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Textron Inc. Annual Report • 2013 22
Cessna Segment (Loss) Profit
Factors contributing to 2013 year-over-year segment (loss) profit change are provided below:
(In millions)
2013 versus
2012
Volume $ (99)
Inflation, net of pricing (21)
Other (10)
Total change $ (130)
Cessna’s segment profit decreased $130 million in 2013, compared with 2012, primarily due to a $99 million impact from lower
sales volume as described above and $21 million in inflation, net of pricing, largely due to higher pension expense of $17 million.
Segment profit was also impacted by $28 million in severance costs incurred in 2013, largely offset by a $27 million charge from
an unfavorable arbitration award incurred in 2012, as described above.
Factors contributing to 2012 year-over-year segment profit change are provided below:
(In millions)
2012 versus
2011
Volume and mix $ 53
Performance 12
Inflation, net of pricing (43)
Total change $ 22
In 2012, Cessna’s segment profit increased $22 million, 37%, compared with 2011, primarily due to the change in mix of Citation
jets sold during the period. Improved performance included the following:
• $33 million in improved factory efficiency.
• $24 million in lower engineering and development expenses.
• $(27) million unfavorable arbitration award as described above.
• $(19) million of lower forfeiture income due to fewer order cancellations in 2012.
Inflation, net of pricing, included a $26 million unfavorable LIFO impact largely due to a $22 million LIFO benefit recorded in
2011.
Cessna Backlog
Cessna’s backlog decreased $44 million, 4%, in 2013 and $827 million, 44%, in 2012. The decrease in backlog in 2012 was
mainly attributable to deliveries in excess of new orders and canceled Citation jet orders.
Bell
% Change
(Dollars in millions) 2013 2012 2011 2013 2012
Revenues:
V-22 program $ 1,755 $ 1,611 $ 1,380 9% 17%
Other military 959 940 919 2% 2%
Commercial 1,797 1,723 1,226 4% 41%
Total revenues 4,511 4,274 3,525 6% 21%
Operating expenses 3,938 3,635 3,004 8% 21%
Segment profit 573 639 521 (10)% 23%
Profit margin 13% 15% 15%
Backlog $ 6,450 $ 7,469 $ 7,346 (14)% 2%
Bell’s major U.S. Government programs at this time are the V-22 tiltrotor aircraft and the H-1 helicopter platforms, which are both
in the production stage and represent a significant portion of Bell’s revenues from the U.S. Government. During the second
quarter of 2013, we signed the second multi-year V-22 contract for production and delivery of 99 units beginning in late 2014 with
options for 23 additional aircraft.