1 SHAW FINANCIAL LITERACY Breakout Session Hard Surface Business March 24, 2015

Sub-title Goes Here 2 Hard Surface Breakout Session Agenda -Prison Industry Enterprise (PIE) Program -Engineered Hardwood -HDF Hardwood -Solid Hardwood -Resilient

Sub-title Goes Here 3 Prison Industry Enterprise (PIE) Program South Carolina Department Of Corrections -Strict guidelines must be followed which require that inmates voluntarily work in the program and acknowledge that taxes, victim compensation and room and board will be deducted from their gross pay. -Prison Industries does not displace currently employed workers in the community. Since the work is manufacturing and good are placed in interstate commerce, the PIE guidelines must be followed. -Currently hardwood flooring, apparel, wire harnesses and furniture are being produced. Pay ranges from $7.25 to $10.00 per hour. -Approximately 1,345 inmates are working in Prison Industries. The Prison Industries Program is completely self supporting, providing valuable training for the inmates while generating funding for the agency.

Sub-title Goes Here 4 Engineered Hardwood -Engineered Plants -Engineered products are 5 ply veneer construction. Standard composition is face/back (target finished hardwood species) and 2 cross bands/1 core (miscellaneous hardwood species). -Engineered thicknesses are 3/8" and 1/2" -Very complicated inventory accounting. Finished product cost is based on standard composition. Veneer is a from a natural resource. Quantity and grade can be very difficult to predict.

Sub-title Goes Here 5 HDF Hardwood -HDF Plants -Engineered products are 3 ply construction. Standard composition is face/back (target finished hardwood species), 1 core (high density fiberboard) -3/8" thickness -Very complicated inventory accounting. Finished product cost is based on standard composition. Veneer is a from a natural resource. Quantity and grade can be very difficult to predict.

Sub-title Goes Here 6 Solid Hardwood -Solid Plants -3/4" thickness -Very complicated inventory accounting. Finished product cost is based on standard grade mix. Lumber is a from a natural resource. Quantity and grade can be very difficult to predict.

Sub-title Goes Here 7

8 Resilient - Has gone from 0% in 2011 to a substantial part of HS business in 2015 business plan. -Shaw still has less than 20% market share. There are other plants under construction in the United States. -Resilient competes in every product category. -Products can be sold through existing channels without adding to our sales structure.