----

----

|                                 |   | 2010   |    |   | 2009   |   |    | 2008   |   |   | 2007    |   |   | 2006   |    |
|--------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| Net sales                            |   | $      | 121,185 |   |   | $      | 132,195 |   |   | $      | 153,886 |   |   | $      | 146,770 |   |   | $ | 154,213 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net income                           |   | $      | 224     |   |   | $      | 4,685   |   |   | $      | 10,233  |   |   | $      | 15,110  |   |   | $ | 13,211 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net income per share                 |   |   | $0.06   |   |   |   | $1.18   |   |   |   | $2.54   |   |   |   | $3.78   |   |   |   | $3.28 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total assets                         |   | $      | 174,099 |   |   | $      | 176,998 |   |   | $      | 174,765 |   |   | $      | 167,488 |   |   | $ | 162,504 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Long‑term debt obligations     |   | $      | 9,154   |   |   | $      | 12,097  |   |   | $      | 17,752  |   |   | $      | 20,206  |   |   | $ | 22,083 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash dividends declared per share    |   |   | $0.92   |   |   |   | $0.92   |   |   |   | $0.92   |   |   |   | $0.88   |   |   |   | $0.84 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Stockholders’ equity per share |   |   | $25.32  |   |   |   | $25.65  |   |   |   | $24.98  |   |   |   | $24.92  |   |   |   | $22.84 |   |

----

----

|                                                                                                              | Total    Sales |
|-------------------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                                                              | December 31,                  |
|                                                                                                              | 2010                          |   | 2009 |   | 2008 |
| Cement Business                                                                                              | 40.8%                         |   | 42.1% |   | 45.3% |
| Ready-Mixed Concrete Business               | 59.2%                         |   | 57.9% |   | 54.7% |
|                                                                                                              | 100.0%                        |   | 100.0% |   | 100.0% |

----

-     general economic and business conditions;  
-     competition; 
-     raw material and other operating costs; 
-     costs of capital equipment; 
-     changes in business strategy or expansion plans;  
-     demand for our Company’s products; 
-     cyclical and seasonal nature of our business; 
-     the effect of weather on our business; 
-     the effect of environmental and other government regulations;  
-     the availability of credit at reasonable prices; and 
-     the effect of federal and state funding on demand for our products. 

|                                 |   |     |       |   | Ready‑Mixed |   |       |         |   |
|--------------------------------------|--------|----------|------------|--------|-------------------|--------|------------|--------------|--------|
|                                 |   | Cement   |       |   | Concrete          |   |       |         |   |
|                                 |   | Business |       |   | Business          |   |       | Consolidated |   |
| For the Year Ended December 31, 2010 |   |     |       |   |              |   |       |         |   |
| Sales to unaffiliated customers      |   | $        | 49,436,170 |   |              | $      | 71,748,664 |         |   | $ | 121,184,834 |   |
| Income (loss) from operations        |   |     | 6,147,514  |   |              |   | (6,005,382 | )            |   |   | 142,132 |   |
|                                 |   |     |       |   |              |   |       |         |   |   |   |   |
| For the Year Ended December 31, 2009 |   |     |       |   |              |   |       |         |   |   |   |   |
| Sales to unaffiliated customers      |   | $        | 55,687,700 |   |              | $      | 76,506,842 |         |   | $ | 132,194,542 |   |
| Income (loss) from operations        |   |     | 7,019,307  |   |              |   | (2,070,723 | )            |   |   | 4,948,584 |   |
|                                 |   |     |       |   |              |   |       |         |   |   |   |   |
| For the Year Ended December 31, 2008 |   |     |       |   |              |   |       |         |   |   |   |   |
| Sales to unaffiliated customers      |   | $        | 69,683,762 |   |              | $      | 84,202,711 |         |   | $ | 153,886,473 |   |
| Income (loss) from operations        |   |     | 18,362,170 |   |              |   | (1,607,168 | )            |   |   | 16,755,002 |   |

----

----

----

----

----

|                       |   | 2011   |       |   | 2012   |   |                                  | 2013   |   |   | 2014                                  |   |   | 2015   |                                  |   | Thereafter |   |
|----------------------------|--------|--------|------------|--------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|------------|--------|
| Long-term debt             |   | $      | 2,823,648  |   |   | $      | 3,018,713                             |   |   | $      | 3,015,188                             |   |   | $      | 3,120,186                             |   |       | $      | -       |   |   | $ | -       |   |
| Interest payments          |   |   | 367,865    |   |   |   | 265,243                               |   |   |   | 164,517                               |   |   |   | 63,928                                |   |       |   | -       |   |   |   | -       |   |
| Pension                    |   |   | 3,118,000  |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |       |   | -       |   |   |   | -       |   |
| Postretirement             |   |   |       |   |   |   |                                  |   |   |   |                                  |   |   |   |                                  |   |       |   |   |   |   |   |   |   |
|   benefit obligations |   |   | 1,773,836  |   |   |   | 1,878,055                             |   |   |   | 2,000,562                             |   |   |   | 2,109,258                             |   |       |   | 2,214,397 |   |   |   | 11,936,481 |   |
| Open purchase orders       |   |   | 4,991,021  |   |   |   | 1,701,171                             |   |   |   | 850,585                               |   |   |   | -       |   |       |   | -       |   |   |   | -       |   |
| Total                      |   | $      | 13,074,370 |   |   | $      | 6,863,182                             |   |   | $      | 6,030,852                             |   |   | $      | 5,293,372                             |   |       | $      | 2,214,397 |   |   | $ | 11,936,481 |   |

----

----

----

----

----

----

----

|                                                                                                    |   | 2010   |   |   | 2009  |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|------------|--------|
|                                                                                                    |   | Price  |   |   | Dividends  |   |   | Price  |   |   | Dividends |   |
| Quarter                                                                                                 |   | Low         |   |   | High       |   |   | Declared |   |   | Low |   |   | High |   |   | Declared |   |
| First                                                                                                   |   |        | $28.50 |   |       |   | $30.56 |   |   |   | $  -     |   |   |   | $20.25 |   |   |   | $27.23 |   |   |   | $  -     |   |
| Second                                                                                                  |   |        | $25.67 |   |       |   | $29.05 |   |   |   | $0.23 |   |   |   | $23.00 |   |   |   | $30.75 |   |   |   | $0.23 |   |
| Third                                                                                                   |   |        | $23.37 |   |       |   | $26.17 |   |   |   | $0.23 |   |   |   | $30.51 |   |   |   | $31.50 |   |   |   | $0.23 |   |
| Fourth                                                                                                  |   |        | $22.00 |   |       |   | $25.00 |   |   |   | $0.46 | * |   |   | $30.24 |   |   |   | $33.00 |   |   |   | $0.46 | * |
|                                                                                                    |   |
|  *Reflects declaration of two $0.23 dividends payable in the first quarter of 2011 and 2010.  |   |

----

|                         |   |   | 12/05   |   |   |   | 12/06   |   |   |   | 12/07   |   |   |   | 12/08   |   |   |   | 12/09   |   |   |   | 12/10   |   |
|------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                         |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
| Monarch Cement Company (The) |   |   | $100.00 |   |   |   | $145.59 |   |   |   | $137.20 |   |   |   | $131.24 |   |   |   | $147.43 |   |   |   | $134.73 |   |
| S&P 500                  |   |   | 100.00  |   |   |   | 115.80  |   |   |   | 122.16  |   |   |   | 76.96   |   |   |   | 97.33   |   |   |   | 111.99  |   |
| Peer Group                   |   |   | 100.00  |   |   |   | 137.31  |   |   |   | 135.76  |   |   |   | 58.17   |   |   |   | 74.24   |   |   |   | 64.20   |   |

----

----

----

----

| The Monarch Cement Company and Subsidiaries                                                                      |
|-----------------------------------------------------------------------------------------------------------------------|
| Consolidated Balance Sheets                                                                                      |
| December 31, 2010 and 2009                                                                                       |
|                                                                                                                  |   |   |   |   |   |   |
| ASSETS                                                                                                                |   | 2 0 1 0 |   |   | 2 0 0 9 |   |
| Current Assets:                                                                                                       |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                             |   | $ | 2,695,267 |   |   | $ | 2,149,397 |   |
| Receivables, less allowances of $707,000 in 2010 and                                                                  |   |   |   |   |   |   |   |   |
|      $911,000 in 2009 for doubtful accounts                                                       |   |   | 12,016,919 |   |   |   | 12,558,856 |   |
| Inventories, priced at cost which is not in excess of market-                                                         |   |   |   |   |   |   |   |   |
|      Finished cement                                                                              |   | $ | 5,665,411 |   |   | $ | 5,345,468 |   |
|      Work in process                                                                              |   |   | 2,095,963 |   |   |   | 2,050,200 |   |
|      Building products                                                                            |   |   | 4,692,327 |   |   |   | 5,225,431 |   |
|      Fuel, gypsum, paper sacks and other                                                          |   |   | 5,838,637 |   |   |   | 7,625,573 |   |
|      Operating and maintenance supplies                                                           |   |   | 11,751,562 |   |   |   | 11,538,788 |   |
|           Total inventories                                              |   | $ | 30,043,900 |   |   | $ | 31,785,460 |   |
| Refundable federal and state income taxes                                                                             |   |   | -       |   |   |   | 310,795 |   |
| Deferred income taxes                                                                                                 |   |   | 735,000 |   |   |   | 775,000 |   |
| Prepaid expenses                                                                                                      |   |   | 125,787 |   |   |   | 324,844 |   |
|                Total current assets             |   | $ | 45,616,873 |   |   | $ | 47,904,352 |   |
| Property, Plant and Equipment, at cost, less accumulated depreciation                                                 |   |   |   |   |   |   |   |   |
| and depletion of $173,656,095 in 2010 and $162,880,507 in 2009                                                        |   |   | 84,912,099 |   |   |   | 90,817,394 |   |
| Deferred Income Taxes                                                                                                 |   |   | 19,254,393 |   |   |   | 19,093,778 |   |
| Investments                                                                                                           |   |   | 23,984,320 |   |   |   | 18,419,208 |   |
| Other Assets                                                                                                          |   |   | 331,143 |   |   |   | 762,945 |   |
|                                                                                                                  |   | $ | 174,098,828 |   |   | $ | 176,997,677 |   |
|                                                                                                                  |   |   |   |   |   |   |   |   |
| LIABILITIES AND EQUITY                                                                                                |   |   |   |   |   |   |   |   |
| Current Liabilities:                                                                                                  |   |   |   |   |   |   |   |   |
| Accounts payable                                                                                                      |   | $ | 5,054,236 |   |   | $ | 5,083,300 |   |
| Line of credit payable                                                                                                |   |   | -       |   |   |   | 511,944 |   |
| Current portion of term loan                                                                                          |   |   | 2,823,648 |   |   |   | 2,732,490 |   |
| Accrued liabilities-                                                                                                  |   |   |   |   |   |   |   |   |
|      Dividends                                                                                    |   |   | 1,845,988 |   |   |   | 1,851,131 |   |
|      Compensation and benefits                                                                    |   |   | 3,259,188 |   |   |   | 3,064,633 |   |
|      Federal and state income taxes                                                               |   |   | 135,470 |   |   |   | -       |   |
|      Miscellaneous taxes                                                                          |   |   | 744,126 |   |   |   | 777,349 |   |
|      Other                                                                                        |   |   | 1,947,343 |   |   |   | 5,207,483 |   |
|                Total current liabilities        |   | $ | 15,809,999 |   |   | $ | 19,228,330 |   |
| Long-Term Debt                                                                                                        |   |   | 9,154,087 |   |   |   | 12,096,835 |   |
| Accrued Postretirement Benefits                                                                                       |   |   | 34,782,978 |   |   |   | 30,206,610 |   |
| Accrued Pension Expense                                                                                               |   |   | 12,723,073 |   |   |   | 12,250,038 |   |
| Stockholders’ Equity:                                                                                           |   |   |   |   |   |   |   |   |
| Capital Stock, par value $2.50 per share, one vote per share ‑                                                  |   |   |   |   |   |   |   |   |
|      Authorized 10,000,000 shares, Issued and Outstanding 2,532,328                               |   |   |   |   |   |   |   |   |
|      shares at December 31, 2010 and 2,532,463 shares at                                          |   |   |   |   |   |   |   |   |
|      December 31, 2009                                                                            |   | $ | 6,330,820 |   |   | $ | 6,331,158 |   |
| Class B Capital Stock, par value $2.50 per share, ten votes per                                                       |   |   |   |   |   |   |   |   |
|      share - Authorized 10,000,000 shares, Issued and Outstanding                                 |   |   |   |   |   |   |   |   |
|      1,480,690 shares at December 31, 2010 and 1,491,735 shares                              |   |   |   |   |   |   |   |   |
|      at December 31, 2009                                                                         |   |   | 3,701,725 |   |   |   | 3,729,337 |   |
| Retained earnings                                                                                                     |   |   | 102,270,564 |   |   |   | 105,989,712 |   |
| Accumulated other comprehensive loss                                                                                  |   |   | (10,674,418 | )  |   |   | (12,834,343 | ) |
|                Total Stockholders’ Equity |   | $ | 101,628,691 |   |   | $ | 103,215,864 |   |
|                                                                                                                  |   | $ | 174,098,828 |   |   | $ | 176,997,677 |   |
| See notes to consolidated financial statements                                                                        |   |   |   |   |   |   |   |   |

----

| The Monarch Cement Company and Subsidiaries                                                     |
|------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Income                                                               |
| For the Years Ended December 31, 2010, 2009 and 2008                                            |
|                                                                                                 |   | 2 0 1 0 |   |   | 2 0 0 9 |   |   | 2 0 0 8 |   |
| NET SALES                                                                                            |   | $ | 121,184,834 |   |   | $ | 132,194,542 |   |   | $ | 153,886,473 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| COST OF SALES                                                                                        |   |   | 104,977,712 |   |   |   | 110,646,807 |   |   |   | 120,887,764 |   |
|           Gross profit from operations             |   | $ | 16,207,122 |   |   | $ | 21,547,735 |   |   | $ | 32,998,709 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| SELLING, GENERAL AND                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|    ADMINISTRATIVE EXPENSES                                                            |   |   | 16,064,990 |   |   |   | 16,599,151 |   |   |   | 16,243,707 |   |
|           Income from operations                   |   | $ | 142,132 |   |   | $ | 4,948,584 |   |   | $ | 16,755,002 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|      Interest income                                                             |   | $ | 120,071 |   |   | $ | 74,624 |   |   | $ | 175,895 |   |
|      Interest expense                                                            |   |   | (540,439 | ) |   |   | (631,600 | ) |   |   | (917,218 | ) |
|      Loss on impairment of equity investments                                    |   |   | (858,787 | ) |   |   | (524,188 | ) |   |   | (4,157,612 | ) |
|      Gain (loss) on sale of equity investments                                   |   |   | (79,793 | ) |   |   | 136,853 |   |   |   | -       |   |
|      Dividend income                                                             |   |   | 249,929 |   |   |   | 186,752 |   |   |   | 267,435 |   |
|      Other, net                                                                  |   |   | 890,809 |   |   |   | 1,193,594 |   |   |   | 834,205 |   |
|                                                                                                 |   | $ | (218,210 | ) |   | $ | 436,035 |   |   | $ | (3,797,295 | ) |
| INCOME (LOSS) BEFORE PROVISION FOR                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|      (BENEFIT FROM) INCOME TAXES                                                 |   | $ | (76,078 | ) |   | $ | 5,384,619 |   |   | $ | 12,957,707 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| PROVISION FOR (BENEFIT FROM) INCOME TAXES                                                            |   |   | (300,000 | ) |   |   | 700,000 |   |   |   | 2,725,000 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                                                                           |   | $ | 223,922 |   |   | $ | 4,684,619 |   |   | $ | 10,232,707 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: Net loss attributable to noncontrolling interest                                               |   |   | -       |   |   |   | (48,799 | ) |   |   | (174 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME ATTRIBUTABLE TO COMPANY                                                                   |   | $ | 223,922 |   |   | $ | 4,733,418 |   |   | $ | 10,232,881 |   |
| Basic earnings per share                                                                             |   |   | $0.06 |   |   |   | $1.18 |   |   |   | $2.54 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated Statements of Comprehensive Income                                                 |
| For the Years Ended December 31, 2010, 2009 and 2008                                            |
|                                                                                                 |   |   | 2 0 1 0 |   |   |   | 2 0 0 9 |   |   |   | 2 0 0 8 |   |
| NET INCOME                                                                                           |   | $ | 223,922 |   |   | $ | 4,684,619 |   |   | $ | 10,232,707 |   |
| UNREALIZED APPRECIATION (DEPRECIATION) ON AVAILABLE                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|      FOR SALE SECURITIES (Net of deferred tax (benefit) expense             |   |   |   |   |   |   |   |   |   |   |   |   |
|      of $1,972,000, $816,000 and $(3,040,000) for 2010, 2009 and 2008,      |   |   |   |   |   |   |   |   |   |   |   |   |
|      respectively)                                                          |   |   | 2,959,420 |   |   |   | 1,226,665 |   |   |   | (4,557,612 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| RECLASSIFICATION ADJUSTMENT FOR REALIZED (GAINS)                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|      LOSSES INCLUDED IN NET INCOME (Net of deferred tax (benefit)           |   |   |   |   |   |   |   |   |   |   |   |   |
|      expense of $(376,000), $(156,000), and $(1,664,000) for 2010, 2009          |   |   |   |   |   |   |   |   |   |   |   |   |
|      and 2008, respectively)                                                     |   |   | 562,580 |   |   |   | 231,335 |   |   |   | 2,493,612 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| MINIMUM PENSION LIABILITY (Net of deferred tax (benefit) expense                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|      of $(300,000), $1,070,000 and $(3,800,000) for 2010, 2009 and 2008,    |   |   |   |   |   |   |   |   |   |   |   |   |
|      respectively)                                                               |   |   | (453,765 | ) |   |   | 1,616,189 |   |   |   | (5,705,931 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| POSTRETIREMENT LIABILITY (Net of deferred tax (benefit) expense                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|      of $(1,050,000), $(945,000) and $975,000 for 2010, 2009 and 2008, |   |   |   |   |   |   |   |   |   |   |   |   |
|      respectively)                                                          |   |   | (908,310 | ) |   |   | (1,399,409 | ) |   |   | 1,462,306 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                                                                                 |   | $ | 2,383,847 |   |   | $ | 6,359,399 |   |   | $ | 3,925,082 |   |
| See notes to consolidated financial statements                                                       |   |   |   |   |   |   |   |   |   |   |   |   |

----

| The Monarch Cement Company and Subsidiaries                                        |   |
|------------------------------------------------------------------------------------|--------|
| Consolidated Statements of Stockholders’ Equity and Noncontrolling Interests |   |
| For the Years Ended December 31, 2010, 2009 and 2008                               |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   | Company Stockholders |   |   |   |   |   |   |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumu- |   |   |   |   |   |   |   |
|                                                                               |   |   |   |   | Class B |   |   |   |   |   |   |   |   | lated Other |   |   | Non- |   |   |   |   |
|                                                                               |   |  Capital |   |   | Capital |   |   | Retained |   |   | Treasury |   |   |  Comprehen- |   |   | Controlling |   |   |   |   |
|                                                                               |   |  Stock |   |   | Stock |   |   | Earnings |   |   | Stock |   |   |  sive Income |   |   | Interest |   |   | Total |   |
| Balance                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 01, 2008                                                                   |   | $ | 6,276,770 |   |   | $ | 3,790,625 |   |   | $ | 98,488,627 |   |   | $ | -       |   |   | $ | (8,201,498 | ) |   | $ | 709,038 |   |   | $ | 101,063,562 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                         |   |   | -       |   |   |   | -       |   |   |   | 10,232,881 |   |   |   | -       |   |   |   | -       |   |   |   | (174 | ) |   |   | 10,232,707 |   |
| Dividends declared                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      ($0.92 per share)                                    |   |   | -       |   |   |   | -       |   |   |   | (3,703,531 | ) |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (3,703,531 | ) |
| Transfer of shares                                                                 |   |   | 26,775 |   |   |   | (26,775 | ) |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |
| Purchase of treasury stock                                                         |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (66,321 | ) |   |   | -       |   |   |   | -       |   |   |   | (66,321 | ) |
| Retirement of treasury stock                                                       |   |   | (6,900 | ) |   |   | -       |   |   |   | (59,421 | ) |   |   | 66,321 |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |
| Change in unrealized                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      appreciation on available-                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      for-sale securities                                  |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (2,064,000 | ) |   |   | -       |   |   |   | (2,064,000 | ) |
| Adjustment to recognize                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      minimum pension liability                            |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (5,705,931 | ) |   |   | -       |   |   |   | (5,705,931 | ) |
| Adjustment to recognize                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      postretirement liability                             |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 1,462,306 |   |   |   | -       |   |   |   | 1,462,306 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008                                                                  |   | $ | 6,296,645 |   |   | $ | 3,763,850 |   |   | $ | 104,958,556 |   |   | $ | -       |   |   | $ | (14,509,123 | ) |   | $ | 708,864 |   |   | $ | 101,218,792 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                         |   |   | -       |   |   |   | -       |   |   |   | 4,733,418 |   |   |   | -       |   |   |   | -       |   |   |   | (48,799 | ) |   |   | 4,684,619 |   |
| Dividends declared                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      ($0.92 per share)                                    |   |   | -       |   |   |   | -       |   |   |   | (3,702,262 | ) |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (3,702,262 | ) |
| Transfer of shares                                                                 |   |   | 34,513 |   |   |   | (34,513 | ) |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |
| Change in unrealized                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      appreciation on available-                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      for-sale securities                                  |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 1,458,000 |   |   |   | -       |   |   |   | 1,458,000 |   |
| Adjustment to recognize                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      minimum pension liability                            |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 1,616,189 |   |   |   | -       |   |   |   | 1,616,189 |   |
| Adjustment to recognize                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      postretirement liability                             |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (1,399,409 | ) |   |   | -       |   |   |   | (1,399,409 | ) |
| Increase (decrease) in                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      noncontrolling interest                                   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (660,065 | ) |   |   | (660,065 | ) |
| Balance                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                                                  |   | $ | 6,331,158 |   |   | $ | 3,729,337 |   |   | $ | 105,989,712 |   |   | $ | -       |   |   | $ | (12,834,343 | ) |   | $ | -       |   |   | $ | 103,215,864 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                         |   |   | -       |   |   |   | -       |   |   |   | 223,922 |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 223,922 |   |
| Dividends declared                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      ($0.92 per share)                                    |   |   | -       |   |   |   | - |   |   |   | (3,697,119 | ) |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (3,697,119 | ) |
| Transfer of shares                                                                 |   |   | 27,612 |   |   |   | (27,612 | ) |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |
| Purchase of treasury stock                                                         |   |   | -       |   |   |   | -       |   |   |   |  -       |   |   |   | (273,901 | ) |   |   | -       |   |   |   | -       |   |   |   | (273,901 | ) |
| Retirement of treasury stock                                                       |   |   | (27,950 | ) |   |   | -       |   |   |   | (245,951 | ) |   |   | 273,901 |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |
| Change in unrealized                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      appreciation on available-                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      for-sale securities                                  |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 3,522,000 |   |   |   | -       |   |   |   | 3,522,000 |   |
| Adjustment to recognize                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      minimum pension liability                            |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (453,765 | ) |   |   | -       |   |   |   | (453,765 | ) |
| Adjustment to recognize                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      postretirement liability                             |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (908,310 | ) |   |   | -       |   |   |   | (908,310 | ) |
| Balance                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                                                  |   | $ | 6,330,820 |   |   | $ | 3,701,725 |   |   | $ | 102,270,564 |   |   | $ | -       |   |   | $ | (10,674,418 | ) |   | $ | -       |   |   | $ | 101,628,691 |   |
|                                                                               |   |
| See notes to consolidated financial statements                                     |   |

----

| The Monarch Cement Company and Subsidiaries                                                     |
|------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Cash Flows                                                           |
| For the Years Ended December 31, 2010, 2009 and 2008                                            |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   | 2 0 1 0 |   |   | 2 0 0 9 |   |   | 2 0 0 8 |   |
| OPERATING ACTIVITIES:                                                                                |   |   |   |   |   |   |   |   |   |
| Net income                                                                                           |   | $ | 223,922 |   |   | $ | 4,684,619 |   |   | $ | 10,232,707 |   |
| Adjustments to reconcile net income to                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|    net cash provided by operating activities:                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|       Depreciation, depletion and amortization                         |   |   | 11,742,667 |   |   |   | 12,588,799 |   |   |   | 12,270,723 |   |
|       Deferred income taxes                                            |   |   | (1,118,615 | ) |   |   | (782,238 | ) |   |   | (2,192,006 | ) |
|       Gain on disposal of assets                                       |   |   | (58,335 | ) |   |   | (69,668 | ) |   |   | (234,940 | ) |
|       Realized (gain) loss on sale of equity investments               |   |   | 79,793 |   |   |   | (136,853 | ) |   |   | -       |   |
|       Realized loss on impairment of equity investments                |   |   | 858,787 |   |   |   | 524,188 |   |   |   | 4,157,612 |   |
|       Gain on disposal of other assets                                 |   |   | (700,000 | ) |   |   | -       |   |   |   | -       |   |
|       Postretirement benefits and pension expense                      |   |   | 2,362,328 |   |   |   | 2,057,067 |   |   |   | 717,711 |   |
|       Change in assets and liabilities:                                |   |   |   |   |   |   |   |   |   |   |   |   |
|           Receivables, net                         |   |   | 541,937 |   |   |   | 2,940,782 |   |   |   | (1,968,417 | ) |
|           Inventories                              |   |   | 1,741,560 |   |   |   | (2,987,972 | ) |   |   | (721,888 | ) |
|           Refundable income taxes                  |   |   | 310,795 |   |   |   | (283,693 | ) |   |   | (27,102 | ) |
|           Prepaid expenses                         |   |   | 199,057 |   |   |   | 183,480 |   |   |   | (259,944 | ) |
|           Other assets                             |   |   | 2,442 |   |   |   | 20,447 |   |   |   | 32,821 |   |
|           Accounts payable and accrued liabilities |   |   | (2,281,418 | ) |   |   | 4,764 |   |   |   | 2,033,813 |   |
|       Net cash provided by operating activities                        |   | $ | 13,904,920 |   |   | $ | 18,743,722 |   |   | $ | 24,041,090 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| INVESTING ACTIVITIES:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition of property, plant and equipment                                                         |   | $ | (6,205,837 | ) |   | $ | (9,830,150 | ) |   | $ | (8,150,297 | ) |
| Proceeds from disposals of property, plant and equipment                                             |   |   | 120,176 |   |   |   | 130,442 |   |   |   | 250,727 |   |
| Proceeds from disposals of other assets                                                              |   |   | 700,000 |   |   |   | -       |   |   |   | -       |   |
| Payment for acquisition of business                                                                  |   |   | -        |   |   |   | (1,696,840 | ) |   |   | (2,319,934 | ) |
| Payment for purchases of equity investments                                                          |   |   | (1,046,224 | ) |   |   | (5,225,374 | ) |   |   | (6,869,537 | ) |
| Proceeds from disposals of equity investments                                                        |   |   | 412,532 |   |   |   | 1,589,076 |   |   |   | -       |   |
| (Increase) decrease in short-term investments, net                                                   |   |   | -       |   |   |   | 2,100,000 |   |   |   | (2,100,000 | ) |
|       Net cash used for investing activities                           |   | $ | (6,019,353 | ) |   | $ | (12,932,846 | ) |   | $ | (19,189,041 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in line of credit, net                                                           |   | $ | (511,944 | ) |   | $ | 511,944 |   |   | $ | -       |   |
| Payment on bank loans                                                                                |   |   | (2,731,213 | ) |   |   | (2,644,316 | ) |   |   | (2,116,417 | ) |
| Payments on other long-term debt                                                                     |   |   | (120,377 | ) |   |   | (278,289 | ) |   |   | (337,656 | ) |
| Cash dividends paid                                                                                  |   |   | (3,702,262 | ) |   |   | (3,702,262 | ) |   |   | (3,624,262 | ) |
| Purchases of noncontrolling interests                                                                |   |   | -       |   |   |   | (660,065 | ) |   |   | -       |   |
| Purchase of treasury stock                                                                           |   |   | (273,901 | ) |   |   | -       |   |   |   | (66,321 | ) |
|       Net cash used for financing activities                           |   | $ | (7,339,697 | ) |   | $ | (6,772,988 | ) |   | $ | (6,144,656 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                 |   | $ | 545,870 |   |   | $ | (962,112 | ) |   | $ | (1,292,607 | ) |
| Cash and Cash Equivalents, beginning of year                                                         |   |   | 2,149,397 |   |   |   | 3,111,509 |   |   |   | 4,404,116 |   |
| Cash and Cash Equivalents, end of year                                                               |   | $ | 2,695,267 |   |   | $ | 2,149,397 |   |   | $ | 3,111,509 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional Cash Flow Information:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest paid, net of amount capitalized                                                             |   | $ | 545,034 |   |   | $ | 635,939 |   |   | $ | 939,179 |   |
| Income taxes paid, net of refunds                                                                    |   |   | (303,996 | ) |   |   | 1,764,563 |   |   |   | 5,500,016 |   |
| Capital equipment additions included in accounts payable                                             |   |   | 12,495 |   |   |   | 748,479 |   |   |   | 221,914 |   |
| Acquisition of business included in accrued liabilities                                              |   |   | -       |   |   |   | 400,000 |   |   |   | -       |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| See notes to consolidated financial statements                                                       |   |   |   |   |   |   |   |   |   |   |   |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

----

|         |
|---------------------------------------|

|                                |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|-------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Cost of Sales                       |   | $      | 10,900,000 |   |   | $      | 11,700,000 |   |   | $ | 11,500,000 |   |
| Selling, General and Administrative |   |   | 300,000    |   |   |   | 400,000    |   |   |   | 400,000 |   |
| Other, net                          |   |   | 500,000    |   |   |   | 500,000    |   |   |   | 400,000 |   |
|      Total |   | $      | 11,700,000 |   |   | $      | 12,600,000 |   |   | $ | 12,300,000 |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

----

|             |
|--------------------------------------------------------------------|

|                                                                            |   |       |       |   | Fair Value Measurements at Reporting Date Using: |   |
|---------------------------------------------------------------------------------|--------|------------|------------|--------|--------------------------------------------------|--------|
|                                                                            |   |       |       |   | Quoted Prices                                    |   |   | Significant |   |   |   |   |
|                                                                            |   |       |       |   | in Active                                        |   |   | Other |   |   | Significant |   |
|                                                                            |   |       |       |   | Markets for                                      |   |   | Observable |   |   | Unobservable |   |
|                                                                            |   |       |       |   | Identical Assets                                 |   |   | Inputs |   |   | Inputs |   |
| Assets:                                                                         |   | 12/31/2010 |       |   | (Level 1)                                        |   |   | (Level 2) |   |   | (Level 3) |   |
| Available-for-sale equity securities                                            |   |       |       |   |                                             |   |   |   |   |   |   |   |
|       Cement industry                             |   | $          | 9,499,615  |   |                                             | $      | 9,499,615 |   |   | $ | -       |   |   | $ | -       |   |
|       General building materials industry         |   |       | 3,623,769  |   |                                             |   | 3,623,769 |   |   |   | -       |   |   |   | -       |   |
|       Oil and gas refining and marketing industry |   |       | 7,545,978  |   |                                             |   | 7,545,978 |   |   |   | -       |   |   |   | -       |   |
|       Residential construction industry           |   |       | 896,346    |   |                                             |   | 896,346 |   |   |   |  -       |   |   |   | -       |   |
| Total assets measured at fair value                                             |   | $          | 21,565,708 |   |                                             | $      | 21,565,708 |   |   | $ | -       |   |   | $ | -       |   |
|                                                                            |   |       |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                         |   | 12/31/2009 |       |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale equity securities                                            |   |       |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
|       Cement industry                             |   | $          | 7,910,269  |   |                                             | $      | 7,910,269 |   |   | $ | -       |   |   | $ | -       |   |
|       General building materials industry         |   |       | 4,091,932  |   |                                             |   | 4,091,932 |   |   |   | -       |   |   |   | -       |   |
|       Oil and gas refining and marketing industry |   |       | 3,410,106  |   |                                             |   | 3,410,106 |   |   |   | -       |   |   |   | -       |   |
|       Residential construction industry           |   |       | 1,020,500  |   |                                             |   | 1,020,500 |   |   |   | -       |   |   |   | -       |   |
| Total assets measured at fair value                                             |   | $          | 16,432,808 |   |                                             | $      | 16,432,808 |   |   | $ | -       |   |   | $ | -       |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

| Available-for-sale equity securities                |   | Less than 12 Months    |                                  |   | 12 Months or Greater  |   |                                  | Total  |   |
|-----------------------------------------------------|--------|---------------------------------------|---------------------------------------|--------|----------------------------|--------|---------------------------------------|-------------|--------|
|                                                |   |                                  |                                  |   | Unrealized                 |   |                                  |        |   |   | Unrealized |   |   |   |   |   | Unrealized |   |
| December 31, 2010                                   |   | Fair Value                            |                                  |   | Losses                     |   |                                  | Fair Value  |   |   | Losses |   |   | Fair Value |   |   | Losses |   |
|    Cement industry                   |   | $                                     | -       |   |                       | $      | -       |        |   | $ | 16,400 |   |   | $ | 1,716 |   |   | $ | 16,400 |   |   | $ | 1,716 |   |
|    Residential construction industry |   |                                  | 488,379                               |   |                       |   | 86,054                                |        |   |   | -       |   |   |   | -       |   |   |   | 488,379 |   |   |   | 86,054 |   |
| Total                                               |   | $                                     | 488,379                               |   |                       | $      | 86,054                                |        |   | $ | 16,400 |   |   | $ | 1,716 |   |   | $ | 504,779 |   |   | $ | 87,770 |   |
|                                                |   |                                  |                                  |   |                       |   |                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                   |   |                                  |                                  |   |                       |   |                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Cement industry                   |   | $                                     | 14,600                                |   |                       | $      | 3,516                                 |        |   | $ | -       |   |   | $ | -       |   |   | $ | 14,600 |   |   | $ | 3,516 |   |
|    Oil and gas refining and          |   |                                  |                                  |   |                       |   |                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| marketing industry                                  |   |                                  | 952,168                               |   |                       |   | 114,528                               |        |   |   | -       |   |   |   | -       |   |   |   | 952,168 |   |   |   | 114,528 |   |
|    Residential construction industry |   |                                  | 381,580                               |   |                       |   | 32,198                                |        |   |   | 105,300 |   |   |   | 12,724 |   |   |   | 486,880 |   |   |   | 44,922 |   |
| Total                                               |   | $                                     | 1,348,348                             |   |                       | $      | 150,242                               |        |   | $ | 105,300 |   |   | $ | 12,724 |   |   | $ | 1,453,648 |   |   | $ | 162,966 |   |

----

|                             |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     |   |      |       |      | Gross         |   |       | Gross          |   |   |                                  |   |
|----------------------------------------------------------|--------|-----------|------------|-----------|---------------|--------|------------|----------------|--------|--------|---------------------------------------|--------|
|                                                     |   | Amortized |       |      | Unrealized    |   |       | Unrealized     |   |   | Fair                                  |   |
| December 31, 2010                                        |   | Cost      |       |      | Holding Gains |   |       | Holding Losses |   |   | Value                                 |   |
| Available for sale equity securities                     |   |      |       |      |          |   |       |           |   |   |                                  |   |
| Cement industry                                          |   | $         | 4,971,000  |      |          | $      | 4,529,000  |           |   | $      | -       |   |   | $ | 9,500,000 |   |
| General building materials industry                      |   |      | 2,866,000  |      |          |   | 758,000    |           |   |   | -       |   |   |   | 3,624,000 |   |
| Oil and gas refining and marketing industry              |   |      | 2,600,000  |      |          |   | 4,946,000  |           |   |   | -       |   |   |   | 7,546,000 |   |
| Residential construction industry                        |   |      | 849,000    |      |          |   | 47,000     |           |   |   | -       |   |   |   | 896,000 |   |
| Total available for sale equity securities               |   | $         | 11,286,000 |      |          | $      | 10,280,000 |           |   | $      | -       |   |   | $ | 21,566,000 |   |
| Less: Deferred taxes on unrealized holding gains         |   |      |       |      |          |   | 4,112,000  |           |   |   |                                  |   |   |   |   |   |
| Unrealized gains recorded in equity, net of deferred tax |   |      | $          | 6,168,000 |          |   |       |           |   |   |                                  |   |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

|                                                     |   |      |       |      | Gross         |   |      | Gross          |   |   |                                  |   |
|----------------------------------------------------------|--------|-----------|------------|-----------|---------------|--------|-----------|----------------|--------|--------|---------------------------------------|--------|
|                                                     |   | Amortized |       |      | Unrealized    |   |      | Unrealized     |   |   | Fair                                  |   |
| December 31, 2009                                        |   | Cost      |       |      | Holding Gains |   |      | Holding Losses |   |   | Value                                 |   |
| Available for sale equity securities                     |   |      |       |      |          |   |      |           |   |   |                                  |   |
| Cement industry                                          |   | $         | 5,000,000  |      |          | $      | 2,910,000 |           |   | $      | -       |   |   | $ | 7,910,000 |   |
| General building materials industry                      |   |      | 3,590,000  |      |          |   | 500,000   |           |   |   | -       |   |   |   | 4,090,000 |   |
| Oil and gas refining and marketing industry              |   |      | 2,600,000  |      |          |   | 810,000   |           |   |   | -       |   |   |   | 3,410,000 |   |
| Residential construction industry                        |   |      | 830,000    |      |          |   | 190,000   |           |   |   | -       |   |   |   | 1,020,000 |   |
| Total available for sale equity securities               |   | $         | 12,020,000 |      |          | $      | 4,410,000 |           |   | $      | -       |   |   | $ | 16,430,000 |   |
| Less: Deferred taxes on unrealized holding gains         |   |      |       |      |          |   | 1,764,000 |           |   |   |                                  |   |   |   |   |   |
| Unrealized gains recorded in equity, net of deferred tax |   |      | $          | 2,646,000 |          |   |      |           |   |   |                                  |   |   |

|                                                                |   | 2010   |     |   | 2009   |   |      | 2008   |   |
|---------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|-----------|--------|--------|
| Proceeds from sale of equity securities                             |   | $      | 412,532  |   |   | $      | 1,589,076 |   |   | $ | -       |   |
| Realized gain/(loss) on equity securities                           |   |   | (79,793  | )      |   |   | 136,853   |   |   |   | -       |   |
| Realized losses due to other-than-temporary                         |   |   |     |   |   |   |      |   |   |   |   |   |
|       impairment of equity securities |   |   | (858,787 | )      |   |   | (524,188  | )      |   |   | (4,157,612 | ) |

|                                         |   | Lives (Years) |             |   | 2010   |      |        | 2009   |   |
|----------------------------------------------|--------|---------------|------------------|--------|--------|-----------|-------------|--------|--------|
| Quarry land                                  |   |          |             |   | $      | 2,004,549 |        |   | $      | 2,004,549 |   |
| Other land                                   |   |          |             |   |   | 7,906,086 |        |   |   | 7,755,444 |   |
| Buildings and improvements                   |   |          | 15 – 39    |   |   |      | 31,042,385  |   |   |   | 30,451,877 |   |
| Cement manufacturing equipment               |   |          | 15 – 25    |   |   |      | 122,435,381 |   |   |   | 122,293,513 |   |
| Ancillary equipment                          |   |          | 5 – 10     |   |   |      | 12,964,237  |   |   |   | 12,791,566 |   |
| Ready-mix and concrete production            |   |          |             |   |   |      |        |   |   |   |   |   |
|    machinery and equipment    |   |          | 5 – 15     |   |   |      | 33,220,392  |   |   |   | 31,849,800 |   |
| Transportation and mobile equipment          |   |          | 3 – 7 |   |   |      | 40,689,339  |   |   |   | 40,330,336 |   |
| Office machinery, equipment,                 |   |          |             |   |   |      |        |   |   |   |   |   |
|    furniture and fixtures     |   |          | 3 – 10     |   |   |      | 2,872,920   |   |   |   | 2,199,862 |   |
| Construction in process                      |   |          |             |   |   |      | 5,432,905   |   |   |   | 4,020,954 |   |
|                                         |   |          |             |   |   | $         | 258,568,194 |   |   | $ | 253,697,901 |   |
| Less--Accumulated depreciation and depletion |   |          |             |   |   |      | 173,656,095 |   |   |   | 162,880,507 |   |
|                                         |   |          |             |   |   | $         | 84,912,099  |   |   | $ | 90,817,394 |   |

----

|                        |
|----------------------------------------------------------------------------------------------------------------------------|

|                                                                           |   | 2010    |       |   | 2009   |    |
|--------------------------------------------------------------------------------|--------|---------|------------|--------|--------|---------|
| Note payable, bank (a)                                                         |   | $  | 11,866,018 |   |   | $  | 14,597,231 |   |
| Other                                                                          |   |    | 111,717    |   |   |    | 232,094 |   |
|                                                                           |   | $  | 11,977,735 |   |   | $  | 14,829,325 |   |
| Less current maturity                                                          |   |    |       |   |   |    |   |   |
| of bank note payable                                                           |   |    | 2,823,648  |   |   |    | 2,732,490 |   |
| Total long-term debt                                                           |   | $  | 9,154,087  |   |   | $  | 12,096,835 |   |
| (a) Due December 31, 2014; payable $794,611 quarterly including interest. |   |

| 2011   |   | $  | 2,823,648  |   |
|--------|--------|---------|------------|--------|
| 2012   |   |    | 3,018,713  |   |
| 2013   |   |    | 3,015,188  |   |
| 2014   |   |    | 3,120,186  |   |
|   |   | $  | 11,977,735 |   |

|                                      |   | 2010   |     |   | 2009   |   |      | 2008   |   |
|-------------------------------------------|--------|--------|----------|--------|--------|--------|-----------|--------|--------|
| Taxes currently payable                   |   | $      | 134,000  |   |   | $      | 1,482,000 |   |   | $ | 4,917,000 |   |
| Deferred income taxes                     |   |   | (434,000 | )      |   |   | (782,000  | )      |   |   | (2,192,000 | ) |
| Provision for (benefit from) income taxes |   | $      | (300,000 | )      |   | $      | 700,000   |   |   | $ | 2,725,000 |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

|                                      |   | 2010   |                                  |   | 2009   |   |                                  | 2008   |   |
|-------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|--------|
| Computed at statutory rate                |   |   |                                  |   |   |   |                                  |   |   |
| (34%; over $10 million-35%)               |   | $      | (25,000                               | )      |   | $      | 1,831,000                             |   |   | $ | 4,435,000 |   |
| Increase (decrease) resulting from:       |   |   |                                  |   |   |   |                                  |   |   |   |   |   |
| State income taxes, net of federal        |   |   |                                  |   |   |   |                                  |   |   |   |   |   |
| tax benefit (expense)                     |   |   | (244,000                              | )      |   |   | (40,000                               | )      |   |   | -       |   |
| Percentage depletion                      |   |   | (552,000                              | )      |   |   | (675,000                              | )      |   |   | (1,328,000 | ) |
| Valuation allowance                       |   |   | -       |   |   |   | (110,000                              | )      |   |   | (40,000 | ) |
| Domestic production activities deduction  |   |   | (26,000                               | )      |   |   | (91,000                               | )      |   |   | (284,000 | ) |
| Life insurance proceeds                   |   |   | -       |   |   |   | (146,000                              | )      |   |   | -       |   |
| Adjustment for Medicare drug subsidy      |   |   | 685,000                               |   |   |   | -       |   |   |   | -       |   |
| Dividends received deduction              |   |   | (43,000                               | )      |   |   | (44,000                               | )      |   |   | (48,000 | ) |
| Other                                     |   |   | (95,000                               | )      |   |   | (25,000                               | )      |   |   | (10,000 | ) |
| Provision for (benefit from) income taxes |   | $      | (300,000                              | )      |   | $      | 700,000                               |   |   | $ | 2,725,000 |   |

|                                                             |   | 2010    |       |   | 2009   |    |
|------------------------------------------------------------------|--------|---------|------------|--------|--------|---------|
| Current:                                                         |   |    |       |   |   |    |
|    Allowance for doubtful accounts                     |   | $  | 285,000    |   |   | $  | 365,000 |   |
|    Accrued vacation                                    |   |    | 450,000    |   |   |    | 410,000 |   |
|       Net current deferred tax assets   |   | $  | 735,000    |   |   | $  | 775,000 |   |
|                                                             |   |    |       |   |   |    |   |   |
| Noncurrent:                                                      |   |    |       |   |   |    |   |   |
|    Depreciation                                        |   | $  | (44,000    | )      |   | $  | (65,000 | ) |
|    Postretirement benefits                             |   |    | 14,121,000 |   |   |    | 12,322,000 |   |
|    Pension liability                                   |   |    | 5,122,000  |   |   |    | 4,933,000 |   |
|    Unrealized holding gains                            |   |    | (4,112,000 | )      |   |    | (1,764,000 | ) |
|    Net operating loss carryforwards                    |   |    | 1,412,000  |   |   |    | 1,433,000 |   |
|    Alternative minimum tax credit                      |   |    | 373,000    |   |   |    | 200,000 |   |
|    Impairment on investments                           |   |    | 1,624,000  |   |   |    | 1,399,775 |   |
|    Other, net                                          |   |    | 758,393    |   |   |    | 635,003 |   |
|       Net long-term deferred tax assets |   | $  | 19,254,393 |   |   | $  | 19,093,778 |   |

|    ExpirationDate |   | OperatingLoss |      |
|-----------------------------|--------|---------------|-----------|
| 2024                        |   | $             | 78,000    |   |
| 2025                        |   |          | 685,000   |   |
| 2026                        |   |          | 380,000   |   |
| 2027                        |   |          | 19,000    |   |
| 2028                        |   |          | 136,000   |   |
| 2029                        |   |          | 114,000   |   |
|                        |   | $             | 1,412,000 |   |

----

|                        |
|----------------------------------------------------------------------------------------------------------------------------|

|                                                                                              |   | 2010    |                                  |    | 2009   |    |
|---------------------------------------------------------------------------------------------------|--------|---------|---------------------------------------|---------|--------|---------|
| Change in benefit obligation                                                                      |   |    |                                  |    |   |    |
|     Beginning of year                                                              |   | $       | 31,956,610                            |    |   | $       | 27,770,409 |   |
|     Service cost                                                                   |   |    | 545,569                               |    |   |    | 523,914 |   |
|     Interest cost                                                                  |   |    | 1,868,486                             |    |   |    | 1,822,318 |   |
|     Actuarial (gain)/loss                                                          |   |    | 3,364,218                             |    |   |    | 3,461,520 |   |
|     Benefits and expenses paid*                                                    |   |    | (1,176,905                            | )       |   |    | (1,352,568 | ) |
|     Plan amendments                                                                |   |    | -       |    |   |    | (268,983 | ) |
|     Benefit obligation at end of year                                         |   | $       | 36,557,978                            |    |   | $       | 31,956,610 |   |
|                                                                                              |   |    |                                  |    |   |    |   |   |
| Change in fair value of plan assets                                                               |   |    |                                  |    |   |    |   |   |
|     Beginning of year                                                              |   | $       | -       |    |   | $       | -       |   |
|     Employer contributions*                                                        |   |    | 1,176,905                             |    |   |    | 1,352,568 |   |
|     Benefits paid and expenses*                                                    |   |    | (1,176,905                            | )       |   |    | (1,352,568 | ) |
|     Fair value of plan asset at end of year                                   |   | $       | -       |    |   | $       | -       |   |
|                                                                                              |   |    |                                  |    |   |    |   |   |
| *Amounts are net of retiree prescription drug subsidy received during the fiscal year.  |   |
|                                                                                              |   |    |                                  |    |   |    |   |   |
| Funded status = year-end benefit liability                                                        |   | $  | (36,557,978                      | )  |   | $  | (31,956,610 | )  |

|   |   |                                                 |   | 2010   |        |   | 2009   |   |
|--------|--------|------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| A.     |   | Accrued postretirement benefits at beginning of year |   | $      | (19,601,943 | )      |   | $      | (17,760,151 | ) |
| B.     |   | Net periodic postretirement benefit cost             |   |   | 3,134,963   |   |   |   | 3,194,360 |   |
| C.     |   | Employer contributions                               |   |   | 1,329,046   |   |   |   | 1,428,696 |   |
| D.     |   | Retiree Drug Subsidy                                 |   |   | 152,141     |   |   |   | 76,128 |   |
| E.     |   | Accrued postretirement benefits at end of year       |   | $      | (21,560,001 | )      |   | $      | (19,601,943 | )  |
|   |   | (A) - (B) + (C) - (D)                           |   |   |        |   |   |   |   |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

|                  |   | 2010   |        |   | 2009   |   |
|-----------------------|--------|--------|-------------|--------|--------|--------|
| Current liability     |   | $      | (1,775,000  | )      |   | $      | (1,750,000 | ) |
| Noncurrent liability  |   |   | (34,782,978 | )      |   |   | (30,206,610 | ) |
| Net amount recognized |   | $      | (36,557,978 | )      |   | $      | (31,956,610 | ) |

|                        |   | 2010   |       |   | 2009   |   |
|-----------------------------|--------|--------|------------|--------|--------|--------|
| Net actuarial loss/(gain)   |   | $      | 15,216,208 |   |   | $      | 12,623,650 |   |
| Prior service cost/(credit) |   |   | (218,231   | )      |   |   | (268,983 | ) |
|                        |   | $      | 14,997,977 |   |   | $      | 12,354,667 |   |

|                                           |   | 2010   |                                  |   | 2009   |   |                                  | 2008   |   |
|------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|--------|
| Current year actuarial (gain)/loss             |   | $      | 3,364,218                             |   |   | $      | 3,461,520                             |   |   | $ | (1,734,298 | ) |
| Amortization of actuarial loss                 |   |   | (771,660                              | )      |   |   | (848,128                              | )      |   |   | (703,008 | ) |
| Current year prior service credit              |   |   | -       |   |   |   | (268,983                              | )      |   |   | -       |   |
| Amortization of prior service credit           |   |   | 50,752                                |   |   |   | -       |   |   |   | -       |   |
| Total recognized in other comprehensive income |   | $      | 2,643,310                             |   |   | $      | 2,344,409                             |   |   | $ | (2,437,306 | ) |

| Actuarial loss       |   | $      | 1,014,961 |   |
|----------------------|--------|--------|-----------|--------|
| Prior service credit |   |   | (50,752   | )      |
| Total                |   | $      | 964,209   |   |

|                                    |   | 2010   |      |   | 2009   |   |                                  | 2008   |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|---------------------------------------|--------|--------|
| Components of net periodic benefit cost |   |   |      |   |   |   |                                  |   |   |
| Service cost                            |   | $      | 545,569   |   |   | $      | 523,914                               |   |   | $ | 473,443 |   |
| Interest cost                           |   |   | 1,868,486 |   |   |   | 1,822,318                             |   |   |   | 1,611,513 |   |
| Amortization of prior service cost      |   |   | (50,752   | )      |   |   | -       |   |   |   | -       |   |
| Unrecognized net loss                   |   |   | 771,660   |   |   |   | 848,128                               |   |   |   | 703,008 |   |
| Net periodic benefit cost               |   | $      | 3,134,963 |   |   | $      | 3,194,360                             |   |   | $ | 2,787,964 |   |

|        |   |        |   |    |     |    |      | 12/31/10    |   |     |         |   |
|-------------|--------|-------------|--------|---------|----------|---------|-----------|-------------|--------|----------|--------------|--------|
|        |   | Date        |   | Initial |     | Initial |      | Outstanding |   |     | Annual       |   |
| Description |   | Established |   | Amount  |     | Period  |      | Balance     |   |     | Amortization |   |
| Lifetime    |   |        |   |    |     |    |      |        |   |     |         |   |
| Maximums    |   | 12/31/09    |   | $       | (268,983 | )       | 5.3 years |        | $      | (218,231 | )            |   | $ | (50,752 | ) |

----

|                        |
|----------------------------------------------------------------------------------------------------------------------------|

|                               |   | 2010   |   |   | 2009   |   |   | 2008 |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|--------|------|--------|
| Discount rate- benefit obligation  |   |   | 6.00   | %      |   |   | 6.00   | %    |   |   | 6.00 | % |
| Discount rate- postretirement cost |   |   | 5.50   | %      |   |   | 6.00   | %    |   |   | 6.00 | % |

|                                                               |   | 1% Increase |      |   | 1% Decrease |   |
|--------------------------------------------------------------------|--------|-------------|-----------|--------|-------------|--------|
| Interest cost and service cost for 2010                            |   | $           | 387,652   |   |        | $      | (314,121 | ) |
| Accumulated postretirement benefit obligation at December 31, 2010 |   |        | 5,324,567 |   |        |   | (4,380,686 | ) |

| Assuming Medicare Part D Subsidy receipts    |   | $      | 36,557,978 |   |
|----------------------------------------------|--------|--------|------------|--------|
| Assuming no Medicare Part D Subsidy receipts |   |   | 38,850,330 |   |

| December 31, 2011                          |   | $      | 1,773,836  |   |
|--------------------------------------------|--------|--------|------------|--------|
| December 31, 2012                          |   |   | 1,878,055  |   |
| December 31, 2013                          |   |   | 2,000,562  |   |
| December 31, 2014                          |   |   | 2,109,258  |   |
| December 31, 2015                          |   |   | 2,214,397  |   |
| Five fiscal years ending December 31, 2020 |   |   | 11,936,481 |   |

| Change in benefit obligation            |   | 2010   |                                  |   | 2009   |   |
|-----------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|
| Benefit obligation at beginning of year |   | $      | 34,200,588                            |   |   | $      | 32,344,767 |   |
| Service cost                            |   |   | 668,980                               |   |   |   | 606,644 |   |
| Interest cost                           |   |   | 2,063,316                             |   |   |   | 1,905,750 |   |
| Actuarial (gain)/loss                   |   |   | 2,238,159                             |   |   |   | 1,145,444 |   |
| Plan amendment                          |   |   | -       |   |   |   | 55,026 |   |
| Benefits paid and expenses              |   |   | (1,912,401                            | )      |   |   | (1,857,043 | ) |
| Benefit obligation at end of year       |   | $      | 37,258,642                            |   |   | $      | 34,200,588 |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

| Change in plan assets                          |   | 2010   |        |   | 2009   |   |
|------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Fair value of plan assets at beginning of year |   | $      | 21,950,550  |   |   | $      | 17,623,815 |   |
| Actual return on plan assets                   |   |   | 2,231,098   |   |   |   | 4,087,805 |   |
| Employer contribution                          |   |   | 2,266,322   |   |   |   | 2,095,973 |   |
| Benefits paid and expenses                     |   |   | (1,912,401  | )      |   |   | (1,857,043 | ) |
| Fair value of plan assets at end of year       |   | $      | 24,535,569  |   |   | $      | 21,950,550 |   |
| Funded status, end of year                     |   |   |        |   |   |   |   |   |
| Fair value of plan assets                      |   | $      | 24,535,569  |   |   | $      | 21,950,550 |   |
| Benefits obligation                            |   |   | 37,258,642  |   |   |   | 34,200,588 |   |
| Funded status                                  |   | $      | (12,723,073 | )      |   | $      | (12,250,038 | ) |

| Accumulated benefit obligation, end of year |   | $ | 35,538,166  |   |   | $ | 32,365,998 |   |
|---------------------------------------------|--------|---|------------------|--------|--------|---|------------|--------|

|                  |   | 2010   |                                  |   | 2009   |   |
|-----------------------|--------|--------|---------------------------------------|--------|--------|--------|
| Current liability     |   | $      | -       |   |   | $      | -       |   |
| Noncurrent liability  |   |   | (12,723,073                           | )      |   |   | (12,250,038 | ) |
| Net amount recognized |   | $      | (12,723,073                           | )      |   | $      | (12,250,038 | ) |

|                                              |   | 2010   |       |   | 2009   |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Net actuarial loss                                |   | $      | 13,270,761 |   |   | $      | 12,407,018 |   |
| Prior service cost                                |   |   | 948,680    |   |   |   | 1,058,658 |   |
|                                              |   | $      | 14,219,441 |   |   | $      | 13,465,676 |   |
| Less: Deferred tax                                |   |   | 5,690,000  |   |   |   | 5,390,000 |   |
| Additional Pension Liability, net of deferred tax |   | $      | 8,529,441  |   |   | $      | 8,075,676 |   |

|                                           |   | 2010   |                                  |   | 2009   |   |       | 2008   |   |
|------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|------------|--------|--------|
| Current year actuarial (gain)/loss             |   | $      | 1,732,397                             |   |   | $      | (1,586,733 | )      |   | $ | 9,838,021 |   |
| Amortization of actuarial gain/(loss)          |   |   | (868,654                              | )      |   |   | (1,020,563 | )      |   |   | (196,253 | ) |
| Current year prior service (credit)/loss       |   |   | -       |   |   |   | 55,026     |   |   |   | -       |   |
| Amortization of prior service credit/(cost)    |   |   | (109,978                              | )      |   |   | (133,919   | )      |   |   | (135,837 | ) |
|                                           |   | $      | 753,765                               |   |   | $      | (2,686,189 | )      |   | $ | 9,505,931 |   |
| Less: Deferred tax                             |   |   | 300,000                               |   |   |   | (1,070,000 | )      |   |   | 3,800,000 |   |
| Minimum pension liability, net of deferred tax |   | $      | 453,765                               |   |   | $      | (1,616,189 | )      |   | $ | 5,705,931 |   |

| Actuarial loss        |   | $      | 925,000   |   |
|-----------------------|--------|--------|-----------|--------|
| Prior service cost    |   |   | 111,000   |   |
| Total to be amortized |   | $      | 1,036,000 |   |

----

|                        |
|----------------------------------------------------------------------------------------------------------------------------|

|                            |        |   |    |    |    |         | 12/31/2010  |   |    |         |   |
|---------------------------------|-------------|--------|---------|---------|---------|--------------|-------------|--------|---------|--------------|--------|
|                            | Established |   | Initial |    | Initial |         | Outstanding |   |    | Annual       |   |
| Description                     | Dec. 31 of: |   | Amount  |    | Period  |         | Balance     |   |    | Amortization |   |
| Unrecognized Prior Service Cost | 1996        |   | $       | 162,785 |    | 15.881 Years |        | $      | 19,285  |         |   | $ | 10,250 |   |
|                            | 1999        |   |    | 37,715  |    | 16.530 Years |        |   | 12,613  |         |   |   | 2,282 |   |
|                            | 2001        |   |    | 409,804 |    | 15.745 Years |        |   | 175,552 |         |   |   | 26,028 |   |
|                            | 2003        |   |    | 22,267  |    | 13.230 Years |        |   | 10,486  |         |   |   | 1,683 |   |
|                            | 2007        |   |    | 876,119 |    | 13.410 Years |        |   | 680,120 |         |   |   | 65,333 |   |
|                            | 2009        |   |    | 55,026  |    | 12.500 Years |        |   | 50,624  |         |   |   | 4,402 |   |
|                            |        |   |    |    |    |         |        | $      | 948,680 |         |   | $ | 109,978 |   |

|                                                                         |   | 2010   |      |   | 2009   |   |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| A.      Cumulative balance at beginning of year     |   | $      | 1,215,638 |   |   | $      | 1,430,913 |   |
| B.      Net periodic pension cost                   |   |   | 1,985,592 |   |   |   | 2,311,248 |   |
| C.      Contributions                               |   |   | 2,266,322 |   |   |   | 2,095,973 |   |
| D.      Cumulative balance at end of year           |   | $      | 1,496,368 |   |   | $      | 1,215,638 |   |
|           (A) – (B) + (C) |   |   |      |   |   |   |   |   |

|                                            |   | 2010   |   |    | 2009   |   |   | 2008    |   |
|-------------------------------------------------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| Benefit obligation:                             |   |   |   |    |   |   |   |    |   |
| Discount rate                                   |   |   | 5.50   | %  |   |   | 6.00   | %  |   |   | 6.00 | %  |
| Expected return on plan assets                  |   |   | 8.00   | %  |   |   | 8.00   | %  |   |   | 8.00 | %  |
| Rate of compensation increase (Staff plan only) |   |   | 4.00   | %  |   |   | 4.50   | %  |   |   | 4.50 | % |
| Pension cost:                                   |   |   |   |    |   |   |   |    |   |   |   |   |
| Discount rate                                   |   |   | 6.00   | %  |   |   | 6.00   | %  |   |   | 6.00 | %  |
| Expected return on plan assets                  |   |   | 8.00   | %  |   |   | 8.00   | %  |   |   | 8.00 | %  |
| Rate of compensation increase (Staff plan only) |   |   | 4.50   | %  |   |   | 4.50   | %  |   |   | 4.50 | %  |

|                                 |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|--------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Service cost                         |   | $      | 668,980    |   |   | $      | 606,644    |   |   | $ | 580,046 |   |
| Interest cost                        |   |   | 2,063,316  |   |   |   | 1,905,750  |   |   |   | 1,878,251 |   |
| Expected return on plan assets       |   |   | (1,725,336 | )      |   |   | (1,355,628 | )      |   |   | (1,996,149 | ) |
| Amortization of prior service cost   |   |   | 109,978    |   |   |   | 133,919    |   |   |   | 135,837 |   |
| Recognized net actuarial (gain)/loss |   |   | 868,654    |   |   |   | 1,020,563  |   |   |   | 196,253 |   |
| Net periodic pension expense         |   | $      | 1,985,592  |   |   | $      | 2,311,248  |   |   | $ | 794,238 |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

| Equities     |   | 60% |
|--------------|--------|-----|
| Fixed Income |   | 40% |

|            |   |   |  2010 |   |   |   |  2009 |   |
|-----------------|--------|--------|------------|--------|--------|--------|------------|--------|
| Equities        |   |   | 57         | %      |   |   | 60         | %      |
| Debt securities |   |   | 38         | %      |   |   | 34         | %      |
| Other           |   |   | 5          | %      |   |   | 6          | %      |

|                        |   |   |       | Fair Value Measurements Using: |             |
|-----------------------------|--------|--------|------------|--------------------------------|------------------|
|                        |   |   |       |                           | Quoted Prices    |   |   |   |   |   |   |   |
|                        |   |   |       |                           | in Active        |   |   | Significant |   |   | Significant |   |
|                        |   |   |       |                           | Markets for      |   |   | Observable |   |   | Unobservable |   |
|                        |   |   |       |                           | Identical Assets |   |   | Inputs |   |   | Inputs |   |
| 2010                        |   | Total  |       |                           | (Level 1)        |   |   | (Level 2) |   |   | (Level 3) |   |
| Cash and cash equivalents   |   | $      | 1,347,066  |                           |             | $ | 1,347,066 |   |   | $ | -       |   |   | $ | -       |   |
| Equity securities:          |   |   |       |                           |             |   |   |   |   |   |   |   |   |   |   |   |
| Materials                   |   |   | 862,935    |                           |             |   | 862,935 |   |   |   | -       |   |   |   | -       |   |
| Industrials                 |   |   | 1,692,975  |                           |             |   | 1,692,975 |   |   |   | -       |   |   |   | -       |   |
| Telecommunication           |   |   | 1,061,276  |                           |             |   | 1,061,276 |   |   |   | -       |   |   |   | -       |   |
| Consumer discretion         |   |   | 1,747,794  |                           |             |   | 1,747,794 |   |   |   | -       |   |   |   | -       |   |
| Consumer staples            |   |   | 1,274,340  |                           |             |   | 1,274,340 |   |   |   | -       |   |   |   | -       |   |
| Energy                      |   |   | 1,857,015  |                           |             |   | 1,857,015 |   |   |   | -       |   |   |   | -       |   |
| Financials                  |   |   | 2,135,305  |                           |             |   | 2,135,305 |   |   |   | -       |   |   |   | -       |   |
| Healthcare                  |   |   | 1,706,119  |                           |             |   | 1,706,119 |   |   |   | -       |   |   |   | -       |   |
| Information technology      |   |   | 875,584    |                           |             |   | 875,584 |   |   |   | -       |   |   |   | -       |   |
| Utilities                   |   |   | 727,869    |                           |             |   | 727,869 |   |   |   | -       |   |   |   | -       |   |
| Fixed income securities:    |   |   |       |                           |             |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds             |   |   | 3,209,469  |                           |             |   | -       |   |   |   | 3,209,469 |   |   |   | -       |   |
| Foreign obligations         |   |   | 530,320    |                           |             |   | -       |   |   |   | 530,320 |   |   |   | -       |   |
| U.S. government obligations |   |   | 5,507,504  |                           |             |   | -       |   |   |   | 5,507,504 |   |   |   | -       |   |
| Total                       |   | $      | 24,535,569 |                           |             | $ | 15,288,276 |   |   | $ | 9,247,293 |   |   | $ | -       |   |

----

|                        |
|----------------------------------------------------------------------------------------------------------------------------|

|                        |   |   |       |   | Fair Value Measurements Using:  |   |
|-----------------------------|--------|--------|------------|--------|--------------------------------------|--------|
|                        |   |   |       |   | Quoted Prices                        |   |   |   |   |   |   |   |
|                        |   |   |       |   | in Active                            |   |   | Significant |   |   | Significant |   |
|                        |   |   |       |   | Markets for                          |   |   | Observable |   |   | Unobservable |   |
|                        |   |   |       |   | Identical Assets                     |   |   | Inputs |   |   | Inputs |   |
| 2009                        |   | Total  |       |   | (Level 1)                            |   |   | (Level 2) |   |   | (Level 3) |   |
| Cash and cash equivalents   |   | $      | 1,313,332  |   |                                 | $      | 1,313,332 |   |   | $ | -       |   |   | $ | -       |   |
| Equity securities:          |   |   |       |   |                                 |   |   |   |   |   | -       |   |   |   |   |   |
| Materials                   |   |   | 471,040    |   |                                 |   | 471,040 |   |   |   | -       |   |   |   | -       |   |
| Industrials                 |   |   | 1,065,459  |   |                                 |   | 1,065,459 |   |   |   | -       |   |   |   | -       |   |
| Telecommunication           |   |   | 1,351,285  |   |                                 |   | 1,351,285 |   |   |   | -       |   |   |   | -       |   |
| Consumer discretion         |   |   | 2,035,289  |   |                                 |   | 2,035,289 |   |   |   | -       |   |   |   | -       |   |
| Consumer staples            |   |   | 759,525    |   |                                 |   | 759,525 |   |   |   | -       |   |   |   |  -       |   |
| Energy                      |   |   | 1,960,261  |   |                                 |   | 1,960,261 |   |   |   | -       |   |   |   | -       |   |
| Financials                  |   |   | 2,635,158  |   |                                 |   | 2,635,158 |   |   |   | -       |   |   |   | -       |   |
| Healthcare                  |   |   | 1,235,468  |   |                                 |   | 1,235,468 |   |   |   | -       |   |   |   | -       |   |
| Information technology      |   |   | 1,412,894  |   |                                 |   | 1,412,894 |   |   |   | -       |   |   |   | -       |   |
| Utilities                   |   |   | 243,181    |   |                                 |   | 243,181 |   |   |   | -       |   |   |   | -       |   |
| Fixed income securities:    |   |   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds             |   |   | 3,480,146  |   |                                 |   | -       |   |   |   | 3,480,146 |   |   |   | -       |   |
| Foreign obligations         |   |   | 586,157    |   |                                 |   | -       |   |   |   | 586,157 |   |   |   | -       |   |
| U.S. government obligations |   |   | 3,401,355  |   |                                 |   | -       |   |   |   | 3,401,355 |   |   |   | -       |   |
| Total                       |   | $      | 21,950,550 |   |                                 | $      | 14,482,892 |   |   | $ | 7,467,658 |   |   | $ | -       |   |

| 2011                                                               |   | $      | 2,128,409  |   |
|--------------------------------------------------------------------|--------|--------|------------|--------|
| 2012                                                               |   |   | 2,201,311  |   |
| 2013                                                               |   |   | 2,298,392  |   |
| 2014                                                               |   |   | 2,320,542  |   |
| 2015                                                               |   |   | 2,416,054  |   |
| Five fiscal years ending     December 31, 2020 |   |   | 13,349,932 |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

----

|                     |
|----------------------------------------------------------------------------------------------------------|

|                                     |   |     |       |   | Ready-Mixed |   |                                  | Adjustments  |   |   |                                  |   |
|------------------------------------------|--------|----------|------------|--------|-------------|--------|---------------------------------------|--------------|--------|--------|---------------------------------------|--------|
|                                     |   | Cement   |       |   | Concrete    |   |                                  | and          |   |   |                                  |   |
|                                     |   | Business |       |   | Business    |   |                                  | Eliminations |   |   | Consolidated                          |   |
| For the Year Ended December 31, 2010     |   |     |       |   |        |   |                                  |         |   |   |                                  |   |
| Sales to unaffiliated customers          |   | $        | 49,436,170 |   |        | $      | 71,748,664                            |         |   | $      | -       |   |   | $ | 121,184,834 |   |
| Intersegment sales                       |   |     | 14,846,799 |   |        |   | 14,667                                |         |   |   | (14,861,466                           | )      |   |   | -        |   |
| Total net sales                          |   | $        | 64,282,969 |   |        | $      | 71,763,331                            |         |   | $      | (14,861,466                           | )      |   | $ | 121,184,834 |   |
| Income (loss) from operations            |   | $        | 6,147,514  |   |        | $      | (6,005,382                            | )            |   |   |                                  |   |   | $ | 142,132 |   |
| Other loss, net                          |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   | (218,210 | ) |
| Loss before income taxes                 |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   | $ | (76,078 | ) |
| Identifiable assets at December 31, 2010 |   | $        | 89,992,392 |   |        | $      | 37,106,313                            |         |   |   |                                  |   |   | $ | 127,098,705 |   |
| Corporate assets                         |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   | 47,000,123 |   |
| Total assets at December 31, 2010        |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   | $ | 174,098,828 |   |
| For the Year Ended December 31, 2009     |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   |   |   |
| Sales to unaffiliated customers          |   | $        | 55,687,700 |   |        | $      | 76,506,842                            |         |   | $      | -       |   |   | $ | 132,194,542 |   |
| Intersegment sales                       |   |     | 12,478,688 |   |        |   | -       |         |   |   | (12,478,688                           | )      |   |   | -       |   |
| Total net sales                          |   | $        | 68,166,388 |   |        | $      | 76,506,842                            |         |   | $      | (12,478,688                           | )      |   | $ | 132,194,542 |   |
| Income (loss) from operations            |   | $        | 7,019,307  |   |        | $      | (2,070,723                            | )            |   |   |                                  |   |   | $ | 4,948,584 |   |
| Other income, net                        |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   | 436,035 |   |
| Income before income taxes               |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   | $ | 5,384,619 |   |
| Identifiable assets at December 31, 2009 |   | $        | 95,490,586 |   |        | $      | 39,995,968                            |         |   |   |                                  |   |   | $ | 135,486,554 |   |
| Corporate assets                         |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   | 41,511,123 |   |
| Total assets at December 31, 2009        |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   | $ | 176,997,677 |   |
| For the Year Ended December 31, 2008     |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   |   |   |
| Sales to unaffiliated customers          |   | $        | 69,683,762 |   |        | $      | 84,202,711                            |         |   | $      | -       |   |   | $ | 153,886,473 |   |
| Intersegment sales                       |   |     | 15,873,001 |   |        |   | 1,079                                 |         |   |   | (15,874,080                           | )      |   |   | -       |   |
| Total net sales                          |   | $        | 85,556,763 |   |        | $      | 84,203,790                            |         |   | $      | (15,874,080                           | )      |   | $ | 153,886,473 |   |
| Income (loss) from operations            |   | $        | 18,362,170 |   |        | $      | (1,607,168                            | )            |   |   |                                  |   |   | $ | 16,755,002 |   |
| Other loss, net                          |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   | (3,797,295 | ) |
| Income before income taxes               |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   | $ | 12,957,707 |   |
| Identifiable assets at December 31, 2008 |   | $        | 94,620,462 |   |        | $      | 40,705,428                            |         |   |   |                                  |   |   | $ | 135,325,890 |   |
| Corporate assets                         |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   |   | 39,438,759 |   |
| Total assets at December 31, 2008        |   |     |       |   |        |   |                                  |         |   |   |                                  |   |   | $ | 174,764,649 |   |

----

| The Monarch Cement Company and SubsidiariesNotes to Consolidated Financial StatementsDecember 31, 2010, 2009 and 2008 |
|-----------------------------------------------------------------------------------------------------------------------|

|                                     |   | First   |                                  |   | Second  |   |                                  | Third   |   |   | Fourth     |   |
|------------------------------------------|--------|---------|---------------------------------------|--------|---------|--------|---------------------------------------|---------|--------|--------|------------|--------|
| 2010                                     |   | Quarter |                                  |   | Quarter |   |                                  | Quarter |   |   | Quarter    |   |
| Net sales                                |   | $       | 18,194,726                            |   |    | $      | 34,073,747                            |    |   | $      | 37,123,469 |   |   | $ | 31,792,892 |   |
| Gross profit (loss) from operations      |   |    | (2,464,272                            | )      |    |   | 7,511,514                             |    |   |   | 6,466,840  |   |   |   | 4,693,040 |   |
| Income (loss) from operations            |   |    | (6,351,790                            | )      |    |   | 3,649,746                             |    |   |   | 2,616,147  |   |   |   | 228,029 |   |
| Net income (loss)                        |   |    | (4,697,326                            | )      |    |   | 2,511,966                             |    |   |   | 1,228,351  |   |   |   | 1,180,931 |   |
| Basic earnings (loss) per share          |   |    | (1.17                                 | )      |    |   | 0.62                                  |    |   |   | 0.31       |   |   |   | 0.30 |   |
| Loss on impairment of equity investments |   |    | -       |   |    |   | -       |    |   |   | (858,787   | )      |   |   | -       |   |

|                                     |   |   |                                  |   |   |   |                                  |   |   |   |                                  |   |
|------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|
| 2009                                     |   |   |                                  |   |   |   |                                  |   |   |   |                                  |   |
| Net sales                                |   | $      | 25,330,736                            |   |   | $      | 36,164,068                            |   |   | $      | 42,410,390                            |   |   | $ | 28,289,348 |   |
| Gross profit from operations             |   |   | 471,912                               |   |   |   | 8,230,625                             |   |   |   | 10,648,719                            |   |   |   | 2,196,479 |   |
| Income (loss) from operations            |   |   | (3,649,721                            | )      |   |   | 4,197,728                             |   |   |   | 6,633,114                             |   |   |   | (2,232,537 | ) |
| Net income (loss)                        |   |   | (2,664,491                            | )      |   |   | 2,980,062                             |   |   |   | 4,947,133                             |   |   |   | (578,085 | ) |
| Basic earnings (loss) per share          |   |   | (0.66                                 | )      |   |   | 0.75                                  |   |   |   | 1.23                                  |   |   |   | (0.14 | ) |
| Loss on impairment of equity investments |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | (524,188 | ) |

|                                  |   | 2009   |        |   | Change |   |      | 2010   |   |
|---------------------------------------|--------|--------|-------------|--------|--------|--------|-----------|--------|--------|
| Unrealized appreciation on available- |   |   |        |   |   |   |      |   |   |
|    for-sale securities |   | $      | 2,646,000   |   |   | $      | 3,522,000 |   |   | $ | 6,168,000 |   |
| Pension liability adjustment          |   |   | (8,075,676  | )      |   |   | (453,765  | )      |   |   | (8,529,441 | ) |
| Postretirement liability adjustment   |   |   | (7,404,667  | )      |   |   | (908,310  | )      |   |   | (8,312,977 | ) |
|                                  |   | $      | (12,834,343 | )      |   | $      | 2,159,925 |   |   | $ | (10,674,418 | ) |

----

|                     |
|----------------------------------------------------------------------------------------------------------|

|                                  |   | 2008   |        |   | Change |   |       | 2009   |   |
|---------------------------------------|--------|--------|-------------|--------|--------|--------|------------|--------|--------|
| Unrealized appreciation on available- |   |   |        |   |   |   |       |   |   |
|    for-sale securities |   | $      | 1,188,000   |   |   | $      | 1,458,000  |   |   | $ | 2,646,000 |   |
| Pension liability adjustment          |   |   | (9,691,865  | )      |   |   | 1,616,189  |   |   |   | (8,075,676 | ) |
| Postretirement liability adjustment   |   |   | (6,005,258  | )      |   |   | (1,399,409 | )      |   |   | (7,404,667 | ) |
|                                  |   | $      | (14,509,123 | )      |   | $      | 1,674,780  |   |   | $ | (12,834,343 | ) |

----

----

| CORPORATE INFORMATION                                       |
|-------------------------------------------------------------|
|                                                        |   |   |
| CORPORATE OFFICE                                            |   | DIRECTORS |
| 449 1200 Street                                             |   | Jack R. Callahan |
| P.O. Box 1000                                               |   |  Retired President, The Monarch Cement Company |
| Humboldt, KS 66748                                          |   | Ronald E. Callaway |
| Phone: (620) 473-2222                                       |   |  Retired feed yard manager |
| Fax: (620) 473-2447                                         |   | David L. Deffner |
|                                                        |   |  Director of Music, Davis Community Church |
| AUDITORS                                                    |   | Robert M. Kissick |
| BKD, LLP                                                    |   |  Chairman, Hydraulic Power Systems, Inc. |
| Kansas City, Missouri                                       |   | Gayle C. McMillen |
|                                                        |   |  Adjunct Professor, Kansas Wesleyan University |
| ANNUAL MEETING                                              |   | Richard N. Nixon |
| The annual meeting of the stockholders of                   |   |  Retired partner, Stinson Morrison Hecker LLP law firm |
| The Monarch Cement Company is held the                      |   | Byron J. Radcliff |
| second Wednesday in April of each year at the               |   |  Rancher       |
| Company’s corporate offices.                          |   | Byron K. Radcliff |
|                                                        |   |  Owner/Manager, Radcliff Ranch |
| TRANSFER AGENT AND REGISTRAR                                |   | Michael R. Wachter |
| The Monarch Cement Company                                  |   |  Vice President, Civil Engineer and Director of   |
| P.O. Box 1000                                               |   |  Operations, Concrete Technology Corp.   |
| Humboldt, KS 66748-0900                                     |   | Walter H. Wulf, Jr.  |
| shareholder.relations@monarchcement.com                     |   |  President and Chairman of the Board |
|                                                        |   | Walter H. Wulf, III |
|                                                        |   |  District Sales Manager, General Motors Corporation |
| STOCK TRADING INFORMATION                                   |   |   |
| Trading Symbol: MCEM                                        |   | OFFICERS |
| Over-the-Counter Market                                     |   | Walter H. Wulf, Jr. |
|                                                        |   |  President and Chairman of the Board |
| INVESTOR RELATIONS                                          |   |   |
| Inquiries may be directed to Debra P. Roe,                  |   | *Byron K. Radcliff |
| Chief Financial Officer and Assistant Secretary-            |   |  Vice Chairman of the Board, Secretary and Treasurer |
| Treasurer, at the corporate address shown above.            |   |           |
|                                                        |   | *Robert M. Kissick |
|                                                        |   |  Vice President |
| FORM 10-K                                                   |   |           |
| The Company’s Annual Report on Form 10-K, as          |   | Rick E. Rush  |
| filed with the Securities and Exchange Commission,     |   |  Vice President     |
| is available upon request by writing to Debra P. Roe        |   |   |
| at the corporate address shown above.  The Form        |   | Debra P. Roe       |
| 10-K, without exhibits, will be provided at no              |   |  Chief Financial Officer and |
| charge, and also is available on the Company’s        |   |  Assistant Secretary-Treasurer            |
| website, http://www.monarchcement.com.                      |   |           |
|                                                        |   | Lisa J. Fontaine |
|                                                        |   |  Assistant Secretary     |
| The Company’s financial information is also available |   |      |
| from the SEC at their EDGAR internet address,               |   | Harvey D. Buckley     |
| http://www.sec.gov.                                         |   |  Vice President - Cement Manufacturing |
|                                                        |   |   |
|                                                        |   | N. Joan Perez |
| ETHICS POLICY                                               |   |  Vice President - Sales |
| The Company’s ethics policy is available on the About |   |   |
| Us link of the Company’s website,                     |   |   |
| http://www.monarchcement.com.                               |   |  *Not actively involved in the daily affairs of the Company. |
|                                                        |   |              |