Industry Leaders vs. Typical Industry Leaders vs. Typical Members:Members:

Closing The Gap Closing The Gap In A Recovering MarketIn A Recovering Market

Presented at the 46Presented at the 46thth Annual Annual

NRMCA Business Administration NRMCA Business Administration ConferenceConference

October 18, 2004October 18, 2004

Review Of Changes Review Of Changes Since The Last SurveySince The Last Survey

The Industry Leaders have witnessed a The Industry Leaders have witnessed a dramatic change in the reason why they rank dramatic change in the reason why they rank in the top quartile over the previous year, in the top quartile over the previous year, which is measured in Profit Per Yard.which is measured in Profit Per Yard.

This past year, the Industry Leaders rose to the This past year, the Industry Leaders rose to the top due almost exclusively to dramatic top due almost exclusively to dramatic improvements in Net Sales Price.improvements in Net Sales Price.

Review Of Changes Review Of Changes Since The Last Survey cont’dSince The Last Survey cont’d

Their performance in many other areas shrank Their performance in many other areas shrank both in comparison to the previous year both in comparison to the previous year andand compared to the Typical Member.compared to the Typical Member.

This key finding speaks to the ability of the This key finding speaks to the ability of the Typical Member to close the gap between Typical Member to close the gap between themselves and the Industry Leaders during this themselves and the Industry Leaders during this last recessionary cycle.last recessionary cycle.

Review Of Changes Review Of Changes Since The Last Survey cont’dSince The Last Survey cont’d

This year’s areas of improvement narrowed to This year’s areas of improvement narrowed to only a couple of categories, including value only a couple of categories, including value added and direct delivery costs.added and direct delivery costs.

The Typical Member closed the gap in several The Typical Member closed the gap in several areas including materials costs, Variable areas including materials costs, Variable Delivery Cost, Direct Fixed Plant Costs , and Delivery Cost, Direct Fixed Plant Costs , and G& A expenses.G& A expenses.

Areas of PerformanceAreas of PerformanceThis Year vs LastThis Year vs Last

Income Statement,

Dollars Per Cubic Yd.

2002 2003Year over Year Change

(%)

Typical Member

Industry Leaders

Typical Member

Industry Leaders

Typical Member

Industry Leaders

Sales PriceSales Price $67.21$67.21 $68.95$68.95 $68.04$68.04 $72.81$72.81 1.24%1.24% 5.60%5.60%

Material CostsMaterial Costs $36.81$36.81 $36.14$36.14 $36.98$36.98 $39.09$39.09 0.46%0.46% 8.18%8.18%

Plant CostsPlant Costs $3.85$3.85 $4.15$4.15 $4.04$4.04 $4.33$4.33 5.01%5.01% 4.30%4.30%

Delivery CostsDelivery Costs $12.33$12.33 $11.82$11.82 $12.91$12.91 $12.82$12.82 4.71%4.71% 8.48%8.48%

Total Variable CostsTotal Variable Costs $52.99$52.99 $52.10$52.10 $53.93$53.93 $56.24$56.24 1.78%1.78% 7.94%7.94%

Marginal Marginal ContributionContribution

$14.22$14.22 $16.84$16.84 $14.11$14.11 $16.57$16.57 -0.77%-0.77% -1.62%-1.62%

Areas of PerformanceAreas of PerformanceThis Year vs Last cont’dThis Year vs Last cont’d

Income Statement,

Dollars Per Cubic Yd.

Continued

2002 2003Year over Year Change

(%)

Typical Member

Industry Leaders

Typical Member

Industry Leaders

Typical Member

Industry Leaders

Direct Costs – PlantDirect Costs – Plant $3.02$3.02 $2.71$2.71 $3.05$3.05 $3.23$3.23 0.89%0.89% 19.27%19.27%

Direct Costs – Direct Costs – DeliveryDelivery

$3.99$3.99 $3.75$3.75 $3.79$3.79 $3.35$3.35 -2.46%-2.46% 1.96%1.96%

Operating ProfitOperating Profit $7.21$7.21 $10.39$10.39 $7.27$7.27 $9.99$9.99 0.06%0.06% 0.87%0.87%

Selling ExpensesSelling Expenses $1.36$1.36 $1.34$1.34 $1.30$1.30 $1.33$1.33 -4.14%-4.14% -0/50%-0/50%

G & A ExpensesG & A Expenses $4.08$4.08 $4.87$4.87 $3.73$3.73 $4.49$4.49 -8.61%-8.61% 2.60%2.60%

Profit Before TaxesProfit Before Taxes $1.58$1.58 $4.63$4.63 $2.30$2.30 $4.44$4.44 45.35%45.35% -4.06%-4.06%

Industry Leaders 2004:Industry Leaders 2004:Their Competitive Advantages Are Their Competitive Advantages Are

ShrinkingShrinking

Industry Leaders’ AdvantagesIndustry Leaders’ Advantages Net Sales PriceNet Sales Price Direct Delivery CostsDirect Delivery Costs

Where the Typical Members Have Closed The GapWhere the Typical Members Have Closed The Gap Materials Costs Materials Costs Variable Delivery CostVariable Delivery Cost Direct Fixed Plant CostsDirect Fixed Plant Costs G& A expensesG& A expenses

Industry Leaders:Industry Leaders:Their 2004 AdvantagesTheir 2004 Advantages

Net Sales PriceNet Sales Price Direct Delivery CostsDirect Delivery Costs

Industry Leaders:Industry Leaders:Their 2004 Advantages con’tTheir 2004 Advantages con’t

Net Sales Price Per YardNet Sales Price Per Yard

Industry leaders were able to increase the Net Industry leaders were able to increase the Net Sales Price by $3.86 compared to the previous Sales Price by $3.86 compared to the previous year.year.

Key factors contributing to this increase include:Key factors contributing to this increase include:

Value added increased by $4.59 for a 278% gainValue added increased by $4.59 for a 278% gain

Industry Leaders:Industry Leaders:2004 Advantages con’t2004 Advantages con’t

Net Sales Price Per YardNet Sales Price Per Yard

Miscellaneous yard sales increased $0.76 for a 102% Miscellaneous yard sales increased $0.76 for a 102% gaingain

Fuel and environmental surcharges increased $.13 for a Fuel and environmental surcharges increased $.13 for a gain of 29.5%gain of 29.5%

Despite these gains, the price of concrete declined $1.23 Despite these gains, the price of concrete declined $1.23 (we believe the Industry Leaders are doing a better job (we believe the Industry Leaders are doing a better job of tracking these costs than in previous years).of tracking these costs than in previous years).

Industry Leaders:Industry Leaders:2004 Advantages con’t 2004 Advantages con’t

Net Sales PriceUnder

100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

Ready Mixed Ready Mixed ConcreteConcrete $61.01$61.01 $63.80$63.80 $64.94$64.94 $61.56$61.56 $63.23$63.23 $63.71$63.71

Fibers, super Fibers, super plasticizers, colorsplasticizers, colors $1.41$1.41 $2.25$2.25 $1.40$1.40 $3.14$3.14 $2.94$2.94 $6.24$6.24

Sand, gravel, misc. Sand, gravel, misc. yard sales.yard sales. $1.38$1.38 $0.92$0.92 $1.39$1.39 $0.92$0.92 $0.99$0.99 $1.50$1.50

Waiting time, min. Waiting time, min. load chargesload charges $3.36$3.36 $2.18$2.18 $0.69$0.69 $0.80$0.80 $0.91$0.91 $1.40$1.40

Fuel surcharge, Fuel surcharge, environmentalenvironmental $0.97$0.97 $0.55$0.55 $0.68$0.68 $0.38$0.38 $0.44$0.44 $0.57$0.57

Discounts & Discounts & allowancesallowances ($1.02)($1.02) ($0.67)($0.67) ($0.53)($0.53) ($0.44)($0.44) ($0.47)($0.47) ($0.61)($0.61)

Total Net Total Net

SalesSales$67.11$67.11 $69.03$69.03 $68.57$68.57 $66.36$66.36 $68.04$68.04 $72.81$72.81

Industry Leaders:Industry Leaders:2004 Advantages con’t2004 Advantages con’t

Direct Fixed Delivery Costs Per YardDirect Fixed Delivery Costs Per Yard

Industry leaders decreased their total direct fixed Industry leaders decreased their total direct fixed delivery costs over the previous year by $0.40 delivery costs over the previous year by $0.40

Key factors contributing to the reduction:Key factors contributing to the reduction:Truck equipment leases declined by $0.39Truck equipment leases declined by $0.39Fleet insurance declined by $0.15 Fleet insurance declined by $0.15

Industry Leaders:Industry Leaders:2004 Advantages con’t2004 Advantages con’t

Direct Fixed Delivery Costs

Under 100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

DepreciationDepreciation $1.76$1.76 $1.99$1.99 $1.80$1.80 $1.38$1.38 $1.51$1.51 $1.33$1.33

Truck Equipment Truck Equipment LeasesLeases $0.68$0.68 $0.73$0.73 $0.42$0.42 $0.42$0.42 $0.46$0.46 $0.31$0.31

Dispatch SalariesDispatch Salaries $0.91$0.91 $0.87$0.87 $0.88$0.88 $0.61$0.61 $0.68$0.68 $0.75$0.75

Fleet InsuranceFleet Insurance $0.70$0.70 $0.72$0.72 $0.47$0.47 $0.41$0.41 $0.45$0.45 $0.36$0.36

Vehicle Vehicle RegistrationRegistration $0.47$0.47 $0.43$0.43 $0.40$0.40 $0.28$0.28 $0.30$0.30 $0.28$0.28

Info TechInfo Tech $0.05$0.05 $0.07$0.07 $0.09$0.09 $0.05$0.05 $0.06$0.06 $0.05$0.05

Other Direct Other Direct Delivery ExpensesDelivery Expenses $0.28$0.28 $0.39$0.39 $0.25$0.25 $0.31$0.31 $0.33$0.33 $0.27$0.27

Total Direct Fixed Total Direct Fixed Costs – DeliveryCosts – Delivery $4.85$4.85 $5.20$5.20 $4.31$4.31 $3.46$3.46 $3.79$3.79 $3.35$3.35

Where the Typical Members Have Where the Typical Members Have Closed The GapClosed The Gap

Materials CostsMaterials CostsVariable Delivery CostVariable Delivery CostDirect Fixed Plant CostsDirect Fixed Plant CostsG& A expensesG& A expenses

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

Materials Costs Per YardMaterials Costs Per Yard

While the Typical Member has seen an increase of While the Typical Member has seen an increase of $0.17 over the previous year, this compares to an $0.17 over the previous year, this compares to an increase of $2.95 for the Industry Leaders.increase of $2.95 for the Industry Leaders.

Key factors contributing to comparison include: Key factors contributing to comparison include: Cement decreased by $0.19 compared to an increase of Cement decreased by $0.19 compared to an increase of

$1.10 for the Industry Leaders$1.10 for the Industry LeadersFly ash increased only $0.07 compared to an increase of Fly ash increased only $0.07 compared to an increase of

$0.63 for the Industry Leaders$0.63 for the Industry Leaders

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

Material CostsUnder

100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

CementCement $16.39$16.39 $17.15$17.15 $16.86$16.86 $16.97$16.97 $17.28$17.28 $17.93$17.93

Fly AshFly Ash $1.02$1.02 $0.79$0.79 $0.78$0.78 $1.22$1.22 $1.17$1.17 $1.77$1.77

SlagSlag $0.35$0.35 $0.73$0.73 $0.74$0.74 $0.75$0.75 $0.77$0.77 $0.68$0.68

Chemical Chemical AdmixturesAdmixtures $0.73$0.73 $1.31$1.31 $1.34$1.34 $0.96$0.96 $1.06$1.06 $1.13$1.13

Mechanical Mechanical AdmixturesAdmixtures $0.18$0.18 $0.31$0.31 $0.17$0.17 $0.22$0.22 $0.22$0.22 $0.13$0.13

ColoringColoring $0.05$0.05 $0.12$0.12 $0.05$0.05 $0.07$0.07 $0.07$0.07 $0.13$0.13

Fine AggregatesFine Aggregates $6.10$6.10 $6.10$6.10 $5.98$5.98 $5.80$5.80 $5.94$5.94 $6.92$6.92

Coarse AggregatesCoarse Aggregates $7.83$7.83 $7.75$7.75 $8.57$8.57 $9.74$9.74 $9.62$9.62 $10.49$10.49

WaterWater $0.09$0.09 $0.07$0.07 $0.08$0.08 $0.03$0.03 $0.04$0.04 $0.03$0.03

Misc. Mat. CostsMisc. Mat. Costs $0.73$0.73 $0.59$0.59 $0.54$0.54 $0.84$0.84 $0.81$0.81 $0.51$0.51

Total Direct Fixed Total Direct Fixed Costs – DeliveryCosts – Delivery $33.47$33.47 $34.92$34.92 $35.11$35.11 $36.60$36.60 $36.98$36.98 $39.09$39.09

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

Variable Delivery Costs Per YardVariable Delivery Costs Per Yard

While the Typical Member has seen an increase of $0.58 While the Typical Member has seen an increase of $0.58 over the previous year, this compares to an increase of over the previous year, this compares to an increase of $1.00 for the Industry Leaders.$1.00 for the Industry Leaders.

Key factors contributing to difference include:Key factors contributing to difference include: Driver Wages increased by $0.23 compared to an Driver Wages increased by $0.23 compared to an

increase of $0.63 for the Industry Leadersincrease of $0.63 for the Industry LeadersFringes increased by $0.18 compared to an increase of Fringes increased by $0.18 compared to an increase of

$0.24 for the Industry Leaders$0.24 for the Industry Leaders

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

Variable Delivery Costs

Under 100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

Driver WagesDriver Wages $5.78$5.78 $6.34$6.34 $6.31$6.31 $6.23$6.23 $6.36$6.36 $6.41$6.41

FringesFringes $2.10$2.10 $2.22$2.22 $2.38$2.38 $2.51$2.51 $2.45$2.45 $2.70$2.70

Repairs & Repairs & MaintenanceMaintenance

$2.42$2.42 $2.25$2.25 $2.39$2.39 $1.99$1.99 $2.09$2.09 $1.92$1.92

PowerPower $1.69$1.69 $1.59$1.59 $1.57$1.57 $1.25$1.25 $1.34$1.34 $1.24$1.24

Waste Concrete Waste Concrete CleanupCleanup

$0.34$0.34 $0.36$0.36 $0.24$0.24 $0.25$0.25 $0.26$0.26 $0.24$0.24

All other plant All other plant expensesexpenses

$0.42$0.42 $0.44$0.44 $0.33$0.33 $0.40$0.40 $0.41$0.41 $0.31$0.31

Total Variable Total Variable Costs – DeliveryCosts – Delivery

$12.75$12.75 $13.20$13.20 $13.23$13.23 $12.63$12.63 $12.91$12.91 $12.82$12.82

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

Direct Fixed Plant Costs Per YardDirect Fixed Plant Costs Per Yard

While the Typical Member has seen an increase of only While the Typical Member has seen an increase of only $0.03 over the previous year, this compares to an increase $0.03 over the previous year, this compares to an increase of $0.52 for the Industry Leaders.of $0.52 for the Industry Leaders.

Key factors contributing to difference include: Key factors contributing to difference include: Depreciation increased by $0.05 compared to an increase of Depreciation increased by $0.05 compared to an increase of

$0.19 for the Industry Leaders$0.19 for the Industry LeadersAll other direct plant expense increased by $0.07 compared to All other direct plant expense increased by $0.07 compared to

an increase of $0.36 for the Industry Leadersan increase of $0.36 for the Industry Leaders

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

Direct Fixed Plant Costs

Under 100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

DepreciationDepreciation $0.80$0.80 $0.95$0.95 $1.01$1.01 $1.05$1.05 $1.05 $1.05 $0.94$0.94

Plant & Support Plant & Support Equipment LeasesEquipment Leases $0.32$0.32 $0.36$0.36 $0.28$0.28 $0.18$0.18 $0.21$0.21 $0.21$0.21

InsuranceInsurance $0.15$0.15 $0.16$0.16 $0.17$0.17 $0.14$0.14 $0.15$0.15 $0.19$0.19

Real Estate TaxesReal Estate Taxes $0.16$0.16 $0.17$0.17 $0.19$0.19 $0.20$0.20 $0.20$0.20 $0.21$0.21

Quality ControlQuality Control $0.15$0.15 $0.52$0.52 $0.46$0.46 $0.40$0.40 $0.43$0.43 $0.47$0.47

Environmental Environmental ExpenseExpense $0.08$0.08 $0.07$0.07 $0.07$0.07 $0.09$0.09 $0.08$0.08 $0.09$0.09

Info TechInfo Tech $0.05$0.05 $0.05$0.05 $0.06$0.06 $0.02$0.02 $0.03$0.03 $0.04$0.04

Other Direct Other Direct Delivery ExpensesDelivery Expenses $0.79$0.79 $1.01$1.01 $0.69$0.69 $0.87$0.87 $0.90$0.90 $1.08$1.08

Total Direct Fixed Total Direct Fixed Costs – DeliveryCosts – Delivery $2.50$2.50 $3.29$3.29 $2.93$2.93 $2.95$2.95 $3.05$3.05 $3.23$3.23

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

G & A Expenses Per YardG & A Expenses Per Yard

While the Typical Member has seen an decrease of $0.35 While the Typical Member has seen an decrease of $0.35 over the previous year, this compares to an increase of over the previous year, this compares to an increase of $0.11 for the Industry Leaders.$0.11 for the Industry Leaders.

Key factors contributing to difference include: Key factors contributing to difference include: Executive Salaries decreased by $0.05 compared to an Executive Salaries decreased by $0.05 compared to an

increase of $0.11 for the Industry Leadersincrease of $0.11 for the Industry LeadersOffice Salaries & Wages decreased by $0.14 compared Office Salaries & Wages decreased by $0.14 compared

to an decrease of $0.01 for the Industry Leadersto an decrease of $0.01 for the Industry LeadersFringes decreased by $0.02 compared to an increase of Fringes decreased by $0.02 compared to an increase of

$0.07 for the Industry Leaders $0.07 for the Industry Leaders

Where the Typical Members Have Where the Typical Members Have Closed The Gap con’tClosed The Gap con’t

G&A ExpensesUnder

100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

Executive SalariesExecutive Salaries $0.74$0.74 $1.00$1.00 $0.84$0.84 $0.46$0.46 $0.55$0.55 $0.76$0.76

Executive BonusesExecutive Bonuses $0.08$0.08 $0.27$0.27 $0.15$0.15 $0.08$0.08 $0.10$0.10 $0.16$0.16

Office Salaries & Office Salaries & WagesWages $1.15$1.15 $0.94$0.94 $0.86$0.86 $0.65$0.65 $0.72$0.72 $0.74$0.74

FringesFringes $0.36$0.36 $0.60$0.60 $0.49$0.49 $0.31$0.31 $0.35$0.35 $0.46$0.46

Comm. ExpensesComm. Expenses $0.22$0.22 $0.23$0.23 $0.16$0.16 $0.11$0.11 $0.13$0.13 $0.14$0.14

Office SuppliesOffice Supplies $0.31$0.31 $0.38$0.38 $0.23$0.23 $0.14$0.14 $0.17$0.17 $0.17$0.17

Other Insurance Other Insurance $0.28$0.28 $0.26$0.26 $0.15$0.15 $0.14$0.14 $0.15$0.15 $0.15$0.15

Other D&AOther D&A $0.19$0.19 $0.24$0.24 $0.28$0.28 $0.23$0.23 $0.24$0.24 $0.34$0.34

Info TechInfo Tech $0.08$0.08 $0.12$0.12 $0.17$0.17 $0.11$0.11 $0.13$0.13 $0.24$0.24

Legal & ProfessionalLegal & Professional $0.37$0.37 $0.36$0.36 $0.27$0.27 $0.14$0.14 $0.18$0.18 $0.17$0.17

Bad debtsBad debts $0.23$0.23 $0.32$0.32 $0.29$0.29 $0.12$0.12 $0.15$0.15 $0.15$0.15

All other G&A All other G&A ExpensesExpenses $0.49$0.49 $0.66$0.66 $0.74$0.74 $0.87$0.87 $0.86$0.86 $1.01$1.01

Total G&A ExpensesTotal G&A Expenses $4.50$4.50 $5.38$5.38 $4.63$4.63 $3.36$3.36 $3.73$3.73 $4.49$4.49

Profit Model RatiosProfit Model Ratios Pre-Tax Profit Margin %Pre-Tax Profit Margin % Asset TurnoverAsset Turnover Return on Assets (ROA) %Return on Assets (ROA) % Return on Equity (ROE) %Return on Equity (ROE) %

Profit Model RatiosUnder

100,000 Yards

100,000 to 299,999 yards

300,000 to 500,000 yards

Over 500,000 Yards

Typical NRMCA Member

Industry Leaders

Pre-Tax Profit Pre-Tax Profit Margin %Margin %

5.3%5.3% 1.6%1.6% 3.6%3.6% 3.4%3.4% 3.4%3.4% 6.2%6.2%

Asset TurnoverAsset Turnover 2.0x2.0x 1.5x1.5x 1.7x1.7x 1.7x1.7x 1.7x1.7x 1.7x1.7x

ROA %ROA % 9.9%9.9% 2.6%2.6% 6.3%6.3% 6.0%6.0% 5.8%5.8% 10.3%10.3%

ROE %ROE % 37.8%37.8% 5.3%5.3% 12.2%12.2% 8.8%8.8% 9.0%9.0% 14.0%14.0%

Profit as a Percentage of Sales Profit as a Percentage of Sales by Company Sizeby Company Size

5.30%

1.60%

3.60% 3.40% 3.40%

6.20%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Under 100,000 Yards 100,000 to 299,000 Yards 300,000 to 500,00 Yards

Over 500,000 Yards Typical Member Industry Leader

Profit as a Percentage of Sales Profit as a Percentage of Sales by Regionsby Regions

4.2%

3.6%

8.8%9.0%

3.9%5.7%

4.5%

1.4%

3.4%

6.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Northeastern MidAtlantic Southeastern North Central

South Central Great Lakes Rocky Mountain

Pacific Northwest Pacific Southwest Typical Member

Indistry Leaders

Asset Turnover by Company SizeAsset Turnover by Company Size

2.0x

1.5x

1.7x 1.7x 1.7x 1.7x

0

0.20.4

0.60.8

11.2

1.41.6

1.82

Under 100,000 Yards 100,000 to 299,000 Yards 300,000 to 500,00 Yards

Over 500,000 Yards Typical Member Industry Leader

Asset Turnover by RegionsAsset Turnover by Regions

1.6x1.8x

1.3x

2.2x

1.4x

2.2x

0.9x

2.8x

1.7x

1.7x

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Northeastern MidAtlantic Southeastern North Central

South Central Great Lakes Rocky Mountain

Pacific Northwest Pacific Southwest Typical Member

Indistry Leaders

Return on Assets (ROA) % Return on Assets (ROA) % by Company Sizeby Company Size

9.9%

2.6%

6.3% 6.0% 5.8%

10.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Under 100,000 Yards 100,000 to 299,000 Yards 300,000 to 500,00 Yards

Over 500,000 Yards Typical Member Industry Leader

Return on Assets (ROA) % Return on Assets (ROA) % by Regionsby Regions

6.7% 7.2%

11.1%

2.2%

5.2%

11.0%

3.9% 4.2%

5.8%

10.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Northeastern MidAtlantic Southeastern North Central

South Central Great Lakes Rocky Mountain

Pacific Northwest Pacific Southwest Typical Member

Indistry Leaders

Return on Equity (ROE) % Return on Equity (ROE) % by Company Sizeby Company Size

37.8%

5.3%

12.2%

8.8% 9.0%

14.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Under 100,000 Yards 100,000 to 299,000 Yards 300,000 to 500,00 Yards

Over 500,000 Yards Typical Member Industry Leader

Return on Equity (ROE) % Return on Equity (ROE) % by Regionsby Regions

10.4% 10.7%

13.8%

4.3%

10.2%

15.9%

4.4%

6.9%

9.0%

14.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Northeastern MidAtlantic Southeastern North Central

South Central Great Lakes Rocky Mountain

Pacific Northwest Pacific Southwest Typical Member

Indistry Leaders

Summary SlideSummary Slide

The Industry as a whole does not seem to The Industry as a whole does not seem to have recovered as well as the rest of the have recovered as well as the rest of the economy.economy.

Both the Industry Leaders and the Typical Both the Industry Leaders and the Typical Members have been unable to increase Members have been unable to increase prices to reflect increased costs.prices to reflect increased costs.

Summary Slide con’tSummary Slide con’t

While the gap has narrowed between the While the gap has narrowed between the Industry Leaders and the Typical Member, Industry Leaders and the Typical Member, industry-wide profitability is trailing the highs industry-wide profitability is trailing the highs of the late 90’s by of the late 90’s by $2.97 per yard, or a decline $2.97 per yard, or a decline of 56.3% since 1999 of 56.3% since 1999 ($5.27 in 1999 vs $2.30 ($5.27 in 1999 vs $2.30 in 2003).in 2003).

The industry must increase prices to match the The industry must increase prices to match the realities of increased costs to return to its realities of increased costs to return to its historical levels of profitability.historical levels of profitability.