Ohio | 3011 | 34-0253240 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
1144 East Market Street Akron, Ohio 44316-0001 (330) 796-2121 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices) | C. Thomas Harvie, Esq. Senior Vice President, General Counsel and Secretary The Goodyear Tire & Rubber Company 1144 East Market Street Akron, Ohio 44316-0001 (330) 796-2121 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) |
Proposed Maximum | Proposed Maximum | |||||||||||
Title of Each Class of | Amount to be | Offering Price Per | Aggregate Offering | Amount of | ||||||||
Securities to be Registered | Registered | Unit(1) | Price(1) | Registration Fee | ||||||||
11% Senior Secured Notes due 2011 | $450,000,000 | 100% | $450,000,000 | $52,965(2) | ||||||||
Senior Secured Floating Rate Notes due 2011 | $200,000,000 | 100% | $200,000,000 | $23,540(2) | ||||||||
Note Guarantees | (3) | (4) | (4) | (3) | ||||||||
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933. |
(2) | Computed in accordance with Section 6(b) of the Securities Act of 1933 by multiplying 0.0001177 by the proposed maximum aggregate offering price. |
(3) | The Registrant’s subsidiaries listed on Schedule A hereto have guaranteed, jointly and severally, the payment of all obligations on the notes registered hereby. The subsidiary guarantors are registering the note guarantees. Pursuant to Rule 457(n) under the Securities Act of 1933, no registration fee is required in respect of the note guarantees. |
(4) | Not applicable. |
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Standard | ||||||||||||||||||||
State of | I.R.S. Employer | Industrial | ||||||||||||||||||
Incorporation or | Identification | Address of Registrant’s | Classification | Address of | ||||||||||||||||
Registrant | Organization | Number | Principal Executive Offices | Code Number | Agent for Service | |||||||||||||||
Belt Concepts of America, Inc. | Delaware | 56-1947316 | 605 North Pine Street Spring Hope, North Carolina 27882 (919) 478-4601 | 3060 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Celeron Corporation | Delaware | 51-0269149 | 1144 East Market Street Akron, Ohio 44316 (330) 796-2121 | 9995 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Cosmoflex, Inc. | Delaware | 34-1130989 | 4142 Industrial Avenue Hannibal, Missouri 63401 (573) 221-0242 | 3080 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Dapper Tire Co., Inc. | California | 95-2012142 | 4025 Lockridge Street San Diego, California 92102 (714) 375-6146 | 5013 | CT Corporation System 818 West 7th Street Los Angeles, California 90017 (213) 627-8252 | |||||||||||||||
Divested Companies Holding Company | Delaware | 51-0304855 | 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | 9995 | CT Corporation System 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Divested Litchfield Park Properties, Inc. | Arizona | 51-0304856 | 3225 North Central Avenue Phoenix, Arizona 85012 (602) 277-4792 | 9995 | CT Corporation System 3225 North Central Avenue Phoenix, Arizona 85012 (602) 277-4792 | |||||||||||||||
Goodyear Farms, Inc. | Arizona | 86-0056985 | 3225 North Central Avenue Phoenix, Arizona 85012 (602) 277-4792 | 3523 | CT Corporation System 3225 North Central Avenue Phoenix, Arizona 85012 (602) 277-4792 | |||||||||||||||
Goodyear International Corporation | Delaware | 34-0253255 | 1144 East Market Street Akron, Ohio 44316-0001 (330) 796-2121 | 5013 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Goodyear Western Hemisphere Corporation | Delaware | 34-0736571 | 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | 5013 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
The Kelly- Springfield Tire Corporation | Delaware | 31-1515120 | 1144 East Market Street Akron, Ohio 44316-0001 (330)796-2121 | 9995 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Wheel Assemblies Inc. | Delaware | 34-1879550 | 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | 9995 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Wingfoot Commercial Tire Systems, LLC | Delaware | 31-1735402 | 1144 East Market Street Akron, Ohio 44316-0001 (330) 796-2121 | 5531 | CT Corporation System 1300 East 9th Street Suite 1010 Cleveland, Ohio 44114 (216) 621-4270 | |||||||||||||||
Wingfoot Ventures Eight Inc. | Delaware | 51-0319223 | 1105 North Market Street Suite 1300 Wilmington, Delaware 19899 (302) 651-8410 | 9995 | The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 (302) 658-7581 | |||||||||||||||
Goodyear Canada Inc. | Ontario | Not applicable | 450 Kipling Avenue Toronto Ontario M8Z 5F1 Canada (416) 201-4300 | 3060 | Secretary 450 Kipling Avenue Toronto Ontario M8Z 5F1 Canada (416) 201-4300 |
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
• | Our offer to exchange original notes for exchange notes will be open until 5:00 p.m., New York City time, on , 2005, unless we extend the offer. | |
• | We will exchange all outstanding original notes that are validly tendered and not validly withdrawn prior to the expiration date of the exchange offer. You should carefully review the procedures for tendering the original notes beginning on page 107 of this prospectus. | |
• | If you fail to tender your original notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected. | |
• | The exchange of original notes for exchange notes pursuant to the exchange offer generally will not be a taxable event for U.S. federal income tax purposes. | |
• | We will not receive any proceeds from the exchange offer. | |
• | No public market currently exists for the outstanding notes or the exchange notes. We do not intend to list the exchange notes on any national securities exchange or the Nasdaq Stock Market. | |
• | Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal to be used in connection with the exchange offer states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, if requested by one or more broker-dealers, to make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale for a period ending on the earlier of (i) 180 days after the completion of the exchange offer and (ii) the date on which such broker-dealer has sold all of its exchange notes. See “Plan of Distribution.” |
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• | we have not yet completed the implementation of our plan to improve our internal controls and, as described in “Item 9A — Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2004, Item 4 of Part I of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, and Management’s Report on Internal Controls Over Financial Reporting which accompanies this prospectus, we have two material weaknesses in our internal controls. If these material weaknesses are not remediated or otherwise mitigated they could result in material misstatements in our financial statements in the future, which would result in additional restatements or impact our ability to timely file our financial statements in the future; | |
• | pending litigation relating to our restatement could have a material adverse effect on our financial condition; | |
• | an ongoing SEC investigation regarding our accounting restatement could materially adversely affect us; | |
• | we have experienced significant losses in 2001, 2002 and 2003. Although we recorded net income in 2004 and the first six months of 2005, we cannot provide assurance that we will be able to achieve or sustain future profitability. Our future profitability is dependent upon our ability to continue to successfully implement our turnaround strategy for our North American Tire segment; | |
• | we face significant global competition, increasingly from lower cost manufacturers, and our market share could decline; | |
• | our secured credit facilities limit the amount of capital expenditures that we may make; | |
• | higher raw material and energy costs may materially adversely affect our operating results and financial condition; | |
• | continued pricing pressures from vehicle manufacturers may materially adversely affect our business; | |
• | our financial position, results of operations and liquidity could be materially adversely affected if we experience a labor strike, work stoppage or other similar difficulty; | |
• | our U.S. pension plans are significantly underfunded and our required contributions to those plans are expected to increase. Proposed legislation affecting pension plan funding could result in the need for additional cash payments by us into our U.S. pension plans and increase the insurance premiums we pay to the Pension Benefit Guaranty Corporation; | |
• | our long-term ability to meet current obligations and to repay maturing indebtedness, is dependent on our ability to access capital markets in the future and to improve our operating results; | |
• | we have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health; | |
• | any failure to be in compliance with any material provision or covenant of our secured credit facilities and the indenture governing our senior secured notes could have a material adverse effect on our liquidity and our operations; | |
• | our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly; | |
• | if healthcare costs continue to escalate, our financial results may be materially adversely affected; | |
• | we may incur significant costs in connection with product liability and other tort claims; |
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• | our reserves for product liability and other tort claims and our recorded insurance assets are subject to various uncertainties, the outcome of which may result in our actual costs being significantly higher than the amounts recorded; | |
• | we may be required to deposit cash collateral to support an appeal bond if we are subject to a significant adverse judgment, which may have a material adverse effect on our liquidity; | |
• | we are subject to extensive government regulations that may materially adversely affect our ongoing operating results; | |
• | potential changes in foreign laws and regulations could prevent repatriation of future earnings to our parent company in the United States; | |
• | our international operations have certain risks that may materially adversely affect our operating results; | |
• | we may be impacted by economic disruptions associated with global events including war, acts of terror and civil obstructions; | |
• | the terms and conditions of our global alliance with Sumitomo Rubber Industries, Ltd. (SRI) provide for certain exit rights available to SRI in 2009 or thereafter, upon the occurrence of certain events, which could require us to make a substantial payment to acquire SRI’s interest in certain of our joint venture alliances (which include much of our operations in Europe); | |
• | we have foreign currency translation and transaction risks that may materially adversely affect our operating results; and | |
• | if we are unable to attract and retain key personnel, our business could be materially adversely affected. |
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The following summary contains basic information about this offering. It may not contain all of the information that is important to you and it is qualified in its entirety by the more detailed information included in this prospectus. You should carefully consider the information contained in the entire prospectus, including the information set forth under the heading “Risk Factors” in this prospectus. In addition, certain statements include forward-looking information that involves risks and uncertainties. See “Forward-looking Information — Safe Harbor Statement.” |
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Exchange Offer | We are offering to exchange up to $650,000,000 in aggregate principal amount of our notes, comprised of $450,000,000 of 11% Senior Secured Notes due 2011 and $200,000,000 of Senior Secured Floating Rate Notes due 2011, which have been registered under the Securities Act, for any and all of our outstanding 11% Senior Secured Notes due 2011 and Senior Secured Floating Rate Notes due 2011 to satisfy our obligations under the registration rights agreement that we entered into when the original notes were sold. | |
Expiration Date | The exchange offer will expire at 5:00 p.m., New York City time, on , 2005, unless extended. | |
Withdrawal; Non-Acceptance | You may withdraw any original notes tendered in the exchange offer at any time prior to 5:00 p.m., New York City time, on , 2005. If we decide for any reason not to accept any original notes tendered for exchange, the original notes will be returned to the registered holder at our expense promptly after the expiration or termination of the exchange offer. In the case of original notes tendered by book-entry transfer into the exchange agent’s account at The Depository Trust Company, any withdrawn or unaccepted original notes will be credited to the tendering holder’s account at The Depository Trust Company. | |
For further information regarding the withdrawal of tendered original notes, see “The Exchange Offer — Terms of the Exchange Offer;” “— Expiration Date; Extension; Termination; Amendment” and “— Withdrawal Rights.” | ||
Conditions to the Exchange Offer | The exchange offer is subject to customary conditions, which we may waive. See the discussion below under the caption “The Exchange Offer — Conditions to the Exchange Offer” for more information regarding the conditions to the exchange offer. | |
Exchange Agent | Wells Fargo Bank, N.A. is serving as exchange agent in connection with the exchange offer. | |
Procedures for Tendering Original Notes | If you wish to participate in the exchange offer, you must either: | |
• complete, sign and date an original or faxed letter of transmittal in accordance with the instructions in the letter of transmittal accompanying this prospectus; or | ||
• arrange for The Depository Trust Company to transmit required information to the exchange agent in connection with a book-entry transfer. |
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Then you must mail, fax or deliver all required documentation to Wells Fargo Bank, N.A., which is acting as the exchange agent for the exchange offer. The exchange agent’s address appears on the letter of transmittal. By tendering your original notes in either of these manners, you will represent to and agree with us that: | ||
• you are acquiring the exchange notes in the ordinary course of your business; | ||
• you are not engaged in, and you do not intend to engage in, the distribution (within the meaning of the federal securities laws) of the exchange notes in violation of the provisions of the Securities Act; | ||
• you have no arrangement or understanding with anyone to participate in a distribution of the exchange notes; and | ||
• you are not an “affiliate,” within the meaning of Rule 405 under the Securities Act, of the Company. | ||
See “The Exchange Offer — Procedures for Tendering Original Notes” and “— The Depository Trust Company Book-Entry Transfer.” | ||
Each broker-dealer that receives exchange notes for its own account in exchange for original notes, where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.” | ||
Special Procedures for Beneficial Owners | If you are a beneficial owner of original notes that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian and you wish to tender your original notes, you should contact your intermediary entity promptly and instruct it to tender the exchange notes on your behalf. | |
Guaranteed Delivery Procedures | If you desire to tender original notes in the exchange offer and: | |
• the original notes are not immediately available; | ||
• time will not permit delivery of the original notes and all required documents to the exchange agent on or prior to the expiration date; or | ||
• the procedures for book-entry transfer cannot be completed on a timely basis; | ||
you may nevertheless tender the original notes, provided that you comply with all of the guaranteed delivery procedures set forth in “The Exchange Offer — Guaranteed Delivery Procedures.” | ||
Resales of Exchange Notes | Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that you can resell and transfer your exchange notes without compliance with the registration and prospectus delivery requirements of the Securities |
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Act, if you can make the representations that appear above under the heading “— Procedures for Tendering Original Notes.” | ||
We cannot guarantee that the SEC would make a similar decision about the exchange offer. If our belief is wrong, or if you cannot truthfully make the representations appearing above, and you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your exchange notes from such requirements, you may incur liability under the Securities Act. We are not indemnifying you against this liability. | ||
Accrued Interest on the Exchange Notes and the Original Notes | The exchange notes will bear interest from the most recent date to which interest has been paid on the corresponding series of original notes. If your original notes are accepted for exchange, then you will receive interest on the exchange notes and not on the original notes. | |
Certain United States Federal Tax Considerations | The exchange of original notes for exchange notes in the exchange offer will not be a taxable transaction for United States federal income tax purposes. See the discussion below under the caption “Certain United States Federal Tax Considerations.” | |
Consequences of Failure to Exchange Original Notes | All untendered original notes will remain subject to the restrictions on transfer provided for in the original notes and in the indentures. Generally, the original notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities and may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the original notes under the Securities Act. | |
Because we anticipate that most holders of the original notes will elect to exchange their original notes, we expect that the liquidity of the markets, if any, for any original notes remaining after the completion of the exchange offer will be substantially limited. | ||
Use of Proceeds | We will not receive any proceeds from the issuance of exchange notes in the exchange offer. We will pay all registration and other expenses incidental to the exchange offer. |
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Issuer | The Goodyear Tire & Rubber Company | |
Securities | $450 million aggregate principal amount of 11% Senior Secured Notes due 2011 (the “fixed rate exchange notes”). | |
$200 million aggregate principal amount of Senior Secured Floating Rate Notes due 2011 (the “floating rate exchange notes” and, together with the fixed rate exchange notes, the “exchange notes”). | ||
Principal and Maturity | Fixed rate exchange notes The fixed rate exchange notes will mature on March 1, 2011. | |
Floating rate exchange notes The floating rate exchange notes will mature on March 1, 2011. | ||
Interest | Fixed rate exchange notes 11% per annum. Interest will be payable semiannually on each March 1 and September 1. | |
Floating rate exchange notes Six-month LIBOR plus 8.0%, reset semiannually. Interest will be payable semiannually on each March 1 and September 1. | ||
Optional Redemption | Fixed rate exchange notes Goodyear may redeem some or all of the fixed rate exchange notes beginning on March 1, 2008 at the fixed rate redemption prices listed under “Description of the Exchange Notes — Optional Redemption.” | |
Prior to March 1, 2008, Goodyear may, at its option, redeem some or all of the fixed rate exchange notes at a redemption price equal to the principal amount of the fixed rate exchange notes plus the Applicable Premium and accrued and unpaid interest to the redemption date. The “Applicable Premium” is defined under “Description of the Exchange Notes — Optional Redemption.” | ||
At any time before March 1, 2007, Goodyear may redeem up to 35% of the aggregate principal amount of the fixed rate exchange notes with the net proceeds of certain equity offerings. | ||
Floating rate exchange notes Goodyear may redeem some or all of the floating rate exchange notes beginning on March 1, 2008 at the redemption prices listed under “Description of the Exchange Notes — Optional Redemption.” | ||
At any time before March 1, 2007, Goodyear may redeem up to 35% of the aggregate principal amount of the floating rate exchange notes with the net proceeds of certain equity offerings. | ||
Guarantees | The notes will be guaranteed, jointly and severally, on a senior secured basis, by each of the Company’s U.S. and Canadian subsidiaries that is a guarantor under the Company’s secured credit |
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facilities and, to the extent that they also guarantee any debt of Goodyear or a guarantor, by each of Goodyear’s other restricted subsidiaries. | ||
If the notes are assigned an investment grade rating by Moody’s and S&P and no default or event of default has occurred or is continuing, Goodyear may elect to suspend the guarantees. If either rating on the notes should subsequently decline to below investment grade, the guarantees will be reinstated. | ||
Collateral | Goodyear’s obligations under the notes and the guarantors’ obligations under the guarantees will be secured by liens on the collateral that rank immediately junior in priority to the liens securing the Company’s first lien revolving credit facility and second lien term loan facility and any other indebtedness designated by Goodyear from time to time (and in accordance with the indenture governing the notes) to be priority lien indebtedness, subject to certain exceptions. The fixed rate exchange notes and the floating rate exchange notes will be secured by the collateral on an equal and ratable basis. The collateral will initially consist of: | |
• 100% of the capital stock of, or other equity interests in, certain of the Company’s existing and future U.S. subsidiaries owned directly by the Company and certain of the guarantors, the capital stock of, or other equity interests in, certain of the Company’s existing and future foreign subsidiaries owned directly by the Company and certain of the guarantors, not to exceed 65% of the outstanding capital stock or equity interests in any such foreign subsidiary, and indebtedness held by the Company and certain of the guarantors, in each case, only to the extent that the aggregate principal amount, par value, book value as carried by the Company or market value (whichever is greatest), of any securities of any such subsidiary is not greater than 19.99% of the aggregate principal amount of notes outstanding, | ||
• certain U.S. equipment (including blimps) and U.S. and Canadian intellectual property of the Company and certain of the guarantors, | ||
• the Company’s corporate headquarters, | ||
• certain of Goodyear’s and certain guarantors’ U.S. and Canadian accounts receivable, inventory, cash and cash accounts, and | ||
• any proceeds of any of the preceding. | ||
The liens securing the notes and the guarantees are subject to release in certain circumstances. For example, if the notes are assigned an investment grade rating by Moody’s and S&P and no default or event of default has occurred or is continuing, Goodyear may elect to release any or all of the collateral securing the notes and the guarantees. If either rating on the notes should subsequently decline to below investment grade, the liens will be reinstated. |
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The lenders under Goodyear’s first and second lien credit facilities and the holders of certain interest rate protection and other hedging obligations and certain cash management obligations benefit from, and all other indebtedness that Goodyear incurs in the future and designates in accordance with the indenture governing the notes as priority lien indebtedness will benefit from, liens on the collateral which will have priority over the liens on the collateral securing the notes, to which Goodyear refers as priority liens. The liens securing the notes will also rank pari passu in priority with the liens that secure the Company’s third lien term loan facility. See “Description of the Exchange Notes — Security” and “Risk factors — Risks relating to the notes — You may not be able to fully realize the value of your liens — Your interest in the collateral may be adversely affected by the failure to record and/or perfect security interests in certain collateral.” Additionally, liens against certain of the collateral not perfected pursuant to the restructured credit facilities will not be perfected with respect to the notes. | ||
Any release of all priority liens upon any collateral approved by holders of the obligations secured by priority liens shall also release the liens securing the notes on the same collateral (subject to certain limited exceptions); provided, that after giving effect to the release, at least $200.0 million of obligations secured by the priority liens on the remaining collateral remain outstanding or committed and available to be drawn. The holders of obligations secured by the priority liens will receive all proceeds from any realization on the collateral until the obligations secured by the priority liens are paid in full in cash and the commitments with respect thereto are terminated. See “Description of the Exchange Notes — Security — Intercreditor agreement.” | ||
Intercreditor Agreement | Pursuant to the intercreditor agreement, the liens securing the notes will be expressly junior in priority to all liens that secure (1) obligations under the Company’s first and second lien credit facilities, (2) any future indebtedness permitted to be incurred under the indenture governing the notes that the Company designates in accordance with the terms of such indenture as priority lien indebtedness and (3) certain obligations under interest rate protection and other hedging agreements and certain cash management obligations. The intercreditor agreement will also provide that the liens securing the notes will rank pari passu in priority with the liens that secure the Company’s third lien term loan facility. Pursuant to the intercreditor agreement, the liens securing the notes may not be enforced at any time when obligations secured by priority liens are outstanding, except for certain limited exceptions. | |
Sharing of Liens | In addition to the additional indebtedness that may be secured by the priority liens on the collateral, certain existing and future indebtedness permitted to be incurred under the indenture governing the notes may be secured by liens upon any or all of the collateral securing the notes, on an equal and ratable basis with the liens securing the notes, which we refer to as pari passu liens on the collateral. |
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Ranking | The fixed rate exchange notes and the floating rate exchange notes will rank: | |
• equally in right of payment with each other; | ||
• equally in right of payment to all of the Company’s existing and future senior debt, including debt under the Company’s U.S. secured credit facilities and European credit facility; | ||
• senior in right of payment to all of the Company’s future subordinated indebtedness; | ||
• effectively junior to (i) the Company’s obligations under the Company’s first and second lien credit facilities and any other existing and future obligations secured by a priority lien on the collateral securing the notes to the extent of the value of such collateral and (ii) the Company’s obligations under the Company’s secured credit facilities and any other existing and future obligations that are secured by a lien on assets that are not part of the collateral securing the notes, to the extent of the value of such assets; | ||
• effectively equal and ratable with the Company’s third lien term loan facility and any other existing and future obligations that are secured by a lien on the collateral ranking pari passu with the lien securing the notes, to the extent of the value of the collateral; and | ||
• structurally subordinated to all liabilities, including trade payables, of the Company’s subsidiaries that are not guarantors of the notes, which non-guarantor subsidiaries, for the six months ended June 30, 2005, had net sales of $8.6 billion. This information does not include eliminations for intercompany transactions. For a presentation of the financial information pursuant to Rule 3-10 of Regulation S-X for our subsidiaries guaranteeing the notes and our non-guarantor subsidiaries, see Note to the Financial Statements No. 24, Consolidating Financial Information and Note to the Interim Consolidated Financial Statements No. 9, Consolidating Financial Information, included herein. | ||
Similarly, the guarantees will rank: | ||
• equally in right of payment to all of the applicable guarantor’s existing and future senior debt, including obligations of the applicable guarantor under the Company’s secured credit facilities; | ||
• senior in right of payment to all of the applicable guarantor’s future subordinated debt; and | ||
• effectively junior to (i) the applicable guarantor’s obligations under the Company’s first and second lien credit facilities and any other existing and future obligations to the extent secured by a priority lien on the collateral securing the notes to the extent of the value of such collateral and (ii) the applicable guarantor’s obligations under the Company’s secured credit facilities and any other existing and future obligations that are secured by a |
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lien on assets that are not part of the collateral securing the notes, to the extent of the value of such assets. |
As of June 30, 2005, | ||
• the Company had $5.5 billion of senior debt (including the notes) of which $1.2 billion principal amount has been secured by priority liens on the collateral and $300 million outstanding amounts have been secured by pari passu liens on the collateral; and | ||
• the Company’s subsidiaries that are not guarantors of the notes had $5.232 million of liabilities, including trade payables, excluding liabilities owed to us. For a presentation of the financial information pursuant to Rule 3-10 of Regulation S-X for our subsidiaries guaranteeing the notes and our non-guarantor subsidiaries, see Note to the Financial Statements No. 24, Consolidating Financial Information and Note to the Interim Consolidated Financial Statements No. 9, Consolidating Financial Information, included herein. | ||
Subject to certain conditions, the indenture relating to the notes will permit the Company to incur additional debt, including a substantial amount of debt that may be secured by priority and pari passu liens on the collateral. | ||
Change of Control | Upon the occurrence of a change of control, unless the Company has previously exercised its right to redeem all of the notes as described above, you will have the right to require the Company to repurchase all or a portion of your notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued interest to the date of repurchase. See “Description of the Exchange Notes — Change of Control” and “Risk factors.” | |
Certain Covenants | The Company will issue the notes under the indenture, dated March 12, 2004, with Wells Fargo Bank, N.A., as the trustee. The indenture governing the notes contains covenants that limit the Company’s ability and the ability of certain of its subsidiaries to, among other things: | |
• incur additional indebtedness or issue redeemable preferred stock; | ||
• pay dividends, make distributions in respect of the Company’s capital stock, or make certain other restricted payments or investments; | ||
• incur liens; | ||
• sell assets; | ||
• incur restrictions on the ability of the Company’s subsidiaries to pay dividends or to make other payments to the Company; | ||
• enter into transactions with the Company’s affiliates; | ||
• enter into sale/leaseback transactions; and | ||
• consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets. |
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These covenants are subject to a number of important exceptions and qualifications. For example, if the notes are assigned an investment grade rating by Moody’s and S&P and no default has occurred or is continuing, certain covenants will be suspended. If either rating on the notes should subsequently decline to below investment grade, the suspended covenants will be reinstated. The Company intends to seek a rating of the notes. For more detail, see “Description of the Exchange Notes — Certain covenants.” | ||
Use of Proceeds | We will not receive any proceeds from the issuance of exchange notes in the exchange offer. We will pay all registration and other expenses incidental to the exchange offer. |
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Our internal controls over financial reporting are not effective. |
Pending litigation relating to our restatement could have a material adverse effect on our financial position, cash flows and results of operation. |
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An ongoing SEC investigation regarding our accounting restatement could materially adversely affect us. |
It is uncertain whether we will successfully implement the turnaround strategy for our North American Tire segment. |
We face significant global competition and our market share could decline. |
15
Our U.S. pension plans are significantly underfunded and our required contributions to these plans are expected to increase. |
Higher raw material and energy costs may materially adversely affect our operating results and financial condition. |
Continued pricing pressures from vehicle manufacturers may materially adversely affect our business. |
16
If we fail to extend or renegotiate our primary collective bargaining contracts with our labor unions as they expire from time to time, or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially harmed. |
Our long-term ability to meet our obligations and to repay maturing indebtedness is dependent on our ability to access capital markets in the future and to improve our operating results. |
We have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health. |
• | make it more difficult for us to satisfy our obligations; | |
• | impair our ability to obtain financing in the future for working capital, capital expenditures, research and development, acquisitions or general corporate requirements; | |
• | increase our vulnerability to general adverse economic and industry conditions; | |
• | limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to payments on our indebtedness; | |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and | |
• | place us at a competitive disadvantage compared to our competitors that have less debt. |
17
Any failure to be in compliance with any material provision or covenant of our debt instruments could have a material adverse effect on our liquidity and operations. |
• | incur additional indebtedness and issue preferred stock; | |
• | pay dividends and other distributions with respect to our capital stock or repurchase our capital stock or make other restricted payments; | |
• | enter into transactions with affiliates; | |
• | create or incur liens to secure debt; | |
• | make certain investments; | |
• | enter into sale/leaseback transactions; | |
• | sell or otherwise transfer or dispose of assets; | |
• | incur dividend or other payment restrictions affecting certain subsidiaries; | |
• | use proceeds from the sale of certain assets; and | |
• | engage in certain mergers or consolidations and transfers of substantially all assets. |
18
Our capital expenditures may not be adequate to maintain our competitive position. |
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. |
We may incur significant costs in connection with asbestos claims. |
19
• | the number of claims that are brought in the future; | |
• | the costs of defending and settling these claims; | |
• | the risk of insolvencies among our insurance carriers; | |
• | the possibility that adverse jury verdicts could require us to pay damages in amounts greater than the amounts for which we have historically settled claims; | |
• | the risk of changes in the litigation environment or federal and state law governing the compensation of asbestos claimants; | |
• | the risk that the bankruptcies of other asbestos defendants may increase our costs; and | |
• | the risk that our insurance will not cover all of our asbestos liabilities. |
We may be required to deposit cash collateral to support an appeal bond if we are subject to a significant adverse judgment, which may have a material adverse effect on our liquidity. |
We are subject to extensive government regulations that may materially adversely affect our ongoing operating results. |
20
Our international operations have certain risks that may materially adversely affect our operating results. |
• | exposure to local economic conditions; | |
• | potential adverse changes in the diplomatic relations of foreign countries with the United States; | |
• | hostility from local populations and insurrections; | |
• | adverse currency exchange controls; | |
• | restrictions on the withdrawal of foreign investment and earnings; | |
• | withholding taxes and restrictions on the withdrawal of foreign investment and earnings; | |
• | labor regulations; | |
• | expropriations of property; | |
• | the potential instability of foreign governments; | |
• | risks of renegotiation or modification of existing agreements with governmental authorities; | |
• | export and import restrictions; and | |
• | other changes in laws or government policies. |
We have foreign currency translation and transaction risks that may materially adversely affect our operating results. |
The terms and conditions of our global alliance with Sumitomo Rubber Industries, Ltd. (“SRI”) provide for certain exit rights available to SRI upon the occurrence of certain events, which could require us to make a substantial payment to acquire SRI’s interest in certain of their joint venture alliances. |
21
If we are unable to attract and retain key personnel our business could be materially adversely affected. |
The collateral securing the notes is subject to priority liens held by others. If there is a default, such collateral may not be sufficient to repay those creditors and the holders of the notes. |
You may not be able to fully realize the value of your liens. |
The collateral may not be valuable enough to satisfy all the obligations secured by the collateral. |
22
Bankruptcy laws may limit your ability to realize value from the collateral. |
• | how long payments under the notes could be delayed following commencement of a bankruptcy case; | |
• | whether or when the collateral trustee could repossess or dispose of the collateral; | |
• | the value of the collateral at the time of the bankruptcy petition; or | |
• | whether or to what extent holders of the notes would be compensated for any delay in payment or loss of value of the collateral through the requirement of “adequate protection.” |
23
Your interest in the collateral may be adversely affected by the failure to record and/or perfect security interests in certain collateral. |
State law may limit the ability of the trustee and the noteholders to foreclose on real property and improvements included in the collateral. |
The ability of the noteholders to exercise remedies against the stock of certain of the Company’s foreign subsidiaries pledged as collateral may be limited by the laws of the jurisdictions of organization of these foreign subsidiaries. |
24
The collateral is subject to casualty risks. |
The intercreditor agreement and the lien-ranking provisions set forth in the indenture limit the rights of the holders of the notes with respect to the collateral securing the notes. |
A court could cancel the guarantees of the notes by the Company’s subsidiaries under fraudulent transfer law. |
• | the guarantor was insolvent or rendered insolvent by reason of the incurrence; | |
• | the guarantor was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or | |
• | the guarantor intended to incur, or believed (or reasonably should have believed) that it would incur, debts beyond its ability to pay as those debts matured. |
25
The assets of our non-guarantor subsidiaries will be subject to prior claims by creditors of those subsidiaries. |
Goodyear’s corporate structure may materially adversely affect the Company’s ability to meet its debt service obligations under the notes. |
Goodyear may not have the ability to raise the funds necessary to finance a change of control offer required by the indenture. |
26
If you do not properly tender your original notes for exchange notes, you will continue to hold unregistered notes that are subject to transfer restrictions. |
If an active trading market does not develop for the exchange notes, you may be unable to sell the exchange notes or to sell them at a price you deem sufficient. |
• | the liquidity of any trading market that may develop; | |
• | the ability of holders to sell their exchange notes; or | |
• | the price at which holders would be able to sell their exchange notes. |
• | prevailing interest rates; | |
• | the number of holders of the exchange notes; | |
• | the interest of securities dealers in making a market for the exchange notes; | |
• | the market for similar exchange notes; and | |
• | our operating performance and financial condition. |
27
Year Ended December 31, | Six Months Ended | |||||||||||||||||||||
June 30, | ||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | 2005 | |||||||||||||||||
1.72 | — | (1) | 1.16 | — | (2) | 1.36 | 2.39 |
(1) | Earnings for the year ended December 31, 2003 were inadequate to cover fixed charges. The coverage deficiency was $641.7 million. |
(2) | Earnings for the year ended December 31, 2001 were inadequate to cover fixed charges. The coverage deficiency was $271.2 million. |
28
Year Ended December 31, | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||||||
Restated | June 30, | |||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | 2005 | 2004 | ||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||||||
Net Sales | $ | 18,370.4 | $ | 15,122.1 | $ | 13,856.0 | $ | 14,162.3 | $ | 14,439.0 | $ | 9,759 | $ | 8,821 | ||||||||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | $ | (254.7 | ) | $ | 50.0 | $ | 137 | $ | (48 | ) | ||||||||||
Net Income (Loss) Per Share — Basic | $ | 0.65 | $ | (4.61 | ) | $ | (7.47 | ) | $ | (1.59 | ) | $ | 0.32 | $ | 0.78 | $ | (0.28 | ) | ||||||||||
Net Income (Loss) Per Share — Diluted | $ | 0.63 | $ | (4.61 | ) | $ | (7.47 | ) | $ | (1.59 | ) | $ | 0.31 | $ | 0.69 | $ | (0.28 | ) | ||||||||||
Dividends Per Share | $ | — | $ | — | $ | 0.48 | $ | 1.02 | $ | 1.20 | $ | — | $ | — | ||||||||||||||
Total Assets | $ | 16,533.3 | $ | 14,701.1 | $ | 13,013.1 | $ | 13,719.7 | $ | 13,539.6 | $ | 16,009 | $ | 14,997 | ||||||||||||||
Long Term Debt and Capital Leases Due Within One Year | $ | 1,009.9 | $ | 113.5 | $ | 369.8 | $ | 109.7 | $ | 159.2 | $ | 202 | $ | 1,196 | ||||||||||||||
Long Term Debt and Capital Leases | $ | 4,449.1 | $ | 4,825.8 | $ | 2,989.5 | $ | 3,203.3 | $ | 2,349.4 | $ | 5,033 | $ | 3,916 | ||||||||||||||
Shareholders’ Equity (Deficit) | $ | 72.8 | $ | (32.2 | ) | $ | 221.1 | $ | 2,596.8 | $ | 3,429.3 | $ | 45 | $ | (168 | ) |
(1) | Information on the impact of the restatement follows: |
Year Ended December 31, | ||||||||
2003 | 2003 | |||||||
As Previously | As | |||||||
Reported(B) | Restated | |||||||
(In millions, except per share amounts) | ||||||||
Net Sales | $ | 15,119.0 | $ | 15,122.1 | ||||
Net Loss | $ | (802.1 | ) | $ | (807.4 | ) | ||
Net Loss Per Share — Basic | $ | (4.58 | ) | $ | (4.61 | ) | ||
Net Loss Per Share — Diluted | $ | (4.58 | ) | $ | (4.61 | ) | ||
Dividends Per Share | $ | — | $ | — | ||||
Total Assets | 15,005.5 | 14,701.1 | ||||||
Long Term Debt and Capital Leases Due Within One Year | 113.5 | 113.5 | ||||||
Long Term Debt and Capital Leases | 4,826.2 | 4.825.8 | ||||||
Shareholders’ Equity (Deficit) | (13.1 | ) | (32.2 | ) |
(B) | As reported in 2003 Form 10-K filed on May 19, 2004. |
29
Year Ended December 31, | ||||||||||||
2002 | 2002 | 2002 | ||||||||||
As Originally | As Previously | As | ||||||||||
Reported(A) | Reported(B) | Restated | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Net Sales | $ | 13,850.0 | $ | 13,856.2 | $ | 13,856.0 | ||||||
Net Loss | $ | (1,105.8 | ) | $ | (1,227.0 | ) | $ | (1,246.9 | ) | |||
Net Loss Per Share — Basic | $ | (6.62 | ) | $ | (7.35 | ) | $ | (7.47 | ) | |||
Net Loss Per Share — Diluted | $ | (6.62 | ) | $ | (7.35 | ) | $ | (7.47 | ) | |||
Dividends Per Share | $ | 0.48 | $ | 0.48 | $ | 0.48 | ||||||
Total Assets | 13,146.6 | 13,038.7 | 13,013.1 | |||||||||
Long Term Debt and Capital Leases Due Within One Year | 369.8 | 369.8 | 369.8 | |||||||||
Long Term Debt and Capital Leases | 2,989.0 | 2,989.8 | 2,989.5 | |||||||||
Shareholders’ Equity | 650.6 | 255.4 | 221.1 |
Year Ended December 31, | ||||||||||||
2001 | 2001 | 2001 | ||||||||||
As Previously | As Previously | |||||||||||
Reported(A) | Reported(B) | As Restated | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Net Sales | $ | 14,147.2 | $ | 14,162.5 | $ | 14,162.3 | ||||||
Net Loss | $ | (203.6 | ) | $ | (254.1 | ) | $ | (254.7 | ) | |||
Net Loss Per Share — Basic | $ | (1.27 | ) | $ | (1.59 | ) | $ | (1.59 | ) | |||
Net Loss Per Share — Diluted | $ | (1.27 | ) | $ | (1.59 | ) | $ | (1.59 | ) | |||
Dividends Per Share | $ | 1.02 | $ | 1.02 | $ | 1.02 | ||||||
Total Assets | 13,783.4 | 13,768.6 | 13,719.7 | |||||||||
Long Term Debt and Capital Leases due Within One Year | 109.7 | 109.7 | 109.7 | |||||||||
Long Term Debt and Capital Leases | 3,203.6 | 3,203.6 | 3,203.3 | |||||||||
Shareholders’ Equity | 2,864.0 | 2,627.8 | 2,596.8 |
Year Ended December 31, | ||||||||||||
2000 | 2000 | 2000 | ||||||||||
As Originally | As Previously | As | ||||||||||
Reported(A) | Reported(B) | Restated | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Net Sales | $ | 14,417.1 | $ | 14,459.9 | $ | 14,439.0 | ||||||
Net Income | $ | 40.3 | $ | 51.3 | $ | 50.0 | ||||||
Net Income Per Share — Basic | $ | 0.26 | $ | 0.33 | $ | 0.32 | ||||||
Net Income Per Share — Diluted | $ | 0.25 | $ | 0.32 | $ | 0.31 | ||||||
Dividends Per Share | $ | 1.20 | $ | 1.20 | $ | 1.20 | ||||||
Total Assets | 13,568.0 | 13,576.7 | 13,539.6 | |||||||||
Long Term Debt and Capital Leases due Within One Year | 159.2 | 159.2 | 159.2 | |||||||||
Long Term Debt and Capital Leases | 2,349.6 | 2,349.6 | 2,349.4 | |||||||||
Shareholders’ Equity | 3,503.0 | 3,454.3 | 3,429.3 |
(A) | As reported in 2002 Form 10-K filed on April 3, 2003. | |
(B) | As reported in 2003 Form 10-K filed on May 19, 2004. |
30
31
32
Six Months Ended June 30, 2005 and 2004 |
North American | European Union | |||||||||||||||
Estimated Share | Estimated Share | |||||||||||||||
of Sales | of Sales | |||||||||||||||
First Half | Full Year | First Half | Full Year | |||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Original Equipment | 38 | % | 40 | % | 23 | % | 24 | % | ||||||||
Replacement | 25 | % | 25 | % | 25 | % | 23 | % |
33
Fiscal Years 2004, 2003 and 2002 |
• | a decrease in net after-tax rationalization charges of $215.1 million, | |
• | an after-tax gain from a settlement with certain insurance companies related to coverage for environmental matters of $156.6 million, |
34
• | a decrease in net after-tax charges for accelerated depreciation and asset writeoffs of $122.0 million, | |
• | a decrease in net after-tax charges for general and product liability — discontinued products of $85.4 million (as restated), and | |
• | an increase in net favorable tax adjustments of $10.5 million. |
Year Ended December 31, | ||||||||||||
Restated | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Segment Operating Income | ||||||||||||
North American Tire | $ | 73.5 | $ | (102.5 | ) | $ | (21.5 | ) | ||||
European Union Tire | 252.7 | 129.8 | 101.1 | |||||||||
Eastern Europe, Middle East and Africa Tire | 193.8 | 146.6 | 93.2 | |||||||||
Latin American Tire | 251.2 | 148.6 | 107.6 | |||||||||
Asia/ Pacific Tire | 61.1 | 49.9 | 43.7 | |||||||||
Engineered Products | 113.2 | 46.8 | 39.0 |
35
Three Months Ended June 30, 2005 and 2004 |
36
Rationalization Activity |
37
Six Months Ended June 30, 2005 and 2004 |
38
Rationalization Activity |
Fiscal Years 2004, 2003 and 2002 |
Net Sales |
39
Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of tires) | |||||||||||||
North American Tire (U.S. and Canada) | 70.8 | 68.6 | 69.7 | ||||||||||
International | 88.8 | 82.0 | 77.9 | ||||||||||
Replacement tire units | 159.6 | 150.6 | 147.6 | ||||||||||
North American Tire (U.S. and Canada) | 31.7 | 32.6 | 34.1 | ||||||||||
International | 32.0 | 30.3 | 32.6 | ||||||||||
OE tire units | 63.7 | 62.9 | 66.7 | ||||||||||
Goodyear worldwide tire unites | 223.3 | 213.5 | 214.3 | ||||||||||
Cost of Goods Sold |
40
Selling, Administrative and General Expense |
Other Cost Reduction Measures |
Interest Expense |
Other (Income) and Expense |
41
Foreign Currency Exchange |
42
Equity in (Earnings) Losses of Affiliates |
Income Taxes |
43
Rationalization Activity |
2004 |
2003 |
44
2002 |
General |
45
• | general and product liability and other litigation | |
• | environmental liabilities | |
• | workers’ compensation | |
• | recoverability of goodwill and other intangible assets | |
• | deferred tax asset valuation allowance | |
• | pension and other postretirement benefits | |
• | allowance for doubtful accounts |
46
47
• | future health care costs, | |
• | maximum company-covered benefit costs, | |
• | life expectancies, | |
• | retirement rates, | |
• | discount rates, | |
• | long term rates of return on plan assets, and | |
• | future compensation levels. |
48
+/- Change at December 31, 2004 | ||||||||||||||||
Change | PBO/ABO | Equity | 2005 Expense | |||||||||||||
(Dollars in millions) | ||||||||||||||||
Pensions: | ||||||||||||||||
Assumption: | ||||||||||||||||
Discount rate | +/-0.5 | % | $ | 260 | $ | 260 | $ | 14 | ||||||||
Actual return on assets | +/-1.0 | % | N/A | 30 | 32 | |||||||||||
Estimated return on assets | +/-1.0 | % | N/A | N/A | 30 | |||||||||||
Postretirement Benefits: | ||||||||||||||||
Assumption: | ||||||||||||||||
Discount rate | +/-0.5 | % | 148 | N/A | 4 | |||||||||||
Health care cost trends — total cost | +/-1.0 | % | 14 | N/A | 2 |
49
North American Tire |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
Restated | ||||||||||||||||||||||||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | Change | Change | 2005 | 2004 | Change | Change | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Tire Units | 102.5 | 101.2 | 103.8 | 25.3 | 25.7 | (0.4 | ) | (1.7 | )% | 50.6 | 50.4 | 0.2 | 0.3 | % | ||||||||||||||||||||||||||||||
Net Sales | $ | 8,568.6 | $ | 7,279.2 | $ | 7,097.7 | $ | 2,296 | $ | 2,171 | $ | 125 | 5.8 | % | $ | 4,434 | $ | 4,109 | $ | 325 | 7.9 | % | ||||||||||||||||||||||
Segment Operating Income | 73.5 | (102.5 | ) | (21.5 | ) | 55 | 41 | 14 | 34.1 | % | 66 | 17 | 49 | 288 | % | |||||||||||||||||||||||||||||
Segment Operating Margin | 0.9 | % | (1.4 | )% | (0.3 | )% | 2.4 | % | 1.9 | % | 1.5 | % | 0.4 | % |
Three Months Ended June 30, 2005 and 2004 |
50
Six Months Ended June 30, 2005 and 2004 |
Fiscal Years Ended 2004, 2003 and 2002 |
51
European Union Tire |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
Restated | ||||||||||||||||||||||||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | Change | Change | 2005 | 2004 | Change | Change | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Tire Units | 62.8 | 62.3 | 61.5 | 15.9 | 15.4 | 0.5 | 3.2 | % | 31.9 | 31.7 | 0.2 | 0.6 | % | |||||||||||||||||||||||||||||||
Net Sales | $ | 4,476.2 | $ | 3,921.5 | $ | 3,319.4 | $ | 1,178 | $ | 1,060 | $ | 118 | 11.1 | % | $ | 2,376 | $ | 2,171 | $ | 205 | 9.4 | % | ||||||||||||||||||||||
Segment Operating Income | 252.7 | 129.8 | 101.1 | 85 | 57 | 28 | 49.1 | % | 192 | 127 | 65 | 51.2 | % | |||||||||||||||||||||||||||||||
Segment Operating Margin | 5.6 | % | 3.3 | % | 3.0 | % | 7.2 | % | 5.4 | % | 8.1 | % | 5.8 | % |
Three Months Ended June 30, 2005 and 2004 |
52
Six Months Ended June 30, 2005 and 2004 |
Fiscal Years 2004, 2003 and 2002 |
53
Eastern Europe, Middle East and Africa Tire |
Year Ended December 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | Change | Change | 2005 | 2004 | Change | Change | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Tire Units | 18.9 | 17.9 | 16.1 | 4.7 | 4.5 | 0.2 | 2.9 | % | 9.5 | 9.2 | 0.3 | 3.2 | % | |||||||||||||||||||||||||||||||
Net Sales | $ | 1,279.0 | $ | 1,073.4 | $ | 807.1 | $ | 342 | $ | 301 | $ | 41 | 13.6 | % | $ | 682 | $ | 584 | $ | 98 | 16.8 | % | ||||||||||||||||||||||
Segment Operating Income | 193.8 | 146.6 | 93.2 | 49 | 45 | 4 | 8.9 | % | 96 | 88 | 8 | 9.1 | % | |||||||||||||||||||||||||||||||
Segment Operating Margin | 15.2 | % | 13.7 | % | 11.5 | % | 14.3 | % | 15.0 | % | 14.1 | % | 15.1 | % |
Three Months Ended June 30, 2005 and 2004 |
Six Months Ended June 30, 2005 and 2004 |
54
Fiscal Years 2004, 2003, 2002 |
55
Latin American Tire |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
Restated | ||||||||||||||||||||||||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | Change | Change | 2005 | 2004 | Change | Change | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Tire Units | 19.6 | 18.7 | 19.9 | 5.4 | 4.7 | 0.7 | 14.8 | % | 10.4 | 9.6 | 0.8 | 7.8 | % | |||||||||||||||||||||||||||||||
Net Sales | $ | 1,245.4 | $ | 1,041.0 | $ | 947.7 | $ | 381 | $ | 291 | $ | 90 | 30.9 | % | $ | 729 | $ | 594 | $ | 135 | 22.7 | % | ||||||||||||||||||||||
Segment Operating Income | 251.2 | 148.6 | 107.6 | 77 | 61 | 16 | 26.2 | % | 164 | 123 | 41 | 33.3 | % | |||||||||||||||||||||||||||||||
Segment Operating Margin | 20.2 | % | 14.3 | % | 11.4 | % | 20.2 | % | 21.0 | % | 22.5 | % | 20.7 | % |
Three Months Ended June 30, 2005 and 2004 |
Six Months Ended June 30, 2005 and 2004 |
56
Fiscal Years 2004, 2003 and 2002 |
Asia/ Pacific Tire |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
Restated | ||||||||||||||||||||||||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | Change | Change | 2005 | 2004 | Change | Change | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Tire Units | 19.5 | 13.4 | 13.0 | 5.1 | 4.7 | 0.4 | 9.4 | % | 9.9 | 9.8 | 0.1 | 1.2 | % | |||||||||||||||||||||||||||||||
Net Sales | $ | 1,312.0 | $ | 581.8 | $ | 531.3 | $ | 368 | $ | 328 | $ | 40 | 12.2 | % | $ | 709 | $ | 651 | $ | 58 | 8.9 | % | ||||||||||||||||||||||
Segment Operating Income | 61.1 | 49.9 | 43.7 | 20 | 17 | 3 | 17.6 | % | 39 | 25 | 14 | 56.0 | % | |||||||||||||||||||||||||||||||
Segment Operating Margin | 4.7 | % | 8.6 | % | 8.2 | % | 5.4 | % | 5.2 | % | 5.5 | % | 3.8 | % |
Three Months Ended June 30, 2005 and 2004 |
57
Six Months Ended June 30, 2005 and 2004 |
Fiscal Years 2004, 2003 and 2002 |
58
Engineered Products |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
Restated | ||||||||||||||||||||||||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | Change | Change | 2005 | 2004 | Change | Change | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Net Sales | $ | 1,470.3 | $ | 1,203.7 | $ | 1,126.3 | $ | 427 | $ | 368 | $ | 59 | 16.0 | % | $ | 829 | $ | 712 | $ | 117 | 16.4 | % | ||||||||||||||||||||||
Segment Operating Income | 113.2 | 46.8 | 39.0 | 30 | 33 | (3 | ) | (9.1 | )% | 51 | 55 | (4 | ) | (7.3 | )% | |||||||||||||||||||||||||||||
Segment Operating Margin | 7.7 | % | 3.9 | % | 3.5 | % | 7.0 | % | 9.0 | % | 6.2 | % | 7.7 | % |
Three Months Ended June 30, 2005 and 2004 |
Six Months Ended June 30, 2005 and 2004 |
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Fiscal Years 2004, 2003 and 2002 |
Operating Activities |
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Investing Activities |
Financing Activities |
Credit Sources |
• | a $1.5 billion first lien credit facility due April 30, 2010 (consisting of a $1.0 billion revolving facility and a $500 million deposit-funded facility); | |
• | a $1.2 billion second lien term loan facility due April 30, 2010; | |
• | the Euro equivalent of approximately $650 million in credit facilities for Goodyear Dunlop Tires Europe B.V. (“GDTE”) due April 30, 2010 (consisting of approximately $450 million in revolving facilities and approximately $200 million in term loan facilities); and | |
• | a $300 million third lien term loan facility due March 1, 2011. |
• | our $1.3 billion asset-based credit facility, due March 2006 (the $800 million term loan portion of this facility was fully drawn prior to the refinancing); |
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• | our $650 million asset-based term loan facility, due March 2006 (this facility was fully drawn prior to the refinancing); | |
• | our $680 million deposit-funded credit facility due September 2007 (there were $492 million of letters of credit outstanding under this facility prior to the refinancing); and | |
• | our $650 million senior secured European facilities due April 2005 (the $400 million term loan portion of this facility was fully drawn prior to the refinancing). |
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Consolidated EBITDA (per Credit Agreements) |
Year Ended December 31, | ||||||||||||||||||||||||||||
Three Months | Six Months | |||||||||||||||||||||||||||
Restated | Ended June 30, | Ended June 30, | ||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | $ | 69 | $ | 30 | $ | 137 | $ | (48 | ) | |||||||||||
Interest Expense | 368.8 | 296.3 | 242.7 | 101 | 89 | 203 | 173 | |||||||||||||||||||||
Income Tax | 207.9 | 117.1 | 1,227.9 | 85 | 59 | 152 | 116 | |||||||||||||||||||||
Depreciation and Amortization Expense | 628.7 | 691.6 | 605.3 | 150 | 149 | 307 | 310 | |||||||||||||||||||||
EBITDA | 1,320.2 | 297.6 | 829.0 | 405 | 327 | 799 | 551 | |||||||||||||||||||||
Credit Agreement Adjustments: | ||||||||||||||||||||||||||||
Other (Income) and Expense | 1.9 | 342.6 | 9.8 | 17 | 27 | 27 | 74 | |||||||||||||||||||||
Minority Interest in Net Income (Loss) of Subsidiaries | 57.8 | 32.8 | 55.6 | 33 | 19 | 54 | 25 | |||||||||||||||||||||
Consolidated Interest Expense Adjustment | 10.0 | 18.3 | 28.1 | 1 | 2 | 3 | 5 | |||||||||||||||||||||
Non-Cash Recurring Items | — | 54.7 | — | — | — | — | — | |||||||||||||||||||||
Rationalizations | 55.6 | 291.5 | 5.5 | (5 | ) | 10 | (13 | ) | 34 | |||||||||||||||||||
Less Excess Cash Rationalization Charges(1) | — | (12.9 | ) | — | — | — | — | — | ||||||||||||||||||||
Consolidated EBITDA | $ | 1,445.5 | $ | 1,024.6 | $ | 928.0 | $ | 451 | $ | 385 | $ | 870 | $ | 689 | ||||||||||||||
(1) | “Excess Cash Rationalization charges” is defined in our April 1, 2003 credit facilities and only contemplates cash expenditures with respect to rationalization charges recorded on the Consolidated Statement of Income after April 1, 2003. Amounts incurred prior to April 1, 2003 were not included. |
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Other Foreign Credit Facilities |
International Accounts Receivable Securitization Facilities (On-Balance-Sheet) |
International Accounts Receivable Securitization Facilities (Off-Balance-Sheet) |
Registration Obligations |
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Credit Ratings |
S&P | Moody’s | |||||||
$1.5 Billion First Lien Credit Facility | BB | Ba3 | ||||||
$1.2 Billion Second Lien Term Loan Facility | B+ | B2 | ||||||
$300 Million Third Lien Secured Term Loan Facility | B- | B3 | ||||||
European Facilities | B+ | B1 | ||||||
$650 Million Senior Secured Notes due 2011 | B- | B3 | ||||||
Corporate Rating (implied) | B+ | B1 | ||||||
Senior Unsecured Debt | B- | — | ||||||
Outlook | Stable | Stable |
Potential Future Financings |
Dividends |
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Asset Dispositions |
Payment Due by Period as of June 30, 2005 | ||||||||||||||||||||||||||||
After | ||||||||||||||||||||||||||||
Total | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | 5 Years | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Long Term Debt(1) | $ | 5,425 | $ | 461 | $ | 573 | $ | 100 | $ | 1 | $ | 1,754 | $ | 2,536 | ||||||||||||||
Capital Lease Obligations(2) | 107 | 11 | 12 | 12 | 11 | 11 | 50 | |||||||||||||||||||||
Interest Payments(3) | 2,495 | 383 | 349 | 320 | 314 | 293 | 836 | |||||||||||||||||||||
Operating Leases(4) | 1,490 | 264 | 267 | 206 | 154 | 127 | 472 | |||||||||||||||||||||
Pension Benefits(5) | 1,182 | 482 | 700 | (5) | (5) | (5) | (5) | |||||||||||||||||||||
Other Post Retirement Benefits(6) | 2,363 | 304 | 301 | 252 | 243 | 233 | 1,030 | |||||||||||||||||||||
Workers’ Compensation(7) | 328 | 63 | 47 | 34 | 24 | 18 | 142 | |||||||||||||||||||||
Binding Commitments(8) | 1,081 | 843 | 40 | 27 | 25 | 22 | 124 | |||||||||||||||||||||
Total Contractual Cash Obligations | $ | 14,471 | $ | 2,811 | $ | 2,289 | $ | 951 | $ | 772 | $ | 2,458 | $ | 5,190 | ||||||||||||||
(1) | Long term debt payments include notes payable and reflect long term debt maturities as of June 30, 2005. |
(2) | The present value of capital lease obligations is $75 million. |
(3) | These amounts represent future interest payments related to our existing debt obligations as of June 30, 2005 based on fixed and variable interest rates specified in the associated debt agreements. Payments related to variable debt are based on the six-month LIBOR rate at June 30, 2005 plus the specified margin in the associated debt agreements for each period presented. The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. |
(4) | Operating leases do not include minimum sublease rentals of $52 million, $44 million, $34 million, $25 million, $17 million and $30 million in each of the periods above, respectively, for a total of $202 million. Net operating lease payments total $1,288 million. The present value of operating leases is $895 million. The operating leases relate to, among other things, computers and office equipment, real estate and miscellaneous other assets. No asset is leased from any related party. |
(5) | The obligation related to pension benefits is actuarially determined and is reflective of obligations as of December 31, 2004. The amounts set forth in the table represent our estimated funding requirements in 2005 and 2006 for domestic defined benefit pension plans under ERISA, and approximately $70 million of expected contributions to our funded international pension plans in 2005. Although subject to change, we expect to make contributions to our domestic pension plans of approximately $400 to $425 million in 2005. The amount in the table for 2005 represents the midpoint of this range plus expected contributions to our funded international plans. The expected contributions are based upon a number of assumptions, including: |
• | an ERISA liability interest rate of 6.10% for 2005, and | |
• | plan asset returns of 8.5% in 2005. |
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At the end of 2005, the current interest relief rate measures used for pension funding calculations expire. If current measures are extended, we estimate that required contributions in 2006 will be in the range of $575 million to $625 million. If new legislation is not enacted, the interest rate used for 2006 and beyond will be based upon a 30-year U.S. Treasury bond rate, as calculated and published by the U.S. government as a proxy for the rate that could be attained if 30-year Treasury bonds were currently being issued. Using an estimate of these rates would result in estimated required contributions during 2006 in the range of $675 million to $725 million. The estimated amount set forth in the table for 2006 represents the midpoint of this range. We likely will be subject to additional statutory minimum funding requirements after 2006. We are not able to reasonably estimate our future required contributions beyond 2006 due to uncertainties regarding significant assumptions involved in estimating future required contributions to our defined benefit pension plans, including: |
• | interest rate levels, | |
• | the amount and timing of asset returns, | |
• | what, if any, changes may occur in legislation, and | |
• | how contributions in excess of the minimum requirements could impact the amounts and timing of future contributions. |
We expect the amount of contributions required in years beyond 2006 will be substantial. |
(6) | The payments presented above are expected payments for the next 10 years. The payments for other post-retirement benefits reflect the estimated benefit payments of the plans using the provisions currently in effect. We reserve the right to modify or terminate the plans at any time. The obligation related to other postretirement benefits is actuarially determined on an annual basis. The estimated payments include an estimated reduction in our obligations totaling approximately $475 million to $525 million resulting from the provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. |
(7) | The payments for workers’ compensation are based upon recent historical payment patterns. The present value of anticipated payments for workers’ compensation is $249 million. |
(8) | Binding commitments are for our normal operations and are related primarily to obligations to acquire land, buildings and equipment. In addition, binding commitments include obligations to purchase raw materials through short-term supply contracts at fixed prices or at a formula price related to market prices or negotiated prices. |
• | The terms and conditions of our global alliance with Sumitomo as set forth in the Umbrella Agreement between Sumitomo and us provide for certain minority exit rights available to Sumitomo commencing in 2009. In addition, the occurrence of certain other events enumerated in the Umbrella Agreement, including certain bankruptcy events or changes in control of us, could trigger a right of Sumitomo to require us to purchase these interests immediately. Sumitomo’s exit rights, in the unlikely event of exercise, could require us to make a substantial payment to acquire Sumitomo’s interest in the alliance. | |
• | Pursuant to an agreement entered into in 2001, Ansell Ltd. (Ansell) has the right, during the period beginning August 13, 2005 and ending August 14, 2006, to require us to purchase Ansell’s 50% interest in SPT. The purchase price is a formula price based on the earnings of SPT, subject to various adjustments. If Ansell does not exercise its right, we may require Ansell to sell its interest to us during the 180 days following the expiration of Ansell’s right at a price established using the same formula. |
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• | Pursuant to an agreement entered into in 2001, we shall purchase minimum amounts of carbon black from a certain supplier from January 1, 2003 through December 31, 2006, at agreed upon base prices that are subject to quarterly adjustments for changes in raw material costs and natural gas costs and a one-time adjustment for other manufacturing costs. |
Amount of Commitment Expiration per Period | ||||||||||||||||||||||||||||
Total | 1st Year | 2nd Year | 3rd Year | 4th Year | 5th Year | Thereafter | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Customer Financing Guarantees | $ | 6 | $ | 2 | $ | 1 | $ | — | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||
Affiliate Financing Guarantees | 3 | 3 | — | — | — | — | — | |||||||||||||||||||||
Other Guarantees | 1 | — | 1 | — | — | — | — | |||||||||||||||||||||
Off-Balance Sheet Arrangements | $ | 10 | $ | 5 | $ | 2 | $ | — | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||
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Interest Rate Swap Contracts | 2005 | 2004 | ||||||
(Dollars in millions) | ||||||||
Fixed Rate Contracts: | ||||||||
Notional principal amount | $ | — | $ | 14 | ||||
Pay fixed rate | — | % | 5.94 | % | ||||
Receive variable Australian Bank Bill Rate | — | 5.48 | ||||||
Average years to maturity | — | 1.00 | ||||||
Fair value — liability | — | — | ||||||
Pro forma fair value — liability | — | — | ||||||
Floating Rate Contracts: | ||||||||
Notional principal amount | $ | 200 | $ | 200 | ||||
Pay variable LIBOR | 5.22 | % | 2.92 | % | ||||
Receive fixed rate | 6.63 | 6.63 | ||||||
Average years to maturity | 1.4 | 2.45 | ||||||
Fair value — asset (liability) | $ | 3 | $ | 8 | ||||
Pro forma fair value — asset (liability) | 2 | 7 |
Three Months | Six Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in millions) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Fixed Rate Contracts: | ||||||||||||||||
Domestic: | ||||||||||||||||
Notional principal | $ | — | $ | — | $ | — | $ | 162 | ||||||||
Pay fixed rate | — | % | — | % | — | % | 5.00 | % | ||||||||
Receive variable LIBOR | — | — | — | 1.18 | ||||||||||||
International: | ||||||||||||||||
Notional principal (AUD 20 million) | $ | 15 | $ | 14 | $ | 15 | $ | 15 | ||||||||
Pay fixed rate | 5.94 | % | 5.94 | % | 5.94 | % | 5.94 | % | ||||||||
Receive variable Australian Bank Bill Rate | 5.69 | 5.51 | 5.66 | 5.51 | ||||||||||||
Floating Rate Contracts: | ||||||||||||||||
Notional principal | $ | 200 | $ | 200 | $ | 200 | $ | 200 | ||||||||
Pay variable LIBOR | 4.57 | % | 3.00 | % | 4.44 | % | 2.97 | % | ||||||||
Receive fixed rate | 6.63 | 6.63 | 6.63 | 6.63 |
Fixed Rate Debt | 2005 | 2004 | ||||||
(In millions) | ||||||||
Fair value — liability | $ | 2,989 | $ | 2,607 | ||||
Carrying amount — liability | 2,875 | 2,616 | ||||||
Pro forma fair value — liability | 2,891 | 2,566 |
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2005 | 2004 | |||||||
(In millions) | ||||||||
Fair value — asset (liability) | $44 | $78 | ||||||
Pro forma change in fair value | (20) | (20) | ||||||
Contract maturities | 7/05-10/19 | 7/04-7/19 |
2005 | 2004 | |||||||
(In millions) | ||||||||
Fair value — asset (liability): | ||||||||
Swiss franc swap-current | $ | 43 | $ | (1 | ) | |||
Swiss franc swap-long term | — | 46 | ||||||
Euro swaps-current | — | 30 | ||||||
Euro swaps-long term | — | — | ||||||
Other-current asset | 5 | 6 | ||||||
Other-current liability | (4 | ) | (3 | ) |
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• | automobiles | |
• | trucks | |
• | buses | |
• | aircraft | |
• | motorcycles | |
• | farm implements | |
• | earthmoving equipment | |
• | industrial equipment | |
• | various other applications. |
• | retread truck, aircraft and heavy equipment tires, | |
• | manufacture and sell tread rubber and other tire retreading materials, |
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• | provide automotive repair services and miscellaneous other products and services, and | |
• | manufacture and sell flaps for truck tires and other types of tires. |
Year Ended December 31, | ||||||||||||
Sales of New Tires By | 2004 | 2003 | 2002 | |||||||||
North American Tire | 87.9 | % | 86.3 | % | 86.2 | % | ||||||
European Union Tire | 87.4 | 89.2 | 85.6 | |||||||||
Eastern Europe Tire | 94.6 | 94.1 | 91.8 | |||||||||
Latin American Tire | 92.5 | 91.1 | 90.6 | |||||||||
Asia/ Pacific Tire | 82.2 | 97.7 | 97.2 |
Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of tires) | |||||||||||||
North American Tire | 102.5 | 101.2 | 103.8 | ||||||||||
European Union Tire | 62.8 | 62.3 | 61.5 | ||||||||||
Eastern Europe Tire | 18.9 | 17.9 | 16.1 | ||||||||||
Latin American Tire | 19.6 | 18.7 | 19.9 | ||||||||||
Asia/ Pacific Tire | 19.5 | 13.4 | 13.0 | ||||||||||
Goodyear worldwide | 223.3 | 213.5 | 214.3 |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of tires) | ||||||||||||
Replacement tire units | 159.6 | 150.6 | 147.6 | |||||||||
OE tire units | 63.7 | 62.9 | 66.7 | |||||||||
Goodyear worldwide tire units | 223.3 | 213.5 | 214.3 |
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Tires |
Related Products and Services |
• | retreads truck, aircraft and heavy equipment tires, primarily as a service to its commercial customers, | |
• | manufactures tread rubber and other tire retreading materials for trucks, heavy equipment and aircraft, | |
• | manufactures rubber track for agricultural and construction equipment, | |
• | provides automotive maintenance and repair services at approximately 805 retail outlets, | |
• | sells automotive repair and maintenance items, automotive equipment and accessories and other items to dealers and consumers, | |
• | develops, manufactures, distributes and sells synthetic rubber and rubber lattices, various resins and organic chemicals used in rubber and plastic processing, and other chemical products, and | |
• | provides miscellaneous other products and services. |
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• | North American Tire sells chemical products to Goodyear’s other business segments and to unaffiliated customers. North American Tire owns 4 chemical products manufacturing facilities and conducts natural rubber purchasing operations. Approximately 65% of the total pounds of synthetic materials sold by North American Tire in 2004 was to Goodyear’s other business segments. All production is at 4 plants in the United States. |
Markets and Other Information |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of tires) | ||||||||||||
Replacement tire units | 70.8 | 68.6 | 69.7 | |||||||||
OE tire units | 31.7 | 32.6 | 34.1 | |||||||||
Total tire units | 102.5 | 101.2 | 103.8 |
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• | manufactures and sells Goodyear-brand, Dunlop-brand and Fulda-brand and other house brand passenger, truck, motorcycle, farm and heavy equipment tires, | |
• | sells Debica-brand and Sava-brand passenger, truck and farm tires manufactured by the Eastern Europe Tire Segment, | |
• | sells new, and manufactures and sells retreaded, aircraft tires, | |
• | provides various retreading and related services for truck and heavy equipment tires, primarily for its commercial truck tire customers, | |
• | offers automotive repair services at retail outlets in which it owns a controlling interest, and | |
• | provides miscellaneous related products and services. |
Markets and Other Information |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of tires) | ||||||||||||
Replacement tire units | 43.9 | 43.9 | 41.3 | |||||||||
OE tire units | 18.9 | 18.4 | 20.2 | |||||||||
Total tire units | 62.8 | 62.3 | 61.5 |
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• | maintains sales operations in most countries in Eastern Europe (including Russia), the Middle East and Africa, | |
• | exports tires for sale in Western Europe, North America and other regions of the world, | |
• | provides related products and services in certain markets, | |
• | manufactures and sells Goodyear-brand, Kelly-brand, Debica-brand, Sava-brand and Fulda-brand tires and sells Dunlop-brand tires manufactured by European Union Tire, | |
• | sells new and retreaded aircraft tires, | |
• | provides various retreading and related services for truck and heavy equipment tires, | |
• | sells automotive parts and accessories, and | |
• | provides automotive repair services. |
Markets and Other Information |
Year Ended | ||||||||||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of tires) | ||||||||||||
Replacement tire units | 15.4 | 14.8 | 13.3 | |||||||||
OE tire units | 3.5 | 3.1 | 2.8 | |||||||||
Total tire units | 18.9 | 17.9 | 16.1 |
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• | manufactures and sells pre-cured treads for truck and heavy equipment tires, | |
• | retreads, and provides various materials and related services for retreading, truck, aircraft and heavy equipment tires, | |
• | manufactures other products, including batteries for motor vehicles, | |
• | manufactures and sells new aircraft tires, and | |
• | provides miscellaneous other products and services. |
Markets and Other Information |
Year Ended | ||||||||||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of tires) | ||||||||||||
Replacement tire units | 15.0 | 14.2 | 14.2 | |||||||||
OE tire units | 4.6 | 4.5 | 5.7 | |||||||||
Total tire units | 19.6 | 18.7 | 19.9 |
Markets and Other Information |
Year Ended | ||||||||||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of tires) | ||||||||||||
Replacement tire units | 14.5 | 9.1 | 9.1 | |||||||||
OE tire units | 5.0 | 4.3 | 3.9 | |||||||||
Total tire units | 19.5 | 13.4 | 13.0 |
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• | belts and hoses for motor vehicles, | |
• | conveyor and power transmission belts, | |
• | air, water, steam, hydraulic, petroleum, fuel, chemical and materials handling hose for industrial applications, | |
• | anti-vibration products, | |
• | tank tracks, and | |
• | miscellaneous products and services. |
Markets and Other Information |
Sources and Availability of Raw Materials |
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Patents and Trademarks |
Backlog |
Research and Development |
Year Ended December 31, | ||||||
2004 | 2003 | 2002 | ||||
(In millions) | ||||||
Research and development expenditures | $378.2 | $351.0 | $386.5 |
Employees |
Compliance with Environmental Regulations |
80
81
• | 12 tire plants (9 in the United States and 3 in Canada), | |
• | 1 steel tire wire cord plant, | |
• | 1 tire mold plant, | |
• | 2 textile mills, | |
• | 3 tread rubber plants, and | |
• | 2 aero retread plants. |
• | 13 tire plants, | |
• | 1 tire fabric processing facility, | |
• | 1 steel tire wire cord plant, | |
• | 1 tire mold and tire manufacturing machines facility, and | |
• | 3 tire retread plants. |
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• | 7 hose products plants | |
• | 2 conveyor belting plants | |
• | 2 molded rubber products plants | |
• | 2 power transmission products plants | |
• | 5 mix centers |
• | 2 air springs plants | |
• | 5 hose products plants | |
• | 3 power transmission products plants | |
• | 2 conveyor belting plants |
• | 2 air springs plants | |
• | 1 power transmission products plant | |
• | 1 hose products plant |
• | 1 conveyor belting plant | |
• | 1 hose products plant |
• | one conveyor belting and power transmission products plant |
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• | Malek, et al. v. Goodyear(Case No. 02-B-1172, United States District Court for the District of Colorado), a case involving 25 homesites, in which a federal jury awarded the plaintiffs aggregate damages of $8.1 million of which 40% was allocated to us. On July 12, 2004, judgment was entered inMalekand an additional $4.8 million in prejudgment interest was awarded to the plaintiffs, all of which was allocated to us; and | |
• | Holmes v. Goodyear(Case No. 98CV268-A, District Court, Pitkin County, Colorado), a case involving one site in which the jury awarded the plaintiff $632,937 in damages, of which the jury allocated 20% to us, resulting in a net award against us of $126,587. The plaintiff was also awarded $367,860 in prejudgement interest and costs, all of which was allocated to us. |
• | Goodyear v. Vista Resorts, Inc. (Case No. 02CA1690, Colorado Court of Appeals), an action involving five homesites, in which a jury rendered a verdict in favor of the plaintiff real estate developer in the aggregate amount of approximately $5.9 million, which damages were trebled under the Colorado Consumer Protection Act. The total damages awarded were approximately $22.7 million, including interest, attorney’s fees and costs. This verdict was upheld by the Court of Appeals in 2004 and on August 8, 2005 the Supreme Court of Colorado denied Goodyear’s Petition for Writ of Certiorari; |
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• | Sumerel et al. v. Goodyear et al(Case No. 02CA1997, Colorado Court of Appeals), a case involving six sites in which a judgment was entered against us in the amount of $1.3 million plus interest and costs; and | |
• | Loughridge v. Goodyear and Chiles Power Supply, Inc. (Case No. 98-B-1302, United States District Court for the District of Colorado), a case consolidating claims involving 36 Entran II sites, in which a federal jury awarded 34 homeowners aggregate damages of $8.2 million, 50% of which was allocated to us. On September 8, 2003, an additional $5.7 million in prejudgment interest was awarded to the plaintiffs, all of which was allocated to us. |
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Name | Age | Position(s) Held | ||||
Robert J. Keegan | 58 | Chairman of the Board, Chief Executive Officer and President | ||||
Jonathan D. Rich | 50 | President, North American Tire | ||||
Arthur de Bok | 43 | President, European Union Tire | ||||
Jarro F. Kaplan | 58 | President, Eastern Europe, Middle East and Africa Tire | ||||
Eduardo A. Fortunato | 52 | President, Latin America Tire | ||||
Pierre Cohade | 43 | President, Asia/Pacific Tire | ||||
Timothy R. Toppen | 50 | President, Engineered Products | ||||
Lawrence D. Mason | 44 | President, North American Tire Consumer Business | ||||
Richard J. Kramer | 41 | Executive Vice President and Chief Financial Officer | ||||
Joseph M. Gingo | 60 | Executive Vice President, Quality Systems and Chief Technical Officer | ||||
C. Thomas Harvie | 62 | Senior Vice President, General Counsel and Secretary | ||||
Charles L. Sinclair | 54 | Senior Vice President, Global Communications | ||||
Christopher W. Clark | 54 | Senior Vice President, Global Sourcing | ||||
Kathleen T. Geier | 49 | Senior Vice President, Human Resources | ||||
Darren R. Wells | 39 | Senior Vice President, Business Development and Treasurer | ||||
Thomas A. Connell | 56 | Vice President and Controller | ||||
Donald D. Harper | 58 | Vice President | ||||
William M. Hopkins | 61 | Vice President | ||||
Isabel H. Jasinowski | 56 | Vice President | ||||
Gary A. Miller | 58 | Vice President | ||||
James C. Boland | 65 | Director | ||||
John G. Breen | 71 | Director | ||||
Gary D. Forsee | 55 | Director | ||||
William J. Hudson, Jr. | 71 | Director |
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Name | Age | Position(s) Held | ||||
Steven A. Minter | 66 | Director | ||||
Denise M. Morrison | 51 | Director | ||||
Rodney O’Neal | 51 | Director | ||||
Shirley D. Peterson | 63 | Director | ||||
Thomas H. Weidemeyer | 58 | Director |
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Summary of Compensation |
Long-Term Compensation | |||||||||||||||||||||||||||||||||
Annual Compensation | Awards | Payouts | |||||||||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||||||||||
Underlying | Long Term | ||||||||||||||||||||||||||||||||
Restricted | Options/ | Incentive | |||||||||||||||||||||||||||||||
Other Annual | Stock | SARs | Plan | All Other | |||||||||||||||||||||||||||||
Salary | Bonus | Compensation | Award(s) | (Number | Payouts | Compensation | |||||||||||||||||||||||||||
Name and Principal Position | Year | (Dollars) | (Dollars)(1) | (Dollars)(2) | (Dollars)(3) | of Shares) | (Dollars)(4) | (Dollars)(5) | |||||||||||||||||||||||||
Robert J. Keegan | 2004 | $ | 1,050,000 | $ | 2,600,000 | — | — | 261,548 | $ | 472,113 | $ | 1,000,000 | |||||||||||||||||||||
Chairman of the Board, Chief | 2003 | 1,000,000 | 509,200 | — | — | 200,000 | — | — | |||||||||||||||||||||||||
Executive Officer and President(6) | 2002 | 840,000 | — | — | — | 140,000 | — | 5,100 | |||||||||||||||||||||||||
Jonathan D. Rich | 2004 | 420,000 | 680,000 | — | — | 52,000 | 55,080 | 500,000 | |||||||||||||||||||||||||
President, | 2003 | 345,000 | 63,476 | — | — | 45,000 | — | — | |||||||||||||||||||||||||
North American Tire(7) | 2002 | 223,333 | 131,770 | — | — | 25,000 | — | 5,100 | |||||||||||||||||||||||||
C. Thomas Harvie | 2004 | 431,000 | 560,000 | — | — | 49,087 | 157,371 | 200,000 | |||||||||||||||||||||||||
Senior Vice President, General | 2003 | 415,000 | 175,000 | — | — | 42,700 | — | — | |||||||||||||||||||||||||
Counsel and Secretary | 2002 | 415,000 | 102,537 | — | — | 32,000 | — | 6,655 | |||||||||||||||||||||||||
Richard J. Kramer | 2004 | 378,750 | 587,704 | — | — | 47,861 | 78,686 | 500,000 | |||||||||||||||||||||||||
Executive Vice President and | 2003 | 300,000 | 50,496 | — | — | 41,600 | — | — | |||||||||||||||||||||||||
Chief Financial Officer(8) | 2002 | 289,583 | 251,216 | — | $ | 155,400 | 26,000 | — | 5,782 | ||||||||||||||||||||||||
Michael J. Roney(9) | 2004 | 394,667 | 570,000 | $ | 132,665 | — | 48,000 | 157,371 | 664,152 | ||||||||||||||||||||||||
President | 2003 | 380,000 | 133,000 | 147,754 | — | 37,300 | — | 271,450 | |||||||||||||||||||||||||
European Union Tire | 2002 | 370,000 | 224,000 | 153,251 | — | 28,000 | — | 181,509 |
(1) | Represents amounts awarded under the Performance Recognition Plan. Additional information regarding the amounts awarded to the Named Officers and other executive officers under the Performance Recognition Plan is set forth below under “— Other Compensation Plan Information — Performance Recognition Plan.” In addition, the amount reported for Mr. Kramer in 2002 includes an award of 15,000 shares of unrestricted stock on August 6, 2002 valued at $233,250. |
(2) | These amounts represent reimbursements made to Mr. Roney for incremental taxes resulting from his foreign assignment. |
(3) | Mr. Kramer purchased 10,000 shares of Common Stock for a purchase price of $.01 per share on August 6, 2002. Through August 6, 2005, the shares are subject to transfer and other restrictions and to Goodyear’s option to repurchase under specified circumstances at a price of $.01 per share. The dollar value reported ($155,400) represents the market value of the shares at the date of grant ($15.55 per share on August 6, 2002), less the purchase price. The restrictions and Goodyear’s option in respect of all 10,000 shares of Common Stock will lapse if Mr. Kramer continues to be a Goodyear employee through August 5, 2005. If Mr. Kramer ceases to be an employee prior to that date due to his death or disability, he will be entitled to receive 277 of the shares of Common Stock for each full month of service. Mr. Kramer receives all dividends, if any, paid on the shares of Common Stock. The value of the 10,000 shares of Common Stock (net of the purchase price) was $156,600 at December 31, 2004, based on a closing price on the New York Stock Exchange of $15.67 per share on that date. No other shares of restricted stock were granted, awarded or issued by Goodyear to any Named Officer during 2004, 2003 or 2002. |
(4) | The payouts for 2004 relate to performance equity units granted on December 3, 2001 and August 6, 2002. Amounts earned were determined by the extent to which the performance goals related to the units were achieved during the three year performance period ended December 31, 2004. Payouts are to be made 50% in cash and 50% in shares of Common Stock. The performance measure for 50% of each unit was based on Goodyear’s average annual return on invested capital and the other 50% was based on |
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Goodyear’s total shareholder return relative to a peer group consisting of the firms included in the S&P Auto Parts & Equipment Index. Payouts ranging from 0% to 150% of the units granted could have been earned. Amounts earned were determined based on Goodyear’s average annual total shareholder return (potential payouts ranged from 30% of the units if the total shareholder return equaled or exceeded the 30th percentile of the peer group to 75% of the units if Goodyear’s total shareholder return during the relevant performance period equaled or exceeded the 75th percentile of the peer group) and its return on the invested capital (with potential payouts ranging from 35% of the units if a 7.6% average annual return were achieved to 75% of the units if a 13.6% average annual return were achieved) during the performance period. As a result of the achievement of the target levels during the performance period, each participant earned 89.64% of the units granted. The value of each unit, $14.63, is based on the average of the high and low sale price of the Common Stock on December 31, 2004. | |
(5) | All Other Compensation for each Named Officer in 2004 consists of the guaranteed payout related to grants to the Named Officers under the Executive Performance Plan (the “EP Plan”). This payout will only be made if the Named Officer remains an employee of Goodyear through December 31, 2006. Additional information on grants made under the EP Plan is set forth below under “— Long Term Incentive Awards.” In addition, with respect to Mr. Roney, all other compensation includes payments generally applicable to employees temporarily assigned outside their home countries in an amount aggregating $264,152. This amount includes a foreign housing allowance, tuition for foreign schooling and a foreign service premium payment. |
(6) | Mr. Keegan became a Goodyear employee on October 1, 2000 and served as President and Chief Operating Officer from October 3, 2000 until he was elected the President and Chief Executive Officer effective January 1, 2003. Mr. Keegan became Chairman of the Board effective June 30, 2003. |
(7) | Mr. Rich has served as President of North American Tire since December of 2002. He previously served as President of Chemical Products. |
(8) | Mr. Kramer has served as Executive Vice President and Chief Financial Officer since June of 2004. He previously served as Vice President-Corporate Finance from March 2000 to July 2002, Vice President, Finance-North American Tire from July 2002 to August 2003 and Senior Vice President, Strategic Planning and Restructuring from September 2003 to June 2004. |
(9) | Mr. Roney served as President, European Union Tire until September 16, 2005. |
Option/ SAR Grants In 2004 |
Individual Grants | Potential Realizable Value | |||||||||||||||||||||||
at Assumed Annual Rates | ||||||||||||||||||||||||
% of Total | of Stock Price Appreciation | |||||||||||||||||||||||
Number of | Options/SARs | for Option Term | ||||||||||||||||||||||
Securities Underlying | Granted to | Exercise or Base | (Dollars)(3) | |||||||||||||||||||||
Options/SARs Granted | Employees in | Price (Dollars | Expiration | |||||||||||||||||||||
Name | (Number of Shares)(1) | 2004 | per Share)(2) | Date | 5% | 10% | ||||||||||||||||||
Robert J. Keegan | 233,000 | 5.6 | % | $ | 12.54 | 12-9-14 | $ | 1,838,370 | $ | 4,657,670 | ||||||||||||||
28,548 | 7 | 10.91 | 12-3-12 | 507,298 | 807,908 | |||||||||||||||||||
Jonathan D. Rich | 52,000 | 1.3 | 12.54 | 12-9-14 | 410,280 | 1,039,480 | ||||||||||||||||||
C. Thomas Harvie | 43,000 | 1.0 | 12.54 | 12-9-14 | 339,270 | 859,570 | ||||||||||||||||||
6,087 | .2 | 12.27 | 12-3-12 | 121,679 | 193,749 | |||||||||||||||||||
Richard J. Kramer | 45,000 | 1.1 | 12.54 | 12-9-14 | 355,050 | 899,550 | ||||||||||||||||||
2,861 | .1 | 12.21 | 12-3-12 | 56,905 | 90,608 | |||||||||||||||||||
Michael J. Roney | 48,000 | 1.2 | 12.54 | 12-9-14 | 378,720 | 959,520 |
(1) | On December 9, 2004, stock options in respect of an aggregate of 4,031,135 shares of Common Stock were granted to 867 persons, including the Named Officers. In the case of each Named Officer, incentive stock options were granted on December 9, 2004 in respect of 7,800 shares. All other shares are the |
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subject of non-qualified stock options. Each stock option will vest at the rate of 25% per annum. Each unexercised stock option terminates automatically if the optionee ceases to be an employee of Goodyear or one of its subsidiaries for any reason, except that (a) upon retirement or disability of the optionee more than six months after the grant date, the stock option will become immediately exercisable and remain exercisable until its expiration date, and (b) in the event of the death of the optionee more than six months after the grant thereof, each stock option will become exercisable and remain exercisable for up to three years after the date of death of the optionee. Each option also includes the right to the automatic grant of a new option (a “reinvestment option”) for that number of shares tendered in the exercise of the original stock option. The reinvestment option will be granted on, and will have an exercise price equal to the fair market value of the Common Stock on, the date of the exercise of the original stock option and will be subject to the same terms and conditions as the original stock option except for the exercise price and the reinvestment option feature. The following reinvestment options were granted during 2004: Mr. Keegan, 28,548 shares on August 19, 2004; Mr. Harvie, 6,087 shares on November 18, 2004; and Mr. Kramer, 2,861 shares on November 23, 2004. | |
(2) | The exercise price of each stock option is equal to 100% of the per share fair market value of the Common Stock on the date granted. The option exercise price and/or withholding tax obligations may be paid by delivery of shares of Common Stock valued at the market value on the date of exercise. |
(3) | The dollar amounts shown reflect calculations at the 5% and 10% rates set by the Securities and Exchange Commission and, therefore, are not intended to forecast possible future appreciation, if any, of the price of the Common Stock. No economic benefit to the optionees is possible without an increase in price of the Common Stock, which will benefit all shareholders commensurately. |
Option/ SAR 2003 Exercises and Year-End Values |
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-the-Money | |||||||||||||||||||||||
Options/SARs at | Options/SARs at | |||||||||||||||||||||||
December 31, 2004 | December 31, 2004 | |||||||||||||||||||||||
Shares Acquired | Value | (Number of Shares) | (Dollars)(1) | |||||||||||||||||||||
on Exercise | Realized | |||||||||||||||||||||||
Name | (Number of Shares) | (Dollars) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Robert J. Keegan | 35,000 | $ | 103,775 | 482,500 | 504,048 | $ | 627,700 | $ | 2,248,915 | |||||||||||||||
Jonathan D. Rich | -0- | -0- | 40,550 | 101,850 | 172,313 | 459,178 | ||||||||||||||||||
C. Thomas Harvie | 8,000 | 34,600 | 167,675 | 105,112 | 137,559 | 464,624 | ||||||||||||||||||
Richard J. Kramer | 3,750 | 16,013 | 70,650 | 97,061 | 106,840 | 397,729 | ||||||||||||||||||
Michael J. Roney | -0- | -0- | 116,875 | 96,225 | 167,281 | 415,444 |
(1) | Determined using $14.66 per share, the closing price of the Common Stock on December 31, 2004, as reported on the New York Stock Exchange Composite Transactions tape. |
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Long Term Incentive Awards |
Performance or | Estimated Future Pay-Outs Under | |||||||||||||||||||
Other Period Until | Non-Stock Price-Based Plans(2) | |||||||||||||||||||
Number of | Maturation or | |||||||||||||||||||
Name | Units(1) | Pay-Out | Threshold | Target | Maximum | |||||||||||||||
Robert J. Keegan | 40,000 | 1/1/04-12/31/06 | $ | 1,000,000 | $ | 4,000,000 | $ | 8,000,000 | ||||||||||||
44,000 | 1/1/05-12/31/07 | — | 4,400,000 | 8,800,000 | ||||||||||||||||
Jonathan D. Rich | 10,000 | 1/1/04-12/31/06 | 500,000 | 1,000,000 | 2,000,000 | |||||||||||||||
11,000 | 1/1/05-12/31/07 | — | 1,100,000 | 2,200,000 | ||||||||||||||||
C. Thomas Harvie | 8,000 | 1/1/04-12/31/06 | 200,000 | 800,000 | 1,600,000 | |||||||||||||||
8,300 | 1/1/05-12/31/07 | — | 830,000 | 1,660,000 | ||||||||||||||||
Richard J. Kramer | 10,000 | 1/1/04-12/31/06 | 500,000 | 1,000,000 | 2,000,000 | |||||||||||||||
10,700 | 1/1/05-12/31/07 | — | 1,070,000 | 2,140,000 | ||||||||||||||||
Michael J. Roney | 8,000 | 1/1/04-12/31/06 | 400,000 | 800,000 | 1,600,000 |
(1) | Represents units granted under the Executive Performance Plan. Following the respective performance period, each unit will have a value of between $0 to $200 depending upon the level of achievement of the performance measures. The performance measure for 50% of each unit is based on a cumulative target level of net income over the performance period. The other 50% is based on a cumulative target level of total cash flow over the performance period. |
(2) | The target amount represents the amount to be paid if the units are paid out at a value of $100 per unit. The maximum amount represents the amount to be paid if the units are paid out of a value of $200 per unit. With respect to the units with a performance period ending December 31, 2007, no award will be paid out if the minimum target levels of net income and cash flow are not achieved. With respect to the units with a performance period ending December 31, 2006, the threshold amount represents the amount guaranteed to be paid if the Named Officer remains in the continuous employ of the Company through the performance period. |
Other Compensation Plan Information |
Performance Recognition Plan |
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Executive Performance Plan |
Savings Plan |
Severance Plan |
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Deferred Compensation Plan |
Retirement Benefits |
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Estimated Annual Benefits Upon Retirement at July 1, 2005, for Years of Service Indicated | ||||||||||||||||||||||||
5 Year Average Annual Remuneration | 10 Years | 15 Years | 20 Years | 25 Years | 30 Years | 35 Years | ||||||||||||||||||
$ 250,000 | $ | 50,355 | $ | 68,881 | $ | 87,158 | $ | 99,137 | $ | 111,170 | $ | 118,400 | ||||||||||||
500,000 | 105,355 | 143,881 | 182,158 | 206,637 | 231,170 | 245,900 | ||||||||||||||||||
750,000 | 160,355 | 218,881 | 277,158 | 314,137 | 351,170 | 373,400 | ||||||||||||||||||
1,000,000 | 215,355 | 293,881 | 372,158 | 421,637 | 471,170 | 500,900 | ||||||||||||||||||
1,250,000 | 270,355 | 368,881 | 467,158 | 529,137 | 591,170 | 628,400 | ||||||||||||||||||
1,500,000 | 325,355 | 443,881 | 562,158 | 636,637 | 711,170 | 755,900 | ||||||||||||||||||
1,750,000 | 380,355 | 518,881 | 657,158 | 744,137 | 831,170 | 883,400 | ||||||||||||||||||
2,000,000 | 435,355 | 593,881 | 752,158 | 851,637 | 951,170 | 1,010,900 | ||||||||||||||||||
2,500,000 | 545,355 | 743,881 | 942,158 | 1,066,637 | 1,191,170 | 1,265,900 | ||||||||||||||||||
3,000,000 | 655,355 | 893,881 | 1,132,158 | 1,281,637 | 1,431,170 | 1,520,900 | ||||||||||||||||||
3,500,000 | 765,355 | 1,043,881 | 1,322,158 | 1,496,637 | 1,671,170 | 1,775,900 | ||||||||||||||||||
4,000,000 | 875,355 | 1,193,881 | 1,512,158 | 1,711,637 | 1,911,170 | 2,030,900 |
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Shares of | |||||||||
Common Stock | |||||||||
Beneficially | Percent | ||||||||
Name and Address | Owned | of Class | |||||||
Brandes Investment Partners, L.P. | 30,214,095 | (1) | 17.2 | % | |||||
and related parties | |||||||||
11988 El Camino Real, Suite 500 | |||||||||
San Diego, California 92130 |
(1) | As set forth in a Form 13F filed with the Securities and Exchange Commission on August 15, 2005. |
Shares of | Shares of | Shares of | ||||||||||||||
Common | Common | Common | Deferred | |||||||||||||
Stock | Stock Held | Stock Subject | Share | |||||||||||||
Owned | in Savings | to Exercisable | Equivalent | |||||||||||||
Name | Directly(2) | Plan(3) | Options(4) | Units | ||||||||||||
James C. Boland | 3,000 | -0- | -0- | 15,364 | (12) | |||||||||||
John G. Breen | 5,200 | (5)(6) | -0- | -0- | 45,773 | (12) | ||||||||||
Gary D. Forsee | 1,000 | -0- | -0- | 20,113 | (12) | |||||||||||
C. Thomas Harvie | 18,076 | 1,068 | 146,000 | -0- | ||||||||||||
William J. Hudson, Jr. | 5,000 | -0- | -0- | 34,444 | (12) | |||||||||||
Robert J. Keegan | 114,532 | (7) | 431 | 426,048 | -0- | |||||||||||
Richard J. Kramer | 29,802 | (8) | 207 | 59,250 | 455 | (13) | ||||||||||
Steven A. Minter | 3,580 | (6) | -0- | -0- | 26,879 | (12) | ||||||||||
Denise M. Morrison | 1,100 | -0- | -0- | 1,135 | (12) | |||||||||||
Rodney O’Neal | -0- | -0- | -0- | 7,349 | (12) | |||||||||||
Shirley D. Peterson | -0- | -0- | -0- | 5,447 | (12) | |||||||||||
Jonathan D. Rich | 4,761 | (9) | 3,146 | 35,896 | 23,405 | (13) | ||||||||||
Michael J. Roney | 9,378 | (10) | 211 | 111,875 | 697 | (13) | ||||||||||
Thomas H. Weidemeyer | 1,000 | -0- | -0- | 2,649 | (12) | |||||||||||
All directors and executive officers as a group (29 persons) | 314,313 | 20,252 | 1,408,970 | 195,313 |
(1) | The number of shares indicated as beneficially owned by each of the director and named executive officers, and the 1,743,535 shares of Common Stock indicated as beneficially owned by each person and the group, has been determined in accordance with Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934. In each case, beneficial ownership is less than one percent of all outstanding shares of Common Stock. | |
(2) | Unless otherwise indicated in a subsequent note, each person named and each member of the group has sole voting and investment power with respect to the shares of Common Stock shown. |
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(3) | Shares held in trust under Goodyear’s Employee Savings Plan for Salaried Employees. | |
(4) | Shares which may be acquired upon the exercise of options which are exercisable prior to August 1, 2005 under Goodyear’s 2002 Performance Plan (the “2002 Plan”), Goodyear 1997 Performance Incentive Plan (the “1997 Plan”) and the 1989 Goodyear Performance and Equity Incentive Plan (the “1989 Plan”). | |
(5) | Includes 5,000 shares jointly owned by Mr. Breen and his spouse. | |
(6) | Includes 200 shares acquired pursuant to Goodyear’s 1994 Restricted Stock Award Plan for non-employee Directors, which shares are subject to certain restrictions. | |
(7) | Includes 13,000 shares owned by Mr. Keegan’s spouse. | |
(8) | Includes 10,000 shares acquired under the 2002 Plan and a Restricted Stock Purchase Agreement, which shares are subject to the Company’s repurchase option and certain restrictions on transfer. | |
(9) | Includes 1,000 shares owned jointly by Mr. Rich and his spouse. |
(10) | Includes 200 shares owned jointly by Mr. Roney and his spouse. |
(11) | Includes 279,815 shares owned of record and beneficially or owned beneficially through a nominee, and 34,498 shares held by or jointly with family members of certain directors and executive officers. |
(12) | Deferred units, each equivalent to a hypothetical share of Common Stock, accrued to the accounts of the director under Goodyear’s Outside Director’s Equity Participation Plan, payable in cash following retirement from the Board of Directors. |
(13) | Units, each equivalent to a hypothetical share of Common Stock, deferred pursuant to performance awards earned under the 2002 Plan, 1997 Plan and the 1989 Plan and receivable in cash, shares of Common Stock, or any combination thereof, at the election of the executive officer. |
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•�� | the holder is not our affiliate within the meaning of Rule 405 under the Securities Act; | |
• | the holder is not a broker-dealer who purchases such exchange notes directly from us to resell pursuant to Rule 144A or any other available exception under the Securities Act; | |
• | the exchange notes are acquired in the ordinary course of the holder’s business; and | |
• | the holder does not intend to participate in a distribution of the exchange notes. |
• | will be registered under the Securities Act; and | |
• | will not bear legends restricting their transfer. |
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• | end or amend the exchange offer and not to accept for exchange any original notes not previously accepted for exchange upon the occurrence of any of the events specified below under “— Conditions to the Exchange Offer” that have not been waived by us; and | |
• | amend the terms of the exchange offer in any manner that, in our good faith judgment, is advantageous to you, whether before or after any tender of the original notes. |
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• | complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires and deliver the letter of transmittal or facsimile together with any required documents to the exchange agent prior to the expiration date; | |
• | instruct The Depository Trust Company to transmit on behalf of the holder a computer-generated message to the exchange agent in which the holder of the original notes acknowledges and agrees to be bound by the terms of the letter of transmittal, which computer-generated message shall be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date, according to the procedure for book-entry transfer described below; or | |
• | the holder must comply with the guaranteed delivery procedures described below. |
• | make appropriate arrangements to register ownership of the original notes in the owner’s name; or | |
• | obtain a properly completed bond power from the registered holder of original notes. |
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• | by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or | |
• | for the account of an eligible institution. |
• | original notes or a timely book-entry confirmation that original notes have been transferred into the exchange agent’s account at The Depository Trust Company; and | |
• | a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message. |
• | any exchange notes that the holder receives will be acquired in the ordinary course of its business; | |
• | the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes; | |
• | if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes; | |
• | if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for original notes that were acquired as a result of market-making activities or other trading activities, that |
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it will deliver a prospectus, as required by law, in connection with any resale of those exchange notes (see “Plan of Distribution”); and | ||
• | the holder is not an “affiliate,” as defined in Rule 405 of the Securities Act, of us or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act. |
• | the tender is made through an eligible guarantor institution; | |
• | before expiration of the exchange offer, the exchange agent receives from the eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent’s message and notice of guaranteed delivery (i) setting forth the name and address of the holder and the registered number(s) and the principal amount of original notes tendered, (ii) stating that the tender is being made by guaranteed delivery and (iii) guaranteeing that, within three New York Stock Exchange trading days after expiration of the exchange offer, the letter of transmittal, or facsimile thereof, together with the original notes or a book-entry transfer confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and | |
• | the exchange agent receives the properly completed and executed letter of transmittal, or facsimile thereof, as well as all tendered original notes in proper form for transfer or a book-entry transfer confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after expiration of the exchange offer. |
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• | specify the name of the person that tendered the original notes to be withdrawn; | |
• | identify the original notes to be withdrawn, including the certificate number or numbers and principal amount of such original notes; | |
• | specify the principal amount of original notes to be withdrawn; | |
• | include a statement that the holder is withdrawing its election to have the original notes exchanged; | |
• | be signed by the holder in the same manner as the original signature on the letter of transmittal by which the original notes were tendered or as otherwise described above, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee under the indentures register the transfer of the original notes into the name of the person withdrawing the tender; and | |
• | specify the name in which any of the original notes are to be registered, if different from that of the person that tendered the original notes. |
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• | the exchange notes to be received will not be tradeable by the holder without restriction under the Securities Act, the Exchange Act and without material restrictions under the blue sky or securities laws of substantially all of the states of the United States; | |
• | the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any applicable interpretation of the staff of the SEC; | |
• | any action or proceeding has been instituted or threatened in any court or by or before any governmental agency or regulatory authority with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer. |
• | the representations described under “— Resale of Exchange Notes,” “— Procedures for Tendering Original Notes” and “Plan of Distribution;” and | |
• | such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available an appropriate form for registration of the exchange notes under the Securities Act. |
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By Hand or Overnight Delivery: | |
Wells Fargo Bank, N.A. | |
Attn: Corporate Trust Operations | |
Sixth and Marquette | |
MAC N9303-121 | |
Minneapolis, MN 55479 | |
By Registered or Certified Mail: | |
Wells Fargo Bank, N.A. | |
Attn: Corporate Trust Operations | |
Sixth and Marquette | |
MAC N9303-121 | |
Minneapolis, MN 55479 | |
By Facsimile Transmission: | |
(612) 667-6282 | |
Attn: Corporate Trust Operations | |
To Confirm by Telephone or for Information: | |
(800) 344-5128 |
• | fees and expenses of the exchange agent and trustee; | |
• | SEC registration fees; | |
• | accounting and legal fees; and | |
• | printing and mailing expenses. |
• | certificates representing original notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of original notes tendered; | |
• | exchange notes are to be delivered to, or issued in the name of, any person other than the registered holder of the original notes; |
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• | tendered original notes are registered in the name of any person other than the person signing the letter of transmittal; or | |
• | a transfer tax is imposed for any reason other than the exchange of original notes under the exchange offer. |
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• | will be senior obligations of the Company secured by the Collateral as described below under “Security;” | |
• | will be senior in right of payment to all future Subordinated Obligations of the Company; and | |
• | will be guaranteed by each Subsidiary Guarantor. |
• | Indebtedness under our First Lien Credit Facility and Second Lien Term Loan, and | |
• | certain Hedging Obligations and certain obligations in respect of cash management services incurred in connection with Bank Indebtedness. |
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Redemption | ||||
Year | Price | |||
2008 | 105.50 | % | ||
2009 | 102.75 | % | ||
2010 and thereafter | 100.00 | % |
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(1) | at least 65% of the original aggregate principal amount of the Fixed Rate Notes (calculated giving effect to any issuance of additional Fixed Rate Notes) remains outstanding after giving effect to any such redemption; and | |
(2) | any such redemption by the Company must be made within 90 days after the closing of such Public Equity Offering and must be made in accordance with certain procedures set forth in the Indenture. |
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Redemption | ||||
Year | Price | |||
2008 | 104.00 | % | ||
2009 | 102.00 | % | ||
2010 and thereafter | 100.00 | % |
(1) | at least 65% of the original aggregate principal amount of the Floating Rate Notes (calculated giving effect to any issuance of Additional Floating Rate Notes) remains outstanding after giving effect to any such redemption; and | |
(2) | any such redemption by the Company must be made within 90 days of such Public Equity Offering and must be made in accordance with certain procedures set forth in the Indenture. |
• | 100% of the Capital Stock of, or other equity interests in, certain of our existing and future Domestic Subsidiaries owned directly by us and the Grantor Subsidiary Guarantors (other than Goodyear |
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Canada), in each case other than Excluded Equity Interests and subject to the limitation described in the fifth paragraph under this heading, | ||
• | the Capital Stock of, or other equity interests in certain of our existing and future Foreign Subsidiaries owned directly by us and the Grantor Subsidiary Guarantors (other than Goodyear Canada), in each case other than Excluded Equity Interests and subject to the limitation described in the seventh paragraph under this heading and which in no event exceeds 65% of the total outstanding equity interests of any Foreign Subsidiary, | |
• | Indebtedness held by the Company and the Grantor Subsidiary Guarantors (other than Goodyear Canada), in each case subject to the limitation described in the seventh paragraph under this heading, | |
• | certain equipment (including blimps) and general intangibles (including intellectual property) of the Company and the Grantor Subsidiary Guarantors (other than Goodyear Canada), | |
• | the Company’s Corporate Headquarters, | |
• | certain intellectual property of Goodyear Canada, | |
• | certain accounts receivable, inventory, cash and cash accounts (other than Excluded Operating Accounts) of the Company and the Grantor Subsidiary Guarantors, and | |
• | any proceeds of any of the preceding, | |
• | in each case, other than any Consent Assets and to the extent that a Pari Passu Lien can be granted thereon. |
First, in addition to the Bank Indebtedness currently secured by various portions of the Collateral, the Indenture will permit us to Incur additional Priority Lien Obligations; provided, however, that the total amount of Priority Lien Obligations that may be outstanding pursuant to clause (1) of the definition of “Permitted Collateral Liens” at any one time does not exceed the greater of (a) $2,700.0 million and (b) the sum of (1) 80% of the book value of the inventory of the Company and the Subsidiary Guarantors and (2) 85% of the book value of the accounts receivable of the Company and the Subsidiary Guarantors, in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; provided further, however, that we may allocate all or a portion of this amount to be secured by Pari Passu Liens rather than Priority Liens;provided further, that (x) the first $500.0 million of Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso shall reduce the amount set forth in clause (a) above by the amount of such Indebtedness and (y) all Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso in excess of $500.0 million shall reduce both the amount set forth in clause (a) above and the amount set forth in clause (b) above, in each case, by the amount of such Indebtedness. If any Collateral secures Indebtedness on a Priority Lien basis, such Indebtedness will be considered a Priority Lien Obligation; provided, however, that for purposes of the definition of Priority Lien Obligations, the European Bank Indebtedness will not be considered a Priority Lien Obligation as long as the only Collateral securing the European Bank Indebtedness on a Priority Lien basis is the Company’s equity interest in Luxembourg Finance. | |
Second, in addition to the Notes and any other Indebtedness secured by Pari Passu Liens pursuant to clause First above, the Indenture will permit us to secure Other Pari Passu Lien Obligations (including the European Bank Indebtedness to the extent it constitutes an Other Pari Passu Lien Obligation) in an amount not to exceed the greater of (1) $650.0 million and (2) an amount that as of the date of |
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Incurrence, after giving effect thereto and the application of proceeds therefrom, would not result in a Consolidated Secured Debt Ratio of more than 3.75:1. | |
Third, certain Hedging Obligations and certain obligations in respect of cash management services are and may in the future also be secured by Priority Liens or Pari Passu Liens on the Collateral. | |
Fourth, certain administrative expenses of the Credit Agent, the Collateral Agent and the Trustee may be secured by Priority Liens or Pari Passu Liens on the Collateral. | |
Fifth, other Permitted Collateral Liens. |
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First, to the payment of all costs and expenses Incurred by the Credit Agent in connection with the collection of proceeds or sale of any Collateral or otherwise in connection with the agreements governing the Priority Lien Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Credit Agent on behalf of the Company or a Subsidiary Guarantor and any other costs or expenses Incurred in connection with the exercise of any right or remedy of the holders of the Priority Lien Obligations, | |
Second, to pay amounts due under all Priority Lien Obligations in accordance with the relative priorities of the Priority Liens securing such Priority Lien Obligations, as determined among the holders of the Priority Lien Obligations, | |
Third, to the payment of all costs and expenses Incurred by the Trustee and the Collateral Agent in connection with the collection of proceeds or sale of any Collateral or otherwise in connection with the Indenture, the Security Documents and the Intercreditor Agreement, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Trustee and the Collateral Agent on behalf of the Company or a Subsidiary Guarantor and any other costs or expenses incurred in connection with the exercise of any right or remedy of the holders of the Notes and the Other Pari Passu Lien Obligations, | |
Fourth, to pay the Notes, any accrued and unpaid interest thereon and the Other Pari Passu Lien Obligations on a pro rata basis based on the respective amounts of the Notes and the Other Pari Passu Lien Obligations then outstanding, and | |
Fifth, to the extent of the balance of such proceeds after application in accordance with clauses (1), (2), (3) and (4) above, to the Company or such Subsidiary Guarantor, as applicable, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. |
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(1) | if all other Liens (other than Permitted Collateral Liens described in clause (5) of the definition thereof) on that asset securing Priority Lien Obligations and any Other Pari Passu Lien Obligations then secured by that asset (including all commitments thereunder) are released; provided, however, that after giving effect to the release, at least $300.0 million of obligations secured by the Priority Liens on the remaining Collateral remain outstanding or committed and available to be drawn under the documents governing such commitment and no Default shall have occurred and be continuing under the Indenture as of the time of such proposed release; | |
(2) | in respect of any sales, transfers, leases or other dispositions of assets in transactions permitted or not prohibited under the covenant described below under the caption “— Limitation on Sales of Assets and Subsidiary Stock,” including any such transactions by the Credit Agent in connection with an exercise of remedies against the Collateral on behalf of lenders under any Priority Lien Obligations secured by such Collateral; provided, however, that all other Priority Liens and Pari Passu Liens (other than Permitted Collateral Liens described in clause (5) of the definition thereof) have also been released in respect of such disposed asset; provided further, however, that such Liens shall not be released in respect of any such sale, transfer, lease or other disposition to the Company or any Subsidiary unless the Company elects to cause such transaction to be an Asset Disposition; | |
(3) | if we provide substitute collateral with at least an equivalent Fair Market Value; | |
(4) | if all of the stock of any of our Subsidiaries that is pledged to the Trustee is released (except in the case of a release because such stock has become part of the Excluded Securities) or if any Subsidiary that is a Subsidiary Guarantor is released from its Subsidiary Guarantee, that Subsidiary’s assets will also be released; or | |
(5) | as described under the heading “Amendments and Waivers” below. |
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(1) | upon payment in full of the principal of, accrued and unpaid interest on the Notes and all other obligations under the Indenture, the Subsidiary Guarantees, the Security Documents and the Intercreditor Agreement that are due and payable at or prior to the time such principal, accrued and unpaid interest are paid; | |
(2) | upon a satisfaction and discharge of the Indenture; | |
(3) | at our election, during any Suspension Period (as defined below under “Certain covenants — Suspended Covenants”); or | |
(4) | upon a legal defeasance or covenant defeasance as described below under the heading “Defeasance.” |
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(1) | upon the sale (including any sale pursuant to any exercise of remedies by a holder of Indebtedness of the Company or of such Subsidiary Guarantor) or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor; |
(3) | upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary; | |
(4) | unless there is then existing an Event of Default, at such time and for so long as any such Subsidiary Guarantor that became a Subsidiary Guarantor after March 12, 2004 pursuant to the covenant described under “Certain covenants — Future Subsidiary Guarantors” does not Guarantee any Indebtedness that would have required such Subsidiary Guarantor to enter into a supplemental indenture pursuant to the covenant described under “Certain covenants — Future Subsidiary Guarantors;” | |
(5) | at our election, during any Suspension Period; or | |
(6) | if we exercise our legal defeasance option or our covenant defeasance option as described under “Defeasance” or if our obligations under the Indenture are discharged in accordance with the terms of the Indenture. |
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First, in addition to the Bank Indebtedness currently secured by various portions of the Collateral, the Indenture will permit us to Incur additional Priority Lien Obligations; provided, however, that the total amount of Priority Lien Obligations that may be outstanding pursuant to clause (1) of the definition of “Permitted Collateral Liens” at any one time does not exceed the greater of (a) $2,700.0 million and (b) the sum of (1) 80% of the book value of the inventory of the Company and the Subsidiary Guarantors and (2) 85% of the book value of the accounts receivable of the Company and the Subsidiary Guarantors, in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; provided further, however, that we may allocate all or a portion of this amount to be secured by Pari Passu Liens rather than Priority Liens;provided further, that (x) the first $500.0 million of Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso shall reduce the amount set forth in clause (a) above by the amount of such Indebtedness and (y) all Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso in excess of $500.0 million shall reduce both the amount set forth in clause (a) above and the amount set forth in clause (b) above, in each case, by the amount of such Indebtedness. If any Collateral secures Indebtedness on a Priority Lien basis, such Indebtedness will be considered a Priority Lien Obligation; provided, however, that for purposes of the definition of Priority Lien Obligations, the European Bank Indebtedness will not be considered a Priority Lien Obligation as long as the only Collateral securing the European Bank Indebtedness on a Priority Lien basis is the Company’s equity interest in Luxembourg Finance. | |
Second, in addition to the Notes and any other Indebtedness secured by Pari Passu Liens pursuant to clause First above, the Indenture will permit us to secure Other Pari Passu Lien Obligations (including the European Bank Indebtedness to the extent it constitutes an Other Pari Passu Lien Obligation) in an amount not to exceed the greater of (1) $650.0 million and (2) an amount that as of the date of Incurrence, after giving effect thereto and the application of proceeds therefrom, would not result in a Consolidated Secured Debt Ratio of more than 3.75:1. | |
Third, certain Hedging Obligations and certain obligations in respect of cash management services are and may in the future also be secured by Priority Liens or Pari Passu Liens on the Collateral. | |
Fourth, certain administrative expenses of the Credit Agent, the Collateral Agent and the Trustee may be secured by Priority Liens or Pari Passu Liens on the Collateral. | |
Fifth, other Permitted Collateral Liens. |
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(1) | $4.2 billion of Senior Indebtedness of the Company (other than the Notes), of which $1.2 billion is secured by Priority Liens (exclusive of unused commitments under the Credit Agreements) and | |
(2) | $1.9 billion of Senior Indebtedness of the Subsidiary Guarantors (other than the Subsidiary Guarantees), of which $1.2 billion is secured by Priority Liens. |
(1) | any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company; | |
(2) | during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company (together with any new directors whose election by such board of directors of the Company or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Company then in office; | |
(3) | the adoption of a plan relating to the liquidation or dissolution of the Company; or | |
(4) | the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (as determined on a Consolidated basis) to another Person, and, in the case of any such merger or consolidation, the securities of the Company that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of the Company are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving Person or transferee that represent immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving Person or transferee. |
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(1) | that a Change of Control has occurred and that such Holder has the right to require the Company to purchase all or a portion of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); | |
(2) | the circumstances and relevant facts and financial information regarding such Change of Control; | |
(3) | the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and | |
(4) | the instructions determined by the Company, consistent with this covenant, that a Holder must follow in order to have its Notes purchased. |
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(1) | the Notes have an Investment Grade Rating from both of the Rating Agencies, and | |
(2) | no Default has occurred and is continuing under the Indenture |
(A) | “— Limitation on Indebtedness,” |
(B) | “— Limitation on Restricted Payments,” | |
(C) | “— Limitation on Restrictions on Distributions from Restricted Subsidiaries,” |
(D) | “— Limitation on Sales of Assets and Subsidiary Stock,” |
(E) | “— Limitation on Transactions with Affiliates,” |
(F) | “— Future Subsidiary Guarantors,” and |
(G) | clause (3) of the first paragraph under the heading “Merger and consolidation,” |
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(1) | Bank Indebtedness in an aggregate principal amount not to exceed the greater of (A) $2,700.0 million, less the aggregate amount of all prepayments of principal applied to permanently reduce any such Indebtedness in satisfaction of the Company’s obligations under the covenant described under “— Limitation on Sales of Assets and Subsidiary Stock” and (B) the sum of (i) 60% of the book value of the inventory of the Company and its Restricted Subsidiaries plus (ii) 80% of the book value of the accounts receivable of the Company and its Restricted Subsidiaries (other than any accounts receivable pledged, sold or otherwise transferred or encumbered by the Company or any Restricted Subsidiary in connection with a Qualified Receivables Transaction), in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; provided, however, that the amount of Indebtedness that may be Incurred pursuant to this clause (1) shall be reduced by any amount of Indebtedness Incurred and then outstanding pursuant to the election provision of clause (10)(A)(i) below; | |
(2) | Indebtedness of the Company owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Company or any Restricted Subsidiary; provided, however, that any subsequent event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the issuer thereof; | |
(3) | Indebtedness (A) represented by the Notes (not including any Additional Notes) and the Subsidiary Guarantees, (B) outstanding on March 12, 2004 (other than the Indebtedness described in clauses (1) and (2) above) and (C) consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (3) (including Indebtedness that is Refinancing Indebtedness) or the foregoing paragraph (a); | |
(4) | (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or a Restricted Subsidiary (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or |
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series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date that such Restricted Subsidiary is acquired by the Company, (i) the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the foregoing paragraph (a) after giving effect to the Incurrence of such Indebtedness pursuant to this clause (4) or (ii) the Consolidated Coverage Ratio immediately after giving effect to such Incurrence and acquisition would be greater than such ratio immediately prior to such transaction and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (4); | ||
(5) | Indebtedness (A) in respect of performance bonds, bankers’ acceptances, letters of credit and surety or appeal bonds entered into by the Company or any Restricted Subsidiary in the ordinary course of business, and (B) Hedging Obligations entered into in the ordinary course of business to hedge risks with respect to the Company’s or a Restricted Subsidiary’s interest rate, currency or raw materials pricing exposure and not entered into for speculative purposes; | |
(6) | Purchase Money Indebtedness, Capitalized Lease Obligations and Attributable Debt and Refinancing Indebtedness in respect thereof in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (6) and then outstanding, will not exceed the greater of (A) $600.0 million and (B) 5.0% of Consolidated assets of the Company as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; provided, however, that the aggregate principal amount of Capitalized Lease Obligations and Attributable Debt (and Refinancing Indebtedness in respect thereof) Incurred pursuant to this clause (6) and outstanding in respect of Sale/ Leaseback Transactions relating to Collateral may not exceed $100.0 million; | |
(7) | Indebtedness Incurred by a Receivables Entity in a Qualified Receivables Transaction; | |
(8) | Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of a Financial Officer’s becoming aware of its Incurrence; | |
(9) | any Guarantee (other than the Subsidiary Guarantees) by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by the Company or such Restricted Subsidiary is permitted under the terms of the Indenture (other than Indebtedness Incurred pursuant to clause (4) above); | |
(10) | (A) Indebtedness of Foreign Subsidiaries in an aggregate principal amount that, when added to all other Indebtedness Incurred pursuant to this clause (10)(A) and then outstanding, will not exceed (i) $600.0 million plus (ii) any amount then permitted to be Incurred pursuant to clause (1) above that the Company instead elects to Incur pursuant to this clause (10)(A) and (B) Indebtedness of Foreign Subsidiaries Incurred in connection with a Qualified Receivables Transaction in an amount not to exceed €275.0 million at any one time outstanding; | |
(11) | Indebtedness constituting Other Pari Passu Lien Obligations or unsecured Indebtedness in an amount not to exceed $850.0 million and Refinancing Indebtedness in respect thereof; provided that such Refinancing Indebtedness constitutes Other Pari Passu Lien Obligations or unsecured Indebtedness; and | |
(12) | Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (12) and then outstanding, will not exceed $150.0 million. |
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(1) | Outstanding Indebtedness Incurred pursuant to any of the Credit Agreements prior to or on the March 12, 2004 shall be classified as Incurred as follows: |
(A) | such Indebtedness shall be deemed to have been Incurred pursuant to clause (1) of paragraph (b) above, in an amount such that after giving effect to such Incurrence there will remain available to be Incurred under clause (1) of paragraph (b) an amount of Indebtedness equal to the aggregate amount committed and undrawn under the Credit Agreements on March 12, 2004 (including amounts committed that are not available to be drawn because they have been allocated to undrawn outstanding letters of credit); and |
(B) | to the extent not classified pursuant to (A), such Indebtedness shall be deemed to have been Incurred pursuant to paragraph (a) above. |
(2) | Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness, | |
(3) | in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this covenant, the Company, in its sole discretion, shall classify such Indebtedness (or any portion thereof) as of the time of Incurrence and will only be required to include the amount of such Indebtedness in one of such clauses (provided that any Indebtedness originally classified as Incurred pursuant to clauses (b)(2) through (b)(12) above may later be reclassified as having been Incurred pursuant to paragraph (a) or any other of clauses (b)(2) through (b)(12) above to the extent that such reclassified Indebtedness could be Incurred pursuant to paragraph (a) or one of clauses (b)(2) through (b)(12) above, as the case may be, if it were Incurred at the time of such reclassification), and | |
(4) | all Indebtedness constituting Other Pari Passu Lien Obligations Incurred after March 12, 2004 shall be treated as Incurred pursuant to clause (11) of paragraph (b) above unless and until such Indebtedness can no longer be Incurred pursuant to clause (11) of paragraph (b) above. |
(1) | declare or pay any dividend, make any distribution on or in respect of its Capital Stock or make any similar payment (including any payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary) to the direct or indirect holders of its Capital Stock in |
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their capacity as such, except (A) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock or, in the case of a Restricted Subsidiary, Preferred Stock) and (B) dividends or distributions payable to the Company or a Restricted Subsidiary (and, if such Restricted Subsidiary has Capital Stock held by Persons other than the Company or other Restricted Subsidiaries, to such other Persons on no more than a pro rata basis), | ||
(2) | purchase, repurchase, redeem, retire or otherwise acquire (“Purchase”) for value any Capital Stock of the Company or any Restricted Subsidiary held by Persons other than the Company or a Restricted Subsidiary (other than in exchange for Capital Stock of the Company that is not Disqualified Stock), | |
(3) | Purchase for value, prior to scheduled maturity, any scheduled repayment or any scheduled sinking fund payment, any Subordinated Obligations (other than the Purchase for value of Subordinated Obligations acquired in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such Purchase), or | |
(4) | make any Investment (other than a Permitted Investment) in any Person, (any such dividend, distribution, payment, Purchase or Investment being herein referred to as a “Restricted Payment”) if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: |
(A) | a Default will have occurred and be continuing (or would result therefrom); |
(B) | the Company could not Incur at least $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “— Limitation on Indebtedness;” or | |
(C) | the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by a Financial Officer of the Company, whose determination will be conclusive; provided, however, that with respect to any noncash Restricted Payment in excess of $25.0 million, the amount so expended shall be determined in accordance with the provisions of the definition of Fair Market Value) declared or made subsequent to March 12, 2004 would exceed the sum, without duplication, of: |
(i) | 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter immediately following the first fiscal quarter of 2004 to the end of the most recent fiscal quarter for which financial statements have been filed with the SEC prior to the date of such Restricted Payment (or, in case such Consolidated Net Income will be a deficit, minus 100% of such deficit); |
(ii) | 100% of the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to March 12, 2004 (other than an issuance or sale to a Subsidiary of the Company and other than an issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) and 100% of any cash capital contribution received by the Company from its shareholders subsequent to March 12, 2004; |
(iii) | the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company’s Consolidated balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to March 12, 2004 of any Indebtedness of the Company or its Restricted Subsidiaries issued after March 12, 2004 which is convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash or the Fair Market Value of other property distributed by the Company or any Restricted Subsidiary upon such conversion or exchange); and |
(iv) | an amount equal to the sum of (x) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by |
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such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case realized by the Company or any Restricted Subsidiary, and (y) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary. |
(1) | any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees to the extent such sale to such an employee stock ownership plan or trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided, however, that: |
(A) | such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments, and |
(2) | any prepayment, repayment or Purchase for value of Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale of, other Subordinated Obligations or Indebtedness Incurred under clause (a) of the covenant described under “— Limitation on Indebtedness”; provided, however, that such prepayment, repayment or Purchase for value shall be excluded in the calculation of the amount of Restricted Payments; | |
(3) | dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividends would have complied with this covenant; provided, however, that such dividends shall be included in the calculation of the amount of Restricted Payments; | |
(4) | any Purchase for value of Capital Stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such Purchases for value will not exceed $10.0 million in any calendar year; provided further, however, that any of the $10.0 million permitted to be applied for Purchases under this clause (4) in a calendar year (and not so applied) may be carried forward for use in the following two calendar years; provided further, however, that such Purchases for value shall be excluded in the calculation of the amount of Restricted Payments; | |
(5) | so long as no Default has occurred and is continuing, payments of dividends on Disqualified Stock issued after March 12, 2004 pursuant to the covenant described under “— Limitation on Indebtedness”; provided, however, that such dividends shall be included in the calculation of the amount of Restricted Payments; |
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(6) | repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments; | |
(7) | so long as no Default has occurred and is continuing, any prepayment, repayment or Purchase for value of Subordinated Obligations from Net Available Cash to the extent permitted under the covenant described under “— Limitation on Sales of Assets and Subsidiary Stock” below; provided, however, that such prepayment, repayment or Purchase for value shall be excluded in the calculation of the amount of Restricted Payments; | |
(8) | payments to holders of Capital Stock (or to the holders of Indebtedness that is convertible into or exchangeable for Capital Stock upon such conversion or exchange) in lieu of the issuance of fractional shares; provided, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments; or | |
(9) | any Restricted Payment in an amount which, when taken together with all Restricted Payments made pursuant to this clause (9), does not exceed $50.0 million; provided, however, that (A) at the time of each such Restricted Payment, no Default shall have occurred and be continuing (or result therefrom) and (B) such Restricted Payments shall be included in the calculation of the amount of Restricted Payments. |
(1) | pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company; | |
(2) | make any loans or advances to the Company; or | |
(3) | transfer any of its property or assets to the Company, except: |
(A) | any encumbrance or restriction pursuant to applicable law, rule, regulation or order or an agreement in effect at or entered into on March 12, 2004; |
(B) | any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company) and outstanding on such date; | |
(C) | any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (A) or (B) of this covenant or this clause (C) or contained in any amendment to an agreement referred to in clause (A) or (B) of this covenant or this clause (C); provided, however, that the encumbrances and restrictions contained in any such Refinancing agreement or amendment are no less favorable in any material respect to the Holders than the encumbrances and restrictions contained in such predecessor agreements; |
(D) | in the case of clause (3), any encumbrance or restriction: |
(i) | that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any such lease, license or other contract, or |
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(ii) | contained in mortgages, pledges and other security agreements securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements; |
(E) | with respect to a Restricted Subsidiary, any restriction imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; |
(F) | any encumbrance or restriction existing under or by reason of Indebtedness or other contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided, however, that such restrictions apply only to such Receivables Entity; |
(G) | purchase money obligations for property acquired in the ordinary course of business and Capitalized Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) above; | |
(H) | provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements; |
(I) | restrictions on cash or other deposits or net worth imposed by customers, suppliers or, in the ordinary course of business, other third parties; and |
(J) | with respect to any Foreign Subsidiary, any encumbrance or restriction contained in the terms of any Indebtedness, or any agreement pursuant to which such Indebtedness was issued, if: |
(i) | the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant contained in such Indebtedness or agreement, or |
(ii) | at the time such Indebtedness is Incurred, such encumbrance or restriction is not expected to materially affect the Company’s ability to make principal or interest payments on the Notes, as determined in good faith by a Financial Officer of the Company, whose determination shall be conclusive. |
(1) | the Company or such Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value of the shares and assets subject to such Asset Disposition, | |
(2) | at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of cash or Additional Assets; provided, however, that in the case of an Asset Disposition of any Collateral or Excluded Securities, any Additional Assets received by the Company and any Restricted Subsidiary are added, substantially concurrently with their acquisition, to the Collateral securing (with the same priority as the assets disposed of) the Notes and the Subsidiary Guarantees; provided further, however, that the 75% consideration requirement of this clause (2) shall not apply to any Specified Asset Sale, and | |
(3) | an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be) |
(A) | first, to the extent the Company elects (or is required by the terms of any Applicable Indebtedness) (i) to prepay, repay, purchase, repurchase, redeem, retire, defease or otherwise acquire for value Applicable Indebtedness, (ii) to cause any loan commitment that is available to be drawn under the applicable credit facility and to be Incurred under the Indenture and that when drawn would constitute a Priority Lien Obligation, to be permanently reduced by the amount of Net Available Cash and (iii) to make Designated LC Cash Collateralizations, in each case, other than Indebtedness owed to the Company or an Affiliate of the Company and |
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other than obligations in respect of Disqualified Stock, within 365 days after the later of the date of such Asset Disposition or the receipt of such Net Available Cash; |
(B) | second, to acquire Additional Assets (or otherwise to make capital expenditures), in each case within 365 days after the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that, in the case of an Asset Disposition of any Collateral or Excluded Securities, (A) such Additional Assets are added, substantially concurrently with their acquisition, to the Collateral securing (with the same priority as the assets disposed of) the Notes and the Subsidiary Guarantees or, in the case of capital expenditures, such capital expenditures are used to improve or maintain assets that constitute Collateral or real property or fixtures thereon owned by the Company or a Subsidiary Guarantor; | |
(C) | third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to make an Offer (as defined in paragraph (c) of this covenant below) to purchase Notes pursuant to and subject to the conditions set forth in paragraph (c) of this covenant;provided, however, that if the Company elects (or is required by the terms of any other Senior Indebtedness), such Offer may be made ratably to purchase the Notes and any Applicable Senior Indebtedness, and |
(D) | fourth, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), for any general corporate purpose permitted by the terms of the Indenture; |
provided, howeverthat in connection with any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness pursuant to clause (A) or (C) above, the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid, purchased, repurchased, redeemed, retired, defeased or otherwise acquired for value. |
(b) | For the purposes of this covenant, the following are deemed to be cash: | |
(1) | the assumption of Applicable Indebtedness of the Company (other than obligations in respect of Disqualified Stock of the Company) or any Restricted Subsidiary (other than obligations in respect of Disqualified Stock and Preferred Stock of a Restricted Subsidiary that is Subsidiary Guarantor) and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition; | |
(2) | any Designated Noncash Consideration having an aggregate Fair Market Value that, when taken together with all other Designated Non-cash Consideration received pursuant to this clause and then outstanding, does not exceed at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value) the greater of (1) $200.0 million and (2) 1.5% of the total Consolidated assets of the Company as shown on the most recent balance sheet of the Company filed with the SEC; | |
(3) | securities, notes or similar obligations received by the Company or any Restricted Subsidiary from the transferee that are promptly converted by the Company or such Restricted Subsidiary into cash; and | |
(4) | Temporary Cash Investments. |
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(1) | to purchase Notes tendered pursuant to an offer by the Company for the Notes (the “Offer”) at a purchase price of 100% of their principal amount plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant date to receive interest due on the relevant interest payment date) in accordance with the procedures (including prorating in the event of oversubscription), set forth in the Indenture and | |
(2) | to purchase Applicable Senior Indebtedness of the Company on the terms and to the extent contemplated thereby; provided that in no event shall the Company offer to purchase such Applicable Senior Indebtedness of the Company at a purchase price in excess of 100% of its principal amount (without premium) or, unless otherwise provided for in such Applicable Senior Indebtedness, the accreted amount, if issued with original issue discount, plus accrued and unpaid interest thereon. If the aggregate purchase price of Notes (and Applicable Senior Indebtedness) tendered pursuant to the Offer is less than the Net Available Cash allotted to the purchase of the Notes (and other Applicable Senior Indebtedness), the Company will apply the remaining Net Available Cash in accordance with clause (a)(3)(D) of this covenant. The Company will not be required to make an Offer for Notes (and Applicable Senior Indebtedness) pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in clauses (a)(3)(A) and (B)) is less than $25.0 million for any particular Asset Disposition (which lesser amount will be carried forward for purposes of determining whether an Offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). |
(1) | that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time of such transaction in arm’s-length dealings with a Person who is not such an Affiliate, | |
(2) | that, in the event such Affiliate Transaction involves an aggregate amount in excess of $25.0 million, |
(A) | are set forth in writing, and |
(B) | have been approved by a majority of the members of the Board of Directors having no personal stake in such Affiliate Transaction and, |
(3) | that, in the event such Affiliate Transaction involves an amount in excess of $75.0 million, have been determined by a nationally recognized appraisal, accounting or investment banking firm to be fair, from a financial standpoint, to the Company and its Restricted Subsidiaries. |
(1) | any Restricted Payment permitted to be paid pursuant to the covenant described under “— Limitation on Restricted Payments,” | |
(2) | any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors, |
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(3) | the grant of stock options or similar rights to employees and directors of the Company pursuant to plans approved by the Board of Directors, | |
(4) | loans or advances to employees in the ordinary course of business of the Company, | |
(5) | the payment of reasonable fees and compensation to, or the provision of employee benefit arrangements and indemnity for the benefit of, directors, officers and employees of the Company and its Restricted Subsidiaries in the ordinary course of business, | |
(6) | any transaction between or among any of the Company, any Restricted Subsidiary or any joint venture or similar entity which would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary, joint venture or similar entity, | |
(7) | the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company, | |
(8) | any agreement as in effect on March 12, 2004 and described in this prospectus or in the Company’s SEC filings as filed on or prior to March 12, 2004, or any renewals, extensions or amendments of any such agreement (so long as such renewals, extensions or amendments are not less favorable in any material respect to the Company or its Restricted Subsidiaries) and the transactions evidenced thereby, | |
(9) | transactions with customers, clients, suppliers or purchasers or sellers of goods or services in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the Board of Directors or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party, or |
(10) | any transaction effected as part of a Qualified Receivables Transaction. |
(1) | in the case of any asset that does not constitute Collateral (including assets previously constituting Collateral that have been released from the Liens securing the Notes and the Subsidiary Guarantees), Permitted Liens; provided, however, that any Lien on such assets shall be permitted notwithstanding that it is not a Permitted Lien if all payments due under the Indenture, Notes and Subsidiary Guarantees are secured on an equal and ratable basis with (or, in the case of any such Indebtedness which is a Subordinated Obligation, on a prior basis to) the obligations so secured until such time as such obligations are no longer secured by a Lien on such assets; and | |
(2) | in the case of any asset that constitutes Collateral, Permitted Collateral Liens. |
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(1) | the Company or such Restricted Subsidiary would be entitled to: |
(A) | Incur Indebtedness with respect to such Sale/ Leaseback Transaction pursuant to the covenant described under “— Limitation on Indebtedness” and |
(B) | create a Lien on such property securing such Indebtedness without equally and ratably securing the Notes pursuant to the covenant described under “— Limitation on Liens;” |
(2) | the gross proceeds payable to the Company or such Restricted Subsidiary in connection with such Sale/ Leaseback Transaction are at least equal to the Fair Market Value of such property; and | |
(3) | the transfer of such property is permitted by, and, if applicable, the Company applies the proceeds of such transaction in compliance with, the covenant described under “— Limitation on Sale of Assets and Subsidiary Stock.” |
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(1) | the resulting, surviving or transferee Person (the “Successor Company”) will be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes and the Indenture; | |
(2) | immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; | |
(3) | immediately after giving effect to such transaction, (A) the Successor Company would be able to Incur an additional $1.00 of Indebtedness under paragraph (a) of the covenant described under “— Limitation on Indebtedness” or (B) the Consolidated Coverage Ratio for the Successor Company would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction; and | |
(4) | the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture. |
(1) | except in the case of a Subsidiary Guarantor (i) that has been disposed of in its entirety to another Person (other than to the Company or an Affiliate of the Company), whether through a merger, consolidation or sale of Capital Stock or assets or (ii) that, as a result of the disposition of all or a portion of its Capital Stock, ceases to be a Subsidiary, the resulting, surviving or transferee Person (the “Successor Guarantor”) will be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such Person (if not such Subsidiary Guarantor) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee; | |
(2) | immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; and | |
(3) | the Company will have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture. |
(1) | any Restricted Subsidiary may Consolidate with, merge into or transfer all or part of its properties and assets to the Company or any Subsidiary Guarantor and |
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(2) | the Company may merge with an Affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction within the United States of America, any state thereof or the District of Columbia to realize tax or other benefits. |
(1) | a default in any payment of interest on any Note when due and payable continued for 30 days, | |
(2) | a default in the payment of principal of any Note when due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise, | |
(3) | the failure by the Company or any Subsidiary Guarantor to comply with its obligations under the covenant described under “Merger and consolidation” above, | |
(4) | the failure by the Company or any Restricted Subsidiary to comply for 30 days after notice with any of its obligations under the covenants described under “Change of Control” or “Certain covenants” (other than “Certain covenants — SEC reports”) above (in each case, other than a failure to purchase Notes), | |
(5) | the failure by the Company or any Restricted Subsidiary to comply for 60 days after notice as specified in the Indenture with its other agreements contained in the Notes, the Indenture or the Security Documents, | |
(6) | the failure by the Company or any Restricted Subsidiary to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $50.0 million or its foreign currency equivalent (the “cross acceleration provision”), | |
(7) | certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (the “bankruptcy provisions”), | |
(8) | the rendering of any final and nonappealable judgment or decree (not covered by insurance) for the payment of money in excess of $50.0 million or its foreign currency equivalent (treating any deductibles, self-insurance or retention as not so covered) against the Company or a Significant Subsidiary if such final judgment or decree remains outstanding and is not satisfied, discharged or waived within a period of 60 days following such judgment (the “judgment default provision”), | |
(9) | any Subsidiary Guarantee ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantor’s obligations under the Indenture or any Subsidiary Guarantee and such Default continues for 10 days after receipt of the notice as specified in the Indenture, or |
(10) | (A)the repudiation or disaffirmation by the Company or any Subsidiary Guarantor of its obligations under any of the Security Documents, (B) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Company or any Subsidiary Guarantor for any reason with respect to any material portion of the Collateral or (C) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Trustee a perfected Lien on the Collateral with the priority purported to be created thereby, in each case under this clause (10)(C), with respect to any material portion of the Collateral (the “security default provision”). |
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(1) | such Holder has previously given the Trustee notice that an Event of Default is continuing, | |
(2) | Holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee in writing to pursue the remedy, | |
(3) | such Holders have offered the Trustee reasonable indemnity against any loss, liability or expense, | |
(4) | the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of indemnity and | |
(5) | the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. |
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(1) | reduce the amount of Notes whose Holders must consent to an amendment, | |
(2) | reduce the rate of or extend the time for payment of interest on any Note, | |
(3) | reduce the principal of or extend the Stated Maturity of any Note, | |
(4) | reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under “Optional redemption” above, | |
(5) | make any Note payable in money other than that stated in the Note, | |
(6) | impair the right of any Holder to receive payment of principal of, and interest on, such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes, | |
(7) | make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions, | |
(8) | modify the Subsidiary Guarantees in any manner adverse to the Holders, or | |
(9) | make any change in any Security Document, the Intercreditor Agreement or the provisions in the Indenture dealing with Security Documents or application of Trust proceeds of the Collateral that would adversely affect the Holders. |
(1) | release any Collateral from the Lien of the Indenture and the Security Documents; | |
(2) | change the provisions applicable to the application of the proceeds from the sale of the Collateral in any way adverse to the Holders, or | |
(3) | change or alter the priority of the security interests in the Collateral in any way adverse to the Holders, |
(1) | cure any ambiguity, omission, defect or inconsistency, | |
(2) | provide for the assumption by a successor corporation of the obligations of the Company under the Indenture, |
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(3) | provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code), | |
(4) | add additional Guarantees with respect to the Notes, | |
(5) | add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred upon the Company, | |
(6) | make any change that does not adversely affect the rights of any Holder in any material respect, subject to the provisions of the Indenture, | |
(7) | make any amendment to the provisions of the Indenture relating to the form, authentication, transfer and legending of Notes; provided, however, that |
(A) | compliance with the Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any other applicable securities law and |
(B) | such amendment does not materially affect the rights of Holders to transfer Notes, |
(8) | comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA, or | |
(9) | provide for the addition of Collateral permitted under the terms of the Indenture or Security Documents. |
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(1) | its obligations under the covenants described under “Certain covenants,” | |
(2) | the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries, the judgment default provision and the security default provision described under “Defaults” above and the limitations contained in clauses (3) under the first paragraph of “Merger and consolidation” above (“covenant defeasance”). |
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(3) | any property or assets (other than Indebtedness and Capital Stock) to be used by the Company or a Restricted Subsidiary; | |
(4) | the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or | |
(5) | Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary; |
(1) | the portion of the Company’s and the Grantor Subsidiary Guarantors’ manufacturing facilities that are pledged to secure Bank Indebtedness on March 12, 2004, | |
(2) | any Excluded Securities and | |
(3) | any Consent Assets that are pledged from time to time to secure Priority Lien Obligations permitted under the Indenture. |
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(1) | in respect of any asset that is the subject of an Asset Disposition at a time when such asset is included in the Collateral or is an Excluded Security, any Priority Lien Obligation that, in each case, is secured at such time by such asset on a Priority Lien basis; or | |
(2) | in respect of any asset that is the subject of an Asset Disposition at a time when such asset is not included in the Collateral but is owned, directly or indirectly, by a Foreign Subsidiary the stock of which is included in the Collateral, (A) any Priority Lien Obligation that, in each case, is secured by such stock on a Priority Lien basis, (B) any Indebtedness of such Foreign Subsidiary or (C) any Indebtedness of any other Foreign Subsidiary that is a Wholly Owned Subsidiary; or | |
(3) | in respect of any other asset, Senior Indebtedness of the Company or a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor. |
(1) | in respect of any asset that is the subject of an Asset Disposition at a time when such asset is included in the Collateral, Senior Indebtedness that is secured at such time by such asset; or | |
(2) | in respect of any asset that is the subject of an Asset Disposition at a time when such asset is not included in the Collateral but is owned, directly or indirectly, by a Foreign Subsidiary the stock of which is included in the Collateral, (A) any Priority Lien Obligation that, in each case, is secured by such stock on a Priority Lien basis, (B) any Indebtedness of such Foreign Subsidiary or (C) any Indebtedness of any other Foreign Subsidiary that is a Wholly Owned Subsidiary; or | |
(3) | in respect of any other asset, Senior Indebtedness of the Company or a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor. |
(1) | any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary), | |
(2) | all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary, | |
(3) | any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary or | |
(4) | any other assets of the Company or any Restricted Subsidiary that are the subject of a transaction the Company elects to be an Asset Disposition pursuant to clause (2) under “Security — Release of Collateral.” |
(A) | a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary, |
(B) | for purposes of the provisions described under “Certain covenants — Limitation on Sales of Assets and Subsidiary Stock” only, a disposition subject to the covenant described under “Certain covenants — Limitation on Restricted Payments,” | |
(C) | a disposition of assets with a Fair Market Value of less than $5,000,000, |
(D) | a sale of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity, |
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(E) | a transfer of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) by a Receivables Entity in a Qualified Receivables Transaction, and |
(F) | a disposition of all or substantially all the Company’s assets (as determined on a Consolidated basis) in accordance with the covenant described under “Certain covenants — Merger and consolidation.” |
(1) | the Attributable Debt determined assuming termination upon the first date such lease may be terminated (in which case the Attributable Debt shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) and | |
(2) | the Attributable Debt determined assuming no such termination. |
(1) | the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or scheduled redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by | |
(2) | the sum of all such payments. |
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(1) | the Company, | |
(2) | any Wholly Owned Subsidiary or | |
(3) | any Subsidiary that is not a Wholly Owned Subsidiary unless the waiver of such default or violation would require the consent of any Person other than the Company or another Subsidiary; provided, however, that no asset or right shall be a Consent Asset to the extent that Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the applicable jurisdiction, or any other law of the applicable jurisdiction, shall permit (and excuse any default or violation resulting from) the creating of a security interest in such asset or right notwithstanding the provision of such agreement or instrument prohibiting the creation of a security interest therein or shall render such provision unenforceable. |
(1) | the consent of any Person other than the Company or any Wholly Owned Subsidiary is required by applicable law or the terms of any organizational document of such Subsidiary or other agreement of such Subsidiary or any Affiliate of such Subsidiary in order for such Subsidiary to Guarantee the Notes, pledge its assets to secure its Guarantee of the Notes and perform its obligations under any supplemental indenture and the Security Documents, or in order for Capital Stock of such Subsidiary to be pledged under the Security Documents, as the case may be, and | |
(2) | the Company endeavored in good faith to obtain such consents and such consents shall not have been obtained; provided, however, that any Subsidiary constituting a “Consent Subsidiary” under the U.S. Revolving Credit Facility on March 12, 2004 shall be a Consent Subsidiary only for so long as the assets or Capital Stock of such Subsidiary are not pledged to secure any U.S. Bank Indebtedness or ABL Bank Indebtedness. Notwithstanding the foregoing, no Subsidiary shall be a Consent Subsidiary at any time that it is a guarantor of, or has provided any collateral to secure, Indebtedness for borrowed money of the Company, and any Consent Subsidiary that at any time ceases to meet the test set forth in clause (1) shall cease to be a Consent Subsidiary. |
(1) | the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements have been filed with the SEC to | |
(2) | Consolidated Interest Expense for such four fiscal quarters; |
(A) | if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period, |
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(B) | if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness, | |
(C) | if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets that are the subject of such Asset Disposition for such period or increased by an amount equal to the EBITDA (if negative) directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale), |
(D) | if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of an operating unit, division or line of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period, and |
(E) | if since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period shall have made any Asset Disposition or any Investment or acquisition of assets that would have required an adjustment pursuant to clause (C) or (D) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition of assets occurred on the first day of such period. |
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(1) | interest expense attributable to Capitalized Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction that does not result in a Capitalized Lease Obligation, | |
(2) | amortization of debt discount and debt issuance costs, | |
(3) | capitalized interest, | |
(4) | noncash interest expense, | |
(5) | commissions, discounts and other fees and charges attributable to letters of credit and bankers’ acceptance financing, | |
(6) | interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary and such Indebtedness is in default under its terms or any payment is actually made in respect of such Guarantee, | |
(7) | net payments made pursuant to Hedging Obligations (including amortization of fees), | |
(8) | dividends paid in cash or Disqualified Stock in respect of (A) all Preferred Stock of Restricted Subsidiaries and (B) all Disqualified Stock of the Company, in each case held by Persons other than the Company or a Restricted Subsidiary, | |
(9) | interest Incurred in connection with investments in discontinued operations, and |
(10) | the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust |
(1) | any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that: |
(A) | subject to the limitations contained in clause (4) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution made to a Restricted Subsidiary, to the limitations contained in clause (3) below) and |
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(B) | the Company’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary; |
(2) | any net income (or loss) of any Person acquired by the Company or a Subsidiary of the Company in a pooling of interests transaction for any period prior to the date of such acquisition; | |
(3) | any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company (but, in the case of any Foreign Subsidiary, only to the extent cash equal to such net income (or a portion thereof) for such period is not readily procurable by the Company from such Foreign Subsidiary (with the amount of cash readily procurable from such Foreign Subsidiary being determined in good faith by a Financial Officer of the Company) pursuant to intercompany loans, repurchases of Capital Stock or otherwise), except that: |
(A) | subject to the limitations contained in clause (4) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution made to another Restricted Subsidiary, to the limitation contained in this clause) and |
(B) | the net loss of any such Restricted Subsidiary for such period shall not be excluded in determining such Consolidated Net Income; |
(4) | any gain (or loss) realized upon the sale or other disposition of any asset of the Company or its Consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person; | |
(5) | any extraordinary gain or loss; and | |
(6) | the cumulative effect of a change in accounting principles. |
(A) | total Consolidated Indebtedness of the Company that is secured by Priority Liens and Pari Passu Liens and |
(B) | total Indebtedness for borrowed money of the Foreign Subsidiaries (including the European Bank Indebtedness), in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC, to |
(1) | in the case of the Company, the accounts of each of the Restricted Subsidiaries with those of the Company and |
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(2) | in the case of a Restricted Subsidiary, the accounts of each Subsidiary of such Restricted Subsidiary that is a Restricted Subsidiary with those of such Restricted Subsidiary, in each case in accordance with GAAP consistently applied; |
(1) | the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMorgan Chase Bank, as administrative agent, | |
(2) | the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent and BNP Paribas, as syndication agent, | |
(3) | the $650,000,000 Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, the other borrowers thereunder, certain lenders, JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as syndication agent and | |
(4) | the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as documentation agents, |
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(1) | matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, | |
(2) | is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary; provided, however, that any such conversion or exchange shall be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable) or | |
(3) | is redeemable at the option of the holder thereof, in whole or in part, |
(1) | income tax expense of the Company and its Consolidated Restricted Subsidiaries, | |
(2) | Consolidated Interest Expense, |
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(3) | depreciation expense of the Company and its Consolidated Restricted Subsidiaries, | |
(4) | amortization expense of the Company and its Consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid cash item that was paid in a prior period), | |
(5) | all other noncash charges of the Company and its Consolidated Restricted Subsidiaries (excluding any such noncash charge to the extent it represents an accrual of or reserve for cash expenditures in any future period) less all noncash items of income of the Company and its Restricted Subsidiary in each case for such period (other than normal accruals in the ordinary course of business), and | |
(6) | cash and non-cash charges reflected on the Consolidated financial statements of the Company and its Consolidated Restricted Subsidiaries for any period ending prior to January 1, 2004, related to |
(A) | anticipated liabilities relating to the pending Entran II claims described in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003, filed with the SEC on November 19, 2003, and |
(B) | rationalization actions designed to reduce capacity, eliminate redundancies and reduce costs. |
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(1) | equity interests in any Consent Subsidiary and | |
(2) | equity interests in any Foreign Subsidiary if the Company shall have delivered to the Trustee an Officers’ Certificate certifying that the Company has determined, on the basis of reasonable inquiries in the jurisdiction of such Foreign Subsidiary, that such pledge would affect materially and adversely the ability of such Foreign Subsidiary to conduct its business in such jurisdiction. |
(1) | payments from any account debtor in respect of accounts or | |
(2) | payments in respect of inventory, and containing only such amounts as are required in the Company’s or such Grantor Subsidiary Guarantor’s good faith judgment for near-term operational purposes. |
(1) | the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, | |
(2) | statements and pronouncements of the Financial Accounting Standards Board, | |
(3) | such other statements by such other entities as approved by a significant segment of the accounting profession, and | |
(4) | the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the |
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Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. |
(1) | to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or | |
(2) | entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); |
(1) | the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money; | |
(2) | the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; | |
(3) | all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1), (2) and (5)) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);provided, however, that all obligations of such Person for |
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the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction shall constitute Indebtedness for all purposes of the covenant described under “Limitation on Liens” and for determining the Company’s ability to Incur Liens and for no other purpose under the Indenture, if such obligations are secured by or are purported to be secured by Liens on Collateral; | ||
(4) | all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except Trade Payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services; | |
(5) | all Capitalized Lease Obligations and all Attributable Debt of such Person; | |
(6) | the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued and unpaid dividends); | |
(7) | all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of Indebtedness of such Person shall be the lesser of: |
(A) | the Fair Market Value of such asset at such date of determination and |
(B) | the amount of such Indebtedness of such other Persons; |
(8) | Hedging Obligations of such Person; and | |
(9) | all obligations of the type referred to in clauses (1) through (8) of other Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee. |
(1) | “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary;provided, however, that upon a |
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redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to: |
(A) | the Company’s “Investment” in such Subsidiary at the time of such redesignation less |
(B) | the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and |
(2) | any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer. |
(1) | all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition, | |
(2) | all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition, | |
(3) | all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition and |
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(4) | appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition (but only for so long as such reserve is maintained). |
(1) | Liens on the Collateral securing Priority Lien Obligations in an amount which, when taken together with all other Priority Lien Obligations then outstanding pursuant to this clause (1), does not exceed the greater of (A) $2700.0 million and (B) the sum of (i) 80% of the book value of the inventory of the Company and the Subsidiary Guarantors and (ii) 85% of the book value of the accounts receivable of the Company and the Subsidiary Guarantors, in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC;provided, however, that at the election of the Company, all or a portion of the amount of Indebtedness permitted to be secured by Priority Liens pursuant to this clause (1) may instead be allocated to be secured by Pari Passu Liens;provided further, that (x) the first $500.0 million of Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso shall reduce the amount set forth in clause (a) above by the amount of such Indebtedness and (y) all Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso in excess of $500.0 million shall reduce both the amount set forth in clause (a) above and the amount set forth in clause (b) above, in each case, by the amount of such Indebtedness; | |
(2) | Liens on the Collateral securing the Notes outstanding on March 12, 2004, the Exchange Notes issued in exchange therefor and the Subsidiary Guarantees relating thereto; and Liens on the Collateral securing Other Pari Passu Lien Obligations (including, without limitation, Additional Notes) in an amount which, when taken together with all other Other Pari Passu Lien Obligations (including the European Bank Indebtedness to the extent it constitutes an Other Pari Passu Lien Obligation at the time) then outstanding does not exceed any amount of Indebtedness secured by |
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Pari Passu Liens pursuant to clause (1) above plus the greater of (A) $650.0 million and (B) an amount that as of the date of Incurrence, after giving effect thereto and the application of proceeds therefrom, would not result in a Consolidated Secured Debt Ratio of more than 3.75:1; | ||
(3) | the Priority Lien on the Company’s equity interest in Luxembourg Finance securing the European Bank Indebtedness (which lien is not in existence on the date hereof); | |
(4) | Liens on the Collateral existing on March 12, 2004 (other than Liens specified in clauses (1) through (3) above); | |
(5) | Liens on the Collateral described in clauses (3) through (5), (7), (10), (11), (13), (15) (only in respect of clauses (10) and (11)) and (17) through (22) of the definition of “Permitted Liens”; provided that all obligations secured by such Liens described in clauses (21) and (22) of the definition of “Permitted Liens” shall be deemed to constitute Indebtedness Incurred pursuant to clause (b)(6) of the covenant described under “Certain covenants — Limitation on Indebtedness” for all purposes of the covenant described under “Limitation on Liens” and for determining the Company’s ability to Incur Liens and for no other purpose under the Indenture; | |
(6) | Liens on the Collateral in favor of any collateral agent relating to such collateral agent’s administrative expenses with respect to the Collateral; and | |
(7) | Liens on the Collateral securing Indebtedness Incurred pursuant to clause (b)(6) of the covenant described under “Certain covenants — Limitation on Indebtedness.” |
(1) | the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; | |
(2) | another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; | |
(3) | Temporary Cash Investments; | |
(4) | receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances; | |
(5) | payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; | |
(6) | loans or advances to employees made in the ordinary course of business of the Company or such Restricted Subsidiary; | |
(7) | stock, obligations or securities received in settlement of disputes with customers or suppliers or debts (including pursuant to any plan of reorganization or similar arrangement upon insolvency of a debtor) created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments; |
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(8) | any Person to the extent such Investment represents the noncash portion of the consideration received for an Asset Disposition that was made pursuant to and in compliance with the covenant described under “Certain covenants — Limitation on Sale of Assets and Subsidiary Stock;” | |
(9) | a Receivables Entity or any Investment by a Receivables Entity in any other Person in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness; provided, however, that any Investment in a Receivables Entity is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest; |
(10) | any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary; | |
(11) | any Person to the extent such Investments consist of Hedging Obligations otherwise permitted under the covenant described under “Certain covenants — Limitation on Indebtedness;” | |
(12) | any Person to the extent such Investment in such Person existed on March 12, 2004 and any Investment that replaces, refinances or refunds such an Investment, provided that the new Investment is in an amount that does not exceed that amount replaced, refinanced or refunded and is made in the same Person as the Investment replaced, refinanced or refunded; | |
(13) | advances to, and Guarantees for the benefit of, customers, dealers or suppliers made in the ordinary course of business and consistent with past practice; and | |
(14) | any Person to the extent such Investment, when taken together with all other Investments made pursuant to this clause (14) and then outstanding on the date such Investment is made, does not exceed the greater of (A) the sum of (a) $250.0 million and (b) any amounts under clause (a)(4)(C)(iv)(x) of the covenant described under “Certain covenants — Limitation on Restricted Payments” that were excluded by operation of the proviso in clause (a)(4)(C)(iv) of such covenant and which excluded amounts are not otherwise included in Consolidated Net Income or intended to be permitted under any of clauses (1) through (13) of this definition and (B) 2.0% of Consolidated assets of the Company as of the end of the most recent fiscal quarter for which financial statements of the Company have been filed with the SEC. |
(1) | Liens on Additional Excluded Collateral to secure Priority Lien Obligations permitted pursuant to the Indenture; | |
(2) | Liens on Additional Foreign Bank Collateral to secure European Bank Indebtedness permitted pursuant to clause (b)(1) of the covenant described under “Certain covenants — Limitation on Indebtedness”; | |
(3) | pledges or deposits by such Person under workers’ compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business; | |
(4) | Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review; | |
(5) | Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings; |
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(6) | Liens in favor of issuers of surety or performance bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness; | |
(7) | survey exceptions, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness for borrowed money and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; | |
(8) | Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property of such Person (including Indebtedness Incurred under clause (b)(6) of the covenant described under “Certain covenants — Limitation on Indebtedness”); provided, however, that the Lien may not extend to any other property (other than property related to the property being financed) owned by such Person or any of its Subsidiaries at the time the Lien is Incurred, and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien; | |
(9) | Liens existing on March 12, 2004 (other than (i) Liens referred to in the foregoing clauses (1) and (2) and (ii) Permitted Collateral Liens); |
(10) | Liens on property or shares of stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Liens do not extend to any other property owned by such Person or any of its Subsidiaries, except pursuant to after-acquired property clauses existing in the applicable agreements at the time such Person becomes a Subsidiary which do not extend to property transferred to such Person by the Company or a Restricted Subsidiary; | |
(11) | Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or any Subsidiary of such Person; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens do not extend to any other property owned by such Person or any of its Subsidiaries; | |
(12) | Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Restricted Subsidiary of such Person; | |
(13) | Liens securing Hedging Obligations so long as such obligations relate to Indebtedness that is, and is permitted under the Indenture to be, secured by a Lien on the same property securing such Hedging Obligations; | |
(14) | Liens on assets of Foreign Subsidiaries securing Indebtedness Incurred under clause (b)(10) of the covenant described under “Certain covenants — Limitation on Indebtedness;” | |
(15) | Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (1), (2), (8), (9), (10) and (11);provided, however, that: |
(A) | such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements, accessions, proceeds, dividends or distributions in respect thereof) and |
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(B) | the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of: |
(i) | the outstanding principal amount or, if greater, committed amount of the Indebtedness secured by Liens described under clauses (1), (2), (8), (9), (10) or (11) at the time the original Lien became a Permitted Lien under the Indenture and |
(ii) | an amount necessary to pay any fees and expenses, including premiums, related to such Refinancings; |
(16) | Liens on accounts receivables and related assets of the type specified in the definition of “Qualified Receivables Transaction” Incurred in connection with a Qualified Receivables Transaction; | |
(17) | judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired; | |
(18) | Liens arising from Uniform Commercial Code financing statement filings regarding leases that do not otherwise constitute Indebtedness entered into in the ordinary course of business; | |
(19) | leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Company and its Subsidiaries; | |
(20) | Liens which constitute bankers’ Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with any bank or other financial institution, whether arising by operation of law or pursuant to contract; | |
(21) | Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; | |
(22) | Liens on specific items of inventory or other goods and related documentation (and proceeds thereof) securing reimbursement obligations in respect of trade letters of credit issued to ensure payment of the purchase price for such items of inventory or other goods; and | |
(23) | other Liens to secure Indebtedness in an aggregate amount not to exceed $25.0 million at any time outstanding. |
166
(1) | consisting of the deferred purchase price of property, plant or equipment, conditional sale obligations, obligations under any title retention agreement and other obligations Incurred in connection with the acquisition, construction or improvement of such asset, in each case where the amount of such Indebtedness does not exceed the greater of |
(A) | the cost of the asset being financed and |
(B) | the Fair Market Value of such asset, and |
(2) | Incurred to finance such acquisition, construction or improvement by the Company or a Restricted Subsidiary of such asset; |
(1) | shall be repaid from cash available to the Receivables Entity, other than |
(A) | amounts required to be established as reserves, |
(B) | amounts paid to investors in respect of interest, | |
(C) | principal and other amounts owing to such investors and |
(D) | amounts paid in connection with the purchase of newly generated receivables and |
(2) | may be subordinated to the payments described in clause (A). |
(1) | a Receivables Entity (in the case of a transfer by the Company or any of its Subsidiaries) or | |
(2) | any other Person (in the case of a transfer by a Receivables Entity), |
167
(1) | no portion of the Indebtedness or any other obligations (contingent or otherwise) of which |
(A) | is Guaranteed by the Company or any Subsidiary of the Company (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), |
(B) | is recourse to or obligates the Company or any Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings or | |
(C) | subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; |
(2) | which is not an Affiliate of the Company or with which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms which the Company reasonably believes to be no less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and | |
(3) | to which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. |
(1) | the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced, | |
(2) | the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced, | |
(3) | such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount of the Indebtedness being refinanced (or if issued with original issue discount, the aggregate accreted value) then outstanding (or that would be outstanding if the entire committed amount of any credit facility being Refinanced were fully drawn (other than any such amount that would have been prohibited from being drawn pursuant to the covenant described above under “Certain covenants — Limitation on Indebtedness”)) (plus fees and expenses, including any premium and defeasance costs), and |
168
(4) | if the Indebtedness being Refinanced is subordinated in right of payment to the Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at least to the same extent as the Indebtedness being Refinanced; |
(A) | Indebtedness of a Restricted Subsidiary that is not a Grantor Subsidiary Guarantor that Refinances Indebtedness of the Company or |
(B) | Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary. |
(1) | any obligation of the Company to any Subsidiary of the Company or of such Subsidiary Guarantor to the Company or any other Subsidiary of the Company; | |
(2) | any liability for Federal, state, local or other taxes owed or owing by the Company or such Subsidiary Guarantor, as applicable; | |
(3) | any accounts payable or other liability to trade creditors arising in the ordinary course of business (including Guarantees thereof or instruments evidencing such liabilities); |
169
(4) | any Indebtedness or obligation of the Company (and any accrued and unpaid interest in respect thereof) that by its terms is subordinate or junior in any respect to any other Indebtedness or obligation of the Company or such Subsidiary Guarantor, as applicable, including any Subordinated Obligations of the Company or such Subsidiary Guarantor, as applicable; | |
(5) | any obligations with respect to any Capital Stock; or | |
(6) | any Indebtedness Incurred in violation of the Indenture. |
(1) | such Person, | |
(2) | such Person and one or more Subsidiaries of such Person or | |
(3) | one or more Subsidiaries of such Person. |
(1) | direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; | |
(2) | investments in commercial paper maturing within 270 days from the date of acquisition thereof, and having, at such date of acquisition, ratings of A1 from S&P and P1 from Moody’s; |
170
(3) | investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof and issued or guaranteed by or placed with, and money market deposit accounts issued or offered by any commercial bank organized under the laws of the United States of America or any state thereof which has a short-term deposit rating of A1 from S&P and P1 from Moody’s and has a combined capital and surplus and undivided profits of not less than $500,000,000; | |
(4) | fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (1) above and entered into with a financial institution described in clause (3) above; | |
(5) | money market funds that |
(A) | comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, | |
(B) | are rated AAA by S&P and Aaa by Moody’s and | |
(C) | have portfolio assets of at least $5,000,000,000; and |
(6) | in the case of any Foreign Subsidiary, |
(A) | marketable direct obligations issued or unconditionally guaranteed by the sovereign nation in which such Foreign Subsidiary is organized and is conducting business or issued by any agency of such sovereign nation and backed by the full faith and credit of such sovereign nation, in each case maturing within one year from the date of acquisition, so long as the indebtedness of such sovereign nation is rated at least A by S&P or A2 by Moody’s or carries an equivalent rating from a comparable foreign rating agency, | |
(B) | investments of the type and maturity described in clauses (2) through (5) of foreign obligors, which investments or obligors have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies, | |
(C) | investments of the type and maturity described in clause (3) in any obligor organized under the laws of a jurisdiction other than the United States that |
(i) | is a branch or subsidiary of a lender or the ultimate parent company of a lender under any of the Credit Agreements (but only if such lender meets the ratings and capital, surplus and undivided profits requirements of such clause (3)) or | |
(ii) | carries a rating at least equivalent to the rating of the sovereign nation in which it is located, and |
(D) | other investments of the type and maturity described in clause (3) in obligors organized under the laws of a jurisdiction other than the United States in any country in which such Subsidiary is located; provided, that the investments permitted under this subclause (D) shall not exceed $10,000,000 for all such Subsidiaries in any such country or $50,000,000 in the aggregate for all such Subsidiaries and all countries. |
171
(1) | any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and | |
(2) | any Subsidiary of an Unrestricted Subsidiary. |
(A) | the Subsidiary to be so designated has total Consolidated assets of $1,000 or less or |
(B) | if such Subsidiary has Consolidated assets greater than $1,000, then such designation would be permitted under the covenant entitled “Limitation on Restricted Payments.” |
(x) | (1) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “Certain covenants — Limitation on Indebtedness” or (2) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries would be greater after giving effect to such designation than before such designation and | |
(y) | no Default shall have occurred and be continuing. |
(1) | the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMorgan Chase Bank, as administrative agent and | |
(2) | the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent and BNP Paribas, as syndication agent, |
172
173
174
175
176
1. is permitted under the plan document and other instruments governing the ERISA Plan; and | |
2. is appropriate for the ERISA Plan in view of its overall investment policy and the composition and diversification of its portfolio, taking into account the limited liquidity of the notes. |
177
1. Prohibited transaction class exemption (“PTCE”) 75-1 (relating to specified transactions involving employee benefit plans and broker-dealers, reporting dealers, and banks); | |
2. PTCE 84-14 (relating to specified transactions directed by independent qualified professional asset managers); | |
3. PTCE 90-1 (relating to specified transactions involving insurance company pooled separate accounts); | |
4. PTCE 91-38 (relating to specified transactions by bank collective investment funds); | |
5. PTCE 95-60 (relating to specified transactions involving insurance company general accounts); and | |
6. PTCE 96-23 (relating to specified transactions directed by in-house asset managers). |
1. you have not used the assets directly or indirectly of any Plan to acquire such note; or | |
2. your acquisition and holding of such note (A) is exempt from the prohibited transaction restrictions of ERISA and the Code under one or more prohibited transaction class exemptions or does not constitute a prohibited transaction under ERISA and the Code, (B) meets the applicable fiduciary requirements of ERISA, and (C) does not violate any applicable Similar Law. |
178
179
Page | ||||||
Annual Consolidated Financial Statements: | ||||||
F-2 | ||||||
F-3 | ||||||
F-5 | ||||||
F-6 | ||||||
F-7 | ||||||
F-8 | ||||||
F-9 | ||||||
F-86 | ||||||
F-92 | ||||||
F-98 | ||||||
Other Financial Statements | ||||||
F-99 | ||||||
F-100 | ||||||
Interim Consolidated Financial Statements (Unaudited): | ||||||
F-159 | ||||||
F-160 | ||||||
F-161 | ||||||
F-162 | ||||||
F-163 |
F-1
F-2
F-3
/s/ PricewaterhouseCoopers LLP | |
PRICEWATERHOUSECOOPERS LLP |
F-4
Year Ended December 31, | ||||||||||||
Restated | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(Dollars in millions, except per share amounts) | ||||||||||||
Net Sales | $ | 18,370.4 | $ | 15,122.1 | $ | 13,856.0 | ||||||
Cost of Goods Sold | 14,709.2 | 12,499.0 | 11,306.9 | |||||||||
Selling, Administrative and General Expense | 2,833.1 | 2,374.2 | 2,202.4 | |||||||||
Rationalizations (Note 3) | 55.6 | 291.5 | 5.5 | |||||||||
Interest Expense (Note 15) | 368.8 | 296.3 | 242.7 | |||||||||
Other (Income) and Expense (Note 4) | 8.2 | 263.4 | 56.8 | |||||||||
Foreign Currency Exchange (Gain) Loss | 23.4 | 40.7 | (8.7 | ) | ||||||||
Equity in (Earnings) Losses of Affiliates | (8.4 | ) | 14.5 | 13.8 | ||||||||
Minority Interest in Net Income of Subsidiaries | 57.8 | 32.8 | 55.6 | |||||||||
Income (Loss) before Income Taxes | 322.7 | (690.3 | ) | (19.0 | ) | |||||||
United States and Foreign Taxes on Income (Loss) (Note 14) | 207.9 | 117.1 | 1,227.9 | |||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | ||||
Net Income (Loss) Per Share — Basic | $ | 0.65 | $ | (4.61 | ) | $ | (7.47 | ) | ||||
Average Shares Outstanding (Note 12) | 175.4 | 175.3 | 167.0 | |||||||||
Net Income (Loss) Per Share — Diluted | $ | 0.63 | $ | (4.61 | ) | $ | (7.47 | ) | ||||
Average Shares Outstanding (Note 12) | 192.3 | 175.3 | 167.0 |
F-5
December 31, | ||||||||||
Restated | ||||||||||
2004 | 2003 | |||||||||
(Dollars in millions) | ||||||||||
ASSETS | ||||||||||
Current Assets: | ||||||||||
Cash and cash equivalents (Note 1) | $ | 1,967.9 | $ | 1,546.3 | ||||||
Restricted cash (Note 1) | 152.4 | 23.9 | ||||||||
Accounts and notes receivable (Note 5) | 3,408.8 | 2,602.3 | ||||||||
Inventories (Note 6) | 2,784.8 | 2,467.7 | ||||||||
Prepaid expenses and other current assets | 299.2 | 305.4 | ||||||||
Total Current Assets | 8,613.1 | 6,945.6 | ||||||||
Long Term Accounts and Notes Receivable | 307.5 | 289.7 | ||||||||
Investments in and Advances to Affiliates | 34.9 | 184.2 | ||||||||
Other Assets (Note 8) | 78.3 | 71.5 | ||||||||
Goodwill (Note 7) | 720.3 | 658.2 | ||||||||
Other Intangible Assets (Note 7) | 162.6 | 150.4 | ||||||||
Deferred Income Tax (Note 14) | 83.4 | 70.5 | ||||||||
Prepaid and Deferred Pension Costs (Note 13) | 829.9 | 869.9 | ||||||||
Deferred Charges | 248.1 | 255.9 | ||||||||
Properties and Plants (Note 9) | 5,455.2 | 5,205.2 | ||||||||
Total Assets | $ | 16,533.3 | $ | 14,701.1 | ||||||
LIABILITIES | ||||||||||
Current Liabilities: | ||||||||||
Accounts payable-trade | $ | 1,970.4 | $ | 1,557.8 | ||||||
Compensation and benefits (Note 13) | 1,029.2 | 977.9 | ||||||||
Other current liabilities | 589.4 | 584.3 | ||||||||
United States and foreign taxes | 271.3 | 270.7 | ||||||||
Notes payable (Note 11) | 220.6 | 146.7 | ||||||||
Long term debt and capital leases due within one year (Note 11) | 1,009.9 | 113.5 | ||||||||
Total Current Liabilities | 5,090.8 | 3,650.9 | ||||||||
Long Term Debt and Capital Leases (Note 11) | 4,449.1 | 4,825.8 | ||||||||
Compensation and Benefits (Note 13) | 5,035.8 | 4,512.9 | ||||||||
Deferred and Other Noncurrent Income Taxes (Note 14) | 405.8 | 380.6 | ||||||||
Other Long Term Liabilities | 632.9 | 509.1 | ||||||||
Minority Equity in Subsidiaries | 846.1 | 854.0 | ||||||||
Total Liabilities | 16,460.5 | 14,733.3 | ||||||||
Commitments and Contingent Liabilities (Note 20) | ||||||||||
Shareholders’ Equity (Deficit) | ||||||||||
Preferred Stock, no par value: | ||||||||||
Authorized, 50,000,000 shares, unissued | — | — | ||||||||
Common Stock, no par value: | ||||||||||
Authorized, 300,000,000 shares | ||||||||||
Outstanding shares, 175,619,639 (175,326,429 in 2003) | 175.6 | 175.3 | ||||||||
Capital Surplus | 1,391.8 | 1,390.2 | ||||||||
Retained Earnings | 1,069.9 | 955.1 | ||||||||
Accumulated Other Comprehensive Income (Loss) (Note 19) | (2,564.5 | ) | (2,552.8 | ) | ||||||
Total Shareholders’ Equity (Deficit) | 72.8 | (32.2 | ) | |||||||
Total Liabilities and Shareholders’ Equity | $ | 16,533.3 | $ | 14,701.1 | ||||||
F-6
Accumulated | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
Common Stock | Comprehensive | Total | |||||||||||||||||||||||||
Capital | Retained | Income | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Surplus | Earnings | (Loss) | Equity | ||||||||||||||||||||||
(Dollars in millions, except per share) | |||||||||||||||||||||||||||
Balance at December 31, 2001 as originally restated(A) (after deducting 32,512,970 treasury shares) | 163,165,698 | $ | 163.2 | $ | 1,245.4 | $ | 3,089.3 | $ | (1,870.1 | ) | $ | 2,627.8 | |||||||||||||||
Effect of restatement on periods ending on or before December 31, 2001 | (0.1 | ) | (30.9 | ) | (31.0 | ) | |||||||||||||||||||||
Balance at December 31, 2001 (as restated) | 163,165,698 | $ | 163.2 | $ | 1,245.4 | $ | 3,089.2 | $ | (1,901.0 | ) | $ | 2,596.8 | |||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||
Net loss | (1,246.9 | ) | |||||||||||||||||||||||||
Foreign currency translation (net of tax benefit of $0) | 74.4 | ||||||||||||||||||||||||||
Minimum pension liability (net of tax of $42.4) | (1,283.6 | ) | |||||||||||||||||||||||||
Unrealized investment gain (net of tax of $0) | 7.3 | ||||||||||||||||||||||||||
Deferred derivative gain (net of tax of $0) | 60.6 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $0) | (64.5 | ) | |||||||||||||||||||||||||
Total comprehensive loss | (2,452.7 | ) | |||||||||||||||||||||||||
Cash dividends — $0.48 per share | (79.8 | ) | (79.8 | ) | |||||||||||||||||||||||
Common stock issued from treasury: | |||||||||||||||||||||||||||
Domestic pension funding | 11,300,000 | 11.3 | 126.6 | 137.9 | |||||||||||||||||||||||
Common stock issued for acquisitions | 693,740 | 0.7 | 15.2 | 15.9 | |||||||||||||||||||||||
Stock compensation plans | 147,995 | 0.1 | 2.9 | 3.0 | |||||||||||||||||||||||
Balance at December 31, 2002 (as restated) (after deducting 20,371,235 treasury shares) | 175,307,433 | 175.3 | 1,390.1 | 1,762.5 | (3,106.8 | ) | 221.1 | ||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||
Net loss | (807.4 | ) | |||||||||||||||||||||||||
Foreign currency translation (net of tax benefit of $0) | 393.7 | ||||||||||||||||||||||||||
Minimum pension liability (net of tax of $2.2) | 128.3 | ||||||||||||||||||||||||||
Unrealized investment gain (net of tax of $0) | 4.1 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $8.7) | 8.8 | ||||||||||||||||||||||||||
Deferred derivative gain (net of tax of $0) | 46.3 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $1.9) | (27.2 | ) | |||||||||||||||||||||||||
Total comprehensive loss | (253.4 | ) | |||||||||||||||||||||||||
Common stock issued from treasury: | |||||||||||||||||||||||||||
Stock compensation plans | 18,996 | 0.1 | 0.1 | ||||||||||||||||||||||||
Balance at December 31, 2003 (as restated) (after deducting 20,352,239 treasury shares) | 175,326,429 | 175.3 | 1,390.2 | 955.1 | (2,552.8 | ) | (32.2 | ) | |||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||
Net income | 114.8 | ||||||||||||||||||||||||||
Foreign currency translation (net of tax benefit of $0) | 253.2 | ||||||||||||||||||||||||||
Minimum pension liability (net of tax of $34.2) | (283.8 | ) | |||||||||||||||||||||||||
Unrealized investment gain (net of tax of $0) | 13.4 | ||||||||||||||||||||||||||
Deferred derivative gain (net of tax of $0) | 29.6 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $(3.5)) | (24.1 | ) | |||||||||||||||||||||||||
Total comprehensive income | 103.1 | ||||||||||||||||||||||||||
Common stock issued from treasury: | |||||||||||||||||||||||||||
Stock compensation plans | 293,210 | 0.3 | 1.6 | 1.9 | |||||||||||||||||||||||
Balance at December 31, 2004 (after deducting 20,059,029 treasury shares) | 175,619,639 | $ | 175.6 | $ | 1,391.8 | $ | 1,069.9 | $ | (2,564.5 | ) | $ | 72.8 | |||||||||||||||
(A) | As reported in Form 10-K filed on May 19, 2004. |
F-7
Year Ended December 31, | ||||||||||||||||
Restated | ||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||
(In millions) | ||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | ||||||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||||||||||||||||
Depreciation and amortization | 628.7 | 691.6 | 605.3 | |||||||||||||
Amortization of debt issuance costs | 86.1 | 50.3 | 17.9 | |||||||||||||
Deferred tax provision (Note 14) | (4.5 | ) | (9.9 | ) | 1,131.2 | |||||||||||
Rationalizations (Note 3) | 32.4 | 132.4 | 2.4 | |||||||||||||
(Gain) loss on asset sales (Note 4) | 7.5 | 16.4 | (23.6 | ) | ||||||||||||
Fire loss deductible expense (Note 4) | 11.6 | — | — | |||||||||||||
Insurance settlement gain (Note 4) | (156.6 | ) | — | — | ||||||||||||
Minority interest and equity earnings | 47.5 | 39.3 | 71.4 | |||||||||||||
Net cash flows from sale of accounts receivable (Note 5) | (117.7 | ) | (839.6 | ) | 34.8 | |||||||||||
Pension contributions | (264.6 | ) | (115.7 | ) | (226.9 | ) | ||||||||||
Changes in operating assets and liabilities, net of asset acquisitions and dispositions: | ||||||||||||||||
Accounts and notes receivable | (305.7 | ) | (104.7 | ) | 43.1 | |||||||||||
Inventories | (53.9 | ) | 38.2 | 60.4 | ||||||||||||
Accounts payable — trade | 147.5 | (103.5 | ) | 96.3 | ||||||||||||
Prepaid expenses and other current assets | 64.1 | 202.1 | (131.4 | ) | ||||||||||||
Deferred charges | (19.6 | ) | 1.9 | (9.7 | ) | |||||||||||
Long term compensation and benefits | 689.4 | (20.3 | ) | 1,511.2 | ||||||||||||
Accumulated other comprehensive income (loss) — deferred pension gain (loss) | (244.2 | ) | 191.1 | (1,265.8 | ) | |||||||||||
Other long term liabilities | 96.7 | 221.5 | (88.7 | ) | ||||||||||||
Other assets and liabilities | (39.7 | ) | 127.5 | 105.0 | ||||||||||||
Total adjustments | 605.0 | 518.6 | 1,932.9 | |||||||||||||
Total cash flows from operating activities | 719.8 | (288.8 | ) | 686.0 | ||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||||
Capital expenditures | (518.6 | ) | (375.4 | ) | (458.1 | ) | ||||||||||
Short term securities acquired | — | — | (64.7 | ) | ||||||||||||
Short term securities redeemed | — | 26.6 | 38.5 | |||||||||||||
Asset dispositions | 19.3 | 104.4 | 55.6 | |||||||||||||
Asset acquisitions | (61.8 | ) | (71.2 | ) | (54.8 | ) | ||||||||||
Other transactions | 35.9 | 79.6 | (56.8 | ) | ||||||||||||
Total cash flows from investing activities | (525.2 | ) | (236.0 | ) | (540.3 | ) | ||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||
Short term debt incurred | 162.5 | 323.1 | 84.1 | |||||||||||||
Short term debt paid | (139.2 | ) | (469.2 | ) | (87.5 | ) | ||||||||||
Long term debt incurred | 2,066.7 | 2,983.8 | 38.4 | |||||||||||||
Long term debt paid | (1,693.9 | ) | (1,612.1 | ) | (125.2 | ) | ||||||||||
Common stock issued (Notes 8, 12) | 1.8 | 0.2 | 18.7 | |||||||||||||
Dividends paid to minority interests in subsidiaries | (28.9 | ) | (38.6 | ) | (16.2 | ) | ||||||||||
Dividends paid to Goodyear shareholders | — | — | (79.8 | ) | ||||||||||||
Debt issuance costs | (51.4 | ) | (104.1 | ) | — | |||||||||||
Increase in restricted cash | (128.5 | ) | (23.9 | ) | — | |||||||||||
Other transactions | — | 27.9 | — | |||||||||||||
Total cash flows from financing activities | 189.1 | 1,087.1 | (167.5 | ) | ||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 37.9 | 64.2 | (13.7 | ) | ||||||||||||
Net Change in Cash and Cash Equivalents | 421.6 | 626.5 | (35.5 | ) | ||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 1,546.3 | 919.8 | 955.3 | |||||||||||||
Cash and Cash equivalents at End of the Period | $ | 1,967.9 | $ | 1,546.3 | $ | 919.8 | ||||||||||
F-8
Note 1. | Accounting Policies |
Principles of Consolidation |
Use of Estimates |
• | allowance for doubtful accounts, | |
• | recoverability of intangibles and other long-lived assets, | |
• | deferred tax asset valuation allowances, | |
• | workers’ compensation, | |
• | litigation, | |
• | general and product liabilities, | |
• | environmental liabilities, | |
• | pension and other postretirement benefits, and | |
• | various other operating allowances and accruals, based on currently available information. |
F-9
Revenue Recognition |
Shipping and Handling Fees and Costs |
Research and Development Costs |
Warranty |
Environmental Cleanup Matters |
Legal Expenses |
Advertising Costs |
F-10
Rationalizations |
Income Taxes |
Cash and Cash Equivalents/ Consolidated Statement of Cash Flows |
Restricted Cash and Restricted Net Assets |
Inventories |
Goodwill and Other Intangible Assets |
F-11
Investments |
Properties and Plants |
Foreign Currency Translation |
Derivative Financial Instruments and Hedging Activities |
F-12
Stock-Based Compensation |
Year Ended December 31, | |||||||||||||
Restated | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions, except per share) | |||||||||||||
Net income (loss) as reported | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | |||||
Add: Stock-based compensation expense (income) included in net income (loss) (net of tax) | 6.4 | 1.3 | (5.6 | ) | |||||||||
Deduct: Stock-based compensation expense calculated using the fair value method (net of tax) | (20.2 | ) | (28.0 | ) | (28.7 | ) | |||||||
Net income (loss) as adjusted | $ | 101.0 | $ | (834.1 | ) | $ | (1,281.2 | ) | |||||
Net income (loss) per share: | |||||||||||||
Basic — as reported | $ | 0.65 | $ | (4.61 | ) | $ | (7.47 | ) | |||||
— as adjusted | 0.58 | (4.76 | ) | (7.67 | ) | ||||||||
Diluted — as reported | $ | 0.63 | $ | (4.61 | ) | $ | (7.47 | ) | |||||
— as adjusted | 0.56 | (4.76 | ) | (7.67 | ) |
Earnings Per Share of Common Stock |
F-13
Reclassification |
Recently Issued Accounting Standards |
F-14
F-15
Note 2. | Restatement |
Restatements Included in 2003 Form 10-K |
F-16
F-17
Year Ended | ||||||||||||||||||||
Nine Months Ended | December 31, | |||||||||||||||||||
September 30, | ||||||||||||||||||||
2003 | 2002 | 2001 | Pre-2001 | Total | ||||||||||||||||
(In millions) | (Unaudited) | |||||||||||||||||||
Income (Expense) | ||||||||||||||||||||
Accruals and deferred expenses — Europe and Asia | $ | 4.5 | $ | 0.5 | $ | (8.3 | ) | $ | (2.0 | ) | $ | (5.3 | ) | |||||||
Deferred income — Europe | — | (2.9 | ) | (1.0 | ) | — | (3.9 | ) | ||||||||||||
Workers’ compensation | (4.1 | ) | (5.6 | ) | (2.3 | ) | (5.7 | ) | (17.7 | ) | ||||||||||
Accruals and deferred expenses — Chile | — | 4.5 | (1.6 | ) | (3.5 | ) | (0.6 | ) | ||||||||||||
Land valuation — Chile | — | — | — | (1.5 | ) | (1.5 | ) | |||||||||||||
$ | 0.4 | $ | (3.5 | ) | $ | (13.2 | ) | $ | (12.7 | ) | $ | (29.0 | ) | |||||||
A. Interplant. We use an internal system, the Interplant System, to track the procurement and transfer of fixed assets, raw materials and spare parts acquired or manufactured by Goodyear units in the United States for our foreign manufacturing locations. The $28.8 million Interplant charge corrects an overstatement of income and assets. The most significant items in this category are 1) fixed assets and inventory of $26.0 million which were not properly relieved from the Interplant System when they were billed to the foreign manufacturing locations and accordingly now have to be expensed and 2) the correction of a failure to depreciate $2.8 million of fixed assets. | |
B. North American Tire (NAT) Receivables. The adjustment to accounts receivable of $25.0 million is attributable to amounts erroneously recorded in our general ledger during the period April 1999 to November 2000. During this period, we implemented certain modules of an ERP accounting system. These modules were not properly integrated with existing systems resulting in an overstatement of sales and accounts receivable in the general ledger. This overstatement had to be reversed. Billings to customers and cash collections were appropriate during this period. | |
C. Engineered Products (EPD). It was not possible to allocate the amount of this adjustment to specific periods and accordingly, we recorded substantially all of this adjustment in the first quarter of 2003. This adjustment includes the write-off of $21.3 million consisting of $3.7 million in intercompany |
F-18
accounts and $17.6 million related to payables and other accounts. Several factors relating to our ERP systems implementation resulted in EPD’s inability to locate or recreate account reconciliations for prior periods. | |
D. Wingfoot Commercial Tire Systems, LLC. On November 1, 2000, we made a contribution, which included inventory, to Wingfoot Commercial Tire Systems, LLC, a consolidated subsidiary. On a consolidated basis, the inventory was valued at our historical cost. Upon the sale of the inventory, consolidated cost of goods sold was understated by $11.0 million. Additionally, inventory and fixed asset losses totaling $4.2 million were not expensed as incurred and were written off in connection with the restatement. | |
E. Fixed Assets. The adjustments to other fixed assets totaled $13.1 million and related primarily to the understatement of depreciation expenses and the write-off of assets previously disposed. | |
F. General and Product Liability. The expense for general and product claims increased $11.6 million for the third quarter and nine months ended September 30, 2003, and related to the timing of the recognition of certain liabilities for Entran II claims. We reached final agreement with one of our insurers in November 2003, prior to filing the third quarter 10-Q, and recorded both a receivable and separately a corresponding liability related to Entran II matters. This amount was reflected in our amended quarterly report on Form 10-Q/ A for the period ended September 30, 2003 filed on August 3, 2004, which has subsequently been restated, as discussed below in “Restatements Included in 2004 Form 10-K”. |
F-19
Restatements Included in 2004 Form 10-K |
SPT. These adjustments reduced income by $12.9 million and resulted primarily from the recognition of a contractual obligation related to a supply agreement that was entered into in 2000 with our 50% owned affiliate in Australia, South Pacific Tyres, an impairment of certain property, plant and equipment, the timing of the recognition of certain rationalization charges and other adjustments |
F-20
identified in conjunction with a restatement of SPT’s historical U.S. GAAP financial results. Of this amount, a benefit of $0.6 million was included in income in 2004 and charges of $13.5 million were included in income in prior years. The adjustments included a charge that reduced income by $6.9 million to recognize payments we made pursuant to a long term supply agreement as a capital contribution. We made certain payments to SPT totaling $13.8 million under the terms of the supply agreement. As part of this restatement, we are recording 50% of those payments as capital contributions to SPT and 50% in expense, representing amounts contributed on behalf of our joint venture partner pursuant to the provisions of Emerging Issues Task Force Issue 00-12, “Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee”. We also recorded a charge that reduced income by $4.3 million for the write-down of assets at a closed manufacturing facility. | |
General and Product Liability. We identified adjustments related to general and product liability — discontinued products which increased income by $9.5 million. Of this amount, $2.2 million was included in income in 2004 and $7.3 million was included in income in 2003. These adjustments were the result of the valuation firm’s review of additional historical defense costs data. | |
Account Reconciliations. We identified adjustments related to account reconciliation items in 2004 which reduced cumulative income by $4.0 million. Of this amount, a benefit of $2.5 million was included in income in 2004 and charges of $6.5 million were included in income in prior years. These adjustments were primarily comprised of $4.1 million in net expense related to the write-off of goodwill associated with certain retail stores previously sold in France, $2.9 million in expense related to the write-off of certain deferred charges, $1.8 million in expense related to a clerical error in recording adjustments to our workers’ compensation reserve as part of our restatement as of December 31, 2003, and $1.5 million in expense related to the reconciliation of an intra-company account, partially offset by favorable adjustments related to an overaccrual for payroll deductions of approximately $3.3 million, and additional equity in earnings of affiliates of approximately $1.0 million. Also included in the adjustments were an offsetting charge and credit of $2.7 million identified in 2004 that related to a leased tire asset account. Since it was not possible to allocate these offsetting $2.7 million adjustments to the applicable periods, we recorded both adjustments in the first quarter of 2004.We also reassessed our estimate of the discount rate used in determining net periodic pension cost and benefit obligations for two minor pension plans, and recorded a $1.3 million expense related to these two plans. |
F-21
F-22
Year Ended December 31, | |||||||||||||||||||||
Restated | |||||||||||||||||||||
2003 | 2002 | 2001 | Pre-2001 | Total | |||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
Net loss as originally reported(A) | $ | (1,105.8 | ) | $ | (203.6 | ) | |||||||||||||||
Adjustments (pretax): | |||||||||||||||||||||
Accounting Irregularities | (3.5 | ) | (13.2 | ) | $ | (12.7 | ) | $ | (29.4 | ) | |||||||||||
Account Reconciliations | (6.8 | ) | (12.8 | ) | (82.5 | ) | (102.1 | ) | |||||||||||||
Out-of-Period | 15.2 | (14.5 | ) | (2.1 | ) | (1.4 | ) | ||||||||||||||
Discount Rate Adjustments | (14.9 | ) | (5.5 | ) | 14.5 | (5.9 | ) | ||||||||||||||
Chemical Products | 14.2 | (18.9 | ) | (3.6 | ) | (8.3 | ) | ||||||||||||||
Total adjustments (pretax) | 4.2 | (64.9 | ) | (86.4 | ) | (147.1 | ) | ||||||||||||||
Tax effect of restatement adjustments | (2.9 | ) | 17.9 | 32.3 | 47.3 | ||||||||||||||||
Tax adjustments | (122.5 | ) | (3.5 | ) | 1.2 | (124.8 | ) | ||||||||||||||
Total taxes | (125.4 | ) | 14.4 | 33.5 | (77.5 | ) | |||||||||||||||
Total net adjustments | (121.2 | ) | (50.5 | ) | $ | (52.9 | ) | $ | (224.6 | ) | |||||||||||
Net loss as previously reported(B) | $ | (802.1 | ) | $ | (1,227.0 | ) | $ | (254.1 | ) | ||||||||||||
SPT | (2.3 | ) | (3.5 | ) | 0.6 | (8.3 | ) | (13.5 | ) | ||||||||||||
General and Product Liability | 7.3 | — | — | — | 7.3 | ||||||||||||||||
Account Reconciliations | (5.4 | ) | (1.8 | ) | (1.7 | ) | 2.4 | (6.5 | ) | ||||||||||||
Total adjustments (pretax) | (0.4 | ) | (5.3 | ) | (1.1 | ) | (5.9 | ) | (12.7 | ) | |||||||||||
Tax effect of restatement adjustments | (0.1 | ) | (7.4 | ) | 0.5 | 6.4 | (0.6 | ) | |||||||||||||
Tax adjustments | (4.8 | ) | (7.2 | ) | — | — | (12.0 | ) | |||||||||||||
Total taxes | (4.9 | ) | (14.6 | ) | 0.5 | 6.4 | (12.6 | ) | |||||||||||||
Total net adjustments | (5.3 | ) | (19.9 | ) | (0.6 | ) | $ | 0.5 | $ | (25.3 | ) | ||||||||||
Net loss as restated | $ | (807.4 | ) | $ | (1,246.9 | ) | $ | (254.7 | ) | ||||||||||||
F-23
Year Ended December 31, | ||||||||||||||||||||
Restated | ||||||||||||||||||||
2003 | 2002 | 2001 | Pre-2001 | Total | ||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
Net Income (Loss) Per Share: | ||||||||||||||||||||
Basic as originally reported(A) | $ | (6.62 | ) | $ | (1.27 | ) | ||||||||||||||
Effect of net adjustments | (0.73 | ) | (0.32 | ) | ||||||||||||||||
Basic as previously reported(B) | $ | (4.58 | ) | $ | (7.35 | ) | $ | (1.59 | ) | |||||||||||
Effect of net adjustments | (0.03 | ) | (0.12 | ) | — | |||||||||||||||
Basic as restated | $ | (4.61 | ) | $ | (7.47 | ) | $ | (1.59 | ) | |||||||||||
Diluted as originally reported(A) | $ | (6.62 | ) | $ | (1.27 | ) | ||||||||||||||
Effect of net adjustments | (0.73 | ) | (0.32 | ) | ||||||||||||||||
Diluted as previously reported(B) | $ | (4.58 | ) | $ | (7.35 | ) | $ | (1.59 | ) | |||||||||||
Effect of net adjustments | (0.03 | ) | (0.12 | ) | — | |||||||||||||||
Diluted as restated | $ | (4.61 | ) | $ | (7.47 | ) | $ | (1.59 | ) | |||||||||||
(A) | As reported in 2002 Form 10-K filed on April 3, 2003. |
(B) | As reported in 2003 Form 10-K filed on May 19, 2004. |
Year Ended | ||||||||
December 31, 2003 | ||||||||
As Originally | ||||||||
Reported(A) | Restated | |||||||
(In millions, except per share amounts) | ||||||||
Net Sales | $ | 15,119.0 | $ | 15,122.1 | ||||
Cost of Goods Sold | 12,495.3 | 12,499.0 | ||||||
Selling, Administrative and General Expense | 2,371.2 | 2,374.2 | ||||||
Rationalizations | 291.5 | 291.5 | ||||||
Interest Expense | 296.3 | 296.3 | ||||||
Other (Income) and Expense | 267.3 | 263.4 | ||||||
Foreign Currency Exchange | 40.2 | 40.7 | ||||||
Equity in Earnings of Affiliates | 12.1 | 14.5 | ||||||
Minority Interest | 35.0 | 32.8 | ||||||
Loss Before Income Taxes | (689.9 | ) | (690.3 | ) | ||||
U.S. and Foreign Taxes on Income (Loss) | 112.2 | 117.1 | ||||||
Net Loss | $ | (802.1 | ) | $ | (807.4 | ) | ||
Net Loss Per Share — Basic | $ | (4.58 | ) | $ | (4.61 | ) | ||
Average Shares Outstanding | 175.3 | 175.3 | ||||||
Net Loss Per Share — Diluted | $ | (4.58 | ) | $ | (4.61 | ) | ||
Average Shares Outstanding | 175.3 | 175.3 |
(A) | As reported in 2003 Form 10-K filed on May 19, 2004. |
F-24
Year Ended December 31, 2002 | ||||||||||||
As Originally | As Previously | |||||||||||
Reported(A) | Reported(B) | Restated | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Net Sales | $ | 13,850.0 | $ | 13,856.2 | $ | 13,856.0 | ||||||
Cost of Goods Sold | 11,313.9 | 11,303.9 | 11,306.9 | |||||||||
Selling, Administrative and General Expense | 2,223.9 | 2,203.2 | 2,202.4 | |||||||||
Rationalizations | 8.6 | 5.5 | 5.5 | |||||||||
Interest Expense | 241.3 | 241.7 | 242.7 | |||||||||
Other (Income) and Expense | 25.8 | 56.8 | 56.8 | |||||||||
Foreign Currency Exchange | (10.2 | ) | (9.7 | ) | (8.7 | ) | ||||||
Equity in Earnings of Affiliates | 8.8 | 13.2 | 13.8 | |||||||||
Minority Interest | 55.8 | 55.3 | 55.6 | |||||||||
Loss Before Income Taxes | (17.9 | ) | (13.7 | ) | (19.0 | ) | ||||||
U.S. and Foreign Taxes on Income (Loss) | 1,087.9 | 1,213.3 | 1,227.9 | |||||||||
Net Loss | $ | (1,105.8 | ) | $ | (1,227.0 | ) | $ | (1,246.9 | ) | |||
Net Loss Per Share — Basic | $ | (6.62 | ) | $ | (7.35 | ) | $ | (7.47 | ) | |||
Average Shares Outstanding | 167.0 | 167.0 | 167.0 | |||||||||
Net Loss Per Share — Diluted | $ | (6.62 | ) | $ | (7.35 | ) | $ | (7.47 | ) | |||
Average Shares Outstanding | 167.0 | 167.0 | 167.0 |
Year Ended December 31, 2001 | ||||||||||||
As Originally | As Previously | |||||||||||
Reported(A) | Reported(B) | Restated | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Net Sales | $ | 14,147.2 | �� | $ | 14,162.5 | $ | 14,162.3 | |||||
Cost of Goods Sold | 11,619.5 | 11,685.3 | 11,687.8 | |||||||||
Selling, Administrative and General Expense | 2,248.8 | 2,220.5 | 2,219.1 | |||||||||
Rationalizations | 206.8 | 210.3 | 210.3 | |||||||||
Interest Expense | 292.4 | 297.1 | 298.0 | |||||||||
Other (Income) and Expense | 11.8 | 40.8 | 40.8 | |||||||||
Foreign Currency Exchange | 0.1 | 10.0 | 8.8 | |||||||||
Equity in Earnings of Affiliates | 40.6 | 39.7 | 39.5 | |||||||||
Minority Interest | 0.2 | (3.3 | ) | (3.0 | ) | |||||||
Loss Before Income Taxes | (273.0 | ) | (337.9 | ) | (339.0 | ) | ||||||
U.S. and Foreign Taxes on Income (Loss) | (69.4 | ) | (83.8 | ) | (84.3 | ) | ||||||
Net Loss | $ | (203.6 | ) | $ | (254.1 | ) | $ | (254.7 | ) | |||
Net Loss Per Share — Basic | $ | (1.27 | ) | $ | (1.59 | ) | $ | (1.59 | ) | |||
Average Shares Outstanding | 160.0 | 160.0 | 160.0 | |||||||||
Net Loss Per Share — Diluted | $ | (1.27 | ) | $ | (1.59 | ) | $ | (1.59 | ) | |||
Average Shares Outstanding | 160.0 | 160.0 | 160.0 |
(A) | As reported in 2002 Form 10-K filed on April 3, 2003. | |
(B) | As reported in 2003 Form 10-K filed on May 19, 2004. |
F-25
December 31, 2003 | ||||||||||||||
As Originally | As Previously | |||||||||||||
Reported(A) | Reported(B) | Restated | ||||||||||||
(Dollars in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,541.0 | $ | 1,544.2 | $ | 1,546.3 | ||||||||
Short term securities | 23.9 | 23.9 | 23.9 | |||||||||||
Accounts and notes receivable | 2,621.5 | 2,622.7 | 2,602.3 | |||||||||||
Inventories | 2,465.0 | 2,464.6 | 2,467.7 | |||||||||||
Prepaid expenses and other current assets | 336.7 | 305.7 | 305.4 | |||||||||||
Total Current Assets | 6,988.1 | 6,961.1 | 6,945.6 | |||||||||||
Long Term Accounts and Notes Receivable | 255.0 | 255.0 | 289.7 | |||||||||||
Investments in and Advances to Affiliates | 177.5 | 178.9 | 184.2 | |||||||||||
Other Assets | 74.9 | 71.5 | 71.5 | |||||||||||
Goodwill | 622.5 | 618.6 | 658.2 | |||||||||||
Other Intangible Assets | 161.8 | 161.9 | 150.4 | |||||||||||
Deferred Income Tax | 397.5 | 70.5 | 70.5 | |||||||||||
Prepaid and Deferred Pension Costs | 868.3 | 869.9 | 869.9 | |||||||||||
Deferred Charges | 252.7 | 246.7 | 255.9 | |||||||||||
Properties and Plants | 5,207.2 | 5,208.9 | 5,205.2 | |||||||||||
Total Assets | $ | 15,005.5 | $ | 14,643.0 | $ | 14,701.1 | ||||||||
LIABILITIES | ||||||||||||||
Current Liabilities: | ||||||||||||||
Accounts payable-trade | $ | 1,572.9 | $ | 1,574.9 | $ | 1,557.8 | ||||||||
Compensation and benefits | 983.1 | 982.7 | 977.9 | |||||||||||
Other current liabilities | 572.2 | 571.5 | 584.3 | |||||||||||
United States and foreign taxes | 306.1 | 268.7 | 270.7 | |||||||||||
Notes payable | 137.7 | 137.7 | 146.7 | |||||||||||
Long term debt and capital leases due within one year | 113.5 | 113.5 | 113.5 | |||||||||||
Total Current Liabilities | 3,685.5 | 3,649.0 | 3,650.9 | |||||||||||
Long Term Debt and Capital Leases | 4,826.2 | 4,825.8 | 4,825.8 | |||||||||||
Compensation and Benefits | 4,540.4 | 4,542.6 | 4,512.9 | |||||||||||
Deferred and Other Noncurrent Income Taxes | 689.4 | 370.1 | 380.6 | |||||||||||
Other Long Term Liabilities | 451.4 | 451.4 | 509.1 | |||||||||||
Minority Equity in Subsidiaries | 825.7 | 825.0 | 854.0 | |||||||||||
Total Liabilities | 15,018.6 | 14,663.9 | 14,733.3 | |||||||||||
Commitments and Contingent Liabilities | ||||||||||||||
Shareholders’ Equity | ||||||||||||||
Preferred Stock, no par value: | ||||||||||||||
Authorized, 50,000,000 shares, unissued | — | — | — | |||||||||||
Common Stock, no par value: | ||||||||||||||
Authorized, 300,000,000 shares | ||||||||||||||
Outstanding shares, 175,309,002 | 175.3 | 175.3 | 175.3 | |||||||||||
Capital Surplus | 1,390.2 | 1,390.2 | 1,390.2 | |||||||||||
Retained Earnings | 980.4 | 972.8 | 955.1 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | (2,559.0 | ) | (2,559.2 | ) | (2,552.8 | ) | ||||||||
Total Shareholders’ Equity | (13.1 | ) | (20.9 | ) | (32.2 | ) | ||||||||
Total Liabilities and Shareholders’ Equity | $ | 15,005.5 | $ | 14,643.0 | $ | 14,701.1 | ||||||||
(A) | As reported in 2003 Form 10-K filed on May 19, 2004. | |
(B) | As reported in 2004 Form 10-Q filed on November 9, 2004. |
F-26
December 31, 2002 | ||||||||||||||
As Originally | As Previously | |||||||||||||
Reported(A) | Reported(B) | Restated | ||||||||||||
(Dollars in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 923.0 | $ | 918.1 | $ | 919.8 | ||||||||
Short term securities | 24.3 | 24.3 | 24.3 | |||||||||||
Accounts and notes receivable | 1,459.7 | 1,438.1 | 1,426.8 | |||||||||||
Inventories | 2,371.6 | 2,346.2 | 2,345.6 | |||||||||||
Prepaid expenses and other current assets | 448.1 | 453.7 | 453.1 | |||||||||||
Total Current Assets | 5,226.7 | 5,180.4 | 5,169.6 | |||||||||||
Long Term Accounts and Notes Receivable | 236.3 | 242.8 | 253.4 | |||||||||||
Investments in and Advances to Affiliates | 141.7 | 139.2 | 145.9 | |||||||||||
Other Assets | 254.9 | 253.0 | 249.6 | |||||||||||
Goodwill | 607.4 | 602.6 | 589.1 | |||||||||||
Other Intangible Assets | 161.3 | 161.4 | 146.5 | |||||||||||
Deferred Income Tax | 207.5 | 187.0 | 187.0 | |||||||||||
Prepaid and Deferred Pension Costs | 913.4 | 913.4 | 912.5 | |||||||||||
Deferred Charges | 205.1 | 202.7 | 203.9 | |||||||||||
Properties and Plants | 5,192.3 | 5,156.2 | 5,155.6 | |||||||||||
Total Assets | $ | 13,146.6 | $ | 13,038.7 | $ | 13,013.1 | ||||||||
LIABILITIES | ||||||||||||||
Current Liabilities: | ||||||||||||||
Accounts payable-trade | $ | 1,502.2 | $ | 1,515.4 | $ | 1,512.8 | ||||||||
Compensation and benefits | 961.2 | 913.6 | 907.4 | |||||||||||
Other current liabilities | 481.6 | 512.3 | 511.1 | |||||||||||
United States and foreign taxes | 473.2 | 358.2 | 359.8 | |||||||||||
Notes payable | 283.4 | 283.4 | 283.4 | |||||||||||
Long term debt and capital leases due within one year | 369.8 | 369.8 | 369.8 | |||||||||||
Total Current Liabilities | 4,071.4 | 3,952.7 | 3,944.3 | |||||||||||
Long Term Debt and Capital Leases | 2,989.0 | 2,989.8 | 2,989.5 | |||||||||||
Compensation and Benefits | 4,194.2 | 4,497.3 | 4,487.0 | |||||||||||
Deferred and Other Noncurrent Income Taxes | 194.9 | 298.6 | 305.0 | |||||||||||
Other Long Term Liabilities | 306.3 | 317.1 | 341.3 | |||||||||||
Minority Equity in Subsidiaries | 740.2 | 727.8 | 724.9 | |||||||||||
Total Liabilities | 12,496.0 | 12,783.3 | 12,792.0 | |||||||||||
Commitments and Contingent Liabilities | ||||||||||||||
Shareholders’ Equity | ||||||||||||||
Preferred Stock, no par value: | ||||||||||||||
Authorized, 50,000,000 shares, unissued | — | — | — | |||||||||||
Common Stock, no par value: | ||||||||||||||
Authorized, 300,000,000 shares | ||||||||||||||
Outstanding shares, 175,309,002 | 175.3 | 175.3 | 175.3 | |||||||||||
Capital Surplus | 1,390.3 | 1,390.1 | 1,390.1 | |||||||||||
Retained Earnings | 2,007.1 | 1,782.5 | 1,762.5 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | (2,922.1 | ) | (3,092.5 | ) | (3,106.8 | ) | ||||||||
Total Shareholders’ Equity | 650.6 | 255.4 | 221.1 | |||||||||||
Total Liabilities and Shareholders’ Equity | $ | 13,146.6 | $ | 13,038.7 | $ | 13,013.1 | ||||||||
(A) | As reported in 2002 Form 10-K filed on April 3, 2003. | |
(B) | As reported in 2003 Form 10-K filed on May 19, 2004. |
F-27
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
New charges | $ | 94.8 | $ | 307.2 | $ | 26.5 | ||||||
Reversals | (39.2 | ) | (15.7 | ) | (18.0 | ) | ||||||
Other credits | — | — | (3.0 | ) | ||||||||
$ | 55.6 | $ | 291.5 | $ | 5.5 | |||||||
Associate- | ||||||||||||
Related Costs | Other Than | Total | ||||||||||
Associate- | ||||||||||||
Restated | Related Costs | Restated | ||||||||||
(In millions) | ||||||||||||
Accrual balance at December 31, 2001 | $ | 69.1 | $ | 53.3 | $ | 122.4 | ||||||
2002 charges | 19.5 | 7.0 | 26.5 | |||||||||
Incurred | (49.5 | ) | (11.7 | ) | (61.2 | ) | ||||||
Reversed to goodwill | (0.5 | ) | — | (0.5 | ) | |||||||
Reversed to the income statement | (13.3 | ) | (4.7 | ) | (18.0 | ) | ||||||
Accrual balance at December 31, 2002 | 25.3 | 43.9 | 69.2 | |||||||||
2003 charges | 295.3 | 11.9 | 307.2 | |||||||||
Incurred | (199.3 | ) | (15.5 | ) | (214.8 | ) | ||||||
Reversed to goodwill | — | (2.9 | ) | (2.9 | ) | |||||||
Reversed to the income statement | (11.7 | ) | (4.0 | ) | (15.7 | ) | ||||||
Accrual balance at December 31, 2003 | 109.6 | 33.4 | 143.0 | |||||||||
2004 charges | 75.7 | 19.1 | 94.8 | |||||||||
Incurred | (109.6 | ) | (22.9 | ) | (132.5 | ) | ||||||
FIN 46 adoption | — | 1.5 | 1.5 | |||||||||
Reversed to the income statement | (34.9 | ) | (4.3 | ) | (39.2 | ) | ||||||
Accrual balance at December 31, 2004 | $ | 40.8 | $ | 26.8 | $ | 67.6 | ||||||
F-28
Expected | Charges | Charges | ||||||||||
Total | Recorded in | Reversed in | ||||||||||
Charge | 2004 | 2004 | ||||||||||
(In millions) | ||||||||||||
North American Tire | $ | 7.6 | $ | 7.6 | $ | — | ||||||
European Union Tire | 31.7 | 29.3 | 3.5 | |||||||||
Eastern Europe, Middle East and Africa Tire | 3.7 | 3.7 | — | |||||||||
Engineered Products | 37.4 | 34.7 | — | |||||||||
Corporate | 2.1 | 2.1 | 0.4 | |||||||||
$ | 82.5 | $ | 77.4 | $ | 3.9 | |||||||
F-29
Expected | Charges | Charges | Charges | |||||||||||||
Total | Recorded in | Recorded to | Reversed to | |||||||||||||
Charge | 2004 | Date | Date | |||||||||||||
(In millions) | ||||||||||||||||
North American Tire | $ | 216.4 | $ | 10.3 | $ | 211.0 | $ | 15.2 | ||||||||
European Union Tire | 63.6 | 4.3 | 63.6 | 6.4 | ||||||||||||
Latin American Tire | 11.7 | 1.3 | 11.7 | 4.5 | ||||||||||||
Engineered Products | 29.8 | 0.4 | 29.8 | 12.2 | ||||||||||||
Corporate | 7.4 | — | 7.4 | 2.5 | ||||||||||||
$ | 328.9 | $ | 16.3 | $ | 323.5 | $ | 40.8 | |||||||||
Note 4. | Other (Income) and Expense |
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Restated | ||||||||||||
Asset sales | $ | 4.2 | $ | 25.1 | $ | (28.0 | ) | |||||
Interest income | (34.4 | ) | (25.9 | ) | (18.8 | ) | ||||||
Financing fees and financial instruments | 116.5 | 99.4 | 48.4 | |||||||||
General and product liability — discontinued products | 52.7 | 138.1 | 33.8 | |||||||||
Insurance fire loss deductible | 11.7 | — | — | |||||||||
Environmental insurance settlement | (156.6 | ) | — | — | ||||||||
Miscellaneous | 14.1 | 26.7 | 21.4 | |||||||||
$ | 8.2 | $ | 263.4 | $ | 56.8 | |||||||
F-30
• | $590.3 million or 27.8% in Europe, primarily Western Europe, ($650.8 million (as restated) or 41.4% at December 31, 2003), | |
• | $197.8 million or 9.3% in Latin America, primarily Brazil, ($176.4 million or 11.2% at December 31, 2003), and | |
• | $140.1 million or 6.6% in Asia ($116.8 million or 7.4% at December 31, 2003). |
F-31
Note 5. | Accounts and Notes Receivable |
2004 | 2003 | |||||||
(In millions) | ||||||||
Restated | ||||||||
Accounts and notes receivable | $ | 3,553.2 | $ | 2,731.2 | ||||
Allowance for doubtful accounts | (144.4 | ) | (128.9 | ) | ||||
$ | 3,408.8 | $ | 2,602.3 | |||||
2003 | ||||
(In millions) | ||||
Proceeds from collections reinvested in previous securitizations | $ | 1,089.1 | ||
Servicing fees received | 1.2 | |||
Reimbursement for rebates and discounts issued | 28.2 | |||
Cash used for termination of program | 545.3 |
F-32
2004 | 2003 | |||||||
(In millions) | ||||||||
Proceeds from collections reinvested in previous securitizations | $ | 632.7 | $ | 1,440.3 | ||||
Reimbursement for rebates and discounts issued | 59.3 | 76.5 |
Note 6. | Inventories |
2004 | 2003 | |||||||
(In millions) | ||||||||
Restated | ||||||||
Raw materials | $ | 585.9 | $ | 483.2 | ||||
Work in process | 139.5 | 109.7 | ||||||
Finished products | 2,059.4 | 1,874.8 | ||||||
$ | 2,784.8 | $ | 2,467.7 | |||||
Note 7. | Goodwill and Other Intangible Assets |
2004 | 2003 | ||||||||||||||||||||||||
Restated | |||||||||||||||||||||||||
Gross | Net | Gross | Net | ||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | ||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Goodwill | $ | 833.5 | $ | (113.2 | ) | $ | 720.3 | $ | 764.8 | $ | (106.6 | ) | $ | 658.2 | |||||||||||
Intangible assets with indefinite lives | $ | 123.5 | $ | (7.3 | ) | $ | 116.2 | $ | 117.3 | $ | (7.3 | ) | $ | 110.0 | |||||||||||
Trademarks and Patents | 50.5 | (21.0 | ) | 29.5 | 44.6 | (16.8 | ) | 27.8 | |||||||||||||||||
Other intangible assets | 25.6 | (8.7 | ) | 16.9 | 19.9 | (7.3 | ) | 12.6 | |||||||||||||||||
Total Other intangible assets | $ | 199.6 | $ | (37.0 | ) | $ | 162.6 | $ | 181.8 | $ | (31.4 | ) | $ | 150.4 | |||||||||||
F-33
Restated | ||||||||||||||||||||
Balance at | Purchase | Translation & | Balance at | |||||||||||||||||
December 31, | Price | FIN 46 | Other | December 31, | ||||||||||||||||
2003 | Allocation | Impact | Adjustments | 2004 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
North American Tire | $ | 100.6 | $ | — | $ | 2.6 | $ | (1.5 | ) | $ | 101.7 | |||||||||
European Union Tire | 357.3 | 13.5 | — | 29.4 | 400.2 | |||||||||||||||
Eastern Europe, Middle East and Africa Tire | 116.7 | 0.7 | — | 12.9 | 130.3 | |||||||||||||||
Latin American Tire | 1.2 | — | — | (0.1 | ) | 1.1 | ||||||||||||||
Asia/ Pacific Tire | 62.6 | — | 1.9 | 2.5 | 67.0 | |||||||||||||||
Engineered Products | 19.8 | — | — | 0.2 | 20.0 | |||||||||||||||
$ | 658.2 | $ | 14.2 | $ | 4.5 | $ | 43.4 | $ | 720.3 | |||||||||||
Restated | ||||||||||||||||
Balance at | Purchase Price | Translation & | Balance at | |||||||||||||
December 31, | Allocation | Other | December 31, | |||||||||||||
2002 | Reversals | Adjustments | 2003 | |||||||||||||
(In millions) | ||||||||||||||||
North American Tire | $ | 99.6 | $ | — | $ | 1.0 | $ | 100.6 | ||||||||
European Union Tire | 305.9 | (2.9 | ) | 54.3 | 357.3 | |||||||||||
Eastern Europe, Middle East and Africa Tire | 103.7 | — | 13.0 | 116.7 | ||||||||||||
Latin American Tire | 1.5 | — | (0.3 | ) | 1.2 | |||||||||||
Asia/ Pacific Tire | 60.0 | — | 2.6 | 62.6 | ||||||||||||
Engineered Products | 18.4 | — | 1.4 | 19.8 | ||||||||||||
$ | 589.1 | $ | (2.9 | ) | $ | 72.0 | $ | 658.2 | ||||||||
Note 8. | Investments |
Consolidation of Variable Interest Entities |
F-34
Investments and Acquisitions |
F-35
Non-cash Investing and Financing Activities |
Note 9. | Properties and Plants |
2004 | 2003 | ||||||||||||||||||||||||
Restated | |||||||||||||||||||||||||
Owned | Capital Leases | Total | Owned | Capital Leases | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Properties and plants, at cost: | |||||||||||||||||||||||||
Land and improvements | $ | 360.1 | $ | 16.6 | $ | 376.7 | $ | 343.1 | $ | 9.3 | $ | 352.4 | |||||||||||||
Buildings and improvements | 1,778.6 | 94.0 | 1,872.6 | 1,653.0 | 67.9 | 1,720.9 | |||||||||||||||||||
Machinery and equipment | 10,491.2 | 102.5 | 10,593.7 | 9,873.6 | 92.1 | 9,965.7 | |||||||||||||||||||
Construction in progress | 448.7 | — | 448.7 | 418.9 | — | 418.9 | |||||||||||||||||||
13,078.6 | 213.1 | 13,291.7 | 12,288.6 | 169.3 | 12,457.9 | ||||||||||||||||||||
Accumulated depreciation | (7,746.3 | ) | (90.2 | ) | (7,836.5 | ) | (7,168.8 | ) | (83.9 | ) | (7,252.7 | ) | |||||||||||||
$ | 5,332.3 | $ | 122.9 | $ | 5,455.2 | $ | 5,119.8 | $ | 85.4 | $ | 5,205.2 | ||||||||||||||
F-36
Note 10. | Leased Assets |
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Gross rental expense | $ | 349.4 | $ | 330.5 | $ | 298.8 | ||||||
Sublease rental income | (74.0 | ) | (64.9 | ) | (68.4 | ) | ||||||
$ | 275.4 | $ | 265.6 | $ | 230.4 | |||||||
2010 and | |||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | Beyond | Total | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Capital Leases | |||||||||||||||||||||||||||||
Minimum lease payments | $ | 10.4 | $ | 9.5 | $ | 9.0 | $ | 8.9 | $ | 8.5 | $ | 44.8 | $ | 91.1 | �� | ||||||||||||||
Imputed interest | (29.5 | ) | |||||||||||||||||||||||||||
Executory costs | (1.2 | ) | |||||||||||||||||||||||||||
Present value | $ | 60.4 | |||||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||||||
Minimum lease payments | $ | 320.3 | $ | 262.6 | $ | 203.1 | $ | 146.8 | $ | 110.5 | $ | 476.0 | $ | 1,519.3 | |||||||||||||||
Minimum sublease rentals | (52.2 | ) | (42.9 | ) | (34.2 | ) | (25.6 | ) | (17.0 | ) | (32.0 | ) | (203.9 | ) | |||||||||||||||
$ | 268.1 | $ | 219.7 | $ | 168.9 | $ | 121.2 | $ | 93.5 | $ | 444.0 | 1,315.4 | |||||||||||||||||
Imputed interest | (369.4 | ) | |||||||||||||||||||||||||||
Present value | $ | 946.0 | |||||||||||||||||||||||||||
F-37
Note 11. | Financing Arrangements and Derivative Financial Instruments |
Notes Payable, Long Term Debt due Within One Year and Short Term Financing Arrangements |
2004 | 2003 | ||||||||
(In millions) | |||||||||
Notes payable: | |||||||||
Amounts related to VIEs | $ | 91.4 | $ | — | |||||
Other international subsidiaries | 129.2 | 146.7 | |||||||
$ | 220.6 | $ | 146.7 | ||||||
Weighted-average interest rate | 6.35 | 4.81 | % | ||||||
Long term debt due within one year: | |||||||||
Amounts related to VIEs | $ | 24.4 | $ | — | |||||
6.375% Euro Notes due 2005 | 542.0 | — | |||||||
European credit facilities | 400.0 | — | |||||||
Other (including capital leases) | 43.5 | 113.5 | |||||||
$ | 1,009.9 | $ | 113.5 | ||||||
Weighted-average interest rate | 6.78 | % | 5.25 | % | |||||
Total obligations due within one year | $ | 1,230.5 | $ | 260.2 | |||||
F-38
Long Term Debt and Financing Arrangements |
2004 | 2003 | ||||||||
(In millions) | |||||||||
6.375% Euro Notes due 2005 5.375% Swiss franc bonds due 2006 | $ | 542.0 | $ | 504.6 | |||||
5.375% Swiss franc bonds due 2006 6.375% Euro Notes due 2005 | 139.3 | 128.0 | |||||||
4.00% Convertible Senior Notes due 2034 | 350.0 | — | |||||||
Notes: | |||||||||
65/8% due 2006 | 222.5 | 264.5 | |||||||
81/2% due 2007 | 300.0 | 300.0 | |||||||
63/8% due 2008 | 99.9 | 99.8 | |||||||
76/7% due 2011 | 650.0 | 650.0 | |||||||
Floating rate notes due 2011 | 200.0 | — | |||||||
11% due 2011 | 447.7 | — | |||||||
7% due 2028 | 149.1 | 149.1 | |||||||
Bank term loans: | |||||||||
$645 million senior secured U.S. term facility due 2005 | — | 583.3 | |||||||
$400 million senior secured term loan European facility due 2005 | 400.0 | 400.0 | |||||||
$800 million senior secured asset-based term loan due 2006 | 800.0 | 800.0 | |||||||
$650 million senior secured asset-based term loan due 2006 | 650.0 | — | |||||||
Revolving credit facilities due 2005 and 2006 | — | 839.0 | |||||||
Pan-European accounts receivable facility due 2009 | 224.7 | — | |||||||
Amounts related to VIEs | 94.4 | 60.4 | |||||||
Other domestic and international debt | 129.0 | 112.9 | |||||||
5,398.6 | 4,891.6 | ||||||||
Capital lease obligations | 60.4 | 47.7 | |||||||
5,459.0 | 4,939.3 | ||||||||
Less portion due within one year | (1,009.9 | ) | (113.5 | ) | |||||
$ | 4,449.1 | $ | 4,825.8 | ||||||
2004 | 2003 | |||||||
(In billions) | ||||||||
Carrying amount | $ | 3.05 | $ | 2.23 | ||||
Fair value | 3.22 | 2.11 |
F-39
$350 Million Convertible Senior Note Offering |
$650 Million Senior Secured Notes |
F-40
• | incurring additional indebtedness or liens, | |
• | paying dividends, making distributions and stock repurchases, | |
• | making investments, | |
• | selling assets, and | |
• | merging and consolidating. |
$645 Million Senior Secured U.S. Term Facility |
$650 Million Senior Secured European Facilities |
F-41
• | all of the capital stock of Goodyear Finance Holding S.A. and certain subsidiaries of GDTE, | |
• | a perfected first-priority interest in and mortgages on substantially all the tangible and intangible assets of GDTE in the United Kingdom, Luxembourg, France and Germany, including certain accounts receivable, inventory, real property, equipment, contract rights and cash and cash accounts, but excluding certain accounts receivable used in securitization programs, and | |
• | with respect to the European revolving credit facility, a perfected fourth priority interest in and mortgages on the collateral pledged under the deposit-funded credit facility and the asset-based facilities, except for real estate other than our U.S. corporate headquarters. |
• | incur additional indebtedness (including a limit of €275 million in accounts receivable transactions), | |
• | make investments, | |
• | sell assets beyond specified limits, | |
• | pay dividends, and | |
• | make loans or advances to Goodyear companies that are not subsidiaries of GDTE. |
• | 75% of the net cash proceeds of all sales and dispositions of assets by GDTE and its subsidiaries greater than $5 million, and | |
• | 50% of the net cash proceeds of debt and equity issuances by GDTE and its subsidiaries. |
U.S. Deposit-Funded Credit Facility |
F-42
• | subject to certain exceptions, perfected first-priority security interests in the equity interests in our U.S. subsidiaries and 65% of the equity interests in our non-European foreign subsidiaries, | |
• | a perfected second priority security interest in 65% of the capital stock of Goodyear Finance Holding S.A., a Luxembourg company, | |
• | perfected first-priority security interests in and mortgages on our U.S. corporate headquarters and certain of our U.S. manufacturing facilities, | |
• | perfected third-priority security interests in all accounts receivable, inventory, cash and cash accounts pledged as security under our asset-based facilities, and | |
• | perfected first-priority security interests in substantially all other tangible and intangible assets, including equipment, contract rights and intellectual property. |
F-43
$1.95 Billion Senior Secured Asset-Based Credit Facilities |
International Accounts Receivable Securitization Facilities — On-Balance-Sheet Financing |
F-44
• | the ratio of our consolidated EBITDA to our consolidated interest expense falls below 2.00 to 1.00, | |
• | the ratio of our consolidated senior secured indebtedness to our consolidated EBITDA is greater than 4.00 to 1.00, | |
• | the ratio of GDTE’s third party indebtedness (net of cash held by GDTE and its consolidated subsidiaries in excess of $100 million) to its consolidated EBITDA is greater than 3.00 to 1.00, or | |
• | for so long as such a provision is in our European Credit Facilities, our consolidated net worth is less than $2 billion on or prior to March 31, 2006, or is less than $1.75 billion after March 31, 2006, in each case subject to a 60 day grace period. |
Debt Maturities |
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Debt incurred under revolving credit agreements | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Other — domestic | 569.7 | 111.0 | 2.9 | 6.4 | 229.8 | |||||||||||||||
Other — international | 440.2 | 1,814.1 | 302.4 | 102.4 | 2.5 | |||||||||||||||
$ | 1,009.9 | $ | 1,925.1 | $ | 305.3 | $ | 108.8 | $ | 232.3 | |||||||||||
Derivative Financial Instruments |
F-45
Interest Rate Exchange Contracts |
December 31, | December 31, | |||||||||||||
2003 | Settled | 2004 | ||||||||||||
(Dollars in millions) | ||||||||||||||
Fixed rate contracts: | ||||||||||||||
Notional principal amount | $ | 325.0 | $ | 325.0 | $ | — | ||||||||
Pay fixed rate | 5.00 | % | 5.00 | % | — | |||||||||
Receive variable LIBOR | 1.17 | 1.18 | — | |||||||||||
Average years to maturity | 0.25 | — | — | |||||||||||
Fair value: asset (liability) | $ | (3.1 | ) | $ | — | $ | — | |||||||
Carrying amount: | ||||||||||||||
Current liability | (3.1 | ) | — | — | ||||||||||
Long term liability | — | — | — | |||||||||||
Floating rate contracts: | ||||||||||||||
Notional principal amount | $ | 200.0 | $ | — | $ | 200.0 | ||||||||
Pay variable LIBOR | 2.96 | % | — | 4.31 | % | |||||||||
Receive fixed rate | 6.63 | — | 6.63 | |||||||||||
Average years to maturity | 2.95 | — | 1.95 | |||||||||||
Fair value: asset (liability) | $ | 13.0 | $ | — | $ | 6.0 | ||||||||
Carrying amount: | ||||||||||||||
Current asset | 7.4 | — | 3.7 | |||||||||||
Long term asset | 5.6 | — | 2.3 |
F-46
Twelve Months Ended | |||||||||||||
December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(Dollars in millions) | |||||||||||||
Fixed rate contracts: | |||||||||||||
Notional principal amount | $ | 81.0 | $ | 325.0 | $ | 325.0 | |||||||
Pay fixed rate | 5.00 | % | 5.00 | % | 5.00 | % | |||||||
Receive variable LIBOR | 1.18 | 1.24 | 1.91 | ||||||||||
Floating rate contracts: | |||||||||||||
Notional principal amount | $ | 200.0 | $ | 207.0 | $ | 210.0 | |||||||
Pay variable LIBOR | 3.27 | % | 3.03 | % | 3.68 | % | |||||||
Receive fixed rate | 6.63 | 6.63 | 6.63 |
Interest Rate Lock Contracts |
Foreign Currency Contracts |
F-47
2004 | 2003 | |||||||||||||||||
Fair | Contract | Fair | Contract | |||||||||||||||
Value | Amount | Value | Amount | |||||||||||||||
(In millions) | ||||||||||||||||||
Buy currency: | ||||||||||||||||||
Euro | $ | 159.2 | $ | 115.9 | $ | 145.7 | $ | 111.3 | ||||||||||
Swiss franc | 139.7 | 80.6 | 125.8 | 80.6 | ||||||||||||||
Japanese yen | 22.6 | 22.7 | 13.0 | 16.7 | ||||||||||||||
U.S. dollar | 144.4 | 144.9 | 137.3 | 136.3 | ||||||||||||||
All other | 13.0 | 12.6 | — | — | ||||||||||||||
$ | 478.9 | $ | 376.7 | $ | 421.8 | $ | 344.9 | |||||||||||
Contract maturity: | ||||||||||||||||||
Swiss franc swap | 3/06 | 3/06 | ||||||||||||||||
Euro swap | 6/05 | 6/05 | ||||||||||||||||
All other | 1/05 - 10/19 | 1/04 - 10/19 |
2004 | 2003 | ||||||||||||||||
Fair | Contract | Fair | Contract | ||||||||||||||
Value | Amount | Value | Amount | ||||||||||||||
(In millions) | |||||||||||||||||
Sell currency: | |||||||||||||||||
British pound | $ | 217.4 | $ | 218.8 | $ | 157.9 | $ | 155.2 | |||||||||
Swedish krona | 34.1 | 34.2 | 44.2 | 44.3 | |||||||||||||
Canadian dollar | 62.4 | 63.4 | 93.0 | 91.7 | |||||||||||||
Euro | 77.0 | 74.3 | 71.3 | 70.0 | |||||||||||||
All other | 23.0 | 23.1 | 19.8 | 19.8 | |||||||||||||
$ | 413.9 | $ | 413.8 | $ | 386.2 | $ | 381.0 | ||||||||||
Contract maturity | 1/05 - 12/05 | 1/04 |
2004 | 2003 | ||||||||
Carrying amount — asset (liability): | |||||||||
Swiss franc swap — current | $ | (0.3 | ) | $ | (1.6 | ) | |||
Swiss franc swap — long term | 59.5 | 46.8 | |||||||
Euro swaps — current | 46.4 | 20.5 | |||||||
Euro swaps — long term | — | 13.2 | |||||||
Other — current asset | 5.2 | 7.2 | |||||||
Other — current (liability) | (8.8 | ) | (14.4 | ) |
F-48
Hedges of Net Investment in Foreign Operations |
Results of Hedging Activities |
Note 12. | Stock Compensation Plans and Dilutive Securities |
F-49
2004 | 2003 | 2002 | |||||||||||||||||||||||
Shares | SARs | Shares | SARs | Shares | SARs | ||||||||||||||||||||
Outstanding at January 1 | 26,999,985 | 4,965,789 | 24,476,229 | 4,110,830 | 21,841,798 | 3,398,781 | |||||||||||||||||||
Options granted | 4,149,660 | 1,103,052 | 3,907,552 | 1,009,588 | 3,454,724 | 863,372 | |||||||||||||||||||
Options without SARs exercised | (293,795 | ) | — | — | — | (110,642 | ) | — | |||||||||||||||||
Options with SARs exercised | (16,300 | ) | (16,300 | ) | — | — | (6,439 | ) | (6,439 | ) | |||||||||||||||
SARs exercised | (360 | ) | (360 | ) | — | — | (400 | ) | (400 | ) | |||||||||||||||
Options without SARs expired | (1,105,084 | ) | — | (1,011,943 | ) | — | (509,313 | ) | — | ||||||||||||||||
Options with SARs expired | (188,931 | ) | (188,931 | ) | (154,629 | ) | (154,629 | ) | (144,484 | ) | (144,484 | ) | |||||||||||||
Performance units granted | — | — | 8,500 | — | 227,100 | — | |||||||||||||||||||
Performance unit shares issued | — | — | — | — | (28,196 | ) | — | ||||||||||||||||||
Performance units cancelled | (222,143 | ) | — | (225,724 | ) | — | (247,919 | ) | — | ||||||||||||||||
Outstanding at December 31 | 29,323,032 | 5,863,250 | 26,999,985 | 4,965,789 | 24,476,229 | 4,110,830 | |||||||||||||||||||
Exercisable at December 31 | 20,362,573 | 3,517,595 | 18,697,146 | 2,899,381 | 15,205,724 | 2,314,354 | |||||||||||||||||||
Available for grant at December 31 | 965,138 | 4,846,238 | 8,497,830 | ||||||||||||||||||||||
Options | Options | Exercisable | Remaining | |||||||||||||
Grant Date | Outstanding | Exercisable | Price | Life (Years) | ||||||||||||
12/09/04 | 4,031,135 | — | $ | 12.54 | 10 | |||||||||||
12/03/03 | 3,597,453 | 890,136 | 6.81 | 9 | ||||||||||||
12/03/02 | 2,554,120 | 1,376,049 | 7.94 | 8 | ||||||||||||
12/03/01 | 2,795,299 | 2,303,256 | 22.05 | 7 | ||||||||||||
12/04/00 | 5,290,258 | 5,290,258 | 17.68 | 6 | ||||||||||||
12/06/99 | 2,956,808 | 2,956,808 | 32.00 | 5 | ||||||||||||
11/30/98 | 1,946,282 | 1,946,282 | 57.25 | 4 | ||||||||||||
12/02/97 | 1,708,037 | 1,708,037 | 63.50 | 3 | ||||||||||||
12/03/96 | 1,452,268 | 1,452,268 | 50.00 | 2 | ||||||||||||
01/09/96 | 1,077,217 | 1,077,217 | 44.00 | 1 | ||||||||||||
All other | 1,562,163 | 1,362,262 | 26.23 | 4.7 |
F-50
2004 | 2003 | 2002 | ||||||||||
Outstanding at January 1 | $ | 26.90 | $ | 30.28 | $ | 33.87 | ||||||
Granted during the year | 12.54 | 6.81 | 7.94 | |||||||||
Exercised during the year | 7.61 | — | 17.78 | |||||||||
Outstanding at December 31 | 24.96 | 26.90 | 30.28 | |||||||||
Exercisable at December 31 | 31.02 | 33.80 | 38.13 |
2004 | 2003 | 2002 | ||||||||||
Options | $ | 6.36 | $ | 3.41 | $ | 3.59 | ||||||
Performance units | 12.54 | 6.81 | 7.94 |
2004 | 2003 | 2002 | ||||||||||
Expected life (years) | 5 | 5 | 5 | |||||||||
Interest rate | 3.55 | % | 3.41 | % | 3.18 | % | ||||||
Volatility | 54.7 | 54.0 | 47.5 | |||||||||
Dividend yield | — | — | — |
Earnings Per Share Information |
2004 | 2003 | 2002 | ||||||||||
Average shares outstanding — basic | 175,377,316 | 175,314,449 | 167,020,375 | |||||||||
4% Convertible Senior Notes due 2034 | 14,534,884 | — | — | |||||||||
Stock options | 2,346,070 | — | — | |||||||||
Average shares outstanding — diluted | 192,258,270 | 175,314,449 | 167,020,375 | |||||||||
F-51
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | ||||
After-tax impact of 4% Convertible Senior Notes due 2034 Stock options | 7.0 | — | — | |||||||||
Adjusted Net Income (Loss) | $ | 121.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | ||||
Note 13. | Pension, Other Postretirement Benefit and Savings Plans |
F-52
2004 | 2003 | 2002 | ||||||||||||
(In millions) | ||||||||||||||
Service cost — benefits earned during the period | $ | 85.8 | $ | 122.6 | $ | 116.7 | ||||||||
Interest cost on projected benefit obligation | 421.0 | 399.8 | 385.0 | |||||||||||
Expected return on plan assets | (350.3 | ) | (310.6 | ) | (391.1 | ) | ||||||||
Amortization of unrecognized: — prior service cost | 75.2 | 74.2 | 81.6 | |||||||||||
— net (gains) losses | 118.0 | 125.9 | 36.7 | |||||||||||
— transition amount | 1.3 | 1.1 | 0.6 | |||||||||||
Net periodic pension cost | 351.0 | 413.0 | 229.5 | |||||||||||
Curtailments/settlements | 6.8 | 45.2 | 0.3 | |||||||||||
Special termination benefits | 4.2 | 43.0 | 0.8 | |||||||||||
Total pension cost | $ | 362.0 | $ | 501.2 | $ | 230.6 | ||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions) | ||||||||||||||
Service cost — benefits earned during the period | $ | 24.7 | $ | 24.1 | $ | 19.5 | ||||||||
Interest cost on accumulated benefit obligation | 188.1 | 174.0 | 186.9 | |||||||||||
Amortization of unrecognized: — net losses | 35.2 | 32.0 | 26.2 | |||||||||||
— prior service cost | 44.5 | 17.0 | 19.4 | |||||||||||
Net periodic postretirement cost | 292.5 | 247.1 | 252.0 | |||||||||||
Curtailments/settlements | 12.5 | 23.6 | — | |||||||||||
Special termination benefits | 0.3 | 20.0 | — | |||||||||||
Total postretirement cost | $ | 305.3 | $ | 290.7 | $ | 252.0 | ||||||||
F-53
Pension Plans | Other Benefits | |||||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||||
(In millions) | ||||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||
Beginning balance | $ | (6,883.5 | ) | $ | (6,070.2 | ) | $ | (3,078.6 | ) | $ | (2,723.1 | ) | ||||||
Newly adopted plans | (87.0 | ) | — | (0.5 | ) | — | ||||||||||||
Service cost — benefits earned | (85.8 | ) | (122.6 | ) | (24.7 | ) | (24.1 | ) | ||||||||||
Interest cost | (421.0 | ) | (399.8 | ) | (188.1 | ) | (174.0 | ) | ||||||||||
Plan amendments | 1.1 | (112.4 | ) | 4.0 | (275.8 | ) | ||||||||||||
Actuarial loss | (532.2 | ) | (348.9 | ) | (165.4 | ) | (88.9 | ) | ||||||||||
Employee contributions | (19.2 | ) | (18.8 | ) | (8.8 | ) | (6.6 | ) | ||||||||||
Curtailments/settlements | (1.6 | ) | 16.3 | 0.5 | (15.0 | ) | ||||||||||||
Special termination benefits | (4.3 | ) | (42.9 | ) | (0.3 | ) | (21.3 | ) | ||||||||||
Foreign currency translation | (171.7 | ) | (257.6 | ) | (14.0 | ) | (22.9 | ) | ||||||||||
Benefit payments | 484.9 | 473.4 | 257.6 | 273.1 | ||||||||||||||
Ending balance | (7,720.3 | ) | (6,883.5 | ) | (3,218.3 | ) | (3,078.6 | ) | ||||||||||
Change in plan assets: | ||||||||||||||||||
Beginning balance | $ | 4,129.1 | $ | 3,602.4 | $ | — | $ | — | ||||||||||
Newly adopted plans | 84.4 | — | ||||||||||||||||
Actual return on plan assets | 478.7 | 707.4 | — | — | ||||||||||||||
Company contributions | 264.6 | 115.7 | — | — | ||||||||||||||
Employee contributions | 19.2 | 18.8 | — | — | ||||||||||||||
Foreign currency translation | 107.2 | 158.2 | — | — | ||||||||||||||
Benefit payments | (484.9 | ) | (473.4 | ) | — | — | ||||||||||||
Ending balance | $ | 4,598.3 | $ | 4,129.1 | $ | — | $ | — | ||||||||||
Funded status | (3,122.0 | ) | (2,754.4 | ) | (3,218.3 | ) | (3,078.6 | ) | ||||||||||
Unrecognized prior service cost | 418.1 | 503.4 | 420.1 | 480.9 | ||||||||||||||
Unrecognized net loss | 2,548.5 | 2,194.1 | 895.4 | 763.1 | ||||||||||||||
Unrecognized net obligation at transition | 2.8 | 3.9 | — | — | ||||||||||||||
Net amount recognized | $ | (152.6 | ) | $ | (53.0 | ) | $ | (1,902.8 | ) | $ | (1,834.6 | ) | ||||||
F-54
Pension Plans | Other Benefits | ||||||||||||||||
2004 | 2003 | 2004 | 2003 | ||||||||||||||
(In millions) | |||||||||||||||||
Prepaid benefit cost — current | $ | 41.0 | $ | 86.4 | $ | — | $ | — | |||||||||
— long term | 374.2 | 345.1 | — | — | |||||||||||||
Accrued benefit cost — current | (85.2 | ) | (110.8 | ) | (303.1 | ) | (287.4 | ) | |||||||||
— long term | (3,219.6 | ) | (2,830.8 | ) | (1,599.7 | ) | (1,547.2 | ) | |||||||||
Intangible asset | 429.7 | 512.4 | — | — | |||||||||||||
Deferred income taxes | 305.0 | 273.0 | — | — | |||||||||||||
Minority shareholders’ equity | 173.3 | 126.5 | — | — | |||||||||||||
Accumulated other comprehensive income (OCI) | 1,829.0 | 1,545.2 | — | — | |||||||||||||
Net amount recognized | $ | (152.6 | ) | $ | (53.0 | ) | $ | (1,902.8 | ) | $ | (1,834.6 | ) | |||||
Pension Plans | ||||||||||||||||||||||||
Restated | Other Benefits | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Increase (decrease) in minimum pension liability adjustment included in OCI | $ | 283.8 | $ | (128.3 | ) | $ | 1,283.6 | N/A | N/A | N/A |
Pension Plans | Other Benefits | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Discount rate: — U.S. | 5.75 | % | 6.25 | % | 5.75 | % | 6.25 | % | ||||||||
— International | 5.41 | 5.93 | 6.91 | 7.22 | ||||||||||||
Rate of compensation increase: — U.S. | 4.04 | 4.00 | 4.00 | 4.00 | ||||||||||||
— International | 3.48 | 3.43 | 4.67 | 4.47 |
Pension Plans | Other Benefits | ||||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | ||||||||||||||||||||
Discount rate: — U.S. | 6.25 | % | 6.75 | % | 7.25 | % | 6.25 | % | 6.75 | % | 7.25 | % | |||||||||||||
— International | 5.93 | 6.20 | 6.50 | 7.22 | 7.48 | 7.50 | |||||||||||||||||||
Expected long term return on plan assets: — U.S. | 8.50 | 8.50 | 9.50 | — | — | — | |||||||||||||||||||
— International | 8.03 | 8.03 | 8.50 | — | — | — | |||||||||||||||||||
Rate of compensation increase: — U.S. | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | |||||||||||||||||||
— International | 3.43 | 3.50 | 3.50 | 4.47 | 4.80 | 4.50 |
F-55
Pension Plans | Other Benefits | |||||||
(In millions) | ||||||||
2005 | $ | 419.3 | $ | 303.9 | ||||
2006 | 437.5 | 320.7 | ||||||
2007 | 455.0 | 273.7 | ||||||
2008 | 469.9 | 266.5 | ||||||
2009 | 496.3 | 260.3 | ||||||
2010-2014 | 2,789.2 | 1,199.4 |
2004 | 2003 | |||||||
(In millions) | ||||||||
Projected benefit obligation | $ | 7,559.2 | $ | 6,768.7 | ||||
Accumulated benefit obligation | 7,303.2 | 6,507.6 | ||||||
Fair value of plan assets | 4,431.6 | 4,020.5 |
2004 | 2003 | ||||||||
Equity securities | 64 | % | 69 | % | |||||
Debt securities | 34 | 30 | |||||||
Cash and short term securities | 2 | 1 | |||||||
Total | 100 | % | 100 | % | |||||
F-56
2004 | 2003 | |||||||
Health care cost trend rate assumed for the next year | 12.0 | % | 12.5 | % | ||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.0 | 5.0 | ||||||
Year that the rate reaches the ultimate trend rate | 2013 | 2013 |
1% Increase | 1% Decrease | |||||||
(In millions) | ||||||||
Accumulated postretirement benefit obligation | $ | 35.9 | $ | (31.0 | ) | |||
Aggregate service and interest cost | 2.8 | (2.4 | ) |
Savings Plans |
Note 14. | Income Taxes |
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
U.S. | $ | (328.8 | ) | $ | (1,047.8 | ) | $ | (426.0 | ) | |||
Foreign | 651.5 | 357.5 | 407.0 | |||||||||
322.7 | (690.3 | ) | (19.0 | ) | ||||||||
Minority Interest in Net Income (Loss) of Subsidiaries | 57.8 | 32.8 | 55.6 | |||||||||
$ | 380.5 | $ | (657.5 | ) | $ | 36.6 | ||||||
F-57
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
U.S. Federal income tax at the statutory rate of 35% | $ | 133.2 | $ | (230.1 | ) | $ | 12.8 | |||||
Adjustment for foreign income taxed at different rates | (12.1 | ) | (0.3 | ) | (18.7 | ) | ||||||
Valuation allowance for U.S. tax assets | — | — | 1,217.7 | |||||||||
U.S. loss with no tax benefit | 97.6 | 358.9 | — | |||||||||
State income taxes, net of Federal benefit | (1.2 | ) | (4.2 | ) | (4.4 | ) | ||||||
Foreign operating loss with no tax benefit provided | 45.3 | 35.9 | 5.5 | |||||||||
Settlement of prior years’ liabilities | (46.3 | ) | (44.2 | ) | (36.4 | ) | ||||||
Provision for repatriation of foreign earnings | (4.9 | ) | 7.7 | 50.2 | ||||||||
Other | (3.7 | ) | (6.6 | ) | 1.2 | |||||||
United States and Foreign Taxes on Income (Loss) | $ | 207.9 | $ | 117.1 | $ | 1,227.9 | ||||||
2004 | 2003 | 2002 | |||||||||||
(In millions) | |||||||||||||
Current: | |||||||||||||
Federal | $ | (59.7 | ) | $ | (49.2 | ) | $ | (46.6 | ) | ||||
Foreign income and withholding taxes | 273.3 | 180.4 | 150.9 | ||||||||||
State | (1.2 | ) | (4.2 | ) | (7.6 | ) | |||||||
212.4 | 127.0 | 96.7 | |||||||||||
Deferred: | |||||||||||||
Federal | (1.0 | ) | (7.5 | ) | 1,027.2 | ||||||||
Foreign | (3.5 | ) | (2.4 | ) | (14.4 | ) | |||||||
State | — | — | 118.4 | ||||||||||
(4.5 | ) | (9.9 | ) | 1,131.2 | |||||||||
United States and Foreign Taxes on Income (Loss) | $ | 207.9 | $ | 117.1 | $ | 1,227.9 | |||||||
F-58
2004 | 2003 | ||||||||
(In millions) | |||||||||
Postretirement benefits and pensions | $ | 1,234.8 | $ | 1,163.9 | |||||
Tax credit and operating loss carryforwards | 457.3 | 448.9 | |||||||
Capitalized expenditures for tax reporting | 258.5 | 324.7 | |||||||
Accrued expenses deductible as paid | 276.7 | 250.7 | |||||||
Alternative minimum tax credit carryforwards | 62.0 | 68.2 | |||||||
Vacation and sick pay | 52.1 | 39.0 | |||||||
Rationalizations and other provisions | 16.8 | 25.9 | |||||||
Other | 105.0 | 51.1 | |||||||
2,463.2 | 2,372.4 | ||||||||
Valuation allowance | (2,072.0 | ) | (2,041.9 | ) | |||||
Total deferred tax assets | 391.2 | 330.5 | |||||||
Tax on undistributed subsidiary earnings | (18.4 | ) | (22.9 | ) | |||||
Total deferred tax liabilities: | |||||||||
— property basis differences | (481.8 | ) | (446.4 | ) | |||||
Total deferred tax assets (liabilities) | $ | (109.0 | ) | $ | (138.8 | ) | |||
F-59
Note 15. | Interest Expense |
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Restated | ||||||||||||
Interest expense before capitalization | $ | 375.5 | $ | 304.3 | $ | 249.9 | ||||||
Capitalized interest | (6.7 | ) | (8.0 | ) | (7.2 | ) | ||||||
$ | 368.8 | $ | 296.3 | $ | 242.7 | |||||||
Note 16. | Research and Development |
Note 17. | Advertising Costs |
Note 18. | Business Segments |
F-60
F-61
2004 | 2003 | 2002 | ||||||||||||
(In millions) | ||||||||||||||
Restated | ||||||||||||||
Net Sales | ||||||||||||||
North American Tire | $ | 8,568.6 | $ | 7,279.2 | $ | 7,097.7 | ||||||||
European Union Tire | 4,476.2 | 3,921.5 | 3,319.4 | |||||||||||
Eastern Europe, Middle East and Africa Tire | 1,279.0 | 1,073.4 | 807.1 | |||||||||||
Latin American Tire | 1,245.4 | 1,041.0 | 947.7 | |||||||||||
Asia/ Pacific Tire | 1,312.0 | 581.8 | 531.3 | |||||||||||
Total Tires | 16,881.2 | 13,896.9 | 12,703.2 | |||||||||||
Engineered Products | 1,470.3 | 1,203.7 | 1,126.3 | |||||||||||
Total Segment Sales | 18,351.5 | 15,100.6 | 13,829.5 | |||||||||||
Other | 18.9 | 21.5 | 26.5 | |||||||||||
$ | 18,370.4 | $ | 15,122.1 | $ | 13,856.0 | |||||||||
Segment Operating Income | ||||||||||||||
North American Tire | $ | 73.5 | $ | (102.5 | ) | $ | (21.5 | ) | ||||||
European Union Tire | 252.7 | 129.8 | 101.1 | |||||||||||
Eastern Europe, Middle East and Africa Tire | 193.8 | 146.6 | 93.2 | |||||||||||
Latin American Tire | 251.2 | 148.6 | 107.6 | |||||||||||
Asia/ Pacific Tire | 61.1 | 49.9 | 43.7 | |||||||||||
Total Tires | 832.3 | 372.4 | 324.1 | |||||||||||
Engineered Products | 113.2 | 46.8 | 39.0 | |||||||||||
Total Segment Operating Income | 945.5 | 419.2 | 363.1 | |||||||||||
Rationalizations and asset sales | (59.8 | ) | (316.6 | ) | 22.5 | |||||||||
Accelerated depreciation, asset impairment and asset write-offs | (10.4 | ) | (132.8 | ) | — | |||||||||
Interest expense | (368.8 | ) | (296.3 | ) | (242.7 | ) | ||||||||
Foreign currency exchange | (23.4 | ) | (40.7 | ) | 8.7 | |||||||||
Minority interest in net (income) loss of subsidiaries | (57.8 | ) | (32.8 | ) | (55.6 | ) | ||||||||
Financing fees and financial instruments | (116.5 | ) | (99.4 | ) | (48.4 | ) | ||||||||
Equity in earnings (losses) of corporate affiliates | 1.0 | (18.3 | ) | (15.7 | ) | |||||||||
General and product liability — discontinued products | (52.7 | ) | (138.1 | ) | (33.8 | ) | ||||||||
Expenses for fire loss deductibles | (11.7 | ) | — | — | ||||||||||
Professional fees associated with the restatement | (30.2 | ) | (6.3 | ) | — | |||||||||
Professional fees associated with Sarbanes-Oxley | (18.2 | ) | (0.1 | ) | — | |||||||||
Expenses for environmental remediation at non-operating sites | (11.7 | ) | — | (8.3 | ) | |||||||||
Environmental insurance settlement | 156.6 | — | — | |||||||||||
Other | (19.2 | ) | (28.1 | ) | (8.8 | ) | ||||||||
Income (Loss) before Income Taxes | $ | 322.7 | $ | (690.3 | ) | $ | (19.0 | ) | ||||||
F-62
2004 | 2003 | |||||||||
(In millions) | ||||||||||
Restated | ||||||||||
Assets | ||||||||||
North American Tire | $ | 5,692.5 | $ | 5,687.3 | ||||||
European Union Tire | 4,264.0 | 4,001.9 | ||||||||
Eastern Europe, Middle East and Africa Tire | 1,315.1 | 1,102.7 | ||||||||
Latin American Tire | 845.6 | 710.0 | ||||||||
Asia/ Pacific Tire | 1,153.8 | 669.5 | ||||||||
Total Tires | 13,271.0 | 12,171.4 | ||||||||
Engineered Products | 764.7 | 680.5 | ||||||||
Total Segment Assets | 14,035.7 | 12,851.9 | ||||||||
Corporate | 2,497.6 | 1,849.2 | ||||||||
$ | 16,533.3 | $ | 14,701.1 | |||||||
2004 | 2003 | |||||||||
(In millions) | ||||||||||
Restated | ||||||||||
Investments in and Advances to Affiliates | ||||||||||
North American Tire | $ | 13.8 | $ | 57.8 | ||||||
European Union Tire | 2.3 | 13.2 | ||||||||
Eastern Europe, Middle East and Africa | 3.1 | 2.3 | ||||||||
Asia/ Pacific Tire | 15.3 | 11.2 | ||||||||
Total Segment Investments in and Advances to Affiliates | 34.5 | 84.5 | ||||||||
Corporate | 0.4 | 99.7 | ||||||||
$ | 34.9 | $ | 184.2 | |||||||
F-63
2003 | 2002 | |||||||
(In millions) | ||||||||
Net Sales | $ | 640.3 | $ | 523.4 | ||||
Operating Income (Loss) | 8.4 | (0.5 | ) |
2004 | 2003 | 2002 | |||||||||||
(In millions) | |||||||||||||
Restated | |||||||||||||
Net Sales | |||||||||||||
United States | $ | 8,477.0 | $ | 7,212.3 | $ | 7,144.3 | |||||||
International | 9,893.4 | 7,909.8 | 6,711.7 | ||||||||||
$ | 18,370.4 | $ | 15,122.1 | $ | 13,856.0 | ||||||||
Long-Lived Assets | |||||||||||||
United States | $ | 3,046.5 | $ | 3,148.2 | |||||||||
International | 3,524.5 | 3,225.7 | |||||||||||
$ | 6,571.0 | $ | 6,373.9 | ||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions) | |||||||||||||
Restated | |||||||||||||
Rationalizations | |||||||||||||
North American Tire | $ | 8.4 | $ | 191.9 | $ | (1.9 | ) | ||||||
European Union Tire | 23.1 | 54.3 | (0.4 | ) | |||||||||
Eastern Europe, Middle East and Africa Tire | 3.6 | (0.1 | ) | (0.4 | ) | ||||||||
Latin American Tire | (1.7 | ) | 10.0 | — | |||||||||
Asia/ Pacific Tire | — | — | (1.7 | ) | |||||||||
Total Tires | 33.4 | 256.1 | (4.4 | ) | |||||||||
Engineered Products | 22.8 | 29.4 | 4.6 | ||||||||||
Total Segment Rationalizations | 56.2 | 285.5 | 0.2 | ||||||||||
Corporate | (0.6 | ) | 6.0 | 5.3 | |||||||||
$ | 55.6 | $ | 291.5 | $ | 5.5 | ||||||||
F-64
2004 | 2003 | 2002 | |||||||||||
Restated | |||||||||||||
Other (Income) and Expense | |||||||||||||
North American Tire | $ | 13.2 | $ | 3.8 | $ | 4.1 | |||||||
European Union Tire | (6.2 | ) | 1.5 | (13.7 | ) | ||||||||
Eastern Europe, Middle East and Africa Tire | 0.1 | — | — | ||||||||||
Latin American Tire | — | (2.0 | ) | (13.7 | ) | ||||||||
Asia/ Pacific Tire | — | (2.1 | ) | — | |||||||||
Total Tires | 7.1 | 1.2 | (23.3 | ) | |||||||||
Engineered Products | (2.5 | ) | 6.3 | (0.6 | ) | ||||||||
Total Segment Other (Income) and Expense | 4.6 | 7.5 | (23.9 | ) | |||||||||
Corporate | 3.6 | 255.9 | 80.7 | ||||||||||
$ | 8.2 | $ | 263.4 | $ | 56.8 | ||||||||
(In millions) | |||||||||||||
Capital Expenditures | |||||||||||||
North American Tire | $ | 171.2 | $ | 144.0 | $ | 250.5 | |||||||
European Union Tire | 111.6 | 84.5 | 84.8 | ||||||||||
Eastern Europe, Middle East and Africa Tire | 56.4 | 31.7 | 20.2 | ||||||||||
Latin American Tire | 64.6 | 35.3 | 19.3 | ||||||||||
Asia/ Pacific Tire | 66.6 | 48.7 | 30.2 | ||||||||||
Total Tires | 470.4 | 344.2 | 405.0 | ||||||||||
Engineered Products | 28.1 | 16.8 | 21.3 | ||||||||||
Total Segment Capital Expenditures | 498.5 | 361.0 | 426.3 | ||||||||||
Corporate | 20.1 | 14.4 | 31.8 | ||||||||||
$ | 518.6 | $ | 375.4 | $ | 458.1 | ||||||||
Restated | |||||||||||||
Depreciation and Amortization | |||||||||||||
North American Tire | $ | 303.3 | $ | 313.7 | $ | 310.0 | |||||||
European Union Tire | 129.7 | 120.4 | 119.6 | ||||||||||
Eastern Europe, Middle East and Africa Tire | 45.8 | 44.1 | 44.2 | ||||||||||
Latin American Tire | 24.3 | 19.6 | 23.4 | ||||||||||
Asia/ Pacific Tire | 51.6 | 30.9 | 29.5 | ||||||||||
Total Tires | 554.7 | 528.7 | 526.7 | ||||||||||
Engineered Products | 32.9 | 39.1 | 33.1 | ||||||||||
Total Segment Depreciation and Amortization | 587.6 | 567.8 | 559.8 | ||||||||||
Corporate | 41.1 | 123.8 | 45.5 | ||||||||||
$ | 628.7 | $ | 691.6 | $ | 605.3 | ||||||||
F-65
2004 | 2003 | |||||||
(In millions) | ||||||||
Restated | ||||||||
Foreign currency translation adjustment | $ | (758.3 | ) | $ | (1,011.5 | ) | ||
Minimum pension liability adjustment | (1,829.0 | ) | (1,545.2 | ) | ||||
Unrealized investment gain (loss) | 17.0 | 3.6 | ||||||
Deferred derivative gain (loss) | 5.8 | 0.3 | ||||||
$ | (2,564.5 | ) | $ | (2,552.8 | ) | |||
Warranty |
2004 | 2003 | ||||||||
(In millions) | |||||||||
Balance at January 1 | $ | 12.4 | $ | 11.0 | |||||
Payments made during the period | (20.6 | ) | (17.0 | ) | |||||
Expense recorded during the period | 23.8 | 18.4 | |||||||
Balance at December 31 | $ | 15.6 | $ | 12.4 | |||||
Environmental Matters |
• | legal and consulting fees, | |
• | site studies, | |
• | the design and implementation of remediation plans, and | |
• | post-remediation monitoring and related activities. |
F-66
Workers’ Compensation |
General and Product Liability and Other Litigation |
F-67
2004 | 2003 | 2002 | ||||||||||
(Dollars in millions) | ||||||||||||
Pending claims, beginning of year | 118,000 | 99,700 | 64,200 | |||||||||
New claims filed during the year | 12,700 | 26,700 | 38,900 | |||||||||
Claims settled/dismissed during the year | (3,400 | ) | (8,400 | ) | (3,400 | ) | ||||||
Pending claims, end of year | 127,300 | 118,000 | 99,700 | |||||||||
Payments(1) | $ | 29.9 | $ | 29.6 | $ | 18.8 | ||||||
(1) | Represents amount spent by Goodyear and its insurers on asbestos litigation defense and claim resolution. |
• | review our existing reserves for pending claims, | |
• | determine whether or not we could make a reasonable estimate of the liability associated with unasserted asbestos claims, and | |
• | review our method of determining our receivables from probable insurance recoveries. |
F-68
• | the litigation environment, | |
• | federal and state law governing the compensation of asbestos claimants, | |
• | our approach to defending and resolving claims, and | |
• | the level of payments made to claimants from other sources, including other defendants. |
F-69
Tax Matters |
F-70
Guarantees |
F-71
Note 21. | Preferred Stock Purchase Rights Plan |
Note 22. | Future Liquidity Requirements |
• | a $1.3 billion asset-based credit facility, due March 31, 2006, | |
• | a $650 million asset-based term loan, due March 31, 2006, | |
• | a $680 million deposit funded credit facility, due September 30, 2007, and | |
• | $650 million in credit facilities for our Goodyear Dunlop Tires Europe B.V. affiliate, due April 30, 2005. |
• | a $1.5 billion asset-based credit facility, | |
• | a $1.2 billion second lien term loan, and | |
• | the Euro equivalent of $650 million in credit facilities for Goodyear Dunlop Tires Europe B.V. |
F-72
F-73
Note 23. | Investments in Unconsolidated Affiliates |
Investment | Ownership | |||
Dunlop Goodyear Kabushiki Kaisha | 25.0 | % | ||
Nippon Goodyear Kabushiki Kaisha | 25.0 | |||
RNC | 27.8 | |||
AOT, Inc. | 50.0 | |||
Coast Tire & Auto Service (2002) Ltd | 49.0 | |||
Fountain Tire Limited | 49.0 | |||
SPT | 50.0 | |||
T&WA | 40.0 |
F-74
RNC | All Other | Total | |||||||||||
(In millions) | |||||||||||||
2004 | |||||||||||||
Statement of Income Information: | |||||||||||||
Net sales | $ | 13.7 | $ | 981.6 | $ | 995.3 | |||||||
Gross profit | 0.7 | 235.6 | 236.3 | ||||||||||
Net income (loss) | (1.0 | ) | 27.8 | 26.8 | |||||||||
Financial Position Information: | |||||||||||||
Current assets | 7.1 | 357.4 | 364.5 | ||||||||||
Noncurrent assets | 0.5 | 37.6 | 38.1 | ||||||||||
Current liabilities | 3.2 | 283.3 | 286.5 | ||||||||||
Noncurrent liabilities | 12.1 | 25.3 | 37.4 |
SPT | RNC | All Other | Total | ||||||||||||||
2003 | |||||||||||||||||
Statement of Income Information: | |||||||||||||||||
Net sales | $ | 640.3 | $ | 9.0 | $ | 1,302.4 | $ | 1,951.7 | |||||||||
Gross profit (loss) | 183.6 | (6.5 | ) | 267.4 | 444.5 | ||||||||||||
Net income (loss) | (19.5 | ) | (29.7 | ) | 12.9 | (36.3 | ) | ||||||||||
Financial Position Information: | |||||||||||||||||
Current assets | 287.8 | 10.1 | 354.3 | 652.2 | |||||||||||||
Noncurrent assets | 194.9 | 0.8 | 111.7 | 307.4 | |||||||||||||
Current liabilities | 321.5 | 12.8 | 314.7 | 649.0 | |||||||||||||
Noncurrent liabilities | 97.6 | 10.5 | 88.9 | 197.0 | |||||||||||||
2002 | |||||||||||||||||
Statement of Income Information: | |||||||||||||||||
Net sales | $ | 523.4 | $ | 9.0 | $ | 1,056.1 | $ | 1,588.5 | |||||||||
Gross profit (loss) | 137.2 | (6.9 | ) | 208.0 | 338.3 | ||||||||||||
Net income (loss) | (14.5 | ) | (15.3 | ) | 6.8 | (23.0 | ) |
F-75
Note 24. | Consolidating Financial Information |
(i) | The Goodyear Tire & Rubber Company (the “Parent Company”), the issuer of the guaranteed obligations, |
(ii) | Guarantor subsidiaries, on a combined basis, as specified in the Indenture related to Goodyear’s obligations under $650 million of Senior Secured Notes issued on March 12, 2004 ($450 million of 11% Senior Secured Notes due 2011 and $200 million of Senior Secured Floating Rate Notes due 2011 (the “Notes”)), |
(iii) | Non-guarantor subsidiaries, on a combined basis, |
(iv) | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions and (b) eliminate the investments in our subsidiaries and (c) record consolidating entries, and |
(v) | The Goodyear Tire & Rubber Company and Subsidiaries on a consolidated basis. |
F-76
December 31, 2004 | ||||||||||||||||||||||
Consolidating | ||||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 1,004.2 | $ | 50.2 | $ | 913.5 | $ | — | $ | 1,967.9 | ||||||||||||
Restricted cash | 137.0 | — | 15.4 | — | 152.4 | |||||||||||||||||
Accounts and notes receivable | 1,209.1 | 202.5 | 1,997.2 | — | 3,408.8 | |||||||||||||||||
Accounts and notes receivable from affiliates | — | 611.6 | — | (611.6 | ) | — | ||||||||||||||||
Inventories | 1,162.4 | 249.6 | 1,426.4 | (53.6 | ) | 2,784.8 | ||||||||||||||||
Prepaid expenses and other current assets | 89.6 | 13.9 | 185.7 | 10.0 | 299.2 | |||||||||||||||||
Total Current Assets | 3,602.3 | 1,127.8 | 4,538.2 | (655.2 | ) | 8,613.1 | ||||||||||||||||
Long Term Accounts and Notes Receivable | 240.7 | 7.3 | 59.5 | — | 307.5 | |||||||||||||||||
Investments in and Advances to Affiliates | 4.2 | 10.0 | 20.7 | — | 34.9 | |||||||||||||||||
Other Assets | 61.9 | — | 16.4 | — | 78.3 | |||||||||||||||||
Goodwill | — | 35.2 | 470.4 | 214.7 | 720.3 | |||||||||||||||||
Other Intangible Assets | 100.7 | 41.2 | 61.3 | (40.6 | ) | 162.6 | ||||||||||||||||
Deferred Income Tax | — | 13.9 | 69.5 | — | 83.4 | |||||||||||||||||
Prepaid and Deferred Pension Costs | 432.1 | 178.8 | 219.0 | — | 829.9 | |||||||||||||||||
Deferred Charges | 159.9 | 3.9 | 84.3 | — | 248.1 | |||||||||||||||||
Investments in Subsidiaries | 3,970.7 | 431.9 | 3,075.4 | (7,478.0 | ) | — | ||||||||||||||||
Properties and Plants | 2,088.8 | 332.2 | 3,010.7 | 23.5 | 5,455.2 | |||||||||||||||||
Total Assets | $ | 10,661.3 | $ | 2,182.2 | $ | 11,625.4 | $ | (7,935.6 | ) | $ | 16,533.3 | |||||||||||
LIABILITIES | ||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||
Accounts payable — trade | $ | 529.1 | $ | 61.5 | $ | 1,379.8 | $ | — | $ | 1,970.4 | ||||||||||||
Accounts payable to affiliates | 528.3 | — | 83.3 | (611.6 | ) | — | ||||||||||||||||
Compensation and benefits | 647.8 | 45.8 | 335.6 | — | 1,029.2 | |||||||||||||||||
Other current liabilities | 276.6 | 18.0 | 294.8 | — | 589.4 | |||||||||||||||||
United States and foreign taxes | 62.7 | 31.6 | 177.0 | — | 271.3 | |||||||||||||||||
Notes payable | — | — | 220.6 | — | 220.6 | |||||||||||||||||
Long term debt and capital leases due within one year | 562.5 | 0.2 | 447.2 | — | 1,009.9 | |||||||||||||||||
Total Current Liabilities | 2,607.0 | 157.1 | 2,938.3 | (611.6 | ) | 5,090.8 | ||||||||||||||||
Long Term Debt and Capital Leases | 4,009.8 | 1.5 | 437.8 | — | 4,449.1 | |||||||||||||||||
Compensation and Benefits | 3,336.3 | 312.4 | 1,387.1 | — | 5,035.8 | |||||||||||||||||
Deferred Income Tax | 93.7 | 6.7 | 326.8 | (21.4 | ) | 405.8 | ||||||||||||||||
Other Long Term Liabilities | 541.7 | 9.2 | 82.0 | — | 632.9 | |||||||||||||||||
Minority Equity in Subsidiaries | — | — | 632.0 | 214.1 | 846.1 | |||||||||||||||||
Total Liabilities | 10,588.5 | 486.9 | 5,804.0 | (418.9 | ) | 16,460.5 | ||||||||||||||||
Commitments and Contingent Liabilities | ||||||||||||||||||||||
Shareholders’ Equity (Deficit): | ||||||||||||||||||||||
Preferred Stock | — | — | — | — | — | |||||||||||||||||
Common Stock | 175.6 | 668.8 | 4,190.5 | (4,859.3 | ) | 175.6 | ||||||||||||||||
Capital Surplus | 1,391.8 | 12.2 | 865.6 | (877.8 | ) | 1,391.8 | ||||||||||||||||
Retained Earnings | 1,069.9 | 1,291.0 | 2,082.2 | (3,373.2 | ) | 1,069.9 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | (2,564.5 | ) | (276.7 | ) | (1,316.9 | ) | 1,593.6 | (2,564.5 | ) | |||||||||||||
Total Shareholders’ Equity (Deficit) | 72.8 | 1,695.3 | 5,821.4 | (7,516.7 | ) | 72.8 | ||||||||||||||||
Total Liabilities and Shareholders’ Equity (Deficit) | $ | 10,661.3 | $ | 2,182.2 | $ | 11,625.4 | $ | (7,935.6 | ) | $ | 16,533.3 | |||||||||||
F-77
December 31, 2003 | ||||||||||||||||||||||
Consolidating | ||||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 584.7 | $ | 24.8 | $ | 936.8 | $ | — | $ | 1,546.3 | ||||||||||||
Restricted cash | 17.7 | — | 6.2 | — | 23.9 | |||||||||||||||||
Accounts and notes receivable | 941.3 | 180.7 | 1,480.3 | — | 2,602.3 | |||||||||||||||||
Accounts and notes receivable from affiliates | — | 587.6 | 118.3 | (705.9 | ) | — | ||||||||||||||||
Inventories | 1,176.8 | 243.7 | 1,098.1 | (50.9 | ) | 2,467.7 | ||||||||||||||||
Prepaid expenses and other current assets | 134.7 | 8.4 | 145.9 | 16.4 | 305.4 | |||||||||||||||||
Total Current Assets | 2,855.2 | 1,045.2 | 3,785.6 | (740.4 | ) | 6,945.6 | ||||||||||||||||
Long Term Accounts and Notes Receivable | 271.3 | 7.5 | 53.8 | (42.9 | ) | 289.7 | ||||||||||||||||
Investments in and Advances to Affiliates | 57.9 | 9.7 | 116.5 | 0.1 | 184.2 | |||||||||||||||||
Other Assets | 49.6 | — | 21.9 | — | 71.5 | |||||||||||||||||
Goodwill | — | 35.3 | 389.0 | 233.9 | 658.2 | |||||||||||||||||
Other Intangible Assets | 102.3 | 45.0 | 47.5 | (44.4 | ) | 150.4 | ||||||||||||||||
Deferred Income Tax | — | 4.3 | 66.0 | 0.2 | 70.5 | |||||||||||||||||
Prepaid and Deferred Pension Costs | 506.1 | 153.2 | 210.6 | — | 869.9 | |||||||||||||||||
Deferred Charges | 160.4 | 3.7 | 91.2 | 0.6 | 255.9 | |||||||||||||||||
Investments in Subsidiaries | 3,670.4 | 428.7 | 3,039.7 | (7,138.8 | ) | — | ||||||||||||||||
Properties and Plants | 2,201.7 | 352.1 | 2,622.1 | 29.3 | 5,205.2 | |||||||||||||||||
Total Assets | $ | 9,874.9 | $ | 2,084.7 | $ | 10,443.9 | $ | (7,702.4 | ) | $ | 14,701.1 | |||||||||||
LIABILITIES | ||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||
Accounts payable — trade | $ | 426.4 | $ | 54.7 | $ | 1,076.9 | $ | (0.2 | ) | $ | 1,557.8 | |||||||||||
Accounts payable to affiliates | 705.9 | — | — | (705.9 | ) | — | ||||||||||||||||
Compensation and benefits | 641.6 | 46.1 | 290.2 | — | 977.9 | |||||||||||||||||
Other current liabilities | 340.0 | 22.0 | 222.3 | — | 584.3 | |||||||||||||||||
United States and foreign taxes | 96.5 | 14.5 | 157.7 | 2.0 | 270.7 | |||||||||||||||||
Notes payable | — | — | 146.7 | — | 146.7 | |||||||||||||||||
Long term debt and capital leases due within one year | 70.2 | 0.1 | 43.2 | — | 113.5 | |||||||||||||||||
Total Current Liabilities | 2,280.6 | 137.4 | 1,937.0 | (704.1 | ) | 3,650.9 | ||||||||||||||||
Long Term Debt and Capital Leases | 4,060.3 | 1.8 | 763.7 | — | 4,825.8 | |||||||||||||||||
Compensation and Benefits | 3,116.7 | 252.5 | 1,143.7 | — | 4,512.9 | |||||||||||||||||
Deferred Income Tax | 42.8 | 7.0 | 321.4 | 9.4 | 380.6 | |||||||||||||||||
Other Long Term Liabilities | 406.7 | 9.4 | 126.7 | (33.7 | ) | 509.1 | ||||||||||||||||
Minority Equity in Subsidiaries | — | — | 655.1 | 198.9 | 854.0 | |||||||||||||||||
Total Liabilities | 9,907.1 | 408.1 | 4,947.6 | (529.5 | ) | 14,733.3 | ||||||||||||||||
Commitments and Contingent Liabilities | ||||||||||||||||||||||
Shareholders’ Equity (Deficit) | ||||||||||||||||||||||
Preferred Stock | — | — | — | — | — | |||||||||||||||||
Common Stock | 175.3 | 668.8 | 3,992.7 | (4,661.5 | ) | 175.3 | ||||||||||||||||
Capital Surplus | 1,390.2 | 12.1 | 904.5 | (916.6 | ) | 1,390.2 | ||||||||||||||||
Retained Earnings | 955.1 | 1,240.5 | 1,967.6 | (3,208.1 | ) | 955.1 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | (2,552.8 | ) | (244.8 | ) | (1,368.5 | ) | 1,613.3 | (2,552.8 | ) | |||||||||||||
Total Shareholders’ Equity (Deficit) | (32.2 | ) | 1,676.6 | 5,496.3 | (7,172.9 | ) | (32.2 | ) | ||||||||||||||
Total Liabilities and Shareholders’ Equity (Deficit) | $ | 9,874.9 | $ | 2,084.7 | $ | 10,443.9 | $ | (7,702.4 | ) | $ | 14,701.1 | |||||||||||
F-78
Year Ended December 31, 2004 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net Sales | $ | 8,746.1 | $ | 2,119.6 | $ | 14,902.3 | $ | (7,397.6 | ) | $ | 18,370.4 | |||||||||
Cost of Goods Sold | 7,758.3 | 1,839.1 | 12,563.8 | (7,452.0 | ) | 14,709.2 | ||||||||||||||
Selling, Administrative and General Expense | 1,165.4 | 183.4 | 1,506.8 | (22.5 | ) | 2,833.1 | ||||||||||||||
Rationalizations | 40.6 | (5.9 | ) | 20.9 | — | 55.6 | ||||||||||||||
Interest Expense | 326.4 | 37.1 | 242.0 | (236.7 | ) | 368.8 | ||||||||||||||
Other (Income) Expense | (200.9 | ) | 4.7 | (93.9 | ) | 298.3 | 8.2 | |||||||||||||
Foreign Currency Exchange | 2.3 | (3.3 | ) | 24.4 | — | 23.4 | ||||||||||||||
Equity in (Earnings) Loss of Affiliates | (2.0 | ) | (0.5 | ) | (5.9 | ) | — | (8.4 | ) | |||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 55.9 | 1.9 | 57.8 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (344.0 | ) | 65.0 | 588.3 | 13.4 | 322.7 | ||||||||||||||
United States and Foreign Taxes on Income | (53.3 | ) | 26.0 | 236.3 | (1.1 | ) | 207.9 | |||||||||||||
Equity in (Earnings) Loss of Subsidiaries | (405.5 | ) | (30.3 | ) | — | 435.8 | — | |||||||||||||
Net Income (Loss) | $ | 114.8 | $ | 69.3 | $ | 352.0 | $ | (421.3 | ) | $ | 114.8 | |||||||||
F-79
Year Ended December 31, 2003 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net Sales | $ | 7,816.2 | $ | 1,950.1 | $ | 11,600.9 | $ | (6,245.1 | ) | $ | 15,122.1 | |||||||||
Cost of Goods Sold | 7,240.8 | 1,698.0 | 9,879.0 | (6,318.8 | ) | 12,499.0 | ||||||||||||||
Selling, Administrative and General Expense | 1,071.4 | 176.2 | 1,140.3 | (13.7 | ) | 2,374.2 | ||||||||||||||
Rationalizations | 74.7 | 14.9 | 201.9 | — | 291.5 | |||||||||||||||
Interest Expense | 252.3 | 35.8 | 181.9 | (173.7 | ) | 296.3 | ||||||||||||||
Other (Income) Expense | (17.4 | ) | 4.6 | (115.9 | ) | 392.1 | 263.4 | |||||||||||||
Foreign Currency Exchange | 14.7 | 4.5 | 21.5 | — | 40.7 | |||||||||||||||
Equity in (Earnings) Loss of Affiliates | 8.2 | 0.9 | 5.4 | — | 14.5 | |||||||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 32.8 | — | 32.8 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (828.5 | ) | 15.2 | 254.0 | (131.0 | ) | (690.3 | ) | ||||||||||||
United States and Foreign Taxes on Income | (38.2 | ) | 2.1 | 150.9 | 2.3 | 117.1 | ||||||||||||||
Equity in (Earnings) Loss of Subsidiaries | 17.1 | (16.7 | ) | — | (0.4 | ) | — | |||||||||||||
Net Income (Loss) | $ | (807.4 | ) | $ | 29.8 | $ | 103.1 | $ | (132.9 | ) | $ | (807.4 | ) | |||||||
F-80
Year Ended December 31, 2002 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net Sales | $ | 7,613.1 | $ | 1,890.0 | $ | 9,382.9 | $ | (5,030.0 | ) | $ | 13,856.0 | |||||||||
Cost of Goods Sold | 6,726.4 | 1,662.3 | 7,965.4 | (5,047.2 | ) | 11,306.9 | ||||||||||||||
Selling, Administrative and General Expense | 1,077.8 | 178.1 | 957.3 | (10.8 | ) | 2,202.4 | ||||||||||||||
Rationalizations | 10.4 | (1.7 | ) | (3.2 | ) | — | 5.5 | |||||||||||||
Interest Expense | 210.3 | 32.8 | 122.5 | (122.9 | ) | 242.7 | ||||||||||||||
Other (Income) Expense | 71.4 | (0.2 | ) | (132.2 | ) | 117.8 | 56.8 | |||||||||||||
Foreign Currency Exchange | (1.2 | ) | 0.5 | (8.0 | ) | — | (8.7 | ) | ||||||||||||
Equity in (Earnings) Loss of Affiliates | 10.1 | (0.7 | ) | 4.4 | — | 13.8 | ||||||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 55.6 | — | 55.6 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (492.1 | ) | 18.9 | 421.1 | 33.1 | (19.0 | ) | |||||||||||||
United States and Foreign Taxes on Income | 1,108.6 | 5.4 | 110.3 | 3.6 | 1,227.9 | |||||||||||||||
Equity in (Earnings) Loss of Subsidiaries | (353.8 | ) | (2.6 | ) | — | 356.4 | — | |||||||||||||
Net Income (Loss) | $ | (1,246.9 | ) | $ | 16.1 | $ | 310.8 | $ | (326.9 | ) | $ | (1,246.9 | ) | |||||||
F-81
�� | |||||||||||||||||||||
Twelve Months Ended December 31, 2004 | |||||||||||||||||||||
Consolidating | |||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | ||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Total Cash Flows From Operating Activities | $ | 182.8 | $ | 42.2 | $ | 811.9 | $ | (317.1 | ) | $ | 719.8 | ||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Capital expenditures | (153.2 | ) | (11.5 | ) | (353.3 | ) | (0.6 | ) | (518.6 | ) | |||||||||||
Asset sales | 105.9 | 1.1 | 13.8 | (101.5 | ) | 19.3 | |||||||||||||||
Asset acquisitions | (51.4 | ) | — | (112.5 | ) | 102.1 | (61.8 | ) | |||||||||||||
Capital contributions | (9.4 | ) | (3.2 | ) | (31.3 | ) | 43.9 | — | |||||||||||||
Capital redemptions | 5.8 | — | 115.8 | (121.6 | ) | — | |||||||||||||||
Other transactions | 35.9 | — | — | — | 35.9 | ||||||||||||||||
Total Cash Flows From Investing Activities | (66.4 | ) | (13.6 | ) | (367.5 | ) | (77.7 | ) | (525.2 | ) | |||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Short term debt incurred | 43.7 | — | 118.8 | — | 162.5 | ||||||||||||||||
Short term debt paid | — | (2.7 | ) | (136.5 | ) | — | (139.2 | ) | |||||||||||||
Long term debt incurred | 1,675.3 | — | 391.4 | — | 2,066.7 | ||||||||||||||||
Long term debt paid | (1,247.0 | ) | (0.2 | ) | (446.7 | ) | — | (1,693.9 | ) | ||||||||||||
Common stock issued | 1.8 | — | — | — | 1.8 | ||||||||||||||||
Capital contributions | — | — | 35.3 | (35.3 | ) | — | |||||||||||||||
Capital redemptions | — | — | (117.1 | ) | 117.1 | — | |||||||||||||||
Dividends to minority interests in subsidiaries | — | — | (341.9 | ) | 313.0 | (28.9 | ) | ||||||||||||||
Debt issuance costs | (51.4 | ) | — | — | — | (51.4 | ) | ||||||||||||||
Increase in restricted cash | (119.3 | ) | — | (9.2 | ) | — | (128.5 | ) | |||||||||||||
Total Cash Flows From Financing Activities | 303.1 | (2.9 | ) | (505.9 | ) | 394.8 | 189.1 | ||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | — | (0.3 | ) | 38.2 | — | 37.9 | |||||||||||||||
Net Change in Cash and Cash Equivalents | 419.5 | 25.4 | (23.3 | ) | — | 421.6 | |||||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 584.7 | 24.8 | 936.8 | — | 1,546.3 | ||||||||||||||||
Cash and Cash Equivalents at End of the Period | $ | 1,004.2 | $ | 50.2 | $ | 913.5 | $ | — | $ | 1,967.9 | |||||||||||
F-82
Twelve Months Ended December 31, 2003 | |||||||||||||||||||||
Consolidating | |||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | ||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Total Cash Flows From Operating Activities | $ | (721.4 | ) | $ | (66.9 | ) | $ | 750.4 | $ | (250.9 | ) | $ | (288.8 | ) | |||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Capital expenditures | (158.9 | ) | (5.3 | ) | (204.7 | ) | (6.5 | ) | (375.4 | ) | |||||||||||
Short term securities redeemed | — | — | 26.6 | — | 26.6 | ||||||||||||||||
Asset sales | 367.8 | — | 18.6 | (282.0 | ) | 104.4 | |||||||||||||||
Asset acquisitions | (71.2 | ) | — | (282.3 | ) | 282.3 | (71.2 | ) | |||||||||||||
Capital contributions | (30.7 | ) | — | — | 30.7 | — | |||||||||||||||
Capital redemptions | 43.6 | 16.3 | 162.0 | (221.9 | ) | — | |||||||||||||||
Other transactions | 2.7 | 4.4 | 142.4 | (69.9 | ) | 79.6 | |||||||||||||||
Total Cash Flows From Investing Activities | 153.3 | 15.4 | (137.4 | ) | (267.3 | ) | (236.0 | ) | |||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Short term debt incurred | 8.3 | — | 314.8 | — | 323.1 | ||||||||||||||||
Short term debt paid | — | (0.3 | ) | (469.0 | ) | 0.1 | (469.2 | ) | |||||||||||||
Long term debt incurred | 2,379.7 | — | 604.0 | 0.1 | 2,983.8 | ||||||||||||||||
Long term debt paid | (1,510.2 | ) | (0.1 | ) | (101.8 | ) | — | (1,612.1 | ) | ||||||||||||
Common stock issued | 0.2 | — | — | — | 0.2 | ||||||||||||||||
Capital contributions | — | 48.7 | 30.7 | (79.4 | ) | — | |||||||||||||||
Capital redemptions | — | — | (205.4 | ) | 205.4 | — | |||||||||||||||
Dividends paid to minority interests in subsidiaries | — | — | (432.6 | ) | 394.0 | (38.6 | ) | ||||||||||||||
Dividends paid to Goodyear shareholders | — | 2.0 | — | (2.0 | ) | — | |||||||||||||||
Debt issuance costs | (104.1 | ) | — | — | — | (104.1 | ) | ||||||||||||||
Increase in restricted cash | (17.7 | ) | — | (6.2 | ) | — | (23.9 | ) | |||||||||||||
Other transactions | 27.9 | — | — | — | 27.9 | ||||||||||||||||
Total Cash Flows From Financing Activities | 784.1 | 50.3 | (265.5 | ) | 518.2 | 1,087.1 | |||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | — | 2.4 | 61.8 | — | 64.2 | ||||||||||||||||
Net Change in Cash and Cash Equivalents | 216.0 | 1.2 | 409.3 | — | 626.5 | ||||||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 368.7 | 23.6 | 527.5 | — | 919.8 | ||||||||||||||||
Cash and Cash Equivalents at End of the Period | $ | 584.7 | $ | 24.8 | $ | 936.8 | $ | — | $ | 1,546.3 | |||||||||||
F-83
Twelve Months Ended December 31, 2002 | |||||||||||||||||||||
Consolidating | |||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | ||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Total Cash Flows From Operating Activities | $ | (172.7 | ) | $ | 56.4 | $ | 868.4 | $ | (66.1 | ) | $ | 686.0 | |||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Capital expenditures | (247.1 | ) | (19.2 | ) | (171.8 | ) | (20.0 | ) | (458.1 | ) | |||||||||||
Short term securities acquired | — | — | (64.7 | ) | — | (64.7 | ) | ||||||||||||||
Short term securities redeemed | — | — | 38.5 | — | 38.5 | ||||||||||||||||
Asset sales | 104.4 | — | 57.9 | (106.7 | ) | 55.6 | |||||||||||||||
Asset acquisitions | (15.9 | ) | — | (142.7 | ) | 103.8 | (54.8 | ) | |||||||||||||
Capital contributions | (43.1 | ) | (27.3 | ) | (38.4 | ) | 108.8 | — | |||||||||||||
Capital redemptions | 280.4 | — | 36.0 | (316.4 | ) | — | |||||||||||||||
Other transactions | (30.4 | ) | (0.3 | ) | (45.0 | ) | 18.9 | (56.8 | ) | ||||||||||||
Total Cash Flows From Investing Activities | 48.3 | (46.8 | ) | (330.2 | ) | (211.6 | ) | (540.3 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Short term debt incurred | — | — | 84.1 | — | 84.1 | ||||||||||||||||
Short term debt paid | (3.6 | ) | — | (83.9 | ) | — | (87.5 | ) | |||||||||||||
Long term debt incurred | 0.5 | — | 37.9 | — | 38.4 | ||||||||||||||||
Long term debt paid | (45.8 | ) | (0.1 | ) | (79.3 | ) | — | (125.2 | ) | ||||||||||||
Common stock issued | 18.7 | — | — | — | 18.7 | ||||||||||||||||
Capital contributions | — | 3.0 | 113.9 | (116.9 | ) | — | |||||||||||||||
Capital redemptions | — | — | (272.8 | ) | 272.8 | — | |||||||||||||||
Dividends paid to minority interest in subsidiaries | — | — | (138.0 | ) | 121.8 | (16.2 | ) | ||||||||||||||
Dividends paid to Goodyear shareholders | (79.8 | ) | — | — | — | (79.8 | ) | ||||||||||||||
Total Cash Flows From Financing Activities | (110.0 | ) | 2.9 | (338.1 | ) | 277.7 | (167.5 | ) | |||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | — | (0.2 | ) | (13.5 | ) | — | (13.7 | ) | |||||||||||||
Net Change in Cash and Cash Equivalents | (234.4 | ) | 12.3 | 186.6 | — | (35.5 | ) | ||||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 603.1 | 11.3 | 340.9 | — | 955.3 | ||||||||||||||||
Cash and Cash Equivalents at End of the Period | $ | 368.7 | $ | 23.6 | $ | 527.5 | $ | — | $ | 919.8 | |||||||||||
F-84
Note 25. | Subsequent Events |
F-85
Quarter | |||||||||||||||||||||
Restated | |||||||||||||||||||||
First | Second | Third | Fourth | Year | |||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
2004 | |||||||||||||||||||||
Net Sales | $ | 4,301.9 | $ | 4,519.4 | $ | 4,714.2 | $ | 4,834.9 | $ | 18,370.4 | |||||||||||
Gross Profit | 826.0 | 930.2 | 949.5 | 961.6 | 3,661.2 | ||||||||||||||||
Net Income (Loss) | $ | (78.1 | ) | $ | 29.8 | $ | 38.5 | $ | 124.6 | $ | 114.8 | ||||||||||
Net Income (Loss) Per Share — Basic | $ | (0.45 | ) | $ | 0.17 | $ | 0.22 | $ | 0.71 | $ | 0.65 | ||||||||||
— Diluted | $ | (0.45 | ) | $ | 0.17 | $ | 0.20 | $ | 0.62 | $ | 0.63 | ||||||||||
Average Shares Outstanding — Basic | 175.3 | 175.3 | 175.4 | 175.5 | 175.4 | ||||||||||||||||
— Diluted | 175.3 | 176.8 | 206.9 | 207.8 | 192.3 | ||||||||||||||||
Price Range of Common Stock:* High | $ | 11.97 | $ | 10.45 | $ | 12.00 | $ | 15.01 | $ | 15.01 | |||||||||||
Low | 7.06 | 7.66 | 8.70 | 9.15 | 7.06 | ||||||||||||||||
Selected Balance Sheet Items at Quarter-End: | |||||||||||||||||||||
Total Assets | $ | 15,164.4 | $ | 14,997.2 | $ | 15,774.3 | $ | 16,533.3 | |||||||||||||
Total Debt | 5,401.4 | 5,316.8 | 5,660.5 | 5,679.6 | |||||||||||||||||
Shareholders’ Equity (Deficit) | (144.2 | ) | (167.3 | ) | (47.8 | ) | 72.8 |
Quarter as Originally Reported | |||||||||||||
First(A) | Second(B) | Third(C) | |||||||||||
(In millions, except per share amounts) | |||||||||||||
2004 | |||||||||||||
Net Sales | $ | 4,290.9 | $ | 4,508.9 | $ | 4,713.7 | |||||||
Gross Profit | 825.2 | 926.1 | 947.1 | ||||||||||
Net Income (Loss) | $ | (76.9 | ) | $ | 25.1 | $ | 36.5 | ||||||
Net Income (Loss) Per Share — Basic | $ | (0.44 | ) | $ | 0.14 | $ | 0.21 | ||||||
— Diluted | $ | (0.44 | ) | $ | 0.14 | $ | 0.21 | ||||||
Average Shares Outstanding — Basic | 175.3 | 175.3 | 175.4 | ||||||||||
— Diluted | 175.3 | 176.8 | 177.9 | ||||||||||
Price Range of Common Stock:* High | $ | 11.97 | $ | 10.45 | $ | 12.00 | |||||||
Low | 7.06 | 7.66 | 9.09 | ||||||||||
Selected Balance Sheet Items at Quarter-End: | |||||||||||||
Total Assets | $ | 15,421.3 | $ | 15,261.8 | $ | 15,675.0 | |||||||
Total Debt | 5,341.4 | 5,257.1 | 5,603.8 | ||||||||||
Shareholders’ Equity (Deficit) | (121.5 | ) | (147.5 | ) | (38.4 | ) |
(A) | As reported in 2004 Form 10-Q filed on June 18, 2004. | |
(B) | As reported in 2004 Form 10-Q filed on August 5, 2004. | |
(C) | As reported in 2004 Form 10-Q filed on November 9, 2004. |
* | New York Stock Exchange — Composite Transactions |
F-86
2004 Quarter Ended | |||||||||||||||||
March 31 | June 30 | September 30 | Total | ||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Net income (loss) as originally reported(A) | $ | (76.9 | ) | $ | 25.1 | $ | 36.5 | $ | (15.3 | ) | |||||||
Adjustments (pretax): | |||||||||||||||||
SPT | 1.2 | (1.2 | ) | 0.6 | 0.6 | ||||||||||||
General and Product Liability | (1.5 | ) | 4.1 | (0.4 | ) | 2.2 | |||||||||||
Account Reconciliations | 0.2 | 1.1 | 1.2 | 2.5 | |||||||||||||
Total adjustments (pretax) | (0.1 | ) | 4.0 | 1.4 | 5.3 | ||||||||||||
Tax effect of restatement adjustments | (0.5 | ) | 1.4 | (0.4 | ) | 0.5 | |||||||||||
Tax adjustments | (0.6 | ) | (0.7 | ) | 1.0 | (0.3 | ) | ||||||||||
Total taxes | (1.1 | ) | 0.7 | 0.6 | 0.2 | ||||||||||||
Total net adjustments | (1.2 | ) | 4.7 | 2.0 | 5.5 | ||||||||||||
Net income (loss) as restated | $ | (78.1 | ) | $ | 29.8 | $ | 38.5 | $ | (9.8 | ) | |||||||
Per Share of Common Stock: | |||||||||||||||||
Net income (loss) — Basic as originally reported | $ | (0.44 | ) | $ | 0.14 | $ | 0.21 | ||||||||||
Effect of net adjustments | (0.01 | ) | 0.03 | 0.01 | |||||||||||||
Net income (loss) — Basic as restated | $ | (0.45 | ) | $ | 0.17 | $ | 0.22 | ||||||||||
Net income (loss) — Diluted as originally reported | $ | (0.44 | ) | $ | 0.14 | $ | 0.21 | ||||||||||
Effect of net adjustments | (0.01 | ) | 0.03 | 0.01 | |||||||||||||
Effect of Convertible Senior Notes | — | — | (0.02 | ) | |||||||||||||
Net income (loss) — Diluted as restated | $ | (0.45 | ) | $ | 0.17 | $ | 0.20 | ||||||||||
(A) | As reported in 2004 Forms 10-Q filed on June 18, August 5 and November 9, 2004, respectively. |
F-87
Quarter | |||||||||||||||||||||
Restated | |||||||||||||||||||||
First | Second | Third | Fourth | Year | |||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
2003 | |||||||||||||||||||||
Net Sales | $ | 3,546.5 | $ | 3,754.1 | $ | 3,906.7 | $ | 3,914.8 | $ | 15,122.1 | |||||||||||
Gross Profit | 583.4 | 712.5 | 711.1 | 616.1 | 2,623.1 | ||||||||||||||||
Net Loss | $ | (200.5 | ) | $ | (59.6 | ) | $ | (120.3 | ) | $ | (427.0 | ) | $ | (807.4 | ) | ||||||
Net Loss Per Share — Basic | $ | (1.14 | ) | $ | (0.34 | ) | $ | (0.69 | ) | $ | (2.44 | ) | $ | (4.61 | ) | ||||||
— Diluted | $ | (1.14 | ) | $ | (0.34 | ) | $ | (0.69 | ) | $ | (2.44 | ) | $ | (4.61 | ) | ||||||
Average Shares Outstanding — Basic | 175.3 | 175.3 | 175.3 | 175.3 | 175.3 | ||||||||||||||||
— Diluted | 175.3 | 175.3 | 175.3 | 175.3 | 175.3 | ||||||||||||||||
Price Range of Common Stock:* High | $ | 7.33 | $ | 7.35 | $ | 8.19 | $ | 7.94 | $ | 8.19 | |||||||||||
Low | 3.35 | 4.55 | 4.49 | 5.55 | 3.35 | ||||||||||||||||
Selected Balance Sheet Items at Quarter-End: | |||||||||||||||||||||
Total Assets | $ | 13,227.8 | $ | 14,639.0 | $ | 14,586.0 | $ | 14,701.1 | |||||||||||||
Total Debt | 3,830.1 | 5,026.1 | 4,944.8 | 5,086.0 | |||||||||||||||||
Shareholders’ Equity (Deficit) | 90.1 | 171.8 | 63.5 | (32.2 | ) |
Quarter | |||||||||||||||||||||
As Previously Reported(A) | |||||||||||||||||||||
First | Second | Third | Fourth | Year | |||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
2003 | |||||||||||||||||||||
Net Sales | $ | 3,545.8 | $ | 3,753.3 | $ | 3,906.1 | $ | 3,913.8 | $ | 15,119.0 | |||||||||||
Gross Profit | 583.0 | 714.5 | 711.7 | 614.5 | 2,623.7 | ||||||||||||||||
Net Income (Loss) | $ | (196.5 | ) | $ | (53.0 | ) | $ | (118.2 | ) | $ | (434.4 | ) | $ | (802.1 | ) | ||||||
Net Income (Loss) Per Share — Basic | $ | (1.12 | ) | $ | (0.30 | ) | $ | (0.67 | ) | $ | (2.49 | ) | $ | (4.58 | ) | ||||||
— Diluted | $ | (1.12 | ) | $ | (0.30 | ) | $ | (0.67 | ) | $ | (2.49 | ) | $ | (4.58 | ) | ||||||
Average Shares Outstanding — Basic | 175.3 | 175.3 | 175.3 | 175.3 | 175.3 | ||||||||||||||||
— Diluted | 175.3 | 175.3 | 175.3 | 175.3 | 175.3 | ||||||||||||||||
Price Range of Common Stock:* High | $ | 7.33 | $ | 7.35 | $ | 8.19 | $ | 7.94 | $ | 8.19 | |||||||||||
Low | 3.35 | 4.55 | 4.49 | 5.55 | 3.35 | ||||||||||||||||
Selected Balance Sheet Items at Quarter-End: | |||||||||||||||||||||
Total Assets | $ | 13,246.5 | $ | 14,636.0 | $ | 14,575.9 | $ | 15,005.5 | |||||||||||||
Total Debt | 3,829.1 | 5,025.1 | 4,943.8 | 5,077.4 | |||||||||||||||||
Shareholders’ Equity (Deficit) | 126.1 | 207.9 | 96.0 | (13.1 | ) |
(A) | As reported in 2004 Form 10-K filed on May 19, 2004. |
* | New York Stock Exchange — Composite Transactions |
F-88
Quarter as Originally Reported | |||||||||||||
First(A) | Second(B) | Third(C) | |||||||||||
(In millions, except per share amounts) | |||||||||||||
2003 | |||||||||||||
Net Sales | $ | 3,545.5 | $ | 3,758.2 | $ | 3,906.0 | |||||||
Gross Profit | 621.1 | 707.2 | 719.4 | ||||||||||
Net Loss | $ | (163.3 | ) | $ | (73.6 | ) | $ | (105.9 | ) | ||||
Net Loss Per Share — Basic | $ | (0.93 | ) | $ | (0.42 | ) | $ | (0.60 | ) | ||||
— Diluted | $ | (0.93 | ) | $ | (0.42 | ) | $ | (0.60 | ) | ||||
Average Shares Outstanding — Basic | 175.3 | 175.3 | 175.3 | ||||||||||
— Diluted | 175.3 | 175.3 | 175.3 | ||||||||||
Price Range of Common Stock:* High | $ | 7.33 | $ | 7.35 | $ | 8.19 | |||||||
Low | 3.35 | 4.55 | 4.49 | ||||||||||
Selected Balance Sheet Items at Quarter-End: | |||||||||||||
Total Assets | $ | 13,367.9 | $ | 14,740.7 | $ | 14,597.6 | |||||||
Total Debt | 3,826.7 | 5,022.7 | 4,941.5 | ||||||||||
Shareholders’ Equity | 562.0 | 611.2 | 429.3 |
(A) | As reported in 2003 Form 10-Q filed on April 30, 2003. | |
(B) | As reported in 2003 Form 10-Q filed on July 30, 2003. | |
(C) | As reported in 2003 Form 10-Q filed on November 19, 2003. |
* | New York Stock Exchange — Composite Transactions |
2003 Quarter Ended | |||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | Total | |||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
Net loss as originally reported(A) | $ | (163.3 | ) | $ | (73.6 | ) | $ | (105.9 | ) | $ | (434.4 | )(B) | $ | (777.2 | ) | ||||||
Adjustments (pretax): | |||||||||||||||||||||
Accounting Irregularities | (1.6 | ) | (2.9 | ) | 4.9 | — | 0.4 | ||||||||||||||
Account Reconciliations | (27.7 | ) | 20.9 | (10.5 | ) | — | (17.3 | ) | |||||||||||||
Out-of-Period | 0.7 | (0.2 | ) | 0.4 | — | 0.9 | |||||||||||||||
Discount Rate Adjustments | (4.3 | ) | (4.4 | ) | (4.3 | ) | — | (13.0 | ) | ||||||||||||
Chemical Products | 2.4 | (0.7 | ) | (1.1 | ) | — | 0.6 | ||||||||||||||
Total adjustments (pretax) | (30.5 | ) | 12.7 | (10.6 | ) | — | (28.4 | ) | |||||||||||||
Tax effect of restatement adjustments | (2.7 | ) | 3.7 | (1.7 | ) | — | (0.7 | ) | |||||||||||||
Tax adjustments | — | 4.2 | — | — | 4.2 | ||||||||||||||||
Total taxes | (2.7 | ) | 7.9 | (1.7 | ) | — | 3.5 | ||||||||||||||
Total net adjustments | (33.2 | ) | 20.6 | (12.3 | ) | — | (24.9 | ) | |||||||||||||
Net loss as previously reported(B) | $ | (196.5 | ) | $ | (53.0 | ) | $ | (118.2 | ) | $ | (434.4 | ) | $ | (802.1 | ) | ||||||
F-89
2003 Quarter Ended | |||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | Total | |||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
SPT | (0.4 | ) | (2.0 | ) | (0.4 | ) | 0.5 | (2.3 | ) | ||||||||||||
General and Product Liability | — | — | — | 7.3 | 7.3 | ||||||||||||||||
Account Reconciliations | (2.9 | ) | (2.0 | ) | (1.0 | ) | 0.5 | (5.4 | ) | ||||||||||||
Total adjustments (pretax) | (3.3 | ) | (4.0 | ) | (1.4 | ) | 8.3 | (0.4 | ) | ||||||||||||
Tax effect of restatement adjustments | (0.1 | ) | 0.4 | (0.1 | ) | (0.3 | ) | (0.1 | ) | ||||||||||||
Tax adjustments | (0.6 | ) | (3.0 | ) | (0.6 | ) | (0.6 | ) | (4.8 | ) | |||||||||||
Total taxes | (0.7 | ) | (2.6 | ) | (0.7 | ) | (0.9 | ) | (4.9 | ) | |||||||||||
Total net adjustments | (4.0 | ) | (6.6 | ) | (2.1 | ) | 7.4 | (5.3 | ) | ||||||||||||
Net loss as restated | $ | (200.5 | ) | $ | (59.6 | ) | $ | (120.3 | ) | $ | (427.0 | ) | $ | (807.4 | ) | ||||||
Per Share of Common Stock: | |||||||||||||||||||||
Net loss — Basic as originally reported(A) | $ | (0.93 | ) | $ | (0.42 | ) | $ | (0.60 | ) | $ | (2.49 | )(B) | $ | (4.44 | ) | ||||||
Effect of net adjustments | (0.19 | ) | 0.12 | (0.07 | ) | — | (0.14 | ) | |||||||||||||
Net loss — Basic as previously reported(B) | $ | (1.12 | ) | $ | (0.30 | ) | $ | (0.67 | ) | $ | (2.49 | ) | $ | (4.58 | ) | ||||||
Effect of net adjustments | (0.02 | ) | (0.04 | ) | (0.02 | ) | 0.05 | (0.03 | ) | ||||||||||||
Net loss — Basic as restated | $ | (1.14 | ) | $ | (0.34 | ) | $ | (0.69 | ) | $ | (2.44 | ) | $ | (4.61 | ) | ||||||
Net loss — Diluted as originally reported(A) | $ | (0.93 | ) | $ | (0.42 | ) | $ | (0.60 | ) | $ | (2.49 | )(B) | $ | (4.44 | ) | ||||||
Effect of net adjustments | (0.19 | ) | 0.12 | (0.07 | ) | — | (0.14 | ) | |||||||||||||
Net loss — Diluted as previously reported(B) | $ | (1.12 | ) | $ | (0.30 | ) | $ | (0.67 | ) | $ | (2.49 | ) | $ | (4.58 | ) | ||||||
Effect of net adjustments | (0.02 | ) | (0.04 | ) | (0.02 | ) | 0.05 | (0.03 | ) | ||||||||||||
Net loss — Diluted as restated | $ | (1.14 | ) | $ | (0.34 | ) | $ | (0.69 | ) | $ | (2.44 | ) | $ | (4.61 | ) | ||||||
(A) | As reported in 2003 Forms 10-Q filed on April 30, July 30 and November 19, 2003, respectively. | |
(B) | As reported in 2003 Form 10-K filed on May 19, 2004. |
F-90
Schedule No. | Page Number | |||||||
Condensed Financial Information of Registrant | I | F-92 | ||||||
Valuation and Qualifying Accounts | II | F-98 | ||||||
Other Financial Statements: | ||||||||
Financial Statements of South Pacific Tyres (SPT) | F-100 |
F-91
Year Ended December 31, | |||||||||||||
Restated | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions, except per share amounts) | |||||||||||||
Net Sales | $ | 8,746.1 | $ | 7,816.2 | $ | 7,613.1 | |||||||
Cost of Goods Sold | 7,758.3 | 7,240.8 | 6,726.4 | ||||||||||
Selling, Administrative and General Expense | 1,165.4 | 1,071.4 | 1,077.8 | ||||||||||
Rationalizations | 40.6 | 74.7 | 10.4 | ||||||||||
Interest Expense | 326.4 | 252.3 | 210.3 | ||||||||||
Other (Income) and Expense | (200.9 | ) | (17.4 | ) | 71.4 | ||||||||
Foreign Currency Exchange | 2.3 | 14.7 | (1.2 | ) | |||||||||
Equity in (Earnings) Losses of Affiliates | (2.0 | ) | 8.2 | 10.1 | |||||||||
Loss before Income Taxes and Equity in (Earnings) Losses of Subsidiaries | (344.0 | ) | (828.5 | ) | (492.1 | ) | |||||||
United States and Foreign Taxes on Income (Loss) | (53.3 | ) | (38.2 | ) | 1,108.6 | ||||||||
Equity in (Earnings) Losses of Subsidiaries | (405.5 | ) | 17.1 | (353.8 | ) | ||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | |||||
Net Income (Loss) Per Share — Basic | $ | 0.65 | $ | (4.61 | ) | $ | (7.47 | ) | |||||
Average Shares Outstanding | 175.4 | 175.3 | 167.0 | ||||||||||
Net Income (Loss) Per Share — Diluted | $ | 0.63 | $ | (4.61 | ) | $ | (7.47 | ) | |||||
Average Shares Outstanding | 192.3 | 175.3 | 167.0 |
F-92
December 31, | |||||||||||
Restated | |||||||||||
2004 | 2003 | ||||||||||
(In millions) | |||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 1,004.2 | $ | 584.7 | |||||||
Restricted cash | 137.0 | 17.7 | |||||||||
Accounts and notes receivable, less allowance — $32.0 ($36.8 in 2003) | 1,209.1 | 941.3 | |||||||||
Inventories: | |||||||||||
Raw materials | 220.8 | 187.5 | |||||||||
Work in process | 64.2 | 47.8 | |||||||||
Finished products | 877.4 | 941.5 | |||||||||
1,162.4 | 1,176.8 | ||||||||||
Prepaid expenses and other current assets | 89.6 | 134.7 | |||||||||
Total Current Assets | 3,602.3 | 2,855.2 | |||||||||
Long Term Accounts and Notes Receivable | 240.7 | 271.3 | |||||||||
Investments in and Advances to Affiliates | 4.2 | 57.9 | |||||||||
Other Assets | 61.9 | 49.6 | |||||||||
Intangible Assets | 100.7 | 102.3 | |||||||||
Prepaid and Deferred Pension Costs | 432.1 | 506.1 | |||||||||
Deferred Charges | 159.9 | 160.4 | |||||||||
Investments in Subsidiaries | 3,970.7 | 3,670.4 | |||||||||
Properties and Plants, less accumulated depreciation — $4,445.6 ($4,311.0 in 2003) | 2,088.8 | 2,201.7 | |||||||||
Total Assets | $ | 10,661.3 | $ | 9,874.9 | |||||||
Liabilities | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable-trade | $ | 529.1 | $ | 426.4 | |||||||
Intercompany current accounts | 528.3 | 705.9 | |||||||||
Compensation and benefits | 647.8 | 641.6 | |||||||||
Other current liabilities | 276.6 | 340.0 | |||||||||
United States and foreign taxes | 62.7 | 96.5 | |||||||||
Long term debt and capital leases due within one year | 562.5 | 70.2 | |||||||||
Total Current Liabilities | 2,607.0 | 2,280.6 | |||||||||
Long Term Debt and Capital Leases | 4,009.8 | 4,060.3 | |||||||||
Compensation and Benefits | 3,336.3 | 3,116.7 | |||||||||
Deferred and Other Noncurrent Income Taxes | 93.7 | 42.8 | |||||||||
Other Long Term Liabilities | 541.7 | 406.7 | |||||||||
Total Liabilities | 10,588.5 | 9,907.1 | |||||||||
Commitments and Contingent Liabilities | |||||||||||
Shareholders’ Equity (Deficit) | |||||||||||
Preferred Stock, no par value: Authorized, 50.0 shares, unissued | — | — | |||||||||
Common Stock, no par value: | |||||||||||
Authorized, 300.0 shares; Outstanding shares, 175.6 (175.3 in 2003) | 175.6 | 175.3 | |||||||||
Capital Surplus | 1,391.8 | 1,390.2 | |||||||||
Retained Earnings | 1,069.9 | 955.1 | |||||||||
Accumulated Other Comprehensive Income (Loss) | (2,564.5 | ) | (2,552.8 | ) | |||||||
Total Shareholders’ Equity (Deficit) | 72.8 | (32.2 | ) | ||||||||
Total Liabilities and Shareholders’ Equity | $ | 10,661.3 | $ | 9,874.9 | |||||||
F-93
Accumulated | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
Common Stock | Comprehensive | Total | |||||||||||||||||||||||||
Capital | Retained | Income | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Surplus | Earnings | (Loss) | Equity | ||||||||||||||||||||||
(Dollars in millions, except per share) | |||||||||||||||||||||||||||
Balance at December 31, 2001 as originally restated(A) | 163,165,698 | $ | 163.2 | $ | 1,245.4 | $ | 3,089.3 | $ | (1,870.1 | ) | $ | 2,627.8 | |||||||||||||||
(after deducting 32,512,970 treasury shares) | |||||||||||||||||||||||||||
Effect of restatement on periods ending on or before December 31, 2001 | (0.1 | ) | (30.9 | ) | (31.0 | ) | |||||||||||||||||||||
Balance at December 31, 2001 (as restated) | 163,165,698 | 163.2 | 1,245.4 | 3,089.2 | (1,901.0 | ) | 2,596.8 | ||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||
Net loss | (1,246.9 | ) | |||||||||||||||||||||||||
Foreign currency translation (net of tax benefit of $0) | 74.4 | ||||||||||||||||||||||||||
Minimum pension liability (net of tax of $42.4) | (1,283.6 | ) | |||||||||||||||||||||||||
Unrealized investment gain (net of tax of $0) | 7.3 | ||||||||||||||||||||||||||
Deferred derivative gain (net of tax of $0) | 60.6 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $0) | (64.5 | ) | |||||||||||||||||||||||||
Total comprehensive loss | (2,452.7 | ) | |||||||||||||||||||||||||
Cash dividends — $0.48 per share | (79.8 | ) | (79.8 | ) | |||||||||||||||||||||||
Common stock issued from treasury: | |||||||||||||||||||||||||||
Domestic pension funding | 11,300,000 | 11.3 | 126.6 | 137.9 | |||||||||||||||||||||||
Common stock issued for acquisitions | 693,740 | 0.7 | 15.2 | 15.9 | |||||||||||||||||||||||
Stock compensation plans | 147,995 | 0.1 | 2.9 | 3.0 | |||||||||||||||||||||||
Balance at December 31, 2002 (as restated) | 175,307,433 | 175.3 | 1,390.1 | 1,762.5 | (3,106.8 | ) | 221.1 | ||||||||||||||||||||
(after deducting 20,371,235 treasury shares) Comprehensive income (loss): | |||||||||||||||||||||||||||
Net loss | (807.4 | ) | |||||||||||||||||||||||||
Foreign currency translation (net of tax benefit of $0) | 393.7 | ||||||||||||||||||||||||||
Minimum pension liability (net of tax of $2.2) | 128.3 | ||||||||||||||||||||||||||
Unrealized investment gain (net of tax of $0) | 4.1 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $8.7) | 8.8 | ||||||||||||||||||||||||||
Deferred derivative gain (net of tax of $0) | 46.3 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $1.9) | (27.2 | ) | |||||||||||||||||||||||||
Total comprehensive loss | (253.4 | ) | |||||||||||||||||||||||||
Common stock issued from treasury: | |||||||||||||||||||||||||||
Stock compensation plans | 18,996 | 0.1 | 0.1 | ||||||||||||||||||||||||
Balance at December 31, 2003 (as restated) | 175,326,429 | 175.3 | 1,390.2 | 955.1 | (2,552.8 | ) | (32.2 | ) | |||||||||||||||||||
(after deducting 20,352,239 treasury shares) | |||||||||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||||||
Net income | 114.8 | ||||||||||||||||||||||||||
Foreign currency translation (net of tax benefit of $0) | 253.2 | ||||||||||||||||||||||||||
Minimum pension liability (net of tax of $34.2) | (283.8 | ) | |||||||||||||||||||||||||
Unrealized investment gain (net of tax of $0) | 13.4 | ||||||||||||||||||||||||||
Deferred derivative gain (net of tax of $0) | 29.6 | ||||||||||||||||||||||||||
Reclassification adjustment for amounts recognized in income (net of tax of $(3.5)) | (24.1 | ) | |||||||||||||||||||||||||
Total comprehensive income | 103.1 | ||||||||||||||||||||||||||
Common stock issued from treasury: | |||||||||||||||||||||||||||
Stock compensation plans | 293,210 | 0.3 | 1.6 | 1.9 | |||||||||||||||||||||||
Balance at December 31, 2004 | 175,619,639 | $ | 175.6 | $ | 1,391.8 | $ | 1,069.9 | $ | (2,564.5 | ) | $ | 72.8 | |||||||||||||||
(after deducting 20,059,029 treasury shares) |
F-94
Year Ended December 31, | |||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||
(Dollars in millions) | |||||||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||||
Net Income (Loss) | $ | 114.8 | $ | (807.4 | ) | $ | (1,246.9 | ) | |||||||||
Adjustments to reconcile net loss to cash flows from operating activities: | |||||||||||||||||
Depreciation and amortization | 291.1 | 372.2 | 289.0 | ||||||||||||||
Amortization of debt issue costs | 86.1 | 44.3 | 17.9 | ||||||||||||||
Deferred tax provision | (7.6 | ) | (1.7 | ) | 1,160.7 | ||||||||||||
Rationalizations | 31.4 | 29.2 | 2.4 | ||||||||||||||
Asset sales | (30.4 | ) | (104.5 | ) | 68.5 | ||||||||||||
Insurance settlement gain | (156.6 | ) | — | — | |||||||||||||
Minority interest and equity earnings | (6.1 | ) | (3.2 | ) | 9.5 | ||||||||||||
Net cash flows from sale of accounts receivable | — | (826.2 | ) | 55.9 | |||||||||||||
Pension contributions | (124.9 | ) | (26.8 | ) | (150.6 | ) | |||||||||||
Changes in operating assets and liabilities, net of asset acquisitions and dispositions: | |||||||||||||||||
Accounts and notes receivable | (171.7 | ) | 10.0 | (73.6 | ) | ||||||||||||
Inventories | 14.4 | 27.6 | 13.8 | ||||||||||||||
Accounts payable-trade | 59.0 | (18.0 | ) | 24.1 | |||||||||||||
Prepaid expenses and other current assets | 73.5 | 208.8 | (129.9 | ) | |||||||||||||
Deferred charges | (34.2 | ) | 8.1 | (23.1 | ) | ||||||||||||
Long term compensation and benefits | 344.5 | (106.3 | ) | 903.2 | |||||||||||||
Accumulated other comprehensive income — deferred pension gain (loss) | (283.9 | ) | 191.0 | (1,265.9 | ) | ||||||||||||
Other long term liabilities | 124.9 | 216.6 | (82.9 | ) | |||||||||||||
Other assets and liabilities | (141.5 | ) | 64.9 | 255.2 | |||||||||||||
Total adjustments | 68.0 | 86.0 | 1,074.2 | ||||||||||||||
Total cash flows from operating activities | 182.8 | (721.4 | ) | (172.7 | ) | ||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||||
Capital expenditures | (153.2 | ) | (158.9 | ) | (247.1 | ) | |||||||||||
Asset dispositions | 105.9 | 367.8 | 104.4 | ||||||||||||||
Asset acquisitions | (51.4 | ) | (71.2 | ) | (15.9 | ) | |||||||||||
Capital contributions to subsidiaries | (9.4 | ) | (30.7 | ) | (43.1 | ) | |||||||||||
Capital redemptions from subsidiaries | 5.8 | 43.6 | 280.4 | ||||||||||||||
Other transactions | 35.9 | 2.7 | (30.4 | ) | |||||||||||||
Total cash flows from investing activities | (66.4 | ) | 153.3 | 48.3 | |||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||
Short term debt incurred | 43.7 | 8.3 | — | ||||||||||||||
Short term debt paid | — | — | (3.6 | ) | |||||||||||||
Long term debt incurred | 1,675.3 | 2,379.7 | 0.5 | ||||||||||||||
Long term debt paid | (1,247.0 | ) | (1,510.2 | ) | (45.8 | ) | |||||||||||
Common stock issued | 1.8 | 0.2 | 18.7 | ||||||||||||||
Debt issuance costs | (51.4 | ) | (104.1 | ) | — | ||||||||||||
Increase in restricted cash | (119.3 | ) | (17.7 | ) | — | ||||||||||||
Dividends paid to Goodyear shareholders | — | — | (79.8 | ) | |||||||||||||
Other transactions | — | 27.9 | — | ||||||||||||||
Total cash flows from financing activities | 303.1 | 784.1 | (110.0 | ) | |||||||||||||
Net Change in Cash and Cash Equivalents | 419.5 | 216.0 | (234.4 | ) | |||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 584.7 | 368.7 | 603.1 | ||||||||||||||
Cash and Cash Equivalents at End of the Period | $ | 1,004.2 | $ | 584.7 | $ | 368.7 | |||||||||||
F-95
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Debt incurred under or supported by revolving credit agreements | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Other | 0.6 | 1,812.0 | 0.3 | 0.1 | — | |||||||||||||||
$ | 0.6 | $ | 1,812.0 | $ | 0.3 | $ | 0.1 | $ | — | |||||||||||
F-96
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Consolidated subsidiaries | $ | 155.1 | $ | 219.0 | $ | 113.1 | ||||||
50% or less-owned persons | 0.5 | 2.5 | 1.8 | |||||||||
$ | 155.6 | $ | 221.5 | $ | 114.9 | |||||||
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Sales | $ | 1,506.2 | $ | 1,307.3 | $ | 1,255.1 | ||||||
Cost of goods sold | 1,501.4 | 1,304.1 | 1,251.8 | |||||||||
Interest expense | 15.2 | 10.6 | 5.2 | |||||||||
Other (income) and expense | (386.3 | ) | (440.8 | ) | (190.0 | ) | ||||||
Loss before income taxes | $ | 375.9 | $ | 433.4 | $ | 188.1 | ||||||
F-97
Additions | ||||||||||||||||||||||||||||
(In millions) | Balance | Translation | ||||||||||||||||||||||||||
at | Charged | Charged | Acquired | Deductions | adjustment | Balance | ||||||||||||||||||||||
beginning | (credited) | (credited) | by | from | during | at end of | ||||||||||||||||||||||
Description | of period | to income | to OCI | purchase | reserves | period | period | |||||||||||||||||||||
2004 | ||||||||||||||||||||||||||||
Allowance for doubtful accounts | $ | 128.9 | $ | 50.1 | $ | — | $ | — | $ | (42.0 | )(a) | $ | 7.4 | $ | 144.4 | |||||||||||||
Valuation allowance – deferred tax assets | 2,041.9 | (41.1 | ) | 57.3 | — | — | 13.9 | 2,072.0 | ||||||||||||||||||||
2003 | ||||||||||||||||||||||||||||
Allowance for doubtful accounts | $ | 102.1 | $ | 55.1 | $ | — | $ | — | $ | (39.9 | )(a) | $ | 11.6 | $ | 128.9 | |||||||||||||
Valuation allowance – deferred tax assets | 1,811.7 | 307.9 | (66.6 | ) | — | (11.1 | ) | — | 2,041.9 | |||||||||||||||||||
2002 | ||||||||||||||||||||||||||||
Allowance for doubtful accounts | $ | 88.1 | $ | 39.1 | $ | — | $ | — | $ | (29.1 | )(a) | $ | 4.0 | $ | 102.1 | |||||||||||||
Valuation allowance – deferred tax assets | 258.4 | 1,245.1 | 352.9 | — | (44.7 | ) | — | 1,811.7 | ||||||||||||||||||||
F-98
/s/ KPMG |
F-99
2004 | 2003 | 2002 | ||||||||||||||
Notes | $ | $ | $ | |||||||||||||
Revenue from sale of goods | 3 | 763,609,409 | 737,027,575 | 769,790,943 | ||||||||||||
Revenue from rendering services | 3 | 55,127,229 | 56,569,421 | 59,595,043 | ||||||||||||
Other revenues from ordinary activities | 3 | 6,503,245 | 6,407,910 | 7,615,697 | ||||||||||||
Total revenue from ordinary activities | 825,239,883 | 800,004,906 | 837,001,683 | |||||||||||||
Cost of goods sold | 591,739,184 | 587,501,675 | 647,665,319 | |||||||||||||
Selling, Administrative and General Expenses | 218,086,061 | 219,985,037 | 225,688,548 | |||||||||||||
Significant items | 4(a) | 11,790,923 | 9,752,650 | 93,108,359 | ||||||||||||
Borrowing costs | 4(b) | 21,937,942 | 17,834,103 | 13,660,548 | ||||||||||||
Other expenses from ordinary activities | 297,389 | 287,389 | 485,062 | |||||||||||||
Expenses from ordinary activities | 843,851,499 | 835,360,854 | 980,607,836 | |||||||||||||
Loss from ordinary activities before related income tax expense | (18,611,616 | ) | (35,355,948 | ) | (143,606,153 | ) | ||||||||||
Income tax expense/(benefit) relating to ordinary activities | 6(a) | 3,869,684 | 4,207,837 | (13,579,453 | ) | |||||||||||
Loss from ordinary activities after related income tax expense | (22,481,300 | ) | (39,563,785 | ) | (130,026,700 | ) | ||||||||||
Net loss attributable to outside equity interests | 21 | — | — | (470 | ) | |||||||||||
Net Loss after income tax attributable to the consolidated entity | (22,481,300 | ) | (39,563,785 | ) | (130,027,170 | ) | ||||||||||
F-100
2004 | 2003 | 2002 | |||||||||||||||
Notes | $ | $ | $ | ||||||||||||||
CURRENT ASSETS | |||||||||||||||||
Cash assets | 7 | 56,435,875 | 15,229,939 | 37,100,672 | |||||||||||||
Receivables | 8 | 130,174,880 | 137,441,630 | 141,657,657 | |||||||||||||
Inventories | 9 | 147,411,193 | 162,032,137 | 160,741,965 | |||||||||||||
Prepayments | 10 | 3,219,753 | 3,323,269 | 2,258,575 | |||||||||||||
TOTAL CURRENT ASSETS | 337,241,701 | 318,026,975 | 341,758,869 | ||||||||||||||
NON-CURRENT ASSETS | |||||||||||||||||
Receivables | 8 | 1,651,270 | 9,546,303 | 30,384,952 | |||||||||||||
Property, plant and equipment | 12 | 197,823,676 | 218,425,028 | 202,827,093 | |||||||||||||
Intangible assets | 13 | 4,498,952 | 4,916,874 | 5,204,262 | |||||||||||||
Deferred tax assets | 6(c) | 14,516,753 | 18,231,572 | 22,441,327 | |||||||||||||
TOTAL NON-CURRENT ASSETS | 218,490,651 | 251,119,777 | 260,857,634 | ||||||||||||||
TOTAL ASSETS | 555,732,352 | 569,146,752 | 602,616,503 | ||||||||||||||
CURRENT LIABILITIES | |||||||||||||||||
Payables | 14 | 144,028,406 | 159,953,830 | 161,782,718 | |||||||||||||
Interest bearing liabilities | 15 | 188,484,663 | 171,413,834 | 142,395,212 | |||||||||||||
Current tax liabilities | 6(b) | 290,809 | 135,944 | 58,887 | |||||||||||||
Provisions | 16 | 54,318,272 | 53,365,690 | 102,837,858 | |||||||||||||
TOTAL CURRENT LIABILITIES | 387,122,150 | 384,869,298 | 407,074,675 | ||||||||||||||
NON-CURRENT LIABILITIES | |||||||||||||||||
Payables | 14 | 704,179 | 7,986,959 | 28,491,815 | |||||||||||||
Interest bearing liabilities | 15 | 125,707,508 | 111,097,444 | 61,095,014 | |||||||||||||
Provisions | 16 | 6,357,177 | 6,883,413 | 7,978,203 | |||||||||||||
TOTAL NON-CURRENT LIABILITIES | 132,768,864 | 125,967,816 | 97,565,032 | ||||||||||||||
TOTAL LIABILITIES | 519,891,014 | 510,837,114 | 504,639,707 | ||||||||||||||
PARTNERS’ EQUITY | |||||||||||||||||
Contributed equity | 18 | 317,688,138 | 317,675,138 | 317,675,138 | |||||||||||||
Reserves | 19 | 12,374,551 | 12,570,229 | 12,570,229 | |||||||||||||
Accumulated losses | 20 | (294,221,351 | ) | (271,935,729 | ) | (232,268,571 | ) | ||||||||||
TOTAL PARTNERS’ EQUITY | 35,841,338 | 58,309,638 | 97,976,796 | ||||||||||||||
Outside equity interest | 21 | — | — | — | |||||||||||||
TOTAL PARTNERS’ EQUITY | 35,841,338 | 58,309,638 | 97,976,796 | ||||||||||||||
TOTAL LIABILITIES AND PARTNERS’ EQUITY | 555,732,352 | 569,146,752 | 602,616,503 | ||||||||||||||
F-101
Outside | Total | |||||||||||||||||||||
Contributed | Equity | Accumulated | Partners’ | |||||||||||||||||||
Equity | Interest | Losses | Reserves | Equity | ||||||||||||||||||
Balance at June 30, 2001 | 317,675,137 | 485,688 | (98,587,215 | ) | 9,220,023 | 228,793,633 | ||||||||||||||||
Net loss | (130,027,170 | ) | (130,027,170 | ) | ||||||||||||||||||
Foreign currency translation | (303,980 | ) | (303,980 | ) | ||||||||||||||||||
Foreign Currency Translation Reserve — disposal | (3,645,848 | ) | 3,645,848 | |||||||||||||||||||
Asset Revaluation Reserve — disposal | (8,338 | ) | 8,338 | |||||||||||||||||||
Outside equity interest reduction | (485,688 | ) | (485,688 | ) | ||||||||||||||||||
Additional contributed equity | 1 | 1 | ||||||||||||||||||||
Balance at June 30, 2002 | 317,675,138 | — | (232,268,571 | ) | 12,570,229 | 97,976,796 | ||||||||||||||||
Net loss | (39,563,785 | ) | (39,563,785 | ) | ||||||||||||||||||
Initial adoption of AASB1028 | (103,373 | ) | (103,373 | ) | ||||||||||||||||||
Balance at June 30, 2003 | 317,675,138 | — | (271,935,729 | ) | 12,570,229 | 58,309,638 | ||||||||||||||||
Net loss | (22,481,300 | ) | (22,481,300 | ) | ||||||||||||||||||
Asset Revaluation Reserve — disposal | 195,678 | (195,678 | ) | |||||||||||||||||||
Additional contributed equity | 13,000 | 13,000 | ||||||||||||||||||||
Balance at June 30, 2004 | 317,688,138 | — | (294,221,351 | ) | 12,374,551 | 35,841,338 | ||||||||||||||||
F-102
2004 | 2003 | 2002 | |||||||||||||||
$ | $ | $ | |||||||||||||||
Inflows | Inflows | Inflows | |||||||||||||||
Notes | (Outflows) | (Outflows) | (Outflows) | ||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Cash receipts in the course of operations | 941,655,101 | 836,176,622 | 856,792,111 | ||||||||||||||
Cash payments in the course of operations | (908,776,962 | ) | (882,305,840 | ) | (870,905,731 | ) | |||||||||||
Interest received | 1,160,246 | 1,935,297 | 3,689,606 | ||||||||||||||
Borrowing costs paid | (13,589,472 | ) | (12,737,555 | ) | (13,368,875 | ) | |||||||||||
Income taxes (paid)/refunded | 6(b) | — | 79,774 | (112,184 | ) | ||||||||||||
Net cash provided by/(used in) operating activities | 30(c) | 20,448,913 | (56,851,702 | ) | (23,905,073 | ) | |||||||||||
Cash flows from investing activities | |||||||||||||||||
Proceeds on disposal of controlled entities | — | — | 1,983,805 | ||||||||||||||
Proceeds on disposal of property, plant and equipment | 5,342,999 | 4,472,613 | 2,919,839 | ||||||||||||||
Payments for businesses, (net of cash acquired) | 30(b) | — | — | (1,246,831 | ) | ||||||||||||
Payments for property, plant and equipment | (16,279,869 | ) | (48,512,695 | ) | (14,750,236 | ) | |||||||||||
Net cash used in investing activities | (10,936,870 | ) | (44,040,082 | ) | (11,093,423 | ) | |||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from partner contributions | 13,000 | — | — | ||||||||||||||
Proceeds from borrowings | 49,782,954 | 79,333,371 | 136,589,773 | ||||||||||||||
Repayment of borrowings | (18,195,000 | ) | — | (79,935,051 | ) | ||||||||||||
Dividends paid | — | — | (2,146 | ) | |||||||||||||
Net cash provided by financing activities | 31,600,954 | 79,333,371 | 56,652,576 | ||||||||||||||
Net increase/(decrease) in cash held | 41,112,997 | (21,558,413 | ) | 21,654,080 | |||||||||||||
Cash at the beginning of the financial year | 14,539,451 | 36,097,864 | 14,170,702 | ||||||||||||||
Effects of exchange rate fluctuations on the balances of cash held in foreign currencies | — | — | 273,082 | ||||||||||||||
Cash at the end of the financial year | 30(a) | 55,652,448 | 14,539,451 | 36,097,864 | |||||||||||||
F-103
Note 1. | Statement of Significant Accounting Policies |
• | Manufacture of tyres for vehicles | |
• | Wholesaling and retailing of vehicle and aircraft tyres in Australia |
(a) | Basis of Preparation |
(b) | Principles of Consolidation |
Controlled Entities |
Transactions Eliminated on Consolidation |
(c) | Revenue Recognition — Note 3 |
F-104
Note 1. | Statement of Significant Accounting Policies (Continued) |
Sale of Goods |
Rendering of Services |
Interest Revenue |
Sale of Non-Current Assets |
(d) | Goods and Services Tax |
(e) | Foreign Currency |
Transactions |
Translation of Controlled Foreign Entities |
F-105
Note 1. | Statement of Significant Accounting Policies (Continued) |
(f) | Derivatives |
Hedges |
Anticipated Transactions |
F-106
Note 1. | Statement of Significant Accounting Policies (Continued) |
Other Hedges |
(g) | Borrowing Costs |
(h) | Taxation — Note 6 |
Consolidated Entity |
Controlled Entities |
(i) | Accounting for Acquisitions |
F-107
Note 1. | Statement of Significant Accounting Policies (Continued) |
Goodwill Acquired | Write-Off Period | |
Up to $1.25m | Written off over 5 years in equal installments, but at a rate of not less than $250,000 pa | |
Over $1.25m | Written off over 20 years on a straight line basis, but at a rate of not less than $250,000 pa |
Acquisitions of Assets |
Subsequent Additional Costs |
F-108
Note 1. | Statement of Significant Accounting Policies (Continued) |
Research and Development Costs |
(j) | Use and Revisions of Accounting Estimates |
Trade Debtors |
(l) | Inventories — Note 9 |
Manufacturing Activities |
Net Realisable Value |
(m) | Investments — Note 11 |
F-109
Note 1. | Statement of Significant Accounting Policies (Continued) |
(n) | Leased Assets |
Operating Leases |
(o) | Recoverable Amount of Non-Current Assets Valued on Cost Basis |
(p) | Depreciation and Amortisation |
Complex Assets |
Useful Lives |
2004 | 2003 | 2002 | ||||||||||
Freehold buildings | 2.50% | 2.50% | 2.50% | |||||||||
Leasehold buildings and improvements | 2.5%-40% | 2.5%-40% | 2.5%-40% | |||||||||
Plant and equipment | 6.7%-33.33% | 6.7%-33.33% | 6.7%-33.33% | |||||||||
Leased plant and equipment | 10%-20% | 10%-20% | 10%-20% |
F-110
Note 1. | Statement of Significant Accounting Policies (Continued) |
(q) | Payables — Note 14 |
(r) | Interest Bearing Liabilities — Note 15 |
(s) | Employee Benefits |
Wages, Salaries, Annual Leave, Sick Leave and Non-Monetary Benefits |
Long Service Leave |
Superannuation Plan |
(t) | Provisions |
F-111
Note 1. | Statement of Significant Accounting Policies (Continued) |
Restructuring and Rationalisation |
Surplus Leased Premises |
(u) | Advertising |
(v) | Environmental Remediation |
Note 2. | Change in Accounting Policy |
Employee Benefits |
• | $103,373 increase in provision for employee benefits | |
• | $103,373 decrease in opening retained profits |
F-112
Note 3. | Revenue from Ordinary Activities |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Sale of goods revenue from ordinary activities | 763,609,409 | 737,027,575 | 769,790,943 | ||||||||||
Rendering of services revenue from ordinary activities | 55,127,229 | 56,569,421 | 59,595,043 | ||||||||||
Other revenue from ordinary activities | |||||||||||||
Interest: | |||||||||||||
Associated entities | 27,693 | 814,052 | 1,828,580 | ||||||||||
Other parties | 1,132,553 | 1,121,245 | 1,861,026 | ||||||||||
Revenues from outside ordinary activities | |||||||||||||
Gross proceeds from sale of non-current assets | 5,342,999 | 4,472,613 | 3,926,091 | ||||||||||
Total other revenue | 6,503,245 | 6,407,910 | 7,615,697 | ||||||||||
Total revenue from ordinary activities | 825,239,883 | 800,004,906 | 837,001,683 | ||||||||||
Note 4. | Profit from Ordinary Activities Before Income Tax Expense |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Closure of Footscray & Thomastown tyre factories | 9,458,682 | 3,927,911 | 94,900,000 | |||||||||
Closure of BA Hamill | — | (1,769,227 | ) | 2,900,000 | ||||||||
Retail store restructure programme | — | 928,524 | 1,924,813 | |||||||||
Reverse Radial truck factory plant & equipment storage and removal provision | (1,967,197 | ) | — | — | ||||||||
Closure of radial truck tyre factory | — | — | (3,516,017 | ) | ||||||||
Norhead dispute settlement | — | 2,565,442 | 1,500,000 | |||||||||
Retreading plant closures | 513,743 | — | — | |||||||||
Somerton factory plant & equipment stocktake loss | 4,036,631 | — | — | |||||||||
Write down of Thomastown/Footscray properties to recoverable amount | 2,219,064 | — | — | |||||||||
Activity alignment | — | — | (4,600,437 | ) | ||||||||
Superannuation shortfall deficit/(gain) accrual | (2,470,000 | ) | 4,100,000 | — | ||||||||
11,790,923 | 9,752,650 | 93,108,359 | ||||||||||
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Cost of goods sold | 591,739,184 | 587,501,675 | 647,665,319 | |||||||||
Write-down of Property, Plant & Equipment to recoverable amount | 2,219,064 | — | — |
F-113
Note 4. | Profit from Ordinary Activities Before Income Tax Expense (Continued) |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Depreciation of: | |||||||||||||
Buildings | 251,849 | 175,527 | 104,319 | ||||||||||
Plant and equipment | 21,894,326 | 19,469,383 | 26,628,428 | ||||||||||
22,146,175 | 19,644,910 | 26,732,747 | |||||||||||
Amortisation of: | |||||||||||||
Leasehold land and buildings | 1,158,908 | 1,076,008 | 1,315,525 | ||||||||||
Goodwill | 297,389 | 287,389 | 485,062 | ||||||||||
1,456,297 | 1,363,397 | 1,800,587 | |||||||||||
Total depreciation and amortisation | 23,602,472 | 21,008,307 | 28,533,334 | ||||||||||
Borrowing costs | |||||||||||||
Associated entities | 8,904,264 | 5,816,482 | 3,164,641 | ||||||||||
Bank loans and overdrafts | 13,033,678 | 12,017,621 | 10,495,907 | ||||||||||
Total borrowing costs | 21,937,942 | 17,834,103 | 13,660,548 | ||||||||||
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Research and development expenditure | |||||||||||||
Expensed as incurred | 1,573,420 | 2,849,443 | 1,938,620 | ||||||||||
Net bad and doubtful debts expense including movements in provision for doubtful debts | 624,867 | 619,922 | 1,487,774 | ||||||||||
Net expense for movements in provision for: | |||||||||||||
Employee entitlements | 23,330,487 | 18,361,047 | 83,347,032 | ||||||||||
Rationalisation and restructuring costs | 2,162,833 | 2,565,442 | 91,183,546 | ||||||||||
Rebates and allowances | 27,265,039 | 19,542,569 | 19,979,619 | ||||||||||
Net foreign exchange (gain)/loss: | |||||||||||||
Borrowings | 165,022 | (8,205 | ) | (13,907 | ) | ||||||||
Net loss on disposal/writedown of non-current assets: | |||||||||||||
Property, plant and equipment | 6,134,607 | 7,721,228 | 13,327,002 | ||||||||||
Investments | — | — | 625,815 | ||||||||||
Operating lease rental expense | |||||||||||||
Minimum lease payments | 30,522,660 | 30,138,477 | 31,589,141 |
F-114
Note 5. | Auditors’ Remuneration |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Audit services | |||||||||||||
Auditors of the company — KPMG Australia | 312,437 | 330,000 | 388,622 | ||||||||||
For other services | |||||||||||||
Auditors of the company — KPMG Australia | 3,901 | — | 2,550 |
Note 6. | Taxation |
(a) | Income Tax Expense |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Prima facie income tax expense/(benefit) calculated at 30% (2003: 30%) (2002: 30%) on the profit/(loss) from ordinary activities | (5,583,485 | ) | (10,606,784 | ) | (43,081,846 | ) | |||||||
Increase in income tax expense due to: | |||||||||||||
Depreciation on buildings | 68,953 | 65,465 | 61,316 | ||||||||||
Amortisation of goodwill | 89,217 | 86,217 | 145,519 | ||||||||||
Thin Capitalisation | 1,033,514 | 401,549 | — | ||||||||||
Entertainment | 322,092 | 213,606 | 196,069 | ||||||||||
Sundry items | 412,945 | 84,401 | 219,335 | ||||||||||
Decrease in income tax expense due to: | |||||||||||||
Effects of lower/ higher rates of tax on overseas income | — | — | 157 | ||||||||||
Tax at standard rate on consolidated entity profits attributed to partners | (7,679,125 | ) | (13,350,470 | ) | (29,039,039 | ) | |||||||
Income tax expense/(benefit) on operating profit/(loss) before individually significant income tax items | 4,022,361 | 3,594,924 | (13,420,725 | ) | |||||||||
Add: Income tax under/(over) provided in prior year | (152,677 | ) | 612,913 | (158,728 | ) | ||||||||
Income tax expense/(benefit) attributable to operating profit | 3,869,684 | 4,207,837 | (13,579,453 | ) | |||||||||
Income tax expense/(benefit) attributable to operating profit is made up of: | |||||||||||||
Current income tax provision | 4,633,950 | 2,057,845 | (11,560,219 | ) | |||||||||
Under/(over) provision in prior year | (152,677 | ) | 612,913 | (158,728 | ) | ||||||||
Future income tax benefit | (611,589 | ) | 1,537,079 | (1,860,506 | ) | ||||||||
3,869,684 | 4,207,837 | (13,579,453 | ) | ||||||||||
F-115
Note 6. | Taxation (Continued) |
(b) | Current Tax Liabilities |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Provision for current income tax | ||||||||||||
Movements during the year: | ||||||||||||
Balance at the beginning of year | 135,944 | 58,887 | 167,096 | |||||||||
Income tax (paid)/received | — | 79,774 | (112,184 | ) | ||||||||
Under/(over) provision in prior year | 539 | 635,755 | (72,516 | ) | ||||||||
Current year’s income tax expense/(benefit) on operating loss | 4,633,949 | 2,057,845 | (11,560,219 | ) | ||||||||
Disposal of controlled entity | — | — | 78,048 | |||||||||
Tax loss transferred to FITB | (4,479,623 | ) | (2,696,317 | ) | 11,558,662 | |||||||
290,809 | 135,944 | 58,887 | ||||||||||
(c) | Deferred Tax Assets |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Accumulated non-allowable provisions | 5,761,608 | 4,979,376 | 6,499,991 | |||||||||
Accumulated tax losses | 8,755,145 | 13,252,196 | 15,941,336 | |||||||||
14,516,753 | 18,231,572 | 22,441,327 | ||||||||||
Trading stock adjustments | 166,306 | 36,887 | 30,409 | |||||||||
Depreciation on property, plant and equipment | (1,586,941 | ) | (2,018,708 | ) | (2,132,392 | ) | ||||||
Provisions | 6,892,310 | 6,931,368 | 8,533,692 | |||||||||
Accruals | 237,699 | 160,408 | 251,990 | |||||||||
Accumulated tax losses | 8,755,145 | 13,252,196 | 15,941,336 | |||||||||
Other | 52,234 | (130,579 | ) | (183,708 | ) | |||||||
14,516,753 | 18,231,572 | 22,441,327 | ||||||||||
F-116
Note 6. | Taxation (Continued) |
Note 7. | Cash Assets |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Cash | 56,435,875 | 5,629,939 | 8,400,672 | |||||||||
Bank short term deposits, maturing daily and paying interest at a weighted average interest rate of 4.7% (2003: 4.5%) (2002: 4.7%) | — | 9,600,000 | 28,700,000 | |||||||||
56,435,875 | 15,229,939 | 37,100,672 | ||||||||||
Note 8. | Receivables |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Current | ||||||||||||
Gross debtors | 127,149,457 | 132,004,740 | 138,762,403 | |||||||||
Less: Provision for doubtful trade debtors | (1,730,468 | ) | (2,655,040 | ) | (3,050,317 | ) | ||||||
125,418,989 | 129,349,700 | 135,712,086 | ||||||||||
Other debtors | 4,755,891 | 8,091,930 | 5,945,571 | |||||||||
130,174,880 | 137,441,630 | 141,657,657 | ||||||||||
Non-current | ||||||||||||
Other debtors | 1,651,270 | 9,546,303 | 30,384,952 | |||||||||
131,826,150 | 146,987,933 | 172,042,609 | ||||||||||
F-117
Note 9. | Inventories |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Current | ||||||||||||
Raw materials and stores at cost | 8,406,434 | 11,548,888 | 10,302,933 | |||||||||
Less: Provision for stock obsolescence | (56,185 | ) | (462,697 | ) | (490,527 | ) | ||||||
Raw materials and stores at net realisable value | 8,350,249 | 11,086,191 | 9,812,406 | |||||||||
Work in progress at cost | 5,024,033 | 7,779,196 | 4,950,537 | |||||||||
Less: Provision for stock obsolescence | — | — | (70,301 | ) | ||||||||
Work in progress at net realisable value | 5,024,033 | 7,779,196 | 4,880,236 | |||||||||
Finished goods at cost | 132,113,591 | 138,819,804 | 142,658,001 | |||||||||
Less: Provision for stock obsolescence | (853,652 | ) | (889,531 | ) | (1,816,842 | ) | ||||||
Finished goods at net realisable value | 131,259,939 | 137,930,273 | 140,841,159 | |||||||||
Other stocks at cost | 3,215,229 | 6,519,272 | 6,390,959 | |||||||||
Less: Provision for stock obsolescence | (438,257 | ) | (1,282,795 | ) | (1,182,795 | ) | ||||||
Other stocks at net realisable value | 2,776,972 | 5,236,477 | 5,208,164 | |||||||||
147,411,193 | 162,032,137 | 160,741,965 | ||||||||||
Note 10. | Other Current Assets |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Prepayments | 3,219,753 | 3,323,269 | 2,258,575 | |||||||||
Note 11. | Other Financial Assets |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Non-current | ||||||||||||
Investments in controlled entities | ||||||||||||
Unlisted shares at cost | — | — | — | |||||||||
— | — | — | ||||||||||
F-118
Note 12. | Property, Plant and Equipment |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Freehold land | |||||||||||||
At cost | 2,508,947 | 3,350,000 | 3,350,000 | ||||||||||
2,508,947 | 3,350,000 | 3,350,000 | |||||||||||
Freehold buildings | |||||||||||||
At cost | 10,769,845 | 11,886,348 | 11,841,455 | ||||||||||
Accumulated depreciation | (1,275,597 | ) | (1,184,367 | ) | (1,008,840 | ) | |||||||
9,494,248 | 10,701,981 | 10,832,615 | |||||||||||
Leasehold land and buildings | |||||||||||||
At cost | 34,438,146 | 57,165,525 | 57,096,991 | ||||||||||
Accumulated amortisation | (6,779,839 | ) | (7,366,006 | ) | (6,667,761 | ) | |||||||
27,658,307 | 49,799,519 | 50,429,230 | |||||||||||
Held for sale at recoverable amount | 19,104,877 | — | — | ||||||||||
46,763,184 | 49,799,519 | 50,429,230 | |||||||||||
Plant and equipment | |||||||||||||
At cost | 346,754,924 | 357,168,327 | 369,419,397 | ||||||||||
Accumulated depreciation | (211,578,026 | ) | (227,312,706 | ) | (242,149,279 | ) | |||||||
135,176,898 | 129,855,621 | 127,270,118 | |||||||||||
Held for sale at recoverable amount | 145,123 | — | — | ||||||||||
135,322,021 | 129,855,621 | 127,270,118 | |||||||||||
Buildings and plant under construction | |||||||||||||
At cost | 3,735,276 | 24,717,907 | 10,945,130 | ||||||||||
Total property, plant and equipment net book value | 197,823,676 | 218,425,028 | 202,827,093 | ||||||||||
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Carrying amount at the beginning of year | 3,350,000 | 3,350,000 | 3,350,000 | |||||||||
Disposals | (841,053 | ) | — | — | ||||||||
Carrying amount at the end of year | 2,508,947 | 3,350,000 | 3,350,000 | |||||||||
F-119
Note 12. | Property, Plant and Equipment (Continued) |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Buildings | ||||||||||||
Carrying amount at the beginning of year | 10,701,981 | 10,832,615 | 11,539,044 | |||||||||
Currency conversion | — | — | (101,481 | ) | ||||||||
Additions | — | — | 11,706 | |||||||||
Transfer from capital works in progress | 12,543 | 44,893 | 30,818 | |||||||||
Disposal of businesses/subsidiary (net) | — | — | (543,153 | ) | ||||||||
Disposals | (968,427 | ) | — | — | ||||||||
Depreciation | (251,849 | ) | (175,527 | ) | (104,319 | ) | ||||||
Carrying amount at the end of year | 9,494,248 | 10,701,981 | 10,832,615 | |||||||||
Leasehold land and buildings | ||||||||||||
Carrying amount at the beginning of year | 49,799,519 | 50,429,230 | 51,725,245 | |||||||||
Transfer from capital works in progress | 344,534 | 458,306 | 39,515 | |||||||||
Disposals | (2,221,960 | ) | (12,009 | ) | (20,005 | ) | ||||||
Depreciation | (1,158,909 | ) | (1,076,008 | ) | (1,315,525 | ) | ||||||
Carrying amount at the end of year | 46,763,184 | 49,799,519 | 50,429,230 | |||||||||
Plant and equipment | ||||||||||||
Carrying amount at the beginning of year | 129,855,621 | 127,270,118 | 151,296,771 | |||||||||
Currency conversion | — | — | (31,013 | ) | ||||||||
Acquired businesses/ subsidiaries | — | — | 458,033 | |||||||||
Additions | 189,115 | 11,306 | 188,971 | |||||||||
Transfer from capital works in progress | 36,562,647 | 34,225,413 | 15,784,417 | |||||||||
Disposals | (9,391,035 | ) | (12,181,833 | ) | (13,639,725 | ) | ||||||
Disposal of businesses/subsidiary (net) | — | — | (158,909 | ) | ||||||||
Depreciation | (21,894,327 | ) | (19,469,383 | ) | (26,628,427 | ) | ||||||
Carrying amount at the end of year | 135,322,021 | 129,855,621 | 127,270,118 | |||||||||
Capital works in progress | ||||||||||||
Carrying amount at the beginning of year | 24,717,907 | 10,945,130 | 14,837,434 | |||||||||
Acquired businesses/ subsidiaries | — | — | 458,033 | |||||||||
Additions | 16,090,754 | 48,501,389 | 14,549,558 | |||||||||
Transfer to property, plant and equipment | (36,919,723 | ) | (34,728,612 | ) | (16,312,783 | ) | ||||||
Other disposals | (153,662 | ) | — | (2,587,112 | ) | |||||||
Carrying amount at the end of year | 3,735,276 | 24,717,907 | 10,945,130 | |||||||||
F-120
Note 13. | Intangibles |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Goodwill — at cost | 5,847,772 | 7,268,104 | 7,768,104 | |||||||||
Accumulated amortisation | (1,348,820 | ) | (2,351,230 | ) | (2,563,842 | ) | ||||||
4,498,952 | 4,916,874 | 5,204,262 | ||||||||||
Note 14. | Payables |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Current | |||||||||||||
Trade creditors | 108,050,790 | 115,985,030 | 117,076,110 | ||||||||||
Accrued liabilities | 35,797,893 | 41,841,676 | 43,903,827 | ||||||||||
Other creditors | 179,723 | 2,127,124 | 802,781 | ||||||||||
Total Current | 144,028,406 | 159,953,830 | 161,782,718 | ||||||||||
Non-current | |||||||||||||
Trade creditors | 704,179 | 752,291 | 871,199 | ||||||||||
Other creditors | — | 7,234,668 | 27,620,616 | ||||||||||
Total Non Current | 704,179 | 7,986,959 | 28,491,815 | ||||||||||
Total Payables | 144,732,585 | 167,940,789 | 190,274,533 | ||||||||||
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Current | |||||||||||||
Bank overdrafts — secured | 783,427 | — | — | ||||||||||
Bank overdrafts — unsecured | — | 690,488 | 1,002,808 | ||||||||||
Bank loans — secured | 77,638,119 | — | — | ||||||||||
Bank loans — unsecured | — | 95,833,119 | 65,897,645 | ||||||||||
Goodyear Australia Pty Ltd loans | 35,033,668 | — | — | ||||||||||
Securitisation | 75,029,449 | 74,890,227 | 75,494,759 | ||||||||||
Total Current | 188,484,663 | 171,413,834 | 142,395,212 | ||||||||||
Non-current | |||||||||||||
Partner Loan — Pacific Dunlop Tyres Pty Ltd | 62,853,754 | 55,548,722 | 30,547,507 | ||||||||||
Partner Loan — Goodyear Tyres Pty Ltd | 62,853,754 | 55,548,722 | 30,547,507 | ||||||||||
Total Non Current | 125,707,508 | 111,097,444 | 61,095,014 | ||||||||||
Total Interest bearing liabilities | 314,192,171 | 282,511,278 | 203,490,226 | ||||||||||
F-121
Note 15. | Interest Bearing Liabilities (Continued) |
• | PDL exercising the put option (no earlier than August 2005); | |
• | the tenth anniversary of the Agreements (October 2011); and | |
• | the dissolution of the partnership (not expected.) |
F-122
Note 15. | Interest Bearing Liabilities (Continued) |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Total facilities available: | ||||||||||||
Bank overdrafts | 2,000,000 | 6,500,000 | 6,500,000 | |||||||||
Bank loans | 71,650,000 | 90,000,000 | 105,500,000 | |||||||||
Trade bills | 6,000,000 | 6,000,000 | 6,000,000 | |||||||||
79,650,000 | 102,500,000 | 118,000,000 | ||||||||||
Facilities utilised at balance date: | ||||||||||||
Bank overdrafts | 743,773 | 574,845 | 1,012,585 | |||||||||
Bank loans | 71,650,000 | 90,000,000 | 63,500,000 | |||||||||
Trade bills | 4,859,813 | 5,589,308 | 2,247,952 | |||||||||
77,253,586 | 96,164,153 | 66,760,537 | ||||||||||
Facilities not utilised at balance date: | ||||||||||||
Bank overdrafts | 1,256,227 | 5,925,155 | 5,487,415 | |||||||||
Bank loans | — | — | 42,000,000 | |||||||||
Trade bills | 1,140,187 | 410,692 | 3,752,048 | |||||||||
2,396,414 | 6,335,847 | 51,239,463 | ||||||||||
F-123
Note 16. | Provisions |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Current | ||||||||||||
Employee entitlements | 33,143,515 | 30,803,805 | 35,447,716 | |||||||||
Rationalisation and restructuring | 13,995,281 | 16,981,066 | 60,411,626 | |||||||||
Rebates | 7,179,476 | 5,580,819 | 6,978,516 | |||||||||
54,318,272 | 53,365,690 | 102,837,858 | ||||||||||
Non-current | ||||||||||||
Employee entitlements | 6,357,177 | 6,883,413 | 7,978,203 | |||||||||
6,357,177 | 6,883,413 | 7,978,203 | ||||||||||
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Carrying amount at beginning of year | 16,981,066 | 60,411,626 | 14,084,483 | |||||||||
Provisions made during the year | 2,162,833 | 2,565,442 | 91,183,546 | |||||||||
Provision utilised by loss on disposal/scrappings of assets | — | (8,475,000 | ) | (13,100,000 | ) | |||||||
Payments made during the period | (5,148,618 | ) | (37,521,002 | ) | (31,756,403 | ) | ||||||
Carrying amount at end of year | 13,995,281 | 16,981,066 | 60,411,626 | |||||||||
F-124
Note 16. | Provisions (Continued) |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Rebates | ||||||||||||
Carrying amount at beginning of year | 5,580,819 | 6,978,516 | 6,236,155 | |||||||||
Provisions made during the year | 27,265,039 | 19,542,569 | 19,979,619 | |||||||||
Payments made during the period | (25,666,382 | ) | (20,940,266 | ) | (19,237,258 | ) | ||||||
Carrying amount at end of year | 7,179,476 | 5,580,819 | 6,978,516 | |||||||||
Number of employees | 3,063 | 3,133 | 3,730 |
F-125
Note 17. | Amounts Payable/ Receivable in Foreign Currencies |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
United States dollars | ||||||||||||
Amounts payable: | ||||||||||||
Current | 779,816 | 872,599 | 1,382,011 | |||||||||
Japanese Yen | ||||||||||||
Amounts payable: | ||||||||||||
Current | — | — | 1,432,379 | |||||||||
Euro dollar | ||||||||||||
Amounts payable: | ||||||||||||
Current | 764,127 | 435,439 | 195,889 | |||||||||
Total | 1,543,943 | 1,308,038 | 3,010,279 | |||||||||
Note 18. | Contributed Equity |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Goodyear Tyres Pty Ltd | ||||||||||||
Contributed equity at the beginning of year | 158,837,569 | 158,837,569 | 158,837,569 | |||||||||
Additional contributed equity | 13,000 | — | — | |||||||||
Contributed equity at the end of year | 158,850,569 | 158,837,569 | 158,837,569 | |||||||||
Pacific Dunlop Tyres Pty Ltd | ||||||||||||
Contributed equity at the beginning of year | 158,837,569 | 158,837,569 | 158,837,569 | |||||||||
Contributed equity at the end of year | 158,837,569 | 158,837,569 | 158,837,569 | |||||||||
317,688,138 | 317,675,138 | 317,675,138 | ||||||||||
F-126
Note 19. | Reserves |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Asset revaluation | 12,374,551 | 12,570,229 | 12,570,229 | |||||||||
12,374,551 | 12,570,229 | 12,570,229 | ||||||||||
Movements during the year | ||||||||||||
Asset revaluation reserve | ||||||||||||
Balance at the beginning of year | 12,570,229 | 12,570,229 | 12,561,891 | |||||||||
Transferred to retained profits | (195,678 | ) | — | 8,338 | ||||||||
Balance at the end of year | 12,374,551 | 12,570,229 | 12,570,229 | |||||||||
Foreign currency translation reserve | ||||||||||||
Balance at the beginning of year | — | — | (3,341,868 | ) | ||||||||
Translation adjustment on assets and liabilities held in foreign currencies | — | — | (303,980 | ) | ||||||||
Transferred to retained profits | — | — | 3,645,848 | |||||||||
Balance at the end of year | — | — | — | |||||||||
F-127
Note 20. | Accumulated Losses |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Goodyear Tyres Pty Ltd | ||||||||||||
Accumulated losses at the beginning of year | (136,469,457 | ) | (116,635,878 | ) | (49,795,200 | ) | ||||||
Net loss attributable to partners | (11,240,650 | ) | (19,781,893 | ) | (65,013,585 | ) | ||||||
Amounts transferred from reserves | 97,839 | — | (1,827,093 | ) | ||||||||
Net effect of initial adoption of Revised AASB 1028 “Employee Benefits” | — | (51,686 | ) | — | ||||||||
Accumulated losses at the end of year | (147,612,268 | ) | (136,469,457 | ) | (116,635,878 | ) | ||||||
Pacific Dunlop Tyres Pty Ltd | ||||||||||||
Accumulated losses at the beginning of year | (135,466,272 | ) | (115,632,693 | ) | (48,792,015 | ) | ||||||
Net loss attributable to partners | (11,240,650 | ) | (19,781,892 | ) | (65,013,585 | ) | ||||||
Amounts transferred from reserves | 97,839 | — | (1,827,093 | ) | ||||||||
Net effect of initial adoption of Revised AASB 1028 “Employee Benefits” | — | (51,687 | ) | — | ||||||||
Accumulated losses at the end of year | (146,609,083 | ) | (135,466,272 | ) | (115,632,693 | ) | ||||||
(294,221,351 | ) | (271,935,729 | ) | (232,268,571 | ) | |||||||
Note 21. | Outside Equity Interest |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Outside equity interest in controlled entities comprise: | ||||||||||||
Interest in retained profits at the beginning of the financial year after adjusting for outside equity interests in entities | — | — | 1,034,550 | |||||||||
Interest in operating profit after income tax | — | — | 470 | |||||||||
Interest in dividends provided for or paid | — | — | (2,146 | ) | ||||||||
Disposal of Interest in Retained Profits | — | — | (1,032,874 | ) | ||||||||
Interest in retained profits at the end of the financial year | — | — | — | |||||||||
Interest in share capital | — | — | — | |||||||||
Interest in reserves | — | — | — | |||||||||
Total outside equity interest | — | — | — | |||||||||
Note 22. | Additional Financial Instruments Disclosure |
F-128
Note 22. | Additional Financial Instruments Disclosure (continued) |
Fixed interest maturity in: | ||||||||||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||||||||
average | More | Non- | ||||||||||||||||||||||||||||||
interest | Floating | 1 year or | Over 1 year | than | interest | |||||||||||||||||||||||||||
Note | rate | interest rate | less | to 5 years | 5 years | bearing | Total | |||||||||||||||||||||||||
2004 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
Cash | 7 | 4.74 | % | 56,343,803 | 92,072 | 56,435,875 | ||||||||||||||||||||||||||
Receivables | 8 | — | 131,826,150 | 131,826,150 | ||||||||||||||||||||||||||||
56,343,803 | 131,918,222 | 188,262,025 | ||||||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
Bank overdrafts and loans | 15 | 8.65 | % | 73,561,733 | 73,561,733 | |||||||||||||||||||||||||||
Securitisation | 15 | 5.60 | % | 75,029,449 | 75,029,449 | |||||||||||||||||||||||||||
Partner Loans | 15 | 6.31 | % | 160,741,176 | 160,741,176 | |||||||||||||||||||||||||||
Trade bills | 15 | 8.15 | % | 4,859,813 | 4,859,813 | |||||||||||||||||||||||||||
Accounts payable | 14 | 144,732,585 | 144,732,585 | |||||||||||||||||||||||||||||
Employee entitlements | 16 | 0.00 | % | 33,143,515 | 3,378,237 | 2,978,940 | 39,500,692 | |||||||||||||||||||||||||
314,192,171 | 33,143,515 | 3,378,237 | 2,978,940 | 144,732,585 | 498,425,448 | |||||||||||||||||||||||||||
Interest rate swaps | (20,000,000 | ) | 20,000,000 | |||||||||||||||||||||||||||||
2003 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
Cash | 7 | 4.51 | % | 15,133,917 | 96,022 | 15,229,939 | ||||||||||||||||||||||||||
Receivables | 8 | — | 146,987,933 | 146,987,933 | ||||||||||||||||||||||||||||
15,133,917 | 147,083,955 | 162,217,872 | ||||||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
Bank overdrafts and loans | 15 | 8.27 | % | 90,934,299 | 90,934,299 | |||||||||||||||||||||||||||
Securitisation | 15 | 4.88 | % | 74,890,227 | 74,890,227 | |||||||||||||||||||||||||||
Partner Loans | 15 | 5.35 | % | 111,097,444 | 111,097,444 | |||||||||||||||||||||||||||
Trade bills | 15 | 5.66 | % | 5,589,308 | 5,589,308 | |||||||||||||||||||||||||||
Accounts payable | 14 | 167,940,789 | 167,940,789 | |||||||||||||||||||||||||||||
Employee entitlements | 16 | 1.30 | % | 30,803,805 | 3,177,964 | 3,705,449 | 37,687,218 | |||||||||||||||||||||||||
282,511,278 | 30,803,805 | 3,177,964 | 3,705,449 | 167,940,789 | 488,139,285 | |||||||||||||||||||||||||||
Interest rate swaps | (50,000,000 | ) | 30,000,000 | 20,000,000 | ||||||||||||||||||||||||||||
F-129
Note 22. | Additional Financial Instruments Disclosure (continued) |
Fixed interest maturity in: | ||||||||||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||||||||
average | More | Non- | ||||||||||||||||||||||||||||||
interest | Floating | 1 year or | Over 1 year | than | interest | |||||||||||||||||||||||||||
Note | rate | interest rate | less | to 5 years | 5 years | bearing | Total | |||||||||||||||||||||||||
2002 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
Cash | 7 | 4.70 | % | 37,092,372 | 8,300 | 37,100,672 | ||||||||||||||||||||||||||
Receivables | 8 | — | 172,042,609 | 172,042,609 | ||||||||||||||||||||||||||||
37,092,372 | — | — | — | 172,050,909 | 209,143,281 | |||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
Bank overdrafts and loans | 15 | 6.59 | % | 64,652,501 | 64,652,501 | |||||||||||||||||||||||||||
Securitisation | 15 | 5.06 | % | 75,494,759 | 75,494,759 | |||||||||||||||||||||||||||
Partner Loans | 15 | 5.46 | % | 61,095,014 | 61,095,014 | |||||||||||||||||||||||||||
Trade bills | 15 | 5.32 | % | 2,247,952 | 2,247,952 | |||||||||||||||||||||||||||
Accounts payable | 14 | 190,274,533 | 190,274,533 | |||||||||||||||||||||||||||||
Employee entitlements | 16 | 2.00 | % | 35,447,716 | 4,278,361 | 3,699,842 | 43,425,919 | |||||||||||||||||||||||||
203,490,226 | 35,447,716 | 4,278,361 | 3,699,842 | 190,274,533 | 437,190,678 | |||||||||||||||||||||||||||
Interest rate swaps | (50,000,000 | ) | 20,000,000 | 30,000,000 | ||||||||||||||||||||||||||||
(b) | Foreign exchange risk |
F-130
Note 22. | Additional Financial Instruments Disclosure (continued) |
Average rate | ||||||||||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||||||||||
2004 | 2003 | 2002 | $ | $ | $ | |||||||||||||||||||
Buy US Dollars | ||||||||||||||||||||||||
Not later than one year | 0.7029 | 0.63 | 0.56 | 17,860,867 | 26,558,702 | 43,978 | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
17,860,867 | 26,558,702 | 43,978 | ||||||||||||||||||||||
Sell US Dollars | ||||||||||||||||||||||||
Not later than one year | 0.7155 | 0.64 | — | 1,623,900 | 814,196 | — | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
1,623,900 | 814,196 | — | ||||||||||||||||||||||
Buy EURO dollars | ||||||||||||||||||||||||
Not later than one year | 0.59 | 0.55 | 0.60 | 5,693,338 | 9,937,775 | 1,096,037 | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
5,693,338 | 9,937,775 | 1,096,037 | ||||||||||||||||||||||
Sell EURO dollars | ||||||||||||||||||||||||
Not later than one year | 0.61 | 0.55 | — | 18,245 | 179,783 | — | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
18,245 | 179,783 | — | ||||||||||||||||||||||
Buy Japanese yen | ||||||||||||||||||||||||
Not later than one year | 79.33 | 70.57 | 67.3 | 1,560,868 | 2,101,635 | 223,131 | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
1,560,868 | 2,101,635 | 223,131 | ||||||||||||||||||||||
Sell Japanese yen | ||||||||||||||||||||||||
Not later than one year | 76.45 | 73.94 | — | 133,059 | 56,934 | — | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
133,059 | 56,934 | — | ||||||||||||||||||||||
Buy English pound | ||||||||||||||||||||||||
Not later than one year | — | 0.39 | 0.37 | — | 77,119 | 71,779 | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | |||||||||||||||||||||
Later than two year but not later than three years | — | — | — | |||||||||||||||||||||
— | 77,119 | 71,779 | ||||||||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||||||||||
Gains | Losses | Gains | Losses | Gains | Losses | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Not later than one year | 778,676 | 80,710 | 44,231 | 2,021,565 | 54,818 | — | ||||||||||||||||||
Later than one year but not later than two years | — | — | — | — | — | — | ||||||||||||||||||
Later than two year but not later than three years | — | — | — | — | — | — |
F-131
Note 22. | Additional Financial Instruments Disclosure (continued) |
Recognised Financial Instruments |
Valuation approach |
F-132
Note 22. | Additional Financial Instruments Disclosure (continued) |
2004 | 2003 | 2002 | ||||||||||||||||||||||
Carrying | Net fair | Carrying | Net fair | Carrying | Net fair | |||||||||||||||||||
amount | value | amount | value | amount | value | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Financial assets | ||||||||||||||||||||||||
Cash assets | 56,435,875 | 56,435,875 | 15,229,939 | 15,229,939 | 37,100,672 | 37,100,672 | ||||||||||||||||||
Receivables | 131,826,150 | 131,826,150 | 146,987,933 | 146,987,933 | 172,042,609 | 172,042,609 | ||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||
Payables | 144,732,585 | 144,732,585 | 167,940,789 | 167,940,789 | 190,274,533 | 190,274,533 | ||||||||||||||||||
Bank overdrafts and loans | 73,561,733 | 73,561,733 | 90,934,299 | 90,934,299 | 64,652,501 | 64,652,501 | ||||||||||||||||||
Securitisation | 75,029,449 | 75,029,449 | 74,890,227 | 74,890,227 | 75,494,759 | 75,494,759 | ||||||||||||||||||
Partner Loans | 160,741,176 | 160,741,176 | 111,097,444 | 111,097,444 | 61,095,014 | 61,095,014 | ||||||||||||||||||
Trade bills | 4,859,813 | 4,859,813 | 5,589,308 | 5,589,308 | 2,247,952 | 2,247,952 | ||||||||||||||||||
Employee entitlements | 39,572,002 | 39,572,002 | 37,687,218 | 37,687,218 | 43,425,919 | 43,425,919 |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Forward foreign exchange contracts gains/(losses) | 697,966 | (1,977,334 | ) | 54,818 |
F-133
Note 23. | Commitments |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Capital expenditure commitments | |||||||||||||
Plant | |||||||||||||
Contracted but not provided for and payable within one year | 951,935 | 3,311,414 | 4,505,841 | ||||||||||
951,935 | 3,311,414 | 4,505,841 | |||||||||||
Lease commitments | |||||||||||||
Operating lease expense commitments | |||||||||||||
Future operating lease commitments not provided for in the financial statements and payable: | |||||||||||||
Within one year | 29,992,274 | 23,865,262 | 25,799,409 | ||||||||||
One year or later and no later than five years | 60,779,467 | 47,292,290 | 48,518,490 | ||||||||||
Later than 5 years | 6,720,240 | 15,992,314 | 10,596,215 | ||||||||||
97,491,981 | 87,149,866 | 84,914,114 | |||||||||||
Note 24. | Contingent Liabilities |
Note 25. | Related Party Transactions |
2004 | 2003 | 2002 | ||||||||||
Lease Payments | $ | $ | $ | |||||||||
Ansell Limited Group Companies | 217,885 | 217,885 | 217,885 | |||||||||
Goodyear Tire & Rubber Co. Group Companies | 75,273 | 75,273 | 75,273 |
F-134
Note 25. | Related Party Transactions (Continued) |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Interest expense | — | — | 1,750,000 | |||||||||
Interest revenue | — | — | 1,750,000 |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Sale of goods and services | ||||||||||||
Ansell Limited Group Companies | — | — | 37,791 | |||||||||
Goodyear Tire & Rubber Co. Group Companies | 7,044,157 | 1,357,021 | 4,396,011 | |||||||||
Purchase of goods and services | ||||||||||||
Ansell Limited Group Companies | — | 4,092 | 1,252,256 | |||||||||
Goodyear Tire & Rubber Co. Group Companies | 115,062,875 | 118,165,909 | 107,439,259 |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Current receivables | ||||||||||||
Goodyear Tire & Rubber Co. Group Companies | 588,874 | 182,079 | 526,745 | |||||||||
Current payables | ||||||||||||
Ansell Limited Group Companies | — | — | 81,767 | |||||||||
Goodyear Tire & Rubber Co. Group Companies | 20,921,867 | 21,072,760 | 23,663,413 |
F-135
Note 25. | Related Party Transactions (Continued) |
Mr. Richard Kramer | Dr Edward Tweddell | Mr. Robert W. Tieken | ||
Mr. Hugh D. Pace | Mr. Herbert J. Elliott | Mr. Clark E. Sprang | ||
Ms. Janell Lopus | Mr. Douglas Tough | Mr. Harry Boon | ||
Mr. Harold Smith | Mr. David Graham |
Note 26. | Superannuation Commitments |
2002 | ||||||||||||
$ | ||||||||||||
Net Assets | 148,178,000 | |||||||||||
Accrued benefits | 148,802,000 | |||||||||||
Deficiency | (624,000 | ) | ||||||||||
Vested benefits | 146,578,000 | |||||||||||
Country | Australia | |||||||||||
Benefit type | Defined benefit/Accumulation | |||||||||||
Basis of contribution | Balance of cost/Defined contribution | |||||||||||
Date of last actuarial valuation | 6/30/2002 | |||||||||||
Actuary | Mercer Human Resource Consulting Pty Ltd |
F-136
Note 26. | Superannuation Commitments (Continued) |
Balance of cost | The consolidated entity’s contribution is assessed by the Actuary after taking into account the member’s contribution and the value of assets. | |
Defined contribution | The consolidated entity’s contribution is set out in the appropriate fund rules, usually as a fixed percentage of salary. |
Note 27. | Segment Reporting |
Note 28. | Particulars Relating to Controlled Entities |
Contribution to the Consolidated | ||||||||||||||||||||||||||||||||||||
Beneficial | Profit After Tax Inclusive of Abnormal | |||||||||||||||||||||||||||||||||||
Interest | Book Value of | Items and After Deducting the Amount | ||||||||||||||||||||||||||||||||||
Held by | Consolidated Entity’s Investment | Attributable to Outside Equity Interest | ||||||||||||||||||||||||||||||||||
Place of | Consolidated | Class of | ||||||||||||||||||||||||||||||||||
Name of Company | Incorporation | Entity | Share | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||
South Pacific Tyres | (28,982,129 | ) | (44,501,568 | ) | (96,796,795 | ) | ||||||||||||||||||||||||||||||
Tyre Marketers (Australia) Limited | Vic | 100 | % | Ordinary | 21,496,245 | 21,496,245 | 21,496,245 | 8,559,276 | 4,952,958 | (33,840,907 | ) | |||||||||||||||||||||||||
Sacrt Trading Pty Ltd | Vic | 100 | % | Ordinary | 491,696 | 158,826 | 365,417 | |||||||||||||||||||||||||||||
South Pacific Tyres (PNG) Pty. Ltd. | PNG | 80 | % | Ordinary | — | — | 27,119 | |||||||||||||||||||||||||||||
Dunlop PNG Pty. Ltd. | PNG | 80 | % | Ordinary | — | — | (25,244 | ) | ||||||||||||||||||||||||||||
Consolidation adjustments | (2,550,143 | ) | (174,001 | ) | 243,240 | |||||||||||||||||||||||||||||||
21,496,245 | 21,496,245 | 21,496,245 | (22,481,300 | ) | (39,563,785 | ) | (130,027,170 | ) | ||||||||||||||||||||||||||||
Note 29. | Events Subsequent to Balance Date |
F-137
Note 29. | Events Subsequent to Balance Date (Continued) |
• | Assessment and planning phase | |
• | Design phase | |
• | Implementation phase |
• | financial instruments must be recognised in the statement of financial position and all derivatives and most financial assets must be carried at fair value | |
• | income tax will be calculated based on the “balance sheet” approach, which may result in more deferred tax assets and liabilities and, as tax effects follow the underlying transaction, some tax effects will be recognised in equity | |
• | surpluses and deficits in the defined benefit superannuation plans sponsored by the entities within the consolidated entity will be recognised in the statement of financial position and the statement of financial performance | |
• | revaluation increments and decrements relating to revalued property, plant and equipment and intangible assets will be recognised on an individual asset basis, not a class of asset basis | |
• | intangible assets: |
— | internally generated intangible assets will not be recognised | |
— | intangible assets can only be revalued if there is an active market |
• | goodwill and intangible assets with indefinite useful lives will be tested for impairment annually and will not be amortised | |
• | impairment of assets will be determined on a discounted basis, with strict tests for determining whether goodwill and cash generating operations have been impaired | |
• | changes in accounting policies will be recognised by restating comparatives rather than making current year adjustments with note disclosure of prior year effects. |
F-138
Note 29. | Events Subsequent to Balance Date (Continued) |
Note 30. | Notes to the Statements of Cash Flows |
(a) | Reconciliation of Cash |
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Cash assets | 56,435,875 | 5,629,939 | 8,400,672 | |||||||||
Cash on deposit | — | 9,600,000 | 28,700,000 | |||||||||
Bank overdrafts | (783,427 | ) | (690,488 | ) | (1,002,808 | ) | ||||||
55,652,448 | 14,539,451 | 36,097,864 | ||||||||||
(b) | Acquisition/Disposal of Businesses and Entities |
Acquisitions of Businesses |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Net assets acquired/disposed | |||||||||||||
Property, plant and equipment | — | — | 458,033 | ||||||||||
Inventories | — | — | 298,112 | ||||||||||
Receivables | — | — | 268,685 | ||||||||||
Creditors | — | — | — | ||||||||||
— | — | 1,024,830 | |||||||||||
Goodwill | — | — | 222,001 | ||||||||||
Consideration | |||||||||||||
Cash paid/(received) | — | — | 1,246,831 | ||||||||||
Outflow/(inflow) of cash | |||||||||||||
Cash consideration | — | — | 1,246,831 | ||||||||||
F-139
Note 30. | Notes to the Statements of Cash Flows (Continued) |
Disposal of Entities |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Consideration (Cash) | — | — | 1,983,805 | ||||||||||
Net assets of entity disposed of | |||||||||||||
Property, plant and equipment | — | — | 702,062 | ||||||||||
Inventories | — | — | 2,174,162 | ||||||||||
Receivables | — | — | 1,096,993 | ||||||||||
Other assets | — | — | 60,964 | ||||||||||
Prepayments | — | — | 82,822 | ||||||||||
Creditors | — | — | (952,514 | ) | |||||||||
Other liabilities and provisions | — | — | (146,852 | ) | |||||||||
Outside equity | — | — | (408,017 | ) | |||||||||
— | — | 2,609,620 | |||||||||||
Profit/(loss) on disposal | — | — | (625,815 | ) | |||||||||
F-140
Note 30. | Notes to the Statements of Cash Flows (Continued) |
(c) | Reconciliation of Profit/(Loss) From Ordinary Activities After Income Tax to Net Cash Provided by Operating Activities |
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Loss from ordinary activities after income tax | (22,481,300 | ) | (39,563,785 | ) | (130,026,700 | ) | |||||||
Add /(less) items classified as investing/financing activities: | |||||||||||||
(Profit)/loss on sale of non-current assets | 6,134,607 | 7,721,228 | 13,327,002 | ||||||||||
(Profit)/loss on sale of controlled entities | — | — | 625,815 | ||||||||||
Add /(less) non-cash items: | |||||||||||||
Amortisation | 1,456,297 | 1,363,397 | 1,800,587 | ||||||||||
Depreciation | 22,146,175 | 19,644,910 | 26,732,747 | ||||||||||
Write-down of Property, Plant & Equipment | 2,219,064 | — | — | ||||||||||
Amounts set aside to provisions | (924,572 | ) | 40,073,781 | 134,902,663 | |||||||||
(Decrease)/increase in income taxes payable | 154,865 | 77,057 | (180,144 | ) | |||||||||
Decrease/(increase) in future income tax benefit | 3,714,819 | 4,209,755 | (13,605,285 | ) | |||||||||
Write-off bad trade debts | 1,549,439 | 1,015,199 | 1,386,762 | ||||||||||
Net cash provided by operating activities before change in assets and liabilities | 13,969,394 | 34,541,542 | 34,963,447 | ||||||||||
Change in assets and liabilities adjusted for effects of purchase and disposal of controlled entities during the financial year: | |||||||||||||
(Increase)/decrease in receivables | 14,536,916 | 3,494,488 | (13,406,489 | ) | |||||||||
(Increase)/decrease in inventories | 14,620,947 | (1,290,172 | ) | 4,628,518 | |||||||||
(Increase)/decrease in prepayments | 103,514 | (1,064,694 | ) | 180,180 | |||||||||
(Decrease)/increase in accounts payable | (23,186,218 | ) | (22,333,744 | ) | 20,283,451 | ||||||||
(Decrease)/increase in provisions | 404,360 | (70,199,122 | ) | (70,029,855 | ) | ||||||||
(Decrease)/increase in reserves | — | — | (524,325 | ) | |||||||||
6,479,519 | (91,393,244 | ) | (58,868,520 | ) | |||||||||
Net cash provided by/(used in) operating activities | 20,448,913 | (56,851,702 | ) | (23,905,073 | ) | ||||||||
Note 31. | Summary of Significant Differences Between Generally Accepted Accounting Principles in Australia and Generally Accepted Accounting Principles in the United States — RESTATED |
F-141
Note 31. | Summary of Significant Differences Between Generally Accepted Accounting Principles in Australia and Generally Accepted Accounting Principles in the United States — RESTATED (Continued) |
Note 32. | Major Differences Between Australian GAAP and US GAAP |
F-142
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
F-143
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
Restated | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Australian operations | (18,611,616 | ) | (35,355,948 | ) | (143,606,153 | ) | ||||||
Foreign operations | — | — | — | |||||||||
Total | (18,611,616 | ) | (35,355,948 | ) | (143,606,153 | ) | ||||||
F-144
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
Restated | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Trading stock adjustments | 166,306 | 36,887 | 30,409 | |||||||||
Provisions | 6,892,310 | 6,931,368 | 8,533,692 | |||||||||
Accruals | 237,699 | 160,408 | 251,990 | |||||||||
Accumulated tax losses | 8,755,145 | 13,252,196 | 15,941,336 | |||||||||
Accumulated capital losses | 6,381,352 | 6,624,304 | 6,845,261 | |||||||||
Other | 52,234 | — | — | |||||||||
22,485,046 | 27,005,163 | 31,602,688 | ||||||||||
Less Valuation allowance | (6,381,352 | ) | (6,624,304 | ) | (6,845,261 | ) | ||||||
Total deferred assets | 16,103,694 | 20,380,859 | 24,757,427 | |||||||||
Total deferred liabilities | ||||||||||||
Property, plant and equipment | (1,586,941 | ) | (2,018,708 | ) | (2,132,392 | ) | ||||||
Other | — | (130,579 | ) | (183,708 | ) | |||||||
Total deferred liabilities | (1,586,941 | ) | (2,149,287 | ) | (2,316,100 | ) | ||||||
Total net deferred tax assets | 14,516,753 | 18,231,572 | 22,441,327 | |||||||||
F-145
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
(i) | Derivative Instruments and Hedging Activities |
F-146
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
(j) | Supply Agreement |
(k) | Provision for Environmental Remediation/ Impairment |
(i) Remediation |
(ii) Asset Impairment |
F-147
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
(l) | Activity Alignment |
(m) | Manufacturing Plant — Accelerated Depreciation |
(n) | Tyre Marketers Tax Adjustment |
(o) | Business Interruption |
F-148
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
(p) | Advertising |
(q) | Foreign Currency Translation Reserve |
(r) | Securitisation |
(s) | Warranties |
F-149
Note 32. | Major Differences Between Australian GAAP and US GAAP (Continued) |
(t) | MRT Factory — Costs to Sell Land and Buildings |
(u) | Change in Accounting Policy — Employee Benefits |
(v) | Revenue Recognition |
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) |
Restated | |||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||
$ | $ | $ | |||||||||||||||
Net profit/(loss) of the consolidated entity per Australian GAAP | (22,481,300 | ) | (39,563,785 | ) | (130,026,700 | ) | |||||||||||
Less interest of outside equity holders | 32(b) | — | — | 470 | |||||||||||||
Net profit/(loss) attributable to the consolidated entity | (22,481,300 | ) | (39,563,785 | ) | (130,027,170 | ) | |||||||||||
Adjustments required to accord with US GAAP: | |||||||||||||||||
Add/(deduct) | 977,171 | 1,473,930 | (5,123,240 | ) | |||||||||||||
Net profit/(loss) according to US GAAP | (21,504,129 | ) | (38,089,855 | ) | (135,150,410 | ) | |||||||||||
F-150
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
Restated | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Net profit/(loss) according to US GAAP | (21,504,129 | ) | (38,089,855 | ) | (135,150,410 | ) | ||||||
Foreign currency translation reserve (net of nil tax) | — | — | 3,341,868 | |||||||||
Comprehensive Income (Loss) | (21,504,129 | ) | (38,089,855 | ) | (131,808,542 | ) | ||||||
Restated | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
$ | $ | $ | |||||||||||
Net Cash Provided by Operating Activities according to US GAAP | 20,448,913 | (56,851,702 | ) | (23,905,073 | ) | ||||||||
Write-down of Property, Plant & Equipment | (4,253,064 | ) | — | (7,800,000 | ) | ||||||||
Depreciation | (22,018,175 | ) | (19,802,624 | ) | (26,302,333 | ) | |||||||
Amortisation | (1,168,908 | ) | (1,076,008 | ) | (1,800,587 | ) | |||||||
Amounts set aside to provisions | 4,524,572 | (38,496,466 | ) | (130,626,931 | ) | ||||||||
Write-off bad trade debts | (1,549,439 | ) | (1,015,199 | ) | (1,386,762 | ) | |||||||
Gain/(loss) on sale of investments, properties, plant and equipment | (6,134,607 | ) | (7,721,228 | ) | (13,952,817 | ) | |||||||
Outside equity interest in (profit)/loss for the year | — | — | (470 | ) | |||||||||
Change in assets and liabilities net of effects of purchase and disposal of controlled entities during the financial year: | |||||||||||||
Increase/(decrease) in receivables | (14,536,916 | ) | (3,494,488 | ) | 13,406,489 | ||||||||
Increase/(decrease) in inventories | (14,620,947 | ) | 1,290,172 | (4,628,518 | ) | ||||||||
Increase/(decrease) in prepayments | (103,514 | ) | 1,064,694 | (180,180 | ) | ||||||||
(Increase)/decrease in accounts payable | 23,846,392 | 22,848,394 | (16,683,451 | ) | |||||||||
(Increase)/decrease in provisions | (1,911,330 | ) | 69,587,636 | 68,529,855 | |||||||||
Increase/(decrease) in reserves | 195,678 | — | (3,129,861 | ) | |||||||||
(Increase)/decrease in income taxes payable | (154,865 | ) | (77,057 | ) | 180,144 | ||||||||
Increase/(decrease) in future income tax benefit | (4,067,919 | ) | (4,345,979 | ) | 13,130,085 | ||||||||
Net profit/(loss) according to US GAAP | (21,504,129 | ) | (38,089,855 | ) | (135,150,410 | ) | |||||||
F-151
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
Restated | |||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||
$ | $ | $ | |||||||||||||||
Add/(Deduct): | |||||||||||||||||
Supply Agreement | 32(j) | — | — | — | |||||||||||||
Manufacturing plant accelerated depreciation | 32(m) | — | (285,714 | ) | 285,714 | ||||||||||||
Depreciation difference Thomastown /Footscray | 32(a) | (170,000 | ) | (170,000 | ) | — | |||||||||||
Fixed Asset Revaluation depreciation difference | 32(a) | 298,000 | 298,000 | 144,700 | |||||||||||||
Fixed Asset Disposal Difference | 32(a) | 195,678 | — | (8,338 | ) | ||||||||||||
FAS87 Pension | 32(d) | 205,000 | 1,032,000 | 3,600,000 | |||||||||||||
Environmental remediation | 32(k) | 59,030 | (508,113 | ) | 9,900,000 | ||||||||||||
Impairment | 32(k) | — | — | (7,800,000 | ) | ||||||||||||
Advertising | 32(p) | — | — | — | |||||||||||||
Activity Alignment | 32(l) | — | — | (4,046,953 | ) | ||||||||||||
Business Interruption | 32(o) | — | 1,577,315 | (1,577,315 | ) | ||||||||||||
MRT Factory — Costs to Sell | 32(t) | — | — | (1,500,000 | ) | ||||||||||||
Goodwill Amortisation | 32(g) | 287,389 | 287,389 | — | |||||||||||||
Interest Rate Swaps | 32(h) | 455,174 | (517,350 | ) | — | ||||||||||||
Disposal of PNG — Translation Reserve | 32(q) | — | — | (3,645,848 | ) | ||||||||||||
Initial Adoption of Revised AASB1028 | 32(u) | — | (103,373 | ) | — | ||||||||||||
Income tax (expense)/benefit | 32(n) | (353,100 | ) | (136,224 | ) | (475,200 | ) | ||||||||||
Total Adjustments | 977,171 | 1,473,930 | (5,123,240 | ) | |||||||||||||
Partners’ equity according to AGAAP | 35,841,338 | 58,309,638 | 97,976,796 | ||||||||||||||
Deduct outside equity interests | 32(b) | — | — | — | |||||||||||||
Partners’ equity attributable to the Partners | 35,841,338 | 58,309,638 | 97,976,796 | ||||||||||||||
F-152
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
Restated | |||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||
$ | $ | $ | |||||||||||||||
Add/(Deduct): | |||||||||||||||||
Asset Revaluation Reserve | 32(a) | (12,374,551 | ) | (12,570,229 | ) | (12,570,229 | ) | ||||||||||
Supply Agreement | 32(j) | — | — | — | |||||||||||||
Manufacturing plant accelerated depreciation | 32(m) | — | — | 285,714 | |||||||||||||
Depreciation difference Thomastown/Footscray | 32(a) | (340,000 | ) | (170,000 | ) | — | |||||||||||
Fixed Asset Revaluation depreciation difference | 32(a) | 885,400 | 587,400 | 289,400 | |||||||||||||
FAS87 Pension | 32(d) | (363,000 | ) | (568,000 | ) | (1,600,000 | ) | ||||||||||
Environmental remediation/ Impairment | 32(k) | 1,650,917 | 1,591,887 | 2,100,000 | |||||||||||||
Advertising | 32(p) | (1,200,000 | ) | (1,200,000 | ) | (1,200,000 | ) | ||||||||||
Warranty | 32(s) | (3,204,000 | ) | (3,204,000 | ) | (3,204,000 | ) | ||||||||||
Activity Alignment | 32(l) | — | — | — | |||||||||||||
Business Interruption | 32(o) | — | — | (1,577,315 | ) | ||||||||||||
MRT Factory — Costs to Sell | 32(t) | — | — | — | |||||||||||||
Goodwill Amortisation | 32(g) | 574,778 | 287,389 | — | |||||||||||||
Interest Rate Swaps | 32(h) | (62,176 | ) | (517,350 | ) | — | |||||||||||
Income tax (expense)/benefit | 32(n) | 81,876 | 434,976 | 571,200 | |||||||||||||
Total Adjustments | (14,350,756 | ) | (15,327,927 | ) | (16,905,230 | ) | |||||||||||
Partners’ equity according to US GAAP | 21,490,582 | 42,981,711 | 81,071,566 | ||||||||||||||
F-153
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
Australian Fund | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
$ | $ | $ | ||||||||||
Pension Plan data supporting Note 26 | ||||||||||||
Plan’s funded status at 30 June is summarised as follows: | ||||||||||||
Actuarial present value of accumulated obligations: | ||||||||||||
— Vested | 135,209,000 | 120,700,000 | 141,100,000 | |||||||||
— Non Vested | — | — | — | |||||||||
Total accumulated benefit obligation | 135,209,000 | 120,700,000 | 141,100,000 | |||||||||
Projected benefit obligation | 135,957,000 | 121,887,000 | 142,532,000 | |||||||||
Plan assets at fair value | 138,236,000 | 121,360,000 | 152,709,000 | |||||||||
Excess/(deficiency) of assets over benefit obligations | 2,279,000 | (527,000 | ) | 10,177,000 | ||||||||
Unrecognised net gain/(loss) | (11,588,000 | ) | (11,719,000 | ) | 573,000 | |||||||
Net Pension (Liability)/Asset | 13,867,000 | 11,192,000 | 9,604,000 | |||||||||
NET PENSION COST | ||||||||||||
Defined Benefit Plans: | ||||||||||||
— Service cost-benefits earned during the year | 10,240,000 | 13,914,000 | 10,311,000 | |||||||||
— Interest cost on projected benefit obligation | 7,313,000 | 7,131,000 | 10,072,000 | |||||||||
— Expected return on plan assets | (8,495,000 | ) | (10,092,000 | ) | (13,084,000 | ) | ||||||
— Net amortisation and settlement and curtailment (gain)/loss | — | — | — | |||||||||
Net Pension Cost of Defined Benefit Plans | 9,058,000 | 10,953,000 | 7,299,000 | |||||||||
ASSUMPTIONS (used to determine net pension cost) | ||||||||||||
Weighted average discount rate | 6.00% | 6.00% | 6.00% | |||||||||
Rate of increase in compensation level | 3.50% | 3.50% | 3.50% | |||||||||
Expected long term rate of return | 7.00% | 7.00% | 7.00% |
F-154
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
30 June | 30 June | 30 June | ||||||||||
MEASUREMENT DATE | 2004 | 2003 | 2002 | |||||||||
CHANGE IN BENEFIT OBLIGATION | ||||||||||||
Projected Benefit Obligation at beginning of year | 121,887,000 | 142,532,000 | 179,926,000 | |||||||||
Service cost | 10,240,000 | 13,914,000 | 10,311,000 | |||||||||
Interest cost | 7,313,000 | 7,131,000 | 10,072,000 | |||||||||
Member contributions | 1,387,000 | — | — | |||||||||
Actuarial (gain) /loss | 8,511,000 | (14,990,000 | ) | (19,177,000 | ) | |||||||
Benefits, administrative expenses and tax paid | (13,381,000 | ) | (26,700,000 | ) | (38,600,000 | ) | ||||||
Projected Benefit Obligation at end of year | 135,957,000 | 121,887,000 | 142,532,000 | |||||||||
ASSUMPTIONS (used to determine end of the year benefit obligations) | ||||||||||||
Weighted average discount rate | 5.50 | % | 6.00 | % | 6.00 | % | ||||||
Rate of increase in compensation level | 3.50 | % | 3.50 | % | 3.50 | % | ||||||
CHANGE IN PLAN ASSETS | ||||||||||||
Market value of assets at beginning of year | 121,360,000 | 152,709,000 | 180,630,000 | |||||||||
Member/Employer Contributions | 13,120,000 | 12,541,000 | 10,467,000 | |||||||||
Benefits, administrative expenses and tax paid | (13,381,000 | ) | (26,700,000 | ) | (38,600,000 | ) | ||||||
Actual return on plan assets | 17,137,000 | (17,190,000 | ) | 212,000 | ||||||||
Market value of assets at end of year | 138,236,000 | 121,360,000 | 152,709,000 |
2005 | 14,936,000 | |||
2006 | 15,185,000 | |||
2007 | 18,597,000 | |||
2008 | 18,080,000 | |||
2009 | 18,739,000 | |||
2010-2014 | 82,616,000 |
F-155
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
Plan assets | ||||||||||||
Target | June | June | ||||||||||
Allocation | 2004 | 2003 | ||||||||||
Asset Category | ||||||||||||
Equity securities | 64 | % | 64 | % | 73 | % | ||||||
Debt securities | 22 | % | 21 | % | 15 | % | ||||||
Real estate | 9 | % | 9 | % | 10 | % | ||||||
Other | 5 | % | 6 | % | 2 | % |
Restated | ||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||
$ | $ | $ | ||||||||||||||
Partners’ equity in accordance with US GAAP-Rollforward | ||||||||||||||||
Opening Balance July 1 | 42,981,711 | 81,071,566 | 217,507,945 | |||||||||||||
Cumulative effect of restatement adjustments at 1st July 2001 | — | — | (29,627,838 | ) | ||||||||||||
Net Profit (loss) | (21,504,129 | ) | (38,089,855 | ) | (135,150,410 | ) | ||||||||||
Additional contributed equity — Goodyear Tyres Pty Ltd | 13,000 | — | — | |||||||||||||
Movement in Other Comprehensive Income | — | — | 3,341,869 | |||||||||||||
Additional Equity Contribution — Supply Agreement | 32(j | ) | — | — | 25,000,000 | |||||||||||
Closing Balance | 21,490,582 | 42,981,711 | 81,071,566 | |||||||||||||
F-156
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
2004 | 2003 | 2002 | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Notes | AGAAP | Adjustment | US GAAP | AGAAP | Adjustment | US GAAP | AGAAP | Adjustment | US GAAP | |||||||||||||||||||||||||||||||
STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||||||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||||||||||||||||||||||
Cash assets | 56,435,875 | 56,435,875 | 15,229,939 | 15,229,939 | 37,100,672 | 37,100,672 | ||||||||||||||||||||||||||||||||||
Receivables | 130,174,880 | 130,174,880 | 137,441,630 | 137,441,630 | 141,657,657 | 141,657,657 | ||||||||||||||||||||||||||||||||||
Inventories | 147,411,193 | 147,411,193 | 162,032,137 | 162,032,137 | 160,741,965 | 160,741,965 | ||||||||||||||||||||||||||||||||||
Prepayments | 3,219,753 | 3,219,753 | 3,323,269 | 3,323,269 | 2,258,575 | 2,258,575 | ||||||||||||||||||||||||||||||||||
TOTAL CURRENT ASSETS | 337,241,701 | 0 | 337,241,701 | 318,026,975 | 0 | 318,026,975 | 341,758,869 | 0 | 341,758,869 | |||||||||||||||||||||||||||||||
NON-CURRENT ASSETS | ||||||||||||||||||||||||||||||||||||||||
Receivables | 1,651,270 | 1,651,270 | 9,546,303 | 9,546,303 | 30,384,952 | 30,384,952 | ||||||||||||||||||||||||||||||||||
Property, plant and equipment | 32(a), 32(m), | |||||||||||||||||||||||||||||||||||||||
32(k) | 197,823,676 | (21,663,151 | ) | 176,160,525 | 218,425,028 | (19,952,829 | ) | 198,472,199 | 202,827,093 | (19,795,115 | ) | 183,031,978 | ||||||||||||||||||||||||||||
Intangible assets | 32(g) | 4,498,952 | 574,778 | 5,073,730 | 4,916,874 | 287,389 | 5,204,263 | 5,204,262 | 5,204,262 | |||||||||||||||||||||||||||||||
Deferred tax assets | 32(n) | 14,516,753 | 81,876 | 14,598,629 | 18,231,572 | 434,976 | 18,666,548 | 22,441,327 | 571,200 | 23,012,527 | ||||||||||||||||||||||||||||||
TOTAL NON-CURRENT ASSETS | 218,490,651 | (21,006,497 | ) | 197,484,154 | 251,119,777 | (19,230,464 | ) | 231,889,313 | 260,857,634 | (19,223,915 | ) | 241,633,719 | ||||||||||||||||||||||||||||
TOTAL ASSETS | 555,732,352 | (21,006,497 | ) | 534,725,855 | 569,146,752 | (19,230,464 | ) | 549,916,288 | 602,616,503 | (19,223,915 | ) | 583,392,588 | ||||||||||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||||||||||||||||||||||
Payables | 32(p), 32(d), | |||||||||||||||||||||||||||||||||||||||
32(h) | 144,028,406 | 1,625,176 | 145,653,582 | 159,953,830 | 2,285,350 | 162,239,180 | 161,782,718 | 2,800,000 | 164,582,718 | |||||||||||||||||||||||||||||||
Interest bearing liabilities | 188,484,663 | 188,484,663 | 171,413,834 | 171,413,834 | 142,395,212 | 142,395,212 | ||||||||||||||||||||||||||||||||||
Current tax liabilities | 290,809 | 290,809 | 135,944 | 135,944 | 58,887 | 58,887 | ||||||||||||||||||||||||||||||||||
32(k), 32(s), | ||||||||||||||||||||||||||||||||||||||||
32(I), | ||||||||||||||||||||||||||||||||||||||||
Provisions | 32(o), 32(t) | 54,318,272 | (8,280,917 | ) | 46,037,355 | 53,365,690 | (6,187,887 | ) | 47,177,803 | 102,837,858 | (5,118,685 | ) | 97,719,173 | |||||||||||||||||||||||||||
TOTAL CURRENT LIABILITIES | 387,122,150 | (6,655,741 | ) | 380,466,409 | 384,869,298 | (3,902,537 | ) | 380,966,761 | 407,074,675 | (2,318,685 | ) | 404,755,990 | ||||||||||||||||||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||||||||||||||||||||||||||||
Payables | 704,179 | 704,179 | 7,986,959 | 7,986,959 | 28,491,815 | 28,491,815 | ||||||||||||||||||||||||||||||||||
Interest bearing liabilities | 125,707,508 | 125,707,508 | 111,097,444 | 111,097,444 | 61,095,014 | 61,095,014 | ||||||||||||||||||||||||||||||||||
Provisions | 6,357,177 | 6,357,177 | 6,883,413 | 6,883,413 | 7,978,203 | 7,978,203 | ||||||||||||||||||||||||||||||||||
TOTAL NON-CURRENT LIABILITIES | 132,768,864 | 0 | 132,768,864 | 125,967,816 | 0 | 125,967,816 | 97,565,032 | 0 | 97,565,032 | |||||||||||||||||||||||||||||||
TOTAL LIABILITIES | 519,891,014 | (6,655,741 | ) | 513,235,273 | 510,837,114 | (3,902,537 | ) | 506,934,577 | 504,639,707 | (2,318,685 | ) | 502,321,022 | ||||||||||||||||||||||||||||
PARTNERS’ EQUITY/ ACCUMULATED LOSSES | 35,841,338 | (14,350,756 | ) | 21,490,582 | 58,309,638 | (15,327,927 | ) | 42,981,711 | 97,976,796 | (16,905,230 | ) | 81,071,566 | ||||||||||||||||||||||||||||
TOTAL LIABILITIES AND PARTNERS’ EQUITY | 555,732,352 | (21,006,497 | ) | 534,725,855 | 569,146,752 | (19,230,464 | ) | 549,916,288 | 602,616,503 | (19,223,915 | ) | 583,392,588 | ||||||||||||||||||||||||||||
F-157
Note 33. | Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued) |
Page | |||||
Interim Consolidated Financial Statements (Unaudited): | |||||
Consolidated Statements of Income for the three and six month periods ended June 30, 2005 and June 30, 2004 | F-159 | ||||
Consolidated Balance Sheets at June 30, 2005 and December 31, 2004 | F-160 | ||||
Consolidated Statements of Comprehensive Income (Loss) for the three and six month periods ended June 30, 2005 and June 30, 2004 | F-161 | ||||
Consolidated Statements of Cash Flows for the six month periods ended June 30, 2005 and June 30, 2004 | F-162 | ||||
Notes to Consolidated Financial Statements | F-163 |
F-158
Three Months | Six Months | ||||||||||||||||
Ended June 30, | Ended June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||
NET SALES | $ | 4,992 | $ | 4,519 | $ | 9,759 | $ | 8,821 | |||||||||
Cost of Goods Sold | 3,945 | 3,590 | 7,764 | 7,066 | |||||||||||||
Selling, Administrative and General Expense | 746 | 693 | 1,432 | 1,376 | |||||||||||||
Rationalizations (Note 2) | (5 | ) | 10 | (13 | ) | 34 | |||||||||||
Interest Expense | 101 | 89 | 203 | 173 | |||||||||||||
Other (Income) and Expense (Note 3) | 18 | 29 | 30 | 79 | |||||||||||||
Minority Interest in Net Income of Subsidiaries | 33 | 19 | 54 | 25 | |||||||||||||
Income before Income Taxes | 154 | 89 | 289 | 68 | |||||||||||||
United States and Foreign Taxes on Income | 85 | 59 | 152 | 116 | |||||||||||||
NET INCOME (LOSS) | $ | 69 | $ | 30 | $ | 137 | $ | (48 | ) | ||||||||
NET INCOME (LOSS) PER SHARE OF COMMON STOCK — BASIC | $ | 0.39 | $ | 0.17 | $ | 0.78 | $ | (0.28 | ) | ||||||||
Average Shares Outstanding (Note 4) | 176 | 175 | 176 | 175 | |||||||||||||
NET INCOME (LOSS) PER SHARE OF COMMON STOCK — DILUTED | $ | 0.34 | $ | 0.17 | $ | 0.69 | $ | (0.28 | ) | ||||||||
Average Shares Outstanding (Note 4) | 208 | 177 | 208 | 175 |
F-159
June 30, | December 31, | ||||||||||
2005 | 2004 | ||||||||||
(In millions) | |||||||||||
ASSETS: | |||||||||||
Current Assets: | |||||||||||
Cash and Cash Equivalents | $ | 1,621 | $ | 1,968 | |||||||
Restricted Cash (Note 1) | 219 | 152 | |||||||||
Accounts and Notes Receivable, less Allowance — $134 ($144 in 2004) | 3,516 | 3,408 | |||||||||
Inventories: | |||||||||||
Raw Materials | 617 | 586 | |||||||||
Work in Process | 146 | 140 | |||||||||
Finished Products | 2,157 | 2,059 | |||||||||
2,920 | 2,785 | ||||||||||
Prepaid Expenses and Other Current Assets | 339 | 300 | |||||||||
Total Current Assets | 8,615 | 8,613 | |||||||||
Other Assets | 509 | 669 | |||||||||
Goodwill | 666 | 720 | |||||||||
Other Intangible Assets | 154 | 163 | |||||||||
Deferred Income Tax | 83 | 83 | |||||||||
Deferred Pension Costs | 823 | 830 | |||||||||
Properties and Plants, less Accumulated Depreciation — $7,847 ($7,836 in 2004) | 5,159 | 5,455 | |||||||||
Total Assets | $ | 16,009 | $ | 16,533 | |||||||
LIABILITIES: | |||||||||||
Current Liabilities: | |||||||||||
Accounts Payable-Trade | $ | 1,850 | $ | 1,970 | |||||||
Compensation and Benefits | 1,080 | 1,029 | |||||||||
Other Current Liabilities | 458 | 589 | |||||||||
United States and Foreign Taxes | 281 | 271 | |||||||||
Notes Payable (Note 5) | 265 | 221 | |||||||||
Long Term Debt and Capital Leases due within one year (Note 5) | 202 | 1,010 | |||||||||
Total Current Liabilities | 4,136 | 5,090 | |||||||||
Long Term Debt and Capital Leases (Note 5) | 5,033 | 4,449 | |||||||||
Compensation and Benefits | 4,969 | 5,036 | |||||||||
Deferred and Other Noncurrent Income Taxes | 394 | 406 | |||||||||
Other Long Term Liabilities | 616 | 633 | |||||||||
Minority Equity in Subsidiaries | 816 | 846 | |||||||||
Total Liabilities | 15,964 | 16,460 | |||||||||
Commitments and Contingent Liabilities (Note 7) | |||||||||||
SHAREHOLDERS’ EQUITY: | |||||||||||
Preferred Stock, no par value: | |||||||||||
Authorized, 50 shares, unissued | — | — | |||||||||
Common Stock, no par value: | |||||||||||
Authorized, 300 shares, Outstanding shares — 176 (176 in 2004) after deducting 20 treasury shares (20 in 2004) | 176 | 176 | |||||||||
Capital Surplus | 1,395 | 1,392 | |||||||||
Retained Earnings | 1,207 | 1,070 | |||||||||
Accumulated Other Comprehensive Income (Loss) | (2,733 | ) | (2,565 | ) | |||||||
Total Shareholders’ Equity | 45 | 73 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 16,009 | $ | 16,533 | |||||||
F-160
Three Months | Six Months | |||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(In millions) | ||||||||||||||||||
Net Income (Loss) | $ | 69 | $ | 30 | $ | 137 | $ | (48 | ) | |||||||||
Other Comprehensive Income (Loss): | ||||||||||||||||||
Foreign Currency Translation Loss | (91 | ) | (65 | ) | (203 | ) | (104 | ) | ||||||||||
Minimum Pension Liability | 23 | 7 | 35 | 2 | ||||||||||||||
Deferred Derivative Gain (Loss) | (3 | ) | 4 | (16 | ) | (1 | ) | |||||||||||
Reclassification Adjustment for Amounts Recognized in Income (Loss) | — | (4 | ) | 14 | 8 | |||||||||||||
Tax on Derivative Reclassification Adjustment | — | — | (1 | ) | (4 | ) | ||||||||||||
Unrealized Investment Gain | 2 | 5 | 3 | 12 | ||||||||||||||
Comprehensive Income (Loss) | $ | — | $ | (23 | ) | $ | (31 | ) | $ | (135 | ) | |||||||
F-161
Six Months | ||||||||||||
Ended June 30, | ||||||||||||
2005 | 2004 | |||||||||||
(In millions) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Income (Loss) | $ | 137 | $ | (48 | ) | |||||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||||||||||||
Depreciation and amortization | 307 | 310 | ||||||||||
Rationalizations (Note 2) | (15 | ) | 1 | |||||||||
Net gain on the sale of assets (Note 3) | (12 | ) | (3 | ) | ||||||||
Fire loss deductible expense (Note 3) | (8 | ) | 12 | |||||||||
Minority interest and equity earnings | 51 | 20 | ||||||||||
Net cash flows from sale of accounts receivable | (1 | ) | 46 | |||||||||
Pension contributions | (138 | ) | (44 | ) | ||||||||
Changes in operating assets and liabilities, net of asset acquisitions and dispositions: | ||||||||||||
Accounts and notes receivable | (172 | ) | (583 | ) | ||||||||
Inventories | (241 | ) | (96 | ) | ||||||||
Accounts payable — trade | (57 | ) | (21 | ) | ||||||||
Prepaids | (41 | ) | 75 | |||||||||
Compensation and benefits | 228 | 214 | ||||||||||
United States and foreign taxes | 35 | 42 | ||||||||||
Other assets and liabilities | (12 | ) | 35 | |||||||||
Total adjustments | (76 | ) | 8 | |||||||||
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES | 61 | (40 | ) | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Capital expenditures | (228 | ) | (165 | ) | ||||||||
Acquisitions | — | (51 | ) | |||||||||
Proceeds from asset dispositions | 19 | 11 | ||||||||||
Other transactions | 5 | — | ||||||||||
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES | (204 | ) | (205 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Short term debt incurred | 142 | 106 | ||||||||||
Short term debt paid | (72 | ) | (95 | ) | ||||||||
Long term debt incurred | 2,310 | 1,363 | ||||||||||
Long term debt paid | (2,412 | ) | (1,220 | ) | ||||||||
Debt issuance costs | (50 | ) | (37 | ) | ||||||||
Increase in restricted cash | (67 | ) | (61 | ) | ||||||||
Other transactions | (4 | ) | (17 | ) | ||||||||
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES | (153 | ) | 39 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (51 | ) | (34 | ) | ||||||||
Net Change in Cash and Cash Equivalents | (347 | ) | (240 | ) | ||||||||
Cash and Cash Equivalents at Beginning of the Period | 1,968 | 1,546 | ||||||||||
Cash and Cash Equivalents at End of the Period | $ | 1,621 | $ | 1,306 | ||||||||
F-162
Basis of Presentation |
Consolidation of Variable Interest Entities |
Restricted Cash |
Stock-Based Compensation |
F-163
Three Months | Six Months | ||||||||||||||||
Ended June 30, | Ended June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||
Net income (loss) as reported | $ | 69 | $ | 30 | $ | 137 | $ | (48 | ) | ||||||||
Add: Stock-based compensation expense (income) included in net income (loss) (net of tax) | 1 | — | — | 1 | |||||||||||||
Deduct: Stock-based compensation expense calculated using the fair value method (net of tax) | (5 | ) | (4 | ) | (7 | ) | (8 | ) | |||||||||
Net income (loss) as adjusted | $ | 65 | $ | 26 | $ | 130 | $ | (55 | ) | ||||||||
Net income (loss) per share: | |||||||||||||||||
Basic — as reported | $ | 0.39 | $ | 0.17 | $ | 0.78 | $ | (0.28 | ) | ||||||||
— as adjusted | 0.37 | 0.15 | 0.74 | (0.31 | ) | ||||||||||||
Diluted — as reported | $ | 0.34 | $ | 0.17 | $ | 0.69 | $ | (0.28 | ) | ||||||||
— as adjusted | 0.33 | 0.15 | 0.66 | (0.31 | ) |
Recently Issued Accounting Standards |
F-164
Reclassification |
F-165
Other Than | ||||||||||||
Associate- | Associate-related | |||||||||||
related Costs | Costs | Total | ||||||||||
(In millions) | ||||||||||||
Balance at December 31, 2004 | $ | 41 | $ | 27 | $ | 68 | ||||||
First quarter charges | 1 | 1 | 2 | |||||||||
Incurred | (16 | ) | (3 | ) | (19 | ) | ||||||
Reversed | (4 | ) | (6 | ) | (10 | ) | ||||||
Balance at March 31, 2005 | 22 | 19 | 41 | |||||||||
Second quarter charges | — | — | — | |||||||||
Incurred | (6 | ) | (3 | ) | (9 | ) | ||||||
Reversed | (5 | ) | — | (5 | ) | |||||||
Balance at June 30, 2005 | $ | 11 | $ | 16 | $ | 27 | ||||||
F-166
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Financing fees and financial instruments | $ | 63 | $ | 28 | $ | 89 | $ | 61 | ||||||||
Environmental insurance recoveries | (19 | ) | — | (20 | ) | — | ||||||||||
Interest income | (13 | ) | (7 | ) | (27 | ) | (14 | ) | ||||||||
General & product liability — discontinued products | (8 | ) | 8 | 4 | 17 | |||||||||||
Foreign currency exchange | 5 | (2 | ) | 11 | 4 | |||||||||||
Equity in earnings of affiliates | (2 | ) | (2 | ) | (5 | ) | (4 | ) | ||||||||
Gain on asset sales | — | (2 | ) | (13 | ) | (5 | ) | |||||||||
Miscellaneous | (8 | ) | 6 | (9 | ) | 20 | ||||||||||
$ | 18 | $ | 29 | $ | 30 | $ | 79 | |||||||||
F-167
Three Months | Six Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Average shares outstanding — basic | 176 | 175 | 176 | 175 | ||||||||||||
4% Convertible Senior Notes due 2034 | 29 | — | 29 | — | ||||||||||||
Stock Options and other dilutive securities | 3 | 2 | 3 | — | ||||||||||||
Average shares outstanding — diluted | 208 | 177 | 208 | 175 | ||||||||||||
F-168
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Net Income (Loss) | $ | 69 | $ | 30 | $ | 137 | $ | (48 | ) | |||||||
After-tax impact of 4% Convertible Senior Notes due 2034 | 4 | — | 8 | — | ||||||||||||
Adjusted Net Income (Loss) | $ | 73 | $ | 30 | $ | 145 | $ | (48 | ) | |||||||
Notes Payable, Long Term Debt due Within One Year and Short Term Financing Arrangements |
F-169
2005 | 2004 | ||||||||
(In millions) | |||||||||
Notes payable: | |||||||||
International subsidiaries | $ | 152 | $ | 130 | |||||
Amounts related to VIEs | 113 | 91 | |||||||
$ | 265 | $ | 221 | ||||||
Weighted-average interest rate | 6.46 | % | 6.74 | % | |||||
Long term debt due within one year: | |||||||||
6.375% Euro Notes due 2005 | $ | — | $ | 542 | |||||
5.375% Swiss franc bonds due 2006 | 123 | — | |||||||
Amounts related to VIEs | 6 | 24 | |||||||
European credit facilities | — | 400 | |||||||
Other (including capital leases) | 73 | 44 | |||||||
$ | 202 | $ | 1,010 | ||||||
Weighted-average interest rate | 5.47 | % | 6.78 | % | |||||
Total obligations due within one year | $ | 467 | $ | 1,231 | |||||
Long Term Debt and Financing Arrangements |
F-170
Weighted | Weighted | ||||||||||||||||
Average | Average | ||||||||||||||||
Interest | Interest | ||||||||||||||||
2005 | Rate | 2004 | Rate | ||||||||||||||
(In millions) | |||||||||||||||||
5.375% Swiss franc bonds due 2006 | $ | 123 | * | $ | 139 | * | |||||||||||
6.375% Euro notes due 2005 | — | * | 542 | * | |||||||||||||
4.00% Convertible Senior Notes due 2034 | 350 | * | 350 | * | |||||||||||||
Notes: | |||||||||||||||||
65/8% due 2006 | 219 | * | 223 | * | |||||||||||||
81/2% due 2007 | 300 | * | 300 | * | |||||||||||||
63/8% due 2008 | 100 | * | 100 | * | |||||||||||||
76/7% due 2011 | 650 | * | 650 | * | |||||||||||||
Floating rate notes due 2011 | 200 | 6.43 | % | 200 | 6.87 | % | |||||||||||
11% due 2011 | 448 | * | 448 | * | |||||||||||||
9% due 2015 | 400 | * | — | * | |||||||||||||
7% due 2028 | 149 | * | 149 | * | |||||||||||||
Bank term loans: | |||||||||||||||||
$400 million senior secured term loan European facilities due 2005 | — | * | 400 | 6.87 | |||||||||||||
$800 million senior secured asset-based term loan due 2006 | — | * | 800 | 6.87 | |||||||||||||
$650 million senior secured asset-based term loan due 2006 | — | * | 650 | 6.87 | |||||||||||||
$1.2 billion second lien term loan facility due 2010 | 1,200 | 6.43 | — | * | |||||||||||||
$300 million third lien secured term loan due 2011 | 300 | 6.43 | — | * | |||||||||||||
€155 million senior secured term loan European facility due 2010 | 187 | 6.43 | — | * | |||||||||||||
Pan-European accounts receivable facility due 2009 | 332 | 3.84 | 225 | 5.16 | |||||||||||||
Revolving credit facilities due 2010 | 30 | 4.85 | — | — | |||||||||||||
Other domestic and international debt | 106 | 5.56 | 129 | 6.15 | |||||||||||||
Amounts related to VIEs | 66 | 6.16 | 94 | 6.41 | |||||||||||||
5,160 | 5,399 | ||||||||||||||||
Capital lease obligations | 75 | 60 | |||||||||||||||
5,235 | 5,459 | ||||||||||||||||
Less portion due within one year | 202 | 1,010 | |||||||||||||||
$ | 5,033 | $ | 4,449 | ||||||||||||||
* | Represents debt with fixed interest rate. |
F-171
$350 Million Convertible Senior Note Offering |
$650 Million Senior Secured Notes |
• | incurring additional indebtedness or liens, | |
• | paying dividends, making distributions and stock repurchases, | |
• | making investments, | |
• | selling assets, and | |
• | merging and consolidating. |
$400 Million Senior Notes Offering |
F-172
2005 | 2004 | |||||||
(In millions) | ||||||||
Carrying amount | $ | 2,875 | $ | 3,055 | ||||
Fair value | 2,989 | 3,215 |
• | a $1.5 billion first lien credit facility due April 30, 2010 (consisting of a $1.0 billion revolving facility and a $500 million deposit-funded facility); | |
• | a $1.2 billion second lien term loan facility due April 30, 2010; | |
• | the Euro equivalent of approximately $650 million in credit facilities for Goodyear Dunlop Tires Europe B.V. (“GDTE”) due April 30, 2010 (consisting of approximately $450 million in revolving facilities and approximately $200 million in term loan facilities); and | |
• | a $300 million third lien term loan facility due March 1, 2011. |
• | our $1.3 billion asset-based credit facility, due March 2006 (the $800 million term loan portion of this facility was fully drawn prior to the refinancing); | |
• | our $650 million asset-based term loan facility, due March 2006 (this facility was fully drawn prior to the refinancing); | |
• | our $680 million deposit-funded credit facility due September 2007 (there were $492 million of letters of credit outstanding under this facility prior to the refinancing); and | |
• | our $650 million senior secured European facilities due April 2005 (the $400 million term loan portion of this facility was fully drawn prior to the refinancing). |
F-173
$1.5 Billion First Lien Credit Facility |
• | first-priority security interests in certain U.S. and Canadian accounts receivable and inventory; | |
• | first-priority security interests in and mortgages on our U.S. corporate headquarters and certain of our U.S. manufacturing facilities; | |
• | first-priority security interests in the equity interests in our U.S. subsidiaries and up to 65% of the equity interests in our foreign subsidiaries, excluding GDTE and its subsidiaries; and | |
• | first-priority security interests in substantially all other tangible and intangible assets, including equipment, contract rights and intellectual property. |
• | If the availability under the facility is greater than or equal to $400 million, then drawn amounts (including amounts outstanding under the deposit-funded facility) will bear interest at a rate of |
F-174
175 basis points over LIBOR, and undrawn amounts under the facilities will be subject to an annual commitment fee of 50 basis points; | ||
• | If the availability under the facility is less than $400 million and greater than or equal to $250 million, then drawn amounts (including amounts outstanding under the deposit-funded facility) will bear interest at a rate of 200 basis points over LIBOR, and undrawn amounts under the facilities will be subject to an annual commitment fee of 40 basis points; and | |
• | If the availability under the facility is less than $250 million, then drawn amounts (including amounts outstanding under the deposit-funded facility) will bear interest at a rate of 225 basis points over LIBOR, and undrawn amounts under the facilities will be subject to an annual commitment fee of 37.5 basis points. |
$1.2 Billion Second Lien Term Loan Facility |
$300 Million Third Lien Secured Term Loan Facility |
Euro Equivalent of $650 Million (€505 Million) Senior Secured European Credit Facilities |
F-175
• | first-priority security interests in the capital stock of the principal subsidiaries of GDTE; and | |
• | first-priority security interests in and mortgages on substantially all the tangible and intangible assets of GDTE and GDTE’s subsidiaries in the United Kingdom, Luxembourg, France and Germany, including certain accounts receivable, inventory, real property, equipment, contract rights and cash and cash accounts, but excluding certain accounts receivable and cash accounts in subsidiaries that are or may become parties to securitization programs. |
International Accounts Receivable Securitization Facilities (On-Balance-Sheet) |
• | the ratio of our Consolidated EBITDA to our Consolidated Interest Expense falls below 2.00 to 1.00, | |
• | the ratio of our Consolidated Secured Indebtedness (net of cash in excess of $400 million) to our Consolidated EBITDA is greater than 3.50 to 1.00, | |
• | the ratio of GDTE’s third party indebtedness (net of cash held by GDTE and its Consolidated subsidiaries in excess of $100 million) to its consolidated EBITDA is greater than 2.75 to 1.00. |
F-176
Debt Maturities |
Twelve Months Ending June 30, | ||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Domestic | $ | 133 | $ | 525 | $ | 105 | $ | 5 | $ | 1,205 | ||||||||||
International | 69 | 57 | 3 | 4 | 556 | |||||||||||||||
$ | 202 | $ | 582 | $ | 108 | $ | 9 | $ | 1,761 | |||||||||||
NOTE 6. PENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS |
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Service cost — benefits earned during the period | $ | 22 | $ | 22 | $ | 49 | $ | 45 | ||||||||
Interest cost on projected benefit obligation | 106 | 106 | 213 | 211 | ||||||||||||
Expected return on plan assets | (94 | ) | (87 | ) | (188 | ) | (172 | ) | ||||||||
Amortization of unrecognized: — prior service cost | 17 | 19 | 34 | 38 | ||||||||||||
— net (gains) losses | 36 | 29 | 72 | 61 | ||||||||||||
Net periodic pension cost | 87 | 89 | 180 | 183 | ||||||||||||
Curtailments/ settlements | 1 | — | 1 | 1 | ||||||||||||
Total pension cost | $ | 88 | $ | 89 | $ | 181 | $ | 184 | ||||||||
F-177
Three Months | ||||||||||||||||
Ended | Six Months | |||||||||||||||
June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Service cost — benefits earned during the period | $ | 6 | $ | 7 | $ | 12 | $ | 13 | ||||||||
Interest cost on projected benefit obligation | 39 | 49 | 80 | 98 | ||||||||||||
Amortization of unrecognized: — prior service cost | 11 | 12 | 22 | 24 | ||||||||||||
— net (gains) losses | 4 | 9 | 10 | 18 | ||||||||||||
Net periodic postretirement cost | $ | 60 | $ | 77 | $ | 124 | $ | 153 | ||||||||
Environmental Matters |
Workers’ Compensation |
F-178
General and Product Liability and Other Litigation |
Six Months | Year Ended December 31, | |||||||||||
Ended | ||||||||||||
June 30, 2005 | 2004 | 2003 | ||||||||||
(Dollars in millions) | ||||||||||||
Pending claims, beginning of period | 127,300 | 118,000 | 99,700 | |||||||||
New claims filed | 3,800 | 12,700 | 26,700 | |||||||||
Claims settled/ dismissed | (2,000 | ) | (3,400 | ) | (8,400 | ) | ||||||
Pending claims, end of period | 129,100 | 127,300 | 118,000 | |||||||||
Payments(1) | $ | 13 | $ | 30 | $ | 30 | ||||||
(1) | Represents amount spent by us and our insurers on asbestos litigation defense and claim resolution. |
F-179
F-180
• | the litigation environment, | |
• | federal and state law governing the compensation of asbestos claimants, | |
• | recoverability of receivables due to potential insolvency of carriers, | |
• | our approach to defending and resolving claims, and | |
• | the level of payments made to claimants from other sources, including other defendants. |
F-181
Guarantees |
Subsidiary Guarantees |
Other Financing |
Indemnifications |
F-182
F-183
Three Months | Six Months | |||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(In millions) | ||||||||||||||||||
Sales: | ||||||||||||||||||
North American Tire | $ | 2,296 | $ | 2,171 | $ | 4,434 | $ | 4,109 | ||||||||||
European Union Tire | 1,178 | 1,060 | 2,376 | 2,171 | ||||||||||||||
Eastern Europe, Middle East and Africa Tire | 342 | 301 | 682 | 584 | ||||||||||||||
Latin American Tire | 381 | 291 | 729 | 594 | ||||||||||||||
Asia/ Pacific Tire | 368 | 328 | 709 | 651 | ||||||||||||||
Total Tires | 4,565 | 4,151 | 8,930 | 8,109 | ||||||||||||||
Engineered Products | 427 | 368 | 829 | 712 | ||||||||||||||
Net Sales | $ | 4,992 | $ | 4,519 | $ | 9,759 | $ | 8,821 | ||||||||||
Segment Operating Income: | ||||||||||||||||||
North American Tire | $ | 55 | $ | 41 | $ | 66 | $ | 17 | ||||||||||
European Union Tire | 85 | 57 | 192 | 127 | ||||||||||||||
Eastern Europe, Middle East and Africa Tire | 49 | 45 | 96 | 88 | ||||||||||||||
Latin American Tire | 77 | 61 | 164 | 123 | ||||||||||||||
Asia/ Pacific Tire | 20 | 17 | 39 | 25 | ||||||||||||||
Total Tires | 286 | 221 | 557 | 380 | ||||||||||||||
Engineered Products | 30 | 33 | 51 | 55 | ||||||||||||||
Total Segment Operating Income | 316 | 254 | 608 | 435 | ||||||||||||||
Rationalizations and asset sales | 5 | (8 | ) | 26 | (29 | ) | ||||||||||||
Interest expense | (101 | ) | (89 | ) | (203 | ) | (173 | ) | ||||||||||
Foreign currency exchange | (5 | ) | 2 | (11 | ) | (4 | ) | |||||||||||
Minority interest in net income of subsidiaries | (33 | ) | (19 | ) | (54 | ) | (25 | ) | ||||||||||
Financing fees and financial instruments | (63 | ) | (28 | ) | (89 | ) | (61 | ) | ||||||||||
General and product liability — discontinued products | 8 | (8 | ) | (4 | ) | (17 | ) | |||||||||||
Recovery (expense) for fire loss deductibles | 12 | — | 14 | (12 | ) | |||||||||||||
Professional fees associated with the restatement | (1 | ) | (9 | ) | (2 | ) | (24 | ) | ||||||||||
Environmental insurance recoveries | 19 | — | 20 | — | ||||||||||||||
Other | (3 | ) | (6 | ) | (16 | ) | (22 | ) | ||||||||||
Income before Income Taxes | $ | 154 | $ | 89 | $ | 289 | $ | 68 | ||||||||||
F-184
Three Months | Six Months | |||||||||||||||||
Ended | Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(In millions) | ||||||||||||||||||
Rationalizations: | ||||||||||||||||||
North American Tire | $ | (5 | ) | $ | 4 | $ | (9 | ) | $ | 6 | ||||||||
European Union Tire | — | 4 | (2 | ) | 25 | |||||||||||||
Latin American Tire | — | 2 | — | 2 | ||||||||||||||
Asia/ Pacific Tire | — | — | (2 | ) | — | |||||||||||||
Corporate | — | — | — | 1 | ||||||||||||||
Total Rationalizations | $ | (5 | ) | $ | 10 | $ | (13 | ) | $ | 34 | ||||||||
Other (Income) and Expense(1): | ||||||||||||||||||
North American Tire | $ | (2 | ) | $ | (1 | ) | $ | (8 | ) | $ | (2 | ) | ||||||
European Union Tire | 1 | (1 | ) | (4 | ) | (2 | ) | |||||||||||
Eastern Europe, Middle East and Africa Tire | 1 | — | 1 | — | ||||||||||||||
Engineered Products | — | — | — | (1 | ) | |||||||||||||
Corporate | 15 | 35 | 35 | 84 | ||||||||||||||
Total Other (Income) and Expense | $ | 15 | $ | 33 | $ | 24 | $ | 79 | ||||||||||
(1) | Excludes equity in (earnings) losses of affiliates and foreign currency exchange. |
F-185
(i) | The Goodyear Tire & Rubber Company (the “Parent Company”), the issuer of the guaranteed obligations, |
(ii) | Guarantor subsidiaries, on a combined basis, as specified in the Indenture related to Goodyear’s obligations under the $650 million of Senior Secured Notes issued on March 12, 2004 ($450 million of 11% Senior Secured Notes due 2011 and $200 Senior Secured Floating Rate Notes due 2011) and the Indenture related to Goodyear’s obligation under the $400 million aggregate principal amount of 9.00% Senior Notes due 2015 issued on June 23, 2005 (the “Notes”), |
(iii) | Non-guarantor subsidiaries, on a combined basis, |
(iv) | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions and (b) eliminate the investments in our subsidiaries and (c) record consolidating entries, and |
(v) | The Goodyear Tire & Rubber Company and Subsidiaries on a consolidated basis. |
June 30, 2005 | ||||||||||||||||||||||
Consolidating | ||||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||
Cash and Cash Equivalents | $ | 843 | $ | 18 | $ | 760 | $ | — | $ | 1,621 | ||||||||||||
Restricted Cash | 204 | — | 15 | — | 219 | |||||||||||||||||
Accounts and Notes Receivable | 1,212 | 223 | 2,081 | — | 3,516 | |||||||||||||||||
Accounts and Notes Receivables from Affiliates | — | 621 | — | (621 | ) | — | ||||||||||||||||
Inventories | 1,246 | 289 | 1,446 | (61 | ) | 2,920 | ||||||||||||||||
Prepaid Expenses and Other Current Assets | 100 | 16 | 215 | 8 | 339 | |||||||||||||||||
Total Current Assets | 3,605 | 1,167 | 4,517 | (674 | ) | 8,615 | ||||||||||||||||
Other Assets | 317 | 22 | 170 | — | 509 |
F-186
June 30, 2005 | ||||||||||||||||||||||
Consolidating | ||||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
Goodwill | — | 32 | 431 | 203 | 666 | |||||||||||||||||
Other Intangible Assets | 100 | 37 | 53 | (36 | ) | 154 | ||||||||||||||||
Deferred Income Tax | — | 14 | 69 | — | 83 | |||||||||||||||||
Deferred Pension Costs | 457 | 177 | 189 | — | 823 | |||||||||||||||||
Investments in Subsidiaries | 4,030 | 416 | 3,247 | (7,693 | ) | — | ||||||||||||||||
Properties and Plants | 2,032 | 300 | 2,803 | 24 | 5,159 | |||||||||||||||||
Total Assets | $ | 10,541 | $ | 2,165 | $ | 11,479 | $ | (8,176 | ) | $ | 16,009 | |||||||||||
LIABILITIES: | ||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||
Accounts Payable-Trade | $ | 587 | $ | 66 | $ | 1,197 | $ | — | $ | 1,850 | ||||||||||||
Accounts Payable to Affiliates | 443 | — | 178 | (621 | ) | — | ||||||||||||||||
Compensation and Benefits | 713 | 48 | 319 | — | 1,080 | |||||||||||||||||
Other Current Liabilities | 301 | 10 | 147 | — | 458 | |||||||||||||||||
United States and Foreign Taxes | 59 | 31 | 191 | — | 281 | |||||||||||||||||
Notes Payable | — | — | 265 | — | 265 | |||||||||||||||||
Long Term Debt and Capital Leases due within one year | 124 | — | 78 | — | 202 | |||||||||||||||||
Total Current Liabilities | 2,227 | 155 | 2,375 | (621 | ) | 4,136 | ||||||||||||||||
Long Term Debt and Capital Leases | 4,337 | 1 | 695 | — | 5,033 | |||||||||||||||||
Compensation and Benefits | 3,346 | 310 | 1,313 | — | 4,969 | |||||||||||||||||
Deferred and Other Noncurrent Income Taxes | 68 | 2 | 317 | 7 | 394 | |||||||||||||||||
Other Long Term Liabilities | 518 | 15 | 83 | — | 616 | |||||||||||||||||
Minority Equity in Subsidiaries | — | — | 627 | 189 | 816 | |||||||||||||||||
Total Liabilities | 10,496 | 483 | 5,410 | (425 | ) | 15,964 | ||||||||||||||||
Commitments and Contingent Liabilities | ||||||||||||||||||||||
Shareholders’ Equity (Deficit): | ||||||||||||||||||||||
Preferred Stock | — | — | — | — | — | |||||||||||||||||
Common Stock | 176 | 667 | 4,291 | (4,958 | ) | 176 | ||||||||||||||||
Capital Surplus | 1,395 | 5 | 874 | (879 | ) | 1,395 | ||||||||||||||||
Retained Earnings | 1,207 | 1,321 | 2,259 | (3,580 | ) | 1,207 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | (2,733 | ) | (311 | ) | (1,355 | ) | 1,666 | (2,733 | ) | |||||||||||||
Total Shareholders’ Equity(Deficit) | 45 | 1,682 | 6,069 | (7,751 | ) | 45 | ||||||||||||||||
Total Liabilities and Shareholders’ Equity (Deficit) | $ | 10,541 | $ | 2,165 | $ | 11,479 | $ | (8,176 | ) | $ | 16,009 | |||||||||||
F-187
December 31, 2004 | ||||||||||||||||||||||
Consolidating | ||||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||
Cash and Cash Equivalents | $ | 1,004 | $ | 50 | $ | 914 | $ | — | $ | 1,968 | ||||||||||||
Restricted Cash | 137 | — | 15 | — | 152 | |||||||||||||||||
Accounts and Notes Receivable | 1,209 | 203 | 1,996 | — | 3,408 | |||||||||||||||||
Accounts and Notes Receivable from Affiliates | — | 612 | — | (612 | ) | — | ||||||||||||||||
Inventories | 1,162 | 250 | 1,426 | (53 | ) | 2,785 | ||||||||||||||||
Prepaid Expenses and Other Current Assets | 90 | 13 | 187 | 10 | 300 | |||||||||||||||||
Total Current Assets | 3,602 | 1,128 | 4,538 | (655 | ) | 8,613 | ||||||||||||||||
Other Assets | 467 | 21 | 181 | — | 669 | |||||||||||||||||
Goodwill | — | 35 | 470 | 215 | 720 | |||||||||||||||||
Other Intangible Assets | 101 | 41 | 61 | (40 | ) | 163 | ||||||||||||||||
Deferred Income Tax | — | 14 | 69 | — | 83 | |||||||||||||||||
Deferred Pension Costs | 432 | 179 | 219 | — | 830 | |||||||||||||||||
Investments in Subsidiaries | 3,970 | 432 | 3,075 | (7,477 | ) | — | ||||||||||||||||
Properties and Plants | 2,089 | 332 | 3,011 | 23 | 5,455 | |||||||||||||||||
Total Assets | $ | 10,661 | $ | 2,182 | $ | 11,624 | $ | (7,934 | ) | $ | 16,533 | |||||||||||
LIABILITIES: | ||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||
Accounts Payable — Trade | $ | 529 | $ | 62 | $ | 1,379 | $ | — | $ | 1,970 | ||||||||||||
Accounts Payable to Affiliates | 528 | — | 84 | (612 | ) | — | ||||||||||||||||
Compensation and Benefits | 648 | 46 | 335 | — | 1,029 | |||||||||||||||||
Other Current Liabilities | 276 | 17 | 296 | — | 589 | |||||||||||||||||
United States and Foreign Taxes | 63 | 32 | 176 | — | 271 | |||||||||||||||||
Notes Payable | — | — | 221 | — | 221 | |||||||||||||||||
Long Term Debt and Capital Leases due within one year | 563 | — | 447 | — | 1,010 | |||||||||||||||||
Total Current Liabilities | 2,607 | 157 | 2,938 | (612 | ) | 5,090 | ||||||||||||||||
Long Term Debt and Capital Leases | 4,010 | 2 | 437 | — | 4,449 | |||||||||||||||||
Compensation and Benefits | 3,336 | 312 | 1,388 | — | 5,036 | |||||||||||||||||
Deferred and Other Noncurrent Income Taxes | 92 | 7 | 327 | (20 | ) | 406 | ||||||||||||||||
Other Long Term Liabilities | 543 | 9 | 81 | — | 633 | |||||||||||||||||
Minority Equity in Subsidiaries | — | — | 632 | 214 | 846 | |||||||||||||||||
Total Liabilities | 10,588 | 487 | 5,803 | (418 | ) | 16,460 |
F-188
December 31, 2004 | |||||||||||||||||||||
Consolidating | |||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | ||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||||||
Preferred Stock | — | — | �� | — | — | — | |||||||||||||||
Common Stock | 176 | 669 | 4,191 | (4,860 | ) | 176 | |||||||||||||||
Capital Surplus | 1,392 | 12 | 866 | (878 | ) | 1,392 | |||||||||||||||
Retained Earnings | 1,070 | 1,291 | 2,082 | (3,373 | ) | 1,070 | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) | (2,565 | ) | (277 | ) | (1,318 | ) | 1,595 | (2,565 | ) | ||||||||||||
Total Shareholders’ Equity (Deficit) | 73 | 1,695 | 5,821 | (7,516 | ) | 73 | |||||||||||||||
Total Liabilities and Shareholders’ Equity (Deficit) | $ | 10,661 | $ | 2,182 | $ | 11,624 | $ | (7,934 | ) | $ | 16,533 | ||||||||||
F-189
Three Months Ended June 30, 2005 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net Sales | $ | 2,388 | $ | 557 | $ | 4,325 | $ | (2,278 | ) | $ | 4,992 | |||||||||
Cost of Goods Sold | 2,091 | 490 | 3,675 | (2,311 | ) | 3,945 | ||||||||||||||
Selling, Administrative and General Expense | 301 | 46 | 398 | 1 | 746 | |||||||||||||||
Rationalizations | (1 | ) | — | (4 | ) | — | (5 | ) | ||||||||||||
Interest Expense | 87 | 9 | 44 | (39 | ) | 101 | ||||||||||||||
Other (Income) and Expense | (26 | ) | (1 | ) | (32 | ) | 77 | 18 | ||||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 33 | — | 33 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (64 | ) | 13 | 211 | (6 | ) | 154 | |||||||||||||
United States and Foreign Taxes on Income (Loss) | (2 | ) | 9 | 79 | (1 | ) | 85 | |||||||||||||
Equity in (Earnings) Loss of Subsidiaries | (131 | ) | (12 | ) | — | 143 | — | |||||||||||||
Net Income (Loss) | $ | 69 | $ | 16 | $ | 132 | $ | (148 | ) | $ | 69 | |||||||||
Three Months Ended June 30, 2004 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
(In millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net Sales | $ | 2,201 | $ | 514 | $ | 3,609 | $ | (1,805 | ) | $ | 4,519 | |||||||||
Cost of Goods Sold | 1,935 | 446 | 3,036 | (1,827 | ) | 3,590 | ||||||||||||||
Selling, Administrative and General Expense | 284 | 43 | 370 | (4 | ) | 693 | ||||||||||||||
Rationalizations | 4 | — | 7 | (1 | ) | 10 | ||||||||||||||
Interest Expense | 76 | 9 | 53 | (49 | ) | 89 | ||||||||||||||
Other (Income) and Expense | (21 | ) | 1 | (38 | ) | 87 | 29 | |||||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 18 | 1 | 19 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (77 | ) | 15 | 163 | (12 | ) | 89 | |||||||||||||
United States and Foreign Taxes on Income (Loss) | — | — | 50 | 9 | 59 | |||||||||||||||
Equity in (Earnings) Loss of Subsidiaries | (107 | ) | (6 | ) | 11 | 102 | — | |||||||||||||
Net Income (Loss) | $ | 30 | $ | 21 | $ | 102 | $ | (123 | ) | $ | 30 | |||||||||
F-190
Six Months Ended June 30, 2005 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net Sales | $ | 4,662 | $ | 1,086 | $ | 8,555 | $ | (4,544 | ) | $ | 9,759 | |||||||||
Cost of Goods Sold | 4,135 | 954 | 7,281 | (4,606 | ) | 7,764 | ||||||||||||||
Selling, Administrative and General Expense | 571 | 94 | 772 | (5 | ) | 1,432 | ||||||||||||||
Rationalizations | (4 | ) | — | (9 | ) | — | (13 | ) | ||||||||||||
Interest Expense | 176 | 18 | 100 | (91 | ) | 203 | ||||||||||||||
Other (Income) and Expense | (69 | ) | (2 | ) | (74 | ) | 175 | 30 | ||||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 54 | — | 54 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (147 | ) | 22 | 431 | (17 | ) | 289 | |||||||||||||
United States and Foreign Taxes on Income (Loss) | (9 | ) | 12 | 150 | (1 | ) | 152 | |||||||||||||
Equity in (Earnings) Loss of Subsidiaries | (275 | ) | (24 | ) | — | 299 | — | |||||||||||||
Net Income (Loss) | $ | 137 | $ | 34 | $ | 281 | $ | (315 | ) | $ | 137 | |||||||||
Six Months Ended June 30, 2004 | ||||||||||||||||||||
Consolidating | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net Sales | $ | 4,236 | $ | 1,011 | $ | 7,211 | $ | (3,637 | ) | $ | 8,821 | |||||||||
Cost of Goods Sold | 3,791 | 872 | 6,076 | (3,673 | ) | 7,066 | ||||||||||||||
Selling, Administrative and General Expense | 561 | 86 | 739 | (10 | ) | 1,376 | ||||||||||||||
Rationalizations | 6 | — | 28 | — | 34 | |||||||||||||||
Interest Expense | 146 | 18 | 110 | (101 | ) | 173 | ||||||||||||||
Other (Income) and Expense | (26 | ) | 1 | (24 | ) | 128 | 79 | |||||||||||||
Minority Interest in Net Income of Subsidiaries | — | — | 23 | 2 | 25 | |||||||||||||||
Income (Loss) before Income Taxes and Equity in (Earnings) Loss of Subsidiaries | (242 | ) | 34 | 259 | 17 | 68 | ||||||||||||||
United States and Foreign Taxes on Income (Loss) | (17 | ) | 6 | 122 | 5 | 116 | ||||||||||||||
Equity in (Earnings) Loss of Subsidiaries | (177 | ) | (11 | ) | 11 | 177 | — | |||||||||||||
Net Income (Loss) | $ | (48 | ) | $ | 39 | $ | 126 | $ | (165 | ) | $ | (48 | ) | |||||||
F-191
Six Months Ended June 30, 2005 | |||||||||||||||||||||
Consolidating | |||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | ||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Total Cash Flows From Operating Activities | $ | 75 | $ | (27 | ) | $ | 99 | $ | (86 | ) | $ | 61 | |||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Capital expenditures | (75 | ) | (6 | ) | (143 | ) | (4 | ) | (228 | ) | |||||||||||
Asset sales | 18 | 1 | 7 | (7 | ) | 19 | |||||||||||||||
Acquisitions | — | — | (7 | ) | 7 | — | |||||||||||||||
Other transactions | 3 | — | (104 | ) | 106 | 5 | |||||||||||||||
Total Cash Flows From Investing Activities | (54 | ) | (5 | ) | (247 | ) | 102 | (204 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Short term debt incurred | 13 | — | 129 | — | 142 | ||||||||||||||||
Short term debt paid | — | 2 | (74 | ) | — | (72 | ) | ||||||||||||||
Long term debt incurred | 1,920 | — | 390 | — | 2,310 | ||||||||||||||||
Long term debt paid | (2,001 | ) | (1 | ) | (410 | ) | — | (2,412 | ) | ||||||||||||
Debt issuance costs | (50 | ) | — | — | — | (50 | ) | ||||||||||||||
Increase in restricted cash | (67 | ) | — | — | — | (67 | ) | ||||||||||||||
Other transactions | 3 | — | 9 | (16 | ) | (4 | ) | ||||||||||||||
Total Cash Flows From Financing Activities | (182 | ) | 1 | 44 | �� | (16 | ) | (153 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | (1 | ) | (50 | ) | — | (51 | ) | |||||||||||||
Net Change in Cash and Cash Equivalents | (161 | ) | (32 | ) | (154 | ) | — | (347 | ) | ||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 1,004 | 50 | 914 | — | 1,968 | ||||||||||||||||
Cash and Cash Equivalents at End of the Period | $ | 843 | $ | 18 | $ | 760 | $ | — | $ | 1,621 | |||||||||||
F-192
Six Months Ended June 30, 2004 | |||||||||||||||||||||
Consolidating | |||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | Entries and | ||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Total Cash Flows From Operating Activities | $ | (213 | ) | $ | 6 | $ | 258 | $ | (91 | ) | $ | (40 | ) | ||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Capital expenditures | (35 | ) | (2 | ) | (128 | ) | — | (165 | ) | ||||||||||||
Asset sales | 88 | 1 | 8 | (86 | ) | 11 | |||||||||||||||
Acquisition | (51 | ) | — | (86 | ) | 86 | (51 | ) | |||||||||||||
Other Transaction | (4 | ) | 13 | — | (9 | ) | — | ||||||||||||||
Total Cash Flows From Investing Activities | (2 | ) | 12 | (206 | ) | (9 | ) | (205 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Short term debt incurred | 30 | (6 | ) | 82 | — | 106 | |||||||||||||||
Short term debt paid | — | — | (95 | ) | — | (95 | ) | ||||||||||||||
Long term debt incurred | 1,298 | — | 65 | — | 1,363 | ||||||||||||||||
Long term debt paid | (1,192 | ) | — | (28 | ) | — | (1,220 | ) | |||||||||||||
Debt issuance costs | (37 | ) | — | — | — | (37 | ) | ||||||||||||||
Increase in restricted cash | (58 | ) | — | (3 | ) | — | (61 | ) | |||||||||||||
Other transactions | (1 | ) | (13 | ) | (103 | ) | 100 | (17 | ) | ||||||||||||
Total Cash Flows From Financing Activities | 40 | (19 | ) | (82 | ) | 100 | 39 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | (1 | ) | (33 | ) | — | (34 | ) | |||||||||||||
Net Change in Cash and Cash Equivalents | (175 | ) | (2 | ) | (63 | ) | — | (240 | ) | ||||||||||||
Cash and Cash Equivalents at Beginning of the Period | 585 | 25 | 936 | — | 1,546 | ||||||||||||||||
Cash and Cash Equivalents at End of the Period | $ | 410 | $ | 23 | $ | 873 | $ | — | $ | 1,306 | |||||||||||
F-193
F-194
Item 20. | Indemnification of Directors and Officers |
II-1
II-2
II-3
Item 21. | Exhibits and Financial Statement Schedules |
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
3 | Articles of Incorporation and By-Laws | |||||||||
(a) | Certificate of Amended Articles of Incorporation of The Goodyear Tire & Rubber Company, dated December 20, 1954, and Certificate of Amendment to Amended Articles of Incorporation of The Goodyear Tire & Rubber Company, dated April 6, 1993, and Certificate of Amendment to Amended Articles of Incorporation of the Company dated June 4, 1996, three documents comprising the Company’s Articles of Incorporation, as amended (incorporated by reference, filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1, File No. 333-127918). | |||||||||
(b) | Code of Regulations of The Goodyear Tire & Rubber Company, adopted November 22, 1955, and amended April 5, 1965, April 7, 1980, April 6, 1981, April 13, 1987, May 7, 2003 and April 26, 2005 (incorporated by reference, filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-1, File No. 333-127918). | |||||||||
(c) | Certificate of Incorporation of Wingfoot Ventures Twelve, Inc., dated May 21, 1993 and Certificate of Amendment of Certificate of Incorporation, dated November 15, 1995, changing name from “Wingfoot Ventures Twelve, Inc.” to “Belt Concepts of America, Inc.,” two documents comprising the Certificate of Incorporation, as amended, of Belt Concepts of America, Inc. (incorporated by reference, filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(d) | Bylaws of Belt Concepts of America, Inc. (incorporated by reference, filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(e) | Certificate of Incorporation of Celeron Corporation, dated March 17, 1982 (incorporated by reference, filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(f) | Bylaws of Celeron Corporation (incorporated by reference, filed as Exhibit 3.4 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(g) | Certificate of Incorporation of Cosmoflex, Inc., dated May 29, 1973 (incorporated by reference, filed as Exhibit 3.5 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(h) | Bylaws of Cosmoflex, Inc. (incorporated by reference, filed as Exhibit 3.6 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(i) | Restated Articles of Incorporation of Service Station Supply Co., dated November 30, 1983 and Certificate of Amendment of Articles of Incorporation, dated November 22, 1988, changing name from Service Station Supply Co. to Dapper Tire Co., Inc., two documents comprising the Articles of Incorporation, as amended, of Dapper Tire Co., Inc. (incorporated by reference, filed as Exhibit 3.7 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(j) | Amended and Restated Bylaws of Dapper Tire Co., Inc. (incorporated by reference, filed as Exhibit 3.8 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(k) | Certificate of Incorporation of Divested Companies Holding Company, dated November 24, 1987 (incorporated by reference, filed as Exhibit 3.9 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(l) | Bylaws of Divested Companies Holding Company (incorporated by reference, filed as Exhibit 3.10 to the Company’s Registration Statement on Form S-4, File No. 333-128932). |
II-4
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(m) | Articles of Incorporation of Divested Litchfield Park Properties, Inc., dated November 25, 1987 (incorporated by reference, filed as Exhibit 3.11 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(n) | Bylaws of Divested Litchfield Park Properties, Inc. (incorporated by reference, filed as Exhibit 3.12 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(o) | Restated Articles of Incorporation of Goodyear Farms, Inc., dated May 30, 1980 (incorporated by reference, filed as Exhibit 3.13 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(p) | Bylaws of Goodyear Farms, Inc. (incorporated by reference, filed as Exhibit 3.14 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(q) | Certificate of Incorporation of the Goodyear Tire and Rubber Export Company, dated January 16, 1922; Certificate of Amendment of the Certificate of Incorporation of the Goodyear Tire and Rubber Export Company, dated February 12, 1957; changing name from “Goodyear Tire and Rubber Export Company” to “Goodyear International Corporation,” two documents comprising the Certificate of Incorporation, as amended, of Goodyear International Corporation (incorporated by reference, filed as Exhibit 3.15 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(r) | Bylaws of Goodyear International Corporation (incorporated by reference, filed as Exhibit 3.16 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(s) | Certificate of Incorporation of Goodyear Western Hemisphere Corporation, dated February 27, 1950 (incorporated by reference, filed as Exhibit 3.17 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(t) | Bylaws of Goodyear Western Hemisphere Corporation (incorporated by reference, filed as Exhibit 3.18 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(u) | Certificate of Incorporation of Wingfoot Ventures Fourteen Inc., dated May 21, 1993 and Certificate of Amendment of Certificate of Incorporation of Wingfoot Ventures Fourteen Inc., dated March 7, 1997 changing name from “Wingfoot Ventures Fourteen Inc.” to “The Kelly-Springfield Tire Corporation,” two documents comprising the Certificate of Incorporation, as amended, of The Kelly-Springfield Tire Corporation (incorporated by reference, filed as Exhibit 3.19 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(v) | Bylaws of The Kelly-Springfield Tire Corporation (incorporated by reference, filed as Exhibit 3.20 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(w) | Certificate of Incorporation of Wheel Assemblies Inc., dated July 15, 1998 (incorporated by reference, filed as Exhibit 3.21 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(x) | Bylaws of Wheel Assemblies Inc. (incorporated by reference, filed as Exhibit 3.22 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(y) | Articles of Organization of Wingfoot Commercial Tire Systems, LLC, dated September 21, 2000 (incorporated by reference, filed as Exhibit 3.23 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(z) | Operating Agreement of Wingfoot Commercial Tire Systems, LLC, dated October 31, 2000 (incorporated by reference, filed as Exhibit 3.24 to the Company’s Registration Statement on Form S-4, File No. 333-128932). |
II-5
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(aa) | Certificate of Incorporation of Wingfoot Ventures Eight Inc., dated July 22, 1988 (incorporated by reference, filed as Exhibit 3.25 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(bb) | Bylaws of Wingfoot Ventures Eight Inc. (incorporated by reference, filed as Exhibit 3.26 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(cc) | Certificate and Articles of Amalgamation of Goodyear Canada Inc., dated January 1, 2002 (incorporated by reference, filed as Exhibit 3.27 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(dd) | Bylaws of Goodyear Canada Inc. (incorporated by reference, filed as Exhibit 3.28 to the Company’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
4 | Instruments Defining the Rights of Security Holders, Including Indentures | |||||||||
(a) | Specimen nondenominational Certificate for shares of the Common Stock, Without Par Value, of the Company; EquiServe Trust Company, transfer agent and registrar (incorporated by reference, filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1, File No. 333-127918). | |||||||||
(b) | Indenture, dated as of March 15, 1996, between the Company and JPMorgan Chase Bank, as Trustee, as supplemented on December 3, 1996, March 11, 1998, and March 17, 1998 (incorporated by reference, filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998, File No. 1-1927). | |||||||||
(c) | Indenture, dated as of March 1, 1999, between the Company and JPMorgan Chase Bank, as Trustee, as supplemented on March 14, 2000 in respect of $300,000,000 principal amount of the Company’s 8.50% Notes due 2007 (incorporated by reference, filed as Exhibit 4.1, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, File No. 1-1927), and as further supplemented on August 15, 2001, in respect of the Company’s $650,000,000 principal amount of the Company’s 7.857% Notes due 2011 (incorporated by reference, filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2001, File No. 1-1927). | |||||||||
(d) | First Lien Credit Agreement, dated as of April 8, 2005, among Goodyear, the lenders party thereto, the issuing banks party thereto, Citicorp USA, Inc. as Syndication Agent, Bank of America, N.A., as Documentation Agent, the CIT Group/ Business Credit, Inc., as Documentation Agent, General Electric Capital Corporation, as Documentation Agent, GMAC Commercial Finance LLC, as Documentation Agent and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (incorporated by reference, filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(e) | Second Lien Credit Agreement, dated as of April 8, 2005, among Goodyear, the lenders party thereto, Deutsche Bank Trust Company Americas, as Collateral Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference, filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(f) | Third Lien Credit Agreement, dated as of April 8, 2005, among Goodyear, the subsidiary guarantors listed on the signature pages thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference, filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). |
II-6
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(g) | Amended and Restated Term Loan and Revolving Credit Agreement, dated as of April 8, 2005, among Goodyear, Goodyear Dunlop Tires Europe B.V., Goodyear Dunlop Tires Germany GmbH, Goodyear GmbH & Co. KG, Dunlop GmbH & Co. KG, Goodyear Luxembourg Tires S.A., the lenders party thereto, J.P. Morgan Europe Limited, as Administrative Agent, and JPMorgan Chase Bank, N.A., as Collateral Agent, including Amendment and Restatement Agreement, dated as of April 8, 2005 (incorporated by reference, filed as Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(h) | First Lien Guarantee and Collateral Agreement, dated as of April 8, 2005, among Goodyear, the Subsidiaries of Goodyear identified therein and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference, filed as Exhibit 4.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(i) | Second Lien Guarantee and Collateral Agreement, dated as of April 8, 2005, among Goodyear, the Subsidiaries of Goodyear identified therein and Deutsche Bank Trust Company Americas, as collateral agent (incorporated by reference, filed as Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(j) | Master Guarantee and Collateral Agreement, dated as of March 31, 2003, as Amended and Restated as of February 20, 2004, and as further Amended and Restated as of April 8, 2005, among Goodyear, Goodyear Dunlop Tires Europe B.V., the other subsidiaries of Goodyear identified therein and JPMorgan Chase Bank, N.A., as Collateral Agent, including Amendment and Restatement Agreement, dated as of April 8, 2005 (incorporated by reference, filed as Exhibit 4.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(k) | Lenders Lien Subordination and Intercreditor Agreement, dated as of April 8, 2005, among JPMorgan Chase Bank, N.A. as collateral agent for the First Lien Secured Parties referred to therein, Deutsche Bank Trust Company Americas, as collateral agent for the Second Lien Secured Parties referred to therein, Goodyear, and the subsidiaries of Goodyear named therein (incorporated by reference, filed as Exhibit 4.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 1-1927). | |||||||||
(l) | Purchase Agreement, dated June 20, 2005, among Goodyear, certain subsidiaries of Goodyear and Citigroup Global Markets Inc., as representative of the several Purchasers listed therein (incorporated by reference, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 24, 2005, File No. 1-1927). | |||||||||
(m) | Indenture, dated as of June 23, 2005 among Goodyear, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as Trustee (incorporated by reference, filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed June 24, 2005, File No. 1-1927). | |||||||||
(n) | Registration Rights Agreement, dated as of June 23, 2005, among Goodyear, Citigroup Global Markets Inc., BNP Paribas Securities Corp., Credit Suisse First Boston LLC, Goldman, Sachs & Co., J.P. Morgan Securities Inc., Calyon Securities (USA) Inc., Deutsche Bank Securities, Inc., Natexis Bleichroeder Inc. and KBC Financial Products USA, Inc. (incorporated by reference, filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K filed June 24, 2005, File No. 1-1927). |
II-7
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(o) | Amendment No. 2 to the General Master Purchase Agreement dated May 23, 2005 and August 26, 2005 between Ester Finance Titrisation, as Purchaser, Eurofactor, as Agent, Calyon, as Joint Lead Arranger and as Calculation Agent, Natexis Banques Populairies, as Joint Lead Arranger, Goodyear Dunlop Tires Finance Europe B.V. and the Sellers listed therein (including Amended and Restated General Master Purchase Agreement) (incorporated by reference, filed as Exhibit 4.1 to Goodyear’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(p) | Amendment No. 2 to the Master Subordinated Deposit Agreement dated May 23, 2005 and August 26, 2005 between Eurofactor, as Agent, Calyon, as Calculation Agent, Ester Finance Titrisation, as Purchaser, and Goodyear Dunlop Tires Finance Europe B.V. (including Amended and Restated Master Subordinated Deposit Agreement) (incorporated by reference, filed as Exhibit 4.2 to Goodyear’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(q) | Master Complementary Deposit Agreement dated December 10, 2004 between Eurofactor, as Agent, Calyon, as Calculation Agent, Ester Finance Titrisation, as Purchaser, and Goodyear Dunlop Tires Finance Europe B.V. (incorporated by reference, filed as Exhibit 4.3 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(r) | Indenture dated as of March 12, 2004 among Goodyear, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as Trustee (incorporated by reference, filed as Exhibit 4.11 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(s) | Note Purchase Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear and the investors listed therein (incorporated by reference, filed as Exhibit 4.12 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(t) | Registration Rights Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear and the investors listed therein (incorporated by reference, filed as Exhibit 4.13 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(u) | Collateral Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear and Wilmington Trust Company, as Collateral Agent (incorporated by reference, filed as Exhibit 4.14 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(v) | Lien Subordination and Intercreditor Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear, JPMorgan Chase Bank and Wilmington Trust Company (incorporated by reference, filed as Exhibit 4.15 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(w) | Note Purchase Agreement, dated June 28, 2004, among Goodyear and the purchasers listed therein (incorporated by reference, filed as Exhibit 4.3 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927). | |||||||||
(x) | Indenture, dated as of July 2, 2004, between Goodyear, as Company, and Wells Fargo Bank, N.A., as Trustee (incorporated by reference, filed as Exhibit 4.4 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927). |
II-8
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(y) | Registration Rights Agreement, dated as of July 2, 2004, among Goodyear, Goldman, Sachs & Co., Deutsche Bank Securities Inc., and J.P. Morgan Securities Inc. (incorporated by reference, filed as Exhibit 4.5 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927). | |||||||||
In accordance with Item 601(b)(4)(iii) of Regulation S-K, agreements and instruments defining the rights of holders of long-term debt of the Company pursuant to which the amount of securities authorized thereunder does not exceed 10% of the consolidated assets of the Company and its subsidiaries are not filed herewith. The Company hereby agrees to furnish a copy of any such agreement or instrument to the Securities and Exchange Commission upon request. | ||||||||||
5 | Legal Opinion | |||||||||
(a)** | Opinion of Covington & Burling. | |||||||||
10 | Material Contracts | |||||||||
(a)* | 2005 Performance Plan of the Company (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Current Report on Form 8-K filed April 27, 2005, File No. 1-1927). | |||||||||
(b)* | 2002 Performance Plan of the Company (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, File No. 1-1927). | |||||||||
(c)* | 1997 Performance Incentive Plan of the Company (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, File No. 1-1927). | |||||||||
(d)* | 1989 Goodyear Performance and Equity Incentive Plan (incorporated by reference, filed as Exhibit A to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1989, File No. 1-1927). | |||||||||
(e)* | Performance Recognition Plan of the Company adopted effective January 1, 2003 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, File No. 1-1927). | |||||||||
(f)* | Goodyear Supplementary Pension Plan, as restated and amended December 3, 2001 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-1927). | |||||||||
(g)* | Goodyear Employee Severance Plan, as adopted on February 14, 1989 (incorporated by reference, filed as Exhibit A-II to the Company’s Annual Report on Form 10-K for the year ended December 31, 1988, File No. 1-1927). | |||||||||
(h)* | The Goodyear Tire & Rubber Company Stock Option Plan for Hourly Bargaining Unit Employees at Designated Locations, as amended December 4, 2001 (incorporated by reference, filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-1927). | |||||||||
(i)* | The Goodyear Tire & Rubber Company Deferred Compensation Plan for Executives, amended and restated as of January 1, 2002 (incorporated by reference, filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-1927). | |||||||||
(j)* | First Amendment to The Goodyear Tire & Rubber Company Deferred Compensation Plan for Executives effective as of December 3, 2002 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-1927). |
II-9
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(k)* | 1994 Restricted Stock Award Plan for Non-Employee Directors of the Company, as adopted effective June 1, 1994 (incorporated by reference, filed as Exhibit B to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, File No. 1-1927). | |||||||||
(l)* | Outside Directors’ Equity Participation Plan, as adopted February 2, 1996 and amended February 3,1998 (incorporated by reference, filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-1927). | |||||||||
(m)* | Executive Performance Plan of The Goodyear Tire & Rubber Company (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(n) | Umbrella Agreement, dated as of June 14, 1999, between the Company and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, File No. 1-1927). | |||||||||
(o) | Amendment No. 1 to the Umbrella Agreement dated as of January 1, 2003, between the Company and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-1927). | |||||||||
(p) | Amendment No. 2 to the Umbrella Agreement dated as of April 7, 2003, between the Company and Sumitomo Rubber Industries, Ltd (incorporated by reference, filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, File No. 1-1927). | |||||||||
(q) | Agreement dated as of March 3, 2003, between Goodyear and Sumitomo Rubber Industries, Ltd. amending certain provisions of the alliance agreements (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, File No. 1-1927). | |||||||||
(r) | Amendment No. 3 to the Umbrella Agreement dated July 15, 2004, between the Company and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927). | |||||||||
(s) | Joint Venture Agreement for Europe, dated as of June 14, 1999 (and amendment No. 1 dated as of September 1, 1999), among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc., Sumitomo Rubber Industries, Ltd., and Sumitomo Rubber Europe B.V. (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, File No. 1-1927). | |||||||||
(t) | Shareholders Agreement for the Europe JVC, dated as of June 14, 1999, among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc., and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, File No. 1-1927). | |||||||||
(u) | Amendment No. 1 to the Shareholders Agreement for the Europe JVC, dated April 21, 2000, among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc. and Sumitomo Rubber Industries, Ltd (incorporated by reference, filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, File No. 1-1927). |
II-10
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
(v) | Amendment No. 2 to the Shareholders Agreement for the Europe JVC dated July 15, 2004, (incorporated by reference, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927). | |||||||||
(w) | Amendment No. 3 to the Shareholders Agreement for the Europe JVC dated August 30, 2005 (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Registration Statement on Form S-4, File No. 333-128932). | |||||||||
(x)* | Letter agreement dated September 11, 2000, between the Company and Robert J. Keegan (incorporated by reference, filed as Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 1-1927). | |||||||||
(y)* | Supplement and amendment to letter agreement between the Company and Robert J. Keegan dated February 3, 2004 (incorporated by reference, filed as Exhibit 10.2 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File. No. 1-1927). | |||||||||
(z)* | Form of Restricted Stock Purchase Agreement (incorporated by reference, filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, File No. 1-1927). | |||||||||
(aa)* | Stock Option Grant Agreement dated October 3, 2000, between the Company and Robert J. Keegan (incorporated by reference, filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 1-1927). | |||||||||
(bb)* | Form of Performance Equity Grant Agreement (incorporated by reference, filed as Exhibit 10.3 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(cc)* | Copy of Hourly and Salaried Employees Stock Option Plan of the Company as amended September 30, 2002 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 1-1927). | |||||||||
(dd)* | Forms of Stock Option Grant Agreements for options and SARs, Part I, Agreement for Non-Qualified Stock Options, and Part II, Agreement for Non-Qualified Stock Options with tandem Stock Appreciation Rights (incorporated by reference, filed as Exhibit 10.4 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927). | |||||||||
(ee)* | Form of Grant Agreement for Executive Performance Plan (incorporated by reference, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 28, 2005, File No. 1-1927). | |||||||||
(ff)* | Letter Agreement dated July 14, 2004, between the Company and Robert W. Tieken (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, File No. 1-1927). | |||||||||
(gg)* | Schedule of Outside Directors’ Annual Compensation (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Current Report on Form 8-K filed April 14, 2005, File No. 1-1927). | |||||||||
(hh)* | Schedule of Salary and Bonus for Named Executive Officers (incorporated by reference, filed as Exhibit 10.5 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2004, File No. 1-1927). | |||||||||
12 | Statement re Computation of Ratios | |||||||||
(a) | Statement setting forth the Computation of Ratio of Earnings to Fixed Charges (incorporated by reference, filed as Exhibit 12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, File No. 1-1927). |
II-11
Exhibit | ||||||||||
Table | ||||||||||
Item No. | ||||||||||
Exhibit | ||||||||||
Description of Exhibit | Number | |||||||||
21 | Subsidiaries | |||||||||
(a) | List of subsidiaries of the Company at December 31, 2004 (incorporated by reference, filed as Exhibit 21.1 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2004, File No. 1-1927). | |||||||||
23 | Consents of Independent Registered Public Accounting Firms | |||||||||
(a) | Consent of PricewaterhouseCoopers LLP. | 23.1 | ||||||||
(b) | Consent of KPMG. | 23.2 | ||||||||
24 | Powers of Attorney | |||||||||
(a) | Powers of Attorney of Officers and Directors signing this report. | 24.1 | ||||||||
99 | ||||||||||
(a)** | Form of Letter of Transmittal. |
* | Indicates management contract or compensatory plan or arrangement. |
** | To be filed in amendment. |
Item 22. | Undertakings |
II-12
The Goodyear Tire & Rubber Company |
By: | /s/ RICHARD J. KRAMER |
Name: Richard J. Kramer | |
Title: Executive Vice President and | |
Chief Financial Officer |
Signature | Title | Date | ||||
* | Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) | |||||
/s/ RICHARD J. KRAMER | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | October 11, 2005 | ||||
/s/ THOMAS A. CONNELL | Vice President and Controller (Principal Accounting Officer) | October 11, 2005 | ||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
* | Director | |||||
*By: | /s/ RICHARD J. KRAMER | October 11, 2005 | ||||
Attorney-in-fact for each of the persons indicated |
II-13
Belt Concepts of America, Inc. |
By: | /s/ TIMOTHY R. TOPPEN |
Timothy R. Toppen | |
President |
Signature | Title | |||
/s/TIMOTHY R. TOPPEN | Director and President (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Director, Vice President and Treasurer (Principal Financial Officer) | |||
/s/CHRISTOPHER JONES | Director and Assistant Comptroller (Principal Accounting Officer) |
II-14
Celeron Corporation |
By: | /s/ RICHARD J. KRAMER |
Richard J. Kramer | |
President |
Signature | Title | |||
/s/RICHARD J. KRAMER | Director and President (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Director, Vice President and Treasurer (Principal Financial Officer) | |||
/s/THOMAS A. CONNELL | Director, Vice President and Comptroller (Principal Accounting Officer) |
II-15
Cosmoflex, Inc. |
By: | /s/ RICHARD E. CAMPBELL |
Richard E. Campbell | |
President |
Signature | Title | |||
/s/RICHARD E. CAMPBELL | President (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Director, Vice President and Treasurer (Principal Financial Officer) | |||
/s/CHRISTOPHER JONES | Comptroller (Principal Accounting Officer) | |||
/s/THOMAS A. CONNELL | Director | |||
/s/TIMOTHY R. TOPPEN | Director |
II-16
Dapper Tire Co., Inc. |
By: | /s/ SAL MARQUEZ |
Sal Marquez | |
President |
Signature | Title | |||
/s/ SAL MARQUEZ | President (Principal Executive Officer) | |||
/s/ DARREN R. WELLS | Director, Vice President and Treasurer (Principal Financial Officer) | |||
/s/ THOMAS CONNELL | Vice President (Principal Accounting Officer) | |||
/s/ MICHAEL R. RICKMAN | Director | |||
/s/ JOHN F. WINTERTON | Director |
II-17
Divested Companies Holding Company |
By: | /s/ D. BRENT COPELAND |
D. Brent Copeland | |
President |
Signature | Title | |||
/s/D. BRENT COPELAND | Director and President (Principal Executive Officer) | |||
/s/RONALD J. CARR | Director, Vice President, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | |||
/s/RANDALL M. LOYD | Director |
II-18
Divested Litchfield Park Properties, Inc. |
By: | /s/ D. BRENT COPELAND |
D. Brent Copeland | |
President |
Signature | Title | |||
/s/D. BRENT COPELAND | Director and President (Principal Executive Officer) | |||
/s/RONALD J. CARR | Director, Vice President, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | |||
/s/RANDALL M. LOYD | Director |
II-19
Goodyear Canada Inc. |
By: | /s/ JAMES S. COULTER |
James S. Coulter | |
President |
Signature | Title | |||
/s/JAMES S. COULTER | Director and President (Principal Executive Officer) | |||
/s/LINDA M. ALEXANDER | Director and Vice President Finance and Administration (Principal Financial Officer and Principal Accounting Officer) | |||
/s/DOUGLAS S. HAMILTON | Director | |||
/s/FARRIS J.H. JABOOR | Director | |||
/s/AUGUSTINE M. LIOTTA | Director | |||
/s/LAWRENCE D. MASON | Director and Authorized Representative in the United States | |||
/s/ STEPHEN R. McCLELLAN | Director |
II-20
Signature | Title | |||
/s/CHARLES L. MICK | Director | |||
/s/JONATHAN D. RICH | Director |
II-21
Goodyear Farms, Inc. |
By: | /s/ RICHARD J. KRAMER |
Richard J. Kramer | |
President |
Signature | Title | |||
/s/RICHARD J. KRAMER | Director and President (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Director, Vice President and Treasurer (Principal Financial Officer) | |||
/s/THOMAS A. CONNELL | Director, Vice President and Comptroller (Principal Accounting Officer) | |||
/s/BERTRAM BELL | Director | |||
/s/ANTHONY E. MILLER | Director |
II-22
Goodyear International Corporation |
By: | /s/ ROBERT J. KEEGAN |
Robert J. Keegan | |
President |
Signature | Title | |||
/s/ROBERT J. KEEGAN | Chairman of the Board and President (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Vice President and Treasurer (Principal Financial Officer) | |||
/s/THOMAS A. CONNELL | Director, Vice President and Comptroller (Principal Accounting Officer) | |||
/s/BERTRAM BELL | Director | |||
/s/CHRISTOPHER W. CLARK | Director | |||
/s/RICHARD J. KRAMER | Director | |||
/s/JONATHAN D. RICH | Director |
II-23
Goodyear Western Hemisphere Corporation |
By: | /s/ RICHARD J. KRAMER |
Richard J. Kramer | |
President |
Signature | Title | |||
/s/RICHARD J. KRAMER | Director and President (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Director, Vice President and Treasurer (Principal Financial Officer) | |||
/s/THOMAS A. CONNELL | Director, Vice President and Comptroller (Principal Accounting Officer) | |||
/s/BERTRAM BELL | Director | |||
/s/ROBERT J. KEEGAN | Director |
II-24
The Kelly-Springfield Tire Corporation |
By: | /s/ JONATHAN D. RICH |
Jonathan D. Rich | |
President and Chief Executive Officer |
Signature | Title | |||
/s/JONATHAN D. RICH | Director, President and Chief Executive Officer (Principal Executive Officer) | |||
/s/J. WILLIAM HEITMAN | Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer) | |||
/s/RICHARD J. KRAMER | Director | |||
/s/STEPHEN R. McCLELLAN | Director | |||
/s/MICHAEL R. RICKMAN | Director |
II-25
Wheel Assemblies Inc. |
By: | /s/ JONATHAN D. RICH |
Jonathan D. Rich | |
President and Chief Executive Officer |
Signature | Title | |||
/s/JONATHAN D. RICH | Director and President and Chief Executive Officer (Principal Executive Officer) | |||
/s/DARREN R. WELLS | Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer) | |||
/s/RICHARD J. KRAMER | Director | |||
/s/MICHAEL R. RICKMAN | Director |
II-26
Wingfoot Commercial Tire Systems, LLC |
By: | /s/ D. BRENT COPELAND |
D. Brent Copeland | |
President and Chief Operating Officer | |
President |
Signature | Title | |||
/s/D. BRENT COPELAND | President and Chief Operating Officer (Principal Executive Officer) | |||
/s/RONALD J. CARR | Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||
/s/THOMAS A. CONNELL | Director | |||
/s/J. WILLIAM HEITMAN | Director | |||
/s/STEPHEN R. McCLELLAN | Director | |||
/s/JONATHAN D. RICH | Director |
II-27
Signature | Title | |||
/s/MICHAEL R. RICKMAN | Director | |||
/s/DARREN R. WELLS | Director |
II-28
Wingfoot Ventures Eight Inc. |
By: | /s/ D. BRENT COPELAND |
D. Brent Copeland | |
President |
Signature | Title | |||
/s/D. BRENT COPELAND | Director and President (Principal Executive Officer) | |||
/s/RONALD J. CARR | Director, Vice President, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | |||
/s/RANDALL M. LOYD | Director |
II-29