E-Z-GO 2014 Annual Report Download - page 13

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Our Finance segment’s largest business risk is the collectability of its finance receivable portfolio. See “Finance Portfolio
Quality” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 28 for
information about the Finance segment’s credit performance.
Backlog
Our backlog at the end of 2014 and 2013 is summarized below:
(In millions)
January 3,
2015
December 28,
2013
Bell
$ 5,524
$ 6,450
Textron Systems
2,790
2,803
Textron Aviation
1,365
1,018
Total backlog
$ 9,679
$ 10,271
Approximately 52% of our total backlog at January 3, 2015 represents orders that are not expected to be filled in 2015.
At the end of 2014, approximately 66% of our total backlog was with the U.S. Government, which included only funded amounts
as the U.S. Government is obligated only up to the amount of funding formally appropriated for a contract. Bell’s 2014 backlog
included $2.0 billion related to a multi-year procurement contract with the U.S. Government for the purchase of V-22 tiltrotor
aircraft.
U.S. Government Contracts
In 2014, approximately 28% of our consolidated revenues were generated by or resulted from contracts with the U.S. Government.
This business is subject to competition, changes in procurement policies and regulations, the continuing availability of funding,
which is dependent upon congressional appropriations, national and international priorities for defense spending, world events, and
the size and timing of programs in which we may participate.
Our contracts with the U.S. Government generally may be terminated by the U.S. Government for convenience or if we default in
whole or in part by failing to perform under the terms of the applicable contract. If the U.S. Government terminates a contract for
convenience, we normally will be entitled to payment for the cost of contract work performed before the effective date of
termination, including, if applicable, reasonable profit on such work, as well as reasonable termination costs. If, however, the U.S.
Government terminates a contract for default, generally: (a) we will be paid the contract price for completed supplies delivered and
accepted and services rendered, an agreed-upon amount for manufacturing materials delivered and accepted and for the protection
and preservation of property, and an amount for partially completed products accepted by the U.S. Government; (b) the U.S.
Government may not be liable for our costs with respect to unaccepted items and may be entitled to repayment of advance
payments and progress payments related to the terminated portions of the contract; (c) the U.S. Government may not be liable for
assets we own and utilize to provide services under the “fee-for-service” contracts; and (d) we may be liable for excess costs
incurred by the U.S. Government in procuring undelivered items from another source.
Research and Development
Information regarding our research and development expenditures is contained in Note 1 to the Consolidated Financial Statements
on page 51 of this Annual Report on Form 10-K.
Patents and Trademarks
We own, or are licensed under, numerous patents throughout the world relating to products, services and methods of
manufacturing. Patents developed while under contract with the U.S. Government may be subject to use by the U.S. Government.
We also own or license active trademark registrations and pending trademark applications in the U.S. and in various foreign
countries or regions, as well as trade names and service marks. While our intellectual property rights in the aggregate are important
to the operation of our business, we do not believe that any existing patent, license, trademark or other intellectual property right is
of such importance that its loss or termination would have a material adverse effect on our business taken as a whole. Some of
these trademarks, trade names and service marks are used in this Annual Report on Form 10-K and other reports, including:
Aeronautical Accessories; AAI; acAlert; Ascent; Aerosonde; AH-1Z; Ambush; Arc Horizon; AVCOAT; Bad Boy Buggies; Baron;
BattleHawk; Beechcraft; Beechcraft T-6: Bell; Bell Helicopter; Bonanza; Bravo; Cadillac Gage; Caravan; Caravan Amphibian;
Caravan 675; Cessna; Cessna 350; Cessna 400; Cessna Corvalis TTX; Cessna Turbo Skylane JT-A; Cessna Turbo Skyhawk JT-A;
Citation; CITATION ALPINE EDITION; Citation Encore+; Citation Latitude; Citation Longitude; Citation M2; Citation
Sovereign; Citation X; Citation X+; Citation XLS+; CJ1+; CJ2+; CJ3; CJ3+. CJ4; Clairity; CLAW; Commando; Corvalis;
Cushman; DataScout; Dixie Chopper; Eclipse; Excel; Extreme; Extreme Ti-METAL; E-Z-GO; Fury; GTS-1930 Saber, G3
Tugger; GatorEye; Gator Grips; GLOBAL MISSION SUPPORT; Grand Caravan; Greenlee; H-1; HDE; Hawker; Huey; Huey II;
iCommand; IE2; Instinct; Integrated Command Suite; Jacobsen; Jet Ranger X; Kautex; King Air; King Air C90GTx; King Air
7
Textron Inc. Annual Report • 2014