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:
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
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, 1998 By:/s/August F. DeLuca
Vice President - Finance/CFO/Treasurer
<PAGE>
Financial Statements
and Supplemental Schedules
Elco Thermoplastics, Inc.
Profit Sharing Plan
Years ended December 31, 1997 and 1996
<PAGE>
Elco Thermoplastics, Inc. Profit Sharing Plan
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
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, 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 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.
April 17, 1998
<PAGE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Money Textron
Market Balanced Equity Stock Loan Total
Fund Fund Fund Fund Fund Funds
Assets
Investments, at fair value (Note 4):
Parkstone Equity Income Fund $ - $357,844 $107,420 $ - $ - $465,264
Parkstone Bond Fund - 576,174 - - - 576,174
Parkstone Small Capitalization - 55,725 - - - 55,725
Value Fund
Parkstone Mid Capitalization - 123,698 1,089,902 - - 1,213,600
Value Fund
Parkstone Balanced Allocation - 107,044 - - - 107,044
Fund
Parkstone International Discovery - 119,803 - - - 119,803
Fund
Parkstone Government Money Market 551,375 231 95 - 22 551,723
Fund
Parkstone Prime Obligations Money - - - 30,937 - 30,937
Market Fund
Textron Inc. common stock - - - 1,057,500 - 1,057,500
Participant notes receivable - - - - 9,762 9,762
Total investments 551,375 1,340,519 1,197,417 1,088,437 9,784 4,187,532
Receivables:
Employer's contributions 44,807 73,425 85,389 83,475 - 287,096
Participant contributions 3,966 6,856 9,521 10,092 - 30,435
Accrued income 2,318 1 1 4,363 57 6,740
Other 390 16,297 4,289 32 - 21,008
Total receivables 51,481 96,579 99,200 97,962 57 345,279
Total assets 602,856 1,437,098 1,296,617 1,186,399 9,841 4,532,811
Liabilities
Other 113 277 239 6,842 - 7,471
Net assets available for benefits $602,743 $1,436,821 $1,296,378 $1,179,557 $9,841 $4,525,340
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1996
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Money Textron
Market Balanced Equity Stock Loan Total
Fund Fund Fund Fund Fund Funds
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 - 54,504 - - - 54,504
Value Fund
Parkstone Mid Capitalization
Value Fund (formerly the - 104,175 1,036,984 - - 1,141,159
Parkstone Equity Fund)
Parkstone International Discovery - 111,247 - - - 111,247
Fund
Parkstone Government Money Market 523,856 100,504 9,281 - - 633,641
Fund
Parkstone Prime Obligations Money - - - 7,407 - 7,407
Market FundTextron Inc. common stock - - - 563,898 - 563,898
Participant notes receivable - - - - 4,001 4,001
Total investments 523,856 1,140,910 1,046,265 571,305 4,001 3,286,337
Receivables:
Employer's contributions 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
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Money Textron
Market Balanced Equity Stock Loan Total
Fund Fund Fund Fund Fund Funds
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 27,253 $ 130,897 $ 214,259 $ 17,021 $ 303 $389,733
Net appreciation (depreciation)
in fair value of investments - 16,515 (87,698) 214,014 - 142,831
(Note 4)
27,253 147,412 126,561 231,035 303 532,564
Contributions:
Employer 56,387 95,025 112,006 106,657 - 370,075
Participants 35,381 72,113 103,591 93,362 - 304,447
91,768 167,138 215,597 200,019 - 674,522
Other (467) (835) 5,856 (2,151) 36,751 39,154
Total additions 118,554 313,715 348,014 428,903 37,054 1,246,240
Deductions from net assets
attributed to:
Benefits paid to participants 55,585 103,235 105,377 52,517 - 316,714
Net increase before transfers 62,969 210,480 242,637 376,386 37,054 929,526
Interfund transfers, net (37,489) (9,333) (106,126) 148,596 4,352 -
Net increase 25,480 201,147 136,511 524,982 41,406 929,526
Net assets available for benefits 577,263 1,235,674 1,159,867 654,575 (31,565) 3,595,814
at beginning of year
Net assets available for benefits $602,743 $1,436,821 $1,296,378 $1,179,557 $ 9,841 $4,525,340
at end of year
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Money Textron
Market Balanced Equity Stock Loan Total
Fund Fund Fund Fund Fund Funds
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 - 26,810 (200,012) 47,721 - (125,481)
(Note 4)
15,553 118,231 96,769 52,486 7,678 290,717
Contributions:
Employer 70,828 117,683 132,492 88,805 - 409,808
Participant 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 79,244 247,877 294,942 179,782 (41,093) 760,752
transfers
Transfer from Elco Textron Inc.
Employee Stock Ownership Plan 175,898 313,534 305,501 182,622 - 977,555
(Note 1)
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 512,799 764,912 572,549 - 7,247 1,857,507
at beginning of year
Net assets available for benefits $577,263 $1,235,674 $1,159,867 $654,575 $(31,565) $3,595,814
at end of year
See accompanying notes.
</TABLE>
<PAGE>
1. Description of the Plan
The following brief description of the Elco Thermoplastics,
Inc. Profit Sharing Plan (the 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.
Effective June 30, 1996, the Elco 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
Employee Deferral Contributions related to the first 3% of
earnings. 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 years
ended December 31, 1997 and 1996.
<PAGE>
Elco Thermoplastics, Inc. Profit Sharing Plan
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.
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 employer and employee
contributions in 10% increments in any of the following
investment funds:
Money Market Fund - Funds are invested in the Parkstone
Government 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.
Equity Fund - Funds are invested primarily in the
Parkstone Mid Capitalization Value Fund, a mutual fund,
which invests in common and preferred stocks.
Balanced Fund - Funds are invested primarily in various
Parkstone mutual funds, which invest in a combination of
common stocks (and securities convertible into common
stocks), high- and medium-grade corporate bonds,
government securities and other fixed income securities.
Textron Stock Fund - Funds are invested exclusively in
Textron common stock. Cash dividends, if any, will be
reinvested in shares of Textron common stock. Fractional
interests in the shares of Textron common stock are
allocated to the participant's accounts.
Participants may change their investment options January 1 and July 1.
<PAGE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Accounts
Employee contributions and the Company's 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 participant's 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 participant's account
balance. On termination of service, a participant may elect
to receive either a lump-sum amount equal to the
participant's 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 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. The Government
Money Market Fund and participant loans are valued at cost
which approximates fair value.
<PAGE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Use of Estimates
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.
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 Plan's
net assets at December 31, 1997 and 1996.
December 31
1997 1996
Parkstone Government Money Market Fund $ 551,723 $ 633,641
Parkstone Equity Income Fund 465,264 273,059
Parkstone Bond Fund 576,174 497,421
Parkstone Mid Capitalization Value Fund 1,213,600 1,141,159
Textron Inc. Common Stock 1,057,500 563,898
<PAGE>
Elco Thermoplastics Profit Sharing Plan
Notes to Financial Statements (continued)
4. Investments (continued)
The Plan's investments (including investments bought, sold,
and held during the year) appreciated (depreciated) in fair
value by $142,831 and $(125,481), as follows:
Year ended December 31
1997 1996
Investments at fair value as determined
by quoted market prices:
Parkstone Equity Income Fund $ 20,568 $ (17,215)
Parkstone Bond Fund 13,024 (6,291)
Parkstone Small Capitalization Fund (13,692) 11,223
Parkstone Balanced Allocation Fund 182 -
Parkstone Mid Capitalization Value Fund (84,394) (166,026)
Parkstone International Discovery Fund (6,871) 5,107
Textron Inc. Common Stock 214,014 47,721
$142,831 $(125,481)
5. Differences Between Financial Statements
The following is a reconciliation of net assets available
for benefits per the financial statements to the Form 5500:
December 31
1997 1996
Net assets available for benefits per
the financial statements $4,525,340 $3,595,814
Amounts allocated to withdrawn (40,836) (57,672)
participants
Net assets available per Form 5500 $4,484,504 $3,538,142
<PAGE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Notes to Financial Statements (continued)
5. Differences Between Financial Statements (continued)
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
Year ended December 31
1997 1996
Benefits paid to participants per the
financial statements $316,714 $160,921
Add: Amounts allocated on Form 5500 to
withdrawn participants at the end of 40,836 57,672
the year
Less: Amounts allocated on Form 5500
to withdrawn participants at the (57,672) -
beginning of the year
$299,878 $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.
<PAGE>
Supplemental Schedules
<PAGE>
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, 1997
Description of
Identity of Issue, Borrower, Investment, Current
Lessor, or Similar Party Rate Cost Value
of Interest
Mutual funds:
Parkstone Government Money
Market Fund* 551,723 units $ 551,723 $ 551,723
Parkstone Prime Obligation Money
Market Fund* 30,937 shares 30,937 30,937
Parkstone Equity Income Fund* 26,770 shares 462,373 465,264
Parkstone Bond Fund* 57,733 shares 560,479 576,174
Parkstone Small Capitalization
Value Fund* 2,138 shares 61,183 55,725
Parkstone Mid Capitalization 86,132 shares 1,439,972 1,213,600
Value Fund*
Parkstone Balanced Allocation 8,215 shares 107,624 107,044
Fund*
Parkstone International 8,223 shares 121,862 119,803
Discovery Fund*
Textron Inc. common stock* 16,920 shares 807,190 1,057,500
Participant loans* 7.9% to 9.5%
various maturity dates 9,762 9,762
$4,153,105 $4,187,532
*Indicates party-in-interest to the Plan.
<PAGE>
<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, 1997
<S> <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 (i) - Individual security transactions in excess
of 5 percent of plan assets
First of America
Investment Parkstone Mid $198,236 $ - $198,236 $198,236 $ -
Corporation Capitalization Value
Fund*
Category (iii) - Series of security transactions in excess of 5 percent of plan assets
First of America
Investment Parkstone Government - 704,451 704,451 704,451 -
Corporation Money Market Fund* 622,205 - 622,205 622,205 -
First of America Parkstone Prime - 391,404 391,404 391,404 -
Investment Obligation Money 414,934 - 414,934 414,934 -
Corporation Market Fund*
First of America
Investment Parkstone Equity Income - 4,680 4,755 4,680 (75)
Corporation Fund* 176,316 - 176,316 176,316 -
First of America
Investment Parkstone Bond Fund* - 11,021 10,959 11,021 62
Corporation 76,750 - 76,750 76,750 -
</TABLE>
<PAGE>
<TABLE>
Elco Thermoplastics, Inc. Profit Sharing Plan
Employer Identification Number 35-1291803
Plan Number 001
Line 27d--Schedule of Reportable Transactions (continued)
<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 (Loss)
Date
Category (iii) - Series of security transactions in excess of 5 percent of plan assets (continued)
First of America
Investment Parkstone Small - 377 421 377 (44)
Corporation Capitalization Value 15,290 - 15,290 15,290 -
Fund*
First of America
Investment Parkstone Mid - 216,309 210,437 216,309 5,872
Corporation Capitalization Value 373,144 - 373,144 373,144 -
Fund*
First of America
Investment Parkstone - 2,693 2,398 2,693 295
Corporation International 13,120 - 13,120 13,120 -
Discovery Fund*
Textron Inc. Textron Inc. Common Stock* - 55,559 44,387 55,559 11,172
335,147 - 335,147 335,147 -
First of America
Investment Parkstone Balanced - 86,100 85,338 86,100 762
Corporation Allocation Fund* 192,965 - 192,965 192,965 -
* Indicates party-in-interest to the Plan.
There were no category (ii) or (iv) reportable transactions for the year ended
December 31, 1997.
</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 Elco Thermoplastics, Inc. Profit Sharing Plan of
Textron Inc. of our report dated April 17, 1998, 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, 1997.
ERNST & YOUNG LLP
Providence, Rhode Island
June 23, 1998
