E-Z-GO 2014 Annual Report Download - page 34

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Segment profit for the Industrial segment increased $38 million, 16%, in 2014, compared with 2013, largely due to the impact
from higher volume as described above. Profit was also impacted by improved performance of $15 million, primarily driven by
the Fuel Systems and Functional Components product line.
Factors contributing to 2013 year-over-year segment profit change are provided below:
(In millions)
2013 versus
2012
Performance
$ 39
Volume
9
Inflation, net of pricing
(22)
Other
1
Total change
$ 27
Segment profit for the Industrial segment increased $27 million, 13%, in 2013, compared with 2012, primarily due to improved
performance of which $27 million was associated with the Fuel Systems and Functional Components product line. The $22
million unfavorable impact from inflation, net of pricing, was primarily in the Fuel Systems and Functional Components product
line, reflecting higher compensation and material costs.
Finance
(In millions)
2014
2013
2012
Revenues
$ 103
$ 132
$ 215
Segment profit
21
49
64
Finance Revenues
Finance segment revenues decreased $29 million in 2014, compared with 2013, primarily attributable to a $31 million impact from
gains on the disposition of finance receivables held for sale during 2013. These gains resulted from the payoff of loans in amounts,
and sale of loans at prices, in excess of the values established in previous periods.
Finance segment revenues decreased $83 million in 2013, compared with 2012, primarily attributable to an unfavorable impact of
$46 million, attributable to lower average finance receivables of $834 million. Revenues during 2013 were also lower by $25
million due to the resolution of a Timeshare account that returned to accrual status in 2012.
Finance Segment Profit
Finance segment profit decreased $28 million in 2014, compared with 2013, primarily due to a change in provision for loan losses
of $29 million, largely reflecting reserve reversals in 2013 primarily related to the non-captive business, and the impact from gains
on finance receivables held for sale described above. These decreases in segment profit were partially offset by lower administrative
expense of $19 million in 2014, primarily associated with the exit of the non-captive business.
Finance segment profit decreased $15 million in 2013, compared with 2012, primarily resulting from the resolution of a Timeshare
account in 2012 as described above, as well as an unfavorable impact of $25 million in net interest margin from lower average
finance receivables. These decreases were partially offset by lower administrative expenses of $26 million and lower provision for
loan losses of $20 million, largely related to the downsizing of the non-captive business.
Finance Portfolio Quality
The following table reflects information about the Finance segment’s credit performance related to finance receivables.
(Dollars in millions)
January 3,
2015
December 28,
2013
Finance receivables
$ 1,254
$ 1,483
Nonaccrual finance receivables
81
105
Ratio of nonaccrual finance receivables to finance receivables
6.46%
7.08%
60+ days contractual delinquency
$ 57
$ 80
60+ days contractual delinquency as a percentage of finance receivables
4.55%
5.39%
28 Textron Inc. Annual Report • 2014