A Higher Standard2012–2013 ANNUAL REPORT

PLUMBING-HEATING-COOLING CONTRACTORS—NATIONAL ASSOCIATION

Dear PHCC Members,

Our industry is at a crossroads, meaning that enormous opportunities lie ahead for each of us.

We’re facing a historic combination of changes, challenges, and choices. As leaders of an indispensable industry, our decisions and actions are critical to how our industry helps protect public health, safety, and the environment. Some of our most pressing challenges are:

• Major legislative and regulatory changes that will impact everything from health care to lead-free plumbing products

• Technology advancements that are dramatically changing how we communicate with each other and our customers

• A critical need to replenish the industry’s skilled labor pool

Fortunately, each of these challenges also creates much potential for success. And PHCC is well-positioned to take advantage of these opportunities with nothing less than the best — the best people, the best practices and the highest standards.

As you’ll discover in this report, there were many strategic advancements achieved on your behalf this year. PHCC is hard at work to protect your interests, provide the right type of new business strategies and tools, and connect you with great people who can help you increase the productivity and profitability of your company. I encourage you to read on to learn what’s available to you, and to continue to take advantage of our programs and resources to maximize the value of your investment in PHCC.

Get involved … embrace change … and make your mark. Working together, we can take advantage of our shared opportunities to promote a higher standard.

Sincerely,

David Dugger PHCC—National Association President

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Helping Members Be Successful As the industry continues to evolve, PHCC does, too. Exciting initiatives are underway to provide enhanced value to PHCC members in this ever-changing business world. This year, the Membership and Communications departments collaborated on:

PHCC’s Brand Awareness Campaign, amplifying PHCC’s voice and creating cohesive brand and messaging platforms easily transferrable at local, state, and national levels. A membership video series promoting member benefits will be available soon, as well as toolkits for chapters and contractors that are full of easy-to-use marketing materials promoting the value of PHCC and the importance of hiring professional contractors.

Chapter Support, offering leadership development, resource development and assistance to chapters throughout the country. Periodic webinars on legislative and technical issues and new initiatives also are held regularly.

Membership Management System/Database Enhancements, allowing PHCC to target communications and programming based on member interest.

PHCC Website Updates, maximizing value to members and attracting consumers. Thanks in part to these efforts, PHCC has achieved excellent Google rankings, a strength PHCC will be capitalizing on in the coming year.

New Membership Recruitment Ads, developed and placed in industry trade press, as well as provided to chapters for their respective publications. The ads carry the taglines of the brand awareness campaign: “Experts Pursuing Excellence,” “Best People,” and “Best Practices.”

Enhanced Mobile and Social Media Communications, including a new conference app available at CONNECT 2013, and regular postings on the PHCC Community Network and PHCC’s Facebook page.

Publications, such as a weekly PHCC Online email newsletter and update from the Executive Vice President, a quarterly printed Connection newsletter and an annual “Who’s Who Directory.” In recognition of PHCC’s 130th anniversary in 2012, members received a special list of “130 Tips for Your Business and Life.”

phccweb.org1-800-533-7694

“ My best friends are PHCC members. I can call them on weekends, or evenings, and say, ‘Hey, I have this going on… what do you think? They’ll tell me, ‘Why don’t you try this?’ I’m sure to get an honest response.”

Experts Pursuing Excellence

130YEARS OFINNOVATION

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“ As a new PHCC member, I thought I knew everything about project management. But after attending a PHCC Educational Foundation course, I completely changed everything and vastly improved my bottom line.”

130YEARS OFINNOVATION

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Experts Pursuing Excellence

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PHCC 2012-2013 Accomplishments

PHCC’s reputation for developing the best people in the p-h-c business and promoting the highest standards in the industry is a direct result of the strength of PHCC’s experience, collaboration with industry leaders and partners, and forward-thinking approaches. Take a look at PHCC’s major accomplishments — targeted membership benefits, cutting-edge communications, greater govern-ment presence, crucial technical and safety support, and critically important education efforts — and discover why more than 3,200 contractor members from open and union shops count on PHCC to help them manage their businesses with confidence … and continually work toward a higher standard!

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Providing Cost-Cutting Services and Assistance

To enhance member benefits and generate non-dues revenue, PHCC continues to offer member discount programs of special value to members, their families, and their employees. Most recently, PHCC aligned with the Chrysler Group to offer a special $500 cash allowance toward the purchase or lease of select 2012 and 2013 models. There are more member discount programs in the works that will be unveiled soon.

And, following Superstorm Sandy, PHCC quickly established a special relief program to help members affected by it and other natural disasters. Thanks to generous contributions from PHCC members and funds from the Board’s Reserve Fund, affected members could ask that their 2013 national dues be waived and also could request individual cash grants.

Reducing Regulatory Burdens

With members’ daily focus on maintaining and growing their businesses, PHCC’s Government Relations department serves as their voice on legislative and regulatory issues that affect them and their livelihoods, as well as empowers members to participate in effective grassroots activism.

Through strategic positioning and tactics, PHCC achieved a recognized, expanded presence on Capitol Hill. A key achievement occurred in April 2013, when PHCC Vice President Kevin Tindall (pictured right) testified before Congress on how health care reform will negatively impact small businesses.

Alerting Lawmakers to the Impact of Proposed Rules and Regulations

At a very successful PHCC Legislative Conference held in May 2013, more than 140 members and staff leaders helped educate representatives in Washington on how their actions — or inactions — on impending legislation and regulatory mandates affect PHCC members’ businesses and their ability to be competitive. Of particular note:

• They voiced concerns regarding the Affordable Care Act and the Environmental Protection Agency’s (EPA’s) efforts to expand lead paint rules to commercial buildings.

• During a Legislative Breakfast, Sen. Richard Burr (NC) (pictured left) encouraged PHCC members to advocate for lead paint reform legislation, and Rep. Paul Broun (GA) urged the group to talk to their Members of Congress about concerns with health care reform.

• Twelve Members of Congress attended PHCC’s Capitol Hill reception — signaling a strong interest in p-h-c issues on Capitol Hill.

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• PHCC President David Dugger, members of the Executive Committee (pictured below), and Government Relations Chair Mark Giebelhaus met with House Small Business Committee Chairman Sam Graves (MO) to discuss issues that are important to PHCC members, particularly related to the Affordable Care Act.

• At the Closing Reception, Rep. Glenn Thompson (PA), co-chair of the House Career and Technical Education Caucus, spoke to PHCC members about the need to fund career and technical education programs that will prepare the next generation of skilled workers needed by the p-h-c industry.

Reaching and Influencing Regulators

Recognizing that elected lawmakers aren’t the only ones making public policy decisions that impact the plumbing and HVACR industry, PHCC is fully committed to also lobbying the regulatory process — protecting PHCC members affected by rulings in this all-important system of checks-and-balances — as well as alerting members of impending deadlines. Of particular note:

• PHCC actively participated in a hearing questioning the expansion of the Lead Paint Rule (LRRP) to commercial and public buildings. EPA is bound by law to finalize a rule no later than 2015, with enforcement to begin in 2016.

• PHCC warned the EPA about the use of harmful R-22a refrigerant replacements, and alerted members about these dangerous replacements and the hazards these products may impose upon their workers.

• PHCC continues to update members on the timeline for health care reform issues that mandate that employers offer health care and that individuals carry health care. While certain provisions were set for compliance this year, most will come in 2014.

Advocating at State and Local Levels

With PHCC as the catalyst, chapters and members are making great strides in moving state government relations agendas forward. Among the successful tools provided by PHCC—National:

• StateNet – a service that alerts the national association about state legislative and regulatory activities that impact the p-h-c industry in all 50 states and the District of Columbia.

• A state-level automated grassroots letter-writing program that provides state chapters and PHCC members with the capability to initiate automated letters to lobby state legislators on state-specific p-h-c issues.

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Giving Members Insights in Techniques and Safety

PHCC’s Technical and Code Services department works to increase PHCC visibility to members and industry groups and strives to make PHCC the go-to resource on technical aspects of the p-h-c industry. Department highlights this year:

• PHCC launched a water audit certification program, completed the Beta test portion of the Certification Exam and conducted a study to prepare for the final version, and offered a training and test session at CONNECT 2013 in Las Vegas. The program also was offered at the state chapter level throughout the year.

• PHCC Backflow Prevention Committee members met to discuss encouraging member knowledge of backflow issues and to increase awareness of the market opportunities for plumbing contractors.

• PHCC’s Energy Efficiency and Water Conservation Committee provided feedback and oversight to the Certified Water Auditor Program and distributed crucial information to members on current and emerging conservation topics, as well as changes looming on the regulatory front.

• Representatives of PHCC met with the IAPMO Green Technical Committee to discuss changes in the Green Code Supplement that could be included in the national plumbing codes.

• At the National Standard Plumbing Code Committee public hearing in July, more than 200 proposed changes to the code were submitted. These changes will be published in the 2013 Supplement to the 2012 National Standard Plumbing Code (NSPC) and will be included in the 2015 edition of the NSPC.

• With PHCC on both its executive committee and its technical committee, the Plumbing Efficiency Research Coalition (PERC) has developed a Phase II work plan, building upon the results of its successful Drain Line Transport Study.

• PHCC maintains partnerships with the North American Technician Excellence (NATE) certification program, Alliance for Water Efficiency and the Environmental Protection Agency’s WaterSense program.

Providing Crucial Education

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Through various programs, including many offered by the PHCC Educational Foundation and PHCC’s Enhanced Service Groups, PHCC members receive quality educational programs and services that are needed more today than ever before. Examples include:

• Free live and on-demand business management and technical webinars developed by the PHCC Educational Foundation.

• Education and training programs on relevant topics offered via state and local chapters.

• Most recently, PHCC has been crossing the country to educate members on the new federal “Reduction of Lead in Drinking Water Act” that becomes effective in January 2014.

• Development of a strategic line-up of ideas and tactics for plumbing and HVACR professionals at CONNECT, PHCC’s annual convention and Product & Technology Showcase. At the Oct. 16-19 CONNECT 2013 in Las Vegas, with a theme “Go Big and Innovate,” members were able to learn about relevant topics like online marketing, customer service, business diversification, new DOE water heater regulations, a changing workforce, backflow prevention, environmental issues, and opportunities in water and energy conservation.

Oct. 16-19, 2013The Rio All-Suite Hotel & Casinogo

Big + Innovate

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Enhanced Service GroupsYour membership in PHCC provides you with the opportunity to tap into additional resources to meet the specialized needs of distinct industry segments. Through these Enhanced Service Groups, you gain insight into the specific challenges these industry segments face with additional networking opportunities and valuable member-specific information.

Construction Contractors’ Alliance

The CCA provides members in residential, industrial, commercial, and institutional new construction with a means to find solutions to the issues they face. Highlights this year included:

• A growing membership! CCA witnessed a significant increase in membership, indicating an upturn in the economy and validation of the value of CCA.

• A successful meeting in Scottsdale, Ariz., in March. Highlights included a session on succession planning as well as commercial and residential roundtables.

• A “Driving Your Company to Success” meeting of CCA controllers and business owners in Chicago this spring. A presentation on “The Latest and Greatest on Health Care Reform” was of particular interest.

• An information-packed, semi-annual meeting – “Flash Foresight: Technology for Profit” – in Kohler, Wis., in September. Attendees received a behind-the-scenes look at how Kohler’s facets and fixtures are made; discovered how to capitalize on the next wave of technological change; delved into new technology trends in new construction and the industry; and learned about the latest apps for new construction during a casual and fun “Appy Hour.”

• “Screw Business As Usual” — a seminar co-presented with UAC — during CONNECT 2013. Facilitated by Kirk Alter, this session invited attendees to learn how to innovate and create by refusing to do business as usual.

Looking AheadAs you can see from the highlights in this report, PHCC is moving forward purposefully, determined to excel in our service to members, the industry and society. Drawing on strategies outlined in the PHCC long-range plan, PHCC is committed to strong industry representation, marketing initiatives, infrastructure enhancements, new member programs, and increased communications‚ all designed to help members be more profitable and successful now and in the future.

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Quality Service Contractors

For the service and repair industry, QSC provides plumbing, heating and cooling contractors with an affordable and continually expanding inventory of training programs, products and services.

Highlights this year included:

• Les Hanks joined the QSC staff as a second QSC business coach.

• QSC Premium Coaching levels continued to be offered.

• A successful Power Meeting was held in San Diego, Calif., resulting in nine new members.

• A summer Power Meeting occurred in Baltimore, Md., resulting in four new members.

• QSC members continued to support the PHCC Educational Foundation’s Invest in Your Future campaign by contributing $14,135.

• Bi-weekly technician training was offered. Members are able to download the week’s training video and present it to their employees on a date/time of their choosing.

• A Service Manager/Supervisor two-day training program was developed, and three classes were held with more than 130 people in attendance.

• QSC exhibited at the COMFORTECH Product Showcase.

Union-Affiliated Contractors

The UAC represents a unified voice for the signatory contractors within PHCC to ensure that special needs and concerns are presented. It is comprised of signatory contractors, association executives, and representatives of the United Association (UA) committed to addressing the special concerns of union-employing contractors and bettering the working relationship with the UA.

Among other activities, the UAC held a successful Unity Meeting in Kohler, Wis., this year. Highlights included sessions on:

• Residential New Construction

• Rebate Program

• Plumber 911

• Winning During the “Teen” Years (2013-2019)

• Advantages of State Plumbing Licenses

• Offense & Defense in a Brave New World

At CONNECT 2013, the UAC co-presented a seminar with the CCA — “Screw Business As Usual” — that invited attendees to learn how to innovate and create by refusing to do business as usual. The UAC also presented an interactive, informal session — “Share Best Practices and Lessons Learned” — that encouraged peer sharing on hot topics such as how to find qualified employees, market your business, and make a profit.

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The Association Executives Council (AEC)BY ROCCO FANA, JR., PRESIDENT

The PHCC Association Executives Council (AEC) is an “association within an association.” The AEC is a professional organization of full- and part-time local and state association executives who manage the more than 100 chapters affiliated with PHCC. In addition to its members, the activities and services of the AEC benefit the members of the PHCC- affiliated chapters, the PHCC federation as a whole, the plumbing industry and consumers.

The annual AEC Spectrum Conference is dedicated to education, networking, information-sharing and building deeper relationships between chapter executives and staff. The 2013 AEC Spectrum was held in Nashville, Tenn., and included seminars on “Working with Your Board of Directors,” “The Energized Professional,” “Updates from PHCC National” and “Amplifying People and Presentation Skills.” AEC offered five scholarships for chapter executives to help offset the cost to participate in the conference.

The revamped and reenergized annual AEC Communication Awards allow local PHCC chapters’ hard work to be recognized and honored. Newsletters, magazines, training programs, convention materials, directories, social media and websites were judged by a panel of association experts against other state/local chapters of comparable size. Twenty-four first place winners were announced at the AEC Spectrum luncheon!

AEC membership currently stands at 55, which includes six new chapter execs joining in 2013.

Each year, AEC honors a PHCC Executive who has shown extraordinary leadership skills with the coveted AEC Spectrum Award. Our 2012 Award winner was Tom Theroux, PHCC of Massachusetts.

During CONNECT 2013, AEC members participated in the Board of Directors meeting, Annual Meeting, various educational seminars, the Chapter Leadership Breakfast and Program: “The Fast Track to Peak Performance,” as well as the Team Building Event at the Las Vegas Speedway.

It has been a great honor to serve as the 2012-2013 AEC President. I look forward to working with Beth Killen and Jim Pendergrass as we continue to learn and educate with each other, as well as work for the betterment of our members.

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www.phccweb.org

National Auxiliary BY SANDY STACK, PRESIDENT

The Auxiliary’s greatest accomplishment finally came to fruition. After years of searching for a home for the documented history of our association, the Smithsonian Museum of American History approved, accepted, acquired and archived the records of the PHCC National Auxiliary. The materials date from 1919 through 2011. “This is the Archives Center’s first collection to specifically document the records of a long-standing women’s organization,” said Archivist Cathy Keen.

As a result of this achievement, we have received an enormous amount of positive publicity for the Auxiliary, the PHCC–National Association and many of our manufacturers through press releases, magazine articles and the Smithsonian Museum of Natural History online blog.

During the 2012-2013 year the National Auxiliary has:

Implemented online communication via an email communications vendor

Produced three newsletters

Contributed to the Invest In Your Future Campaign and PHCC Political Action Committee

Attended the PHCC Legislative Conference and sent letters to Congress

Awarded more than $43,500 in scholarships and grants

Promoted PHCC—National Association and Career Days

Promoted World Plumbing Day and Fix-A-Leak Week

At the end of our summer board meeting in June, the Auxiliary Executive Officers shopped and donated to the Smoky Mountain Area Rescue Ministries. Go to: www.smarm.org for more information.

At Connect 2013 we celebrated the 50th Anniversary of our relationship with InSinkErator and our 30th year with Bradford White. We cherish all of our sponsors.

The Auxiliary continues brainstorming for new ways to assist PHCC and the industry.

For more information go to www.phccweb.org/auxiliary.

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Plumbing-Heating-Cooling Contractors – National Association

BALANCE SHEETSJUNE 30, 2012 AND DECEMBER 31, 2011

June 30, December 31,

2012 2011 Variance

ASSETS

Current Assets

Cash – Checking & Savings $ 297,586 $ 251,137 $ 46,449

Accounts Receivable 162,715 102,608 60,107

Inventory 55,897 52,172 3,725

Prepaid Items 188,783 120,737 68,046

Other – Intercompany 87,150 66,956 20,194

TOTAL CURRENT ASSETS 792,131 593,610 198,521

Investments at Market Value 2,898,112 2,741,827 156,285

Fixed Assets – Net (Land, Building, FF&E) 1,384,361 1,426,354 (41,993)

TOTAL ASSETS $ 5,074,604 $ 4,761,791 $ 312,813

LIABILITIES AND MEMBERS’ EQUITY

Liabilities

Accounts Payable & Accrued Expenses $ 292,615 $ 307,845 $ (15,230)

Deferred Membership Dues & Other Deferred Income 1,018,829 432,872 585,957

Tenants' Rent Deposit 12,850 12,850 –

TOTAL CURRENT LIABILITIES 1,324,294 753,567 570,727

Members’ Equity – Prior Year

Undesignated 3,540,718 3,491,946 48,772

Board Reserve 183,970 173,970 10,000

Building Reserve 283,536 269,036 14,500

TOTAL PRIOR YEAR MEMBERS’ EQUITY 4,008,224 3,934,952 73,272

Change in Members’ Equity (257,914) 73,272 (331,186)

TOTAL MEMBERS’ EQUITY 3,750,310 4,008,224 (257,914)

TOTAL LIABILITIES AND MEMBERS’ EQUITY $ 5,074,604 $ 4,761,791 $ 312,813

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Executive CommitteeDavid Dugger, President

Knoxville, TN

Steve Rivers, President-electPleasanton, CA

Kevin Tindall, Vice PresidentPrinceton, NJ

Craig Lewis, SecretaryBryan, TX

Gerry Kennedy, Executive Vice PresidentFalls Church, VA

Board RepresentativesAEC PRESIDENT

Rocco Fana, Jr., Rocky River, OH

AUXILIARY PRESIDENT

Sandy Stack, Kirkland, WA

Board of Directors ZONE ONE

Chris M. Bowman, Cheshire, CTRepresents: CT, MA, ME, NH, RI, and VT

Mike Dolan, Somerset, NJ Represents: NJ, NY and Ontario, Canada

Joseph C. Schlueter, Jr., Cincinnati, OHRepresents: OH, PA, and WV

ZONE TWO

Steven Heidler, Sr., Annapolis, MDRepresents: DE, MD, VA, and Washington DC

Jerry Payne, Sr., Baton Rouge, LA Represents: AL, FL, LA, and MS

Rick Thompson, Knoxville, TN Represents: GA, KY, NC, SC, TN, and the Virgin Islands

ZONE THREE

Larry Fischer, Seattle, WARepresents: AK, ID, MT, OR, WA and WY

Terrence M. McCarthy, Chicago, IL Represents: IL, IN, and MI

Paul Taecker, Watertown, SDRepresents: IA, MN, ND, SD and WI

ZONE FOUR

Raymond Bonetti, Castro Valley, CA Represents: AZ, CA, HI, NV and UT

Raymond Jones, Houston, TX Represents: AR, NM, OK and TX

Roger Peugeot, Overland Park, KSRepresents: CO, KS, MO, and NE

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Handy Resource Information

MEMBER SERVICES800-533-7694 / 703-237-8100 (Metro DC area)

naphcc@naphcc.org

CALENDAR OF EVENTSphccweb.org/events

ONLINE EDUCATIONphccweb.org/onlineeducation

CONTRACTOR RESOURCESSamples & Templates • Safety & Risk Management • Knowledge Center

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INDUSTRY PARTNERS, PREFERRED SERVICE PROVIDERS & DISCOUNT PROGRAMS

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ONLINE BUYERS GUIDEphcc.officialbuyersguide.net

APPRENTICE/JOURNEYMAN TRAININGphccweb.org/apprenticejourneyman

PHCC COMMUNITY NETWORKcommunity.phccweb.org

connect 2014 The annual convention of PHCC—National Association

October 8–10, 2014 New Orleans Marriott Hotel

SA

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Thank you 2013 Corporate Partners, for your support throughout the year!

PHCC—NATIONAL ASSOCIATION180 S. Washington Street, Suite 100 • Falls Church, VA 22046

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