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Textron Inc. Annual Report ● 2012 25
Bell’s operating expenses increased $190 million, 7%, in 2011, compared with 2010, primarily due to higher sales volume
discussed above, partially offset by improved cost performance. Improved cost performance was primarily related to our military
programs due to efficiencies realized through our production ramp-up as described below.
Bell Segment Profit
Factors contributing to 2012 year-over-year segment profit change are provided below:
(In millions)
2012 versus
2011
Volume and mix $ 143
Performance (18)
Other (7)
Total change $ 118
Bell’s segment profit increased $118 million, 23%, in 2012, compared with 2011, primarily due to the impact of higher volume in
our commercial aircraft and military businesses as described above. Performance reflects higher net research and development
expense in 2012 of $26 million due to the ramp-up of new product development and higher selling and administrative expenses
largely due to our investment in business system improvement and upgrade activities, which were partially offset by favorable
program performance in our military programs, reflecting improved manufacturing efficiencies.
Factors contributing to 2011 year-over-year segment profit change are provided below:
(In millions)
2011 versus
2010
Performance $ 109
Volume and mix (22)
Other 7
Total change $ 94
Bell’s segment profit increased $94 million, 22%, in 2011, compared with 2010, primarily due to improved program performance
of $109 million, partially offset by an unfavorable mix of military and commercial aircraft sold during the period. Bell’s improved
performance included the following:
• $122 million resulting from improved manufacturing efficiencies in our military programs, resulting from efficiencies
realized in connection with the ramp up of production lines.
• $30 million unfavorable net change in program profit adjustments; this change was largely due to a $21 million
adjustment recognized in 2010 related to the recognition of profit on the H-1 and V-22 programs for reimbursement of
prior year costs.
Bell Backlog
In 2012 and 2011, Bell’s backlog reflected orders in excess of deliveries resulting in a $123 million, 2%, increase in 2012 and an
$873 million, 13%, increase in 2011.
Textron Systems
% Change
(Dollars in millions) 2012 2011 2010 2012 2011
Revenues $ 1,737 $ 1,872 $ 1,979 (7)% (5)%
Operating expenses 1,605 1,731 1,749 (7)% (1)%
Segment profit 132 141 230 (6)% (39)%
Profit margin 8% 8% 12%
Backlog $ 2,919 $ 1,337 $ 1,598 118% (16)%