E-Z-GO 2013 Annual Report Download - page 36

23 Textron Inc. Annual Report • 2013
Bell Revenues and Operating Expenses
Factors contributing to the 2013 year-over-year revenue change are provided below:
(In millions)
2013 versus
2012
Volume $ 193
Other 44
Total change $ 237
Bell’s revenues increased $237 million, 6% in 2013, compared with 2012, due to the following factors:
• $144 million increase in V-22 program volume largely due to higher aircraft deliveries, as we delivered 41 V-22 aircraft
in 2013, compared with 39 aircraft in 2012. In addition, military aftermarket volume was higher by $35 million, reflecting
increased support of fielded aircraft.
• $74 million increase in commercial revenues, largely due to higher aircraft volume, as we delivered 213 aircraft in 2013,
compared to 188 aircraft in 2012. This increase was partially offset by lower commercial aftermarket revenue of $50
million, largely due to lower volume, which in part, resulted from the conversion to a new enterprise resource planning
system in the first quarter of 2013.
• $19 million increase in other military volume, reflecting higher H-1 deliveries. We delivered 25 H-1 aircraft in 2013,
compared with 24 H-1 aircraft in 2012.
Bell’s operating expenses increased $303 million, 8%, in 2013, respectively, compared with 2012, largely due to higher volume as
described above and $68 million in unfavorable performance, which included $27 million in lower favorable profit adjustments on
its long-term contracts. The unfavorable performance was largely due to manufacturing inefficiencies associated with labor
disruptions resulting from negotiations with bargained employees and with the implementation of a new enterprise resource
planning system in the first quarter of 2013. On October 13, 2013, Bell reached a new five-year collective bargaining agreement
with the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and UAW Local 218 which
represents these employees. The impact of these disruptions is expected to continue to depress Bell’s margins in 2014 as the costs
for inventories manufactured in 2013 are realized as products are delivered.
Factors contributing to the 2012 year-over-year revenue change are provided below:
(In millions)
2012 versus
2011
Volume $ 728
Other 21
Total change $ 749
Bell’s revenues increased $749 million, 21%, in 2012, compared with 2011, primarily due to higher volume, which included the
following factors:
• $476 million increase in commercial volume, largely related to higher deliveries reflecting our investment in new
products and increased focus on commercial markets. Bell delivered 188 commercial aircraft in 2012, compared with 125
aircraft in 2011.
• $231 million increase in volume related to the V-22 program, primarily reflecting higher deliveries based on schedule
requirements and higher revenues related to the support of fielded aircraft. Bell delivered 39 V-22 aircraft in 2012,
compared with 34 deliveries in 2011.
• $21 million increase in other military volume resulting from higher deliveries and services rendered under several
programs, partially offset by lower spares and aftermarket volume. Bell delivered 24 H-1 aircraft in 2012, compared with
25 aircraft in 2011.
Bell’s operating expenses increased $631 million, 21%, in 2012, compared with 2011, primarily due to higher sales volume
discussed above.