SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
for the fiscal year ended December 31, 1997
Commission File Number 1-5480
A. Full title of the plan and address of the plan:
TEXTRON SAVINGS PLAN
40 Westminster Street
Providence, Rhode Island 02903
B. Name of issuer of the securities held pursuant to
the plan and address of its principal executive office:
TEXTRON INC.
40 Westminster Street
Providence, Rhode Island 02903
REQUIRED INFORMATION
Financial Statements and Exhibit
The following Plan financial statements and
schedules prepared in accordance with the
financial reporting requirements of the Employee
Retirement Income Security Act of 1974 are filed
herewith, as permitted by Item 4 of Form 11-K:
Report of Independent Auditors
Statement of Net Assets Available for Benefits for each of
the two years ended December 31, 1997 and 1996
Statement of Changes in Net Assets Available for Benefits
for each of the two years ended December 31, 1997 and 1996
Notes to financial statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
Item 27d - Schedule of Reportable Transactions
The Consent of Independent Auditors is filed as
an exhibit to this Annual Report.
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Committee appointed by the
Board of Directors of Textron Inc. to administer the
Plan has duly caused this Annual Report on Form 11-K
to be signed by the undersigned hereunto duly
authorized.
TEXTRON SAVINGS PLAN
By: /s/Michael D. Cahn
Attorney-in-fact
Date: June 9, 1998
<PAGE>
Financial Statements
and Supplemental Schedules
Textron Savings Plan
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
Textron Savings Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1997 and 1996
<PAGE>
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statement of Net Assets Available for Benefits
With Fund Information, December 31, 1997 2
Statement of Net Assets Available for Benefits
With Fund Information, December 31, 1996 3
Statement of Changes in Net Assets Available for
Benefits With Fund Information, Year ended
December 31, 1997 4
Statement of Changes in Net Assets Available for
Benefits With Fund Information, Year ended
December 31, 1996 5
Notes to Financial Statements 6
Supplemental Schedules
Line 27a--Schedule of Assets Held for Investment Purposes 16
Line 27d--Schedule of Reportable Transactions 18
<PAGE>
Report of Independent Auditors
Textron Inc.
We have audited the accompanying statements of net assets
available for benefits of Textron Savings 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 net assets available for benefits
for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were made 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 LLP
May 14, 1998
<PAGE>
<TABLE>
Textron Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
(In Thousands)
December 31, 1997
Fund Information
<S> <C> <C> <C> <C> <C> <C>
Fund Fund Fund Fund Loan
A B C H Fund Total
Assets
Investments, at fair value
(Notes 2 and 3):
Textron Inc. Common Stock $1,475,645 $ - $ - $ - $ - $1,475,645
Mortgage-backed securities - - 11,882 - - 11,882
Common/collective trust funds 4,160 155,836 7,555 75 - 167,626
Participant notes receivable - - - - 5,533 5,533
Total investments 1,479,805 155,836 19,437 75 5,533 1,660,686
Insurance contracts, at contract
value (Notes 2 and 3) - - 128,530 - - 128,530
Total investments 1,479,805 155,836 147,967 75 5,533 1,789,216
Receivables:
Investment income 5,897 4 763 - - 6,664
Interfund receivable (payable) (405) 47 358 - - -
Other 57 1 - - - 58
Total receivables 5,549 52 1,121 - - 6,722
Total assets 1,485,354 155,888 149,088 75 5,533 1,795,938
Liabilities
Payables:
Excess employer contributions 595 197 172 - - 964
Investments purchased 1,981 - 709 - - 2,690
Total liabilities 2,576 197 881 - - 3,654
Net assets available for benefits $1,482,778 $155,691 $148,207 $75 $5,533 $1,792,284
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Textron Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
(In Thousands)
December 31, 1996
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Fund Fund Fund Fund Loan
A B C H Fund Total
Assets
Investments, at fair value
(Notes 2 and 3):
Textron Inc. Common Stock $1,205,830 $ - $ - $ - $ - $1,205,830
U.S. Government securities - - 9,103 - - 9,103
Common/collective trust funds 1,467 120,775 7,518 160 - 129,920
Participant notes receivable - - - - 41 41
1,207,297 120,775 16,621 160 41 1,344,894
Insurance contracts, at contract
value (Notes 2 and 3) - - 144,641 - - 144,641
Total investments 1,207,297 120,775 161,262 160 41 1,489,535
Receivables:
Investment income 5,664 3 862 1 - 6,530
Interfund receivable (payable) 5 (74) 69 - - -
Other - 15 2 - - 17
Total receivables 5,669 (56) 933 1 - 6,547
Total assets 1,212,966 120,719 162,195 161 41 1,496,082
Liabilities
Payables:
Excess employer contributions 2,541 600 537 - - 3,678
Investments purchased 995 362 780 - - 2,137
Total liabilities 3,536 962 1,317 - - 5,815
Net assets available for benefits $1,209,430 $119,757 $160,878 $161 $41 $1,490,267
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Textron Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
(In Thousands)
Year ended December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Fund Fund Fund Fund Loan
A B C H Fund Total
Additions to net assets
attributed to:
Investment income:
Net appreciation (depeciation) in
fair value of investments (Note 3) $ 375,300 $ 38,944 $ (59) $ - $ - $ 414,185
Dividends 24,104 - - - - 24,104
Interest 121 21 9,676 8 1 9,827
399,525 38,965 9,617 8 1 448,116
Contributions:
Participants 61,433 12,991 8,416 - - 82,840
Employer 36,705 - - - - 36,705
98,138 12,991 8,416 - - 119,545
Total additions 497,663 51,956 18,033 8 1 567,661
Deductions from net assets
attributed to:
Benefits paid to participants 206,854 16,731 28,319 131 79 252,114
Participant rollovers due to sale
of division (Note 5) 7,967 1,070 1,229 - - 10,266
Forfeitures 1,442 57 28 - - 1,527
Administrative expenses 1,425 140 172 - - 1,737
Total deductions 217,688 17,998 29,748 131 79 265,644
Net increase (decrease) prior to
interfund transfers 279,975 33,958 (11,715) (123) (78) 302,017
Interfund transfers, net (6,627) 1,976 (956) 37 5,570 -
Net increase (decrease) 273,348 35,934 (12,671) (86) 5,492 302,017
Net assets available for benefits:
Beginning of year 1,209,430 119,757 160,878 161 41 1,490,267
End of year $1,482,778 $155,691 $148,207 $ 75 $5,533 $1,792,284
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Textron Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
(In Thousands)
Year ended December 31, 1996
<S> <C> <C> <C> <C> <C> <C>
Fund Information
Fund Fund Fund Fund Loan
A B C H Fund Total
Additions to net assets
attributed to:
Investment income:
Net appreciation in fair value of
investments (Note 3) $ 355,525 $ 22,250 $ 13 $ - $ - $ 377,788
Dividends 23,074 - - - - 23,074
Interest 135 5 9,992 8 1 10,141
378,734 22,255 10,005 8 1 411,003
Contributions:
Participants 51,301 10,523 7,581 - - 69,405
Employer 31,991 - - - - 31,991
83,292 10,523 7,581 - - 101,396
Total additions 462,026 32,778 17,586 8 1 512,399
Deductions from net assets
attributed to:
Benefits paid to participants 191,755 11,355 26,309 31 12 229,462
Forfeitures 1,470 31 25 - - 1,526
Administrative expenses 929 92 148 - - 1,169
Total deductions 194,154 11,478 26,482 31 12 232,157
Net increase (decrease) prior to
interfund transfers 267,872 21,300 (8,896) (23) (11) 280,242
Interfund transfers, net (5,615) 3,934 1,521 160 - -
Net increase (decrease) 262,257 25,234 (7,375) 137 (11) 280,242
Net assets available for benefits:
Beginning of year 947,173 94,523 168,253 24 52 1,210,025
End of year $1,209,430 $119,757 $160,878 $161 $41 $1,490,267
See notes to financial statements.
</TABLE>
<PAGE>
Textron Savings Plan
Notes to Financial Statements
December 31, 1997 and 1996
1. Description of Plan
General
The Textron Savings Plan (the "Plan") is an employee stock
ownership plan covering substantially all domestic employees
of Textron Inc. ("Textron"). For a description of the Plan,
refer to the Summary Plan Description that is on file with
the Department of Labor and available at the Human Resources
office of Textron. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan is currently administered under the terms of a
Trust Agreement, dated March 3, 1997, with State Street Bank
and Trust Company (the "Trustee"). Previously, the Plan was
administered under the terms of a Trust Agreement, dated May
1, 1989, with Bankers Trust Company.
Investment Options
The Plan allows participants to direct their employee
contributions to Fund A, B, or C. Participants must
contribute at least 50% to Fund A. Fund H is available to
any participant who has attained age 55 and completed ten
years of service with Textron. Employer contributions are
invested entirely in Fund A.
Fund A invests primarily in Textron Inc. Common Stock that
is either purchased by the Trustee or contributed by
Textron. New shares in connection with a two-for-one stock
split in the form of a stock dividend were issued and
distributed on May 30, 1997, to participants of record on
the close of business on May 9, 1997. All share and value
per unit amounts have been restated for all periods
presented.
Fund B invests primarily in the State Street Bank S&P 500
Index with Futures Fund which is principally a portfolio of
common stocks constructed and maintained with the objective
of providing investment results which approximate the
overall performance of common stocks included in Standard &
Poor's Composite Index of 500 stocks. Prior to the change
in trustee, this fund invested primarily in the Bankers
Trust Pyramid Large Capitalization Equity Index Fund which
was maintained with similar objectives to that of the State
Street Bank S&P 500 Index with Futures Fund.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Fund C may be invested in bonds, notes, debentures,
government obligations, insurance contracts, mortgage-backed
securities, short-term securities, money market instruments
and other fixed income instruments at the discretion of
Textron or an investment manager designated by Textron.
Fund H is invested in the State Street Bank and Trust
Company Short Term Investment Fund, which is a portfolio of
short-term instruments comprised primarily of demand master
notes, certificates of deposit, and commercial paper. Prior
to the change in trustee, this fund invested in the Bankers
Trust Pyramid Directed Cash Fund, which was comprised of
similar investments as the State Street Bank and Trust
Company Short-Term Investment Fund.
At the discretion of the Trustee or other investment
manager, a portion of the assets of Fund A, B, C, or H may
be maintained in cash or invested in short-term securities
(State Street Bank and Trust Company Short-Term Investment
Fund, previously Bankers Trust Pyramid Directed Account Cash
Fund and Bankers Trust Pyramid Discretionary Account Cash
Fund).
At December 31, 1997, there were approximately 33,100
participants in Fund A, 13,000 in Fund B, 15,100 in Fund C
and 5 in Fund H.
Contributions
Participants of the Plan are entitled to elect compensation
deferrals within thelimits prescribed by Section 401(k) of
the Internal Revenue Code (the "Code"). Contributions from
employees and employee compensation deferrals, which are
matched 50% by Textron subject to certain ERISA restrictions
and plan limits, are recorded when Textron makes payroll
deductions from participants' wages. The total of the
matching contributions (net of forfeitures) made by Textron
is limited by the Textron Board of Directors to $40 million
for a calendar year. For the years ending December 31, 1997
and 1996, employee contributions included rollovers of
approximately $3.2 million and $1.2 million, respectively.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Textron makes contributions to the Plan based on estimated
contribution levels. In addition, Textron may make, at its
own discretion, additional discretionary contributions.
There were no discretionary contributions made by Textron in
1997 or 1996. The excess of the estimated contributions
over the actual contributions by the participants is not
allocated to participant accounts; rather such amounts are
used to reduce future Textron contributions and are
disclosed as an excess contribution in the statement of net
assets available for benefits. In addition, all forfeitures
arising out of a participant's termination of employment for
reasons other than retirement, disability or death, are used
to reduce future Textron contributions.
Unit Valuation
Plan equity is reported on a unit valuation basis except for
Fund A, which is reported on a per share basis. Unit values
are determined by dividing the Plan equity in each fund by
the number of fund units outstanding.
At December 31, the number of units outstanding and the
values for each unit were:
1997 1996
Number of Value Number Value
Fund Units per Unit Of Units per Unit
B 23,021,704 $ 6.762800 23,518,513 $4.993703
C 58,043,594 2.553375 66,201,075 2.351977
H 17,183 4.368733 85,748 1.877012
Benefits
In the event a participant ceases to be an employee or
becomes totally disabled while employed, all of his or her
accounts, to the extent then vested, shall become
distributable. Distributions to participants whose accounts
hold more than forty whole shares of Textron Inc. Common
Stock shall be in the form of Textron Inc. Common Stock.
Distributions to participants whose accounts hold forty or
less whole shares of Textron Inc. Common Stock shall be in
the form of cash unless the participant or beneficiary
expressly requests Textron Inc. Common Stock. All other
distributions shall be in the
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
form of cash. An account will be distributed in a single
payment if the value of the account is less than $5,000 when
the account first becomes distributable. If the value of
the account is $5,000 or more when the account first becomes
distributable, a participant is not required to take a
distribution immediately. However, current federal law
requires Textron to begin to distribute accounts by April 1
of the year following the year in which the participant
reaches age 70 1/2. A participant is always vested in the
portions of his or her account attributable to his or her
own contributions and compensation deferrals and to
discretionary contributions by Textron. Employees of
discontinued operations become fully vested upon approval of
the Textron Management Committee. The Plan provides for
full vesting of a participant's account in the event of his
or her termination of employment, other than for cause,
within two years after a change in control of Textron.
Benefits are recorded when paid.
Vesting
Textron's 50% matching contributions vest based on the
length of participation in the Plan as follows:
Months of Participation Ownership Interest
24 months but less than 36 months 25%
36 months but less than 48 months 50%
48 months but less than 60 months 75%
60 months or more 100%
A separate account is maintained for each participant and is
increased monthly by (a) the participant's contributions and
compensation deferrals, (b) Textron's 50% matching
contribution, and annually by the pro rata share of
additional discretionary contributions made by Textron, if
any, and (c) the pro rata share of income.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Plan Termination
Although it has not expressed any intent to do so, Textron
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 Plan
termination, participants will become 100 percent vested in
their accounts.
Participant Notes Receivable
Effective October 1, 1997, a new loan feature was added to
the Plan for all active participants with account balances.
Active participants may have one loan outstanding and may
borrow a minimum of $1,000 up to a maximum of the lessor of
one-half of their vested balance or $50,000 less the
participant's highest outstanding loan balance during the
twelve-month period preceding the new loan request.
Interest is charged at a rate of Bankers Trust Prime Rate
plus 1%. A $50 fee will be charged to the participant to
cover the cost of administration. The loan terms may range
from one to five years and are repaid primarily through
automatic payroll deductions.
2. Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the
accrual method of accounting.
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.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Investment Valuation and Income Recognition
Textron Inc. Common Stock is valued at the New York Stock
Exchange closing price on the last business day of the Plan
year. U.S. Government securities are valued at fair value
as determined by quoted market price. The State Street S&P
500 Index with Futures Fund and the Bankers Trust Pyramid
Large Capitalization Equity Index Fund are valued at the
redemption price established by the fund's Trustee which is
generally based on the fair value of the underlying assets.
Valuations of equity investments in mortgage-backed
securities are estimated by external asset managers.
Factors such as real estate type, market conditions,
property performance, valuation of comparable properties,
and consultation with external real estate advisors are
considered in determining fair value. The State Street Bank
and Trust Company Short Term Investment Fund, the Bankers
Trust Pyramid Directed Account Cash Fund and the Bankers
Trust Pyramid Discretionary Account Cash Fund include pooled
temporary investments and are stated at cost which
approximates market value. Participant notes receivable are
valued at their outstanding balances which approximates fair
value.
Insurance contracts are fully benefit responsive and are
valued at contract value (Note 3) which represents
contributions made under the contract, plus accrued interest
less funds used to pay employee withdrawals and
administrative expenses.
Purchases and sales of investments are recorded on a trade-
date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
Dividends, interest and other distributions received by the
Plan are reinvested in the fund in which earned.
Administrative Expenses
All administrative expenses are paid from Plan assets.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
3. Fair Value of Investments
The Plan's investments are held by a bank-administered trust
fund. The fair value of individual investments that
represent 5% or more of the fair value of the Plan's net
assets is as follows:
December 31
1997 1996
(Share and dollar
amounts in thousands)
Investments at fair value as
determined by quoted market price:
Textron Inc. Common Stock*,
23,610 shares and 25,588** $1,475,645 $1,205,830
shares, respectively
Investments at estimated fair value:
State Street S&P 500 Index with
Futures Fund*, 970 shares 154,501 -
BT Pyramid Capitalization Equity
Index Fund*, 71 shafes - 120,412
* Indicates party-in-interest to the Plan.
** Adjusted for a two-for-one stock split in the form of a
stock dividend (Note 1).
During 1997 and 1996, the Plan's investments (including
investments bought, sold, and held during the year)
appreciated (depreciated) in fair value by $414,185,000 and
$377,788,000 as follows:
December 31
1997 1996
(In thousands)
Investments at fair value as
determined by quoted market price:
Textron Inc. Common Stock $375,300 $355,525
U.S. Government securities (18) 13
375,282 355,538
Investments at estimated fair value:
Common/collective trust funds 38,944 22,250
Mortgage-backed securities (41) -
$414,185 $377,788
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
3. Fair Value of Investments (continued)
Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments,"
(FAS 107) requires disclosure of fair value information
about all financial instruments held or owned by a plan
except for certain excluded instruments and instruments for
which it is not practicable to estimate fair value. Note 2
describes the methods and assumptions used in determining
the fair value of all Plan investments except insurance
contracts.
The estimated fair value of the Plan's investment in
guaranteed insurance contracts was determined by discounted
cash flow analyses using U. S. Treasury Note interest rates
with maturities similar to the remaining terms of the
guaranteed insurance contracts. The estimated fair value of
such contracts was approximately $131 million and $147
million at December 31, 1997 and 1996, respectively. The
average yield approximated 5.70% and 5.99% for the years
ended December 31, 1997 and 1996, respectively, on contracts
with crediting interest rates ranging from 4.67% to 8.28%
and 4.67% to 8.36% for 1997 and 1996, respectively.
The fair values of insurance contracts presented herein are
estimates of the fair value of the insurance contracts at a
specific point in time using available market information
and appropriate valuation methodologies. These estimates
are subjective in nature and involve uncertainties and
significant judgment in the interpretation of current market
data. Therefore, the fair values presented are not
necessarily indicative of amounts the Plan could realize or
settle currently. The Plan does not necessarily intend to
dispose of or liquidate such instruments prior to maturity.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
4. 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
1997 1996
(In thousands)
Net assets available for benefits per
financial statements $1,792,284 $1,490,267
Amounts allocated to withdrawn
participants (24,866) (41,632)
Net assets available for benefits per
Form 5500 $1,767,418 $1,448,635
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
1997 1996
(In thousands)
Benefits paid to participants per the
financial statements $252,114 $229,462
Add: Amounts allocated on Form 5500
to withdrawn participants at the
end of the year 24,866 41,632
Less: Amounts allocated on Form 5500
to withdrawn participants at the
beginning of the year (41,632) (36,154)
Benefits paid to participants $235,348 $234,940
per Form 5500
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
as of that date.
5. Participant Rollovers due to Sale of Division
During 1996, Textron sold the Textron Aerostructures
division. In conjunction with this sale, during 1997, the
accounts of participants employed by this division were
rolled into the qualified plan of the purchaser.
<PAGE>
Textron Savings Plan
Notes to Financial Statements (continued)
6. Party-in-Interest Transactions
Fees paid during the years ended December 31, 1997 and 1996,
for investment management, custodial services, record
keeping and accounting services rendered by parties-in-
interest were based on customary and reasonable rates for
such services. The Plan invests in mutual funds managed by
State Street Bank and Trust Company, who is also the Plan's
trustee. Prior to the change in trustee, the Plan invested
in mutual funds managed by Bankers Trust Company, the
previous trustee. Therefore, these transactions qualify as
party-in-interest transactions.
7. Income Tax Status
The Internal Revenue Service has determined and informed the
Company by a letter dated October 3, 1995, that the Plan is
qualified and the trust established under the Plan is tax
exempt, under the appropriate sections of the Internal
Revenue Service Code. The Plan has been amended since
receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance
with the applicable requirements of the Code. Therefore,
they believe that the Plan is qualified and the related
trust is tax exempt as of the financial statement date.
8. Year 2000 Issue (Unaudited)
Many computer programs, including those used by Textron and
Textron's suppliers (including third-party service providers
to the Plan), use only two digits to identify a year, and
were not designed to handle years beginning after 1999.
These programs, some of which are critical to operations,
could fail to properly process data that contain dates after
1999 unless they are modified. Textron commenced a company-
wide effort to substantially complete the necessary
modifications to its computer programs by early 1999.
Textron also is working with its principal suppliers
(including third-party service providers to the Plan) and
customers to ensure that problems in their computer programs
will not materially affect Textron or the Plan. Textron
believes it is on track to resolve this issue in a timely
fashion without having a material adverse effect on the
business, operations or financial condition of Textron and
of the Plan.
<PAGE>
Textron Savings Plan
Line 27a--Schedule of Assets Held for Investment Purposes
(In Thousands)
December 31, 1997
Number of Cost/
Shares or Contract Fair
Identity of Issue Units Value Value
Common Stock:
Textron Inc.* 23,610 $510,933 $1,475,645
Common/Collective Trust
Funds:
State Street S&P 500 Index
w/Futures Fund* 970 $125,262 $ 154,501
State Street Bank and Trust
Company
Short Term Investment Fund* 13,125 13,125 13,125
Total Common/Collective Trust
Funds: $138,387 $ 167,626
Insurance Contracts:
Metropolitan Life Ins. Co.*
Matures 6/30/98; 4.67% 6,087 $ 6,087 $ 6,061
Matures 3/01/99; 5.27% 1,828 1,828 1,820
Matures 3/31/99; 5.11% 3,041 3,041 3,020
Matures 5/15/99; 7.38% 12,957 12,957 13,260
N.Y. Life Insurance Co.
Matures 9/09/98; 5.2% 12,441 12,441 12,407
Matures 8/16/99; 7.33% 12,702 12,703 13,042
Commonwealth Life Insurance Co.
Matures 1/5/99; 8.28% 6,342 6,342 6,514
Hartford Life Insurance Co.
Matures 1/4/99; 7.97% 6,287 6,287 6,436
AIG Life Insurance Co.
Matures 9/15/01; 6.90% 5,446 5,446 5,678
Allstate Insurance Co.
Matures 12/15/00; 6.87% 10,031 10,031 10,370
<PAGE>
Textron Savings Plan
Line 27a--Schedule of Assets Held for Investment Purposes
(continued)
(In Thousands)
Number of Cost/
Shares or Contract Fair
Identity of Issue Units Value Value
Insurance Contracts (continued):
John Hancock Mutual Life Ins. Co.
Matures 6/30/01; 6.75% 5,856 5,856 6,050
Matures 6/15/01; 6.71% 5,259 5,259 5,433
Matures 6/30/00; 6.50% 5,823 5,823 5,936
Matures 9/15/01; 7.15% 5,464 5,464 5,749
Peoples Security Life
Matures 4/3/01; 6.67 9,369 9,369 9,652
Principal Mutual Life
Matures 6/14/01; 6.58% 8,395 8,395 8,633
SunAmerica Life Insurance Co.
Matures 6/15/00; 5.85% 11,201 11,201 11,234
Total Insurance Contract $128,530 $ 131,295
Mortgage-backed Securities:
Residential Asset Security
Mortgage
Matures 3/25/26; 6.09% 5,585 $ 5,600 $ 5,583
Country Wide Home Equity
Matures 1/1/28; 5.87% 6,324 6,323 6,299
Total Mortgage-backed Securities: $ 11,923 $ 11,882
Participant notes receivable*
(with interest rates ranging
from 9.5% to 11%) $ - $ 5,533
Total assets held for
investment purposes $789,773 $1,791,981
* Indicates party-in-interest to the Plan
<PAGE>
<TABLE>
Textron Savings Plan
Line 27d--Schedule of Reportable Transactions
(In Thousands)
Year ended December 31, 1997
<S> <S> <C> <C> <C> <C> <C>
Current
Purchase Selling Cost of Value of Net Gain
Identity of Description Price Price Assets Asset on (Loss)
Party Transaction
Date
Category (i) -- Individual transactions in excess of 5% of plan assets
State Street Purchase of 943,081
Bank* shares of State Street
Bank S&P 500 Index
with Futures $120,579 $120,579 $120,579
Bankers Trust Sale of 66,198 shares
Company* of Bankers Trust
Pyramid Large
Capitalization Equity
Index Fund $120,544 72,086 $ 48,458
Category (iii)--Series of transactions in excess of 5% of plan assets
** Purchase of 3,430,984
shares of Textron Inc.
Common Stock in 132
transactions 167,197 167,197 167,197
** Sale of 5,179,172
shares of Textron Inc.
Common Stock in 28
transactions 297,024 150,970 146,054
Bankers Trust Purchase of 549 shares
Company* of BT Pyramid Large
Capitalization Equity
Index Fund in 5
transactions 979 979 979
Bankers Trust Sale of 71,136 shares
Company* of BT Pyramid Large
Capitalization Equity
Index Fund in 4
transactions 129,462 77,459 52,003
</TABLE>
<PAGE>
<TABLE>
Textron Savings Plan
Line 27d--Schedule of Reportable Transactions (continued)
(In Thousands)
Year ended December 31, 1997
<S> <S> <C> <C> <C> <C> <C>
Current
Purchase Selling Cost of Value of Net Gain
Identity of Description Price Price Assets Asset on (Loss)
Party Transaction
Date
Category (iii)--Series of transactions in excess of 5% of plan assets (continued)
State Street Purchase of 145,477,319
Bank* shares of State Street
Bank and Trust Short
Term Investment Fund
in 286 transactions 145,477 145,477 145,477
State Street Sale of 132,352,607
Bank* shares of State Street
Bank and Trust Short
Term Investment Fund
in 166 transactions 132,353 132,353
State Street Purchase of 1,060,501
Bank* shares of State Street
Bank S&P 500 Index
with Futures in 24
transactions 136,849 136,849 136,849
State Street Sale of 90,359 shares
Bank* of State Street Bank
S&P 500 Index with
Futures in 13
transactions 12,835 11,586 1,249
There were no category (ii) or (iv) reportable transactions during the year.
* Indicates party-in-interest to the Plan
** Transactions made on the market.
<PAGE>
Supplemental Schedules
</TABLE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-63741) pertaining to
the Textron Savings Plan of our report dated May 14, 1998,
with respect to the financial statements and schedules of
the Textron Savings Plan included in this Annual Report
(Form 11-K) for the year ended December 31, 1997.
/s/ERNST & YOUNG LLP
Boston, Massachusetts
June 4, 1998
