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
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 001-5480
A. Full title of the plan and the address of the plan, if different for
that the issuer named below:
ELCO THERMOPLASTICS INC.
PROFIT SHARING 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
Financial Statements
and Supplemental Schedules
Elco Thermoplastics, Inc.
Profit Sharing Plan
Years ended December 31, 1996 and 1995
Elco Thermoplastics, Inc. Profit Sharing Plan
Financial Statements and
Supplemental Schedules
Years ended December 31, 1996 and 1995
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Net Assets Available for Benefits with Fund Information 2
Statements of Changes in Net Assets Available for Benefits with Fund
Information 4
Notes to Financial Statements 6
Supplemental Schedules
Line 27a--Schedule of Assets Held for Investment Purposes 12
Line 27d--Schedule of Reportable Transactions 13
Report of Independent Auditors
Elco Thermoplastics, Inc. Profit Sharing Plan
Administration Committee
We have audited the accompanying statements of net assets available for benefits
of the Elco Thermoplastics, Inc. Profit Sharing Plan (the Plan) as of December
31, 1996 and 1995, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the PlanOs management. Our responsibility is to express an
opinion on these financial statements based on our audit.
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, 1996 and 1995, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of LaborOs Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The Fund Information in the
statement of net assets available for benefits and statement 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 and changes in 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 financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
June 23, 1997
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<CAPTION>
Fund Information
Money Textron
Market Balanced Equity Stock Loan
Fund Fund Fund Fund Account Total
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 4):
Parkstone Equity Income Fund $ - $ 273,059 $ - $ - $ - $ 273,059
Parkstone Bond Fund - 497,421 - - - 497,421
Parkstone Small Capitalization
Value Fund - 54,504 - - - 54,504
Parkstone Mid Capitalization Value Fund
(formerly the Parkstone Equity Fund) - 104,175 1,036,984 - - 1,141,159
Parkstone International Discovery Fund - 111,247 - - - 111,247
Parkstone Government Money Market Fund 523,856 100,504 9,281 - - 633,641
Parkstone Prime Obligations Money Market Fund - - - 7,407 - 7,407
Textron Inc. Common Stock - - - 563,898 - 563,898
Participant loans - - - - 4,001 4,001
Total investments 523,856 1,140,910 1,046,265 571,305 4,001 3,286,337
Receivables:
Employer's contribution 56,522 92,375 107,327 79,476 - 335,700
Participant contributions 3,020 6,189 9,069 6,399 - 24,677
Accrued income 1,755 280 11 2,673 494 5,213
Other 307 84 84 42 - 517
Total receivables 61,604 98,928 116,491 88,590 494 366,107
Total assets 585,460 1,239,838 1,162,756 659,895 4,495 3,652,444
Liabilities
Overdraft - - - - 36,060 36,060
Other 8,197 4,164 2,889 5,320 - 20,570
Total liabilities 8,197 4,164 2,889 5,320 36,060 56,630
Net assets available for benefits $577,263 $1,235,674 $1,159,867 $654,575 $(31,565) $3,595,814
</TABLE>
See accompanying notes.
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1995
<CAPTION>
Fund Information
Money
Market Balanced Equity Loan
Fund Fund Fund Account Total
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value
(Note 4):
Parkstone Bond Fund $ - $ 345,610 $ - $ - $ 345,610
Parkstone Small Capitalization
Value Fund - 59,611 - - 59,611
Parkstone Mid Capitalization
Value Fund (formerly the
Parkstone Equity Fund) - 239,802 498,461 - 738,263
Parkstone Government Money
Market Fund 410,473 23,284 6,265 13,105 453,127
Participant loans - - - 7,247 7,247
Total investments 410,473 668,307 504,726 20,352 1,603,858
Receivables:
Employer's contribution 95,105 91,055 64,390 - 250,550
Participant contributions 2,142 2,468 1,995 - 6,605
Accrued income 1,781 93 21 39 1,934
Other interfund receivable
(payable) 3,298 2,989 1,417 (7,704) -
Other - - - 99 99
Total receivables 102,326 96,605 67,823 (7,566) 259,188
Total assets 512,799 764,912 572,549 12,786 1,863,046
Liabilities
Other - - - 5,539 5,539
Total liabilities - - - 5,539 5,539
Net assets available for benefits $512,799 $764,912 $572,549 $ 7,247 $1,857,507
</TABLE>
See accompanying notes.
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
with Fund Information
Year ended December 31, 1996
<CAPTION>
Fund Information
Money Textron
Market Balanced Equity Stock Loan
Fund Fund Fund Fund Account Total
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 15,553 $ 91,421 $ 296,781 $ 4,765 $ 7,678 $416,198
Net appreciation (depreciation) in
fair value of investments (Note 4) - 26,810 (200,012) 47,721 - (125,481)
15,553 118,231 96,769 52,486 7,678 290,717
Contributions:
Employer 70,828 117,683 132,492 88,805 409,808
Participants 43,290 82,418 98,742 38,752 263,202
114,118 200,101 231,234 127,557 - 673,010
Total additions 129,671 318,332 328,003 180,043 7,678 963,727
Deductions from net assets attributed
to:
Benefits paid to participants 50,036 72,347 38,004 534 - 160,921
Other 391 (1,892) (4,943) (273) 48,771 42,054
Total deductions 50,427 70,455 33,061 261 48,771 202,975
Net increase (decrease) before
transfers 79,244 247,877 294,942 179,782 (41,093) 760,752
Transfer from Elco Textron Inc.
Employee Stock Ownership Plan
(Note 1) 175,898 313,534 305,501 182,622 - 977,555
Interfund transfers, net (190,678) (90,649) (13,125) 292,171 2,281 -
Net increase (decrease) 64,464 470,762 587,318 654,575 (38,812) 1,738,307
Net assets available for benefits at
beginning of year 512,799 764,912 572,549 - 7,247 1,857,507
Net assets available for benefits at
end of year $577,263 $1,235,674 $1,159,867 $654,575 $(31,565) $3,595,814
</TABLE>
See accompanying notes.
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
with Fund Information
Year ended December 31, 1995
<CAPTION>
Fund Information
Money
Market Balanced Equity Loan
Fund Fund Fund Account Total
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 18,934 $ 35,754 $ 17,624 $ 906 $73,218
Net appreciation in fair value of
investments - 84,603 92,958 - 177,561
18,934 120,357 110,582 906 250,779
Contributions:
Employer 116,216 116,682 82,554 - 315,452
Employee 59,334 71,523 58,768 - 189,625
175,550 188,205 141,322 - 505,077
Total additions 194,484 308,562 251,904 906 755,856
Deductions from net assets attributed
to:
Benefits paid to participants 19,562 61,136 29,859 - 110,557
Total deductions 19,562 61,136 29,859 - 110,557
Net increase before transfers 174,922 247,426 222,045 906 645,299
Interfund transfers, net (41,863) 47,900 (9,637) 3,600 -
Net increase 133,059 295,326 212,408 4,506 645,299
Net assets available for benefits at
beginning of year 379,740 469,586 360,141 2,741 1,212,208
Net assets available for benefits at
end of year $512,799 $764,912 $572,549 $7,247 $1,857,507
</TABLE>
See accompanying notes.
1. Description of the Plan
The following brief description of the Elco Thermoplastics, Inc. Profit Sharing
Plan (the Plan) (formerly the Thermoplastics, Inc. Profit Sharing Plan) is
provided for general information only. Participants should refer to the Summary
Plan Description for more complete information.
General
The Plan is a defined contribution plan formed to provide profit-sharing
benefits to employees of Elco Thermoplastics, Inc. (the Company), a subsidiary
of Elco Textron Inc., and to provide for participant tax-deferred savings under
Section 401(k) of the Internal Revenue Code (IRC). All full-time employees of
the Company with one year of service are eligible to participate in the Plan.
Participants have a 100% vested interest in their account balances. The Plan
allows participants to borrow funds from their individual accounts under terms
specified in the Plan.
Effective June 30, 1996, the Elco Textron Inc. Employee Stock Ownership Plan
(ESOP) was terminated. Accordingly, the assets of the ESOP were transferred
into the participants' new or existing accounts in the Elco Textron Inc. Profit
Sharing and Savings Plan, the Employees' Retirement Savings Plan for the
Precision Stamping Division of Elco Textron Inc., the Anchor Wire Inc.
Retirement Plan, or the Plan, as applicable. Assets distributed to the Plan were
distributed to the participants' investment funds as directed by each
participant.
Contributions
Active participants may make contributions as defined in the Plan. Such
contributions may be in the form of Employee Deferral Contributions (as a
percentage of the participant's compensation) or Nondeductible Employee
Contributions. The Company will contribute an amount equal to 50% of the first
3% of Employee Deferral Contributions. Additional Company contributions may be
made at the sole discretion of the Board of Directors. The Company made a
discretionary contribution of $130,000 in the year ended December 31, 1996.
1. Description of the Plan (continued)
Participant Loans
Participants may borrow an amount that does not exceed the lesser of $50,000 or
one-half the nonforfeitable value of their account balance. Loans must be repaid
within five years and bear interest at the current prime rate.
Investment Option
Effective July 1, 1996, participants were granted the option of investing in the
Textron Stock Fund, which is invested exclusively in Textron Inc. common stock.
Cash dividends, if any, on Textron common stock will be reinvested in shares of
Textron common stock. Fractional interests in the shares of Textron common
stock held by the Textron Stock Fund are allocated to participants' accounts.
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in 10% increments in any of the four investment options:
Money Market Fund - Funds are invested in the Parkstone Prime
Obligations Fund, a mutual fund, which invests in short-term U.S.
Treasury bills or notes as well as other short-term obligations issued
by or guaranteed by the U.S. Government and other short-term
obligations.
Balanced Fund - Funds are invested in the Employee Benefit_Class III
Fund, which invests in a combination of mutual funds which invest in
common stocks, high and medium grade corporate bonds, government
securities and other fixed income securities.
Equity Fund - Funds are primarily invested in the Parkstone Mid-
Capitalization Value Fund, a mutual fund, which invests in common stocks
and securities convertible into common stocks.
Textron Stock Fund - Funds are primarily invested exclusively in Textron
Inc. common stock.
Participants may change their investment options January 1 and July 1.
1. Description of the Plan (continued)
Allocations
Employee contributions and the CompanyOs matching contribution are allocated to
each respective participant account. The additional Company contribution, if
any, is allocated to participant accounts based on participant compensation, as
defined by the Plan, and their years of service in relation to the total of such
amounts for all participants.
Earnings within each fund are allocated semiannually in the proportion that each
participantOs beginning account balance (restated for transfers), plus one-half
of employee contributions made during the six-month period, bears to the total
of such amounts for all participants.
Benefit Payments
The benefit to which a participant is entitled is the benefit that can be
provided from the participantOs account balance. On termination of service, a
participant may elect to receive either a lump-sum amount equal to the
participantOs account balance, or annual installments over a period of time as
defined by the Plan.
2. Significant Accounting Policies
Valuation of Investments
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year end. Textron Inc. common stock
is valued at the last reported sales price on the last business day of the plan
year. The Government Money Market Fund and participant loans are valued at cost
which approximates fair value.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
2. Significant Accounting Policies (continued)
Administrative Expenses
Certain services are provided to the Plan without charge, and administrative
expenses are paid by the Company.
3. Termination Priorities
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of the Employee Retirement Income Security Act of
1974.
4. Investments
The Plan's investments are held in a bank-administered trust fund. The following
table presents the estimated fair values of individual investments that are 5%
or more of the PlanOs net assets at DecemberE31, 1996 and 1995.
December 31
1996 1995
Parkstone Government Money Market Fund $ 633,641 $453,127
Parkstone Equity Income Fund 273,059 -
Parkstone Bond Fund 497,421 345,610
Parkstone Mid Capitalization Value Fund (formerly
the Parkstone Equity Fund) 1,141,159 738,263
Textron Inc. Common Stock 563,898 -
4. Investments (continued)
The PlanOs investments (including investments bought, sold, and held during the
year) appreciated (depreciated) in fair value by $(125,481) and $177,561, as
follows:
Year ended December 31
1996 1995
Investments at fair value as determined by quoted market
prices:
Parkstone Equity Income Fund $(17,215) $ -
Parkstone Bond Fund (6,291) 28,558
Parkstone Small Capitalization Fund 11,223 10,131
Parkstone Mid Capitalization Value Fund (formerly the
Parkstone Equity Fund) (166,026) 138,872
Parkstone International Discovery Fund 5,107 -
Textron Inc. Common Stock 47,721 -
$(125,481) $177,561
5. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
1996 1995
Net assets available for benefits per the financial
statements $3,595,814 $1,857,507
Amounts allocated to withdrawn participants (57,672) -
Net assets available for benefits per the Form 5500 $3,538,142 $1,857,507
5. Differences Between Financial Statements and Form 5500 (continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31
1996
Benefits paid to participants per the financial $ 160,921
statements
Add: Amounts allocated on Form 5500 to withdrawn
participants at December 31, 1996 57,672
Benefits paid to participants per the Form 5500 $ 218,593
Amounts allocated to withdrawn participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
year end but not yet paid.
6. Related-Party Transactions
During the year, the Plan had purchase and sale transactions with mutual funds
administered by an affiliate of the Plan's trustee, and the common stock of
Textron Inc., the ultimate parent company of the Company.
7. Tax Status
The Internal Revenue Service ruled on June 12, 1995, that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the
related trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Company is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
Supplemental Schedules
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Employer Identification Number 35-1291803
Plan Number 001
Line 27a--Schedule of Assets Held for Investment Purposes
December 31, 1996
<CAPTION>
Description of
Identity of Issue, Borrower, Investment, Rate Current
Lessor, or Similar Party of Interest Cost Value
<S> <C> <C> <C>
Mutual Funds:
Parkstone Government Money Market Fund* 633,641 units $ 633,641 $ 633,641
Parkstone Prime Obligation Money Market
Fund* 7,407 shares 7,407 7,407
Parkstone Equity Income Fund* 16,370 shares 290,811 273,059
Parkstone Bond Fund* 51,228 shares 494,688 497,421
Parkstone Small Capitalization Value 1,873 shares 46,314 54,504
Fund*
Parkstone Mid Capitalization Value Fund* 73,909 shares 1,277,265 1,141,159
Parkstone International Discovery Fund* 7,512 shares 106,140 111,247
Textron Inc. Common Stock* 5,983 shares 516,429 563,898
Participant loans* 7.33% to 9.25% 4,001 4,001
$3,376,696 $3,286,337
</TABLE>
* Indicates party-in-interest to the Plan.
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Employer Identification Number 35-1291803
Plan Number 001
Line 27d--Schedule of Reportable Transactions
Year ended December 31, 1996
<CAPTION>
Current
Value Net
Identity of Description of Purchase Selling Cost of of Asset on Gain
Party Involved Assets Price Price Asset Transaction (Loss)
Date
Category (i)--Individual transactions in excess of 5% of plan assets
<S> <C> <C> <C> <C> <C> <C>
Parkstone Government
Money Market Fund* Purchase of 181,148 units $181,148 $181,148 $181,148
Purchase of 193,960 units 193,960 193,960 193,960
Purchase of 225,677 units 225,677 225,677 225,677
Purchase of 253,295 units 253,295 253,295 253,295
Purchase of 794,933 units 794,933 794,933 794,933
Sale of 176,781 units $176,781 176,781 176,781
Sale of 794,933 units 794,933 794,933 794,933
Sale of 227,850 units 227,850 227,850 227,850
Parkstone Equity Purchase of 18,654
Income Fund* shares 332,780 332,780 332,780
Parkstone Bond Fund* Purchase of 12,993
shares 123,563 123,563 123,563
Parkstone Mid-
Capitalization Purchase of 10,444
Fund* shares 226,537 226,537 226,537
Purchase of 18,848
shares 296,291 296,291 296,291
Sale of 12,055 shares 276,783 193,610 276,783 $83,173
Parkstone
International Purchase of 7,509
Discovery Fund* shares 106,107 106,107 106,107
Textron Inc.Common Purchase of 2,132
Stock* shares 182,604 182,604 182,604
Purchase of 3,381
shares 292,034 292,034 292,034
</TABLE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Employer Identification Number 35-1291803
Plan Number 001
Line 27d--Schedule of Reportable Transactions (continued)
Current
<CAPTION>
Value Net
Identity of Description of Purchase Selling Cost of of Asset on Gain
Party Involved Assets Price Price Asset Transaction (Loss)
Date
Category (iii)_Series of transactions in excess of 5% of plan assets
<S> <S> <C> <C> <C> <C> <C>
Parkstone Government Purchased 2,574,504
Money Market units in 153
Fund* transactions 2,574,504 2,574,504 2,574,504
Sale of 2,393,990
units in 94
transactions 2,393,990 2,393,990 2,393,990
Parkstone Prime
Obligation Money Purchased 530,128
Market Fund* units in 12
transactions 530,128 530,128 530,128
Sale of 522,721 units
in 9 transactions 522,721 522,721 522,721
Parkstone Equity Purchased 20,206 units
Income Fund* in 6 transactions 359,245 359,245 359,245
Sale of 3,836 units
in 1 transaction 68,971 68,434 68,971 537
Parkstone Bond Purchased 20,771 units
Fund* in 16 transactions 198,141 198,141 198,141
Sale of 4,173 units
in 5 transactions 40,039 40,402 40,039 (363)
transactions
Parkstone Mid-
Capitalization
Fund* Purchased 46,128
(previously units in 22
Parkstone transactions 863,987 863,987 863,987
Equity Fund)
Sale of 12,917 units
in 9 transactions 295,064 204,785 295,064 90,279
</TABLE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Employer Identification Number 35-1291803
Plan Number 001
Line 27d--Schedule of Reportable Transactions (continued)
<CAPTION>
Current
Value Net
Identity of Description of Purchase Selling Cost of of Asset on Gain
Party Involved Assets Price Price Asset Transaction (Loss)
Date
Category (iii)_Series of transactions in excess of 5% of plan assets (continued)
<S> <C> <C> <C> <C> <C> <C>
Parkstone
International Purchased 7,512
Discovery Fund* shares in
2 transactions 106,140 106,140 106,140
Textron Inc. Common Purchased 6,051
Stock* shares in
8 transactions 522,299 522,299 522,229
Sale of 68 shares in
2 transactions 6,123 5,870 6,123 253
There were no category (ii) or (iv) reportable transactions for the year
ended December 31, 1996.
*Indicates party-in-interest to the Plan.
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 THERMOPLASTICS INC. PROFIT
SHARING PLAN
ELCO TEXTRON INC., Plan Administrator
DATE: June 25, 1997 By: /s/ Kenneth L. Heal
Secretary/Treasurer
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-07121) pertaining to the Elco Thermoplastics, Inc. Profit
Sharing Plan of Textron Inc. of our report dated June 23, 1997, with respect to
the financial statements and schedules of the Elco Thermoplastics, Inc.
Profit Sharing Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1996.
ERNST & YOUNG LLP
Providence, Rhode Island
June 25, 1997
</TABLE>
