Fellow Shareholders,

In 2005, POOLCORP faced new challenges and witnessed new opportunities. Our employees overcame numerous personal and professional obstacles and yet delivered exceptional results. In addition POOLCORP launched a major strategic initiative by entering the irrigation and landscape business with the acquisition of Horizon. As stated on the cover, 70% is not enough.

Monday, August 29th, the United States was confronted with its greatest natural disaster – Hurricane Katrina. On the morning of Hurricane Katrina’s landfall, we were issuing our press release and hosting a conference call to announce our acquisition of Horizon. In the following weeks, our Covington Support Team and the affected service centers’ employees continued to serve their customers while, at the same time, rebuilding their homes and neighborhoods. The protracted hurricane season, together with heavy rains in the west and cooler weather in the north, challenged us, but we persevered to deliver exceptional results.

Our SCP Port St. Lucie service center demonstrated the amazing dedication of our employees. When this service center lost part of its roof during hurricanes in both 2004 and 2005, our employees opened for business the day after each storm, operating without electricity. It is our employees, as exemplified by our Port St. Lucie team, that continue to drive our business and make POOLCORP a truly special organization.

The financial results speak for themselves. Our earnings per share have more than doubled in the past three years and have increased at a CAGR of 37% in our ten years as a public company. Despite these results, we believe that our best years are ahead of us. With a positive long term socio-economic environment and projected population demographics that show a continued migration to warmer climates, the future of outdoor lifestyle

products is very bright. Our position as a distributor is unique and we are constantly investing to increase the value that we provide to our customers and suppliers. While we’ve made significant progress, we have huge opportunities to improve every facet of our business – increasing the value add we create for our customers and suppliers.

Another issue faced during the year was the industry’s reaction and response to unprecedented price increases, especially in chemical products. We succeeded in response to this issue as we gained market share, increased our gross profits on a per unit basis, and produced record results. Our larger than normal preprice increase inventory purchases in the fourth quarter of 2005 should position us even stronger for 2006.

A significant strategic initiative was launched in 2005 with our acquisition of Horizon. The irrigation and landscape business is very complementary to the pool business and Horizon provides us with an excellent platform for future growth. Virtually every aspect of Horizon from culture to operating procedures to investment in employee development is consistent with POOLCORP’s philosophies.

In summary, our employees withstood many personal and professional challenges to, again, deliver exceptional results. We are now a better and stronger company, and have added another avenue for continued long term growth. We are very optimistic about the opportunities available to us and we are focused on converting these opportunities into additional value for our customers, suppliers and shareholders.

Most importantly, we would like to thank you for your continued confidence in POOLCORP. We are honored to have your confidence and trust and feel very privileged to serve you as we move forward in 2006 and beyond.