BALANCE SHEET

As of January 3, 1998 and December 28, 1996                                              CONSOLIDATED
                                                                                  -----------------------
(Dollars in millions)                                                                  1997         1996
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ASSETS
Cash                                                                                $    87       $    47
Investments                                                                             844           820
Receivables - net:
  Finance                                                                            10,226         9,856
  Commercial and U.S. government                                                        920           882
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                                                                                     11,146        10,738
Inventories                                                                           1,349         1,192
Investments in Finance Group                                                              -             -
Investment in discontinued operation                                                      -           770
Property, plant, and equipment - net                                                  1,860         1,539
Goodwill - net                                                                        1,753         1,609
Other (including net prepaid income taxes)                                            1,571         1,520
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    TOTAL ASSETS                                                                    $18,610       $18,235
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable                                                                    $   963       $   850
Accrued postretirement benefits other than pensions                                     799           817
Other accrued liabilities (including income taxes)                                    2,641         2,556
Debt                                                                                 10,496        10,346
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    TOTAL LIABILITIES                                                                14,899        14,569
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TEXTRON - OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES
   OF SUBSIDIARY TRUST HOLDING SOLELY TEXTRON
   JUNIOR SUBORDINATED DEBT SECURITIES                                                  483           483

SHAREHOLDERS' EQUITY
Capital stock:
  Preferred stock:
    $2.08 Cumulative Convertible Preferred Stock, Series A
      (liquidation value - $14)                                                           6             7
    $1.40 Convertible Preferred Dividend Stock, Series B
      (preferred only as to dividends)                                                    7             7
  Common stock (190,689,000 and 94,456,000 shares issued)                                24            12
Capital surplus                                                                         830           793
Retained earnings                                                                     3,362         2,969
Other                                                                                   (62)            7
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                                                                                      4,167         3,795
    Less cost of treasury shares                                                        939           612
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    TOTAL SHAREHOLDERS' EQUITY                                                        3,228         3,183
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    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $18,610       $18,235
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