2011-2012 ANNUAL REPORT 1

EDUCATIONAL FOUNDATION25 Years of Service To The Industry

Building MomentumOn the Strength of Our Experience

PLUMBING-HEATING-COOLING CONTRACTORS ASSOCIATION

EDUCATIONAL FOUNDATION 2011-2012 ANNUAL REPORT

Dear Foundation Friends, Donors and PHCC Members,

“It’s such an obvious benefit, how can anyone oppose it?”

That was the philosophy of R.R. “Dick” Irwin, Charles Hiley, Sr. and John Ward, three of the major supporters of starting an Educational Foundation within PHCC 25 years ago. And—thanks to people like you—they were right.

These “founding fathers” realized they needed to raise what they called “serious money” to sustain and upgrade PHCC’s current educational programs and introduce new ones. Through a Foundation, they suggested, PHCC could accept charitable contributions to help their fellow contractors be more successful through education and professional training.

As you’ll see from the highlights of this year, the Foundation today continues to build on the wisdom of that vision and the strength of our 25 years of experience. We’ve come a long way in expanding and diversifying our educational offerings, providing top-notch training through webinars, seminars and other courses, as well as textbooks, assessment tests, bulletins and other valuable tools.

How do we do it? How do we keep our contractors performing their jobs with best practices and policies? How do we advance this next generation as quickly as the technology is changing? We do it with the generous contributions of people like you who share in the passion to improve our profession … who invest in the current and future workforce … who see how “paying it forward” truly does build a better future for our industry. We do it with the volunteers who spend countless hours doing everything from selecting scholarship winners to developing apprentice training curriculum. And, we do it with the skilled staff members at the Educational Foundation who are constantly ensuring that your gifts are carefully directed to the best possible industry programs and services.

This year, the PHCC Educational Foundation not only celebrates an anniversary, we celebrate a reality—better resources, greater skills, building momentum. It’s a reality only made possible by your investments. Thank you for keeping it going!

Sincerely,

Bill Jones Raven Mechanical, LP Foundation Chairperson

2011-2012 ANNUAL REPORT 1

PROGRESS IN MOTION2011–2012 Educational Foundation Accomplishments

Those who put PHCC’s Educational Foundation in motion 25 years ago believed that by supporting their friends and competitors, the whole profession benefits. And while our workforce is different, technologies have changed and expectations are greater, that belief remains.

We’ve discovered how tools and resources—from the career videos we helped produce this year to excite young people about the rewarding opportunities in this industry to the business management programs—quickly come full circle. The result is a highly skilled workforce that drives increased business. As our founders predicted, the profession is more than benefitting from these efforts … it’s thriving.

Take a look at what we’ve been doing this year through the Foundation. Together, we can keep the momentum going.

Apprentice and Journeyman Training & Workforce Development

CAREER VIDEOS

In partnership with the PHCC Auxiliary, the Educational Foundation helped produce a series of videos targeted to 7th and 8th graders to pique their interest in p-h-c careers. Skilled workers as well as managers with trade experience are in very high demand, and it’s never too early to start educating tomorrow’s experts on the rewarding opportunities in this industry.

SCHOLARSHIPS

Realizing that attracting new talent is essential to the future of this trade, the Foundation has awarded over $2.1 million dollars to deserving students. This year the Educational Foundation awarded more than $61,000 in scholarships to 24 students entering the p-h-c- industry.

From one of the recipients:

“I am very excited to have been selected as a scholarship recipient from PHCC. The funding will relieve a considerable amount of finance-related stress and allow more time to focus on educational goals. This will make me a more effective service tech!

Thank you for your support. For the industry and the trade, I promise to be a good investment.”

– Michael Avig

2 PHCC EDUCATIONAL FOUNDATION

2012 HVACR AND MECHANICAL CONFERENCE FOR EDUCATIONAL PROFESSIONALS

Approximately 200 instructors and industry representatives participated in this year’s conference, held in March. The Foundation jointly sponsored this event, along with the ACCA, AHRI, CARE, HARDI, NATE, PAHRA, PHCC, RSES and SkillsUSA.

REGIONAL INSTRUCTOR WORKSHOPS

This year, the Foundation offered three regional instructor workshops focused on helping instructors improve their classroom techniques. Held in San Diego, Indianapolis and Baltimore, the workshops covered new ways to make presentations more dynamic and interactive as well as ways to integrate green practices into the curriculum.

Here’s what attendees are saying:

“The time we had with Prof. Kitty Manley was worth 100x the cost.”

– Tim Bushnell, Bushnell Plumbing, Inc.

“Kitty [Manley] was great. She handed us a template to make anyone a great instructor with all the formatted items on a disc to just plug in or cut-and-paste to tailor to our own needs ... The E-resources portion was great, too. Purchasing the programs to build PowerPoint presentations and graphics was like hearing the angels sing to me. It makes sense that there is no need to re-invent the wheel when it comes to plumbing training other than what each local area requires …”

– Eddie Edwards, L. A. Hydro-Jet and Rooter Service, Inc.

PLUMBING 101 TEXTBOOK

The Foundation revised the Plumbing 101 apprentice textbook, along with the accompanying instructor guide. This is the latest update in the Foundation’s two four-year series of textbooks aimed at postsecondary and apprentice programs for plumbing and HVACR. We’re proud to report that over the last 10 years our apprentice textbooks have been used to train more than 30,000 students.

PLUMBING AND HVACR HOME STUDY PROGRAM

Starting this year, the Foundation’s plumbing and home study program is available exclusively online. The program is designed for students who are unable to participate in a traditional classroom-based apprentice instruction program. This year, we had 78 students enrolled in the program.

2011-2012 ANNUAL REPORT 3

FOUNDATION’S VIRTUAL UNIVERSITY

The Foundation partnered with 360 Training to offer a wide variety of online training courses for contractors and their employees. The courses are offered through three categories: contractor; environmental; and technical, industrial and safety skills.

SKILLSUSA CONTEST

The Foundation sponsored the plumbing competition and supported the HVACR competition of the annual SkillsUSA contest, held this year in Kansas City. Nearly 100 students participated in these two trade contests, offered to the nation’s best career and technical students to demonstrate their skills and leadership. “These young people are America’s workforce of the future,” said Foundation Chairperson Bill Jones, “and I assure you, we are in good hands.”

Business Management Training

ESSENTIALS OF PROJECT MANAGEMENT COURSE

At the Essentials of Project Management Course this year, both experienced and new project managers picked up dozens of new ideas on site management, scheduling, cash flow and finances, marketing, and human relations.

Here’s what they’re saying:

“Thank you … for the best training experience of my career. The program was, and is, incredibly insightful and effective in changing the way we do business. I would highly recommend to other owners of companies in our trade that they accompany those that they send to the PHCC Project Management course. It has been exciting to see the changes take shape in our company. All I can say is thank you!”

– David Halverson, Halverson Mechanical, Inc.

“We sent two [attendees] last year, and we’re getting great results. One of our attendees was a field foreman and is now a new project manager. The other, who had no mechanical background, was hired to manage our new foam insulation business. He was able to navigate very quickly in the construction market using Kirk Alter’s teachings.

– Dickie McCurdy, MMM Plumbing, Heating & A/C Inc.

4 PHCC EDUCATIONAL FOUNDATION

CONNECT 2012 EDUCATIONAL PROGRAMS

The Foundation was proud to be a gold level sponsor for CONNECT 2012 held in October in Philadelphia—and developed all the educational seminars for the event. Topics included whole-building retrofits, managing your family business, productivity and entrepreneurship, the new lead-free laws, search-engine optimization, customer service and the advantages of hydronic-based heat delivery.

LABOR CALCULATOR SOFTWARE

Thanks to assistance from Maxwell Systems, the Foundation just released a new version of this software program, which gives contractors a reference source of national average installation data on which to base estimates when bidding work.

FOUNDATION SEMINAR SERIES

The Foundation held 20 seminar events this year, many in conjunction with PHCC state chapter conventions. Kohler Company’s support of this program allows the Foundation to sponsor these events, reducing the costs for the host PHCC chapters to deliver education to their members. More than 1700 contractors and their employees attended these seminars this year.

FOUNDATION WEBINAR SERIES

Thanks to a new sponsorship by Kohler Company, the Foundation expanded our popular bi-monthly webinars this year and continues to offer them free-of-charge to PHCC members. Topics included: the new lead-free laws, aging in place, GPS, BIM, mobile devices, and customer service and social media. Key learning points from each webinar are included in PHCC Online and on the Foundation website. Recordings of the webinars are available to members on demand. This year, more than 950 contractors participated in these webinars.

2011-2012 ANNUAL REPORT 5

Communications

FOCUS NEWSLETTER & FOCUS FLASH E-MAIL NEWSLETTER

To supplement our communications between printed issues of the Focus newsletter, this year the Foundation launched a new monthly e-mail newsletter, Focus Flash, sponsored by A.O. Smith. This communication reaches a larger audience and is used to highlight upcoming educational events and webinars, as well as to bring attention to specific Foundation offerings and initiatives. In addition, each issue of Focus Flash links to the latest installment of the HR Personnel e.bulletin, which explores subjects such as emergency preparedness planning, a process for promotions, and current employment law trends and changes.

THE TRUE COST OF RUNNING A BUSINESS GUIDE

Written by Foundation speaker Michael Bohinc, this small business owner’s guide to overhead and pricing is based on our Overhead and Profit Calculator software and the business management sessions Bohinc teaches for the Foundation. This valuable resource also was part of PHCC’s member benefit mailings this year, as well as a chapter in the 2012 plumbing continuing education book published by PHCC of Texas.

Fundraising

VIEGA JOINS BOARD OF GOVERNORS

We are proud to welcome Viega as the newest Corporate Founder of our Board of Governors. Viega is a world-leading company in the field of plumbing, heating and pipe-joining and one of the largest manufacturers in its sector. “Viega has already helped us tremendously in supporting our work with apprentices and other programs,” said Foundation Chairperson Bill Jones. “Now they have stepped forward to do so much more for our industry through education.”

INVEST IN YOUR FUTURE CAMPAIGN

In addition to sponsorships and publication sales, the Foundation also relies on its Invest in Your Future campaign—an annual giving campaign in which contributions from industry contractors and other supporters fund the development and delivery of our educational programs. To expand the financial base of the Foundation and thereby enhance our workforce development, management education and technical training offerings, we’ve set this year’s goal at $145,000, with matching contributions provided by InSinkErator and Ferguson.

An Introductory Guide

The True Cost of Running a Business

6 PHCC EDUCATIONAL FOUNDATION

PHCC – NATIONAL ASSOCIATION EDUCATIONAL FOUNDATION

BALANCE SHEETDECEMBER 31, 2011 AND 2010

*Change due to market fluctuation.

December 31,

2011 2010 Variance

ASSETS

Current Assets

Cash - Checking & Savings $ 131,140 $ 224,604 $ (93,464)

Accounts Receivable 32,975 27,561 5,414

Pledges Receivable 17,500 25,000 (7,500)

Inventory 4,900 2,882 2,018

Prepaid Items 4,734 3,500 1,234

TOTAL CURRENT ASSETS 191,249 283,547 (92,298)

Investments at Market Value* 8,602,692 8,879,293 (276,601)

TOTAL ASSETS $ 8,793,941 $ 9,162,840 $ (368,899)

LIABILITIES AND NET ASSETS

Liabilities

Accounts Payable & Accrued Expenses $54,297 $73,746 $(19,449)

Due to affiliate 63,472 44,729 18,743

Deferred Revenue 22,807 9,775 13,032

TOTAL CURRENT LIABILITIES 140,576 128,250 (706)

Net Assets - Prior Year

Undesignated - operating 270,429 290,276 (19,847)

Scholarships 1,045,189 916,339 128,850

Temporarily restricted 3,560,799 2,853,653 707,146

Permanently restricted 4,158,173 4,061,584 96,589

TOTAL PRIOR YEAR NET ASSETS 9,034,590 8,121,852 912,738

Change in Net Assets (381,225) 912,738 (1,293,963)

TOTAL NET ASSETS 8,653,365 9,034,590 (381,225)

TOTAL LIABILITIES AND NET ASSETS $8,793,941 $9,162,840 $(381,931)

2011-2012 ANNUAL REPORT 7

ENDOWMENT FUND

The PHCC Educational Foundation is a 501(c)(3) non-profit, and the majority of our funding can be traced back to more than 70 contractors, manufacturers and industry partners who have made major gifts to establish the Foundation’s Endowment Fund. These major donors form the core membership of our committees and together serve as our Board of Governors (see page 8).

ECIC ENDOWMENT FUND

0

$2M

$4M

$6M

$8M

$10M

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

ENDOWMENT PRINCIPAL - PERMANENT

ENDOWMENT PRINCIPAL - TEMP RESTRICTED

ECIC EARNINGS - TEMP RESTRICTED

Moving forward …For 25 years, the Foundation has been anticipating the needs of the industry’s workforce and responding with targeted training programs and educational resources. Those needs never stop changing, and neither do we. We’re already planning on how we’ll keep the momentum going moving forward …

HVAC Contest. Like our popular Plumbing Apprentice Contest, the Educational Foundation is exploring the possibility of bringing this practical, hands-on event to CONNECT 2013 in Las Vegas, allowing the next generation of HVACR contractors to demonstrate their knowledge and skill while being exposed to the latest technologies and products available to the industry.

Plumbing Course Lesson Plans. The Foundation currently is breaking down our plumbing curriculum into 36 modules per year for the development of specific lesson plans tailored to each module. This will enable PHCC program instructors to have weekly lesson plans that will help standardize training across the country. Our plan is to then share the lesson plans on the PHCC Community Network in an instructor forum.

Lead Training. The Foundation is taking a lead in putting together an Industry Lead-Free Training Consortium of associations, foundations, manufacturers and wholesalers to prepare the entire industry for the new lead-free laws that will take effect in January 2014, making the transition as smooth as possible.

8 PHCC EDUCATIONAL FOUNDATION

Charles “Red” Englert* =

Richard E. Farrell*

David = and Jean Fox* =

John Garvelink

Mary Garvelink

Mark Giebelhaus

John Giolitto* =

James Hansbauer*

William L. Harvey*

Charles F. Hiley, Sr.* =

Charles F. Hiley, Jr.* =

Larry W. Howe*

Dick and Patty Irwin*

William and Patty Jones*

Richard R. Kerzetski

Kenneth E. Krauska* =

Jim and Patricia Lewis

William Linek*

William Lynch* =

Frank and Iris Maddalon

John A. McWilliams

Harold Michel*

Joseph “Herb” Miller*

Donald and Lorraine Morin*

Adam Moyer*

Christopher T. Moyer

Hunter Botto, President and

New York State PHCC*

Ron and Jeanette Newman

Walter Parkes*

Roger Peugeot

PHCC of Massachusetts*

Donald Priest* =

Carl Rice

Orville and Doreen = Taecker

Dennis Tarpenning

William and Bette = Trombly*

John = and Jo Wagner

John = and Kate Ward*

Francis = and Anne Williams*

Franklin Youngblood* =

F. Carl Ziegler =

F. Kent Ziegler

R. Scott Ziegler

CHARTER FOUNDERS

American Standard

Delta Faucet Company and the Masco Family of Companies

InSinkErator

Kohler Company

PROGRAM UNDERWRITER

Eljer Plumbingware, Inc.

CHANCELLOR

Maxwell Systems, Inc.

Moen Incorporated

CORPORATE FOUNDERS

Anaheim Manufacturing

Anvil International

Bradford White Corporation

Cerro Flow Products LLC

Charlotte Pipe and Foundry

Elkay Manufacturing Company

Federated Mutual Insurance

Ferguson and Wolseley, plc.

InSinkErator

Kohler Company

Legend Valve

NIBCO INC.

QuickPen International

Rheem Manufacturing Co. and Ruud Water Heater

Viega

Watts Water Technologies, Inc.

CONTRACTOR MEMBERS

Kirk and Pam Alter

William Becker*

Joseph Beetz*

Irwin Botto*

Daniel Burnette* =

Steve Carder

John “Tim” Ceren*

Ray = and Connie Dauenhauer*

Ray Dauenhauer, Sr. = (Memorial)

James T. Driscoll, Jr.

David and Janet Dugger

PHCC Educational Foundation Board of Governors

* Founder. = Deceased.

2011-2012 ANNUAL REPORT 9

FOUNDATION CHAIRPERSON

William P. Jones

Raven Mechanical, LP

Houston, TX

FOUNDATION VICE-CHAIRPERSON

Jo Rae Wagner

CTO, Inc.

Harlingen, TX

FOUNDATION

SECRETARY-TREASURER

Ron Newman

Lakes Plumbing, Heating & Cooling, Inc.

Spirit Lake, IA

CHIEF OPERATING OFFICER

Cindy Sheridan

PHCC Educational Foundation

Falls Church, VA

FOUNDATION BOARD MEMBERS

Tom Applegate

Nat’l Council of Local Administrators of Career & Technical Education

Westerville, OH

Keith Bienvenu

Bienvenu Brothers Plumbing

Metairie, LA

Laurie C. Crigler

L & D Associates, Inc.

Aroda, VA

David Dugger

ShoffnerKalthoff Mechanical Elec. Service

Knoxville, TN

Michael J. Kastner, Jr.

Kastner Plumbing & Heating

West Friendship, MD

Gerry Kennedy

PHCC-National Association

Falls Church, VA

Richard Kerzetski

Universal Plbg & Htg Co.

Las Vegas, NV

Barbara Kreifels

Action Plumbing, Htg. & A/C

Lincoln, NE

Rex Martin

NIBCO, INC.

Elkhart, IN

Steve Rivers

Rivers Plumbing, Heating & Air

Pleasanton, CA

Doug Santoro

General Plumbing, Inc.

West Palm Beach, FL

Tom Theroux

PHCC of Massachusetts

Braintree, MA

2011-2012 PHCC Educational Foundation Board of Directors

EDUCATIONAL FOUNDATION25 Years of Service To The Industry

PHCC EDUCATIONAL FOUNDATION 180 S. Washington St. Falls Church, VA 22046

800-533-7694 Fax: 703-237-7442

www.phccfoundation.org