inDurban, Sasolburg, Secunda and sub-Saharan Africa.

Freedom of Association and Right to Collective Bargaining

Fluor recognizes and respects the legal rights of employees to join or to refrain from joining workerorganizations, including labor organizations ortrade unions, without fear of reprisal, intimidationor harassment. e company complies with legal

RECOGNITION ANDAWARDS

G.I. Jobs magazines listof the 50 Most MilitaryFriendly Employers forthe third consecutiveyear; Fluor ranked in15th place overall.

Business Centre ClubsCaesars of SilesianBusiness Award,recognizing Fluor as abusiness resource forintellectual potential inPoland. (Gliwice o ce

HR Impact Award,which recognizesexcellence in humanresources programsand practices. (Houstono ces MentoringCircles Program)Presidential Rank Awards MeritoriousExecutive Award forexceptional leadership,accomplishments andservice. (Ronald W.Hertwig Jr.)Black Engineer of theYear Awards ModernDay TechnologyLeaders, recognizingthose shaping thefuture of engineering,science and technology.(Lynn E. Weaver andHubert E. Ausbie II)Texas TechUniversity Collegeof EngineeringsDistinguished

(Tom Zachman)Society of WomenEngineers (SWE)Emerging LeaderAward, which honorswomen engineers whohave demonstratedoutstandingleadership andtechnical excellence.(Amy Herbert)RasGas ShukranAward for outstandingperformance oraccomplishments onthe RasGas CommonO -Plots Project inQatar. (Ed StandifordIII and TamilmaranDuraisamy)


Engineer Award.


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Through its work indesigning and building

some of the worldsgreatest industrialprojects, Fluor has anesteemed track recordof providing crafttraining that meetsthe highest industrialstandards to indigenousworkers, furtheringtheir employmentopportunities andprofessional growth.

requirements worldwide regarding employee and third-party involvement and provides training in whichmanagers and supervisors are advised of employees rights in this respect. Where employees are represented by a legally recognized union, we are committed to establishing a constructive dialogue with their freely chosenrepresentatives and are committed to bargaining in good faith with such representatives. Our long-standing belief is that the interests of Fluor and our employees are best served through a work environment that is collaborativeand allows for direct communication between employees and management.

Looking Ahead

e impact of the ongoing global economic crisis is far-reaching, and Fluor is not immune. Like many companies,Fluor is taking proactive steps to reduce expenses and to contain costs during 2009 and beyond.

We remain committed, however, to maintaining our position in a marketplace that will become even morecompetitive in the coming years. Performance and execution are key to our Human Resources plan, which also

will focus on retention, diversity and inclusion and strategic investments in the training and development of ourpeople and leaders, who provide Fluors competitive advantage.



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30 FLUORSUSTAINABILITYREPORT 2008

RESPECT AND UNDERSTANDINGARE USEFUL BUILDING TOOLS.

The Newmont Power Project.

In more than three decades at Fluor, Jim Law had already seen a lot of interesting challenges when, in 2004, hetook on a new one: site manager of the TS Power Project in northeastern Nevada. Of course he had to completethe job on time and within budget, but Law faced an immediate and thorny problem.is project was in one of the states least populated counties, hours from any major population center. He needed to determine how and

where to nd enough quali ed, skilled people to work on the isolated site for the next four years.

Drawing on knowledge gained from experience in similar circumstances and partnering with internal HumanResources management and external resources, Law and his team set to work to meet the challenge.eirsta ng plan was two-pronged. ey would attract and retain qualied workers, some of them experienced andalready in the Fluor database, and at the same time develop and train people new to the construction industry.

Aware that they would have to rely largely on the self-employed for their needs, Law and his team also knew many potential workers resided in the Native American communities in surrounding counties.

rough job fairs and other methods, Fluor was able to recruit people, not only from Nevada but also fromneighboring states, who were willing to travel to or temporarily locate in the remote construction area in EurekaCounty. Among them were more than 450 Native Americans, many from the Navajo Nation and about half of

whom were new to Fluor and to the construction industry.

e company used DEL-JENs Job Corps training facility in Albuquerque, NM, to provide the basic skillstraining required to maximize employees eciencies on site. A signicant majority of the students were Native

Americans taking advantage of the opportunity to better themselves economically. Additionally, Fluor set upfacilities to provide training in key crafts such as welding, pipetting and ironworking.

But job skills training was only part of the education required for this project. Fluor supervisors hadsomething to learn as well.

We had a learning curve with our supervision, he says. We all realized that we needed to work within theNative Americans culture, rather than expecting them to adjust their ways to ours. For instance, once weunderstood that tribal traditions require younger workers to listen to the elders in the community, we were able toestablish more e ective work teams.

rough our research, we also learned that important tribal traditional celebrations and observations called for theattendance of many of our workers. When we respected those needs, we found morale improved, and we were betterable to retain the workers, which was, of course, extremely important to the on-time completion of the project.

In the 1980s, Law had hired members of the Navajo Nation as welders on another project.at experience, along with the TS Power Project, drove home some important lessons. Key among them, Law recalls, was, Learninglocal workers cultures and traditions and managing accordingly are very important to the success of a project.

Fluor completed the engineering, procurement and construction of the 242-megawatt power plant projectduring 2008, delivering an innovative design and world-class technology within budget, ahead of schedule and

Documents

Flu or Sustainability Report 2008