E-Z-GO 2010 Annual Report Download - page 30

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Dollars in millions, except per share amounts)
2010
2009
2008
Revenues
$ 10,525
$ 10,500
$ 14,010
Operating expenses:
Manufacturing cost of sales
8,605
8,468
10,583
Selling and administrative expenses
1,231
1,338
1,590
Special charges
190
317
526
Net cash provided by operating activities of continuing operations for Manufacturing
group
730
738
407
Diluted earnings per share from continuing operations
0.30
(0.28)
1.29
2010 was a year marked by continued global and economic challenges and yet also was a year in which we made significant progress
with cost initiatives, strengthened our overall capital position and had strong execution that allowed us to deliver improved financial
results. Cash generated from our manufacturing businesses enabled us to continue to invest in products and technologies that will
position us for future growth as the economy recovers.
We completed our restructuring program in 2010, which has driven out costs in all of our segments. Since the inception of the
program in late 2008, we have lowered our headcount by 28% and have exited 30 facilities.
During 2010, we continued to make significant progress in our plan to exit the non-captive commercial finance business in our
Finance segment by liquidating a total of $2.4 billion in finance receivables across the segment, $1.8 billion of which were receivables
in our non-captive portfolio, through discounted payoffs, portfolio sales and finance receivable amortization.
Our liquidity position strengthened during the year as our businesses generated positive operating cash flow. As a result, we paid off
the Manufacturing group’s drawn $1.25 billion credit facility in its entirety and paid down the Finance group’s $1.75 billion drawn
credit facility by $300 million. In addition, we strengthened the funding level of our pension plans with a $350 million voluntary
contribution in the fourth quarter of 2010.
Revenues
(Dollars in millions)
2010
2009
2008
Revenues
$ 10,525
$ 10,500
$ 14,010
% change compared with prior period
— %
(25)%
Revenues increased $25 million in 2010, compared with 2009. This increase was due to significant revenue increases in the
Industrial, Bell and Textron Systems segments that were largely offset by lower revenue in the Cessna and Finance segments. The net
revenue increase included the following factors:
• Higher revenues of $446 million in the Industrial segment, largely due to higher volume reflecting improvements in the
automotive industry;
• Bell’s revenue increased $399 million, primarily due to higher V-22 and H-1 volume and improved pricing in its commercial
business; and
• Textron Systems’ revenue increased $80 million, primarily due to higher UAS volume;
• Partially offset by lower revenues at Cessna of $757 million, primarily due to lower business jet volume; and
• A $143 million reduction in Finance segment revenues, largely due to lower average finance receivables resulting from the
continued liquidation.
In 2009, revenues decreased $3.5 billion, 25%, to $10.5 billion, compared with 2008. This decrease was primarily due to the
following factors:
• Lower manufacturing volume of $3.3 billion, reflecting:
— $2.4 billion decrease at Cessna, primarily related to fewer deliveries due to the economic recession;
— $801 million decrease in the Industrial segment, principally due to recession-related lower demand; and a
— $79 million decrease at Bell, largely related to lower commercial helicopter volume as a result of the economic
recession.
• Lower Finance segment revenues of $362 million, reflecting an increase in portfolio losses, lower market interest rates and
lower securitization income; and
• Unfavorable foreign exchange impact of $51 million in the Industrial segment;
• Partially offset by higher pricing of $155 million, primarily at Bell and Cessna.