These instructions are making a general assumption about the ride height of the towed vehicle. The position of the ball mount should be adjusted to compensate for the ride height of the trailer tongue. Ideally, you want the trailer to ride as close to level as possible, when connected to the tow vehicle. The easiest way to accomplish this is to adjust the height of the ball mount. I usually, on level ground, use the screw jack on the trailer to adjust the trailer tongue up or down, until the frame is riding level. Then I back the tow vehicle up to the trailer, and measure how high the top surface of the ball mount extension needs to be in order to keep the trailer riding at level, and get the correct ball mount to fit. The amount of drop, or rise is measured from the top surface of the ball mount shaft that fits into the receiver socket. The OEM ball mount I received with my '03 has either a '0' rise, when installed with the extension tab in the upper position, or a '1 1/4" drop when reversed. I have 4 different ball mounts, with each having a different drop/rise measurement, to accommodate each of the 4 different trailers I tow.