E-Z-GO 2014 Annual Report Download - page 32

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Textron Systems’ operating expenses decreased $44 million, 3%, in 2014, compared with 2013, primarily due to lower volume as
described above, as well as the impact of a $15 million charge recorded in 2013 related to the fee-for-service program described
below. Operating expenses also included the impact of costs related to acquisitions.
Factors contributing to the 2013 year-over-year revenue change are provided below:
(In millions)
2013 versus
2012
Volume
$ (76)
Other
4
Total change
$ (72)
Revenues at Textron Systems decreased $72 million, 4%, in 2013, compared with 2012, primarily due to lower volume in the
Marine and Land product line of $51 million and in the Unmanned Systems product line of $28 million.
Textron Systems’ operating expenses decreased $87 million, 5%, in 2013, compared with 2012, primarily due to improved
performance reflecting the favorable impact of lower profit adjustments, including $22 million in lower fee-for-service program charges
discussed below, along with cost reduction initiatives across most product lines. Operating expenses were also impacted by lower
volume as described above.
In 2013 and 2012, we recorded $15 million and $37 million, respectively, in unfavorable program profit adjustments related to
start-up and engine performance issues for Unmanned System’s fee-for-service program. As a result of the engine performance
issues, during the third quarter of 2013 we transitioned the manufacture of the engines to our Lycoming business, which has
resulted in improved performance.
Textron Systems Segment Profit
Factors contributing to 2014 year-over-year segment profit change are provided below:
(In millions)
2014 versus
2013
Performance
$ 22
Volume
(12)
Other
(7)
Total change
$ 3
Segment profit at Textron Systems increased $3 million, 2%, in 2014, compared with 2013, primarily driven by $22 million of improved
performance, partially offset by $12 million from lower volume as described above. Performance primarily reflects the impact of
unfavorable profit adjustments in 2013, including a $15 million charge related to the fee-for-service program described above.
Factors contributing to 2013 year-over-year segment profit change are provided below:
(In millions)
2013 versus
2012
Performance
$ 58
Volume and mix
(33)
Other
(10)
Total change
$ 15
Segment profit at Textron Systems increased $15 million, 11% in 2013 compared with 2012, largely due to improved performance
reflecting the favorable impact of lower profit adjustments, including $22 million in lower fee-for-service program charges, along with cost
reduction initiatives across most product lines. This improved performance was partially offset by lower volume as described above.
26 Textron Inc. Annual Report • 2014