E-Z-GO 2010 Annual Report Download - page 35

23
2009, commercial revenues decreased 3% from 2008, primarily due to lower helicopter and aftermarket volume of $130 million,
partially offset by higher pricing of $84 million.
Bell’s operating expenses decreased by $11 million in 2009, compared with 2008, as improved cost performance, which included
lower selling and administrative and research and development expense of $47 million, and lower net sales volume were partially
offset by inflation.
Bell Segment Profit
Factors contributing to 2010 year-over-year segment profit change are provided below:
(In millions)
2010 versus
2009
Performance
$ 106
Pricing, net of inflation 23
Other
(6)
Total change
$ 123
Bell’s segment profit increased $123 million, 40%, in 2010, compared with 2009, primarily due to improved performance of $106
million and higher pricing, net of inflation of $23 million. Sales volume did not have a significant net impact on segment profit due to
the mix of commercial and military aircraft sold. The improved performance was largely due to the following factors:
• $73 million attributable to the V-22 and H-1 programs, resulting from a $38 million favorable impact from efficiencies
realized in connection with the ramp-up of production lines, $21 million in profit recognized in the second quarter of 2010
related to the reimbursement of prior year costs and $14 million of lower material costs; and
• An $18 million net improvement from unfavorable adjustments recorded in 2009 for the 429 program that did not occur in
2010;
• Partially offset by $14 million in higher research and development costs.
Factors contributing to 2009 year-over-year segment profit change are provided below:
(In millions)
2009 versus
2008
Volume and mix
$ (40)
Performance
19
Pricing, net of inflation 47
Total change
$ 26
In 2009, Bell’s segment profit increased $26 million, 9%, compared with 2008, primarily due to higher pricing in excess of inflation
of $47 million and improved cost performance of $19 million, partially offset by a change in product mix of $22 million, primarily
due to commercial helicopters and lower volume of $18 million. The improved cost performance primarily reflects lower selling and
administrative expense of $26 million, lower research and development expense of $21 million and improvement in the V-22 program
of $16 million, partially offset by unfavorable adjustments of $24 million for the 429 model, primarily due to inventory write-downs
resulting from changes in pricing assumptions and higher than anticipated learning curve costs.
Bell Backlog
In 2010, Bell’s backlog increased $296 million, 4%, largely related to the V-22 and H-1 programs, partially offset by a decline in
commercial backlog reflecting deliveries in excess of new orders. Backlog at Bell increased 11% in 2009 from 2008, primarily due to
funding for the V-22 program, partially offset by a decline in commercial aircraft orders, largely due to the economic recession.
Textron Systems
% Change
(Dollars in millions)
2010
2009
2008
2010
2009
Revenues
$ 1,979
$ 1,899
$ 1,880
4%
1%
Operating expenses
1,749
1,659
1,629
5%
2%
Segment profit
230
240
251
(4)%
(4)%
Profit margin
12%
13%
13%
Backlog
$ 1,598
$ 1,664
$ 2,190
(4)%
(24)%