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:
EMPLOYEES' RETIREMENT SAVINGS PLAN
FOR PRECISION STAMPING DIVISION OF
ELCO TEXTRON INC.
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
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Years ended December 31, 1996 and 1995
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Financial Statements
and Supplemental Schedules
Years ended December 31, 1996 and 1995
Contents
Report of Independent Auditors 1
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
Employees' Retirement Savings Plan for the Precision
Stamping Division of Elco Textron Inc.
Administration Committee
We have audited the accompanying statements of net assets available for benefits
of the Employees' Retirement Savings Plan for the Precision Stamping Division of
Elco Textron Inc. (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 Plan's
management. Our responsibility is to express an opinion on these financial
statements 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, 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 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 financial statements. The Fund Information in the
statement of net assets available for benefits and the 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>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<CAPTION>
Fund Information
Small
Money High Capital- Textron
Main Market Income ization Balanced Stock Loan
Fund Fund Equity Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Note 4):
Parkstone Prime Obligation
Money Market Fund $ 8,262 $1,073,821 $ 10,507 $ 15,225 $ 8,396 $ 6,174 $ - $1,122,385
Parkstone High Income
Equity Fund - - 1,106,381 - - - - 1,106,381
Parkstone Small - - - 1,454,312 - - - 1,454,312
Capitalization Fund
Parkstone Balanced Fund - - - - 865,319 - - 865,319
Textron Inc. Common Stock - - - - 397,452 - 397,452
Loans to participants - - - - - - 82,522 82,522
Total investments 8,262 1,073,821 1,116,888 1,469,537 873,715 403,626 82,522 5,028,371
Receivables:
Participants' contributions - 6,838 8,735 12,771 6,969 4,461 - 39,774
Employer's contributions - 60,058 44,747 55,976 41,637 19,152 - 221,570
Other receivable (payable) - (127,039) 80,351 46,869 2,818 6,048 - 9,047
Accrued income 92 4,430 24 35 19 1,864 - 6,464
Total receivables 92 (55,713) 133,857 115,651 51,443 31,525 - 276,855
Due (to) from other funds (8,354) 30,010 (4,828) 25,326 (42,975) 691 130 -
Net assets available for
plan benefits $ - $1,048,118 $1,245,917 $1,610,514 $882,183 $435,842 $82,652 $5,305,226
</TABLE>
See accompanying notes.
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1995
<CAPTION>
Fund Information
Money High Small
Main Market Income Capital- Balanced Loan
Fund Fund Equity Fund ization Fund Fund Total
Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Note 4):
Parkstone Prime Obligation
Money Market Fund $ 31,247 $ 97,021 $ 45,541 $ 62,356 $ 12,703 $ - $ 248,868
Parkstone High Income Equity
Fund - - 346,673 - - - 346,673
Parkstone Small Capitalization
Fund - - - 574,846 - - 574,846
Parkstone Balanced Fund - - - - 201,300 - 201,300
Loans to participants - - - - - 28,302 28,302
Total investments 31,247 97,021 392,214 637,202 214,003 28,302 1,399,989
Receivables:
Participant's contributions - 1,661 6,011 8,416 3,320 - 19,408
Employer's contributions - 375 1,084 967 667 - 3,093
Accrued income 165 420 183 237 80 - 1,085
Total receivables 165 2,456 7,278 9,620 4,067 - 23,586
Due (to) from other funds (31,412) 4,584 649 (24,770) 50,949 - -
Net assets available for plan
benefits $ - $104,061 $400,141 $622,052 $269,019 $28,302 $1,423,575
</TABLE>
See accompanying notes.
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<CAPTION>
Fund Information
Small
Money High Capital- Textron
Main Market Income ization Balanced Stock Loan
Fund Fund Equity Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation) in fair
value of investments
(Note 4) $ - $ - $ (12,804) $ (57,176) $(51,554) $ 35,045 $ - $ (86,489)
Interest and dividend income - 22,975 116,064 224,631 107,487 6,444 1,393 478,994
- 22,975 103,260 167,455 55,933 41,489 1,393 392,505
Contributions:
Participants - 56,941 111,901 156,158 83,217 28,196 - 436,413
Employer - 54,434 62,539 78,369 55,426 22,796 - 273,564
- 111,375 174,440 234,527 138,643 50,992 - 709,977
Total additions - 134,350 277,700 401,982 194,576 92,481 1,393 1,102,482
Deductions from net assets
attributed to:
Benefits paid to
participants - 94,608 2,613 1,963 12,329 - - 111,513
Administrative expenses - 872 914 1,077 750 440 - 4,053
Total deductions - 95,480 3,527 3,040 13,079 440 - 115,566
Net increase prior to
interfund transfers and
transfer from other plan - 38,870 274,173 398,942 181,497 92,041 1,393 986,916
Interfund transfers (net) - 111,517 (14,472) (147,719) (88,919) 86,636 52,957 -
Transfer from the Elco
Industries, Inc. Employee
Stock Ownership Plan (Note 1) - 793,670 586,075 737,239 520,586 257,165 - 2,894,735
Net increase - 944,057 845,776 988,462 613,164 435,842 54,350 3,881,651
Net assets available for
benefits, beginning of year - 104,061 400,141 622,052 269,019 - 28,302 1,423,575
Net assets available for
benefits, end of year $ - $1,048,118 $1,245,917 $1,610,514 $882,183 $435,842 $ 82,652 $5,305,226
</TABLE>
See accompanying notes.
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1995
<CAPTION>
Fund Information
Money High Small
Main Market Income Capital- Balanced Loan
Fund Fund Equity Fund ization Fund Fund Total
Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net realized and unrealized
appreciation in fair value
of investments $ - $ - $ 54,850 $ 73,513 $ 27,504 $ - $ 155,867
Interest and dividend income - 4,844 17,519 70,219 14,855 2,525 109,962
- 4,844 72,369 143,732 42,359 2,525 265,829
Contributions:
Participants - 26,968 92,664 124,085 51,453 - 295,170
Company - 4,296 14,250 18,547 8,500 - 45,593
- 31,264 106,914 142,632 59,953 - 340,763
Total additions - 36,108 179,283 286,364 102,312 2,525 606,592
Deductions to net assets
attributed to:
Benefits paid to participants - 54 2,925 5,960 41,068 - 50,007
Administrative expenses - 467 858 1,195 725 - 3,245
Total deductions - 521 3,783 7,155 41,793 - 53,252
Net increase prior to interfund
transfers - 35,587 175,500 279,209 60,519 2,525 553,340
Interfund transfers (net) - (15,497) (3,873) (9,448) 29,832 (1,014) -
Net increase - 20,090 171,627 269,761 90,351 1,511 553,340
Net assets available for
benefits, beginning of year - 83,971 228,514 352,291 178,668 26,791 870,235
Net assets available for
benefits, end of year $ - $104,061 $400,141 $622,052 $269,019 $28,302 $1,423,575
</TABLE>
See accompanying notes.
1. Description of the Plan
The following brief description of the Employees' Retirement Savings Plan for
the Precision Stamping Division of Elco Textron Inc. (the Plan) (formerly, the
Employees' Retirement Savings Plan for the Precision Stamping Division of Elco
Industries, Inc.) is provided for general information purposes only.
Participants should refer to the Summary Plan Description for more complete
information.
General
The Plan is a defined contribution plan formed to provide a retirement savings
plan to employees of the Precision Stamping Division of Elco Textron Inc. (Elco
or the Company). Elco was purchased by Textron Inc. (Textron) in October 1995
and changed its name from Elco Industries, Inc. to Elco Textron Inc. The Plan
provides for participant tax-deferred savings under Section 401(k) of the
Internal Revenue Code (IRC) and is subject to the provisions of the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan is administered by an
administrative committee consisting of not fewer than three members selected by
the Board of Directors of Elco.
Effective June 30, 1996, the Elco Industries, Inc. Employee Stock Ownership Plan
(ESOP) was terminated. 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 Elco Thermoplastics Inc. Profit Sharing Plan, the Elco
Anchor Wire Inc. Retirement Plan, or the Plan, as applicable. Assets
distributed to the Plan were distributed to the participant's investment funds
as directed by each participant.
Eligibility
All employees of the Precision Stamping Division of Elco are eligible to
participate in the Plan after completing one year of service, as defined in the
Plan.
1. Description of the Plan (continued)
Vesting and Forfeitures
Participants are immediately vested in the value of their contributions and
related allocation of trust income or loss.
Participants become fully vested in the value of contributions made by Elco and
related allocations of trust income or loss after five years of credited
service.
Any forfeitures are allocated to remaining Plan participants.
Contributions
Active participants may contribute up to 14% of their pretax annual
compensation, as defined by the Plan, subject to a dollar limitation of $9,500
in 1996 and $9,240 in 1995.
The Plan provides for an employer matching contribution on the portion of the
participant's pre-tax contribution, as defined in the plan documents. Effective
January 1, 1996, the Plan was amended whereby the employer matching contribution
was increased to 25% (previously between 15% and 25%) of the participant's first
4% deferral. The Plan also provides for discretionary Company contributions.
Elco made a discretionary contribution of $215,000 in 1996. No discretionary
contribution was made by the Company in 1995.
Investment Options
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.
1. Description of the Plan (continued)
Participants are allowed to direct employer and employee contributions in 10%
increments in any of the following investment funds:
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.
High Income Equity Fund - Funds are invested in the Parkstone High
Income Equity Fund, a mutual fund, which invests in common and preferred
stocks.
Small Capitalization Fund - Funds are invested in the Parkstone Small
Capitalization Fund, a mutual fund, which investments in common and
preferred stock.
Balanced Fund - Funds are invested in the Parkstone Balance Fund, a
mutual fund, which invests in a combination of common stocks (and
securities convertible into common stocks) and fixed income securities.
Textron Stock Fund - Funds are invested exclusively in Textron Common
Stock.
Participants may change their investment options January 1 and July 1.
Allocations
The Plan document provides for semiannual allocation of trust income or loss
which 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 are made. Company contributions are allocated
as of the end of each plan year.
1. Description of the Plan (continued)
Distribution of Plan Benefits
Distribution of the vested value of a participant's account is made by the
trustee within sixty (60) days after the end of the Plan year in which occurs a
participants' normal retirement date, early retirement date, late retirement
date, disability retirement date, severance date or death.
The vested value of such distribution includes any pre-tax contributions made to
the participant's account during the Plan year and is determined subsequent to
the inclusion of his allocable share of trust income or loss.
2. Summary of Significant Accounting Policies
Investment Valuation
The Plan's investments are stated at fair value. The shares of the registered
investment companies are valued at quoted market prices which represent the net
asset values of the shares held by the Plan at year end. Shares of Textron Inc.
Common Stock are valued at the last reported sales price on the last business
day of the Plan year.
Participant loans are stated at cost, which approximate fair value.
Use of Estimates
The preparation of financial statements in conformity 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.
Administrative Expenses
Certain services are provided to the Plan by Elco without charge.
3. Termination Priorities
Although it has not expressed any intent to do so, Elco has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of termination, participants
become 100% vested in their accounts.
4. Investments
The Plan's investments are held by the trustee. The fair values of investments
that exceed 5% of the net assets available for plan benefits are as follows:
<TABLE>
<CAPTION>
December 31
1996 1995
<S> <C> <C>
Parkstone Prime Obligation Money Market Fund $1,122,385 $248,868
Parkstone High Income Equity Fund 1,106,381 346,673
Parkstone Small Capitalization Fund 1,454,312 574,846
Parkstone Balanced Fund 865,319 201,300
Textron Inc. Common Stock 397,452 -
The Plan's investments (including investments bought, sold, as well as
held during the year) appreciated (depreciated) in value by $(86,489)
as $155,867, as follows:
</TABLE>
<TABLE>
<CAPTION>
December 31
1996 1995
<S> <C> <C>
Investments at fair value as determined by quoted market price:
Parkstone High Income Equity Fund $(12,804) $ 54,850
Parkstone Small Capitalization Fund (57,176) 73,513
Parkstone Balanced Fund (51,554) 27,504
Textron Inc. Common Stock 35,045 -
$(86,489) $155,867
</TABLE>
5. 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., parent company of Elco.
6. Income Tax Status
The Internal Revenue Service ruled on April 6, 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 plan administrator is not aware of any course of
action or series of events that have occurred that might adversely affect the
Plan's qualified status.
Supplementary Schedules
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Employer Identification Number 36-1033080
Plan Number 012
Line 27a--Schedule of Assets Held for Investment Purposes
December 31, 1996
<CAPTION>
Number of
Shares or Current
Face Amount Cost Value
<C> <C> <C> <C>
Parkstone Prime Obligation Money
Market Fund* 1,122,385 $1,122,385 $1,122,385
Mutual funds:
Parkstone High Income Equity Fund* 66,330 1,083,891 1,106,381
Parkstone Small Capitalization Fund* 49,976 1,415,756 1,454,312
Parkstone Balanced Fund* 70,180 895,948 865,319
3,395,595 3,426,012
Textron Inc. Common Stock* 4,217 362,421 397,452
Participant loans - bearing interest
rates of 7.25% to 10.00% per
annum, with various maturity dates* 82,522 82,522 82,522
$4,962,923 $5,028,371
</TABLE>
* Indicates party-in-interest to the Plan.
<TABLE>
Employees' Retirement Savings Plan for the Precision Stamping Division of
Elco Textron Inc.
Employer Identification Number 36-1033080
Plan Number 012
Line 27d--Schedule of Reportable Transactions
Year ended December 31, 1996
Current
<CAPTION>
Value
Description of Asset on Net
Identity of of Purchase Selling Cost of Transaction Gain
Party Involved Assets Price Price Asset Date (Loss)
Category (i)--Individual transactions in excess of 5% of plan assets
<S> <C> <C> <C> <C> <C> <C>
Parkstone Prime
Obligation Money Purchase of 916,591 units
Market Fund* $916,591 $916,591 $916,591
Purchase of 583,612 units 583,612 583,612 583,612
Purchase of 607,623 units 607,623 607,623 607,623
Purchase of 441,922 units 441,922 441,922 441,922
Sale of 583,642 units $583,642 583,642 583,642
Sale of 608,372 units 608,372 608,372 608,372
Sale of 441,965 units 441,965 441,965 441,965
Parkstone High Purchase of 33,256 shares
Income Equity 583,642 583,642 583,642
Fund*
Parkstone Small Purchase of 17,461 shares
Capitalization 608,372 608,372 608,372
Fund*
Purchase of 7,658 shares 221,248 221,248 221,248
Parkstone Purchase of 32,738 shares 441,965 441,965 441,965
Balanced Fund*
Textron Inc. Purchased 3,003 shares 257,205 257,205 257,205
Common Stock*
</TABLE>
<TABLE>
Employees' Retirement Savings Plan for the Precision Stamping Division of
Elco Textron Inc.
Employer Identification Number 36-1033080
Plan Number 012
Line 27d--Schedule of Reportable Transactions (continued)
Current
<CAPTION>
Value
of Asset on Net
Identity of Description of Purchase Selling Cost of Transaction Gain
Party Involved Assets Price Price Asset Date (Loss)
Category (iii)-Series of transactions in excess of 5% of plan assets
<S> <C> <C> <C> <C> <C> <C>
Parkstone Prime Purchase of 6,449,381 units in 211
Obligation Money transactions 6,449,381 6,449,381 6,449,381
Market Fund*
Sale of 5,575,864 units in 152
transactions 5,575,864 5,575,864 5,575,864
Parkstone High Purchase of 49,263 shares in 27
Income Equity transactions 854,854 854,854 854,854
Fund*
Sale of 4,654 shares in 10
transactions 82,342 74,472 82,342 $7,870
Parkstone Small Purchase of 32,962 shares in 15
Capitalization transactions 1,058,970 1,058,970 1,058,970
Fund*
Sale of 4,332 shares in 12
transactions 122,328 102,834 122,328 19,494
Parkstone Balanced Purchase of 56,878 shares in 29
Fund* transactions 750,722 750,722 750,722
Sale of 2,751 shares in 9
transactions 35,149 32,365 35,365 2,784
Textron Inc. Purchased 4,220 shares in 6
Common Stock* transactions 362,679 362,679 362,679
Sold 3 shares in 1 transaction
272 258 272 14
</TABLE>
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.
EMPLOYEES' RETIREMENT SAVINGS PLAN
FOR PRECISION STAMPING DIVISION OF
ELCO TEXTRON INC.
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 Employees' Retirement Savings
Plan for the Precision Stamping Division of Elco Textron Inc. of Textron
of our report dated June 23, 1997, with respect to the financial statements
and schedules of the Employees' Retirement Savings Plan for the Precision
Stamping Division of Elco Textron Inc. included in this Annual Report
(Form 11-K) for the year ended December 31, 1996.
ERNST & YOUNG LLP
Providence, Rhode Island
June 25, 1997
