E-Z-GO 2009 Annual Report Download - page 33

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24
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In 2008, Textron Systems revenues increased $766 million, compared with 2007, primarily due to the acquisition of AAI in 2007, which
contributed $701 million to revenues in 2008, and higher volume of $85 million, partially offset by the nonrecurrence of a $28 million cost
reimbursement in 2007 related to losses incurred during Hurricane Katrina. The volume increase is primarily due to $69 million in higher volume
in our Armored Security Vehicle aftermarket products, $48 million in higher volume for Intelligent Battlefield System products and $22 million in
higher volume at Lycoming, partially offset by $32 million in lower Sensor Fused Weapon volume.
Textron Systems Segment Profit
Segment profit at Textron Systems decreased $11 million in 2009, compared with 2008, primarily due to the impact of lower aircraft engine
volume of $38 million, partially offset by a $29 million impact from higher defense volumes.
In 2008, Textron Systems segment profit increased $77 million, compared with 2007, primarily due to the acquisition of AAI, which contributed
$62 million in 2008, and favorable cost performance of $12 million. The favorable cost performance included $39 million related to the Armored
Security Vehicle program, partially offset by the 2007 reimbursement of $28 million for the impact of losses incurred during Hurricane Katrina.
The Armored Security Vehicle program cost performance is primarily due to improved labor efficiencies and lower material costs.
Industrial
(Dollars in millions) 2009 2008 2007
Revenues $ 2,078 $ 2,918 $ 2,825
Segment profit $ 27 $ 67 $ 173
Profit 1% 2% 6%
Industrial Revenues
Revenues in the Industrial segment decreased $840 million in 2009, compared with 2008, primarily due to $801 million in lower volume,
reflecting lower demand due to the economic recession, and an unfavorable foreign exchange impact of $51 million, largely due to fluctuations of
the euro, partially offset by $8 million in higher pricing.
In 2008, Industrial segment revenues increased $93 million, compared with 2007, primarily due to a favorable foreign exchange impact of
$95 million, higher pricing of $34 million and the favorable impact of an acquisition of $24 million, partially offset by lower volume of
$62 million. Volume declined in the Kautex, Greenlee and Jacobsen businesses as demand softened, with the largest decline at Kautex as the
slowing economy had a significant impact on automotive sales in the second half of 2008, resulting in numerous factory shutdowns at automotive
original equipment manufacturers around the world. At E-Z-GO, volume increased $41 million, largely due to increased fleet car sales related to
the successful introduction of the RXV model.
Industrial Segment Profit
Industrial segment profit decreased $40 million in 2009, compared with 2008, primarily due to the $265 million impact from lower volume,
partially offset by improved cost performance of $211 million and lower inflation of $21 million. Cost performance has improved largely due to
significant efforts made to reduce costs through workforce reductions, employee furloughs, temporary plant shutdowns and lower selling and
administrative costs.
In 2008, Industrial segment profit decreased $106 million, compared with 2007, mainly due to inflation in excess of pricing of $61 million and the
impact of lower volume and mix of $54 million, partially offset by improved cost performance of $13 million.
Finance
(Dollars in millions) 2009 2008 2007
Revenues $ 361 $ 723 $ 875
Segment profit (loss) $ (294) $ (50) $ 222
Profit (loss) (81)% (7)% 25%