With “Operational Excellence” as our pledge and commitment, 2010 provides renewed opportunity to achieve optimal efficiency and effectiveness in safety, quality, and service delivery while providing the best value to the customer – as defined by the customer…Additional opportunity comes in the form of more shovel-ready smart grid and broadband projects funded by stimulus grants…H&M records its sixth consecutive year over year improvement in OSHA recordable incident rate…The 2010 Safety Summit is held in Dallas, Texas with a theme of “Leading the Way” to World Class Safety. The formation of an Executive Safety Council, Process Improvement Teams (Communication, Activities & Involvement; Incident Investigation; Rules & Procedures; and Safety Observation), Regional Steering Teams, and a Train the Trainer program energize and organize the effort… In other safety news, more than 1,500 H&M employees have successfully completed OSHA’s Electric Transmission and Distribution Partnership’s 10-hour training program targeted to power operations personnel. The 20-hour Supervisory Leadership Outreach training is a requirement for power personnel at or above the foreman level. Additionally, all executives at the VP level or above have completed this program…The National Safety Council’s Milestone Award was earned by H&M’s Central Region Power Group in Wisconsin for operating more than 32,000 employee hours without injury or illness involving days away from work…H&M’s Project Management initiative continues full speed ahead. Ninety-three employees have received their Associate Certificates and thirty-four have earned their Master’s Certificates from ESI International and The George Washington University. In addition, fourteen employees have earned the Project Management Institute’s Project Management Professional (PMP®) credential, the profession’s most globally recognized and respected certification credential... Taking the show on the road, four H&M project management personnel conduct guest lectures at Southern Adventist University in Tennessee… The Human Resource Department identifies a new management development training platform, consisting of the following programs: Introduction to Leadership, Core Leadership, Strategic Leadership, and Field Leadership... This year’s golf tournaments in the East and West raise almost $150,000 for worthy causes while the United Way/Boy Scouts of America and Juvenile Diabetes Research Foundation campaigns contribute approximately $215,000 to these organizations.

IN OUR MARKETS...

Electric Power: Central Region Power Operations continues to progress on this new 38-mile, 345 kV line from Vectren’s A.B. Brown Power Plant just outside of Mt. Vernon, Indiana, to Duke Gibson Power Plant in Princeton, Indiana. Twelve miles of the 954 ACSR bundle conductor with shield and fiber optics included have also been installed... In the East, the Power and Underground Groups are teaming to execute an Amtrak project from Metuchen to Edison, New Jersey. The work consists of 7,500 feet of 6” duct bank structure, several pre-cast manholes, multiple steel-cased road bores (one is 700 feet and will be micro tunneled), two 138 kV underground high voltage circuits, and modifications to two existing substation steel structures…The East Region is also awarded a large stimulus funded project for Amtrak working under contract for Adesta. The project, a collaboration between the Power and Telecommunications Groups and H&M NetWorks, includes the construction and installation of various network OSP/ISP connections at Amtrak facilities in Pennsylvania and Delaware…Additional East projects include two efforts for PPL: the Cellon Transmission Pole Replacement project, which will replace 176 wood transmission poles with 69 kV and 138 kV tubular steel poles throughout the Harrisburg and Lancaster areas of Pennsylvania, and the Susquehanna to Lackawanna Optical Ground Wire project, consisting of sixteen miles of fiber installation…The Region is also involved with a PSE&G buried underground distribution project encompassing 240,000 feet of cabling in Central New Jersey for the purpose of increasing the reliability of PSE&G’s electrical distribution system. The Power Group will pull electric cable through installed conduit and terminate in the transformer…In the Central Region, JCP&L awards a project for the construction of six miles of new/rebuilt 34.5 kV line in New Jersey…The West Region is awarded the Shadow Ridge Transmission Enhancement project consisting of a new 138 kV loop circuit, approximately four miles long, from a substation in San Marcos, California into the Shadow Ridge substation. The double circuit line will be constructed on approximately twenty-five new steel tubular galvanized poles mounted on concrete foundations.

Renewables: The East Region’s York, Pennsylvania operations staff and the Infrastructure Engineering Group out of Blue Bell, Pennsylvania complete a one megawatt photovoltaic (PV) solar array (5,000 fixed, ground mount panels as well as one fixed tracker and one dual axis tracker) for the Carlisle Area School District in Pennsylvania under an engineer, procure and construct model. This project is the largest of its kind for a public school system in Pennsylvania and was financed in part by a grant from the Commonwealth of Pennsylvania, Commonwealth Financing Authority. The project was also funded by the Pennsylvania Energy Development Authority using monies from the American Recovery and Reinvestment Act of 2009. H&M’s Training Services is also working with the school district’s Center for Careers and Technology to deliver the National Center for Construction Education and Research PV training program to district students …Henkels & McCoy’s Central Region wind energy crews are back at work for Horizon Wind Energy. Following successful construction of Meadow Lake Phase I, Henkels & McCoy was awarded scope elements on Phases III & IV that include underground collector, foundation conduit and grounding, and tower wiring on (69) GE and (47) Suzlon turbines. This 200 MW expansion represents a number of firsts for Henkels & McCoy; the first project with balance of plant contractor White Construction, the first project wiring Suzlon turbines, and the first project constructing simultaneous phases on a wind farm. The Region is also awarded tower wiring work on wind farms in Minnesota, Illinois, and West Virgina…The East Region is involved with a solar project for the PSEG Edison Training Center PV system consisting of a 1 MW PV solar farm with ground, rooftop, and parking canopy systems.

Pipeline/Natural Gas: The East Region’s Underground Group is awarded two contracts for the City of Richmond; one is renewal of leak repair blanket and one is for annual gas renewal contracts. These are one year awards with 4 one year extensions…The Group has also earned the renewal of Yankee Gas three-year Gas Mains and Services Blanket contract. They have held this contract for many years. Additional awards include several high-value PSEG projects around the Trenton and Audubon areas in New Jersey…The West Region is awarded a major transmission line project in San Diego County. The purpose of the initiative is to improve the reliability of the line by replacing more than 150 steel poles and reconductoring the line for approximately eleven miles.

Communications: The Central Region begins work under the AT&T Strategic Partnership Agreement (SPA) designed to deliver state of the art cable television, high-speed Internet, and telephone service to end users in six SPA areas in Ohio and Indiana... The Region is also awarded a maintenance contract for Garland (Texas) Independent School District’s Metropolitan Area Network. H&M originally completed the design/build of the network in 2007, including the construction of more than 100 miles of fiber…Also in the Midwest, crews are plowing 97 miles of Amtrak right-of-way from Indiana to Michigan, installing 2-inch and 1.25-inch HDPE innerduct over the entire route.

H&M NetWorks: H&M NetWorks is selected to install a structured cabling system for a new hospital being built in Newnan, Georgia by Piedmont Healthcare System. The facility will encompass more than 360,000 square feet over nine floors. H&M Networks’ scope of responsibility includes all engineering, installation, project management, and testing.

In Addition: The East Region’s Infrastructure Engineering Group is designing several power distribution projects for Duquesne Light in Pittsburgh and is teaming with the General Construction Group to provide upgrades to City of Philadelphia’s emergency communications system for police, fire, and emergency response…The Region’s General Construction Group is awarded projects with the East Windsor Municipal Utility Authority and Atlantic City MUA, both involving upgrades to water treatment facilities…The General Construction Group is also awarded a project for New Jersey American Water (NJAW), in Voorhees, New Jersey. The work consists of the demolition of the existing facilities and the construction of 20,000-square-feet of offices, work stations, and new kitchen space. This facility will become NJAW’s new corporate headquarters…The Training Services Group screens more than 2,100 youth in Florida and selects 1,161 for placement at more than 400 worksites in paid summer jobs while training an additional 200 youth in Green Job Awareness through the assembly of computers, wind energy turbine kits, solar panels, and a hydrogen fuel cell car (left).