===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 11-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission file number 001-05480
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
ELCO TEXTRON INC.
PROFIT SHARING AND SAVINGS PLAN
1111 SAMUELSON ROAD
P.O. BOX 7009
ROCKFORD, ILLINOIS 61125
B. Name of issuer of securities held pursuant to the plan and
address of its principal executive office:
TEXTRON INC.
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND 02903
===============================================================================
REQUIRED INFORMATION
The following Financial Statements for the Elco Textron Inc. Profit
Sharing and Savings Plan (formerly known as Elco Industries, Inc. Profit
Sharing and Savings Plan) are furnished herein:
INDEX
Report of Independent Auditors............................................. 3
Financial Statements
Statements of Net Assets Available for Plan Benefits................... 4
Statement of Changes in Net Assets Available for Plan Benefits......... 5
Notes to Financial Statements.......................................... 6
Supplemental Schedules
Assets Held for Investment............................................. 10
Reportable Transactions ............................................... 15
Report of Independent Auditors
Pension Committee
Elco Industries, Inc. Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for
benefits of Elco Industries, Inc. Profit Sharing and Savings Plan (the Plan)
as of December 31, 1995 and 1994, and the related statements of changes in net
assets available for benefits for the year ended December 31, 1995. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financials based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1995 and 1994, and the changes in net assets available for
benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment as of December 31, 1995, and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the statement of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for
benefits of each fund. The supplemental schedules and Fund Information have
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Ernst & Young LLP
Milwaukee, Wisconsin
May 31, 1996
Elco Industries, Inc.
Profit Sharing and Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1995 DECEMBER 31, 1994
--------------------------------------------------------- -----------------------------------------
Money
Market Balanced Mortgage & Total Balanced Mortgage & Total
Fund Fund Bond Fund Funds Fund Bond Fund Funds
--------------------------------------------------------- -----------------------------------------
ASSETS
Investments, at
fair value:
Mortgage notes $ - $ - $ 6,124,887 $ 6,124,887 $ - $ 6,863,754 $ 6,863,754
Common stocks - 19,616,737 - 19,616,737 13,807,379 - 13,807,379
Preferred stocks - 1,411,713 - 1,411,713 324,856 - 324,856
U.S. Government
and Agency
obligations - 7,868,687 6,740,495 14,609,182 7,432,086 7,029,533 14,461,619
Corporate and
municipal
obligations - 1,645,356 3,235,413 4,880,769 1,656,169 2,920,293 4,576,462
Foreign bonds - 97,138 - 97,138 126,000 - 126,000
Short-term
investments 1,245,289 4,855,118 1,046,161 7,146,568 2,538,873 192,676 2,731,549
Loans to
participants - - 5,498 5,498 - 5,222 5,222
Cash, interest-
bearing 8,550 143,324 209,960 361,834 631,709 127,293 759,002
--------------------------------------------------------- -----------------------------------------
1,253,839 35,638,073 17,362,414 54,254,326 26,517,072 17,138,771 43,655,843
Employer
contribution
receivable - 512,624 - 512,624 1,056,982 - 1,056,982
Interest and
dividend
receivable 5,381 216,068 139,628 361,077 83,088 137,817 220,905
Accounts receivable - - - - 20,146 24,544 44,690
Due to (from) other
fund 22,449 (92,830) 70,381 - (75,272) 75,272 -
--------------------------------------------------------- -----------------------------------------
$1,281,669 $36,273,935 $17,572,423 $55,128,027 $27,602,016 $17,376,404 $44,978,420
========================================================= =========================================
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
Elco Industries, Inc.
Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1995
<S> <C> <C> <C> <C>
Money
Market Balanced Mortgage & Total
Fund Fund Bond Fund Funds
----------------------------------------------------------------------------
Additions:
Contributions:
Employer $ 21,654 $ 1,092,881 $ 67,889 $ 1,182,424
Employee 33,226 884,381 464,986 1,382,593
Interest and dividends 65,177 1,091,529 1,150,798 2,307,504
Net appreciation in fair value
of investments - 6,903,221 851,973 7,755,194
----------------------------------------------------------------------------
120,057 9,972,012 2,535,646 12,627,715
Deductions:
Benefits payments to participants
or their beneficiaries 97,807 672,324 1,504,066 2,274,197
Administrative expenses - 154,698 49,213 203,911
----------------------------------------------------------------------------
97,807 827,022 1,553,279 2,478,108
Transfers, net 1,259,419 (473,071) (786,348) -
----------------------------------------------------------------------------
Net additions 1,281,669 8,671,919 196,019 10,149,607
Net assets available for Plan
benefits, beginning of year - 27,602,016 17,376,404 44,978,420
----------------------------------------------------------------------------
Net assets available for Plan
benefits, end of year $1,281,669 $36,273,935 $17,572,423 $55,128,027
============================================================================
</TABLE>
See accompanying notes.
Elco Industries, Inc.
Profit Sharing and Savings Plan
Notes to Financial Statements
December 31, 1995
1. DESCRIPTION OF THE PLAN
The Elco Industries, Inc. Profit Sharing and Savings Plan (the Plan) is a
defined contribution plan formed to provide profit sharing benefits to
employees of Elco Textron Inc. (the Company). Elco Industries, Inc. was
purchased in October 1995 and changed its name to Elco Textron Inc. All
full-time employees of the Company's Corporate Division, Precision Automotive
Division, Precision Commercial Division, Heat Treat and Finishes Division,
Tool Manufacturing Division, Construction Products Division and Elco Consumer
Products Corp. are eligible to participate in the Plan, commencing with the
first annual anniversary of their employment. Plan participants vest in the
Company's contributions at the rate of 10 percent per year for each of the
first two years of participation in the Plan and at the rate of 20 percent per
year for the next four years. Participants become fully vested after six
years. Forfeitures are allocated to remaining Plan participants.
The Plan is administered by an administrative committee consisting of not
fewer than three members selected by the Board of Directors of the Company.
The Company annually contributes to the Plan the lesser of 10 percent of its
current year adjusted net income plus an additional amount, which may be
authorized at the discretion of its Board of Directors, or 15 percent of the
aggregate compensation paid to all Plan participants. Active participants may
elect to make taxable contributions not to exceed 10 percent of their
earnings, and/or tax reduction contributions as a percent of earnings as
determined annually by the administrative committee. Employee and employer
contributions are funded currently with the custodian.
The Plan requires that at least two investment portfolios be maintained. The
Company's contributions generally are invested in common stocks and other
equity securities. The participants' contributions may be invested in money
market funds, fixed income securities (Mortgage & Bond Fund) or in a stock
portfolio (Balanced Fund) as directed by each participant. However, the
administrative committee may direct that any portion of the funds be invested
in fixed income property to conserve principal.
The allocation of Plan income or loss to active participants is made in the
same ratio that a participant's account bears to the sum of the balances of
all participants' accounts, taking into consideration the dates on which
additional contributions and withdrawals are made.
The allocation of Company contributions and forfeitures is based on
participant earnings, plus years of service, as defined by the Plan document.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account balance. On termination of service, a
participant may elect to receive either a lump-sum amount equal to the vested
portion of his account, or periodic payments over a period of time as defined
by the Plan.
In accordance with the terms of the trust agreement as amended January 1,
1976, the custodian has custody of all trust assets.
The Plan has received a determination letter dated April 6, 1995, from the
Internal Revenue Service that the Plan meets the requirements of Section
401(b) of the Internal Revenue Code (IRC) and, therefore, is not subject to
federal or state income taxes. Once qualified, a plan is required to operate
in conformity with the IRC to maintain its qualification. The plan
administrator is not aware of any course of action or series of events that
might adversely affect the Plan's qualified status.
Participants should refer to the Summary Plan Description for a more complete
description of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Common stocks, preferred stocks, U.S. Government and Agency obligations,
foreign bonds, and corporate and municipal obligations are carried at fair
value based on quoted market values. The values of investments in mortgage
notes and loans to participants represent the uncollected principal balances,
which approximate fair value. Short-term investments are reported at cost,
which approximates fair value.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Certain administrative services are provided to the Plan by the Company
without charge.
3. TERMINATION PRIORITIES
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contribution at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of termination,
participants will become 100% vested in their accounts.
4. MORTGAGE NOTES
The Plan invests in mortgage notes receivable from certain employees of the
Company in northern Illinois who may or may not be Plan participants. The
Plan's policy restricts these investments to first mortgages on personal
residences, including subsequent home improvements, and requires approval by
the administrative committee. The mortgage amount may not exceed 80 percent of
the appraised value of the property plus 50 percent of the participant's
vested benefit in their profit sharing account. The maximum amount loaned is
limited to the appraised value, but may not exceed $50,000. Interest rates
currently range from 7.5% to 8.5%. The notes are granted with maturities of up
to ten years and payment schedules based on periods of up to twenty-five
years. At the maturity date, unpaid loan balances are reviewed by the
administrative committee and, upon approval, are refinanced at prevailing
interest rates.
5. NET APPRECIATION (DEPRECIATION) OF INVESTMENTS
During 1995, Plan investments (including investments bought, sold, as well as
held during the year) appreciated (depreciated) in fair value as follows:
Common stocks $6,187,450
Preferred stocks 67,634
U.S. Government and Agency obligations 1,061,506
Corporate obligations 494,341
Foreign bonds (55,737)
-------------------
$7,755,194
===================
6. INVESTMENTS EXCEEDING FIVE PERCENT OF NET ASSETS AVAILABLE FOR
PLAN BENEFITS
The fair value of individual investments that exceed five percent of net
assets is as follows:
----------------------------
1995 1994
----------------------------
U.S. Treasury notes, 5.125%, due 12/31/98 $3,486,875 $3,904,959
Parkstone U.S. Government Obligations
Money Market Fund 4,210,996
Parkstone Prime Obligations Money
Market Fund 2,935,572
7. RELATED-PARTY TRANSACTIONS
As of December 31, 1994, common stock included 110,019 shares of Elco
Industries, Inc., common stock with a fair value of $1,870,323. During 1995,
the Plan sold the 110,019 common shares of Elco Industries, Inc. at $3,960,684
for a gain of $3,663,262.
The Plan had the following related-party transactions with funds administered
by an affiliate of the Plan's custodian, for the year ended December 31, 1995:
Purchases Sales
--------------------------------------------
Parkstone Money
Market Funds $32,090,278 $27,675,259
<TABLE>
<CAPTION>
Elco Industries, Inc.
Profit Sharing and Savings Plan
Assets Held for Investment
December 31, 1995
<S> <C> <C> <C>
PAR VALUE CURRENT
IDENTITY /DESCRIPTION OR SHARES COST VALUE
- --------------------------------------------------------------------------------------------------------------
Mortgage notes, interest rates of 7.5% - 8.5%, maturing
at various dates through 2005 - $6,124,887 $6,124,887
Common stocks:
AT&T Corporation 2,350 135,744 152,162
Allstate Corporation 2,885 91,712 118,646
American Express Company Exchangeable Note 5,400 262,210 299,700
American Home Products Corporation 2,650 217,802 257,050
Atlantic Richfield Company 2,150 245,678 238,112
Bandag Incorporated Class A Common 2,600 134,462 137,800
Banta Corporation 3,200 104,400 140,800
Belden Incorporated 10,200 265,058 262,650
Brinker International Corporation 29,000 440,957 438,625
Bristol Myers Squibb Company 3,100 258,612 266,212
Browning Ferris Industries 17,500 508,143 514,062
Browning Ferris Industries Incorporated Common
Auto Exchange 3,850 136,560 120,794
Burlington Resources, Inc. 10,500 398,030 412,125
CCH Incorporated Class B Nonvoting 5,300 111,699 292,162
Casey's General Stores 15,900 123,005 347,812
Coca Cola Company 3,700 210,108 274,725
Conagra Incorporated 3,200 109,986 132,000
Corning Incorporated 6,900 184,074 220,800
Deluxe Corporation 9,700 268,998 281,300
Dentsply International Incorporated 5,200 171,600 208,000
Duke Power Company 7,300 303,279 345,837
Duracell International Incorporated 5,550 260,762 287,212
Eli Lilly and Company 7,500 303,154 421,875
Emerson Electric Company 4,100 293,640 335,175
Enron Corporation Common Exchangeable EOG 5,800 134,814 139,200
FPL Group Incorporated 7,700 301,477 357,087
Family Dollar Store, Inc. 31,000 468,867 426,250
Federal National Mortgage Association 3,500 256,073 433,562
First Financial Corporation Wisconsin 9,400 46,083 216,200
First Tennessee National Corporation 2,100 118,075 127,050
Fisher Scientific International Incorporated 8,100 261,486 270,338
Frontier Corporation 8,600 194,819 258,000
G & K Services, Inc. Class A 15,000 133,925 382,500
Glatfelter P H Company 5,500 84,142 94,188
HJ Heinz Company 10,175 312,639 337,047
Haemonetics Corporation 14,500 299,534 257,375
Harding Lawson Associates Group Incorporated 4,300 73,100 25,800
John Alden Financial Corporation 6,400 137,623 133,600
Johnson & Johnson 4,300 275,487 367,650
Liqui Box Corporation 2,400 47,600 71,100
MBNA Corporation 8,700 245,597 320,813
Marshall & Ilsley Corporation 6,900 69,000 179,400
May Department Stores Company 3,150 124,808 132,694
Mentor Graphics Corporation 18,000 200,865 328,500
Minerals Technologies Incorporated 3,700 131,269 135,050
Mobil Corporation 4,150 397,595 463,763
New England Electric System 3,400 122,897 134,725
Newell Company 4,400 79,242 113,850
Occidental Petroleum Corporation 7,850 184,528 167,794
Old Republic International Corp. 7,200 168,301 255,600
PNC Bank Corporation 4,200 126,861 135,450
Pall Corporation 11,600 182,410 311,750
Policy Management Systems Corporation 8,700 293,128 414,338
Proctor & Gamble Company 5,000 343,175 415,000
Progressive Corporation Ohio 5,000 179,630 244,375
Providian Corporation 6,400 135,235 260,800
Questar Corporation 3,950 128,995 132,325
Raychem Corporation 8,000 330,688 455,000
Regal Beloit Corporation 14,500 134,449 315,375
Roto Rooter, Inc. 3,500 52,500 114,625
Royal Dutch Petroleum Company 2,950 359,161 416,319
Ryans Steak House 34,000 284,185 238,000
Sears Roebuck and Company 7,450 254,118 290,550
Service Corporation International 6,268 170,300 275,796
Snap On Incorporated 4,250 182,906 192,313
Stratus Computer, Inc. 9,900 335,280 342,788
Sungard Data Systems 15,000 158,826 427,500
Sybron International Corporation 6,600 80,190 155,925
Texas Utilities Company 3,250 117,973 133,250
US Healthcare Corporation 2,750 109,849 127,875
UST Incorporated 11,950 358,387 398,831
United Technologies Corporation 3,400 238,060 322,575
Watts Industries Class A 18,000 394,365 418,500
Wausau Paper Mills Company 4,180 88,825 113,905
Xerox Corporation 2,400 283,620 328,800
-------------------------------------
15,732,635 19,616,737
Preferred stocks:
Alco Standard 4,250 338,946 363,375
Allstate Corporation 3,250 135,779 133,250
Bowater Incorporated 4,150 131,285 126,575
First Bank System 2,450 176,346 210,088
First USA, Inc. 7,600 288,952 300,200
Houghton Mifflin Company 1,250 90,100 85,000
Sunamerica Incorporated 2,950 187,653 193,225
-------------------------------------
1,349,061 1,411,713
U.S. Government obligations:
U.S. Treasury note, 6.375%, due 7/15/99 1,200,000 1,206,447 1,240,500
U.S. Treasury note, 5.625%, due 8/31/97 2,000,000 2,056,750 2,013,120
U.S. Treasury note, 5.125%, due 12/31/98 3,500,000 3,463,299 3,486,875
U.S. Treasury note, 5.875%, due 2/15/04 1,300,000 1,242,578 1,326,000
U.S. Treasury note, 7.875%, due 11/15/04 650,000 649,188 752,577
-------------------------------------
8,618,262 8,819,072
U.S. Government Agency obligations:
FHLB, 7.050% DTD 12/21/95, due 12/21/05 700,000 700,000 700,000
FHLB, 6.880% DTD 8/01/95, due 8/01/00 825,000 825,000 822,690
FHLB, 6.877% DTD 9/13/95, due 9/13/00 500,000 500,781 507,350
FHLB, 7.300% DTD 12/27/95, due 12/27/10 800,000 800,000 800,000
FHLB, 7.325% DTD 12/28/95, due 12/28/10 600,000 600,000 600,000
FHLMC Debenture, 7.000% DTD 12/01/95, due 12/02/02 750,000 750,000 750,000
FHLMC Debenture, 7.050% DTD 1/29/93, due 1/29/03 500,000 502,031 503,300
FHLMC Debenture, 6.780% DTD 2/12/93, due 2/12/03 500,000 499,297 500,650
SLMA, 6.970% DTD 8/23/95, due 8/23/0 0 600,000 601,500 606,120
-------------------------------------
5,778,609 5,790,110
Corporate and municipal obligations:
American Express Master Trust CMO, 6.050%, due
7/15/97 200,000 199,418 201,609
Analog Devices Incorporated, 3.500%, due 12/01/00 125,000 125,962 133,594
Anheuser Busch, Inc., 8.750%, due 12/01/99 300,000 320,478 332,154
Bear Steams Companies, 9.375%, due 6/01/01 150,000 153,314 172,407
Browning Ferris Industries, 6.750%, due 7/18/05 120,000 120,275 119,700
Coca Cola Enterprises, Inc., 7.875%, due 2/01/02 300,000 298,050 329,484
Dupont E I De Nemours & Co., 8.500%, due 2/15/03 400,000 421,559 451,312
First Financial Management Corporation, 5.000%,
due 12/15/99 80,000 106,675 124,300
Ford Motor Company, 9.000%, due 9/15/01 300,000 305,625 342,468
General Instrument Corporation, 5.000%,
due 6/15/00 80,000 105,573 88,000
Great Western Financial Corporation, 6.375%, due
7/01/00 200,000 198,666 203,186
Healthsouth Rehabilitation Corporation, 5.000%,
due 4/01/01 175,000 223,550 280,000
Integrated Device Technology, 5.500%, due 6/01/02 135,000 134,463 110,025
Lowes Companies Incorporated, 3.000%,
due 7/22/03 115,000 130,298 150,650
Northern Telecom, 6.875%, due 10/01/02 300,000 300,000 311,718
Olsten Corporation, 4.875%, due 5/15/03 110,000 123,300 126,500
Pacific Gas and Electric Co., 5.375%, due 8/01/98 500,000 498,175 494,920
Sterling Software Incorporated, 5.750%,
due 2/01/03 150,000 189,000 323,813
Texas Instruments, Inc., 9.0%, due 3/15/01 350,000 371,350 396,154
VLSI Technology Incorporated, 8.250%, due 10/01/05 65,000 65,070 59,962
Wendy's International, 7.0%, due 4/01/06 75,000 108,000 128,813
--------------------------------------
4,498,801 4,880,769
Foreign bonds -
Scholastic Corporation Euro Bond, 5.000%, due
8/15/05 95,000 106,575 97,138
Short-term investments:
Parkstone Prime Obligations Money Market Fund 2,935,572 2,935,572 2,935,572
Parkstone U.S. Government Obligations Money
Market Fund 4,210,996 4,210,996 4,210,996
--------------------------------------
7,146,568 7,146,568
Loans to participants, 8.5% - - 5,498
Cash - 361,834 361,834
--------------------------------------
$49,717,232 $54,254,326
======================================
</TABLE>
<TABLE>
<CAPTION>
Elco Industries, Inc.
Profit Sharing and Savings Plan
Reportable Transactions
Year ended December 31, 1995
<S> <C> <C> <C> <C> <C>
NUMBER OF
TRANSACTIONS PROCEEDS FROM SALES REALIZED
-------------------------COST OF PURCHASES OR REDEMPTIONS GAIN
DESCRIPTION PURCHASES SALES DURING THE YEAR DURING THE YEAR (LOSS)
- --------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5 percent of plan assets
Parkstone Prime Obligations
Money Market Fund 179 68 $25,104,302 $23,686,101 $ -
Parkstone U.S. Government
Obligations Money Market
Fund 100 27 6,985,976 3,989,158 -
FHLMC Debenture, 7.910%,
due 12/5/97 1 1 1,409,188 1,400,000 (9,188)
FNMA Discounted Note DTD
7/25/94 due 7/17/95 1 1 1,607,940 1,645,000 37,060
FNMA Discounted Note,
due 9/11/95 1 1 1,565,882 1,600,000 34,118
Elco Industries Incorporated
common stock - 2 - 3,960,684 3,663,262
</TABLE>
There were no Category (ii) or (iv) reportable transactions. Category (i)
reportable transactions are included in Category (iii) reportable transactions
above.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELCO TEXTRON INC. PROFIT SHARING AND SAVINGS PLAN
ELCO TEXTRON INC., Plan Administrator
DATE June 28, 1996 By /s/ Kenneth L. Heal
Name: Kenneth L. Heal
Title: Secretary/Treasurer
