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 31, 2003
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)
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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 31, 2003, together with the report of PricewaterhouseCoopers LLP,
independent registered public accounting firm, 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. The
Financial Statements of the Plan included herein cover the December 31, 2002
one-day transition period.
EXHIBITS.
EXHIBIT 23. CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Consent of PricewaterhouseCoopers LLP, independent registered public accounting
firm, 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.
1
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 28, 2004 By: /s/ Darren Wells
------------------------------------------
Darren Wells, Vice President and Treasurer
2
ANNEX A
TO
FORM 11-K
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
* * * * *
FINANCIAL STATEMENTS
DECEMBER 31, 2003
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND
DECEMBER 31, 2002
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
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PAGE
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Report of Independent Registered Public Accounting Firm 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits at
December 31, 2003 and December 31, 2002 3
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 2003 and for the
One Day Plan Period Ended December 31, 2002 3
Notes to Financial Statements 4-16
Supplemental Information
Schedule of Assets (Held at End of Year) Schedule I
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 REGISTERED PUBLIC ACCOUNTING FIRM
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 31, 2003
and December 31, 2002, and the changes in net assets available for plan benefits
for the year ended December 31, 2003 and for the one day plan period ended
December 31, 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 the standards of the Public Company Accounting
Oversight Board (United States). These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets (Held
at End of Year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and in our opinion, is fairly
stated in all material respects in relations to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Cleveland, Ohio
June 25, 2004
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
DECEMBER 31, 2003 AND DECEMBER 31, 2002
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STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
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(Dollars in Thousands) December 31, December 31,
2003 2002
------------------ -----------------
Plan's Interest in Master Trust at fair value $ 629,160 $ 551,493
Promissory Notes 43,268 44,794
------------------ -----------------
Net Assets Available for Plan Benefits $ 672,428 $ 596,287
================== =================
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
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(Dollars in Thousands) One Day Plan
Investment Income: Year Ended Period Ended
December 31, December 31,
2003 2002
--------------------- -------------------
Contributions:
Employer Contributions $ 5,081 $ 3
Employee Contributions 43,776 -
--------------------- -------------------
Total additions 48,857 3
Deductions:
Benefits Paid to Participants or Their Beneficiaries (58,138) -
Net Transfers Out (531) -
Interest From Promissory Notes 2,425 -
Investment Gain from Plan's Interest in Master Trust 83,528 914
--------------------- -------------------
Increase in Assets Available for Plan Benefits During the Plan Period 76,141 917
Net Assets Available for Plan Benefits at Beginning of Plan Year 596,287 595,370
--------------------- -------------------
Net Assets Available for Plan Benefits at End of Plan Year $ 672,428 $ 596,287
===================== ===================
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 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
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 is a calendar year. Effective December 31, 2002, the Plan
was amended to change the plan year-end from December 30 to December 31 of
each year.
TRUST ASSETS
Savings plans sponsored by The Goodyear Tire & Rubber Company and certain
subsidiaries (the "Company") maintain their assets in a master trust (the
"Commingled Trust") administered by the Trustee. The Company sponsored two
savings plans at December 31, 2003 and December 31, 2002, 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
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 9). 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 or 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 31, 2003 AND DECEMBER 31, 2002
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INCOME RECOGNITION
Employer and employee contributions are recognized in Plan assets 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 9).
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 accounting
principals generally accepted in the United States of America 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.
RISK AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities
are exposed to various risks such as interest rate, market, and credit
risk. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts
reported in the statement of net assets available for benefits.
-5-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
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2. GENERAL DESCRIPTION AND OPERATION OF THE PLAN:
INCEPTION
The Plan is a defined contribution plan, which became effective July 1,
1984.
ELIGIBILITY
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 December 31, 2003 and December 31, 2002, approximately
17,200 employees (18,400 in 2002) of the Company were eligible with
approximately 11,600 employees (12,700 in 2002) participating in the Plan.
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.
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.
-6-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
The Board of Directors of the Company determines the matching percent used
as the employer contribution for each Plan year. Effective April 20, 2003,
the Employer Matching Contributions were suspended; on the same date, any
participant who has a vested interest 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.
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. The remainder is held in a suspense account, which is
applied to reduce employer contributions in the following Plan years. On
May 20, 2003, the Plan was amended to remove the minimum contribution
provisions effective December 31, 2002.
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 that 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.
-7-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
- 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 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 2003, the price per share of Goodyear common
stock ranged from $8.10 to $3.57 (6.60 to 28.31 during 2002). The
closing price per share of Goodyear common stock on The New York Stock
Exchange was $7.86 at December 31, 2003 ($6.81 at December 31, 2002).
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.
-8-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
- 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 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 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. For the December 31, 2003 and December 31,
2002 Plan year, the Plan had forfeiture credits in the amounts of $1,604
and $0, respectively.
-9-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
PROMISSORY NOTES
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 that will be
established at the time of the loan application. The interest rate at the
beginning of 2003 Plan year was 5.25%, which decreased throughout the year
to 5.00% at December 31, 2003. The interest rate in effect for the one day
plan period ended December 31, 2002 was 5.25%.
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.
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 and,
recordkeeping services 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.
-10-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
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. TAX STATUS OF THE PLAN:
The Internal Revenue Service has determined and informed the Company by a
letter dated February 25, 2003 that the Plan is qualified and the trust
established for the plan is exempt from Federal Income Tax under the
appropriate Sections of the Internal Revenue Code.
5. LITIGATION:
On October 22, 2003, the Company announced that it would restate its
financial results for the years ended 1998-2002 and for the first and
second quarters of 2003. Following this announcement, at least 11 lawsuits
have been filed in the United States District Court for the Northern
District of Ohio against the Company, the trustee, and current and/or
former officers of the Company including Samir G. Gibara, Robert W. Tieken,
Robert J. Keegan, Stephanie W. Bergeron, Kathleen T. Geier, Donald D.
Harper, Darren R. Wells and others asserting breach of fiduciary duty
claims under the Employee Retirement Income Security Act (ERISA) on behalf
of a putative class of participants in the Company's Employee Savings Plan
for Bargaining Unit Employees and the Company's Employee Savings Plan for
Salaried Employees. The plaintiffs seek to represent a class of
participants in these plans. While the Company believes the claims are
without merit and intends to vigorously defend these lawsuits, it is unable
to predict the outcome of these actions.
-11-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
6. RECONCILIATION OF FINANCIAL STATEMENTS TO 5500
The following is a reconciliation of net assets available for plan benefits
per the financial statements at December 31, 2003 and December 31, 2002 to
the Form 5500:
(Dollars in Thousands) December 31, December 31,
2003 2002
----------------- ----------------
Net Assets Available for Plan Benefits per the Financial
Statements $672,428 $596,287
Amounts Allocated to Withdrawing Participants (514) (658)
----------------- ----------------
Net Assets Available for Plan Benefits per the Form 5500 $671,914 $595,629
================= ================
The following is a reconciliation of benefits paid to participants per the
financial statements at December 31, 2003 and December 31, 2002 to the Form
5500:
(Dollars in Thousands) One Day Plan
Year Ended Period Ended
December 31, December 31,
2003 2002
----------------- ------------------
Benefits Paid to Participants per the Financial Statements $58,138 $ -
Add: Amounts Allocated to Withholding Participants 514 658
Less: Amounts Allocated to Withdrawing Participants at
December 31, 2002 and December 30, 2002 (658) (658)
----------------- -------------------
Benefits Paid to Participants per the Form 5500 $57,994 $ -
================= ===================
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior
to the plan year end, but not yet paid as of that date.
-12-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
------------------------------------------------------------------------------
7. FINANCIAL DATA OF THE MASTER TRUST:
A portion of the Plan's investments are in the Master Trust, which was
established for the investment of assets of the Plan. Each Participating
plan has an undivided interest in the Master Trust. At December 31, 2003
and December 31, 2002, the Plan's interest in the net assets of the Master
Trust was approximately 35.6% and 34.9% respectively. The Master Trust
assets are held by The Northern Trust Company (Trustee).
See pages 14 through 16 of these financial statements, which set forth the
financial data of the master trust.
-13-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
-------------------------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
-------------------------------------------------------------------------------
(Dollars in Thousands) December 31, December 31,
2003 2002
-------------- -------------
COMMINGLED FUNDS
State Street Income and Growth Fund,
Cost $17,736 - 1,179,627 Units $ 20,941 $ 17,197
State Street Moderate Asset Allocation Fund,
Cost $45,530 - 3,051,369 Units 58,722 48,549
State Street Life Solutions Aggressive Fund,
Cost $26,130 - 1,513,126 Units 30,587 21,653
Collective Daily Stock Index Fund,
Cost $342,721 - 137,522 Units 391,432* 307,843*
Short-Term Investments 34,300 21,775
MUTUAL FUNDS
American Century Investor's Income Ultra Fund,
Cost $90,798 - 2,846,833 Units 76,087 58,783
Franklin Strategic Series Small Cap Fund II,
Cost $124,751 - 13,746,501 Units 145,975* 86,822*
Templeton Foreign Fund,
Cost $36,971 - 3,914,847 Units 41,702 31,017
Charles Schwab Self Directed Account 16,402 12,000
COMMON STOCK OF THE GOODYEAR TIRE & RUBBER
COMPANY,** Cost $387,626 - 23,343,089 Units 176,628* 156,787*
GUARANTEED INVESTMENT CONTRACTS (SEE NOTE 9) 774,931* 815,801*
---------- ----------
Investment 1,767,707 1,578,227
Receivables:
Accrued Interest and Dividends 122 559
---------- ----------
Total Assets Available for Plan Benefits 1,767,829 1,578,786
Liabilities:
Administrative Expenses Payable 379 58
---------- ----------
Total Liabilities 379 58
---------- ----------
Net Assets Available for Plan Benefits $1,767,450 $1,578,728
========== ==========
*Individual investment represents 5% or more of the Net Assets Available
for Plan Benefits.
**Includes nonparticipant-directed investments. See Note 8.
-14-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
-------------------------------------------------------------------------------
MASTER TRUST INVESTMENT INCOME:
Investment income for the Master Trust is as follows:
INVESTMENT INCOME:
(Dollars in Thousands) One Day Plan
Year Ended Period Ended
December 31, December 31,
2003 2002
-------------------- ----------------
Net Appreciation in Fair Value of Investments:
Commingled Funds $ 104,413 $ 199
Mutual Funds 70,333 583
Common Stock 29,230 1,609
-------------------- ----------------
203,976 2,391
Interest 35,795 111
Administrative Expenses (778) (4)
-------------------- -------------------
Total Income $ 238,993 $ 2,498
==================== ===================
-15-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND DECEMBER 31, 2002
-------------------------------------------------------------------------------
8. MASTER TRUST NON-PARTICIPANT DIRECTED INVESTMENTS:
Employees of the Plan are allowed to make employee contributions to the
Goodyear Stock Fund. Information about the significant components of the
changes in net assets relating to the investments of the total Goodyear
Stock Fund in the master trust is as follows:
(Dollars in Thousands) One Day Plan
Year Ended Period Ended
December 31, December 31,
2003 2002
-------------- --------------
Changes in Net Assets:
Employer Contributions $ 5,080 $ 129
Employee Contributions 5,585 -
Interest Income 298 -
Net Appreciation in Fair Market Value of Assets 29,397 1,609
Benefits Paid to Participants or Their Beneficiaries (7,840) -
Transfers Between Funds (9,362) -
----------- ---------
Increase in Net Assets During Plan Period 23,158 1,738
Net Assets at Beginning of Plan Year 162,141 160,403
----------- ---------
Net Assets at End of Plan Year $ 185,299 $ 162,141
=========== =========
Non-participant Directed Assets at End of Plan Year $ 5,664 $ 98,344
=========== =========
9. 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 31, 2003 and December 31, 2002 were
approximately $858,509,000 and $741,712,000, respectively. The average
effective yield and the average crediting interest rate associated with the
GICs were approximately 4.74% and 5.04% at December 31, 2003 and December
31, 2002, 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.
-16-
THE GOODYEAR TIRE & RUBBER COMPANY SCHEDULE I
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
EMPLOYER IDENTIFICATION NUMBER: 34-0253240, PLAN NUMBER: 006
(a) (b) IDENTITY OF ISSUER, BORROWER (c) DESCRIPTION OF INVESTMENT (d) COST (e) CURRENT VALUE
LESSOR OR SIMILAR PARTY INCLUDING MATURITY DATE,
RATE OF INTEREST,
COLLATERAL PAR, OR
MATURITY VALUE
PARTICIPANT LOANS 5% - 5.25% $ - $ 43,267,620.00