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Management’s Discussion (Continued)
Manufacturing, Service and Retailing (Continued)
Other manufacturing (Continued)
chemical manufacturer that we acquired on September 16, 2011, IMC International Metalworking Companies (“Iscar”), an
industry leader in the metal cutting tools business with operations worldwide, Forest River, a leading manufacturer of leisure
vehicles and CTB, a manufacturer of equipment and systems for the livestock and agricultural industries.
Other manufacturing revenues in 2013 increased $2.3 billion (8.7%) to $29.1 billion. Forest River generated revenues of
$3.3 billion in 2013, a 24% increase over 2012. The increase reflected a 17% volume increase and higher average sales prices,
attributable to price and product mix changes. Revenues in 2013 from our building products businesses increased 8% to about
$9.6 billion. These businesses benefitted from the generally improved residential and commercial construction markets. Apparel
revenues in 2013 increased 3.5% to about $4.3 billion. Our other businesses in this group produced revenues in 2013 of $11.9
billion in the aggregate, an increase of about 8% over 2012. Most of the increase in revenues of these other businesses was
attributable to bolt-on acquisitions during the last two years.
Pre-tax earnings of our other manufacturing businesses in 2013 were $3.6 billion, an increase of $289 million
(8.7%) versus 2012. Increased earnings were generated by Forest River (32%), building products businesses (13%) and apparel
businesses (25%) compared to 2012. Pre-tax earnings of Iscar and Lubrizol were roughly unchanged from 2012. In addition,
bolt-on acquisitions during the last two years contributed to the overall increased earnings.
Revenues of our other manufacturing businesses in 2012 were approximately $26.8 billion, an increase of approximately
$5.6 billion (26%) over 2011. Excluding Lubrizol, revenues in 2012 grew 6% over 2011. Revenues of Forest River increased
27%, which was attributable to increased volume and average sales prices. Revenues from building products and apparel
businesses increased 4% and 5%, respectively, as compared with 2011. However, revenues of Iscar and CTB (before the impact
of bolt-on acquisitions) declined compared to 2011 as a result of weakness in demand, particularly in non-U.S. markets.
Pre-tax earnings of our other manufacturing businesses were approximately $3.3 billion in 2012, an increase of $922
million (38%) over earnings in 2011. Excluding the impact of Lubrizol, earnings of our other manufacturing businesses in 2012
increased 6% compared to 2011. The increase was primarily attributable to increased earnings from building products, apparel
and Forest River, partially offset by lower earnings from Iscar, CTB and Scott Fetzer. In 2012, our Shaw carpet and flooring
business benefited from the impact of price increases at the end of 2011 and the beginning of 2012, as well as from relatively
stable raw material costs, which resulted in higher margins. Our apparel businesses benefitted from past pricing actions and
stabilizing raw material costs. On the other hand, our other businesses that manufacture products that are primarily for
commercial and industrial customers, particularly those with significant business in overseas markets, such as CTB and Iscar,
were negatively impacted in 2012 by slowing economic conditions in certain of those markets.
Other service
Our other service businesses include NetJets, the world’s leading provider of fractional ownership programs for general
aviation aircraft and FlightSafety, a provider of high technology training to operators of aircraft. Among the other businesses
included in this group are: TTI, a leading electronic components distributor; Business Wire, a leading distributor of corporate
news, multimedia and regulatory filings; Dairy Queen, which licenses and services a system of over 6,300 stores that offer
prepared dairy treats and food; the Buffalo News; the BH Media Group (“BH Media”), which includes the Omaha World-
Herald, as well as 29 other daily newspapers and numerous other publications; and businesses that provide management and
other services to insurance companies.
Revenues of our other service businesses in 2013 were $9.0 billion, an increase of $821 million (10%) over revenues in
2012. In 2013, revenues of NetJets increased $288 million (7.5%), driven by higher sales of fractional aircraft shares, while
TTI’s revenues increased $255 million (11%) over 2012. Revenues of BH Media increased $207 million (66%), attributable to
the impact of business acquisitions during the last two years. Pre-tax earnings of $1.1 billion in 2013 increased $130 million
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