Presentation to bt 2 Steering Committee Meeting June 5 th , 2009

1. Presentation to bt2 Steering Committee MeetingJune 5th, 2009

3. Accomplishments Since Last Meeting • Went Live in Orlando with Branch Inventory Solution • Exited Integrated Test Round One for Los Lunas • Began Star Item Creation in Production to Support Los Lunas • Completed Basic Design of Component Plants

4. Action Items from Previous Meeting

6. Current Workstreams • Customer Facing • proCAB (4.1) • Intelliquote – coding complete by June – Q4 launch (4.6) • Masterpiece • Branch Roll Out (4.2) • Inventory solution in late May for Florida • Align Quality/Merillat Go Live at each Branch • All Branches implemented by year-end • Los Lunas Implementation (4.3) • Component Plants (4.4) • Do design now – may also test with above • Duncanville Go – Back (4.5) • QBAC – will also affect Cedar Hill and the Mill • Strategy for Upper / Lower • Support Rapid City transition • May also tie into Cedar Hill consolidation • Objective to test as a group – design and build now – integrated test in October

7. Leadership Agenda - bt² Releases in Production

8. Leadership Agenda - bt² Implementations in Process

9. R4 – Los Lunas - Key Milestones

10. bt2 Risk Management Starting to see possibility of risk realization Don’t foresee risk realization G Y Risk has been realized R

11. MBP Discussion • 2008 MBP Results • Generated very low scores for leaders • Some had worst reviews of career in the year of highest commitment • MBP Count Remains at 7 • Dropped MBP’s • SOX – Automate 80% of Manual Controls • Goals will be achieved when implementation complete • Surveys • Team Member – Turnover Metric • Stakeholder – Readiness • We will continue to do surveys, but measurement will be secondary to determining actions

12. MBP Discussion • MBP Objectives proposed for 2009 • Management • Project Milestones on Time – SPI • Project Costs on Track – CPI • Maintain salaried turnover below 5% • Allow for this as a 4.0 achievement – company average = 3.0 • 100% of Team Members with Transition Plan to Business • All Team Members • Project Milestones for Team Members – By Track: % period planned versus actual milestones • Project Benefits in Line with Business Case • $145 million - prior to volume changes • Personal Knowledge Transfer Plans in Place • Goal 100% by September • Business Readiness by Function – replace surveys • Plan by area • Shared with business users • Need to establish metric

13. BCG Key Success Metrics - MBP’s • Project Milestones August Revised Budget • SPI - .94 • CPI – 1.10 • Will report at next Steering Committee on benefits roll-up • Working through defining measurements for several new MBP’s • Knowledge transfer plans • Business/Customer Readiness • Transition Plans

15. Budget Status - Capital

16. Budget Status - Expense

18. With multiple tracks of the project (implementation, deployment, design) running in parallel now, the focus of the program leadership needs to change from the “next release” to coordination between these multiple tracks R4 and Beyond: Key Focus Areas for Leadership ** Highlighted areas are where the Steering Committee can influence

19. R4 and Beyond: Key Focus Areas for Leadership Focus for the customer facing activities is a high priority for Release 4. IS will begin focus on performance, support and error prevention

20. Los Lunas Versus Culpeper Decision to implement Los Lunas as the First Merillat Assembly Plant Ability to flex volume was the primary driver Pros Allows for more flexibility to reduce volumes to reduce business impacts **** Less time between Culpeper and Mt Sterling (Hickory and Bisque sourcing) ** Fewer M2OE customers *** May link Culpeper Go Live to Mt Sterling Mill Go Live ** Delays Pick and Pack implementation *** More smooth transition for Duncanville Mill to support Los Lunas ** Cons May defer visibility of size related issues ** Lower consulting footprint at Culpeper Go Live ** Impact to freight cost and lead time *** Custom shop solution needed immediately *** Less mature processes in Los Lunas ** Data setup will require more effort before INT2 ** More branches aligned to Los Lunas – can shift to Mt Sterling *** **** = each star indicates higher impact

21. Intelliquote / OI - Summary of Remaining Efforts and Costs Core IntelliQuote Original projection: 7,900 Hours consumed to date: 9,895 Estimate at Completion: 13,483 Current authorized work • Path forward • Design complete for all above scope • Need to complete IQ and stabilize before adding OI scope • OI projected to have very large benefits

24. Action Items from Meeting

26. Appendix Content • Internal Staffing Changes • EVD Description and Overall Timeline • Scope Change Management • Issue Metrics • Risk Management • Solutions & Deployment Teams Details

27. Staffing Update • 34 positions filled for “business roles” • Added Brook Stephens • To Date Resignations • 2007 Joe Oddo OTC Team • Fresh-Outs • Filled 10 of 10 positions • 16 positions filled for “IS roles” • Technology resources and 3 development rolled back to IS • To Date Resignations • Feb 2008 Christine Flamm Systems Architect • Mar 2008 Steve Hester OTC Process Manager • Jun 2008 Godfrey Chinomona OTC Bus Analyst • Aug 2008 Randy Guinn Unix Admin • Aug 2008 Patty Jones Developer (Doc Link support)

28. Business Transformation Timeline Q3 2007 Q4 2007 Q1 2008 – Q4 2009 Finance Go Live, April 2008 – Cedar Hill, July 2008 – Duncanville, March 2008

29. bt2 Build Phase Activities Vision Plan Design Build Deliver Operate The purpose of this phase is to develop needed RICEW elements defined in design, put in place the software and hardware environment, prepare learning materials, and test the solution. Support Leadership Monitor Change Readiness Deliver On Going Communications Support Stakeholders People, Change& Learning Conduct Change Impact Assessment Design Performance Management Process Develop Organization Strategy Transfer Capabilities Develop Performance Management Strategy Develop End-User Learning Program Processand Package Configure Software Develop Functional Test Work plan Build Cutover Develop Functional Test Materials Conduct Functional Tests Support Non-Production Environments Conduct Technical Tests Design and Build Batch Schedule Procure Production Hardware Information Technology Build and Test Production Environment Build Software Development Programs Develop and Test Process Controls Develop and Test Interface and Data Migration Controls Build, Install and Configure Technical Security Infrastructure Develop and Test Information Technology Controls Securityand Controls Define Technical Security Infrastructure Policies and Procedures Develop and Test Production Application Security Test Technical Security Infrastructure Test Production Application Security ProjectManagement Plan Project Execute Project Control Project

30. Bt2 Deliver Phase Activities Vision Plan Design Build Deliver Operate The purpose of this phase is to complete integration and user acceptance testing, prepare the workforce, complete cutover activities and implement Support Leadership Monitor Change Readiness Deliver Ongoing Communications Support Stakeholders Prepare Workforce People, Change& Learning Implement Organization Structure Transfer Capabilities Deliver End-User Learning Program Design and Implement Performance Management Metrics Implement Performance Management System Processand Package Develop Functional Test Materials Conduct Functional Tests Execute Cutover Deliver Project Book Content Information Technology Conduct Performance and Stress Tests Build Technical Cutover Plans Develop Operational and Monitoring Processes Deliver Production Environment Securityand Controls Deliver Process Controls Deliver Production Application Security Deliver Interface and Data Migration Controls Deliver Information Technology Controls Implement Support Organization Validate Application Management Services Monitor Application Management Services Risks Test Support and System Infrastructure Support Transition Applications to Support Organization ProjectManagement Plan Project Execute Project Control Project

33. Scope Change Management Change Request Status • Approved Requests Since Last Meeting • Bill Of Lading Document Change • Auto Scrap Reorder Coding Change

34. Issues Management

35. Risk Management • Risk Management Status • Continued work on mitigation plans

36. Risk Management