E-Z-GO 2002 Annual Report Download - page 25

reflected lower foreign military sales of $74 million, partially offset by higher commercial spares and ser-
vice sales of $21 million. Bell’s profit decreased $184 million primarily due to $124 million related to
reduced profitability expectations or losses on certain development and production contracts and $25
million related primarily to receivable and inventory reserve increases. The reduced profitability expec-
tations were based on program reviews in the second half of 2001, and reflect the clarification of several
matters including extended development schedules and planned design changes on a number of pro-
grams, as well as ongoing development efforts. Profit also decreased due to higher selling and adminis-
trative expense of $24 million, primarily related to hardware and software system upgrades, lower
income of $13 million ($17 million in 2001 vs. $30 million in 2000) from a joint venture related to the
BA609 program, $10 million of cost related to outsourcing the manufacture of certain parts and the con-
tribution of $9 million from lower foreign military sales, partially offset by a benefit of $10 million related to
the higher spares and service sales and a favorable LIFO inventory reserve adjustment of $8 million
from a reduction in inventories.
Fastening Systems
2002 vs. 2001
The Fastening Systems segment’s revenues decreased $29 million, while profit increased $6 million. The
revenue decrease was primarily due to the divestiture of non-core product lines of $30 million and cus-
tomer price reductions of $29 million, partially offset by the favorable impact of foreign exchange of $27
million in the European operations and higher sales volume of $3 million. Profit increased primarily due
to the improved cost performance of $40 million and the impact of a $5 million loss on the sale of non-
core product lines in 2001, partially offset by customer price reductions of $29 million and a reduced
contribution of $11 million from an unfavorable mix.
2001 vs 2000
The Fastening Systems segment’s revenues and profit decreased $317 million and $130 million, respec-
tively. The revenue decrease was primarily due to lower sales volume of $266 million as a result of
depressed market demand in most businesses, customer price reductions of $37 million and the unfa-
vorable impact of foreign exchange of $20 million in the European operations, partially offset by the con-
tribution of $6 million from acquisitions. Profit decreased primarily due to a reduced contribution of $67
million from the lower sales volume, customer price reductions of $37 million, unfavorable cost perfor-
mance of $11 million, a customer warranty issue of $7 million and a $5 million loss on the sale of a non-
core product line. The unfavorable cost performance of $11 million related to low volume manufacturing
inefficiencies, primarily as a result of production decreases to reduce inventory levels and the impact of
smaller lot sizes, partially offset by the net benefit of restructuring activities of $19 million.
Industrial Products
2002 vs. 2001
The Industrial Products segment’s revenues and profit decreased $133 million and $23 million, respec-
tively. Revenues decreased in most of the segment’s businesses primarily due to lower sales of $133
million from depressed markets and the divestiture of non-core product lines of $20 million during 2001,
partially offset by higher revenues of $13 million in the aerospace and defense business. Profit
decreased primarily due to a reduced contribution of $67 million from the lower sales volume, a $32 mil-
lion increase in receivable reserves and the nonrecurring impact of a gain of $5 million on the sale of a
product line in 2001, partially offset by improved cost performance of $72 million, including the benefit
of $49 million from restructuring activities, and the favorable impact of $7 million from losses recorded in
2001 related to divested product lines.
2001 vs. 2000
The Industrial Products segment’s revenues and profit decreased $274 million and $190 million, respec-
tively. Revenues decreased in most of the segment’s businesses primarily due to lower sales of $349
million from depressed markets, with the largest decreases in the light construction equipment and the
golf car and turf care businesses, partially offset by the contribution of $50 million from acquisitions and
higher revenues of $27 million in the aerospace and defense business. Profit decreased primarily due to
unfavorable cost performance of $102 million and a reduced contribution of $100 million from the lower
sales volume, partially offset by the contribution of $9 million from acquisitions and a $5 million gain on
the sale of a small product line. The unfavorable cost performance of $102 million, primarily in the light
construction, golf car and turf care businesses, was primarily caused by manufacturing inefficiencies of
$110 million resulting from reduced production and the shut-down of certain facilities in an effort to
reduce inventory levels, a write-down of $16 million of used golf car and other inventories, the impact of
$12 million of higher rebates to stimulate sales and an increase of $12 million in the reserve for receiv-
23
00 01 02
(3%) (16%) (2%)
$1,996
$1,679
$1,650
01 00 02
(6%) (68%) 10%
$192
$62
$68
Fastening Systems
Revenues
Segment Profit
00 01 02
38% (12%) (7%)
$2,248
$1,974
$1,841
01 00 02
28% (64%) (22%)
$296
$106
$83
Industrial Products
Revenues
Segment Profit