2009 Annual Report

Strategy

• Total Shareholder Return (TSR) is our primary financial objective; all decisions judged against impact to TSR
• TSR derived from four activities: 1) margin improvement, 2) dividend yield, 3) revenue growth, and 4) stock buyback
• Business units each have a specific "role" in portfolio based upon their competitive advantages, market position, and financial health
• Business unit bonus is tied to return on assets
• Long term growth relies on successful product innovation and development of new growth platforms

Leggett Distinctives

• Financial stability, strong balance sheet, solid cash flow
• Strong market positions
• Consistent dividend growth
• Management with "skin in the game"

Track Record

• 2-year TSR (2008 & 2009) in top 4% of the S&P 500
• Dividends increased by 14% annual average for 38 consecutive years – one of the best records among the S&P 500
• Credit rating consistently in upper third of the S&P 500

Cash Use Priorities

1. Fund capital needs and dividends
2. If needed (e.g. sales increase), expand working capital
3. Fund acquisitions, if any
4. Use excess cash flow, if any, to repurchase stock

Financial Goals; Dividend Policy

• TSR (total shareholder return) in top 1/3 of S&P 500
• Steady dividend increases; 50-60% payout
• 30% - 40% net debt to net capital
• Long-term: 4% - 5% annual growth

Capital Structure

• About $3 billion market cap; $4 billion enterprise value
• 23.7% net debt to net capital
• 149 million shares outstanding at Dec. 31, 2009
• Standing authorization to buy back up to 10m shares annually

Stock Information

• Listed on NYSE; ticker = LEG; approximately 30,000 shareholders
• Current indicated annual dividend of $1.04 per share
• Dividend yield = 5.1% (on $20.40 year-end stock price)
• 2009 price range of $10.03 - $21.44
• 2009 daily volume averaged 1.8 million shares
• About 10% of stock owned by management and employees, directors, retirees, merger partners, and their family members
• Compound annual TSR of 14% since 1967 IPO

Quick Facts

• 2009 sales from continuing ops. of $3.06 billion; 25% international
• Broad customer base; mainly manufacturers and retailers
• Few large competitors; almost none are public
• 4 Reporting Segments; 10 Groups; 19 Business Units
• 19,000 employees; over 140 manufacturing facilities in 18 countries

2009 Accomplishments

• Achieved 2009 TSR in the top 38% of S&P 500 companies; 2-year TSR in top 4%
• Posted 2nd-highest cash flow from operations in company history
• Improved both gross and EBIT margins despite severe economic downturn
• Significantly reduced working capital as a percent of sales
• Maintained strong balance sheet
• Increased dividend; 38th consecutive annual increase
• Reduced shares outstanding by 4.5%

Recognition

• Included among Standard & Poor's 'Dividend Aristocrats'; possess 13th longest string of annual dividend increases
• On Fortune's list of World's Most Admired Companies; scored in the top third of the companies listed
• Among the top firms in Mergent's Dividend Achievers
• One of America's Finest Companies according to the Staton Institute

Profile

S&P 500 diversified manufacturer that conceives, designs and produces a wide range of engineered components and products that can be found in most homes, offices, and automobiles, and in many retail stores. North America’s largest independent manufacturer of a variety of products including:

• Components for bedding and residential furniture
• Carpet padding
• Components for office furniture
• Drawn steel wire
• Automotive seat support and lumbar systems

Brief History

• 1883: Partnership founded in Carthage, Missouri
• 1901: Leggett & Platt was incorporated
• 1967: Company went public; revenues of $13 million
• 1979: Listed on New York Stock Exchange (LEG)
• 1990: Revenues exceed $1 billion
• 1998: Included in the FORTUNE 500
• 1999: Added to the S&P 500 index
• 2007: Announced major changes to strategy
• 2008: 125th Anniversary

Peer Group

Eleven large, diversified manufacturing peers.