E-Z-GO 2007 Annual Report Download - page 37

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Consolidated Results of Operations
Revenues
Revenues increased $1.7 billion, or 15%, to $13.2 billion in 2007, compared with 2006. The primary reasons for this increase are:
• Higher manufacturing volume of $1.0 billion with $631 million at Cessna, primarily related to an increase in business jet deliveries;
$253 million in Bell’s U.S. Government business, largely related to the H-1 program and higher armored security vehicle (“ASV”) deliveries;
and a $148 million increase in the Industrial segment, principally due to higher demand at Kautex;
• Higher pricing of $344 million, with $212 million at Cessna, $94 million in Bell’s commercial business and $46 million in the
Industrial segment;
• Additional revenues from newly acquired businesses of $166 million, primarily the acquisitions of Overwatch Systems and AAI in the
Bell segment;
• Favorable foreign exchange impact of $148 million in the Industrial segment; and
• A $66 million impact from higher average fi nance receivables due to growth in the aviation and resort fi nance businesses in the
Finance segment.
In 2006, our revenues increased $1.5 billion, or 14%, compared with 2005, primarily due to higher manufacturing sales volume of $1.0 billion,
higher pricing of $274 million and higher revenues in the Finance segment of $170 million.
Segment Profi t
Segment profi t increased $373 million, or 29%, to $1.6 billion in 2007, compared with 2006. This increase is primarily due to the
following factors, which were partially offset by infl ation of $256 million:
• Higher pricing of $344 million, with $212 million at Cessna, $94 million in Bell’s commercial business and $46 million in the
Industrial segment;
• Favorable cost performance of $164 million, which includes net charges in 2007 for the Armed Reconnaissance Helicopter (“ARH”) Low Rate
Initial Production (“LRIP”) program of $50 million, the $32 million favorable impact of the recovery of ARH System Development and
Demonstration (“SDD”) launch-related costs written off in 2006 and lower charges related to the H-1 LRIP program of $43 million;
• A $148 million net benefi t from higher volume, partially offset by unfavorable product mix; and
• Profi t from newly acquired businesses of $20 million.
In 2006, our segment profi t increased $121 million, or 11%, compared with 2005, primarily due to higher pricing of $274 million, higher sales
volume of $198 million, improved cost performance of $54 million in the Industrial segment, favorable warranty performance at Cessna of
$39 million and higher profi t in the Finance segment of $39 million. These increases were partially offset by infl ation of $272 million, higher
spending for engineering and new product development of $74 million, higher overhead of $55 million in Bell’s commercial business and
increased charges related to the H-1 LRIP program of $68 million.
Corporate Expenses and Other, net
Corporate expenses and other, net increased $51 million in 2007, compared with 2006, primarily due to the following:
• $26 million of higher compensation expenses, largely related to stock appreciation;
• $14 million of higher professional and consulting fees, related to corporate initiatives;
• $11 million of increased costs for divested operations, primarily due to higher pension costs and other retained liabilities; and
• A $6 million increase in our contribution to the Textron Charitable Trust;
• Partially offset by an $8 million gain on an insurance settlement.
Corporate expenses and other, net increased $3 million in 2006, compared with 2005, principally due to $7 million of higher share-
based compensation expense and $4 million of higher incentive compensation, partially offset by $8 million of lower expenses related
to corporate initiatives.
Special Charges
There were no special charges in 2007 or 2006. In 2005, special charges totaled $118 million and included $112 million related to the 2001
disposition of the Automotive Trim (“Trim”) business and $6 million in restructuring expense in the Industrial segment.
16
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations