GILBANE BUILDING COMPANY 2016 ANNUAL REPORT NEXT PAGE Click to jump to any section. TABLE OF CONTENTS A Letter From Our CEO | 3-4 FORWARD LEANING Client Satisfaction | 5-6 High-Performing Teams | 7-8 Gilbane Lean Is Powering Excellence | 9-11 Metrocentric Focus | 12-14 International Focus | 15-16 Individual Efforts = Collective Excellence | 17-18 Safety Leader | 19-20 A Letter From Our Chairman | 21-22 Gilbane Cares | 23-24 Commitment to Sustainability | 25-26 Building Our Future Board of Directors 2016 HIGHLIGHTS “Gilbane has been undergoing a technology transformation … we are an industry leader in the application of state-of-the-art technology ...” ACHIEVED OUTSTANDING FINANCIAL PERFORMANCE Michael E. McKelvy President and CEO Gilbane Building Company NON-NEGOTIABLES TOOK SAFETY STANDARDS Mission TO NEW HEIGHTS We are recognized as a global provider of facility solutions, operating as One Company, effectively integrating and leveraging all of RECORD SALES OF Gilbane’s expertise. $7.2 BILLION We embrace the historical family culture and live the core values of Gilbane. Client advocacy and superior execution 13 YEARS ON serve as the foundation for exceptional TRAINING MAGAZINE’S customer satisfaction. TOP 125 LIST Leadership embraces entrepreneurship and fosters a culture of innovation throughout the company. PROGRESSIVE PAID FAMILY LEAVE POLICY Gilbane is the recognized employer of choice. ROLLED OUT We consistently achieve sustainable, profitable growth for the benefit of all stakeholders. RECEIVED TWO ENR GLOBAL PROJECT AWARDS Cover Photo: Chris Utley | Project: Northwestern Mutual Virtual reality allows users to experience Tower and Commons, Milwaukee, Wisconsin facilities before they are built. 2 A LETTER FROM OUR CEO A Great Year When we look back over the last year, 2016 was a great During the last year, we made progress implementing year for Gilbane Building Company. We met our annual Lean practices across the company with our unique, three- operating plan for profit and exceeded the plan for sales, dimensional approach to individuals, project teams and with year-over-year improvement from 2015. our company’s processes and systems. Through the use of Advanced Planning and Scheduling, we were able to deliver This is no small accomplishment as 2015 was one of the some remarkable facilities for our clients in 2016. Our march best years in Gilbane Building Company’s history. One toward process simplification via the use of Playbooks made could argue that 2016 was the best year. In addition, our great progress with even more planned for 2017. plans for 2017 show continued growth in profits and sales. So the foundation of our company, built on the Gilbane has been undergoing a technology transformation core values of our founders, is rock solid. We adjusted as well. Nearly all of our job site teams have taken great our Vision 2020 strategy last year and set our sights on strides toward becoming “paperless,” and we are an industry the next three years to come. We have a plan and are leader in the application of state-of-the-art technology, working that plan across all of the company. We continue such as our proprietary project team collaboration tool, to make strides to show our strategy to each and every SmartApp, as well as building information modeling, employee to enable them to apply that strategy to laser scanning, virtual reality and more. We embrace their daily work. The outcomes are reflected in many these technologies, not just because it is good for the ways, from positive employee survey results to reduced environment or because it increases our productivity. We voluntary turnover in 2016 (down to 9.1 percent) to great embrace them because ultimately it is about customer customer survey feedback. satisfaction from a project well done. Our client Clay Goser, director of program management at the University of As good as 2016 was for the record books, there is Chicago Medicine, describes the use of Lean scheduling always room for improvement. Gilbane Cares – and our and our use of technology on his projects as the key to Michael E. McKelvy (left) interacts with the dedication to keeping everyone in our offices and job making all the work inside his hospital become “very, very South Street Landing team in Providence, R.I. sites safe – continues to be our No. 1 value. Although we predictable.” This applies as well to our internal customers … continue to be an industry leader in safety, there are still our employees, the true best resource in Gilbane. avenues to follow that could lead to even greater safety gains. Continued focus on caring and keeping everyone We continue to hear in our industry from teammates, When we look back over last year, 2016 was a great year for safe must always be at the forefront. Our implementation subcontractors, clients and new employees into the of our Gilbane Safety “Non-Negotiables” last year will help company, that there is a difference working with Gilbane. Gilbane Building Company. We met our annual operating plan us stay consistent across all our multiple locations. Our That difference comes from our roots and the humble mandatory requirement for fall protection above 6 feet beginnings of the Gilbane family. Their establishment of for profit and exceeded the plan for sales, with year-over-year helped save three lives during 2016. our Core Values – Integrity, Toughmindedness, Teamwork, Dedication to Excellence, Loyalty, Discipline and our more improvement from 2015. Our customer satisfaction and Although we did have a great year financially, we recent addition, Caring, applied consistently by us all truly can also make improvements on that front and we does make a difference. These values have kept us going safety results were also outstanding. hold ourselves to achieving a higher standard. We for more than 144 years and continue to provide the did, however, have a more “balanced” year across our cornerstone for our future. geographic business units with tremendous growth in New York City and Florida. As we get into 2017, this is OUR even more so the case with New York City becoming our CORE largest unit. VALUES INTEGRITY TOUGHMINDEDNESS TEAMWORK DEDICATION LOYALTY DISCIPLINE CARING Michael E. McKelvy TO EXCELLENCE President and CEO Gilbane Building Company 3 4 CLIENT SATISFACTION Client Feedback Exceeding Expectations THESE RESULTS DRIVE Client The results are in. PERFORMANCE, CHANGE Satisfaction Project Results Improvement In 2016, Gilbane received 967 completed satisfaction For the last several years, our clients have told us that AND TRAINING PRIORITIES surveys from our clients, architects/engineer partners, our values align with their own, and they rate us highest COMPANYWIDE project management firms and trade partners. In total, on integrity and honesty. Passed on from our founders, 99 percent of them reported that we had either met or Integrity is one of our driving values. Similarly, safety is exceeded their expectations. Delivering this high level of our top priority at all times, and our clients recognize client satisfaction has led to significant repeat business the comprehensive planning and oversight that Gilbane totaling 71 percent. uses to send everyone home safe from our project sites and offices. Also highly rated, is our proactive and We survey our clients at the start, midpoint and end collaborative planning along with diligent execution. 2016 of a project. The questions we ask provide us with a clear picture of where we stand and those areas that Gathering feedback and listening to the insights our need improvement. Our project teams and upper clients and partners offer drives our business planning. 2016 management review all of our survey results and thrive In 2016, this forward-leaning attitude helped Gilbane on the insights our clients offer. deploy Lean Advanced Planning and Scheduling. "EXCEEDING % By the end of the year, our client scores for schedule 71 The driving force behind this system is William J. Gilbane, EXPECTATIONS" reliability were rising. The same is true for technology of Gilbane’s work Jr., Vice Chairman, who helped invent the survey process, is our average rating is from repeat deployment to help drive high-performance planning clients which uses feedback to drive improvement and raise based on and collaboration. These efforts have led to steadily satisfaction year after year. This improvement journey increasing scores for the last four years when we asked C owner o s began with Bill’s steadfast attitude that if you measure m n 534 evaluations clients whether we were using technology effectively. p tio it, you can improve it. For more than 15 years, we have an ua ywide Eval received great and informative feedback from more than In 2017, we hope to receive surveys from record 13,000 evaluations. Bill says his passion is creating clients numbers of clients, drive excellence in everything we do for life by understanding our clients’ expectations and and cement new and exciting, long-term relationships. then overcoming whatever challenges come our way. Our Commitment to TOP 5 Corporate CONTINUOUS Our project teams and upper management RANKED AREAS by owners, trade contractors, IMPROVEMENT review all of our survey results and thrive on project management firms and in Corporate trade partners in 2016 the insights our clients offer. INTEGRITY AND HONESTY 14 15 16 17 RESPONSIVENESS TO ISSUES 20 CONSTRUCTABILITY REVIEWS Consistently increasing ratings on SAFETY “Keeping You Informed” PROJECT TEAM EFFECTIVENESS 5 5 6 Our people never stop looking for ways to meet Academic Commons at Salisbury University – Katy ISD High School – Katy, Texas HIGH-PERFORMING and exceed our clients’ expectations. Here are a Salisbury, Maryland TEAMS few of the challenges our high-performing teams overcame in 2016. A new 625,525-square-foot high school located on a 147-acre site to serve over 3,000 students. Two, 3-story academic wings with classrooms supporting CTE (Career and Technical Education), science labs and collaboration spaces as well as two dining commons, a performing arts center, four gymnasiums, a natatorium and competition baseball, softball, football and track facilities.