THE GOODYEAR TIRE & RUBBER COMPANY
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
LONG TERM DEBT AND FINANCING ARRANGEMENTS
At December 31, 2006, the Parent Company was a party to various long term financing facilities. Under the terms of these facilities, the Parent Company pledged a significant portion of its assets as collateral. The collateral included first, second, and third priority security interests in current assets, certain property, plant and equipment, capital stock of certain subsidiaries, and other tangible and intangible assets. In addition, the facilities contain certain covenants that, among other things, limit the Parent Company’s ability to secure additional indebtedness, make investments, and sell assets beyond specified limits. The facilities limit the Parent Company’s ability to pay dividends on its common stock and limit the amount of capital expenditures the Parent Company, together with its consolidated subsidiaries, may make. The facilities also contain certain financial covenants including the maintenance of a ratio of Consolidated EBITDA to Consolidated Interest Expense, and a ratio of net Consolidated Senior Secured Indebtedness to Consolidated EBITDA (as such terms are defined in the respective facility agreements). For further information, refer to the Note to the Consolidated Financial Statements No. 11, Financing Arrangements and Derivative Financial Instruments.
The annual aggregate maturities of long term debt and capital leases for the five years subsequent to December 31, 2006 are presented below. Maturities of debt credit agreements have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of their current terms.
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(In millions) | | 2007 | | | 2008 | | | 2009 | | | 2010 | | | 2011 | |
Debt maturities | | $ | 339 | | | $ | 102 | | | $ | 497 | | | $ | 2,039 | | | $ | 2,101 | |
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Our U.S. Revolving Credit Facility is due 2010, as such, the borrowings outstanding are presented in the table as maturing in 2010. However, in January 2007, we repaid outstanding amounts under the revolving credit facility.
COMMITMENTS AND CONTINGENT LIABILITIES
At December 31, 2006, the Parent Company did not have off-balance-sheet financial guarantees written and other commitments.
At December 31, 2006, the Parent Company had recorded costs related to a wide variety of contingencies. These contingencies included, among other things, environmental matters, workers’ compensation, general and product liability and other matters. For further information, refer to the Note to the Consolidated Financial Statements No. 18, Commitments and Contingent Liabilities.
DIVIDENDS
The Parent Company used the equity method of accounting for investments in consolidated subsidiaries during 2006, 2005 and 2004.
The following table presents dividends received during 2006, 2005 and 2004:
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(In millions) | | 2006 | | | 2005 | | | 2004 | |
Consolidated subsidiaries | | $ | 247 | | | $ | 290 | | | $ | 155 | |
50% or less-owned persons | | | — | | | | 1 | | | | 1 | |
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| | $ | 247 | | | $ | 291 | | | $ | 156 | |
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There were no stock dividends received from consolidated subsidiaries in 2006. Dividends received from consolidated subsidiaries included stock dividends of $16 million and $15 million in 2005 and 2004, respectively.
SUPPLEMENTAL CASH FLOW INFORMATION
The Parent Company made cash payments for interest in 2006, 2005 and 2004 of $410 million, $349 million and $308 million, respectively. The Parent Company had net cash receipts for income taxes in 2006, 2005 and 2004 of $6 million, $19 million and $10 million, respectively.
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