UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 30, 2002
COMMISSION FILE NUMBER: 1-1927
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THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
(FULL TITLE OF THE PLAN)
THE GOODYEAR TIRE & RUBBER COMPANY
(NAME OF ISSUER OF THE SECURITIES)
1144 EAST MARKET STREET
AKRON, OHIO 44316-0001
(ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICE)
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
ITEM 1. Not applicable.
ITEM 2. Not applicable.
ITEM 3. Not applicable.
ITEM 4. FINANCIAL STATEMENTS OF THE PLAN
The Financial Statements of The Goodyear Tire & Rubber Company Employee
Savings Plan for Bargaining Unit Employees (the "Plan") for the fiscal year
ended December 30, 2002, together with the report of PricewaterhouseCoopers LLP,
independent accountants, are attached to this Annual Report on Form 11-K as
Annex A, and are by specific reference incorporated herein and filed as a part
hereof. The Financial Statements and the Notes thereto are presented in lieu of
the financial statements required by Items 1, 2 and 3 of Form 11-K. The Plan is
subject to the requirements of the Employee Retirement Income Security Act of
1974 (ERISA). Effective December 31, 2002, the fiscal year end of the Plan was
changed from December 30 to December 31.
EXHIBITS.
EXHIBIT 23. CONSENT OF INDEPENDENT AUDITORS. Consent of
Pricewaterhouse-Coopers LLP, independent accountants, to incorporation by
reference of their report set forth at page 2 of Annex A to this Form 11-K in
Registration Statements, Nos. 333-84352 and 33-65183, on Form S-8.
EXHIBIT 99. CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE PLAN ADMINISTRATOR HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
THE GOODYEAR TIRE & RUBBER COMPANY,
PLAN ADMINISTRATOR OF THE GOODYEAR TIRE &
RUBBER COMPANY EMPLOYEE SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
Dated: June 27, 2003 By: /s/ Darren R. Wells
-----------------------------------
Darren R. Wells, Vice President
and Treasurer
1
ANNEX A
TO
FORM 11-K
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
* * * * *
FINANCIAL STATEMENTS
DECEMBER 30, 2002
THE GOODYEAR TIRE &
RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
------------------------------------------------------------------------------------------------------------------------------------
PAGE
Report of Independent Auditors 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits at 3
December 30, 2002 and 2001
Statement of Changes in Net Assets Available for Plan 3
Benefits for the Plan Year Ended December 30, 2002
Notes to Financial Statements 4-16
Note: Certain schedules required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because
of the absence of the conditions under which they are required.
REPORT OF INDEPENDENT AUDITORS
To the Participants and Administrator
of the Employee Savings Plan for Bargaining
Unit Employees (sponsored by The Goodyear
Tire & Rubber Company)
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Employee Savings Plan for Bargaining Unit Employees (the
"Plan") (sponsored by The Goodyear Tire & Rubber Company) at December 30, 2002
and 2001, and the changes in net assets available for plan benefits for the year
ended December 30, 2002 in conformity with accounting principles generally
accepted in the United States of America. 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 of these statements in accordance with auditing standards generally
accepted in the United States of America, which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
June 27, 2003
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
DECEMBER 30, 2002 AND 2001
------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 30,
------------------------------
2002 2001
--------------- ----------------
Plan's Interest in Master Trust Representing Total Net Assets
Available for Plan Benefits $ 595,370 $ 728,410
=============== ================
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) Year Ended
December 30, 2002
-------------------
Increase in Assets Available for Plan Benefits:
Employer Contributions $ 16,464
Employee Contributions 49,950
-------------------
66,414
Decrease in Assets Available for Plan Benefits:
Benefits Paid to Participants or Their Beneficiaries (45,509)
Investment Loss from Plan's Interest in Master Trust (153,945)
-------------------
Decrease in Assets Available for Plan Benefits During the Plan Year (133,040)
Net Assets Available for Plan Benefits at Beginning of Plan Year 728,410
-------------------
Net Assets Available for Plan Benefits at End of Plan Year $ 595,370
===================
The accompanying notes are an integral part of these statements.
-3-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The accounts of The Goodyear Tire & Rubber Company Employee Savings Plan
for Bargaining Unit Employees (the "Plan") are maintained on the accrual
basis of accounting and in accordance with The Northern Trust Company (the
"Trustee") Trust Agreement, effective November 1, 1995.
PLAN YEAR
The Plan year commences on December 31 of each year and ends on the
following December 30. The Plan year ended December 30, 2002 represents the
period of December 31, 2001 through December 30, 2002.
TRUST ASSETS
Savings plans sponsored by The Goodyear Tire & Rubber Company and certain
subsidiaries (the "Company") maintain their assets in a master trust
administered by the Trustee. The Company sponsored two savings plans at
December 30, 2002 and 2001, respectively, that participated in the master
trust. The Plan's undivided interest in the trust is presented in the
accompanying financial statements in accordance with the allocation made by
the Trustee. At December 30, 2002 and 2001, the Plan's undivided interest
in the master trust was 35.8% and 35.6%, respectively.
ASSET VALUATION
The majority of the assets of the Plan are valued at fair market value.
Investments in the Goodyear Stock Fund are valued at the last reported
sales price on the last business day of the month. If no sales were
reported on that date, the shares are valued at the last bid price.
Investments held in the Stable Value Fund are invested in various
instruments that have a rate of return, and are reported at contract value
(See Note 13). Investments in the Conservative Asset Allocation Fund,
Moderate Asset Allocation Fund, Aggressive Asset Allocation Fund, S&P 500
Index Stock Equity Fund, Small Capitalization Stock Equity Fund, Large
Capitalization Stock Equity Fund, International Stock Equity Fund, and
Self-Directed Account are valued based on units of participation in
commingled funds and mutual funds as reported by the fund manager, which
approximates fair market value. The allocation of assets, interest and
dividend income, and realized and unrealized appreciation and depreciation
is made based upon contributions received and benefits paid by each
participating plan on a daily basis.
-4-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
INCOME RECOGNITION
Employer and employee contributions are recognized in Plan equity on the
accrual basis of accounting.
Dividend income is recorded on the ex-dividend date.
Interest income is recorded as earned.
Appreciation or depreciation on Goodyear common stock distributed to
participants is the difference between the weighted average cost and the
current market value at the time of distribution.
CONCENTRATION OF CREDIT RISK
The Stable Value Fund of the Plan invests part of the fund in investment
contracts of financial institutions with strong credit ratings and has
established guidelines relative to diversification and maturities that
maintain safety and liquidity (See Note 13).
The Goodyear Stock Fund invests primarily in the Common Stock of Goodyear.
Significant changes in the price of Goodyear Stock can result in
significant changes in the Net Assets Available for Plan Benefits.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the basic financial
statements and related notes to financial statements. Changes in such
estimates may affect amounts reported in future years.
2. GENERAL DESCRIPTION AND OPERATION OF THE PLAN:
INCEPTION
The Plan is a defined contribution plan which became effective July 1,
1984.
ELIGIBILITY
Certain bargaining unit employees of the Company are eligible to
participate in the Plan as of the first enrollment date after completing
three months of continuous service with the Company. At the end of the 2002
Plan year, approximately 18,388 employees (19,432 in 2001) of the Company
were eligible with approximately 12,698 employees (13,440 in 2001)
participating in the Plan, including participants transferred from the Brad
Ragan, Inc.
-5-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
Retirement Savings Plan (See Note 4).
VESTING
Employee contributions are fully vested. Employer matching contributions
become vested after the participant has completed three years of continuous
service with the Company.
CONTRIBUTIONS
Eligible employees may elect to contribute any whole percent from 1% to 50%
of earnings including wages, bonuses, commissions, overtime and vacation
pay into the Plan. In addition, the Plan permits catch-up contributions by
participants who have attained age 50 by December 31 of each year subject
to certain limitations under the Internal Revenue Code. Participating
employees may elect to have their contributions invested in the Stable
Value Fund, Conservative Asset Allocation Fund, Moderate Asset Allocation
Fund, Aggressive Asset Allocation Fund, S&P 500 Index Stock Equity Fund,
Small Capitalization Stock Equity Fund, Large Capitalization Stock Equity
Fund, International Stock Equity Fund, Goodyear Stock Fund, and
Self-Directed Account or in any combination of these ten funds in multiples
of 1%. The Company calculates and deducts employee contributions from gross
earnings each pay period based on the percent elected by the employee.
Employees may change their contribution percent up to the 15th day of the
month for changes to be effective on the 1st day of the following month.
Employees may transfer amounts attributable to employee contributions from
one fund to the other on a daily basis. Eligible employees may enroll in
the Plan effective on the 1st day of the month by enrolling by the 15th day
of the prior month. Employees may suspend their contributions at any time
effective immediately.
Employees who are 52 years of age or older are able to transfer employer
contributions from the Goodyear Stock Fund into the Plan's other investment
funds.
The Plan has been established under section 401 of the Internal Revenue
Code. Therefore, employee and employer contributions to the Plan are not
subject to federal withholding tax, but are taxable when they are withdrawn
from the Plan.
The Board of Directors of the Company determines the matching percent used
as the employer contribution for each Plan year. The Company matching
contributions are limited to the first 6% of employee contributions at the
rate of 50% and employee contributions are limited to $11,000 in 2002 and
$10,500 in 2001 (See Note 8).
The Plan provides the Company the ability to establish a minimum
contribution level for each Plan year. The minimum contribution level is
first satisfied from employee contributions and the remainder is satisfied
by employer contributions. In the event the minimum contribution level
exceeds the sum of the employee contributions and employer matching
contributions, the excess is allocated to the participants' accounts to the
extent permitted.
-6-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
The remainder is held in a suspense account which is applied to reduce
employer contributions in the following Plan years. The calculation of the
Company's matching contributions is not impacted by this minimum
contribution level. At the end of the Plan year, no minimum contribution
level existed.
INVESTMENTS
The Trustee of the Plan maintains the following eleven funds under the
Plan:
- Stable Value Fund - Employee contributions are invested in various
investment contracts which provide for rates of return for particular
periods of time. The Guaranteed Investment Contracts and the
Short-Term Investments Fund are the current investments related to
this fund.
- Conservative Asset Allocation Fund - Employee contributions are
invested in a commingled fund containing a portfolio of U.S. common
stocks and bonds which provide an investment return similar to a
portfolio invested 40% in the Russell 3000 Equity Index plus
reinvested dividends and 60% in bonds which compose the Lehman
Aggregate Long-Term Bond Index. The State Street Income and Growth
Fund is the current investment related to this fund.
- Moderate Asset Allocation Fund - Employee contributions are invested
in a commingled fund containing a portfolio of U.S. common stocks and
bonds which provide an investment return similar to a portfolio
invested 60% in the Russell 3000 Equity Index plus reinvested
dividends and 40% in bonds which compose the Lehman Aggregate
Long-Term Bond Index. The State Street Moderate Asset Allocation Fund
is the current investment related to this fund.
- Aggressive Asset Allocation Fund - Employee contributions are invested
in a commingled fund containing a portfolio of U.S. common stocks,
international stocks, and bonds which provide an investment return
similar to a portfolio invested 65% in the Russell 3000 Equity Index
plus reinvested dividends, 15% in the MSCI EAFE Index, and 20% in
bonds which compose the Lehman Aggregate Long-Term Bond Index. The
State Street Life Solutions Aggressive Fund is the current investment
related to this fund.
- S&P 500 Index Stock Equity Fund - Employee contributions are invested
in a commingled fund consisting of a portfolio of common stocks which
provide a return similar to the Standard and Poor's Composite Index of
500 stocks plus reinvested dividends. The Collective Daily Stock Index
Fund is the current investment related to this fund.
- Large Capitalization Stock Equity Fund - Employee contributions are
invested in a mutual fund containing a portfolio of common stocks of
medium and large companies
-7-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
that are expected to provide better-than-average prospects for
appreciation. The American Century Investor's Income Ultra Fund is the
current investment related to this fund.
- Small Capitalization Stock Equity Fund - Employee contributions are
invested in a mutual fund containing a portfolio of common stocks of
small companies that are expected to provide long-term capital growth.
The Franklin Strategic Series Small Cap Fund II is the current
investment related to this fund.
- International Stock Equity Fund - Employee contributions are invested
in a mutual fund containing a portfolio of common stocks and debt
obligations of companies and governments located outside of the United
States that are expected to provide long-term capital growth. The
Templeton Foreign Fund is the current investment related to this fund.
- Loan Investment Fund - Employee contributions are transferred from
other funds into the Loan Investment Fund, and then loaned to the
participant. The interest rate on the loan is prime plus 1%. The
Promissory Notes are the current investments related to this fund.
- Goodyear Stock Fund - Employer and employee contributions are invested
in Goodyear common stock except for short-term investments needed for
Plan operations. During 2002, the price per share of Goodyear common
stock on The New York Stock Exchange Composite Transactions ranged
from $6.60 to $28.31 ($17.72 to $31.64 during 2001). The closing price
per share was $6.74 at December 30, 2002 ($24.13 at December 30,
2001). The common stock of The Goodyear Tire & Rubber Company and the
Short-Term Investments Fund are the current investments related to
this fund. The portion of this fund related to employer contributions
was converted to an employee stock ownership plan (ESOP) effective
December 31, 2001.
- Self-Directed Account - Employee contributions are invested in the
mutual fund(s) of the participant's choice through the establishment
of a brokerage account for the participant administered by Charles
Schwab.
PARTICIPANT ACCOUNTS
A Stable Value Fund, Conservative Asset Allocation Fund, Moderate Asset
Allocation Fund, Aggressive Asset Allocation Fund, S&P 500 Index Stock
Equity Fund, Small Capitalization Stock Equity Fund, Large Capitalization
Stock Equity Fund, International Stock Equity Fund, Loan Investment Fund,
and Goodyear Stock Fund have been established for each participant in the
Plan. All accounts are valued daily by the Trustee.
Interest is automatically reinvested in each participant's respective
accounts. Price fluctuations and dividends in common stock of the Company
and companies in the
-8-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
Conservative Asset Allocation Fund, Moderate Asset Allocation Fund,
Aggressive Asset Allocation Fund, S&P 500 Index Stock Equity Fund, Small
Capitalization Stock Equity Fund, Large Capitalization Stock Equity Fund,
International Stock Equity Fund, Goodyear Stock Fund, and Self-Directed
Account are reflected in the unit value of the fund which affects the value
of the participants' accounts.
PLAN WITHDRAWALS AND DISTRIBUTIONS
Participants may withdraw vested amounts from their accounts if they:
- Attain the age of 59 1/2, or
- Qualify for a serious financial hardship.
The Internal Revenue Service (IRS) issued guidelines governing financial
hardship. Under the IRS guidelines, withdrawals are permitted for severe
financial hardship. Contributions to the Plan are suspended for 6 months
subsequent to a financial hardship withdrawal.
Participant vested amounts are payable upon retirement, death or other
termination of employment.
Under the ESOP, participants may elect to receive in cash the dividend on
the Goodyear stock held in their employer match account.
All withdrawals and distributions are valued as of the end of the month
they are processed, and are subject to federal income tax upon receipt. Any
non-vested Company contributions are forfeited and applied to reduce future
contributions by the Company. During 2002 and 2001, the Plan had forfeiture
credits in the amounts of $19,502 and $59,207, respectively.
LOAN INVESTMENT FUND
Eligible employees may borrow money from their participant accounts. The
minimum amount to be borrowed is $1,000. The maximum amount to be borrowed
is the lesser of $50,000 reduced by the highest outstanding balance of any
loan during the preceding twelve month period, or 50% of the participant's
vested account balance. Participants may have up to two loans outstanding
at any time. The interest rate charged will be a fixed rate which will be
established at the time of the loan application. The interest rate at the
beginning of the 2002 Plan year was 6.00%, which decreased throughout the
year to 5.25% at December 30, 2002. The interest rate at the beginning of
the 2001 Plan year was 10.50%, which decreased throughout the year to 6.00%
at December 30, 2001.
Loan repayments, with interest, are made through payroll deductions. If a
loan is not repaid when due, the loan balance is treated as a taxable
distribution from the Plan.
-9-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
ROLLOVERS
Employees, Plan participants, or former Plan participants may transfer
eligible cash distributions from any other employer sponsored plan
qualified under Section 401 of the Internal Revenue Code into the Plan by a
direct transfer from such other plan.
EXPENSES
Expenses of administering the Plan were paid partly by the Company and
partly by the Trust. The payment of Trustee's fees and brokerage
commissions associated with the Company Stock Fund are paid by the Company.
Expenses related to the asset management of the investment funds are paid
from such Funds which reduces the investment return reported and credited
to participant accounts.
TERMINATION PROVISIONS
The Company anticipates and believes that the Plan will continue without
interruption, but reserves the right to discontinue the Plan. In the event
of termination, the obligation of the Company to make further contributions
ceases. All participants' accounts would then be fully vested with respect
to Company contributions.
3. RELATED PARTY TRANSACTIONS:
The Trustee serves as the fund manager of the S&P 500 Index Stock Equity
Fund.
The Company Stock Fund is designed primarily for investment in common stock
of the Company.
4. PLAN MERGER:
Effective November 30, 2001, certain participants of the Brad Ragan, Inc.
Retirement Savings Plan were merged into the Plan. In conjunction with this
merger, 24 participants and assets totaling $326,000 were transferred to
the Plan in December 2001. The provisions of the Plan and its related trust
now govern with respect to the interests of the participants transferred
from the Brad Ragan, Inc. Retirement Savings Plan.
5. TAX STATUS OF THE PLAN:
On February 25, 2003 the IRS advised that the Plan is qualified in
accordance with the appropriate sections of the Internal Revenue Code, and
the trust established with the Plan constitutes a qualified trust and is
therefore exempt from federal income taxes.
-10-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
6. TRANSFER OF PARTICIPANT ACCOUNTS:
In April 2001, certain Goodyear employees who were participants in the Plan
were transferred to Wingfoot Commercial Tires, LLC, a new joint venture
created by the Company. As a result of the transfer, the participants'
individual accounts and assets in the Plan totaling $548,000 were
transferred to the Wingfoot Commercial Tires, LLC Savings and Retirement
Plan in April and May 2001.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO 5500
The following is a reconciliation of net assets available for plan benefits
per the financial statements at December 30, 2002 to the Form 5500:
(Dollars in Thousands) 2002
----------------
Net Assets Available for Plan Benefits per the Financial Statements $595,370
Amounts Allocated to Withdrawing Participants at December 30, 2002 (658)
----------------
Net Assets Available for Plan Benefits per the Form 5500 $594,712
================
The following is a reconciliation of benefits paid to participants per the
financial statements for the plan year ended December 30, 2002 to the Form
5500:
Benefits Paid to Participants per the Financial Statements $45,509
Add: Amounts Allocated to Withdrawing Participants at December 30, 2002 658
Less: Amounts Allocated to Withdrawing Participants at December 30, 2001 (232)
----------------
Benefits Paid to Participants per the Form 5500 $45,935
================
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior
to December 30, 2002, but not yet paid as of that date.
-11-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
--------------------------------------------------------------------------------
8. SUBSEQUENT EVENT:
Effective December 31, 2002, the Plan was amended to remove the minimum
contribution provisions. In addition, the Plan year was changed. There will
be a one day Plan year that begins and ends on December 31, 2002. The Plan
year will be a calendar year thereafter.
Effective April 20, 2003, the Employer Matching Contributions were
suspended; on the same date, any participant who has a vested interested in
the Goodyear Stock Fund attributable to Matching Employer Contributions (or
a Beneficiary with respect to any such participant) may elect at any time
to transfer all or a portion of the vested interest to another investment
fund.
Effective June 13, 2003, the assets of Northern Trust Retirement Consulting
were acquired by Hewitt Associates, effectively changing record-keeping
duties of the Plan from Northern Trust Retirement Consulting to Hewitt
Associates. Northern Trust will remain the Trustee of the Plan.
9. FINANCIAL DATA OF THE MASTER TRUST:
See pages 13 through 16 of these financial statements which set forth the
financial data of the master trust.
-12-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2002 AND 2001
------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 30,
2002 2001
--------------- ----------------
State Street Income and Growth Fund,
Cost $16,289 - 1,122,913 Units $ 17,196 $ 19,190
State Street Moderate Asset Allocation Fund,
Cost $43,744 - 3,026,850 Units 48,531 59,690
State Street Life Solutions Aggressive Fund,
Cost $23,255 - 1,357,656 Units 21,621 25,897
Collective Daily Stock Index Fund,
Cost $316,009 - 13,431,068 Units 307,554* 428,900*
American Century Investor's Income Ultra Fund,
Cost $93,206 - 2,783,243 Units 58,731 81,205
Franklin Strategic Series Small Cap Fund II,
Cost $110,009 - 12,098,220 Units 86,534* 133,818*
Templeton Foreign Fund,
Cost $35,841 - 3,727,822 Units 30,910 33,283
Common Stock of The Goodyear Tire & Rubber Company,**
Cost $448,517 - 22,983,036 Units 155,077* 359,945*
Short-Term Investments 31,635 30,531
Promissory Notes 85,864* 85,984
Guaranteed Investment Contracts 805,823* 775,821*
Charles Schwab Self Directed Account 11,957 12,620
--------------- ----------------
Investments 1,661,433 2,046,884
Receivables:
Accrued Interest and Dividends 559 681
--------------- ----------------
559 681
Total Assets Available for Plan Benefits 1,661,992 2,047,565
--------------- ----------------
Liabilities:
Administrative Expenses Payable 58 2
--------------- ----------------
Total Liabilities 58 2
--------------- ----------------
Net Assets Available for Plan Benefits $1,661,934 $2,047,563
=============== ================
* Individual investment represents 5% or more of the Net Assets Available for
Plan Benefits.
** Includes nonparticipant-directed investments. See Note 12.
The accompanying notes are an integral part of these statements.
-13-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2002
------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
December 30,
2002
---------------------
Increase in Assets Available for Plan Benefits:
Employer Contributions $ 37,810
Employee Contributions 120,020
---------------
157,830
Interest and Dividend Income 56,475
Decrease in Assets Available for Plan Benefits:
Benefits Paid to Participants or Their Beneficiaries 130,375
Net Depreciation in Fair Market Value 469,559
---------------
599,934
Decrease in Assets Available for Plan Benefits During Plan Year 385,629
Net Assets Available for Plan Benefits at Beginning of Plan Year 2,047,563
---------------
Net Assets Available for Plan Benefits at End of Plan Year $ 1,661,934
===============
The accompanying notes are an integral part of these statements.
-14-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2002
--------------------------------------------------------------------------------
10. MASTER TRUST APPRECIATION/DEPRECIATION:
During 2002, the master trust's investments depreciated in value by
$469,559 as follows:
(Dollars in Thousands)
Mutual Funds $ (66,611)
Common Stock (291,104)
Commingled Funds (111,844)
-------------------
$ (469,559)
===================
11. MASTER TRUST INTEREST AND DIVIDEND INCOME:
During 2002, the master trust's investments received interest and dividend
income of $56,475 as follows:
(Dollars in Thousands)
Common Stock $ 8,125
Guaranteed Investment Contracts 42,070
Promissory Notes 6,280
-----------------
$ 56,475
=================
12. MASTER TRUST NONPARTICIPANT-DIRECTED INVESTMENTS:
Employees of the Plan are permitted to make employee contributions to the
Goodyear Stock Fund. The employer matching contributions made to the
Goodyear Stock Fund continue to be non-participant directed. Information
about the significant components of the changes in net assets relating to
the non-participant directed investments of the Goodyear Stock Fund in the
master trust is as follows:
-15-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2002
--------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) Year Ended December
30, 2002
---------------------
Changes in Net Assets:
Employer Contributions $ 37,682
Interest and Dividend Income 7,213
Net Depreciation in Fair Market Value of Assets (215,244)
Benefits Paid to Participants or Their Beneficiaries (9,681)
Transfers Between Funds (503)
---------------------
Decrease in Net Assets During Plan Year (180,533)
Net Assets at Beginning of Plan Year 277,567
---------------------
Net Assets at End of Plan Year $ 97,034
=====================
13. GUARANTEED INVESTMENT CONTRACTS:
The master trust holds fully benefit-responsive guaranteed investment
contracts (GICs), which are presented at contract value in the Statement of
Net Assets Available for Plan Benefits as previously stated in Note 1. The
fair values of the GICs at December 30, 2002 and 2001 were $742,493 and
$798,815, respectively. The average effective yield and the average
crediting interest rate associated with the GICs were approximately 5.08%
and 5.86% at December 30, 2002 and 2001, respectively. The GICs in the
master trust are of various types and primarily have zero minimum crediting
interest rates and variable crediting interest rates that reset on a
monthly or quarterly basis.
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