Marmon Brochure 2012 High

Annual Brochure The Marmon Group, part of Berkshire Hathaway Inc., is a global, diversified industrial organization. Marmon comprises three autonomous companies consisting of 11 diverse, stand-alone business sectors, and more than 150 independent manufacturing and service businesses. These three companies and their respective sectors are: Marmon Engineered Industrial Marmon Natural Resource Marmon Retail & End User & Metal Components, Inc. & Transportation Services, Inc. Technologies, Inc. 2012 Revenues* $2.446 billion 2012 Revenues* $2.615 billion 2012 Revenues* $2.221 billion Distribution Services Crane Services Food Service Equipment Providing specialty metal pipe, tubing and Supplying mobile cranes and operators Producing food preparation equipment beams, and related value-added services for primarily to the energy, mining and primarily for quick-serve restaurants, and a broad range of industries. petrochemical markets. shopping carts for retail stores. 41% of company revenues 17% of company revenues 9% of company revenues Electrical & Plumbing Products– Engineered Wire & Cable Highway Technologies Distribution Producing electrical and electronic wire and Supporting the heavy-duty highway Supplying electrical building wire for cable for energy-related markets as well as transportation industry with trailers and vehicle construction, and copper tube for the plumbing, transit, aerospace, defense, communication components, and the light-vehicle aftermarket HVAC, refrigeration and industrial markets, and other industrial applications. with clutches and related products. through the wholesale channel. 30% of company revenues 34% of company revenues 45% of company revenues Transportation Services & Retail Home Improvement Industrial Products Engineered Products Products Serving a variety of markets through four Serving the transportation, energy, chemical Supplying electrical building wire and groups: Fasteners, Metal Fabrication, Safety and related markets with products and services related specialty products, plumbing tube, Products, and Tubing & Fittings. including railroad tank cars and intermodal and brass fittings primarily through the home 14% of company revenues tank containers. center channel. 53% of company revenues 15% of company revenues Retail Store Fixtures Providing shelving, other merchandising displays, and related services for retail stores, as well as work and garden gloves sold at retail. Marmon is our kind of company. 20% of company revenues Warren Buffett, Chairman & CEO, Berkshire Hathaway Inc. Water Treatment n More than 150 autonomous business units Producing water treatment equipment for resi- dential, commercial and industrial applications. n Approximately 300 manufacturing, distribution and service facilities n More than 17,000 employees worldwide 22% of company revenues n Founded in 1953 by brothers Jay and Robert Pritzker n Berkshire Hathaway acquired majority interest in Marmon in 2008 *Revenues before intercompany eliminations The Marmon Group Selected Financial Data (dollars in millions) 2012 2011 2010 2009 2008 2007 2006 2005 Revenues $7,163 $6,913 $5,963 $5,062 $6,919 $6,904 $6,933 $5,605 Operating Income** 1,163 1,018 855 751 977 951 884 556 Operating Income % 16.2% 14.7% 14.3% 14.8% 14.1% 13.8% 12.8% 9.9% Total Assets 9,910 9,027 8,249 7,755 7,390 8,079 7,708 7,758 Shareholders’ Equity 6,854 6,065 5,393 4,840 4,311 5,037 4,486 4,495 **Excludes interest income and interest expense 2 Marmon’s 80/20-Driven Organization e are pleased to report that The Marmon Group achieved all-time also faces different opportunities and challenges requiring different strategies. highs in revenues, operating income, and operating income margins This new structure will enable even greater concentration on innovation, W in 2012. By any relevant standard, Marmon is a strong and successful productivity, bolt-on acquisitions and managerial development. diversified industrial company, thanks to the efforts of our management teams Marmon’s new structure is not aimed in any way at consolidating operations, and employees worldwide, and their effectiveness in implementing our 80/20 which our 80/20 philosophy strongly discourages. If anything, we expect it will business model. lead to further decentralization and segmentation However, we recognize that past success offers no to serve our key customers even better. While now guarantee for the future. Large companies with many in vogue in corporate culture, such consolidations diverse products and end markets often fall victim falsely claim overhead savings and rarely recognize to their own success. Distracted by issues of size the resultant loss of focus on profitable growth and complexity, they risk losing sight of their most and the erosion of customer service. Even though profitable growth opportunities. The Marmon Business Model employs the Marmon is one of the world’s most decentralized At Marmon, we do not take excellence for granted. time-tested lessons of 80/20 statistical large industrial companies, our total 2012 overhead To build on our success, we continually rely on 80/20 analysis as part of a comprehensive, continual (including all commercial and factory overhead, and tenets–including highly decentralized management thinking process. Key elements include: all depreciation on production and leased assets, on of segmented businesses that are intensely focused n Decentralized management of small, a GAAP basis) was only 22.5 percent of revenue. on key niche markets and products. homogeneous, segmented businesses This achievement came despite our innovation and For the past decade, Marmon and our customers customer satisfaction activity being at world-class n Focus on niche markets/products with have been well served by a structure in which profitable growth potential levels. While it is impossible for us to benchmark independent businesses with related products and this total overhead metric—i.e., public companies services, or serving similar markets, are grouped n Innovative products/services that provide are not required to disclose overhead to such an together in one of 11 business sectors. This approach practical solutions to meet customer needs extent—we are quite sure Marmon excels in this and create Marmon’s differentiation “moat” has been instrumental in the development of vital 80/20 performance measurement. hundreds of innovative products and services that n Continuous improvement in operating As always, our success depends upon both the benefit our customers. efficiency and productivity effective use of our 80/20 business model, and the Our 80/20 business model also dictates a n Selective “bolt-on” acquisitions to viability and health of our customers. The following structure that enables us to better recognize future enhance strategic direction pages profile Marmon’s 11 business sectors, now opportunities—what lies over the next hill—and grouped according to our new three-company understand what we need to do to make the most framework. These profiles highlight examples of of those opportunities. With this in mind, we have now grouped Marmon’s 11 how Marmon businesses are forming closer customer relationships, whether by sectors into three new autonomous companies, each led by an accomplished physically locating near key customers, or by developing products and services senior executive with a long Marmon tenure: that meet a need or solve a problem. As Marmon applies 80/20 principles • Marmon Engineered Industrial & Metal Components, Inc., led by Woody within our new structure, our goal remains the same: to continually get closer Petchel. to our customers. • Marmon Natural Resource & Transportation Services, Inc., led by Ken Fischl. • Marmon Retail & End User Technologies, Inc., led by John Goody. As the accompanying charts show, each of these three companies—with their Frank S. Ptak respective sectors and businesses—has its own mix of key end markets. Each President & CEO, The Marmon Group *Revenues before intercompany eliminations Key End Markets (% of 2012 revenues) Marmon Engineered Industrial Marmon Natural Resource Marmon Retail & End User & Metal Components, Inc. & Transportation Services, Inc. Technologies, Inc. A Construction 43% H A Energy & Mining 43% A A Retail Stores & I G H I H F Restaurants 24% G A B Industrial 21% A B Petrochemical & G F E C HVAC 10% Chemical 24% B Construction 17% E F D Construction & Agri- D C Transportation C Consumer 14% D cultural Equipment 7% Providers 10% B D Heavy-Duty Vehicle D Industrial 9% E Manufacturers 13% E Vehicle Manufacturers & C C Aftermarket 6% E Construction 5% E Vehicle Aftermarket 13% B F Aerospace & Military 4% B F Food Processing 4% D C F Transportation Providers 7% G Transportation Providers 2% G Aerospace & Military 4% G Energy, Mining & H Energy, Mining & H Other 1% Petrochemical 7% Petrochemical 2% H Industrial 3% I Other 5% I Other 2% 3 Marmon Engineered Industrial & Metal Components, Inc. Distribution Services Sector Through Marmon/Keystone and its affiliates, Marmon Distribution Services provides many industries with specialty pipe and tubing in steel, aluminum and alloys. Businesses in this Marmon sector operate 60 sales and Marmon/Keystone’s Value service centers in North Added Services business supplies America, Europe and Asia. customers with finished or semi-finished parts rather than raw stock. The division offers more than 150 services such as machining, honing, drilling, threading and fabrication. Future Metals serves the aerospace industry with tubular, bar and sheet products

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