Laing O'Rourke Annual Review 2009 Operational overview We had another year of notable achievements, with our portfolio of projects continuing to make good progress. A selection of our projects are described in detail as case studies on pages 14 to 33. Additionally, during the year we completed or worked on: Lifestyle - Housing projects including the large Jumeirah Golf Estates and MotorCity in Dubai, Hemisphere in Birmingham and Elysee Apartments on Australia's Gold Coast. - Shopping, leisure and entertainment complexes including Westpoint Blacktown in New South Wales, Australia, where the original contractor reneged on the contract and we successfully dealt with 19,000 defects. Business - Office complexes, including a new high- rise office building in Brisbane which will be the new headquarters for a major global mining group. - An extension to the Gold Coast Convention and Exhibition Centre and a brand new convention centre in Darwin which was delivered months ahead of schedule as our innovative design and construction methodologies allowed work to continue during wet weather, a critical capability in a tropical environment with significant annual rainfall. Social Infrastructure - Healthcare facilities including Bristol Heart Institute, Freeman Hospital and National Blood Centre in the UK, University College in Dubai and Weipa in the far north of Queensland where we successfully overcame many logistical challenges caused by the remote location. - Educational facilities including Broughton High School, Bonaly Primary and Juniper Green Primary in Edinburgh. Transport and Mining - Major road infrastructure including Junction 6 on the M62, Junction 11 on the M4 and sections of the A590 in the UK. - Rail track construction and upgrades including work for the Australian Rail Track Corporation and rail stations including Hornsby Station in Sydney - Maintenance of elements of the Hong Kong Metro system and the BHP heavy haul mining railways in Western Australia. - Manchester Airport's Terminals 1 and 2. - Chatswood Transport Interchange, a major rail, bus, retail and commercial development in Sydney. - Construction of a new wharf for loading coal onto ships at Newcastle, north of Sydney. - Since the year end, commenced track laying on the North- South railway in Saudi Arabia. Energy, Utilities and Waste - Major power generation infrastructure including the Darling Downs Power Station in Queensland and the NewGen Kwinana Power Station in Western Australia. - Utilities and waste management infrastructure and water treatment plants. We now have capabilities covering the whole project lifecycle - from feasibility, programme management, design, engineering, manufacturing, construction to operations, maintenance and decommissioning. A key challenge going forward will be for us to grow our capabilities and convert the opportunities we see into substantial businesses. Outlook Notwithstanding the testing economic conditions, the outlook for Laing O'Rourke remains favourable. We have been effective at managing costs and cash flow, and will maintain our focus in these areas. At any time, but particularly in the current financial environment, our capabilities in work- winning will be critical in securing and growing our market presence. Our positioning as an engineering- led construction solutions provider increases the number of tenders available to us in targeted markets. Over time, this should result in the Group securing an increased level of profitable and cash- generating new work. Across the businesses, our ' One Team' approach to vertical integration is increasingly being embedded, and the Group is beginning to realise the benefits of this united thinking in improved earnings margins at the individual project delivery level. Prior sector experience, regardless of where it is domiciled, is becoming increasingly important in the tender process. Our ability to quickly and seamlessly transfer expertise between our three international hubs represents a key differentiator for the business. The order book comprises a strong mix of publicly and privately funded projects across our core sectors. In Europe alone we have identified an additional £ 9.5 billion of opportunity, with an increasing amount of infrastructure work as various government offices continue with capital investment programmes to replace ageing infrastructure, while providing an important stimulus to the wider economy. Overall, the Group's order book stands at £ 10.0 billion. This figure compares favourably to previous years and has been secured under tightening market conditions. We are leading the industry in our ability to deliver projects using Modern Methods of Construction. The benefits that our Design for Manufacture and Assembly ( DfMA) approach brings are considerable. By working in a controlled factory environment, we can deliver projects faster, cost effectively and to greater quality than traditional on- site methods. This automated approach is already standard practice in other industries but, in our view, is significantly under- utilised in commercial and residential construction. We plan to significantly expand the percentage of projects delivered in this way. We have ambitions to achieve 75 per cent of the total project delivery under our direct management through DfMA. We are investing significant sums in our major manufacturing facility, Explore Industrial Park, at Steetley in the UK, as well as in our other internationally based modular operations. Laing O'Rourke has always led the industry in its approach to investing in people. Our continuing focus on human capital management is an important pillar of our strategy and is positioning us well for the future. Our engineering heritage and relentless pursuit of a better way in everything we do will continue to deliver superior results through the practical application of innovative and creative thinking. We believe our systematic approach to project delivery - ' Complete Thinking', will deliver exemplary performance and value creation, as we continue to be regarded as the company of choice by forward-thinking clients. 36- 37Operating and financial review

Balance sheet strength We are a well- capitalised company with a prudent approach to cash management. Cash generated from operations £ 147m Cash and cash equivalents £ 614m Available liquidity £ 793m Scale We are one of the world's leading privately owned construction solutions providers. Managed revenue £ 5bn Direct employees 35,753 Order book £ 10bn Diversity With a strong portfolio of clients across multiple sectors and geographic markets, we are a highly diverse, value- creating company. Average project duration ( years) 2.6 Flexibility Our operating model creates greater leanness and agility in our strategic decision- making and business operations. Staff: workforce ratio 31: 69 Employees transferred between hubs 295 Employees on development programmes 597 Financial resilience Our robust position is a source of competitive advantage and will allow us to exploit future opportunities. Public: private clients ratio 44: 56 Pre- exceptional EBIT contribution by hub (%) Europe: MESA: Australasia 47: 35: 18