Noé Hernández-Sáenz Burns & McDonnell Engineering Quantitative Easing 3.0 – Boosting the Amount of Information in the Project System Noé Hernández-Sáenz Burns & McDonnell Engineering

CII: Driving Predictable Business Outcomes Building a Performance Culture (2009) We already have a great safety culture Integration of Project Management and Financial Intelligence (2010) Joe Knight It’s proven: metrics can bind operational and financial performance Improved Project Performance Boosts Business Outcomes (2011)

25% Savings – It is Possible “The management of capital investment has an enormous effect on profitability and competitiveness, yet few companies do it effectively. We believe that the use of evaluation tools, disciplined processes, and best practices can help companies trim capital spending by up to a quarter without reducing capacity or functionality – and improve their operating costs and revenues through better investment decisions.” - McKinsey & Co.

Dow Jones Industrial Average (Annual Avg. Improvement) Dow Jones Industrial Average vs. CII Owner Cohort Index (Normalized to FY2000) Dow Jones Industrial Average (Annual Avg. Improvement) CII Owner Cohort Index 1991 → 2010 +12.6% +30.6% 1995 → 2010 +8.0% +27.7% 2000 → 2010 -0.1% +8.3% 2005 → 2010 +0.6% +10.9% 2008 → 2010 +5.4% -4.7% Data courtesy of UT McCombs School of Business

CII Owner BMM Cohort Project Performance Project Cost Growth (Absolute Difference) Project Schedule Growth 2000 vs. 2010 -5.7% -17.6% 2005 vs. 2010 -1.1% -2.2% Data source: CII Benchmarking & Metrics Program

Construction In Progress/Capital Expenditure CII Owner BMM Cohort vs. CII Owner Cohort (Annual Avg. Improvement) CII Owner Cohort vs. Non-CII Owner Cohort 1997 → 2010 +3.2% +15.8% 2000 → 2010 +0.6% +17.3% 2005 → 2010 +6.0% +22.9% 2008 → 2010 +6.5% +29.9% Data courtesy of UT McCombs School of Business

Cash Flow/Capital Expenditure CII Owner BMM Cohort vs. CII Owner Cohort (Annual Avg. Improvement) CII Owner Cohort vs. Non-CII Owner Cohort 1997 → 2010 +14.1% +7.0% 2000 → 2010 +23.1% +9.4% 2005 → 2010 +29.7% +3.1% 2008 → 2010 +75.3% +14.6% Data courtesy of UT McCombs School of Business

Economic Value Added/Cash Flow CII Owner BMM Cohort vs. CII Owner Cohort (Annual Avg. Improvement) CII Owner Cohort vs. Non-CII Owner Cohort 2002 → 2010 -12.0% +11.6% 2005 → 2010 +14.1% +13.5% 2008 → 2010 +5.4% +50.9% Data courtesy of UT McCombs School of Business

Today’s Marketplace Cash Is King Value Creation Ability to Grow Organically (Not Reliant upon M&A) Ability to Self-Fund Capital Projects Value Creation By Growing Income Not Only by Cutting Expenses More Capital Projects = Economic Value Added (More Work for Contractors, Suppliers) Enabler: External, Quantitative Information (From CII)

Path Forward Implementation Session Columbus Hall IJ Financial Analyses (Owners and Contractors) Value of Best Practices Safety Data Trends and Findings Regional (Gulf Coast) Productivity Findings Columbus Hall IJ 4:20 pm (Today) 9:20 am (Tomorrow) CII Benchmarking and Metrics Product Display