Zachry Advantage - 2017, Issue 3

IN FORMAT I O N FO R ZAC HRY CO R P O R AT I O N E M P LOYE E S , FA M I L I E S A N D F R IE N DS

Cover Story:

WALLER CREEK EXPANSION IN AUSTIN P. 8

PROJECT WINS FOR ZACHRY P. 4 THE PECOS VALLEY SOUTHERN RAILWAY P. 11 BENEFITS ANNUAL ENROLLMENT IS RIGHT AROUND THE CORNER P. 12

ISSUE 3, 2017

DEAR READERS, The first half of 2017 was a great start to the year!

We are gaining momentum everywhere – winning projects, bringing new plants online, winning awards and getting valuable feedback from our employees so that we can improve as an organization.

I particularly want to thank everyone who responded to our employee engagement survey, especially those who wrote additional comments. We saw improvement in a number of areas but also a lack of progress in others. We have already begun analyzing the survey results and have started developing plans to address many of the responses. For example: • We have a real and continuing need for leadership and supervisory training across the company. This issue was identified last year as well and we are starting to roll out new programs that we have been developing.

• The costs of our health insurance programs are at the upper end of what many of our employees can afford. I admit to struggling with this because I want our employees to have great health coverage, but the costs continue to skyrocket.

As a result of your feedback, we will be changing our plan structure, combining some plans and introducing others, to ensure our employees an opportunity to participate in excellent, cost-effective plans.

• Balancing work and family life remains a challenge. We introduced a maternity and parental leave program in response to last year’s survey. We also conducted additional market research, based on your comments, and will be improving our vacation plan for many of our employees.

Then there was Hurricane Harvey. No words can adequately express our concern or sadness for the employees who suffered losses in the flooding, and our hearts go out to each of them.

I also cannot possibly convey the appreciation and admiration I have for the wonderful and amazing people in our company.

The response to the horrific flooding and the trauma it inflicted on many of our own employees and families was incredible.

Leaders emerged all around the company, showing their hearts and playing important and integral roles in our response. From making calls to locate our employees as the flooding began to finding hotels for families to assisting with filling out insurance forms to helping clean up when the water went down, our values were evident. “Every person matters” took on its most basic meaning. I am particularly thankful for the strong leadership we had in the Houston area, especially Joe Wilson who led our efforts on the ground.

As the people of Houston start cleaning up, we all need to remember that some parts of the pain inflicted by the storm cannot be seen from the outside. A tragedy impacts everyone around it, and how each person deals with the resulting fear and loss is different. I strongly encourage our impacted families to seek help from professional counselors or ministers, especially for your children.

We will remember Harvey as we remember Katrina and Ike. They will always be a part of who we are, but we also know that a single event can never fully define a person or an organization.

The momentum we had in the first half of the year will continue and we will grow and be an even stronger company. We will make improvements and learn and create new opportunities for the future. Our people have always been our greatest asset and resource, whether they are responding to crises or offering honest opinions. I am grateful to each of you for your courage, your wisdom and your grit.

David S. Zachry President and CEO

WE WANT TO HEAR

FROM YOU! 2 | ZACHRY ADVANTAGE ISSUE 2, 2017

Zachry Advantage is your magazine. It is designed to keep employees informed on company happenings and we want to hear from you.

Please send your story ideas, suggestions for improvement or maybe a cool photo taken on the job to Public Affairs at public.affairs@zachrycorp.com or by calling 210.871.3366.

QUERIDO LECTORS, ¡Tuvimos un gran inicio en la primera mitad del 2017! Estamos tomando fuerza en todas partes – obteniendo proyectos, creando más plantas en línea, obteniendo reconocimientos y valiosa retroalimentación de nuestros empleados que nos ayuda a mejorar como organización.

Particularmente deseo agradecer a todos aquellos que participaron en la encuesta de compromiso de nuestros empleados, especialmente a aquellos que escribieron comentarios adicionales. Pudimos observar mejoras en algunas áreas, pero también falta de avance en otras. Hemos comenzado a analizar los resultados de las encuestas y hemos empezado a desarrollar planes para dar seguimiento a la mayoría de Ias respuestas. Por ejemplo: • Tenemos una real y continua necesidad de entrenamiento para liderazgo y de supervisores en toda la compañía.

Este problema fue identificado el año pasado y ya hemos empezado a desarrollar nuevos programas que se han estado lanzando.

• El costo de nuestro seguro de salud está mucho más elevado de lo que nuestros empleados pueden costearse.

Admito que esto ha sido dificultoso y lo hemos estado revisando porque quiero que nuestros empleados posean una buena cobertura de seguro médico sin embargo, los costos siguen elevándose continuamente. Como resultado de su retroalimentación cambiaremos la estructura de nuestro plan, combinando algunos planes y presentando otros nuevos.

• El equilibrio entre trabajo y vida familiar sigue siendo un desafío. Hemos ofrecido un programa de licencia de maternidad y parental en respuesta a la encuesta del año pasado. También, llevamos a cabo investigación de mercados adicionales basados en sus comentarios y mejoraremos nuestro plan de vacaciones para muchos de nuestros empleados.

Luego sucedió el huracán Harvey. No hay palabras que puedan expresar apropiadamente nuestra preocupación o tristeza por los empleados que sufrieron pérdidas en las inundaciones. Nuestros corazones están con cada uno de ellos.

Tengo un gran aprecio y admiración a

toda la gente maravillosa y asombrosa que trabaja en nuestra compañía. Su respuesta a las terribles inundaciones y a el trauma que infligió en muchos de nuestros empleados y sus familias fue increíble. Surgieron muchos líderes dentro de la compañía, mostrando sus corazones y desempeñando papeles importantes y fundamentales en respuesta. Desde hacer llamadas para localizar a nuestros empleados al momento que comenzó la inundación, como a encontrar hoteles para las familias, a ayudar llenando formularios de seguros, a ayudar a limpiar cuando el agua se redujo, etc., nuestros valores eran evidentes. “Toda persona es importante” adquirió su significado más básico. Estoy particularmente agradecido por el fuerte liderazgo que tuvimos en el área de Houston, especialmente con Joe Wilson quien dirigió nuestros esfuerzos sobre el terreno.

A medida que la gente de Houston continúa limpiando, debemos recordar que parte del dolor infligido por la tormenta no puede ser visto desde el exterior. Una tragedia afecta a todos a su alrededor, y la forma en que cada persona responde al miedo o a la pérdida es diferente.

Alentamos encarecidamente a nuestras familias afectadas a buscar ayuda de consejeros o ministros profesionales, especialmente para sus hijos.

Recordaremos a Harvey así como recordamos a Katrina e Ike. Siempre serán una parte de lo que somos, pero también sabemos que un solo evento nunca puede definir completamente a una persona o a una organización. El impulso que hemos tenido en la primera mitad del año continuará y vamos a seguir creciendo para ser una empresa aún más fuerte. Haremos mejoras, aprenderemos y crearemos nuevas oportunidades para el futuro. Nuestra gente siempre ha sido nuestro mayor y eficaz recurso, ya sea al responder en situaciones de crisis u ofreciendo sus honestas opiniones. Estoy agradecido con cada uno de ustedes por su valor, su sabiduría y su firmeza.

David S. Zachry President and CEO

EDITORIAL BOARD MEMBERS Christie Boubel Robert Chapa John Farrow Ben Fox Chris Jaworski Nancy Lopez Connie Norton

Wendy Parker TJ Pritchard Lee Scheel Tara Snowden Marie Surls Kevin Walters Patti Webber

CONTENTS 2

Dear Readers

3

Querido Lectors

4

Project Wins

6

Pineapple Award

7

The Zachry Scene Zachry Corporation Volunteer Projects

8

Waller Creek Expansion

10

BPC Update Tech Corner

11

Capitol Aggregates PVSR

12

HR and You

13

Interns Texas A&M Summer Bridge

14

The Zachry Way

16

Through the Lens

On the cover: Graphic rendering of Waterloo Park.

ZACHRY ADVANTAGE | 3

ZACHRY CONSTRUCTION

PROJECT MAYHILL ROAD WIDENING PROJECT Owner: City of Denton Timeline: Sept. 2017 – Sept. 2019 Location: Denton, TX Value: $35.8 Million

CITY OF FRISCO 4TH ARMY DRIVE CONSTRUCTION Owner: City of Frisco Timeline: Feb. 2017 – Jul. 2018 Location: Frisco, TX Value: $9.6 Million

4 | ZACHRY ADVANTAGE ISSUE 2, 2017

Zachry was awarded the Mayhill Road Widening project with the City of Denton, to reduce congestion resulting from the large population growth of North Texas including the City of Denton. The project consists of replacing and widening an existing two-lane asphalt road with a six-lane concrete road with 3.7 miles of sidewalks. Scope of work includes three span bridges over Cooper Creek and Pecan Creek, concrete pipe and box culverts, water, wastewater and small retaining walls.

Team Members: Project Sponsor: Bob Hoffer | Project Manager: Kevin Ghorbani | Superintendent: JD White Project Engineer: Aaron Vrazel | Field Engineer: Renee Borunda | Survey: Benjamin Castaneda

Zachry was awarded the 4th Army Drive transportation project with the City of Frisco. The project includes constructing roadway along 4th Army Drive to connect Lebanon and Stonebrook Streets for access to the Dog Park as well as adding seven driveways and two roundabouts leading to B.F. Phillips Park and Timber Ridge Drive. Project elements also include landscaping and irrigation, storm drainage, installation of utilities, and relocation of existing fire hydrants and manholes.

Team Members: Project Sponsor: Bob Hoffer | Project Manager: Jeff Sienkiewicz Superintendent: James Chandler | Field Engineer: Jordon Selby Bridge Foreman: Ignacio Apolinar | Survey: Victor Rodriquez

EASTLAND COUNTY IH 20 (RANGER ROAD) Owner: Texas Department of Transportation Timeline: Jul. 2017 – Jan. 2020 Location: Eastland County, TX

Overview: Zachry was awarded the Eastland County IH 20 (Ranger Road) project with the Texas Department of Transportation to realign existing roadway including grading, pavement, drainage, signage and road illumination. The project location is IH 20 from approximately 3.5 miles east of LP 254 to 0.5 miles east of SH 16. The project removes a rock hill that has caused numerous traffic accidents.

The hill will be cut down to 65 foot to improve driver safety. The project has more than 1.2 million yards of embank material, large yellow iron equipment that includes D10s, 374 excavators and portable crushers and more than 95,000 yards of paving.

Value: $76.2 Million

Team Members: Project Sponsor: Bob Hoffer | Project Manager: Jason Eiland Superintendent: Jerry Johnson | Project Engineer: Rick Finch | Field Engineer: Jacob Selby Dirt Foreman: Francisco “Poncho” Esparza | Dirt Foreman: Keith Hogan Survey: Stephen Murphy Jr.

TEXAS FACILITIES COMMISSION – EXCAVATION & UTILITIES PACKAGE

Zachry was awarded Construction-Manager-At-Risk (CMAR) contracts for the Excavation Package and the Utility Relocation Package for the Capitol Complex Texas Facilities Commission project.

Zachry will provide preconstruction, consultation and administrative services during the planning and design portions of the work. In addition, Zachry Construction will also provide construction services, closeout, and warranty phase services for the excavation and shoring for future belowgrade, five-level parking garage, two office buildings, an outdoor Green Mall venue and various utility relocations within a five block radius in urban Austin. Utilities to be relocated are on Congress Avenue from 16th Street to Martin Luther King Jr. Blvd., for the future construction of an underground five-level parking garage and building sites located at 1801 and 1601 Congress Avenue. Utility relocations will also address conflicts associated with the construction of the new utility tunnel which will extend from the Central Utility Plant at 14th Street and San Jacinto Blvd. to the future building sites. These services are in coordination with the on-going design and administrative efforts for the Capitol Complex Program. This is a project that involves both Building and Heavy personnel.

Owner: Texas Facilities Commission Timeline: Aug. 2017 – May 2019 Location: Austin, TX Estimated Project Budget: Excavation Pkg. = $21.7 Million Utilities Pkg. = $20 Million

Team Members: Project Sponsor: Darrell Arevalo | Project Manager: Fabian R. Leal Superintendent: Fred Allison | Superintendent: Hunter Phillips Project Engineer: José Sanchez

BELTWAY 8 WIDENING HCTRA CONTRACT 338 & CONTRACT 346 Owner: Harris County Toll Road Authority (HCTRA) Timeline: Oct. 2017 – Apr. 2020 Location: Houston, TX Value: Contract 338 = $102.4 Million Contract 346 = $74.4 Million

Zachry was awarded two Harris County Toll Road Authority (HCTRA) projects to widen and reconstruct the southern portion of Beltway 8 tollway (BW8) facility. Both projects widen the toll road from Southwest Freeway (US 59) to the north side of the Houston Ship Channel. This first project, Contract 338, begins south of Spencer Highway to north of Greenshadow Drive along the Sam Houston Tollway East. The second project, Contract 346, begins north of Greenshadow Drive and continues to Jacinto Port Road. Scope of work includes concrete paving, bridge construction, drainage improvements, MSE walls, water and sewer relocations, toll booths, high mast lightings and sound walls. These projects are a continuation of the ongoing HCTRA program to widen all of BW8 to at least three lanes in both directions. Construction is anticipated to begin in October 2017.

Team Members: Construction Manager: Joe Wilson | Project Manager: Omar Mitri General Superintendent: Jay Lopez | Structures Superintendent: Nathan Terry Drainage Superintendent: Anthony Nanfro | Paving Superintendent: Mike Kimble Project Engineer: Steven Suits | Field Engineer: Jes Allen | Field Engineer: Arun Ghimire Field Engineer: Animesh Aggarwal

ZACHRY ADVANTAGE | 5

BRINGS SWEET TASTE OF SUCCESS TO HILTON PALACIO DEL RIO. The pineapple is the international symbol of hospitality.

Small wonder that staff members took the opportunity to pose for pictures with the Pineapple award!

Hilton Palacio del Rio achieved the highest honor among its local peer-hotels by winning the San Antonio Pineapple (SAP) Award as the 2017 Full Service Hotel of the Year – and that has Zachry Hospitality team members beaming with pride.

“When people enjoy working somewhere, it shows,” notes Robert Chapa, human resources manager for the hotel. “And when they’re happy, they help make guests happy.”

The San Antonio Hotel & Lodging Association presented the inaugural Pineapple Award during a formal presentation on May 10 during National Travel & Tourism Week.

Chapa points to employee longevity at the hotel as proof.

Considering the fact that Hilton Palacio del Rio turns 50 next year, it’s impressive that it has:

This prestigious award recognizes and celebrates top performing hotels, managers, employees, and allied partners.

• 50 team members with 10 - 19 years of service.

• 45 team members with 20 - 29 years of service.

• 30 team members with 30 - 39 years of service.

“Our hotel gets the award, but the real credit goes to the staff – 379 strong – who deliver the kind of guest experience that clinched the votes.”

- Robert Thrailkill, Vice President of Zachry Hospitality.

The award was based on several different factors: guest experience, creative thinking, use of technology, community involvement and more — the Hilton Palacio del Rio scored high on all counts.

Take the hotel’s use of digital keys as an example of technology.

While traditional check-in/check-out is available, guests have the option to select the floor they want, reserve a specific room, check in and out and more, all via the internet. As for community service, hotel staff members logged 1,258 volunteer hours during 2016 in cooperation with Zachry Corporation Volunteer Council initiatives!

Pictured from L to R: Liza Barratachea, President of the San Antonio Hotel & Lodging

Positive guest experience is really where the hotel stood out.

Hilton tracks guest experience through SALT or Satisfaction and Loyalty Tracker. The survey asks guests to rate their overall experience and specific aspects of hotel operations – from amenities and cleanliness to personal service and interaction with the staff. One major differentiating factor for Hilton is front line empowerment, allowing staff members to make decisions when presented with a complaint, concern, or any opportunity to improve the individual guest’s experience.

This is part of a culture that makes Zachry Hospitality – and Hilton Palacio del Rio in particular – an organization in which staff takes real pride in their work. Management encourages this pride with “blue energy stars” – a recognition program that congratulates exemplary employees and rewards them with gift cards. But this recent Hotel of the Year announcement elevates their efforts even more dramatically.

6 | ZACHRY ADVANTAGE ISSUE 2, 2017

Association (SAHLA), Robert Thrailkill, VP Operations Zachry Hospitality & General Manager of the Hilton Palacio del Rio, Bill Petrella, SAHLA Chairman, Ric Morales, Key Account Manager, Silver Eagle Distributors.

Even more amazing, says Chapa, there are five individuals with more than 40 years of service: • Jerry Vasquez, Banquets Department (40 years) • Lois Lewis, Housekeeping Department (41 years) • Anita Castillo, Finance Department (42 years) • Clarence W. Jones, Banquets Department (44 years) • Reynaldo Ramos, Transportation Department (48 years) To all staff members and to everyone involved in helping make Hilton Palacio del Rio the Hotel of the Year, congratulations!

Thank you to all San Antonio employees who donated for the 2017 USO Drive. Employees donated $1700 and three truckloads of supplies including snacks, beverages, cleaning supplies, gift cards and stamps to support our soldiers. The mission of the USO is to lift the spirits of troops and their families, and that mission is accomplished on a daily basis thanks to the dedication and generosity of the American people. Photo/Abel Luna

Quilting for a cause Zachry’s Quilting Z’s club will be raffling their quilt called Modern Building Blocks (84 x 96”). All proceeds from the sale purchases supplies for the Quilting Z’s to hand make additional quilts for the SAMMinistries organization.

They quilts are given to families who move from the shelter to their transitional home/apartment so they have something new to take with them.

THE

ZACHRY SCEN

USO

Ticket prices: 6 = $5; 13 = $10; 20 = $15; 28 = $20 Tickets will be sold Nov. 6-17 and can be purchased with cash, check or payroll deduction from: • Michell Barthold 210-871-3302 michell.barthold@zachrycorp.com • Rachael Farerra 210-871-2867 rachael.ferrera@zachrycorp.com

ZACHRY CORPORATION VOLUNTEER PROJECTS 11/06/17 – 11/17/17

12/2017 – Date TBD

Quilting Z’s

San Antonio Police Department

Quilt Raffle Lead Coordinator - Michell Barthold

Blue Santa Lead Coordinator - Tracey Taylor

ZACHRY ADVANTAGE | 7

“The Waller Creek Expansion is really exciting. The vision is different but the size is comparable to San Antonio’s River Walk 50 years ago.”

– Travis Mross, Vice President of the Southwest Region

THE WALLER CREEK

EXPANSION: TURNING AUSTIN INTO A CITY OF PARKS. Everyone knows the City of Austin as the state capital and home to the University of Texas. But people who don’t live there may not know Waller Creek, the little stream that winds all through the middle of downtown, past government buildings, the campus, residential and retail areas. Over the next several years, Zachry Construction will help turn Waller Creek into a chain of parks.

Once it’s completed, the Waller Creek Expansion will be a major attraction for people who live in local neighborhoods, work downtown, or come to visit as tourists. There will be places to eat and shop, of course, but the real emphasis will be on natural beauty at all points along the creek. People will come to relax, exercise, gather with friends, have family picnics, listen to outdoor concerts and attend special events.

“The Waller Creek Expansion is really exciting,” said Travis Mross, Vice President of the Southwest Region and Project Sponsor.

“The vision is different but the size is comparable to San Antonio’s River Walk 50 years ago.”

The Waller Creek Conservancy, designers, professional and civic groups created a master plan, then hired Zachry Construction to oversee the entire expansion. This will include five major projects at points all over downtown Austin, starting with the 11-acre Waterloo Park. A new outdoor amphitheater is also part of the plan.

“The amphitheater will draw lots of interest,” says Project Manager Tyler Farella. “We’ll be building a structured lawn in arcs rising up from the open-air stage with elevated walkways, sidewalks, hiking trails and lots of green space.”

Zachry’s Heavy Department and Building Division have been collaborating since being awarded the Construction-Manager-AtRisk (CMAR) in July 2017. Preconstruction on Waterloo Park began earlier this year, with actual construction slated to begin shortly after Labor Day and continuing until expected completion in 2020.

8 | ZACHRY ADVANTAGE ISSUE 3, 2017

COVER STORY

THE WALLER CREEK EXPANSION WILL INCLUDE: Creek Mouth The Waller Delta is the deepest, most ecologically diverse section of the creek – at the mouth of Waller Creek where it meets Lady Bird Lake. Features will include a series of lightweight suspension bridges, as well as a signature pedestrian bridge connecting Waller Creek and the Ann and Roy Butler Hikeand-Bike Trail to South Austin, extending new opportunities for walking, running, biking, socializing, and commuting.

Graphic rendering of Waterloo Park.

Palm Park This historically important park has strong connections to East Austin communities, and will serve as a major entrance to the creek trail and central space for community activities. New development will enhance Palm Park features and facilities to be even more engaging for families and children coming for The Waller Creek Pop-Up Picnic, movie nights, Sunday Funday and other events.

Waterloo Park At 11 acres, this will be the largest park in the Waller Creek district – located between 12th and 15th Streets – and a central gathering space for the Red River Cultural District, the emerging Innovation Zone, the Central Health Brackenridge redevelopment, and the Dell Medical School. Designed by Michael Van Valkenburgh and Associates, Waterloo Park will reflect Austin and Central Texas landscapes with hill country gardens, oaks and native plantings, wetland spaces, expansive lawns, and more than a mile and a half of trails.

DID YOU KNOW?

Waterloo Park

Waterloo was the name of the original settlement built in 1837 on the banks of the Colorado River. By 1839, the name was officially changed to Austin – in honor of the “Father of Texas” Stephen F. Austin. It became the seventh (and final) capital of the Republic of Texas, and later state capital after Texas joined the United States in 1845. But you’ll still find Austin businesses, sites and events that carry the name Waterloo – including the Waterloo Park that’s part of this major project.

ZACHRY ADVANTAGE | 9

PAPERLESS IS A REALITY AT LAST FOR ZACHRY CONSTRUCTION. During the first quarter of 2017, Zachry Construction Corporation (ZCC) implemented its plan to create the Business Processing Center (BPC). The ultimate design of the BPC was to reorganize business administration personnel, traditionally located at project sites, and centralize these resources at the home office in San Antonio to leverage their talent across multiple project sites.

“ZCC has centralized administrative functions in the past,” said Bryan Golla, ZCC Vice President and Controller. “However, this time our ability to succeed is much greater due to the integration of the SAP and ELO systems.”

The primary business function being centralized in the BPC is accounts payable function. All invoices of ZCC projects, ZCC subsidiaries and some home office departments will be received by the BPC in San Antonio. From there, the BPC will validate the invoice, then route it to the appropriate location via an electronic workflow for approval, which can take place via laptop, desktop or tablet. “In the past, this process could take days or weeks, but now through proper planning and execution, this process could take minutes,” says Golla.

The BPC improves overall efficiency by matching purchase orders to receipts and catching discrepancies faster. It also coordinates vendor setup, lien releases, Disadvantaged Business Enterprise reporting, weekly payroll capture and validation, and more. The BPC implemented these processes since the beginning of the year for any new projects. Conversion of ongoing construction work began in March, starting with the Central Texas region, followed by the East Coast region, then projects in the North Texas region. The final region to be converted will be the Gulf Coast region with a goal to have all projects in the system by the end of October.

“I want to thank our Business Administration managers and the Enterprise Resource Planning (ERP) team for putting all the tools in place to make the BPC a reality.

A special thanks to the employees we currently have in the BPC. Your experience and dedication has ensured the BPC would be a success.”

– Bryan Golla, ZCC Vice President and Controller

KEVIN WALTERS NAMED SECRETARY FOR S.I.M. Kevin Walters, VP and Chief Information Officer for Zachry Corporation, was just elected secretary for the new local chapter of the national organization SIM – Society for Information Management.

The organization provides a forum for senior IT professionals to network, share best practices, technology trends, and discuss cybersecurity and other technical related topics. SIM also gives back to the community by helping young people get into information technology as a career. The local start-up chapter already has twelve local companies on board, including USAA, Rackspace, various credit unions, in addition to Zachry. Others are expected to join as the organization becomes established. Kevin’s initial duties will be to coordinate meetings and events for the group, the first of which was slated for September of 2017.

TECH CORNER

WHAT IS HAPPENING IN TECH AT ZACHRY? • Increased installation of security patches for computers company-wide to keep all information safe.

• Mobility Solution “2.0” – It improves performance, simplifies navigation, and improves access to data.

The rollout of v2.0 of zMTC is in the final stages.

• The phone system at Hilton Palacio del Rio has been updated, including the installation of new phones in all guest rooms.

• IT will be working closely with the team developing the Embassy Suites - Landmark to install all the required property technology, including networks, phone systems, and wireless connectivity.

10 | ZACHRY ADVANTAGE ISSUE 2, 2017

THE PECOS VALLEY SOUTHERN RAILWAY —

THE LITTLE TRAIN THAT COULD

The Pecos Valley Southern Railroad (PVSR) received its first charter from the Texas Railroad Commission in 1909. It ran 40.1 miles from the Union Pacific interchange in Pecos, TX to Toyahvale, TX until 1971. Originally, the railroad hauled livestock and cotton. During the 1940s, passenger cars (which included a liquor car) also carried troops on leave from the Pecos Army Airfield shuttling military personnel to and from the base to dance halls and restaurants. By the 1950s, the PVSR served the areas then–booming agricultural industry and the many loading docks and warehouses along its path.

Almost 50 years ago, in March 1968, the PVSR was purchased by H.B. Zachry Company as part of the acquisition of an aggregate operation at Hoban, Texas, and remains under the ownership of Capitol Aggregates.

The aggregate plant served by the PVSR was temporarily renamed “Trans-Pecos Materials, Inc.,” but is now simply known as the Hoban Plant.

After the acquisition, the plant and the PVSR continued to serve the industry throughout West Texas, including Midland and Odessa.

Life changed for the PVSR when agriculture faded from the landscape in West Texas, which took with it much of the industry in the area. The PVSR proved to be a tough little railroad, however, seeking out a quiet existence by serving Capitol Aggregates and other small, local producers through some very lean years. By 1971, the railroad was all but forgotten by anyone except the most die-hard railroad fans. It would take several more years of struggle before anyone learned that underneath this little quiet, forgotten railroad was a colossal oil deposit.

In 2016, life changed again for the PVSR with the discovery what is believed to be the 4th largest oil deposit in the world, located in the Wolfcamp Shale of West Texas. The discovery fueled a massive influx of oil and gas companies into the Permian Basin, including the Pecos area, and the PVSR suddenly found itself in high demand as the need for transportation increased. This demand allowed substantial improvement and updating to the PVSR, which has rapidly become a thriving and important means of transportation to the oil and gas industry, moving valuable sand and water for fracking all around the Permian Basin, serving transload facilities and, of course, Capitol Aggregates’ Hoban plant. In addition, the PVSR rail line has become a critical crossing point for pipelines and roads.

Today, the newly invigorated PVSR remains highly active as one of the oldest continuously operated short-line railroads in the state of Texas.

ZACHRY ADVANTAGE | 11

Company-Wide Employee Referral Plan Update

HR

Since program inception in January 2017, more than $20,000 has been paid to 48 Zachry employees who participated in the Employee Referral Program. The program has been a success so far and continues to grow. Current Zachry Construction, Capitol Aggregates and Zachry Hospitality employees are eligible to participate. If you have a friend or family member who is qualified for one of the open positions, you may receive $300 if it is an hourly position and $1,000 for a salaried position.

Go to www.zachrycorp.com and click on search for careers here at the top-right corner of the page to see all the listings for each company.

Survey Results Thank you for your participation, feedback and written comments! The 2017 Employee Survey had great participation this year and your feedback is providing insight into what is important to employees. Last year’s survey was a baseline, a starting point on our journey to reach our full potential, and while the results once again varied by departments, the best value by far this year were the many specific written comments. This information is invaluable, so thank you for speaking from the heart.

The highest scoring responses across all Zachry companies include: • I look forward to going to work • I believe in my organization’s values • I believe this is a great place to work Our lowest rated items are: • My organization encourages work-life balance • Senior leaders clearly communicate my organization’s long term goals and strategy • I am satisfied with being recognized Department leaders, and in some cases Human Resources representatives, will share specific results with employees with low scoring survey areas to provide more clarity regarding improvements to their departments. More to come.

Benefits Annual Enrollment is around the corner…

Annual Enrollment begins on Monday, October 23, 2017 and ends on Friday, November 10, 2017.

Zachry’s goal is to provide an opportunity for you and your family to customize a benefits solution that will meet your specific needs and preferences. The benefits provide important protection for you and your family in the case of illness or injury. As much as possible, you get to choose the benefits that are right for you and your family.

Effective January 1, 2018 - Zachry Construction Corporation, Capitol Aggregates, Inc. and Zachry Hospitality will be introducing a new High Deductible Health Plan (HDHP), Health Savings Account (HSA), access to Telemedicine and Group Accident Benefits. In addition, we will combine the existing EPO and PPO Plans into a new PPO Plan Option.

We will continue to have BlueCross BlueShield (BCBS) of Texas and Prime Therapeutics provide our medical and prescription benefits, respectively.

You will each have the opportunity to elect and contribute to a Health Care Flexible Spending Account or participate in a Health Savings Account, depending on the Health Plan option you elect.

The Benefits Department will be conducting employee meetings for all companies at all locations to discuss these changes, as well as providing information. .

We are also changing the vision plan option for Zachry Construction Corporation and Capitol Aggregates, Inc.

12 | ZACHRY ADVANTAGE ISSUE 2, 2017

Visit www.mybensite.com/zachrycorp (Username-zachrycorp/Password-benefits)

ZACHRY HELPS WOMEN CROSS “SUMMER BRIDGE” TO ENGINEERING CAREERS.

First row: Taylor Marshall - UTSA, Stephen Kapp - UTSA, Ian Salas - UTSA, Madeline Berry - LSU, Shandey Ketchey

This year Zachry supported Texas A&M University’s Women in Engineering Summer Bridge Program to help “bridge the gap for success” for first-generation College of Engineering students.

- TAMU, Dylan Redmann - LSU, Kinsey Dean - TAMU, Jenna Lucas – Colorado School of Mines, Ramses Carranza TAMU Second Row: Matt Tschirhart - TAMU, Alexis Vega – TAMU San Antonio, Wyatt Bagwell – Central Arizona, Austin Reeves – Central Arizona, Adam Mahmoud - TAMU, Christopher Wieland - TTU, Gus Rowland - TTU, Jorge Hernandez - UTSA

THE INTERN PROGRAM:

FINDING THE “NEXT GENERATION” OF ZACHRY. Zachry’s Intern Program continues to grow each year and the benefits of the program have created an outstanding foundation for our company’s upcoming talent.

This year’s program had a total of 26 students, each paired with a peer partner who gives insight into what it’s like to work at Zachry. Throughout their internship, interns receive valuable experience in their chosen field and have the support of the Zachry team working diligently to ensure developmental opportunities. Many interns get invited back for extended internships or full-time positions.

“We select top talent from key universities throughout the year,” said Armando Leal, Director of Talent Management. “We present them with challenging responsibilities and empower them to make decisions so they get to experience what it means to be a part of the Zachry family.”

The 58 students lived in dorms during the five-week summer program and were paired with specially chosen mentors who answered questions about the Engineering Department, the University, and college life in general. The mentors also helped them face what may be their biggest obstacle: the math required for the engineering degree. Each student was enrolled in a preparatory math class, either calculus or pre-calculus. By the end of the program, each student gained the experience of the academic rigor required for college and earned full course credit toward a degree.

“Thank you to Zachry for helping make this program a success,” notes Dr. John E. Hurtado, Associate Dean for Academic Affairs at A&M’s College of Engineering.

“The program has set these students on a path for college success by eliminating a few of the usual freshman obstacles and providing effective study strategies focused on advanced problems from one of the challenging math courses.”

On August 23, the interns attended a Wrap-Up Lunch event with senior leaders and their peer partners. During the event, students had the opportunity to present and/or listen to other students share about their lessons learned throughout their summer experience. “Teamwork is a word you hear a lot, but working here made it real. We are all on the same team,” said Christopher Wieland, Texas Tech University intern working as an Estimator with the Heavy Civil Department.

“Teamwork is a word you hear a lot, but working here made it real. We are all on the same team.”

- Christopher Wieland, intern with Heavy Civil/Estimating Overall the 2017 Summer Intern Program was a great success, with seven intern students expected to return and five additional students accepting full-time positions.

Students from Texas A&M University’s Women in Engineering Summer Bridge Program. Photo/Courtesy of Texas A&M

ZACHRY ADVANTAGE | 13

Congratulations

THE

KIRT KRUEGER EARNS MASTER’S DEGREE Congratulations to Kirt Krueger for finishing his Master of Science in Human Resource Development from University of Texas at Tyler. Kirt is the Director of Compensation, Benefits, and HR Systems.

ANIMESH AGGARWAL RECEIVES HIS P.E. Congratulations to Animesh Aggarwal for receiving his Professional Engineer License in Structures in the State of Texas.

WEIGHT WATCHERS Congratulations to the San Antonio Weight Watchers group who lost a total of 173 pounds over a 12 week period. Six of the 16 members lost 5 percent of their body weight, which is very beneficial to their health. Together we can do great things.

e n o Kid Z Y ZACHR

jokes Q:

Where do fish keep their money?

A: In River Banks!

14 | ZACHRY ADVANTAGE ISSUE 2, 2017

Births TORIN DOMINIC KEYES Mother: Claudia Keyes Payroll Manager, Zachry Hospitality Born: June 5, 2017 Weight: 7 lbs. 10 oz. | Length: 19.75”

ADRIAN GHORBANI Father: Kevin Ghorbani Project Manager, Zachry Construction – North Texas Mother: Sepideh Shams Born: July 31, 2017 Weight: 6 lbs. | Length: 20”

BROOKLYN LORA BOUBEL Mother: Christie Boubel Financial Accounting Manager, Zachry Corporation Father: Ryan Boubel Born: September 9, 2017 Weight: 7 lbs. 5 oz. | Length: 20”

BUILDING DIVISION RECEIVES AWARDS FOR CONVENTION CENTER The Associated General Contractors (AGC) - Texas Building Branch (TBB) San Antonio awarded the Hunt-Zachry joint venture the Design Build 3 Outstanding Construction Award and the Best of the Build Award in the Design-Build Over $30 million category for its work on the Henry B. Gonzalez Convention Center. AGC-TBB presented the awards at the 2017 Convention in June 2017. Zachry Construction’s Building Division accepted the awards along with Hunt Construction Division.

Pictured left to right: AGC-TBB Rep Mike Chatron, Daniel Najera (Hunt), AGC-TBB Chapter President Mike Sireno, Zachry representatives Fabian Leal, Fred Alison, Adam Lopez, Darrell Arevalo, Travis Mross. Photo Courtetsy of AGC-TBB. ZACHRY ADVANTAGE | 15

2330 North Loop 1604 West | San Antonio, TX 78248 P.O. Box 33240 | San Antonio, TX 78265 zachrycorp.com

PROJECT:

Hospitality employees (left) Margaret Hernandez, Catering Administrative Assistant and (right) Yajaira Rodriguez, Host Person, pose in the break room of the Hilton Palacio del Rio with the Pineapple Award. The Palacio won 2017 Full Service Hotel of the Year on May 10 from the San Antonio Hotel & Lodging Association.

PRSRT STD U.S. POSTAGE PAID SAN ANTONIO, TX PERMIT NO. 244

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