E-Z-GO 2013 Annual Report Download - page 31

Textron Inc. Annual Report • 2013 18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview and Consolidated Results of Operations
For Textron, 2013 was an important year with significant new product introductions, strategic acquisitions and investments in the
future of our businesses. During 2013, we accomplished the following:
• Invested $651 million in research and development costs, a 12% increase over the prior year, demonstrating our
commitment to expanding our current product lines across all of our businesses. As a result, we brought new products to
market in many of our businesses, including the certification of two new models of Cessna aircraft, the Citation M2 and
the Sovereign+ jet.
• Acquired six companies, including two flight simulation and aircraft training product companies for the Textron Systems
segment, two companies to augment our Greenlee business in the Industrial segment and two service centers at Cessna for
an aggregate cash payment of $196 million.
• Made $204 million in contributions to our pension plans and ended the year with an unfunded pension plan liability of
$199 million, compared to $1.3 billion at the end of 2012.
• Reduced our debt-to-capital, net of cash ratio to 15% from 24% in the prior year, in part due to the maturity of our
convertible senior notes and the settlement of the related call option and warrants.
An analysis of our consolidated operating results is set forth below. A more detailed analysis of our segments’ operating results is
provided in the Segment Analysis section on pages 20 to 28.
Revenues
(Dollars in millions) 2013 2012 2011
Revenues $ 12,104 $ 12,237 $ 11,275
% change compared with prior period (1)% 9%
Revenues decreased $133 million, 1%, in 2013, compared with 2012, as revenue decreases in the Cessna, Finance, and Textron
Systems segments were partially offset by higher revenues in the Bell and Industrial segments. The net revenue decrease included
the following factors:
• Lower Cessna revenues of $327 million, primarily due to lower Citation jet volume of $384 million and CitationAir
volume of $114 million, partially offset by higher aftermarket volume of $65 million and higher pre-owned aircraft
volume of $53 million.
• Lower Finance revenues of $83 million, primarily attributable to an unfavorable impact of $46 million from lower
average finance receivables and a decrease of $25 million in revenues related to the resolution of a Timeshare account in
2012.
• Lower Textron Systems revenues of $72 million, largely due to lower volume of $51 million in the Marine & Land
product line and lower volume of $28 million in the UAS product line.
• Higher Bell revenues of $237 million, largely due to higher volume of $163 million in our military programs, primarily
reflecting higher V-22 deliveries and aftermarket volume, and $74 million of higher commercial revenues, largely due to
higher aircraft volume.
• Higher Industrial segment revenues of $112 million, primarily due to higher volume of $58 million and the impact of
acquisitions of $46 million.
Revenues increased $962 million, 9%, in 2012, compared with 2011, as increases in the Bell, Cessna, Industrial and Finance
segments were partially offset by a reduction in the Textron Systems segment. The net revenue increase included the following
factors:
• Higher Bell revenues of $749 million, primarily due to higher commercial aircraft volume of $476 million and an increase
in V-22 program volume of $231 million, largely due to higher deliveries.
• Higher Cessna revenues of $121 million, primarily due to higher pre-owned aircraft volume of $68 million and Citation
jet revenues of $57 million, reflecting a change in mix of jets sold during the period.
• Increased Industrial segment revenues of $115 million, primarily due to higher volume of $171 million, primarily
reflecting higher market demand in the Fuel Systems and Functional Components and Golf, Turf Care and Light