1. Genesis Products: Environmental Challenges and Opportunities

• Presentation

• May 2008

2. Formaldehyde is:

• a naturally occurring substance discovered in 1867

• present in most life forms: humans, animals & plants

• normally functioning cells produce and use formaldehyde

• used in the production of furniture, fabrics, paint, foam, rubber, insulation, textiles, paper, pharmaceuticals, wood paneling products and many other household items

• even found in outer space!

3. Formaldehyde is used as:

• an industrial disinfectant and/or as a preservative

• a raw material in resins, producing a unique glue bond for the manufacturing of items such as furniture, flooring, cabinets

• a component of dyes and inks - in magazines, newspapers and photo-copiers

• in our industry, HcHo is used in the glue or adhesive in pressed wood products - such as particleboard,hardwood plywood, and medium density fiberboard (MDF)

4. How can / will our Industry respond?

• Time and technology will resolve many of our challenges, as will ordinary business cycles- but not all of them

• Long term success, perhaps even survival, will depend in part on delivering a compelling message of leadership and stewardship (corporate responsibility, go green)

• Success will also depend on supplier/customer strategies that will ultimately lower manufacturing costs

5. The best plan?... Have a plan. Genesis rejected idea # 37: Deliver bundles of wood with flat bed concept-car to reduce HcHo rating.

6. Todays Topics

• Overview of CARB

• CARB 1 and 2: What it means for you

• The role Genesis is taking in this Industry transition

7. CARBs View: US Emission Standards

• Set in 1985 by U.S. Dept. of Housing and Urban Development (HUD)

• • This is considered dated and out-of-touch with World-wide standards

• Applies only to PB and HWPW in manufactured homes

• • Emissions occur with many products, and in many areas of living

• High emission rate compared to Europe, Australia, and Japan

• • Need to recognize our role and responsibility as a Global Supplier

8. CARBs View: International Emission Standards

• Lower than current U.S. standard

• • If the U.S. doesnt keep up, it will become obsolete in Global Market

• Programs are fundamentally different and not directly comparable

• • Asian, European, HUD all are measured and tested to different standards

9. Key Elements of the ATCM

• Establishes new formaldehyde emission limits for HWPW, PB, and MDF panels, and requires their use in finished goods

• Panel manufacturers must demonstrate compliance through third party certification

• Fabricators must use compliant products in their finished goods for California

10. ATCM Provisions

• Applies to products sold, supplied, used, or manufactured for sale in California

• Emission standards in two phases

• Sell-through

• Exemptions

• Enforcement

11. ATCM Applicability

• Panel manufacturers

• Distributors ( Genesis )

• Importers

• Fabricators ( Genesis, Keystone RV )

• Retailers

• Finished goods

• Consumer Products

• • but Not Consumers

12. Composite Wood Products Covered Under ATCM

• Hardwood Plywood (HWPW)

• • Veneer core

• • Composite core

• Particleboard (PB)

• Medium Density Fiberboard (MDF)

• • Thickness >8mm

• • Thickness < 8mm (Thin MDF)

13. Phase 1 Standards ----- 0.21 ppm Thin MDF ----- 0.21 ppm MDF ----- 0.18 ppm PB 0.08 ppm ----- HWPW-CC ----- 0.08 ppm HWPW-VC Jul 1, 2009 Jan 1, 2009 Product

14. Phase 2 Standards 0.05 ppm Jan 1, 2010 ----- 0.13 ppm ----- Thin MDF ----- ----- 0.11 ppm MDF ----- ----- 0.09 ppm PB 0.05 ppm ----- ----- HWPW-CC ----- ----- HWPW-VC Jul 1, 2012 Jan 1, 2012 Jan 1, 2011 Product

15. Comparison of ATCM Standards* 0.05 0.05 0.08 0.08 0.20 None Hardwood Plywood: - Veneer Core - Composite Core 0.11 0.13 0.21 0.21 None None Medium Density Fiberboard (>8mm) - Thin MDF (