-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VGBSL1CnTBkTCtcXQPKDsdr17RY1TWdqxptI6WaQdyzRixvl3PeLhGW1UbPQ4OBp eJJ9V2h+YAl0xDyqUrKDjg== 0000217346-99-000012.txt : 19990630 0000217346-99-000012.hdr.sgml : 19990630 ACCESSION NUMBER: 0000217346-99-000012 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEXTRON INC CENTRAL INDEX KEY: 0000217346 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT & PARTS [3720] IRS NUMBER: 050315468 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-05480 FILM NUMBER: 99654578 BUSINESS ADDRESS: STREET 1: 40 WESTMINSTER ST CITY: PROVIDENCE STATE: RI ZIP: 02903 BUSINESS PHONE: 4014212800 MAIL ADDRESS: STREET 1: 40 WESTMINSTER ST CITY: PROVIDENCE STATE: RI ZIP: 02903 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TEXTRON INC DATE OF NAME CHANGE: 19710510 11-K 1 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, 1998 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 28, 1999 By: /s/Mark S. Arnold Mark S. Arnold Director of Finance Financial Statements and Supplemental Schedules Elco Thermoplastics, Inc. Profit Sharing Plan Years ended December 31, 1998 and 1997 Elco Thermoplastics, Inc. Profit Sharing Plan Financial Statements and Supplemental Schedules Years ended December 31, 1998 and 1997 Contents Report of Independent Auditors 1 Financial Statements Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 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 Line 27e - Schedule of Non-Exempt Transactions 15 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 as of December 31, 1998 and 1997, 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, 1998 and 1997, 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, 1998, reportable transactions, and non-exempt transactions for the year then ended, are presented for purpose of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of Plan's management. The Fund Information in the statement of net assets available for benefits and statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP ERNST & YOUNG LLP May 5, 1999 1 Elco Thermoplastics, Inc. Profit Sharing Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1998
Fund Information Money Textron Market Balanced Equity Stock Loan Total Fund Fund Fund Fund Fund Funds Assets Investments, at fair value: Pegasus Equity Index Fund $ - $ - $1,394,452 $ - $ - $1,394,452 The George Putnam Fund of - 1,600,539 - - - 1,600,539 Boston Pegasus Money Market Fund 600,222 - - - - 600,222 Textron Inc. common stock - - - 1,472,455 - 1,472,455 Participant notes - - - - 19,284 19,284 receivable Total investments 600,222 1,600,539 1,394,452 1,472,455 19,284 5,086,952 Receivables: Employer's contributions 36,476 57,732 63,141 73,699 - 231,048 Participant contributions 4,733 7,876 9,075 11,006 - 32,690 Total receivables 41,209 65,608 72,216 84,705 - 263,738 Net assets available for benefits $641,431 $1,666,147 $1,466,668 $1,557,160 $19,284 $5,350,690
See accompanying notes. 2 Elco Thermoplastics, Inc. Profit Sharing Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1997
Fund Information Money Textron Market Balanced Equity Stock Loan Total Fund Fund Fund Fund Fund Funds Assets Investments, at fair value: Parkstone Equity Income $ - $357,844 $107,420 $ - $ - $465,264 Fund Parkstone Bond Fund - 576,174 - - - 576,174 Parkstone Small Capitalization - 55,725 - - - 55,725 Value Fund Parkstone Mid Capitalization Value - 123,698 1,089,902 - - 1,213,600 Fund Parkstone Balanced Allocation Fund - 107,044 - - - 107,044 Parkstone International Discovery Fund - 119,803 - - - 119,803 Parkstone Government Money Market Fund 551,375 231 95 - 22 551,723 Parkstone Prime Obligations Money - - - 30,937 - 30,937 Market Fund Textron Inc. common stock - - - 1,057,500 - 1,057,500 Participant notes - - - - 9,762 9,762 receivable 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. 3 Elco Thermoplastics, Inc. Profit Sharing Plan Statement of Changes in Net Assets Available for Benefits with Fund Information Year ended December 31, 1998
Fund Information Money Textron Market Balanced Equity Stock Loan Total Fund Fund Fund Fund Fund Funds Investment income: Interest and dividends $33,433 $142,947 $89,928 $25,280 $1,430 $293,018 Net appreciation in fair value of investments - 11,116 94,947 255,888 - 361,951 33,433 154,063 184,875 281,168 1,430 654,969 Contributions: Employer 50,052 82,273 91,612 103,924 - 327,861 Participants 40,791 75,878 94,072 106,119 - 316,860 90,843 158,151 185,684 210,043 - 644,721 Total additions 124,276 312,214 370,559 491,211 1,430 1,299,690 Deductions from net assets attributed to: Benefits paid to 50,421 136,265 159,160 115,780 1,478 463,104 participants Other 4,360 (6,500) 2,786 9,603 987 11,236 Net increase (decrease) before 69,495 182,449 208,613 365,828 (1,035) 825,350 transfers Interfund transfers, net (30,807) 46,877 (38,323) 11,775 10,478 - Net increase 38,688 229,326 170,290 377,603 9,443 825,350 Net assets available for benefits at beginning of 602,743 1,436,821 1,296,378 1,179,557 9,841 4,525,340 year Net assets available for benefits at end of year $641,431 $1,666,147 $1,466,668 $1,557,160 $19,284 $5,350,690
See accompanying notes. 4 Elco Thermoplastics, Inc. Profit Sharing Plan Statement of Changes in Net Assets Available for Benefits with Fund Information Year ended December 31, 1997
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 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 at beginning of year 577,263 1,235,674 1,159,867 654,575 (31,565) 3,595,814 Net assets available for benefits at end of year $602,743 $1,436,821 $1,296,378 $1,179,557 $9,841 $4,525,340
See accompanying notes. 5 Elco Thermoplastics, Inc. Profit Sharing Plan Notes to Financial Statements Years ended December 31, 1998 and 1997 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. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 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 4% to 6% of earnings, as defined (3% prior to March 1, 1998). Additional Company contributions may be made at the sole discretion of the Board of Directors. The Company made discretionary contributions of $215,884 and $130,000 in the years ended December 31, 1998 and 1997, respectively. Participant Notes Receivable Participants may borrow an amount that does not exceed the lesser of $50,000 or one-half the value of their account balance relating only to employee contributions. Loans must be repaid within five years and bear interest at the current prime rate plus 1%. 6 Investment Options 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 Pegasus Money Market 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 Pegasus Equity Index Fund, a mutual fund, which invests in common and preferred stocks. Balanced Fund - Funds are invested primarily in The George Putnam Fund of Boston, 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 quarterly. During October 1998, the underlying investments available to participants changed. 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. 7 Earnings within each fund are allocated daily in the proportion that each participant's beginning account balance (restated for transfers), plus one-half of 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 Money Market Fund and participant loans are valued at their outstanding balances which approximate fair value. 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. 8 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 ERISA. 4. Investments The Plan's investments are held by the Trustee in a bank-administered trust fund. Effective October 1, 1998, Trustee responsibilities and all Plan assets were transferred from National City Bank to Putnam Fiduciary Trust Company (Putnam). The Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in fair value by $361,951 and $142,831, as follows: Year ended December 31 1998 1997 Investments at fair value as determined by quoted market prices: Parkstone Equity Income Fund $(30,295) $20,568 Parkstone Bond Fund 23,636 13,024 Parkstone Small Capitalization Fund (4,729) (13,692) Parkstone Balanced Allocation Fund 2,614 182 Parkstone Mid Capitalization Value Fund (115,024) (84,394) Parkstone International Discovery Fund (675) (6,871) Pegasus Equity Index Fund 194,784 - The George Putnam Fund of Boston 35,752 - Textron Inc. Common Stock 255,888 214,014 $361,951 $142,831 9 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 1998 1997 Net assets available for benefits per the financial statements $5,134,806 $4,525,340 Amounts allocated to withdrawn participants - (40,836) Net assets available per Form 5500 $5,134,806 $4,484,504 Year ended December 31 1998 1997 Benefits paid to participants per the financial statements $463,104 $316,714 Add: Amounts allocated on Form 5500 to withdrawn participants at the end of the year - 40,836 Less: Amounts allocated on Form 5500 to withdrawn participants at the beginning of the year (40,836) (57,672) $422,268 $299,878 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. 10 7. Tax Status The Plan has received a letter from the Internal Revenue Service dated June 12, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (IRC), and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator believes that the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is exempt. 8. Year 2000 (Unaudited) The Company has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Company is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Both internal and external resources are being utilized to replace or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Company anticipates substantially completing this phase of the project by mid-1999. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Company. For the second phase of the project, Plan management established formal communications with its third-party providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third-party service providers have indicated that they will be Year 2000 compliant by mid-1999. If modification of data processing systems of either the Plan, the Company, or its service providers is not completed on time, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan, because they are confident that all systems will be Year 2000 ready. 11 Supplemental Schedules 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, 1998
Description of Identity of Issue, Borrower, Investment, Rate Current Lessor, or Similar Party of Interest Cost Value Pegasus Money Market Fund* 600,222 units $600,222 $600,222 Mutual funds: Pegasus Equity Index Fund* 54,921 shares 1,199,668 1,394,452 The George Putnam Fund of Boston* 88,721 shares 1,564,789 1,600,539 Textron Inc. common stock* 19,930 shares 1,013,115 1,472,455 Participant loans 7.9% to 9.5% - 19,284 $4,377,794 $5,086,952
*Indicates party-in-interest to the Plan. 12 Elco Thermoplastics, Inc. Profit Sharing Plan Employer Identification Number 35-1291803 Plan Number 001 Line 27d - Schedule of Reportable Transactions Year ended December 31, 1998 Current Value
of Asset on Cost Transaction Net Identity of Party Purchase Selling of Gain Involved Description of Assets Price Price Asset Date (Loss) Category (i) - Individual transactions in excess of 5 percent of plan assets Putnam* Putnam Equity Index Fund $1,089,794 $ - $1,089,794 $1,089,794 $ - Putnam* The George Putnam Fund of Boston 1,428,195 - 1,428,195 1,428,195 - Putnam* Pegasus Money Market Fund 578,904 - 578,904 578,904 - First of America Investment Parkstone Government Money Corporation* Market Fund - 590,079 590,079 590,079 - First of America Investment Parkstone Mid Capitalization Corporation* Value Fund - 1,006,899 1,317,501 1,006,899 (310,602) First of America Investment Corporation* Parkstone Bond Fund - 621,614 582,282 621,614 39,332 First of America Investment Corporation* Parkstone Equity Income Fund - 349,703 368,727 349,703 (19,024) Category (iii) - Series of security transactions in excess of 5 percent of plan assets First of America Investment Parkstone Government Money Corporation* Market Fund 775,807 - 775,807 775,807 - - 1,327,530 1,327,530 1,327,530 - First of America Investment Parkstone Prime Obligation Corporation* Money Market Fund 405,677 - 405,677 405,677 - - 436,614 436,614 436,614 - First of America Investment Corporation* Parkstone Equity Income Fund 34,963 - 34,963 34,963 - - 469,937 497,336 469,937 (27,399) First of America Investment Corporation* Parkstone Bond Fund 21,803 - 21,803 21,803 - - 621,614 582,282 621,613 39,332
13 Elco Thermoplastics, Inc. Profit Sharing Plan Employer Identification Number 35-1291803 Plan Number 001 Line 27d - Schedule of Reportable Transactions (continued) Current
Value of Cost Asset on Net Identity of Purchase Selling of Transaction Gain Party Involved Description of Assets Price Price Asset Date (Loss) Category (iii) - Series of security transactions in excess of 5 percent of plan assets (continued) First of America Parkstone Mid Investment Capitalization Corporation* Value Fund 188,789 - 188,789 188,789 - - 1,289,347 1,628,761 1,289,347 (339,414) Textron Inc. * Textron Inc. Common 320,018 - 320,018 320,018 - Stock - 160,951 114,093 160,951 46,858 First of America Investment Parkstone Balanced Corporation* Allocation Fund 221,975 - 221,975 221,975 - - 331,632 329,599 331,632 2,033 Putnam* Pegasus Equity Index 1,199,668 - 1,199,668 1,199,668 - Fund Putnam* The George Putnam Fund 1,564,859 - 1,564,859 1,564,859 - of Boston - 72 70 72 2 Putnam* Pegasus Money Market 600,836 - 600,836 600,836 - Fund - 614 614 614 -
*Indicates party-in-interest to the Plan. There were no category (ii) or (iv) reportable transactions for the year ended December 31, 1998. 14 Elco Thermoplastics, Inc. Profit Sharing Plan Employer Identification Number 35-1291803 Plan Number 001 Line 27e - Schedule of Non-Exempt Transactions Year ended December 31, 1998
Relationship to Plan Description of Transactions, Including Employer or Other Maturity Date, Rate of Interest, Identity of Party Involved Party-in-Interest Collateral, Par or Maturity Value Elco Thermoplastics, Inc. Employer/Sponsor Employee contributions of $5,332.70 withheld from an April 1998 payroll were remitted on November 3, 1998. No adjustment for lost earnings has been made to date.
15 EX-23 2 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 May 5, 1999, 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, 1998. /s/ Ernst & Young LLP ERNST & YOUNG LLP Providence, Rhode Island June 28, 1999 -----END PRIVACY-ENHANCED MESSAGE-----