E-Z-GO 2011 Annual Report Download - page 40

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Industrial Segment Profit
Factors contributing to 2011 year-over-year segment profit change are provided below:
(In millions)
2011 versus
2010
Volume
$ 31
Performance
34
Inflation, net of pricing
(35)
Other
10
Total change
$ 40
Industrial segment profit increased $40 million, 25%, in 2011 from 2010, primarily due to a $34 million impact from improved
performance and a $31 million impact from higher volume, as described above, partially offset by inflation, net of pricing of $35
million. Performance was favorable for the period due to continued cost reduction activities and improved manufacturing leverage
resulting from higher volume. Inflation, net of pricing was primarily due to higher direct material costs for commodity and
material components that exceeded related price increases, principally in the Fuel Systems and Functional Components product
line.
Factors contributing to 2010 year-over-year segment profit change are provided below:
(In millions)
2010 versus
2009
Volume
$ 127
Performance
76
Inflation, net of pricing
(59)
Other
(9)
Total change
$ 135
Industrial segment profit increased $135 million, 500%, in 2010, compared with 2009, primarily due to the $127 million impact
from higher volume and $76 million in improved performance, partially offset by inflation in excess of higher pricing of $59
million. The improved cost performance in 2010 was largely due to the significant efforts made in 2009 to reduce costs through
workforce reductions and other initiatives, along with improved manufacturing leverage due to higher volume.
Finance
(In millions)
2011
2010
2009
Revenues
$ 103
$ 218
$ 361
Provision for losses on finance receivables
12
143
267
Segment loss
(333)
(237)
(294)
Our plan to exit the non-captive commercial finance business of our Finance segment is being effected through a combination of
orderly liquidation and selected sales. Depending on market conditions, we expect continued progress in liquidating the remaining
$950 million in the non-captive portfolio over the next several years.
Finance Revenues
Finance segment revenues decreased $115 million, 53%, in 2011 compared with 2010, primarily attributable to the impact of a
$1.8 billion lower average finance receivable balance.
In 2010, Finance segment revenues decreased $143 million, 40%, compared with 2009, primarily due to the $141 million impact from a
lower average finance receivable balance of $1.8 billion and lower servicing fees, investment and other income, along with $54 million in
lower gains on debt extinguishments. These reductions were partially offset by an $81 million impact from lower net portfolio losses,
primarily as a result of $40 million in lower impairment charges in the Structured Capital portfolio, $23 million in gains on the sale of two
Distribution Finance portfolios in 2010 and a $21 million decrease in discounts taken on the sale or early termination of finance assets
associated with the liquidation of Distribution Finance receivables, partially offset by an $11 million increase in impairment charges on
owned aircraft that are subject to operating lease or have been repossessed.
29
Textron Inc. Annual Report • 2011 29