E-Z-GO 1998 Annual Report Download - page 28

PBell Helicopter’s revenues decreased $137 million, due primarily to the completion in
1997 of the Canadian Forces contract ($180 million), partially offset by higher commercial
spares sales ($23 million) and higher revenues to the U.S. Government ($29 million). The
higher U.S. Government revenues were due to higher revenues on the V-22 program and
the Huey and Cobra upgrade contracts ($140 million), partially offset by lower foreign
military sales and lower revenues on other U.S. Government aircraft and spares ($111
million). Bell’s income decreased due to the lower revenues and a change in product mix,
primarily resulting from lower margins on U.S. Government contracts. This unfavorable
impact was partially offset by the benefit on the 609 program from a joint venture with an
international partner and a lower level of product development expense in 1998.
Under the joint venture agreement, Bell has received $100 million in cash and its
partner has assumed a significant portion of product development effort for joint ven-
ture aircraft. The benefit from the joint venture contribution in the fourth quarter 1998
($10 million) has been recognized in relation to total projected product development
spending. The quarter also benefited by $7 million for development spending that will
be reimbursed by the venture partner.
1997 vs. 1996
The Aircraft segment’s revenues and income increased $432 million (17%) and $52 million
(20%), respectively, due primarily to higher results at Cessna Aircraft.
PBell Helicopter’s revenues increased $27 million primarily as a result of higher U.S.
Government and commercial aircraft sales ($91 million) and higher revenues on the Huey
upgrade contract for the U.S. Marines ($28 million), partially offset by lower revenues on
the V-22 program ($80 million) and lower foreign military sales ($23 million). Bell’s com-
mercial aircraft sales included the completion of the three-year contract for model 412
helicopters with the Canadian Forces. Its income increased slightly as a result of the high-
er revenues, partially offset by higher product development expenses primarily related to
its new commercial aircraft models.
PCessna Aircraft’s revenues increased $405 million as a result of higher sales of
business jets, including the Citation X and Bravo. Its income increased as a result of
the higher revenues, partially offset by an increased level of expenses due to the intro-
duction and support of new products.
Automotive
1998 vs. 1997
The Automotive segment’s revenues increased $278 million (13%), while income before
special charges increased $29 million (19%). The revenue increase was due to higher
volume at Kautex associated with capacity expansion in North America and higher
sales at the Trim operations, due primarily to increased Chrysler production (which
was depressed in 1997 by a strike at Chrysler in the second quarter of 1997) and the
contribution from acquisitions. These revenue increases were partially offset by the
impact of a strike at General Motors in 1998 and the impact of customer price reductions.
The increase in income reflected the above factors and improved performance at Trim.
1997 vs. 1996
The Automotive segment’s revenues increased $500 million (31%), primarily as a result of
the first quarter 1997 acquisition of Kautex, the third quarter 1997 acquisition of the
General Rubber Goods division of Pirelli Tyres, Ltd., and the 1996 acquisitions of Valeo
Wiper Systems and the remaining 50% of a joint venture in Born, Netherlands. The benefit
of the higher sales from the acquisitions was partially offset by the unfavorable impact of
a strike at a Chrysler engine plant in the second quarter 1997 and the timing of replace-
ment business and new model launches. Income approximated last year’s level, reflecting
the above factors, increased costs related to new model launches and the impact of a
restructuring effort which began in the second quarter 1997.
24 1998 TEXTRON ANNUAL REPORT
$338
$313
$261
989796
8%20%10%
Operating
Income
$179
$150
$146
989796
19%3%8%
Operating
Income
$2,405
$2,127
$1,627
989796
13%31%6%
Automotive
Revenues