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, 2001
COMMISSION FILE NUMBER: 1-1927
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 for the fiscal year ended December
30, 2001, 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 of 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 and were prepared
in accordance with the financial reporting requirements of the Employee
Retirement Income Security Act of 1974.
EXHIBITS.
EXHIBIT 4. (a) RESTATEMENT OF THE PLAN. The Goodyear Tire & Rubber Company
Savings Plan for Bargaining Unit Employees (December 31, 2001 Restatement), as
amended effective as of December 31, 2001.
EXHIBIT 23. CONSENT OF INDEPENDENT ACCOUNTANTS. 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.
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 26, 2002 By: /s/ Stephanie W. Bergeron
------------------------------------
Stephanie W. Bergeron, 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, 2001
THE GOODYEAR TIRE &
RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
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Page
----
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits at 3
December 30, 2001 and 2000
Statement of Changes in Net Assets Available for Plan 3
Benefits for the Plan Year Ended December 30, 2001
Notes to Financial Statements 4-17
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 ACCOUNTANTS
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 statements of net assets available for plan
benefits and the related statements 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, 2001
and 2000, and the changes in net assets available for plan benefits for the year
ended December 30, 2001 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
June 21, 2002
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
DECEMBER 30, 2001 AND 2000
-------------------------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
-------------------------------------------------------------------------------
(Dollars in Thousands) December 30,
------------------------------
2001 2000
--------------- ----------------
Plan's Interest in Master Trust Representing Total Net Assets
Available for Plan Benefits $ 728,410 $ 723,198
=============== ================
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
-----------------------------------------------------------------------------
(Dollars in Thousands) Year Ended
December 30,
2001
-------------------
Increase in Assets Available for Plan Benefits:
Employer Contributions $ 16,801
Employee Contributions 51,297
------------
68,098
Decrease in Assets Available for Plan Benefits:
Benefits Paid to Participants or Their Beneficiaries 54,067
Transfers Between Plans 222
------------
54,289
Investment Loss from Plan's Interest in Master Trust (8,597)
Increase in Assets Available for Plan Benefits During the Plan Year 5,212
Net Assets Available for Plan Benefits at Beginning of Plan Year 723,198
------------
Net Assets Available for Plan Benefits at End of Plan Year $ 728,410
============
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, 2001 AND 2000
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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 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, 2001 represents the
period of December 31, 2000 through December 30, 2001.
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 and four savings
plans at December 30, 2001 and 2000, 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, 2001 and 2000, the Plan's undivided
interest in the master trust was 35.6% and 33.9%, 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 monthly basis.
-4-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
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).
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 2001
Plan year, approximately 19,432 employees (19,799 in 2000) of the Company
were eligible with approximately 13,440 employees (13,701 in 2000)
participating in the Plan, including participants transferred from the Brad
Ragan, Inc. Retirement Savings Plan (See Note 4).
-5-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
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VESTING
Employee contributions are fully vested. Employer matching contributions
become vested after the participant has completed four years of continuous
service with the Company (See Note 8).
CONTRIBUTIONS
Eligible employees may elect to contribute any whole percent from 1% to 22%
of earnings including wages, bonuses, commissions, overtime and vacation
pay into the Plan. 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 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 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 $10,500 in 2001 and
2000.
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. The
calculation of the Company's matching contributions is not impacted by this
minimum contribution level.
-6-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
Effective June 1, 2000, the Plan was amended to establish a Goodyear Stock
Fund as an investment fund to which employee contributions can be
allocated. Prior to June 1, 2000, the Company Stock Fund only maintained
the employer matching contributions.
The Plan was also amended effective June 1, 2000 to provide for a
self-directed account in which the participant may direct their investment
or a portion of their account among a list of mutual funds selected by the
Company and the Trustee. All assets of each self-directed account will be
held and administered as a separate trust fund.
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.
-7-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
- 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 commingled 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 commingled 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 commingled 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 contributions and effective June 1,
2000, employee contributions are invested in Goodyear common stock
except for short-term investments needed for Plan operations. During
2001, the price per share of Goodyear common stock on The New York
Stock Exchange Composite Transactions ranged from $17.72 to $31.64
($15.60 to $31.65 during 2000). The closing price per share was $24.13
at December 30, 2001 ($22.99 at December 30, 2000). The common stock
of The Goodyear Tire & Rubber Company and the Short-Term Investments
Fund are the current investments related to this fund.
- 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.
-8-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
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 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 12 months
subsequent to a financial hardship withdrawal (See Note 8).
Participant vested amounts are payable upon retirement, death or other
termination of employment.
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 2001 and 2000, the Plan had forfeiture
credits in the amounts of $59,207 and $36,604, 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
-9-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
be established at the time of the loan application. 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. The interest rate at the beginning
of the 2000 Plan year was 9.50%, which increased throughout the year to
10.50% at December 30, 2000.
Loan repayments, with interest, are made through payroll deductions. If a
loan is not repaid when due, the loan balance will be 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 Company Stock Fund is designed primarily for investment in common stock
of the Company.
-10-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
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 and are included in Transfers Between Plans on
the Statement of Changes In Net Assets Available for Plan Benefits. 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:
As described in Notes 2 and 8, the Plan has been amended since receipt of
the last determination letter dated December 16, 1997. On December 16,
1997, 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 is in the process
of applying 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 $548,000 were
transferred to the Wingfoot Commercial Tires, LLC Savings and Retirement
Plan in April and May 2001 and are included in Transfers Between Plans on
the Statement of Changes in Net Assets Available for Plan Benefits.
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, 2001 to the Form 5500:
(Dollars in Thousands) 2001
----------------
Net Assets Available for Plan Benefits per the Financial Statements $728,410
Amounts Allocated to Withdrawing Participants at December 30, 2001 (232)
--------
Net Assets Available for Plan Benefits per the Form 5500 $728,178
========
-11-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
The following is a reconciliation of benefits paid to participants per the
financial statements for the plan year ended December 30, 2001 to the Form
5500:
Benefits Paid to Participants per the Financial Statements $54,067
Add: Amounts Allocated to Withdrawing Participants at December 30, 2001 232
Less: Amounts Allocated to Withdrawing Participants at December 30, 2000 --
----------------
Benefits Paid to Participants per the Form 5500 $54,299
================
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, 2001, but not yet paid as of that date.
The following is a reconciliation of the increase in assets available for
plan benefits per the financial statements for the plan year ended December
30, 2001 to the Form 5500:
2001
----------------
Increase in Assets Available for Plan Benefits per the Financial Statements $5,212
Less: Transfers Between Plans (222)
----------------
Increase in Assets Available for Plan Benefits per the Form 5500 $5,434
================
8. SUBSEQUENT EVENT:
Effective December 31, 2001, the Plan was amended and restated to conform
to the provisions of The Economic Growth and Tax Relief Reconciliation Act
of 2001 and to provide for certain other changes. Among the changes, the
amendment provides for the following: the maximum employee contribution
percentage increases from 22% to 50%; the period to fully vest in employer
matching contributions reduces from four years to three years; authorizes
catch-up contributions by participants who have attained age 50 by December
31 of each year, subject to certain limitations of the Internal Revenue
Code; and reduces the period during which the recipient of a hardship
withdrawal cannot make additional contributions from twelve months to six
months. In addition, the amendment converts that portion of the Plan that
consists of matching employer contributions into an employee stock
ownership plan (ESOP). Under the ESOP, participants may elect to receive in
cash the dividend on the Goodyear stock held in their employer match
account. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
-12-
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------
9. FINANCIAL DATA OF THE MASTER TRUST:
See pages 14 through 17 of these financial statements which set forth the
financial data of the master trust.
-13-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2001 AND 2000
-------------------------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
------------------------------------------------------------------------------
(Dollars in Thousands) December 30,
2001 2000
---------- ----------
State Street Income and Growth Fund,
Cost $17,393 - 1,222,340 Units $ 19,190 $ 20,298
State Street Moderate Asset Allocation Fund,
Cost $47,102 - 3,312,053 Units 59,690 61,801
State Street Life Solutions Aggressive Fund,
Cost $23,095 - 1,353,549 Units 25,897 28,807
Collective Daily Stock Index Fund,
Cost $335,354 - 14,446,235 Units 428,900* 525,143*
American Century Investor's Income Ultra Fund,
Cost $102,937 - 2,906,134 Units 81,205 100,513
Franklin Strategic Series Small Cap Fund II,
Cost $125,604 - 13,434,140 Units 133,818* 189,222*
Templeton Foreign Fund,
Cost $36,202 - 3,614,645 Units 33,283 39,570
Common Stock of The Goodyear Tire & Rubber Company,**
Cost $364,581 - 14,923,988 Units 359,945* 334,829*
Short-Term Investments 30,531 39,530
Promissory Notes 85,984 86,988
Guaranteed Investment Contracts 775,821* 694,915*
Charles Schwab Self Directed Account 12,620 9,888
---------- ----------
Investments 2,046,884 2,131,504
Receivables:
Accrued Interest and Dividends 681 257
---------- ----------
681 257
Total Assets Available for Plan Benefits 2,047,565 2,131,761
---------- ----------
Liabilities:
Administrative Expenses Payable 2 39
---------- ----------
Total Liabilities 2 39
---------- ----------
Net Assets Available for Plan Benefits $2,047,563 $2,131,722
========== ==========
* 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.
-14-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2001
------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
-------------------------------------------------------------------------------
(Dollars in Thousands)
December 30,
2001
-----------
Increase in Assets Available for Plan Benefits:
Employer Contributions $ 38,036
Employee Contributions 130,773
-----------
168,809
Interest and Dividend Income 65,794
Decrease in Assets Available for Plan Benefits:
Benefits Paid to Participants or Their Beneficiaries 199,213
Net Depreciation in Fair Market Value 103,755
Transfers Between Plans 15,794
-----------
318,762
Decrease in Assets Available for Plan Benefits During Plan Year (84,159)
Net Assets Available for Plan Benefits at Beginning of Plan Year 2,131,722
-----------
Net Assets Available for Plan Benefits at End of Plan Year $ 2,047,563
===========
The accompanying notes are an integral part of these statements.
-15-
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
DECEMBER 30, 2001
------------------------------------------------------------------------------
10. MASTER TRUST APPRECIATION/DEPRECIATION:
During 2001, the master trust's investments depreciated in value by
$103,755 as follows:
(Dollars in Thousands)
Mutual Funds $ (60,303)
Common Stock 19,492
Commingled Funds (62,944)
-------------
$ (103,755)
=============
11. MASTER TRUST INTEREST AND DIVIDEND INCOME:
During 2001, the master trust's investments received interest and dividend
income of $65,794 as follows:
(Dollars in Thousands)
Common Stock $ 14,509
Guaranteed Investment Contracts 43,957
Promissory Notes 7,328
-------------
$ 65,794
=============
12. MASTER TRUST NONPARTICIPANT-DIRECTED INVESTMENTS:
As stated in Note 2, effective June 1, 2000, employees of the Plan were
allowed 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, 2001
------------------------------------------------------------------------------
(Dollars in Thousands) Year Ended
December 30,
2001
---------
Changes in Net Assets:
Employer Contributions $ 38,039
Interest and Dividend Income 10,483
Net Appreciation in Fair Market Value of Assets 13,897
Benefits Paid to Participants or Their Beneficiaries (22,237)
Transfers Between Funds (9,669)
---------
Increase in Net Assets During Plan Year $ 30,513
Net Assets at Beginning of Plan Year $ 247,054
---------
Net Assets at End of Plan Year $ 277,567
=========
13. GUARANTEED INVESTMENT CONTRACTS:
The master trust holds fully benefit-responsive guaranteed investment
contracts (GICs), which are presented at contract value in the Net Assets
Available for Plan Benefits as previously stated in Note 1. The fair values
of the GICs at December 30, 2001 and 2000 were $798,815 and $705,990,
respectively. The average effective yield and the average crediting
interest rate associated with the GICs were approximately 5.86% and 6.30%
at December 30, 2001 and 2000, 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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