UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
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 SALARIED 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 SALARIED 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 Salaried 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. 333-84346, 33-65187, 33-65181 and 33-65185, 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 SALARIED EMPLOYEES
Dated: June 27, 2003 By: /s/ Darren R. Wells
----------------------------------------------
Darren R. Wells, Vice President
and Treasurer
ANNEX A
TO
FORM 11-K
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
* * * * *
FINANCIAL STATEMENTS
DECEMBER 30, 2002
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR SALARIED EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
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PAGE
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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 Salaried
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 Salaried 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 SALARIED 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 $ 1,066,564 $ 1,319,153
=============== ================
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 $ 21,346
Employee Contributions 70,070
-------------------
91,416
Decrease in Assets Available for Plan Benefits:
Benefits Paid to Participants or Their Beneficiaries (84,866)
Investment Loss from Plan's Interest in Master Trust (259,139)
-------------------
Decrease in Assets Available for Plan Benefits During the Plan Year (252,589)
Net Assets Available for Plan Benefits at Beginning of Plan Year 1,319,153
-------------------
Net Assets Available for Plan Benefits at End of Plan Year $ 1,066,564
===================
The accompanying notes are an integral part of these statements.
-3-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The accounts of The Goodyear Tire & Rubber Company Employee Savings Plan
for Salaried Employees (the "Plan") are maintained on the accrual basis of
accounting and in accordance with The Northern Trust Company (the
"Trustee") Trust Agreement, effective as of 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 (See Note 4). 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 64.2% and 64.4%, 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 SALARIED 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
Effective December 30, 2001, all salaried, hourly, and U.S. expatriate
employees, including officers, 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 16,737 employees (16,869 in 2001) of the Company were
eligible with approximately 12,545 employees (13,030 in 2001)
participating in the Plan,
-5-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
including employees transferred from The Goodyear Tire & Rubber Company
Employee Savings Plan for Hourly Employees, The Goodyear Tire & Rubber
Company Employee Savings Plan for Salaried Expatriate Employees, and the
Brad Ragan, Inc. 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 any time 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
-6-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
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. 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.
-7-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
- Large Capitalization Stock Equity Fund - Employee contributions
are invested in a mutual fund containing a portfolio of common
stocks of medium and large companies 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 ($17.75 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.
-8-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
Interest is automatically reinvested in each participant's respective
accounts. Price fluctuations and dividends in common stock of the Company
and companies 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, 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 $140,437 and $181,221, 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
-9-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
when due, the loan balance is treated as a taxable distribution from
the Plan.
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 Goodyear 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, 467 participants and assets totaling $9,267,000 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.
Effective December 30, 2001, The Goodyear Tire & Rubber Company Employee
Savings Plan for Hourly Employees and The Goodyear Tire & Rubber Company
Employee Savings Plan for Salaried Expatriate Employees were merged into
the Plan. In conjunction with these mergers, 675 and 375 participants and
assets totaling $41,675,000 and $26,699,000 were transferred from The
Goodyear Tire & Rubber Company Savings Plan for Hourly Employees
-10-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
and The Goodyear Tire & Rubber Company Savings Plan for Salaried
Expatriate Employees, respectively, to The Goodyear Tire & Rubber Company
Savings Plan for Salaried Employees in January 2002. The provisions of The
Goodyear Tire & Rubber Company Savings Plan for Salaried Employees and its
related trust now govern with respect to the interests of the participants
transferred from The Goodyear Tire & Rubber Company Savings Plan for
Hourly Employees and The Goodyear Tire & Rubber Company Savings Plan for
Salaried Expatriate Employees.
5. TAX STATUS OF PLAN:
As described in Notes 2 and 8, the Plan has been amended since receipt of
the last determination letter dated May 22, 1995. On May 22, 1995, 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. The Plan administrator has applied for a new determination
letter and does not anticipate that changes in the Plan or other events
occurring after the receipt of the IRS ruling will affect the
qualification of the Plan or the tax exempt status of the Trust.
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
$24,839,000 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 $1,066,564
Amounts Allocated to Withdrawing Participants at December 30, 2002 (768)
--------------
Net Assets Available for Plan Benefits per the Form 5500 $1,065,796
==============
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 $84,866
-11-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2002 AND 2001
-------------------------------------------------------------------------------
Add: Amounts Allocated to Withdrawing Participants at December 30, 2002 768
Less: Amounts Allocated to Withdrawing Participants at December 30, 2001 (787)
--------------
Benefits Paid to Participants per the Form 5500 $84,847
==============
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.
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 January 1, 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:
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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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