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Bell Revenues and Operating Expenses
Factors contributing to the 2014 year-over-year revenue change are provided below:
(In millions)
2014 versus
2013
Volume and mix
$ (300)
Other
34
Total change
$ (266)
Bell’s revenues decreased $266 million, 6%, in 2014, compared with 2013, primarily due to the following factors:
x $183 million decrease in commercial revenues, largely related to lower volume reflecting lower sales activity across the
commercial helicopter market. Bell delivered 178 commercial aircraft in 2014, compared with 213 commercial aircraft in
2013.
x $99 million decrease in other military volume, primarily related to the H-1 program, largely reflecting lower aircraft
deliveries and production support. Lower volume was partially offset by $41 million recorded in the second quarter of
2014, related to the settlement of the SDD phase of the ARH program, which was terminated in October 2008. Bell
delivered 24 H-1 aircraft in 2014, compared with 25 aircraft in 2013.
x $16 million increase in V-22 program revenues, reflecting higher product support volume of $115 million. This increase
was largely offset by lower aircraft deliveries, as we delivered 37 V-22 aircraft in 2014 compared to 41 V-22 aircraft in
2013.
Bell’s operating expenses decreased $222 million, 6% in 2014, compared with 2013, primarily due to the lower net volume as
discussed above. In addition, Bell experienced favorable profit adjustments on its long-term contracts, primarily driven by cost
reduction activities in 2014 as well as unfavorable performance in 2013 as discussed below.
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:
x $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.
x $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 revenues 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.
x $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.
24 Textron Inc. Annual Report • 2014