SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1997
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
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, 1998 By: /s/August F. DeLuca
Vice President - Finance/CFO/Treasurer
<PAGE>
Financial Statements
and Supplemental Schedules
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Years ended December 31, 1997 and 1996
<PAGE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Financial Statements
and Supplemental Schedules
Years ended December 31, 1997 and 1996
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
<PAGE>
Report of Independent Auditors
Administrative Committee
Employees' Retirement Savings Plan
for the Precision Stamping Division
of Elco Textron Inc.
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, 1997 and 1996, 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, 1997 and
1996, 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, 1997, 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 statements 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 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.
/s/Ernst & Young
April 17, 1998
<PAGE>
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Information
Money High Small Textron
Main Market Income Capitali Balanced Stock Loan
Fund Fund Equity zation Fund Fund Fund Total
Fund Fund
Investments, at fair value
(Note 4):
Parkstone Prime Obligation Money $ 137 $659,902 $ 112 $ 195 $ 7,464 $ 42,612 $ - $
Market Fund
Parkstone High Income Equity Fund - - 1,761,879 - - - - 1,761,879
Parkstone Mid Capitalization Fund - - 23,923 - - - - 23,923
Parkstone Small Capitalization Fund - - - 1,879,144 - - - 1,879,144
Parkstone Balanced Fund - - - - 1,054,342 - - 1,054,342
Textron Inc. common stock - - - - - 705,625 - 705,625
Participant notes receivable - - - - - - 80,955 80,955
Total investments 137 659,902 1,785,914 1,879,339 1,061,806 748,237 80,955 6,216,290
Receivables:
Participant contributions - 2,944 13,878 16,613 8,389 7,614 - 49,438
Employer's contributions - 14,841 28,538 34,060 21,644 16,330 - 115,413
Other receivable (payable) - (1,617) (2,654) (2,734) (1,814) 374 - (8,445)
Accrued income 570 2,888 2 2 9 2,994 - 6,465
Total receivables 570 19,056 39,764 47,941 28,228 27,312 - 162,871
Due (to) from other funds (707) 3,185 (1,402) (822) (1,046) 783 9 -
Net assets available for benefits $ - $682,143 $1,824,276 $1,926,458 $1,088,988 $776,332 $80,964 $6,379,161
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Information
Money High Small Textron
Main Market Income Capitali Balanced Stock Loan
Fund Fund Equity Fund zation Fund Fund Fund Total
Investments, at fair value
(Note 4):
Parkstone Prime Obligation Money $8,262 $1,073,821 $ 10,507 $ 15,225 $ 8,396 $ 6,174 $ - $1,122,385
Market Fund
Parkstone High Income Equity Fund - - 1,106,381 - - - - 1,106,381
Parkstone Small Capitalization - - - 1,454,312 - - - 1,454,312
Fund
Parkstone Balanced Fund - - - - 865,319 - - 865,319
Textron Inc. common stock - - - - - 397,452 - 397,452
Participant notes receivable - - - - - - 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:
Participant 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 benefits $ - $1,048,118 $1,245,917 $1,610,514 $882,183 $435,842 $82,652 $5,305,226
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statements of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Information
Money High Small Textron
Market Income Capitaliza Balanced Stock Loan
Fund Equity Fund tion Fund Fund Fund Total
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation) in fair value $ - $ 25,963 $ (162,454) $ 55,606 $125,250 $ - $ 44,365
of investments (Note 4)
Interest and dividend income 41,698 298,698 89,173 56,299 11,600 7,312 504,780
41,698 324,661 (73,281) 111,905 136,850 7,312 549,145
Contributions:
Participant 46,514 146,270 188,542 94,126 75,687 - 551,139
Employer 22,805 49,511 59,529 37,401 27,070 - 196,316
69,319 195,781 248,071 131,527 102,757 - 747,455
Total additions 111,017 520,442 174,790 243,432 239,607 7,312 1,296,600
Deductions from net assets
attributed to:
Benefits paid to participants 150,139 9,578 3,649 40,524 467 - 204,357
Administrative expenses 264 262 262 262 871 - 1,921
Other 1,958 1,962 2,536 1,388 687 7,856 16,387
Total deductions 152,361 11,802 6,447 42,174 2,025 7,856 222,665
Net increase (decrease) (41,344) 508,640 168,343 201,258 237,582 (544) 1,073,935
prior to interfund transfers
Interfund transfers (net) (324,631) 69,719 147,601 5,547 102,908 (1,144) -
Net increase (decrease) (365,975) 578,359 315,944 206,805 340,490 (1,688) 1,073,935
Net assets available for 1,048,118 1,245,917 1,610,514 882,183 435,842 82,652 5,305,226
benefits, beginning of year
Net assets available for $ 682,143 $1,824,276 $1,926,458 $1,088,988 $ 776,332 $80,964 $6,379,161
benefits, end of year
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Statements of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Information
Money High Small Textron
Market Income Capitaliza Balanced Stock Loan
Fund Equity Fund tion Fund Fund Fund Total
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:
Participant 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
Total contributions 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 38,870 274,173 398,942 181,497 92,041 1,393 986,916
transfer from other plan
Interfund transfers (net) 111,517 (14,472) (147,719 ) (88,919) 86,636 52,957 -
Transfer from the Elco
Industries, Inc. Employee 793,670 586,075 737,239 520,586 257,165 - 2,894,735
Stock Ownership Plan (Note 1)
Net increase 944,057 845,776 988,462 613,164 435,842 54,350 3,881,651
Net assets available for 104,061 400,141 622,052 269,019 - 28,302 1,423,575
benefits, beginning of year
Net assets available for $1,048,118 $1,245,917 $1,610,514 $882,183 $435,842 $ 82,652 $5,305,226
benefits, end of year
See accompanying notes.
</TABLE>
<PAGE>
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) 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). 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 participants' 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.
Vesting and Forfeitures
Participants are immediately vested in the value of their
contributions and related allocation of trust income or
loss.
<PAGE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Notes to Financial Statement (continued)
1. Description of the Plan (continued)
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 pre-
tax compensation, as defined by the Plan, subject to dollar
limitations of $9,500 in 1997 and 1996.
The Plan provides for an employer matching contribution of
25% of a participant's contribution, not to exceed 1% of the
participant's compensation. The Plan also provides for
discretionary Company contributions. Elco made discretionary
contributions of $107,500 and $215,000 in 1997 and 1996,
respectively.
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.
Participants are allowed to direct the 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
invests in common and preferred stocks.
<PAGE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Balanced Fund - Funds are invested in the Parkstone
Balanced 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 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.
Participants may change their investment options monthly.
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.
Distribution of 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.
<PAGE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Notes Receivable
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.
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 sale price on
the last day of business of the Plan year. Participant loans
are stated at cost, which approximates fair value.
Use of Estimates
The preparation of financial statements in conformity 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.
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
ofERISA. In the event of termination, participants become
100% vested in their accounts.
<PAGE>
Empoyees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Notes to Financial Statements (continued)
4. Investments
The Plan's investments are held by a bank-administered trust
fund. The fair values of investments that represent 5% or
more of the Plan's net assets are as follows:
December 31
1997 1996
Parkstone Prime Obligation Money Market Fund $ 710,422 $1,122,386
Parkstone High Income Equity Fund 1,761,879 1,106,381
Parkstone Small Capitalization Fund 1,879,144 1,454,312
Parkstone Balanced Fund 1,054,342 865,319
Textron Inc. common stock 705,625 397,452
During 1997 and 1996, Plan investments (including
investments bought, sold, as well as held during the year)
appreciated (depreciated) in value by $44,365 and $(86,489),
as follows:
1997 1996
Investments at fair value, determined by
quoted market price:
Parkstone High Income Equity Fund $ 26,664 $(12,804)
Parkstone Small Capitalization Fund (162,454) (57,176)
Parkstone Balanced Fund 55,606 (51,554)
Parkstone Mid Capitalization Fund (701) -
Textron Inc. common stock 125,250 35,045
$ 44,365 $(86,489)
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.
<PAGE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Notes to Financial Statements (continued)
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.
<PAGE>
Supplemental Schedules
<PAGE>
Employees' Retirement Savings Plan
for the Precision Stamping Division of
Elco Textron Inc.
Employer Identification Number 36-1033080
Plan Number 012
Line 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
Number
of Shares
or Face
Amount Cost Current
Value
Parkstone Prime Obligation Money
Market Fund* 710,422 $ 710,422 $ 710,422
Mutual funds:
Parkstone High Income 101,374 1,714,631 1,761,879
Equity Fund*
Parkstone Mid 1,698 24,711 23,923
Capitalization Fund*
Parkstone Small 72,108 2,000,356 1,879,144
Capitalization Fund*
Parkstone Balanced Fund* 80,916 1,033,279 1,054,342
Textron Inc. common stock 11,290 549,003 705,625
Participant notes receivable,
bearing interest at rates of
8% to 10% per annum, with - 80,955
various maturity dates*
$6,032,402 $6,216,290
* Indicates a party-in-interest to the Plan.
<PAGE>
<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, 1997
Current Value
<S> <C> <C> <C> <C> <C>
Identity of Description of Purchase Selling Cost of of Asset on Net Gain
Party Involved Assets Price Price Asset Transaction Date (Loss)
Category (i) - Individual security transactions in excess
of 5 percent of plan assets
First of America
Investment Parkstone High Income $272,054 $ - $ 272,054 $ 272,054 $ -
Corporation* Equity Fund
Category (iii) - Series of security transactions in
excess of 5 percent of plan assets
First of America Parkstone Prime Obligation
Investment Money Market Fund - 1,270,056 1,270,056 1,270,056 -
Corporation* 858,092 - 858,092 858,092 -
First of America
Investment Parkstone High Income - 32,990 31,085 32,990 1,905
Corporation* Equity Fund
661,824 - 661,824 661,824 -
First of America
Investment Parkstone Small - 27,217 29,903 27,217 (2,686)
Corporation* Capitalization Fund
614,502 - 614,502 614,502 -
</TABLE>
<PAGE>
<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)
<S> <C> <C> <C> <C> <C>
Current Value
Identity of Description of Purchase Selling Cost of of Asset on Net Gain
Party Involved Assets Price Price Asset Transaction (Loss)
Date
Category (iii) - Series of security transactions in excess of 5 percent
of plan assets (continued)
First of America
Investment Parkstone Balanced Fund - 123,747 119,833 123,747 3,914
Corporation*
257,164 - 257,164 257,164 -
Textron Inc.* Textron Inc. common stock - 21,904 18,245 21,904 3,659
204,828 - 204,828 204,828 -
There were no Category (ii) or (iv) reportable transactions during the year
ended December 31, 1997.
* Indicates a party-in-interest to the Plan.
</TABLE>
Exhibit 23
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 Inc. of
our report dated April 17, 1998, 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, 1997.
ERNST & YOUNG LLP
Providence, Rhode Island
June 23, 1998
