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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30,1995
Commission File Number 1-5480
Textron Inc.
(Exact name of registrant as specified in charter)
Delaware 05-0315468
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 Westminster Street, Providence, R.I. 02903
(401) 421-2800
(Address and telephone number of principal executive
offices)
______________
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of Each Exchange on
Which Registered
Common Stock - par value $0.125;
(85,978,117 shares outstanding at New York Stock Exchange
March 1, 1996) Pacific Stock Exchange
Preferred Stock Purchase Rights Chicago Stock Exchange
$2.08 Cumulative Convertible New York Stock Exchange
Preferred Stock, Series A-
no par value
$1.40 Convertible Preferred
Dividend Stock, Series B
(preferred only as to dividends) -
no par value New York Stock Exchange
9.25% Debentures due March 15, 2016 New York Stock Exchange
8.75% Debentures due July 1, 2022
7.92% Trust Preferred Securities of New York Stock Exchange
Subsidiary Trust (and Textron Guaranty
with respect thereto)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90
days. Yes X . No .
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by
non-affiliates of the registrant is $6,886,686,124 as of
March 1, 1996.
Portions of Textron's Annual Report to
Shareholders for the fiscal year ended December 30,
1995 are incorporated by reference in Parts I and II of
this Report. Portions of Textron's Proxy Statement for
its Annual Meeting of Shareholders to be held on April 24,
1996 are incorporated by reference in Part III of this
Report.
__________________________________________________
PART I
ITEM 1. BUSINESS OF TEXTRON*
Textron is a global multi-industry company with
operations in six business segments - Aircraft, Automotive,
Industrial, Systems and Components, Finance and Paul Revere. A
listing of the Divisions within each business segment, including a
description of the product lines of each Division, is incorporated
herein by reference to pages 53 through 55 of Textron's 1995
Annual Report to Shareholders. Financial information by business
segment and geographic area is incorporated herein by reference to
pages 22 and 49 of Textron's 1995 Annual Report to Shareholders.
Additional information regarding each business segment and Textron
in general is set forth below.
Business Segments
Aircraft. The Aircraft segment consists of Bell Helicopter
and The Cessna Aircraft Company. Based on unit sales, Bell
Helicopter is the largest supplier of helicopters, spare parts and
helicopter-related services in the world. Since it was founded in
1946, Bell has delivered over 33,000 aircraft to military and
civilian customers in over 120 countries. Bell has four military
and seven civilian helicopter models in current production. Its
aircraft are turbine powered, and range in size from the five
place Bell Model 206 series to the Bell Model 412P aircraft,
which carries up to fifteen people.
Bell's military business includes both U.S. Government and
non-U.S. Government customers. There are more helicopters in field
service in the inventory of the U.S. Government manufactured by
Bell than by any other helicopter company. Currently, Bell is
supplying advanced military helicopters, spare parts and product
support to the U.S. and Canadian Governments and to the
governments of several countries in the Pacific Rim, Middle East
and Europe. Military sales to non-U.S. customers are made only
with the concurrence of the U.S. Government.
Bell is also a leading supplier of commercially-certified
helicopters, with a market share of approximately 50% of current
deliveries to charter, offshore, utility, police, fire, rescue and
emergency medical helicopter operators. Bell's non-U.S.
Government business (including non-U.S. military customers)
typically represents 40% to 60% of its annual sales. In 1995,
such sales accounted for 48% of Bell's business.
____________________
* Reference herein to "Textron" includes Textron Inc., its
divisions and subsidiaries. A Textron "Division" is an operating
unit which may be comprised of an unincorporated division of
Textron, a subsidiary of Textron, or an unincorporated division of
a subsidiary.
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Bell is teamed with the Helicopter Division of the Boeing
Company in the development of the V-22 Osprey tiltrotor aircraft
for the U.S. Department of Defense. Tiltrotor aircraft are
designed to utilize the benefits of both helicopters and fixed-
wing aircraft. Production of V-22 aircraft is expected to begin
in late 1996 or early 1997. In addition, Bell is developing an
unmanned tiltrotor under contract with the Department of Defense.
Bell will introduce two new civilian helicopter models in
1996: the single-engine Bell Model 407 (a light helicopter), and
the twin-engine intermediate size Bell Model 430. Other
commercial products and product improvements continue to be
developed.
In the light and medium helicopter market, Bell Helicopter
has two major U.S. competitors and one major European competitor.
Certain of its competitors are substantially larger and more
diversified aircraft manufacturers. Bell Helicopter markets its
products worldwide through its own sales force as well as through
independent representatives. Price, financing terms, aircraft
performance, reliability and product support are significant
factors in the sale of helicopters. Bell has developed the
world's largest distribution system to sell and support
helicopters, serving customers in over 120 countries. Revenues of
Bell Helicopter accounted for approximately 16%, 14% and 13% of
Textron's total revenues in 1995, 1994 and 1993, respectively.
The Cessna Aircraft Company is, based on unit sales, the
world's largest manufacturer of light and mid-size business jets
and single-engine utility turboprop aircraft. Cessna designs,
manufactures and sells general aviation aircraft, aircraft
propellers and related accessories worldwide. Based on units
shipped by manufacturers, Cessna's 1995 share of all
manufacturers' worldwide sales of light and midsize jets was 52%.
Cessna currently has two major product lines, Citation
business jets and single-engine turboprop Caravans. In addition,
Cessna has commenced construction of a manufacturing facility for
single-engine piston aircraft production in Independence, Kansas.
The Independence facility is scheduled to begin production in late
1996 and will produce Cessna Model 172, 182 and 206 aircraft,
orders for which are currently being taken.
The Cessna Caravan is the world's best selling utility
turboprop. The delivery of the 750th Caravan will occur in 1996.
Caravan deliveries have averaged over 60 aircraft per year since
the Caravan's introduction in 1982. Caravans are used in the
United States primarily to carry overnight express package
shipments. International uses of Caravans include commuter
airlines, relief flights, tourism and freight.
Cessna currently produces a family of Citation business jets
ranging from the Citation Jet to the Citation X. The Citation X
is the world's fastest business jet with a maximum operating speed
of Mach .92. Full certification of the Citation X is expected in
April 1996, with deliveries expected to commence in June 1996.
In addition, deliveries of the new Citation Bravo and Citation
Excel business jets will commence in 1997 and 1998, respectively.
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Cessna markets its products worldwide primarily through its
own sales force as well as through a network of authorized
independent sales representatives. Cessna has five major
competitors for its business jet products, two U.S. and three
foreign. Cessna's aircraft compete with other aircraft that vary
in size, speed, range, capacity, handling characteristics and
price. Reliability and product support are significant factors in
the sale of these aircraft. Cessna provides its business jet
operators with factory-direct customer support offering 24 hour a
day service and maintenance. More than 40% of the worldwide
Citation fleet of 2,300 aircraft receive service through Cessna-
owned service centers. Cessna Caravan customers receive product
support through independently owned service stations and 24 hour
spare parts support through Cessna.
Automotive. The Automotive segment, organized under an
umbrella organization called Textron Automotive Company ("TAC"),
consists of the Textron Automotive Trim Operations, CWC Castings,
McCord Winn, Micromatic and Randall. These operations sell
primarily to automotive original equipment manufacturers and their
suppliers ("OEMs") operating in North America and, to a lesser
extent, in Europe.
Through its Textron Automotive Trim Operations, TAC is a
leading worldwide supplier of automotive interior and exterior
plastic components. Products include totally integrated interior
systems, including instrument panels, door and sidewall trim,
airbag doors, console assemblies, trim components, package trays,
armrests and headliner systems. In addition, TAC's trim facilities
manufacture painted fascias, body side moldings and claddings,
fender liners, lighting assemblies and structural composite bumper
beams. Revenues of the Textron Automotive Trim Operations
accounted for 13%, 13% and 10% of Textron's total revenues in
1995, 1994 and 1993, respectively.
TAC's other operations manufacture and sell a broad variety
of functional components. CWC Castings designs and manufactures
engine camshafts, balance shafts and vibration damper components.
McCord Winn manufactures seating comfort systems, windshield
washer systems and precision DC motors. Micromatic manufactures
machine tools used in the production of automobile engines for
precision bore and surface finishing, spline and gear production.
Randall produces fuel filler systems, tubular seat frames, metal
wheel covers and hub caps.
TAC is headquartered in Troy, Michigan and has over 30
facilities located in the United States, Canada, Mexico and the
United Kingdom. TAC's newly opened plant in Saltillo, Mexico,
provides components for the Dodge Ram pick-up truck. TAC also has
a 50% interest in a joint venture in the Netherlands for the
manufacture of instrument panels.
In 1995, TAC supplied on average approximately $116 in
components for every car and light truck built in North America.
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More than 70 models currently carry parts made by TAC, including
Chrysler's Jeep Grand Cherokee and Voyager and Caravan mini-vans,
Ford's Lincoln Town Car and Windstar and Aerostar mini-vans, and
GM's Cadillac Seville, Cutlass Supreme and Pontiac Transport
minivan. TAC supplies almost $800 of components in every Chrysler
LH series car.
TAC's manufacturing operations are supported by a staff of
research and design specialists at TAC's Automotive Technology
Center. These specialists have developed new processes and
products, many of which are patented, that allow TAC to offer its
customers technology driven products and processes. In the
plastics and coatings area, TAC is a recognized leader in
alternative skin materials (including non-PVC materials), spray
urethane and cloth integration, energy management foam (including
impact and knee bolsters), the development of modular integrated
assemblies and vertical body panels, and High Crystalline
Polypropylene material for complete mold-in-color interior
components. CWC Castings is a leader in the design and manufacture
of automotive castings. It has developed a selective austempering
heat treatment process for ductile camshafts as well as a vacuum
casting system for hollow steel camshafts. McCord Winn is working
with OEMs worldwide to develop advanced technologies in areas such
as "intelligent" comfort seating systems, brushless motors and
carbon commutation for flexible fuel applications. Micromatic
machine tools are recognized throughout the world for their
cylindrical form generation and surface finishing capabilities.
In the automotive business, there is often a long lead time
from the time a supplier is selected to supply components on a new
car model to the time the supplier can first begin shipping
production parts. During this period, the supplier incurs
engineering and development costs. Until recently, the OEMs
reimbursed the supplier for these costs as incurred. Within the
last few years, the OEMs have begun to require that these costs be
recovered in the piece prices charged by the suppliers as the
goods are shipped. In addition, automotive OEMs often require
"just-in-time" delivery, so the manufacturer has to both plan
shipments in advance and hold inventory.
Automotive OEMs and their suppliers are the principal
customers of TAC. The only customers, the loss of which would
have a material adverse effect on TAC, are the U.S. based
automotive OEMs and their first-tier suppliers. However, because
of the broad range of products sold to such customers, it is
unlikely that such customers would cease all purchases from TAC.
Each of TAC's businesses faces competition from a number of
other manufacturers, based primarily on price, quality, reputation
and delivery. Although TAC is one of the largest manufacturers
offering its range of products and services, it faces strong
competition in all of its market segments. Because of the
diversity of products and services offered, no single company is a
competitor in all market segments. In certain markets, TAC also
competes for business with the OEMs' own operations.
6
Industrial. The Industrial segment consists of three major
product groups: Fastening Systems, Golf and Turf Care Equipment,
and Diversified Products.
The Fastening Systems Group consists of the Avdel, Camcar,
Cherry and Elco Divisions, which manufacture and sell fasteners,
fastening systems and installation tools to the aerospace,
appliance, automotive, business equipment, construction, do-it-
yourself, general industrial and transportation markets. Sales
are made to a wide range of customers, including OEMs,
distributors and consumers. Fasteners manufactured by the Group
include rivets, threaded and non-threaded fasteners and cold-
formed special fasteners, as well as assemblies which incorporate
such products with other products, such as metal stampings and
molded plastics. Elco was acquired by Textron in 1995, as was the
German-based Boesner unit of Camcar. In February 1996, Textron
announced that it had signed a definitive agreement to acquire
Valios Industries, a French based manufacturer of engineered
fastening systems, subject to European Commission approval.
Although the Fastening Systems Group is one of the largest
manufacturers of its products and services, there are hundreds of
competitors of the Fastening Systems Group ranging from small
proprietorships to multi-national companies. As is the case with
all Divisions of the Industrial segment, competition is based
primarily on price, quality, reputation and delivery. In
addition, larger customers of fastening systems tend to procure
products and services from the larger suppliers, except for
"niche" products which may be sourced from smaller companies. The
only customers, the loss of which would have a material adverse
effect on the Fastening Systems Group, are the U.S. automotive
OEMs and their first-tier suppliers. However, because of the
broad range of products sold to such customers, it is unlikely
that such customers will cease all purchases from the Fastening
Systems Group.
The Golf and Turf Care Equipment Group consists of the E-Z-GO
Division, which manufactures and sells electric powered and
gasoline powered golf cars and multipurpose utility vehicles, and
the Jacobsen Division, which manufactures and sells professional
mowing and turf maintenance equipment. The customers of the Golf
and Turf Care Equipment Group consist primarily of golf courses,
resort communities and commercial and industrial users such as
airports and factories. Sales are made directly through factory
branches, through a network of distributors and to end-users.
Many sales of golf and turf care equipment (both at the
distributor and end-user level) are financed through Textron
Financial Corporation, both for marketing purposes and as an
additional source of revenue to Textron.
The Diversified Products Group consists of Divisions
manufacturing a wide range of products, including double
enveloping worm gear speed reducers, gear motors and gear sets
(Cone Drive); powered equipment, electrical test instruments and
hand tools (Greenlee); and watch attachments and fashion jewelry
(Speidel). Products of the Diversified Products Group are sold to
a wide variety of customers, including OEMs, distributors and end-
users.
7
Systems and Components. The Systems and Components segment
consists of seven Divisions which serve both commercial and
military customers, primarily in aerospace markets, with an
extensive offering of systems, subsystems, components, materials
and services.
Fuel Systems designs, manufactures and overhauls gas turbine
engine injection and metering devices, fuel distribution valves,
and augmentor fuel injection systems for commercial and military
aircraft, and industrial, marine, and vehicular markets. OEM
sales are made directly to customers, and overhaul and repair
services are sold directly to domestic customers and through a
distributor for international customers. Fuel Systems invests in
the design and development of innovative, proprietary products,
provides on-site engineering support at customer facilities, and
maintains a state-of-the-art development laboratory to extend
customers' own design activities.
HR Textron ("HRT") designs and manufactures control systems
and components for aircraft, armored vehicles and commercial
applications. HRT markets its aerospace and defense products
directly to the U.S. Government and OEMs and, in the aftermarket,
both directly and through service centers. HRT has launched an
initiative to diversify its business base by adapting aerospace
technology to servovalves used in commercial and industrial
applications, including timber milling, molding machinery, test
equipment, and animated figures in entertainment theme parks. In
addition, HRT is working with several automotive manufacturers to
develop fast acting precision control products for active
suspension, power steering, and braking systems.
Textron Aerostructures designs and manufactures structural
assemblies for aircraft and space vehicles. The principal
products of Textron Aerostructures, which are marketed directly to
its customers, are wing components for the Airbus 330/340
aircraft, the empennage for the C130 military transport, the
empennage for the Bell/Boeing V-22 Osprey, the wings for the
Gulfstream GIV executive jet, and the nose cones and aft skirts
for the Titan IV booster.
Textron Lycoming is the world leader in the design,
manufacture and overhaul of reciprocating piston aircraft engines
serving the worldwide general aviation market, with a worldwide
market share of 80 percent of units sold. Textron Lycoming sells
new products directly to general aviation airframe manufacturers,
including Piper Aircraft, Robinson Helicopter and SOCATA, a
division of Aerospatiale, and will build the engines for Cessna's
new product line of single engine aircraft. Aftermarket sales
are made to the more than 180,000 existing owners of Textron
Lycoming products through a worldwide network of independently
owned distributors.
Textron Marine & Land Systems ("TM&LS") is a world leader in
the design and construction of advanced marine craft, including
air cushion vehicles, surface effect ships and rugged monohulls.
TM&LS's products also include light armored combat vehicles,
turrets, gun systems and advanced suspension systems. TM&LS's
products are in use in 35 countries by both military and
commercial customers. TM&LS's products are marketed directly in
the United States and through sales representatives and
distributors internationally. TM&LS has been awarded a production
contract from the U.S. Coast Guard for its 47' Motor Lifeboat and
a contract from the U.S. Army for the design and production of its
Armored Security Vehicle.
8
Textron Systems designs and manufactures products in three
primary areas: sensor fuzed munitions, surveillance systems and
aircraft landing systems. The focus of Textron Systems is on
real-time control systems _ products that sense their environment,
analyze and process data, make a decision, and take action in real
time. Sales are made primarily to the U. S. Department of
Defense, but Textron Systems also is applying its technologies to
several commercial products, including aircraft landing systems
and opto-electronic sensors. In February, 1996, Textron Systems
become responsible for the operations of the former Textron
Specialty Materials Division, which develops and manufactures high
strength, lightweight, advanced composite materials for aircraft,
automotive, industrial and sporting goods manufacturers, and fire
protection materials for oil and chemical companies worldwide.
Textron Systems generally sells its products directly to its
customers, but Specialty Materials products are also sold through
sales representatives and a small proportion of international
sales are made through sales representatives and distributors.
Turbine Engine Components is one of the world's largest
independent suppliers of internal components for gas turbine
engines for aircraft and industrial applications. Its products
include fan and compressor blades, vanes, shafts, disks, rotors,
blisks and other rotating components; the forgings from which
those products are machined; and stationary components of turbine
engines, such as frames, diffusers, and air collectors. Turbine
Engine Components manufactures its products to the specifications
of its customers, and most of its sales are made directly to its
customers.
The principal competitive factors affecting sales of the
products of the Systems and Components segment are price, quality,
customer service, performance, reliability, reputation and
existing product base. In the case of programs requiring a large
investment in inventory and tooling, such as those of Textron
Aerostructures, competitive factors also include a willingness to
invest in the customer's program.
Finance. The Finance segment consists of Avco Financial
Services ("AFS") and Textron Financial Corporation ("TFC").
AFS is primarily engaged in consumer finance and insurance
activities. AFS's finance operations mainly involve loans made by
the Avco Financial Services Group, consisting of consumer loans
which are unsecured or secured by personal property, real estate
loans secured by real property, and retail installment contracts,
principally covering personal property. AFS's insurance business
consists primarily of the sale of credit life, credit disability
and casualty insurance, offered through the Avco Insurance
Services Group, a significant part of which is directly related to
AFS's finance activities. AFS's consumer finance and insurance
activities are conducted through its nearly 1,200 finance offices
located in the United States, Australia, Canada, Hong Kong, New
Zealand, Spain and the United Kingdom. AFS's loan business is
regulated by laws that, among other things, generally limit
maximum charges for loans and the maximum amount and term thereof.
Such laws also require disclosure to customers of the interest
rate and other basic terms of most credit transactions and give
customers a limited right to cancel certain loans and retail
9
installment contracts without penalty. In addition, in certain
jurisdictions, its retail installment business is subject to
regulations that, among other things, limit the rates which may be
charged and require that certain disclosures be made to customers.
The insurance business is subject to licensing and regulation by
state authorities.
The consumer finance business is highly competitive, with
price and service being the principal competitive factors. AFS's
competitors include not only other companies operating under
consumer loan laws, but also other types of lending institutions
not so regulated and usually not limited in the size of their
loans, such as companies which finance the sale of their own
merchandise or the merchandise of others, industrial banks, the
personal loan departments of commercial banks and credit unions.
AFS's strongest competition is from commercial banks and credit
unions. The interest rates charged by these lenders are usually
lower than the rates charged by AFS. AFS's insurance businesses,
to the extent not related to AFS's finance activities, compete
with many other insurance companies offering similar products. In
January 1995, AFS purchased the stock of Household International,
Inc.'s Australian subsidiary, HFC of Australia Ltd., adding
approximately $436 million to AFS's finance receivable portfolio.
Revenues of AFS accounted for approximately 17%, 14% and 15% of
Textron's total revenues in 1995, 1994 and 1993, respectively.
TFC is a diversified commercial finance company specializing
in aircraft, golf and equipment financing and revolving credit
arrangements. TFC provides commercial financing for a wide range
of customers, including those who purchase or lease Textron
products and certain suppliers to Textron Divisions. TFC
presently offers its services primarily in the United States and,
to a lesser extent, in Europe and Canada, through its eight
business units. Each TFC business unit has a discrete market
focus and specific profit objectives and is staffed to provide
responsive services to its market. TFC's activities are subject
to a variety of federal and state regulations.
The businesses in which TFC operates are highly competitive.
TFC is subject to competition from various types of financing
institutions, including banks, investment banks, leasing
companies, insurance companies, independent finance companies
associated with manufacturers and public utilities, and finance
companies that are subsidiaries of banking institutions.
Competition within the commercial finance industry is primarily
focused on price and service.
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Finance Receivables
The following table presents the Finance segment's outstanding
finance receivables by country:
December 31,
1995 1994
(In millions)
United States $6,750 $6,627
Australia 1,026 626
Canada 1,013 942
United Kingdom 632 613
Other countries 473 276
$9,894 $9,084
At December 31, 1995, finance receivables in the United
States represented 68% of Textron's total finance receivables
outstanding. At such date, no receivables outstanding in any one
state other than California exceeded 7% of the United States
portfolio. In California, outstanding receivables represented 16%
of the United States portfolio and 11% of the consolidated
portfolio.
Accrual of interest income is suspended for accounts which
are contractually delinquent by more than three months
(commercial) or three payments (consumer). Accrual of interest on
commercial loans is resumed, and suspended interest income is
recognized, when loans become contractually current, whereas
subsequent interest income on consumer loans is recognized when
collected. Nonearning consumer and commercial loans were $115
million and $99 million, respectively, at the end of 1995 and $82
million and $100 million, respectively, at the end of 1994.
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The following table presents accruing loans on which one or
more installments were more than 60 days past due (expressed as a
percentage of the related gross receivables outstanding):
Years ended Consumer Commercial Total
December 31,
loans loans loans
1995 2.89% 0.24% 2.10%
1994 2.28% - 1.59%
The following table shows gross and net write-offs, the
percentages which those amounts bear to average finance
receivables, and the amount of the provision for losses charged to
income (less recoveries):
Gross write-offs Recoveries Net write-offs
Percentage from Percentage Provision
of average receivables of average for losses
Years ended finance previously finance less
December 31, Amount receivables written off Amount receivables recoveries
(In millions)
1995
Consumer $177 2.6% $33 $144 2.1% $149
Commercial 25 0.9% 4 21 0.7% 19
$202 2.1% $37 $165 1.7% $168
1994
Consumer $ 142 2.5% $ 28 $ 114 2.0% $ 136
Commercial 27 1.0% 3 24 0.4% 24
$ 169 2.0% $ 31 $ 138 1.6% $ 160
1993
Consumer $ 138 2.7% $ 26 $ 112 2.1% $ 121
Commercial 20 0.8% 3 17 0.7% 21
$ 158 2.0% $ 29 $ 129 1.7% $ 142
Paul Revere. Paul Revere, which is 83% owned by Textron, is
the leading provider of individual non-cancelable disability
insurance in the United States and Canada. In addition to its
individual disability insurance products, Paul Revere also
provides group disability, life and annuity products. Paul
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Revere's products are marketed primarily through its brokerage
organization, its national accounts program and its career sales
agency system. Paul Revere is subject to regulation by the states
in which its insurance subsidiaries are domiciled or transact
business. In addition, Paul Revere's insurance subsidiaries are
subject to various regulatory restrictions on the maximum amount
of dividends and other payments that they can make to Paul Revere
without obtaining prior regulatory approval. Paul Revere operates
in a highly competitive environment. Insurance companies compete
on the basis of many factors, including financial strength,
pricing and other terms and conditions of products, commission
structure, perceived stability of the insurer, claims paying
ratings, service, name recognition and reputation.
Backlog
Information regarding Textron's backlog of government and
commercial orders by business segment at the end of the past two
fiscal years is contained on page 29 of Textron's 1995 Annual
Report to Shareholders, which page is incorporated herein by
reference.
Approximately 45% of Textron's total backlog at December 30,
1995, represents orders which are not expected to be filled within
the 1996 fiscal year. Approximately 60% of the total backlog is
funded.
Government Contracts
In 1995, 33% and 49% of the revenues of the Aircraft and the
Systems and Components segments, respectively, constituting 13% of
Textron's consolidated revenues, were generated by or resulted
from contracts with the United States Government. U.S. Government
business is subject to competition, changes in procurement
policies and regulations, the continuing availability of
Congressional appropriations, world events, and the size and
timing of programs in which Textron may participate.
A substantial portion of Textron's government contracts are
fixed-price or fixed-price incentive contracts. Contracts that
contain incentive pricing terms provide for upward or downward
adjustments in the prices paid by the U.S. Government thereunder
upon completion of the contract or any agreed portion thereof,
based on cost or other performance factors. U.S. Government
contracts generally may be terminated in whole or in part at the
convenience of the U.S. Government or if the contractor is in
default. Upon termination of a contract for the convenience of
the U.S. Government, the contractor is normally entitled to
reimbursement for allowable costs incurred (up to a maximum equal
to the contract price) and an allowance for profit or adjustment
for loss if the contractor would have incurred a loss had the
entire contract been completed. If, however, a contract is termi
nated for default: (i) the contractor is paid such amount as may
be agreed upon for manufacturing materials and partially completed
products accepted by the U.S. Government; (ii) the U.S. Government
is not liable for the contractor's costs with respect to
unaccepted items and is entitled to repayment of advance payments
and progress payments, if any, related to the terminated portions
of the contract; and (iii) the contractor may be liable for excess
costs incurred by the U.S. Government in procuring undelivered
items from another source.
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Research and Development
Information regarding Textron's research and development
expenditures is contained on page 45 of Textron's 1995 Annual
Report to Shareholders, which page is incorporated herein by
reference.
Patents and Trademarks
Textron owns, or is licensed under, a number of patents and
trademarks throughout the world relating to methods of
manufacturing and products. Patents and trademarks have been of
value in the past and are expected to be of value in the future;
however, the loss of any single patent or group of patents would
not, in the opinion of Textron, materially affect the conduct of
its business.
Environmental Considerations
Textron's operations, like those of other companies engaged in
similar businesses, are subject to numerous laws and regulations
designed to protect the environment. Compliance with such laws
and expenditures for environmental control facilities have not
had, and are not expected to have, a material effect on capital
expenditures, earnings or the competitive position of Textron.
Additional information regarding environmental matters is
contained on pages 29, 38 and 48 of Textron's 1995 Annual Report
to Shareholders, which pages are incorporated herein by reference.
Employees
At December 30, 1995, Textron had approximately 57,000
employees.
ITEM 2. PROPERTIES
At December 30, 1995, Textron operated a total of 136 plants
located throughout the United States and 9 plants outside the
United States. Of the total of 145 plants, Textron owned 104 and
the balance was leased. In the aggregate, the total manufacturing
space was approximately 25 million square feet.
In addition, Textron owns or leases offices, warehouse and
other space at various locations throughout the United States and
outside the United States. Textron also owns or leases such
machinery and equipment as is necessary in the operation of its
Divisions. Textron considers the productive capacity of the
plants operated by each of its business segments to be adequate.
In general, the plants and machinery are in good condition, are
considered to be adequate for the uses to which they are being
put, and are substantially in regular use.
14
ITEM 3. LEGAL PROCEEDINGS
There are pending or threatened against Textron and its sub
sidiaries lawsuits and other proceedings, some of which allege
violations of federal government procurement regulations, involve
environmental matters, or are or purport to be class actions.
Among these suits and proceedings are some which seek
compensatory, treble or punitive damages in substantial amounts;
fines, penalties or restitution; or the remediation of allegedly
hazardous wastes; or which under federal government procurement
regulations could result in suspension or debarment of Textron or
its subsidiaries from U.S. Government contracting for a period of
time. On the basis of information presently available, Textron
believes that any liability for these suits and proceedings, or
the impact of the application of such government regulations,
would not have a material effect on Textron's net income or
financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Textron's security
holders during the last quarter of the period covered by this
Report.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information
concerning the executive officers of Textron as of March 4, 1996.
Unless otherwise indicated, the employer is Textron.
Name Age Position
James F. Hardymon 61 Chairman since 1993, and Chief
Executive Officer since 1992;
formerly President, 1989
through 1993, and Chief
Operating Officer, 1989
through 1991; Director since
1989.
CORPORATE OPERATING MANAGEMENT
Lewis B. Campbell 49 President and Chief Operating
Officer since 1994; formerly
Executive Vice President and
Chief Operating Officer, 1992
to 1993; Vice President of
General Motors (1988 to 1992)
and General Manager of its GMC
Truck Division (1991 to 1992),
and General Manager of its
Flint Automotive Division
Buick - Oldsmobile - Cadillac
Group (1988 to 1991); Director
since 1994.
Harold K. McCard 64 Senior Vice President
Operations since August 1995;
formerly President of Textron
Systems Division, 1985 to
August 1995.
Herbert L. Henkel 47 President, Textron Industrial
Products since August 1995;
15
formerly Group Vice President,
Textron Inc., 1993 to August
1995; President of the
Greenlee Textron Division,
1987 to 1993.
Derek Plummer 62 Chairman, Textron Automotive
Company since April 1994;
formerly Group Vice President,
Textron Inc., 1986 to 1994.
Terry D. Stinson 54 President, Textron Systems and
Components since August 1995;
formerly Group Vice President,
Textron Inc., 1991 to August
1995; President of the
Hamilton Standard Division of
United Technologies
Corporation, 1986 to 1991.
CORPORATE STAFF MANAGEMENT
Mary L. Howell 43 Executive Vice President,
Government and International
since August 1995; formerly
Senior Vice President
Government and International
Relations 1993 to August 1995;
Vice President - Government
Affairs, 1985 to 1993.
Wayne W. Juchatz 49 Executive Vice President and
General Counsel since April
1995; formerly Executive Vice
President and General Counsel
of R.J. Reynolds Tobacco
Company, 1994 to 1995; and
Senior Vice President, General
Counsel and Secretary of R.J.
Reynolds Tobacco Company, 1987
to 1994.
Stephen L. Key 52 Executive Vice President and
Chief Financial Officer since
March 1995; formerly Executive
Vice President and Chief
Financial Officer of ConAgra,
Inc., 1992 to March 1995;
Managing Partner of the New
York office of Ernst & Young
(formerly Arthur Young), 1988
to 1992.
Richard A. McWhirter 61 Executive Vice President and
Corporate Secretary since
March 1995; formerly Executive
Vice President and Chief
Financial Officer, 1993 to
March 1995; Senior Vice
President and Secretary, 1991
to 1993; Senior Vice President
- Insurance and Environmental
Affairs, 1988 to 1991.
William F. Wayland 60 Executive Vice President
Administration and Chief Human
Resources Officer since
January 1993; formerly
Executive Vice President -
Human Resources, 1989 to
January 1993.
Richard A. Watson 51 Senior Vice President and
Treasurer since October 1995;
formerly Senior Vice
President, Financial Services,
August 1995 to October 1995;
Group Vice President, 1990 to
August 1995.
16
Carl D. Burtner 53 Vice President - Human
Resources since September
1995; also served as Acting
President of Speidel Textron,
September 1995 to January
1996; formerly President of
Greenlee Textron, 1993 to
September 1995; Vice President
Operations of Greenlee
Textron, 1991 to 1993; and
Vice President, Administration
of Greenlee Textron, 1985 to
1991.
Peter B. S. Ellis 42 Vice President Strategic
Planning since March 1995;
formerly Managing Director,
Telecommunications Practice of
Arthur D. Little, Inc., 1991
to March 1995; Vice President,
Business Development of Contel
Corporation, 1988 to 1991.
Douglas A. Fahlbeck 50 Vice President - Mergers and
Acquisitions since August
1995; formerly Executive Vice
President, Chief Financial
Officer and Director of
Textron Financial Corporation,
1994 to August 1995; Senior
Vice President and Chief
Financial Officer of Textron
Financial Corporation, 1985 to
1994.
Arnold M. Friedman 53 Vice President and Deputy
General Counsel since 1984.
William B. Gauld 42 Vice President - Corporate
Information Management and
Chief Information Officer
since August 1995; formerly
Staff Vice President,
Corporate Information
Management and Chief
Information Officer, 1994 to
August 1995; Chief Information
Officer of General Electric
(Electrical Distribution and
Control business) 1992 to
1994; Manager, Manufacturing
Systems of General Electric
(Appliances), 1989 to 1992.
Gregory E.Hudson 49 Vice President - Taxes since
1987.
William P. Janovitz 53 Vice President - Financial
Reporting since October 1995;
formerly Vice President and
Controller, 1983 to October
1995.
Mary F. Lovejoy 40 Vice President - Investor
Relations since August 1995;
formerly Director of Investor
Relations, 1993 to August
1995; Vice President and
Senior Corporate Banker of The
First National Bank of
Chicago, 1991 to 1993; Vice
President and Senior
Transaction Manager of The
First National Bank of
Chicago, 1989 to 1991.
Frank W. McNally 56 Vice President - Employee
Relations and Benefits since
August 1995; formerly Staff
Vice President, Employee
Relations and Benefits, 1993
to August 1995, Staff Vice
President Employee Relations,
1992 to 1993; Director,
Employee Relations, 1991 to
1992.
17
Gero K.H. Meyersiek 49 Vice President - International
since February 1996; formerly
Vice President of Textron
International Inc., February
1995 to February 1996; Vice
President, International
Business Development of GE
Financial Services, 1991 to
1994; Managing Director,
European Business Development
of GE Financial Services, 1988
to 1991.
Daniel L. Shaffer 59 Vice President Audit and
Business Ethics since November
1994; formerly President of
Textron's Aircraft Engine
Components Division, 1992 to
November 1994; Vice President
Finance of the Textron Systems
Division, 1984 to 1992.
Richard F. Smith 57 Vice President - Government
Affairs since August 1995;
Staff Vice President -
Government Affairs, March 1995
to August 1995; Director -
Government Affairs, 1985 to
March 1995.
Richard L. Yates 45 Vice President and Controller
since November 1995; formerly
Executive Vice President,
Chief Financial Officer and
Treasurer of Paul Revere, 1994
to November 1995; Senior Vice
President, Chief Financial
Officer and Treasurer of Paul
Revere, 1991 to 1994.
John F. Zugschwert 62 Vice President - Government
Marketing since August 1995;
Staff Vice President,
Washington Operations 1993 to
August 1995; Vice President,
Washington Operations of Bell
Helicopter Textron, 1991 to
1993.
No family relationship exists between any of the individuals
named above.
PART II
ITEM 5. MARKETS FOR THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Textron's common stock is traded on the New York, Chicago and
Pacific Stock Exchanges. Additional information regarding
"Markets for the Registrant's Common Equity and Related
Stockholder Matters" is contained on pages 51 and 52 and on the
inside back cover of Textron's 1995 Annual Report to Shareholders,
which pages are incorporated herein by reference.
18
ITEM 6. SELECTED FINANCIAL DATA
Information regarding "Selected Financial Data" is contained
in the Five Year Summary on page 52 of Textron's 1995 Annual
Report to Shareholders, which page is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition
and Results of Operations is contained on pages 23 through 29 of
Textron's 1995 Annual Report to Shareholders, which pages are
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and the supplementary
information listed in the accompanying index to financial
statements and financial statement schedules are filed as part of
this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding Textron's directors is contained on
pages 2 through 6 and page 9 of Textron's Proxy Statement for the
Annual Meeting of Shareholders to be held on April 24, 1996, which
pages are incorporated herein by reference.
Information regarding Textron's executive officers is included
on pages 14 through 17 of Part I of this Report.
19
ITEM 11. EXECUTIVE COMPENSATION
Information regarding "Executive Compensation" is contained on
pages 10 through 20 of Textron's Proxy Statement for the Annual
Meeting of Shareholders to be held on April 24, 1996, which pages
are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Information regarding "Security Ownership of Certain
Beneficial Holders" and "Security Ownership of Management" is
contained on pages 8 and 9 of Textron's Proxy Statement for the
Annual Meeting of Shareholders to be held on April 24, 1996, which
pages are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related
transactions is contained on page 19 of Textron's Proxy Statement
for the Annual Meeting of Shareholders to be held on April 24,
1996, which page is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) Financial Statements and Schedules
The consolidated financial statements, supplementary
information and financial statement schedules listed in the
accompanying index to financial statements and financial statement
schedules are filed as part of this Report.
Exhibits
3.1 Restated Certificate of Incorporation of
Textron as filed March 24, 1988. Incorporated by
reference to Exhibit 3.1 to Textron's Annual Report
on Form 10-K for the fiscal year ended January 2,
1988.
3.2 By-Laws of Textron, restated December 10,
1992. Incorporated by reference to Exhibit 3.2 to
Textron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
20
NOTE: Exhibits 10.1 through 10.21 below are
management contracts or compensatory plans,
contracts or agreements.
10.1 Annual Incentive Compensation Plan For
Textron Employees.
10.2 Deferred Income Plan For Textron Key
Executives.
10.3 Severance Plan For Textron Key Executives.
10.4 Special Benefits for Textron Key Executives.
10.5 Supplemental Benefits Plan For Textron Key
Executives with Market Square Profit Sharing Plan
Schedule.
10.6 Supplemental Retirement Plan For Textron Key
Executives.
10.7 Survivor Benefit Plan For Textron Key Executives.
10.8A Textron 1982 Long-Term Incentive Plan ("1982
Plan"). Incorporated by reference to Exhibit
10.5(a) to Textron's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
10.8B First Amendment to 1982 Plan. Incorporated by
reference to Exhibit 10.5(b) to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 3, 1987.
10.8C Second Amendment to 1982 Plan. Incorporated
by reference to Exhibit 10.5(c) to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 2, 1988.
10.9A Textron 1987 Long-Term Incentive Plan ("1987
Plan"). Incorporated by reference to Exhibit 10.6
to Textron's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989.
10.9B First Amendment to 1987 Plan. Incorporated
by reference to Exhibit 10.6(b) to Textron's Annual
Report on Form 10-K for the fiscal year ended
December 28, 1991.
10.10A Textron 1990 Long-Term Incentive Plan ("1990
Plan"). Incorporated by reference to Exhibit 10.7
to Textron's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989.
10.10B First Amendment to 1990 Plan. Incorporated by
reference to Exhibit 10.7(c) to Textron's Annual
Report on Form 10-K for the fiscal year ended
December 28, 1991.
10.10C Second Amendment to 1990 Plan. Incorporated
by reference to Exhibit 10.7(c) to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 2, 1993.
10.11 Textron 1994 Long-Term Incentive Plan.
Incorporated by reference to Exhibit 10 to
Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 2, 1994.
10.12 Form of Indemnity Agreement between Textron
and its directors and executive officers.
Incorporated by reference to Exhibit A to Textron's
Proxy Statement for its Annual Meeting of
Shareholders on April 29, 1987.
21
10.13A Pension Plan for Directors as amended by a
First Amendment. Incorporated by reference to
Exhibit 10.14 to Textron's Annual Report on Form 10-
K for the fiscal year ended December 31, 1988.
10.13B Second Amendment to Pension Plan for
Directors. Incorporated by reference to Exhibit
10.16(b) to Textron's Annual Report on Form 10-K
for the fiscal year ended December 29, 1990.
10.14 Deferred Income Plan for Textron Directors.
Incorporated by reference to Exhibit 10.18 to
Textron's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994.
10.15A Employment Agreement between Textron and James
F. Hardymon dated November 24, 1989 ("Employment
Agreement"). Incorporated by reference to Exhibit
10.9 to Textron's Annual Report on Form 10-K for
the fiscal year ended December 30, 1989.
10.15B Amendment dated as of December 15, 1994 to
Employment Agreement. Incorporated by reference to
Exhibit 10.10B to Textron's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.16A Employment Agreement between Textron and Lewis B.
Campbell dated September 22, 1992. Incorporated
by reference to Exhibit 10.9 to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 2, 1993.
10.16B Retention Award granted to Lewis B. Campbell
on December 14, 1995.
10.17 Employment Agreement between Textron and Mary
L. Howell dated May 4, 1993. Incorporated by
reference to Exhibit 10.11 to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 1, 1994.
10.18 Employment Agreement between Textron and Wayne
W. Juchatz dated November 1, 1995.
10.19 Employment Agreement between Textron and
Stephen L. Key dated November 1, 1995.
10.20 Employment Agreement between Textron and
Richard A. McWhirter dated February 16, 1993.
Incorporated by reference to Exhibit 10.11 to
Textron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993.
10.21 Employment Agreement between Textron and
William F. Wayland dated January 1, 1989.
Incorporated by reference to Exhibit 10.12 to
Textron's Annual Report on Form 10-K for the fiscal
year ended December 30, 1989.
10.22A Credit Agreement dated as of November 1, 1993
among Textron, the Lenders listed therein and
Bankers Trust Company as Administrative Agent
("Credit Agreement"). Incorporated by reference to
Exhibit 10.20A to Textron's Annual Report on Form
10-K for the fiscal year ended January 1, 1994.
22
10.22B First Amendment dated as of October 30, 1994
to Credit Agreement. Incorporated by reference to
Exhibit 10.22B to Textron's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.22C Second Amendment to Credit Agreement dated as
of July 1, 1995. Incorporated by reference to
Exhibit (b) (3) to Schedule 14D-1 filed by Textron
on September 19, 1995.
12.1 Computation of ratio of income to fixed
charges of the Textron Parent Company Borrowing
Group.
12.2 Computation of ratio of income to fixed
charges of Textron Inc. including all
majority-owned subsidiaries.
13 A portion (pages 22 and following) of
Textron's 1995 Annual Report to Shareholders.
Except for pages or items specifically incorporated
by reference herein, such portion of Textron's 1995
Annual Report to Shareholders is furnished for the
information of the Commission and is not filed as
part of this Report.
21 Certain subsidiaries of Textron. Other
subsidiaries, which considered in the aggregate do
not constitute a significant subsidiary, are
omitted from such list.
23 Consent of Independent Auditors.
24.1 Power of attorney.
24.2 Certified copy of a resolution of the Board of
Directors of Textron.
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter
of the period covered by this Report.
23
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly
caused this Annual Report on Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized on this
14th day of March, 1996.
TEXTRON INC.
Registrant
By: /s/ Michael D. Cahn
Michael D. Cahn
Attorney-in-fact
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below on this 14th day of March,
1996, by the following persons on behalf of the registrant and in
the capacities indicated:
NAME TITLE
*
James F. Hardymon Chairman and Chief
Executive Officer,
Director (principal
*
Lewis B. Campbell President and Chief
Operating Officer, Director
*
H. Jesse Arnelle Director
*
R. Stuart Dickson Director
24
*
B.F. Dolan Director
*
Paul E. Gagne Director
*
John D. Macomber Director
*
Barbara Scott Preiskel Director
*
Brian H. Rowe Director
*
Sam F. Segnar Director
*
Jean Head Sisco Director
*
John W. Snow Director
*
Martin D. Walker Director
25
*
Thomas B. Wheeler Director
*
Stephen L. Key Executive Vice President and
Chief Financial Officer
(principal financial officer)
*
Richard L. Yates Vice President and Controller
(principal accounting
officer)
*By: /s/ Michael D. Cahn
Michael D. Cahn
Attorney-in-fact
26
TEXTRON INC.
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
Item 14(a)
Form Annual Report
Textron Inc. 10-K to Shareholders
Report of Independent Auditors 31
Consolidated Statement of Income for each of the
three years in the period ended December 30, 1995 32
Consolidated Balance Sheet at December 30, 1995 and 33
December 31, 1994
Consolidated Statement of Cash Flows for each of 34
the three years in the period ended December 30,
1995
Consolidated Statement of Changes in Shareholders' 35
Equity for each of the three years in the period
ended December 30, 1995
Summary of Significant Accounting Policies 36-38
Notes to Consolidated Financial Statements 38-50
Revenues and Income by Business Segment 22
Supplementary Information (Unaudited):
Quarterly Financial Information 1995 and 1994 51
Financial Statement Schedules for each of the three
years in the period ended December 30, 1995
I Condensed financial information of 27
registrant
II Valuation and qualifying accounts 28
All other schedules are omitted because the conditions requiring
the filing thereof do not exist or because the information
required is included in the financial statements and notes
thereto.
27
TEXTRON INC.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
For each of the three years in the period ended December 30, 1995
Financial information of the Registrant is omitted because
condensed financial information of the Textron Parent Company
Borrowing Group, which includes the Registrant and all of its
majority-owned subsidiaries other than its finance and insurance
subsidiaries, is shown on page 30 of Textron's 1995 Annual Report
to Shareholders. Management believes that the disclosure of
financial information on the basis of the Textron Parent Company
Borrowing Group results in a more meaningful presentation, since
this group constitutes the Registrant's basic borrowing entity and
the only restrictions on net assets of Textron's subsidiaries
relate to its finance and insurance subsidiaries. The
Registrant's investment in its finance and insurance subsidiaries
is shown on page 30 of Textron's 1995 Annual Report to
Shareholders under the caption "Investments in finance and
insurance subsidiaries."
The Textron Parent Company Borrowing Group received dividends
of $126 million, $115 million and $94 million from its finance and
insurance subsidiaries in 1995, 1994 and 1993, respectively. The
portion of the net assets of Textron's finance and insurance
subsidiaries available for cash dividends and other payments to
the Textron Parent Company Borrowing Group is restricted by the
terms of lending agreements and insurance statutory requirements.
As of December 30, 1995, approximately $376 million of their net
assets of $2.6 billion was available to be transferred to the
Textron Parent Company Borrowing Group pursuant to these
restrictions.
For information concerning the Textron Parent Company
Borrowing Group's long-term debt and restrictions contained in its
debt agreements, see Note 7 to the consolidated financial
statements appearing on pages 42-43 of Textron's 1995 Annual
Report to Shareholders.
28
TEXTRON INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For each of the three years in the period ended December 30, 1995
(In millions)
Allowance for credit losses
Changes in the allowance for credit losses for the years indicated
were as follows:
1995 1994 1993
Balance of the allowance for credit
losses at the biginning of the year $250 $225 $212
Add - charge to income:
Consumer 149 136 121
Commercial 19 24 21
168 160 142
Deduct - balances charged off:
Gross charge offs:
Consumer (177) (142) (138)
Commercial (25) (27) (20)
(202) (169) (158)
Recoveries:
Consumer 33 28 26
Commercial 4 3 3
37 31 29
Net charge offs (165) (138) (129)
Other 17 3 -
Balance of the allowance for credit
losses at the end of the year $ 270 $ 250 $ 225
Balance of the allowance for credit
losses at the end of the year applicable
to:
Consumer $ 195 $ 181 $ 155
Commercial 75 69 70
$ 270 $ 250 $ 225
28
TEXTRON INC.
Index of Exhibits
Annual Report on Form 10-K
for the Fiscal Year Ended December 31, 1994
Exhibits Description
3.1 Restated Certificate of Incorporation of
Textron as filed March 24, 1988. Incorporated by
reference to Exhibit 3.1 to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 2, 1988.
3.2 By-Laws of Textron, restated December 10,
1992. Incorporated by reference to Exhibit 3.2 to
Textron's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993.
NOTE: Exhibits 10.1 through 10.21 below are
management contracts or compensatory plans,
contracts or agreements.
10.1 Annual Incentive Compensation Plan For
Textron Employees.
10.2 Deferred Income Plan For Textron Key
Executives.
10.3 Severance Plan For Textron Key Executives.
10.4 Special Benefits for Textron Key
Executives.
10.5 Supplemental Benefits Plan For Textron Key
Executives with Market Square Profit Sharing
Plan Schedule.
10.6 Supplemental Retirement Plan For Textron Key
Executives.
10.7 Survivor Benefit Plan For Textron Key Executives.
10.8A Textron 1982 Long-Term Incentive Plan ("1982
Plan"). Incorporated by reference to Exhibit
10.5(a) to Textron's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988.
10.8B First Amendment to 1982 Plan. Incorporated
by reference to Exhibit 10.5(b) to Textron's
Annual Report on Form 10-K for the fiscal year
ended January 3, 1987.
10.8C Second Amendment to 1982 Plan. Incorporated
by reference to Exhibit 10.5(c) to Textron's
Annual Report on Form 10-K for the fiscal year
ended January 2, 1988.
10.9A Textron 1987 Long-Term Incentive Plan ("1987
Plan"). Incorporated by reference to Exhibit 10.6
to Textron's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989.
10.9B First Amendment to 1987 Plan. Incorporated
by reference to Exhibit 10.6(b) to Textron's
Annual Report on Form 10-K for the fiscal year
ended December 28, 1991.
10.10A Textron 1990 Long-Term Incentive Plan ("1990
Plan"). Incorporated by reference to Exhibit 10.7
to Textron's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989.
10.10B First Amendment to 1990 Plan. Incorporated
by reference to Exhibit 10.7(c) to Textron's
Annual Report on Form 10-K for the fiscal year
ended December 28, 1991.
10.10C Second Amendment to 1990 Plan. Incorporated
by reference to Exhibit 10.7(c) to Textron's
Annual Report on Form 10-K for the fiscal year
ended January 2, 1993.
10.11 Textron 1994 Long-Term Incentive Plan.
Incorporated by reference to Exhibit 10 to
Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 2, 1994.
10.12 Form of Indemnity Agreement between Textron
and its directors and executive officers.
Incorporated by reference to Exhibit A to
Textron's Proxy Statement for its Annual Meeting
of Shareholders on April 29, 1987.
10.13A Pension Plan for Directors as amended by a
First Amendment. Incorporated by reference to
Exhibit 10.14 to Textron's Annual Report on Form
10-K for the fiscal year ended December 31, 1988.
10.13B Second Amendment to Pension Plan for
Directors. Incorporated by reference to Exhibit
10.16(b) to Textron's Annual Report on Form 10-K
for the fiscal year ended December 29, 1990.
10.14 Deferred Income Plan for Textron Directors.
Incorporated by reference to Exhibit 10.18 to
Textron's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994.
10.15A Employment Agreement between Textron and
James F. Hardymon dated November 24, 1989
("Employment Agreement"). Incorporated by
reference to Exhibit 10.9 to Textron's Annual
Report on Form 10-K for the fiscal year ended
December 30, 1989.
10.15B Amendment dated as of December 15, 1994 to
Employment Agreement. Incorporated by reference
to Exhibit 10.10B to Textron's Annual Report on
Form 10-K for the fiscal year ended December 31,
1994.
10.16A Employment Agreement between Textron and Lewis B.
Campbell dated September 22, 1992. Incorporated
by reference to Exhibit 10.9 to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 2, 1993.
10.16B Retention Award granted to Lewis B. Campbell
on December 14, 1995.
10.17 Employment Agreement between Textron and Mary
L. Howell dated May 4, 1993. Incorporated by
reference to Exhibit 10.11 to Textron's Annual
Report on Form 10-K for the fiscal year ended
January 1, 1994.
10.18 Employment Agreement between Textron and
Wayne W. Juchatz dated November 1, 1995.
10.19 Employment Agreement between Textron and
Stephen L. Key dated November 1, 1995.
10.20 Employment Agreement between Textron and
Richard A. McWhirter dated February 16, 1993.
Incorporated by reference to Exhibit 10.11 to
Textron's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993.
10.21 Employment Agreement between Textron and
William F. Wayland dated January 1, 1989.
Incorporated by reference to Exhibit 10.12 to
Textron's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989.
10.22A Credit Agreement dated as of November 1, 1993
among Textron, the Lenders listed therein and
Bankers Trust Company as Administrative Agent
("Credit Agreement"). Incorporated by reference
to Exhibit 10.20A to Textron's Annual Report on
Form 10-K for the fiscal year ended January 1,
1994.
10.22B First Amendment dated as of October 30, 1994
to Credit Agreement. Incorporated by reference to
Exhibit 10.22B to Textron's Annual Report on Form
10-K for the fiscal year ended December 31, 1994.
10.22C Second Amendment to Credit Agreement dated as
of July 1, 1995. Incorporated by reference to
Exhibit (b) (3) to Schedule 14D-1 filed by Textron
on September 19, 1995.
12.1 Computation of ratio of income to fixed
charges of the Textron Parent Company Borrowing
Group.
12.2 Computation of ratio of income to fixed
charges of Textron Inc. including all
majority-owned subsidiaries.
13 A portion (pages 22 and following) of
Textron's 1995 Annual Report to Shareholders.
Except for pages or items specifically
incorporated by reference herein, such portion of
Textron's 1995 Annual Report to Shareholders is
furnished for the information of the Commission
and is not filed as part of this Report.
21 Certain subsidiaries of Textron. Other
subsidiaries, which considered in the aggregate do
not constitute a significant subsidiary, are
omitted from such list.
23 Consent of Independent Auditors.
24.1 Power of attorney.
24.2 Certified copy of a resolution of the Board of
Directors of Textron.
27 Financial Data Schedule.