Document QymG6eNE9kbKD1MB1kdXQmd8

(Laser D Document Print Summary Accounting: Date Printed: Time Printed: Company Name: Exchange: Ticker Symbol: Company #: Document Type: Document Date: Amendment: Document #: Printed: Pages Printed: Disabled 01/24/91 02:36 P.M. GOODYEAR TIRE k RUBBER CO N GT G591600000 10-K 12/31/89 N/A 00750806 Document 71 PLAINTIFFS EXHIBIT GTR-2 DISCLOSURE INC. DALLAS INFORMATION CENTim Laser Another tmouomm^ Information Service GZHf'dO MI FORM 10-K SECURITIES AMD EXCHANGE COMMISSION ..KOfllSTWKi Waahlagton, DjC. 20640 CCRr yRW -LIAISON ANNUAL REPORT PURSUANT TO SECTION 13 OR 1524 A 0 52 THE SECURITIES EXCHANGE ACT OF 1934 Tor the fiscal year ended December SI, 1989 Commisalon PDe Number: HUT THE GOODYEAR TIRE & RUBBER COMP (IxmcC mm f Itgbimt u irtIHwI 1b to charter) Ohio (Suu* or 34-0263240 1144 Erne Market Street, Akron, Ohio ............................... ") 44316-0001 (SsCafe) Beglatrant's telephone munber, including area code: (216) 766-21X1 Secnxitlea regiatend pazenaet to Sectloe 12(b) of the Act: ntitrfM Common Stock, Without Par Value Preferred Stock Purchase Bights 8.60% Sinking Fund Debentures, doe September 30,1996 7.36% Sinking Fund Debentures, due September 16,1997 New York Stock Exchange Midwest Stock Exchange Pacific Stock Exchange New York Stock Exchange Midwest Stock Exchange Pacific Stock New York Stock Exchange New York Stock Exchange Securities registered pursuant to Section 13(g) of the Act: N 1*f Indicate fay check mark whether the Registrant (L) has filed all reports required to be filed by Section 13 or 16(d) of the Securities Exchange Act of 1934 daring the preceding 12 months, and (2) has been subject to aach filing requirements for the past 90 days. Yea V No The aggregate Mill* rf (Vynmwi Stnrif Vl(j fry nwiiaiitu of the Registrant on February 16,1990, determined using the per share dosing pries thereof on the New York Stock Exchange Composite Transactions tape of 636.00 on that Hit> was approximately 62,026,790,966.00. - Shares of Common Stock, Without Par Value, oatstandtog at February 16, lM6e _________67,96236* DOCUMENTS INCORPORATED BY REFERENCE: Portions of Beglscxmafa definitive Proxy Statement, dated February 26,1990, fr ita 1990 Annual Meeting of Shareholders axe incorporated by reference into Part ML THE GOODYKAE THE * EOBBKB COMPANY Annual Beport an Fans UML TWbte of Goftteat* PARI 1 BnataMM........................................... ........................................ 2 Properties......................................................... 1...................... 8 Legal Proceeding!....................................................................... 4 Submission of Matters to a Vote of Security Holders........... 4(A) Executive Offlcma of Registrant............................................... PABTD . 6 Market for the Bagtstnntis Common Stock sad Edited Stockholder Mattota............................................................... 6 Selected Financial Data............................................................. 7 Management*! Discussion and Analysis of Flnandal Condition and Results of Operations.................................. 8 Financial Statemeate and Supplementary Data.................... 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.................................. PAST in 10 Dimeters and Executive QOcers of the Registrant............... 11 Executive Compensation.................................. /...................... 12 Security Ownership of Certain Beneficial Owners and Management.......................................................................... 13 Certain Relationships and Related Transactions.................. 14 ' PART IV Exhibits, Financial Statement Schedules, and Reports on Form 64C................................................................................ Signatures...................................................................... Index to Financial Statement Schedules................................. Index of Exhibits..................................................................... 1 14 M 20 20 24 25 25 31 53 53 63 63 63 63 54 FS-1 Xl I # e * e THE GOODYEAR TOE ft RUBBER COMPANY ITElfL BUSINESS. PARTI BUSINESS OP GOODYEAR The Goodyear Tire A Bobber Company is ao Ohio corporation ocgwimd hi 1886. ha principal offices are located at 1144 East Market Street, Akron, OMo 44316-0001. ha tatepto&e number la (218) 788*2121. The term MBa0atzaiitM wherever wed herein refers solely to The Goodyear Tire A Rubber Company. The terms "Goodyear" and the "Company" wherever used herein refer to The Goodyear Tire A Bobber Company together with all of Its domestic and foreign subsidiary companies, unless the context indicates to the contrary. Goodyear ia one of the world's leading manufacturers of tires and rubber products, engaging in operations throughout the free world. Goodyear's net sales in 1968 were S10.9 billion. Goodyear's net income In 1968 was $206.8 miHfaai, including 817.4 million of tax benefits from loss carryovers on prior foreign losses which were accounted for aa an extraordinary item. Goodyear's worldwide employment averaged approximately 111,468 during 1989. Goodyear's principal business is the development, manufacture, distribution and sale of tires for most applications throughout the free world. Goodyear also manufactures and markets numerous rubber, chemical and plastic products for the transportation industry and various industrial and consumer markets. The Company also provides automotive repair and other services and sells various other products. Goodyear also engages in various crude ail transportation and trading activities through the Celeron subsidiaries. The All American Pipeline System has been designed, when completed, to be a 1,750 mile heated crude oil pipeline capable of transporting approximately 300,000 barrels per day of heavy erode oil produced offshore California from the California Coast to refineries along the Gulf Coast and in the mid-continent region. The l,225-mile mainline segment extending from near Bakersfield, California, to McCamey, Texas, has been transporting limited quantities of onshore California and Alaska North Slope crude oil to Texas since December of 1887, when the segment commenced preoperational developmental and testing operatiops. RECENT DEVELOPMENTS IN GOODYEAR'S BUSINESS During 1989, the Company continued cost containment programs and reorganized its management and operating structure designed to make the Company more responsive to the demands of the market place, an extension of the Company's continuing Comprehensive Restructuring Plan initiated la 1986. Goodyear's Comprehensive Restructuring Plan included, among other things, the following: (1) Registrant's 1986 and 1987 purchase of approximately 63,616,992 shares of its Common Stock for approximately $2.6 billion; (2) the Divestiture Program, pursuant to which Registrant sold its Motor Wheel, Goodyear Aerospace and Celeron Oil and Gas subsidiaries and certain real estate and other assets for approximately $1.6 billion in 1986 and 1987 and ia currently holding available for sale the All American Pipeline System and other oil transportation assets; (3) the Facility Modernization Program consisting of the closure of obsolete facilities, other capacity realignments and process improvement and cost containment programs; sad (4} Cost Reduction Programs, which included special workforce reduction programs during 1966 through 1989. During 1989, Goodyear sold its South Africa tire and general products nmiuftrrurg subsidiary for $41.0 million, incurring s $43.0 million pre-tax ($62.0 million after-tax) loss. All American Pipeline Company, s wholly-owned subsidiary of Registrant, sold approximately 435 miles of unused 30-inch pipe for approximately $70.0 million, incurring a $48.3 million pre-tax ($43.0 million after-tax) loss. In December of 1989, Goodyear also acquired Co-Ex Plastics lac, a blown wrapping films manufacturing company located in Lewisburg, Tennessee. 1 The Company commenced construction of a radial passenger and light track tire manufac turing plant in Napanee, Ontario, Cauda, in July of 1688, scheduled to be completed la two phases at an aggregate coat of approximately Canadian $320 million. The first phase, which is expected to coet approximately t240 million, is scheduled to be reedy for start up in mid-1990. It is expected that the Napanee plant, designed to serve the Canadian original equipment market, will be capable of produdng approximately 14,000 tires per day by late 1991. During 1989, the Company continued the acquisition and development of a site in Korea for a radial passenger and light trade tire manufacturing facility. The Company had obtained authorization from the Republic of Korea to build the facility in 1988, A new technology tread rubber plant at Greenville, Texas, was completed in 1969. Daring 1989, the Company continued its program designed to enhance production opacity and addency through significant plant modernisation and expansion projects. Projects com pleted daring 1969 included passenger tire expansions at the Fayetteville, North Carolina and Union City, Tennessee plants, light end medium radial truck tire expansions at the Company's Danville, Virginia, Fayetteville, North Carolina, and Topeka, Kansas plants sad redial aircraft tire and esrthmover tire expansions at the Danville, Virgins end Topeka, Kansas plants. Expansions of tire capacity in plants in Luxembourg, Mexico and Venezuela were also completed during 1989. Expansion of the Lincoln, Nebraska industrial rubber products plant was also computed during 1989. Other significant plant modernization and expansion prefects are presently underway at the Company's Lawton, Oklahoma, Topeka, Kansas, Union City, Tennes see, Americana, Brazil, Fulda, West Germany, and (zralt, Turkey tire plants. Expansions were also started in 1989 at the Company's Houston, Texas, and Beaumont, Texas, chemical plants. The Company continued Its emphasis on the design and development of high technology radial passenger and truck tires. The market share of radial passenger and truck tires, which offer more performance and durability than bias-ply or bias-belted tires, continued to increase ia 1989. Approximately 93% of all passenger tires sold in the United States during 1969 were radial, compared to 92% in 1988, 89% in 1987,86% ia 1986 and 82% in 1985. Approximately 68% of all highway truck tires sold in the United States during 1989 were redials, compared to 64% in 1988, 58% in 1987, 52% in 1986 and 48% in 1985. High performance tires continued to increase their share of the total United States passenger tire market, constituting approximately 19% of the market in 1989, compared to 17% of the market in 1988 and 11% of the market in 1987. In 1989, Goodyear introduced the EAGLE GA, a new all season, high performance radial passenger tire for luxury touring sedans. The EAGLE GA was the most widely accepted new passenger tire by auto manufacturers in the Company's history. Other new tires introduced in 1989 included the EAGLE ZR35 Gatorback, a foot-wide high performance tire designed for the rear wheels of the ZR-1 Corvette, radial tires for stock car racing and the Unisteel G259, a new steer-axle tire designed to provide increased mileage for over-the-road trucks. FINANCIAL INFORMATION ABOUT GOODYEAR'S INDUSTRY SEGMENTS Financial information relating to Goodyear's "Industry Segments" for each of the three years in the period ended December 31, 1989, appears in the Note captioned "Business Segments" and in the tabulation captioned "Industry Segments" in the Notes to Financial Statements set forth in Item 8 or this Annual Report, at pages 46 and 48, respectively, and is incorporated herein by specific reference. As further described in the "Business Segments" Note, the Company realigned its Industry Segments in 1989. The realigned Industry Segments natch external segment reporting to the internal structure of the Company's worldwide Tire Division, worldwide General Products Division and the Celeron Subsidiaries. The Tires and Related Industry Segment, formerly the Tire and Related Transportation Products Industry Segment, no longer includes certain rubber and plastic automotive products which are now included in the General Products Industry Segment, Formerly the Industrial Rubber, Chemical and Plastic Products Industry Segment. Industry Segment information for 1988 and 1987 has been restated to relect these changes 2 DESCRIPTION OP GOODYSATS BUSINESS -- INDUSTRY SEGMENTS TUBS AND BELATED Goodyear's principal Industry Segment in the development, manufacture, distribution and ale of Tim and related products and services (the "Tires and Related" Industry Segment), which accounted for approximately 81.4%, 82.3% and 83J>% of Goodyear's net sales and approximately 78.0%, 7&4% and 81.5% of Goodyear's operating income for the years 1988, 1888 and 1983, respectively. The principal cleat of products in the Tires and Related Industry Segment is tires for most applications. Salas of tires were approximately 724%, 73.9% end 74.3% of Goodyear's net sales in the years 1989,1968 and 1987, respectively. No other class of products or services in the Tires and Related Industry Segment accounted for as much ss 10% of Goodyear's sales in any of the last three years. The products and services comprising the Urea and Belated Industry Segment Include: Ilrta Goodyear manufactures and markets throughout the world s broad line of rubber tiree and tubes for automobiles, trucks, buses, tractors, farm implements, earthnoring equip ment, airplanes, industrial equipment and various other applications, in each case for sale to original equipment manufacturers and In the replacement market. In die United States and in several other markets, Goodyear offers two basic constructions of tires, radial and bias-ply. Various bolting and reinforcing materials are used, Including rayon, nylon and polyester tire cord, fiberglass, aramid fiber and steel. Several major lines of Goodyear-brand radial passenger tiree are sold in the United States, including the VECTOR, the ABRIVA, the TEMPO, the DOUBLE EAGLE, the EAGLE GT+4, the INV1CTA and the CORSA all season tire lines, the new all season, high performance EAGLE GA touring tire, the EAGLE ZR S, the EAGLE GT, the EAGLE ST, the EAGLE VR50, the EAGLE VR40 and the EAGLE ZR3S "Gatorback" high performance tire lines, the CUSTOM POLYSTEEL and the P32 and the ULTRA GRIP winter tire lines. Several major lines of Goodyear-brand radial light truck tires are offered in the United States, including the WRANGLER AT, KT, LT and XT and the TRACKER LT II lines. These lines of tires are also sold in Canada. Goodyear offers several passenger tire lines in the various foreign markets it serves. In Europe, where substantially all tires sold are redials, several linos of Goodyear-brand radial passenger tires are sold, including the VECTOR, the EAGLE, the GRAND PRIX S, the high performance EAGLE VR and NCT, the GT, the GTA and the EAGLE M + S all season passenger tire lines, the ALL WEATHER and ULTRA GRIP lines of winter passenger tires, and the WRANGLER, G22 and G46 light truck tire lines. In the Asian. African and Latin American markets, both radial and biaa-ply Goodyear-brand passenger and light truck tires are manufac tured and sold. Goodyear manufactures three constructions of redial medium truck tires, one using fabric, one using fabric and steel and another, the UNISTEEL Series, using an ail-steel cord and belt coMtruction. Goodyear also offers a full line of bias-ply medium truck tires. Goodyear produces several lines ortires for other applications, including radial and bias-ply tires for farm machinery, heavy equipment and aircraft. Goodyear retreads truck, aircraft and heavy equipment tires, primarily as a service to its commercial customers, aad manufactures and sells tread rubber and other tire retreading materials for various applications. The Kelly-8priagfirid Tire Company, a wholly-owned subsidiary of Registrant ("KellySpringfield"), manufactures and sells several lines of radial and bias-ply passenger and trade tiree in the United States replacement market and sells various lines of Kelly-brand tires in the replacement markets in Canada and certain ocher countries. Lee Tire ft Rubber Company, a wholly-owned subsidiary of Registrant ("Lee Tire"), markets several lines of radial and biaaply passenger and truck tires in the United States replacement market. Bred Rsgn, Inc., a 74.5% owned subsidiary of Registrant, is a tire retailing and commercial tire sales, retreading and service chain with operations in several areas of the United States. Air Treads, Inc., a 3 wholly-owned subsidiary of Registrant, sells new aircraft tins, produces and sella retreaded aircraft tires and repairs aircraft wheels and brakes in the United States and Canada. thlatodprodBctmamdaenteta. Additional products and services in the Tim and Related Industry Segment include: automotive repair services provided by Goodyear through its retail outlets and the sale to dealers and consumers of automotive repair and maintenance items, automotive equipment and accessories and other <*--", including televisions and stereos, household appliances, hone and garden equipment and supplies, and recreational equipment, purchased for such resale; the operation of six rubber plantations and the processing and sale of natural rubber; aircraft wheel and brake maintenance; end miscellaneous other products and Markets and Distribution--Competition The Company offers a brand line of tires for most applications and for all classes of customers. In the United States sad in most other countries, the Company sells Goodyear-brand tires to vehicle manufacturers for use as original equipment on vehicles they produce and sells Goodyear-braad, Kelly-brand, other house brand and private brand tires through various channels of distribution for sale to vehicle owners for replacement purposes. Worldwide, the Company's sales of passenger, truck and farm tires in the replacement market substantially exceed its sales of passenger, truck and farm dree to original equipment manufacturers. Because of their superior durability, handling and fuel economy, demand for radial tires in tha United States and other countries has increased significantly in recant years. Except for bias-ply temporary spare tires, all passenger tires sold in the United States to automobile manufacturers since 1982 have been radiate. During 1988, approximately 94% of ill tires sold to automobile manufacturers outside the United States were rariiala Approximate!; 96% of all passenger tires sold during 1989 in the United States replacement market were redials, compared to 94% in 1988, 90% in 1987, 87% In 1986,81% in 1986 and 76% in 1984. Goodyear anticipates that during 1990 approximately 97% of an passenger tires sold in the United States replacement market will be radiate. For the same reasons, demand for radial truck tires in the United States has also increased in recent years. During 1989, approximately 84% of all light and medium highway truck tires sold in die United States to truck manufacturers were radiate, compared to 76% in 1988 and 70% in 1987. During 1989, approximately 64% of all light and medium highway truck tires sold in the United States replacement market were radiate, compared to 61% in 1988,56% In 1987,49% in 1986 and 46% in 1986. Goodyear anticipates that daring 1990 approximately 69% of all highway truck tires sold in the United States replacement market will be radiate. Goodyear's tires are sold under highly competitive conditions both In the United States and in other countries. There are approximately 10 members of the tire manufacturing industry in the United States. Goodyear's principal domestic competitors are The Firestone Tire A Rubber Company (acquired by Bridgestone in 1988), Uniroyal-Goodrich Tire Company (which has agreed to be acquired by Michelin) and General Tire Inc. (acquired by Continental in 1987). In addition, Goodyear also competes worldwide with several major foreign based tire manufactur* . lug concerns, Including Michelin (which has four plants in the United States * has agreed to acquire Uulroyal-Goodiich), Bridgestone (which owns five plants in the United States as a result of its purchase of Firestone), Continental (which owns four General Tire plants in the United States), Pirelli, Sumitomo, Toyo, Yokohama and several Korean tire companies. Goodyear competes with other tire manufacturers on the basis of price, warranty, service, product design, performance and reputation, and consumer convenience. The Company believes Goodyear-brand tires enjoy a high recognition factor throughout the world and have reputa tion for high quality and value. 4 Goodyear is a major supplier, on a dtaect salt beais of Urea to several manufacture of aBtomobfies, trueks, farm and construction equipment and other vehicles, both la the United States aad several foreign markets. Goodyear sails tires to the amjar United States automobile sad trade manufacturers: General Motors, Ford, Chrysler, Nissan, Honda, Volkswagen, Naviatar, Mack Track, Freightliner, Peterbilt and Kenworth. Goodyear Is a signiBcant supplier of tires to several European manufacture, jadnding Flat, DaimkwDena, Volkswagen, Volvo, Ferrari, Jaguar, Lotus, Porsche, Alfa Boamo aad leaenlt, to four Japanese manufacturers, Nissan, Msnda, Toyota and Isusu, aad to fordgn^aubddiariaa oT General Motors, Ford end Chrysler. Goodyear also supplies major manufacturers of construction aad agricultural equipment, hiriiuntig Caterpillar, Ford Tractor, J. L Case, John Deere and Mmsey-Fetguaon. No customer or group of affiliated cuatomma accounted for as much as 741% of Goodyear's consolidated net sales during 1088, 1088 or 1087. Worldwide, Goodyear's annual net sales (including sales of bath the Tires and Edited aad General Products Industry Segments) to its ten largest vehicle manufacturing cuatomers, including their respective affiliates, represented Mae than 18.5% of Goodyear's consolidated net sales for each of 1080,1088 and 1987. Goodycnr-brand drat for replacement purposes are marketed in the United States in various ways. The principal method of distribution is a large network of independent dealers and franchisees. In addition, approximately 1,016 retail outlets (Inducting truck tire centers and leased space in department stores) an operated under the Goodyear same. In addition, approximately 385 retail and commercial outlets are operated by subsidiaries of the Registrant, including Brad Ragan/CaroUna Tire, Cambridge Tire, Mark C. Bloome, Capital Tire, Delta Tire, Dorman's Tire & Auto Service, Sima Tire, Gerard Tire, Norton Tire, and Atomic Tire A Service. ^ Kelly-Springfleld manufactures and markets under its own trade names several lines of passenger and truck tires, primarily through Independent dealers. KeDy-Springlleid also sells private brand and its own brands of tires to nations! and regional wholesale marketers, to retail chain marketers, to service stations aad to various other retail marketers. Lee Tire markets passenger and truck tires in the replacement market through Independent dealers and several large wholesale marketing organizations. The major portion of Kelly-Sprlngfleld's sales are private brand passenger tires. The major portion of Lee's sales are boose brand pasoengcr tires. Goodyear sells tires outside the United States to original equipment manufacturers and in the replacement market through its own wholesale distribution organizations and, in some countries, through its own retail stores, as well as through independent wholesale distributors. In certain countries Goodyear manufactures tires for others under their brand names and in certain other countries Goodyear contracts for the manufacture by others of Goodyear-brand tires. Belated products and services, including automotive parts, automotive maintenance and repair services and asaoctated merchandise, are aold in the United States through approximately 1,380 retail outlets operated by the Compaay. Automotive repair and maintenance items, automotive equipment and accessories and other items which are purchased for resale by the Company are distributed to many of the Company's tire dealers and franchisees. Belated products are sold principally bn the United States and Canada, under highly competitive conditions. The National Highway Traffic Safety Administration ("NHTSA"), under authority granted to it by the National Traffic and Motor Vehicle Safety Act of 1066, aa amended, has established various standards and regulations relating to motor vehicle safety, some of which apply to tires sold in the United States for highway use. The NHTSA baa the authority to order the recall of automotive products, including tires, having defects deemed to present a signileant safety risk. NHTSA has also issued "Uniform Tire Quality Grading" regulations requiring the grading of passenger tires for treadwear, traction and temperature resistance pursuant to prescribed 5 testing procedures ml the molding f such grades into the sidewall of each tire. The effect of with these regulations on Goodyear's sales and proffta cannot be determined. However, these regulations have increased the cost of producing and marketing psmenger tires in the United States. Other Information Befardfag Tina and Belated Induety Bagmaat Goodyear does not consider its Tires and Belated hastoess to be seasonal to any tigniflcant degree. Goodyear maiwtehis a gwiarnt inventory of new tires and certain other products ia order to rationalise production schedule* aad assure prompt availability of and* products to Its (InnAytr maintains a rigWl inventory awtoil prnflram. Goodyear offers Ita customers various flnandng snd extended payment programs from time to time. Goodyear does not believe these programs, when considered in the aggregate, require an unusual amount of working capital relative to the volume nf sake involved end the prevailing practices In the tire industry. A nationwide special purpose credit card lasasd by a bank, which ia honored at all Goodyear retail outlets and by participating Independent Goodyear dealers and franchiserii. la available to qualiSed persons. Sacs January 1, 1980, the Company has main tained a limited retail installment credit program in aippleieeat the special purpose credit card aad other third party credit faculties la the United States replacement market, 1989 unit sales of passenger tires decreased 1.1% compared to 1988 unit sales levels, and inenased 1.1% compared to 1987 unit sales levels Ir the United States original equipment market, 1989 unit sales of passenger tires decreased 5.6% compared to 1988 unit sales levels, and decreased 3.3% compared to 1967 unit sates levels. Total unit sates in the United States passenger tire market decreased approximately 2.0% in 1989 compared to 1988 and .1% compared to 1987. Based on current economic forecasts, Goodyear expects the total market for passenger tires in tiie United States in 1990 to be approximately the same as during 1989. Goodyear estimates that demand for original equipment passenger tires during 1990 will be approximately 5% below 1989 levels and that demand for passenger tires in the replacement market during 1990 will be appranmately 2% higher than in 1988. The total unit sales of passenger tires by the Company in the United States during 1989 decreased approximately 8.7% from 1968 levels and 9.7% from 1987 levels. The Company's unit sqjes of passenger tires in the United States replacement market during 1989 were 6.9%, or approximately 2.3 million units, lower than 1988 levels aad 11.1% lower than in 1987. The Company's unit sales of passenger tires to automobile manufacturers in the United States during 1989 were 14.0%, or approximately 3.0 million units, lower than in 1988 and 6.6% Lowe* than during 1987. Goodyear also exported approximately .67 million, 1.6 million and 1.9 million tires to Japan and Korea during 1989, 1988 aad 1987, respectively, for vehicles manufactured far shipment to the United States. Goodyear's total replacement market unit sates of light truck tires in the United States were 8.6% lower in 1989 than in 1988 compared to an Industry unit increase of 2.2%; and were 9.4% lower than 1987 levels compared to a 2.7% increase over 1987 levels for the entire industry. Goodyear's unit sales of light truck tires to truck manufacturers tn the United States during 1969 increased 27.1% over 1988 levels and 41.7% over 1987 levels. Based on reported shipments in the United States, the Company delivered approximately 27.5%, 29.3%, 30.2%, 29.2% and 28.4% of all passenger and truck tires shipped in the United States during 1989,1988,1987,1986 and 1985, respectively. The share of market for Goodyearbrand passenger and truck tires in the United States in 1989 was approximately 16.9%, compared to approximately 18.7% in 1988 and 1987, 18.9% in 1986 and 18.6% in 1985. The Company delivered approximately 46.5% of all farm tires shipped ia the United States riming 1989, compared to approximately 442% during 1988 and 42.5% during 1987. 6 Although prior to 1988 there had bean aa apparent excuse of tiro capacity tan tha United States, the tire industry was operating near ita radial passenger tin capacity during 1988 and in early 1989. Thto was priiaariiy due to continnad high Levels of new automobile production. From time to time in 1988 and eariy 1989 there ware backlogs of orders due to limitations on capacity, eapedaliy in certain sixes of radial high performance paaaaagar and light truck tires. The high Levels of capacity utilisation in the United States continued daring 1989 until the second half of the year, when substantially reduced demand in the original equipment market for automobile slid truck tires and the effects of lower than expected demand for the Company's tires resulted \m In-- iitHi--Him TVnrinj IQftft rVyutyw^ rodtal pmsnger Mid track tiro capacity was generally saffloent to meet demand. In order to maintain ita competitive position, respond to rffwgtwg market conditions and optimise production eadencien, Goodyear has a continuing program for the construction of new, and the expansion and modernisation of existing. radial passenger end truck tire facilities. Goodyear's worldwide unit sales of auto, truck mid fans tires decreased approximately 4.2% in 1989 compared to 1988, and were approximately 241% Lower than in 1987. la the United States, Goodyear's unit tiro sales wen approximately 7.6% lower than la 1988, and approxi mately 8% lower than in 1987. Unit sales of the Company's tiros in foreign markets In 1969 decreased approximately .1% from 1988 levels, but were 6.2% over 1987 levels. Goodyear believes it is generally well positioned to supply the anticipated demand for its aato, truck and form tires in each market it serves baaed on existing capedty sad additional capacity which is under construction or planned. GKNBSAL PRODUCTS Another Industry Segment is the development, manufacture, distribution and sale of numerous rubber, chemical and plastic products (Che "General Products" Industry Segment). The General Products Industry Segment accounted for approximately 18.6%, 17.6% and 16.3% of Goodyear's net sales and 28.1%, 26.0% and 18.4% iff Goodyear's total operating income in the yean 1989, 1988 and 1967, respectively. No class of produces or services in the General Products Industry Segment accounted for aa much aa 10% of Goodyear's net sales in any of the last three years. The products and services comprising the General Products Industry Segment include: Vehicle Component*. Goodyear manufactures a wide variety of automotive belts and hoses, air springs, engine mounts, instrument panels and various body and chassis parts for motor vehicles made of rubber, fiberglass, urethane and reinforced plastics. fsihsH'tsf Rubber Products. Goodyear produces various industrial rubber products, in cluding: conveyor, transmission and power transmission belts, betting and other products; air, steam, oil, water, gasoline and dry materials hose aad hydraulic hose for industrial applications; tank and pipe lining; noise abatement materials; air springs and bellows; and dock fenders. Goodyear also manufactures various rubber and plastic custom designed and engineered products, including rubber railroad crossings, rubber treads for tank tracks, and miscellaneous molded and extruded products. ____ Qknalcsi Product*. Goodyear produces a broad line of synthetic rubber, rubber latioes, organic chemicals used in rubber aad plastic processing and vinyl resins sod latices. Polpeoter Prodaeto. Goodyear produces polyester resins for containers, dual-ovenable trays, textiles sad other applications, high purity bottle resins aad specialty and coating resins. FUm Products. Goodyear manufactures: various PVC films for the packaging industry, for the food industry and for various industrial end use applications sad other purpooes; various films using LLDPE resins for pallet wrap aad other industrial packaging applications; a wide variety of primed and embossed vinyl laminating films for the furniture, kitchen cabinet and 7 cue goods iadustriea; sad numerous cut sod blown rigid sod flexible flbns and specialty films for wtous spplicationa. Aoe Product*. Goodyear, utilizing products obtained under foreign offtake agreements, markets heels, soles end strips for new shoes and shoe repair from rubber and other synthetic GrqpMe Products, Goodyear manufactures engraving rubber, printing blankets and gums for the printing industry. / floghg Product* Goodyear manufactures and markets elastomer membrane roofing materials and systems for commercial and industrial roofs. Most General Products ere sold directly to manufacturers or sold through independent wholesale distributors. No single customer or group of customers accounted for s significant portion of General Products sales. Goodyear does not maintain a significant inventory ofGeneral Products when considered in relation to the volume of business conducted. Tbe General Produets Industry Segment consists of a large number of product lines in respect of which several mannfactarers produce some, but not all, of the products manufactured by Goodyear. There ere approximately 300 suppliers of automotive belts and hoot products, rubber, fiberglass, urethane and reinforced plastic components for motor vehicles. Goodyear is a leading manufacturer of such products. Goodyear is a leading producer of industrial rubber products, an industry served by about 60 major firms. There are over 325 other firms participat ing in the engineered products segment of the market, Goodyear being one of the lending suppliers. Several major firms are significant suppliers of one or more chemical products similar to those manufactured by Goodyear. Goodyear is a major producer of synthetic rubber, rubber chemicals and latex. Goodyear is a major global supplier of blown and cast plastic flbns utilized in selected food packaging and industrial market segments and a significant supplier to the roofing market These markets are highly competitive, with quality and price being the most significant factors to most customers. Goodyear considers its products to be very competitive in both quality and price. OIL TRANSPORTATION Goodyear's crude oil transportation and related energy activities (the "Oil Transportation" Industry Segment) are conducted by the Celeron group of companies ("Celeron"). The Oil Transportation Industry Segment accounted for approximately .1%, .1% and .2% of Goodyear's net,,saies in the years 1989, 19S8 and 1987, respectively. The Oil Transportation Industry Segment incurred operating losses In 1969 aggregating an amount equivalent to 6.1% of Goodyear's 1989 total operating income and accounted for approximately .6% and .1% of Goodyear's total operating income in the yean 1988 and 1967, respectively. The Oil Transporta* tkm Industry Segment had no net sales or operating income In 1986. The Oil Transportation Industry Segment, previously referred to as the "Oil and Gas Industry Segment", was renamed In 1987 due to the Company's sale of substantially all of its oil and gas reserves and related assets in two transactions completed during 1987. On July 24, 1987, Celeron Oil and Gaa Company ("Celeron Oil and Gas") sold approximately 614% of its reserves to IP Petroleum Inc, a subsidiary of International Paper Company, for approximately 670 million in cash. On December 4,1987, all of the shares of Celeron Oil and Gas were sold to Exxon San Joaquin Production Company, a subsidiary of Exxon Corporation, for approximately 6615 million in cash. These transactions were accounted for as HiMwitimiwi operations. All American Pipeline Company, a wholly-owned subsidiary of Registrant ("All Ameriean"), is engaged in the design, construction, development end operation of a 1,750 mile heated 8 crude oil pipeline system which hae been designed to ertsnd. when competed, from the California Coast in the Santa Barbara Channel -- Santa Maria Basin area to the Texas Gulf Coast in the Webster/lioustoa Ship Channel area (the "All American Pipeline System"). Celeron Gathering Company, a wholly-owned subsidiary of Registrant ("Celeron Gathering"), engages in the gathering and trading of crude oil and, la chat oMmectiaii, has constructed and in n 43-mile gathering pipeline in the San Joaquin Talley, California (the "San Joaquin Talley Pipeline"). The locations of the All American Pipeline System and of the San Joaquin Valley Pipeline are shows on Maps 1 and 2, respectively, Mow. Celeron Trading A Transportation Company, a wholly-owned subsidiary of Registrant, is engaged in various crude ofl trading activities. The assets comprising the Oil Transportation Industry Segment remain available for sale as a part of the Company's Comprehensive Restructuring Plan. See "Recent Developments in Goodyear's Business" at page 1 of this Annual Report. All American Crnde Oil Pipeline System All American is currently constructing and developing the AU American Crude OU Pipeline System, a 1,750 mile heated crude oil pipeline designed to transport up to 300,000 barrels per day of heavy crude oil from points along the California coast and from various onshore California oil fields in the San Joaquin Talley and ocher areas in central California, for delivery to refineries in the mid-continent region and along the Gulf Coast. The All American Pipeline System is also capable of transporting up to 450,000 barrels per day of lighter crude oils or lower daily volumes of combinations of heavy crude oils (which must be heated) from fields on the outer continental shelf along the California coast in the Santa Barbarba Channel -- Santa Maria Basin area ("CCS Crude Oil") and lighter crude oils (which would not require heating) from various onshore California lelds ("CaBfornia Crude OU") or other sources to refineries in Che mid-continent region and along the Gulf Coast. Construction of the Ail American Pipeline System was started in late 1964 and had been scheduled to be completed in 1989 at an estimated cost of approximately 11.2 bfltton, excluding capitalised interest. During 1967, the 1,225-mile nsinline segment of the All American Pipeline System extending from Pentland Station located near Bakersfield, California, to McCamey, Texas (the "Pentland to McCamey Segment"), was filled with over 6 million barrels of crude oil. Since December 7,1987,'the Pentland to McCamey Segment of the All American Pipeline System has been transporting California Crude Oil and Alaska North Slope erode oil ("ANS Crude Oil") from central California to McCamey, Texas, while conducting preoperutional development and testing operations. The average daily volume ofsuch crude oils transported by the All American Pipeline System aggregated approximately 90,000 barrels per day during 1969 and 72,000 barrels per day during 1988. During 1990 and 1991, throughput levels are not expected to change significantly from 1989 levela Construction of the 460-mile segment of the All American Pipeline System which would extend from McCamey to the Texas Gulf Coast (the "McCamey to Houston Segment") had been delayed by, among other things, the acquisition of rights-of-uray and permits by All American along the preferred route determined by the United States Bureau of Land Management and approved by All American, the State of Texas and a Federal District Court (which route is shown on Map 1 at page 9). Construction of the McCamey to Houston Segment of the All American Pipeline System is currently planned to be undertaken only If and when it has been determined that there will be sufficient demand for OCS Crude Oil at refineries along the Gulf Coast and that substantial quantities of OCS Crude Oil are expected to be available to the All American Pipeline System on a timely basis subsequent to completion and then only when various ancillary permits have been obtained and necessary rights-of-way have been acquired While the All American Pipeline System continues to be in the construction (from Pentland Station west to the California Coast at Gaviota and along the coast from Gaviota to Las Flores and, when appropriate, from McCamey, Texas, east to the Texas Gulf Coast near Houston) and preoperational development stage, and due in part to the current unavailability of OCS Crude OU, the All American Pipeline System has been transporting, and expects to continue transport ing, limited quantities of California Crude Oil produced in the San Joaquin Valley area of California and ANS Crude Oil received front other pipelines from insert points in central California to terminals located in and near McCamey, Texas. Other potential transportation strategies, in addition to the current activities of All American and the heavy oU transportation activities for which the All American Pipeline System has been designed, are being reviewed and studied with a view to increasing the utilization of the All American Pipeline System. All American Pipeline Company is also investigating several potential methods of deUvering OCS Crude Oil, and developing plans for constructing such pipeline or other connecting faculties as may be required to deliver OCS Crude Oil, to connecting curriers for redelivery to refineries located in the Los Angeles Basin. !n September of 1989, All American Pipeline Company sold approximately 4S6 miles of unused 30-inch mainline pipe at a pre-tax loss of approximately $48.3 million ($43.0 million after tax). The pipe, which had been purchased to construct the McCamey to Houston Segment, was sold to reduce interest, storage and maintenance costs. Effective October l, 1989, the Company began recognizing depredation, other net operating expenses and interest expense of the All American Pipeline System, which had previously been capitalised, reducing the Company's fourth quarter 1989 pretax results by $41.2 million. All costs associated with the All American System were capitalized (net of tariff revenues received) and, therefore, were not induded in the results of operations for Goodyear in 1988 and the first three quarters of 1989. Assuming that fourth quarter 1989 AU American Pipeline System 10 levels tad the effective cost of capital continue in 1900, All American Pipeline Sjystem operations are expected, to result in pretax leases totailing approximately IITS million in 1990. San Jeaquie Valley Pipeline Celeron Gathering engages in various crude oil gathering and trading activities in the San Joaquin Valley, California, and, in that connection, has constructed and owns and operates the Saa Joaquin Valley Pipeline, a 43-mik crude oil gathering pipeline system completed in June of 1987 at s cost of approximately $22.5 million, including the cost of subsequently added tankage, connecting and handling facilities. The Saa Joaquin Valley Pipeline has a design capacity of up to 100,000 barrels per day of crude oiL Celeron Gathering aaaa the Saa Joaquin Valley Pipeline in connection with it* gathering of and trading in crude olllt purchases from various producing areas ia the San Joaquin Valley, particularly the South Belridge area. Celeron Gathering sells or exchanges substantially all of the crude oil it acquires in the San Joaquin Valley, the major portion of which is ultimately sold to or traded with refiners located ia the mid-continent mid Gulf Coast areas. Celeron Gathering also trades crude oil In California, moat of which ia ultimately used by refiners located in the Los Angeles Basin and in Northern California. The All American Pipeline System is a common carrier pipeline system end, as such, under current law is subject to the general Jurisdiction of the Federal Energy Regulatory Commission (the "FERC"). Pursuant to the Interstate Commerce Act, the All American Pipeline System is subject to FERC regulation as to tariffs, annual reporting requirements and other operating matters. The All American Pipeline System will file an Animat Report on FERC Form No. 6 with the FERC in March of 1990 in respect of its activities during 1989. The Sen Joaquin Valley Pipeline, which is owned end operated by Celeron Gathering, is a proprietary intrastate gathering pipeline system and, as such, is not subject to the general jurisdiction of the FERC. In accordance with current laws and the regulations of the FERC, the AH American Pipeline System has filed with the FERC interim tariffs for transportation sendees being offered to shippers desiring to transport crude oil through the 1,225-mile segment extending from Pentland Statins, California, to McCamey, Texas, during the period required by All American to conduct its operational and market testing, to complete the portion of the All American Pipeline System extending westward from Pentland to the California Coast, and to construct the segment of the All American Pipeline System extending eastward from McCamey, Texas to the Texas Gulf Coast. The All American Pipeline System filed a request with, and received the approval of, the FERC for authority to continue to capitalize costs and expenses, including interest, incurred through December 31,1989. The All American Pipeline System has filed with FERC a request for extended authority to continue to capitalize costs and expenses through December 31,1990. GENERAL BUSINESS INFORMATION Sources and Availability of Row Materials Goodyear uses substantial quantities of petrochemical feedstocks end fuels in the produc tion of tires and other rubber products, synthetic rubber and latex, vinyl and polyester resins and other products. The principal raw materials used in Goodyear's products, primarily in tires, hose products and belting, are synthetic and natural rubber. Goodyear purchases substantially all of its requirements for natural rubber in the world market. Synthetic rubber accounted for approxi mately 60% of all rubber consumed by Goodyear worldwide during 1989, compared to 70% in 1988. The Company's plants located in Beaumont and Houston, Texas, supply the major portion of its domestic synthetic rubber requirements. Substantially all synthetic rubber used by Goodyear in foreign countries ia supplied by third parties. The principal raw materials used in the production of synthetic rubber are butadiene and styrene, which are purchased from others, 1! and lioprenc, which U purchased from other* or produced by Goodjwur toot purchased Nylon, rayon and poiyetfer yam, substantial quantities of which are processed in Good year's textile mill*, and wire for radial tires, & portion of which produced by Goodyear, are used ia significant quantities by Goodyear. Othar Important raw materials used by Goodyear arc carbon Mack, pigments, chemicals, bead wire, fiberglass and aiamid fiber. Substantially all of these raw materials are purchased from third parties, except tor pedyemer resins and certain other chemicals which Goodyear manufactures. Goodyear purchases most of the materials sad supplies It uses in significant quantifies from several mppiiera, except In those instance* where only one or a fiew qualified sources are available. As ia 1989, Goodyear anticipates the continued availability (subject to passible spot shortages) of all such materials during 1990. Although there were spot shortages of various petrochemical feedstocks from time to time in early 1989, such shortages did not have a mseerUd adverse effect on Goodyear's operations. Petrochemical feedstock prices began to decline in mid*1989 and were generally below early 1988 levels by the end of 1989. Goodyear anticipates that supplies of petrochemical feedstocks adequate to meet Goodyear's production requirements for 1990 will be available, generally at the same or somewhat lower price levels than those in effect at the end of 1969. Supplies of petroleum and natural gas baaed fuels have been and are expected to continue to be adequate for domestic manufacturing plants. Goodyear owns approximately 1,876 patents issued by the United Sates Patent Ofitoc and approximately 4,400 patents issued or granted in other countries around the world, and also has licenses under numerous patents of others, covering various improvements in the design and manufacture of its products and in processes and equipment for the manufacture of its products. Goodyear also has approximately 300 patent applications currently on Me with the United States Patent Office sad approximately 2,775 patent applications on file in ocher countries around the world. While Goodyear considers that such patents, potent applications and licenses as a group are of material importance, it does not consider any one patent, patent application or license, or nay related group of them, to be of such importance that the loss or expiration tlwreof would materially affect its business considered as a whole or the business of any of its Industry Segments. Goodyear owns and uses approximately 1,060 different trademarks, including several using the word "Goodyear". These trademarks are protected by approximately 7,399 registrations worldwide. While Goodyear believes such trademarks as a group are of importance, the only trademarks Goodyear considers material to its business are those using the word "Goodyear''. Goodyear believes all of its significant trademarks are valid and will have unlimited duration as long as they are adequately protected and appropriately used. Goodyear does not consider its backlog of orders to be material to, or a significant factor in, evaluating and understanding its business considered as a whole or the business of any Industry The total amount of Goodyear's business during 1989 under contracts or subcontracts which were subject to termination at the election of the United States Government amounted to approximately 1.0% of Goodyear's consolidated net sales for 1989. Kamarch and Development Goodyear expends significant amounts each year on basic and applied research for the development of new, and the improvement of existing, products snd manufacturing processes sad equipment. Goodyear maintains substantial research and development centers for tires and 12 related produces in Akron, Ohio, and Colmar-Berg, Luxembourg; and tiro proving ponds in Akron, Ohio, San Angelo, Texas, Mireral, France, and Colmar-Berg, Luxembourg. Goodyear operates anhatantisl research and development far ether products in Akron, Ohio, and Quay, France. The Company has also established s tires and related products technical group in Japan. Construction of the first phase of a tiro technical center in Japan was started In December of IMP. During the years ended December 3t, IMP, 1988 aad 1967, Goodyear expended, directly or indirectly, $303.3 million, $3044) mllBon and I2M4 milKna, respectively, an basic and applied research, and cn development and certain engineering activities, relating to the design, develop ment, improvement or modification of new or existing products or services and to the formulu- tkn and of new manufacturing processes or equipment or improvements on proem-- or equipment. Goodyear estimates that it will expend approximately $325.0 million for reaenrch and development activities during 1990. As of December31,1989, Goodyear employed approximately 100,800 people throughout the world. Of the approximately 52321 persons employed In the United States, approximately 13,107 were at December 31,1080 covered by n master collective bargaining agreement, dated April 23, 1088, with the United Rubber, Cork, linoleum and Plastic Workers of America ("URW"), which agreement will expire on April 20,1991. Of the remaining domestic employ* ess, at December 31,1989 approximately 11,020 were covered by other contracts with the URW and various other unions and 28304 were not represented by any onion. Compliance with Environmental Regulations Goodyear has a continuing program to assure its compliance with Federal, State and local environmental and occupational safety and health laws and regulations. Goodyear expended approximately $24.1 million, $223 million, $11.8 million and $10.6 million during the years 1980, 1988, 1087 and 1988, respectively, for environmental improvement and occupational safety and health compliance projects in respect of its facilities worldwide. Goodyear presently estimates that it will make expenditures for pollution control facilities of approximately S2S million during 1990 and approximately $27 million during 1991. Approximately $1.0 million will he expended on occupational safety and health projects daring the same two-year period. In addition, during 1989 Goodyear expended approximately $30 million, and during 1990 and 1991 Goodyear expects to expend approximately $45 million and approximately $45 million, respec tively, to maintain and operate Us pollution control facilities and conduct its other environmen tal and occupational safety and health activities, including the control, disposal and dean-up of hazardous substances. The above estimates of expenditures for 1990 and 1991 arc expected to be sufficient to comply with applicable existing environmental and occupational safety and health laws and regulations and are not expected to have a material adverse effect on Goodyear's competitive position in the various industries in which it participates. FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES Financial information relating to Goodyear's "Geographic Segments" for each of the three years in the period ended December 31, 1989 appears in the Note captioned "Business Segments" and in the tabulation captioned "Geographic Segments" in the Notes to Financial Statements set forth in Item 8 of this Annual Repeal, at pages 46 and 49, respectively, and is incorporated herein by specific reference. The Company, through its foreign subsidiaries, engages In manufacturing or opera tions in most countries in the free world, including manufacturing operations in 25 foreign countries. Foreign sales represented 41%, 41% and 40% of total sales and foreign operating income represented 47%, 56% end 43% of total operating income in 1989, 1988 and 1967, 13 respectively. Goodyear's foreign manufacturing operations eoneiat primarily of tfae production oftires. Industrial rubber, parkaging flim and certain other products am also manufactured in certain of the Company's foreign plants. Goodyear also participates ia several Joint ventures In various foreign countries. In 1087, Goodyear and Pacific Dunlop Limited established South Pacific Tyres, an Australian partner* ship, and South Pacific Tyres NJZ. Limited, a New Zealand company, ia eaeh of which Goodyear and Pacific Dunlop Limited each have a 60% equity interest, which entities operate five die Manufacturing plants (taro of which were formerly owned by an Australian subsidiary of , Registrant), 27 retrend plants and a chain of approximately 426 retail outlets in Australia, New and Papua - New Guinea, hi I960, Goodyear and Podfic Dunlop Limited established Tacbelt Pacific, an Australian partnership in which Goodyear and Pacific Dunlop Limited each have a 60% equity interest, which entity will manufacture steel reinforced conveyor belting in Australia. Other Joint venture interests of the Company include: (1) a 60% interest in Nippon Giant Tire Co., Ltd., which manufactures earthmover dree in Japan; (2) a 60% interest in a Vbalt plant in Taiwan; and (6) a 30% interest hi a synthetic rubber and specialty polymers facility ia BrariL These joint venture interests are accounted for on an eqaity basis. " ' In addition to the ordinary risks of the marketplace, the Company's foreign operations and the results thereof in some countries are significantly affected by rigid price controls, impact controls, labor regulations, tariffs, extreme Inflation or fiuctuatUms in currency values. Further more, in certain countries where Goodyear operates (primarily countries located in Central and South America), transfers of funds from foreign operations are generally or periodically subject to die availability of foreign exchange in the host country and other related restrictive governmental regulations. For some investments in developing countries, insurance against expropriation, war losses and currency mmconverdbUity is available through Overseas Private Investment Corporation ("OPIC"). When available, the Company normally affords itself of the protection provided by OPIC insurance in respect of its investments in such countries. ITEM 2. PROPERTIES. Goodyear manufactures its products in 86 manufacturing facilities located throughout the free world. There are 43 plants at 41 locations in 21 states of the United States and 43 plants at 39 locations in 25 foreign countries. The table below identifies by location each of the Company's 86 manufacturing facilities, indicates the principal product or products manufactured therein and sets forth the approxi mate number of square feet of usable floor space at each facility or multiple plant location. In addition, each Industry Segment using the facility is indicated after the products manufactured therein wiih the following references: (A), which indicates use by the Urea and Related Industry Segment; and (B), which indicates use by the General Products Industry Segment. Except as indicated in die Notes to the following list of ManufacturingFacilities, Goodyear owns each facility, including the land, buildings and manufacturing equipment comprising ch facility. MANUFACTURING FACILITIES UNTIED STATES Akron, Ohio (Multiple Plant location--3 Plants) (1) Asheboro, North Carolina Auburn, Pennsylvania (1) Bayport, Texas Urea, Chemicals and Film Products (A) and (B) Tire Wire Cord (A) Vinyl Laminating and Other Film Products (B) Rubber Processing Chemicals (A)and (B) 14 1.906 282 103 39 Beaumont, Texas Bowfing Green, Kentucky Calhoun, Georgia Carrollton, Ohio CartarsviUe, Georgia Cleveland, Ohio (2) Danville, Virginia Decatur, Alabama Fayetteville, North Carolina Freeport, Rtinoia Qadadon, Alabama (3) Greeniburg, Ohio GrtanvIDe, Texas Hannibal, Missouri (4) Houston, Texas Jackson, Otdo (4) Lawton, Oklahoma (4) Lnvrisburg, Tennessee Lincoln, Nebraska (I) Logan, Ohio (4) Madisonville, Kentucky (4) Marysville, Ohio Merced, California Me Pleasant, Iowa New Bedford, Massachusetts Niagara Falls, New York Norfolk, Nebraska Point Pleasant, West Virginia Radford, Virginia (6) St Marys, Ohio Scottaboro, Alabama Spartanburg, South Caroliaa Stow, Ohio (1) Sun Prairie, Wisconsin Topeka, Kansas Tyler, Texas Union City, Tennessee (4) Synthetic Rubber, Robber Chemicals and Hydrocarbon Resina (A) and (B) FUm Products (B) Latex and Packaging Films (B) FUm Products (B) Textile MUl (A) and (8) Scrap Rubber Processing (A) end (B) Urea (A) Textile Mill (A) and (B) Tins (A) Tires (A) Tins (A) Air Springs (B) Treed Rubber (A) Hoea Products (B) Synthetic Rubber (A) and (B) Automotive end Commercial Reinforced Plsstica (B) Tine (A) FUm Products (B) Belting and Hose Products (B) Automotive and Commercial Custom Foam Products (A) Industrial Urea (A) Conveyor Betting and Roofing Products (B) Packaging Films (B) Hose Products (B) Bladders and Sleeves, Graphic Arts sad Booling Produces (A) and (B) Chemicals and Vinyl Resina (A) mad (B) Hose Products (B) Polyester Resin (A) and (B) Tread Rubber (A) Molded and Extruded Rubber Products (B) Polyester Tire Cord Fibers, Textile Mill and PET Resina (A) and (B) Tread Rubber (A) Tire Molds (A) Hose Products (A) Tins (A) Tires (A) Tires (A) POU1GN Argentina -- Buenos Aires Australia -- Melbourne Sydney ftraill -- Americana San Paulo (2 Plants) Tires, Tubes, Industrial Rubber Products and Fabric (A) and (B) Films (B) Conveyor Beta (B) Tires, Fabric Dipping and Films (A) end (B) Tires, Tubes, Belting and Hose Products and Fabric (A) and (B) Bowmanville, Ontario Conveyor Beta (B) 16 646 44 100 68 688 46 2,060 662 1,976 1,160 2,068 112 24 30 641 220 1,816 40 1,167 410 183 374 36 110 846 300 267 676 66 829 548 96 132 173 206 1,306 2,026 938 18 303 1,471 1,096 323 Colllngwood, Ontario Medicine Hat, Alberts Oven Sound, Ontario Qoabec City, Quebec T _ SL Alphonse de Granby, How Products (B) Tins (A) TramuniasiMi Belts and V-Belts (BJ Molded Products and Tread Rubber (A) sad CB) How Products (B) [ St Hyatinthe, Quebec ~ Toroatto, Ontario YaUeyfldd, Quebec Textile Mill (A) and (B) Films (B) Tires (A) Chile -- Santiago Tires, Tubes, Industrial Rubber Products and Batteriw (A) and (B) Colombia -- Cali France -- Amiens LeHavre Tires, Tubes and Industrial Rubber Products (A) aad (B) Tires (A) Chemicals (B) Greeee -- Salonika Tires (A) Guatemala -- Guatemala City Tires aad Tubes (A) India -- New Delhi Tires aad Tubes (A) Indonesia -- Bogor (6) Tires aad Tubes (A) Italy -- Cisterns di Latina Tires (A) Jamaica -- Morant Bay Tires (A) Luxembourg ' Colraar-Berg (4 Plants) (1) Tires, Fabrics, Steel Tire Cord, Tire Molds end Machines (A) Malaysia -- Kuala Lumpur (7) Tires (A) Mexico -- Mexico City San Luis Potoei Tins, Tubes, Conveyor Belts, Plastic How aad Films (A) aad (B) V-Belts and Hose Products (B) Morocco -- Casablanca Tires and Tubes (A) Peru -- Lima Tires, Tubes and industrialRubber Products (A) aad (B) Philippines -- Manila (8) Tires and Tubes (A) Taiwan -- Taipei Tires (A) Thailand -- Bangkok Tires (A) Turkey -- Adapasari limit Tires (A) Tins and Tubes (A) United Kingdom Wolverhampton, England Tires (A) Venemela -- Valencia " Tires, Tubes and IndustrialRubber Products (A) and (B) West Germany -- Fuida(l) Tires (A) ___________ Philippsburg Tires sad Rims (A) and(B) Nocem (L) Portion of facility is leased by Goodyear. (2) Facility is leased by Goodyear. 16 206 111 108 204 168 442 106 1,001 804 446 714 208 268 341 664 677 660 164 2,208 386 1,226 82 215 467 380 260 289 536 380 1,970 768 1,360 1,018 (3) Portlonof facility Is leased by Goodyear in conjunction with an expansion project financed by industrial development revenue mortgage bonds. The expansion facility may be pur - chased upon the expiration of the initial tana of the lease at a nominal option price. (4) Facility is tossed by Goodyear. The lease provides that the Company has the option to purchase the facility at the expiration of the initial torn at an option price which is ether nominal or highly favorable to Goodyear. It la anticipated that such option will be exerdaed . at the appropriate time if such facility is then needed in Goodyear's manufacturing operations or its acquisition would otherwise be advantageous to Goodyear. (6) Fadfity is owned by Brad Began, Inc., a 74JX owned subsidiary of Registrant. (6) Facility is situated on land bald under a use rightwhichaxpiresinl9B7.lt is not possible to obtain fee title under Indonesian law. (7) Pacflity is situated on land held under the terms of a land lease which expires in 2072. It Is not possible to obtain fee title to land under Malaysian law. (8) Facility is situated cn land owned by a Philippine company ia which Goodyear Philippines Inc. owns a40X equity interest and is leased under a land lease having 11 years remaining, with a Mi-year renewal option. Philippine law requires ail land to be beneficially owned by Philippine citizens or by companies at least SOX owned by Philippine dtiaena. The manufacturing facilities of Goodyear are, when considered in the aggregate, modern and adequately maintained. Goodyear's capital expenditures for new plant and equipment, for expansion, modernization and replacement of existing plants and equipment, and for construc tion of the AD American Pipeline System and another pipeline and related assets, aggregated S77S.7 million in 1989, S743.7 million in 1988 and S666.6 million in 1987 (which amounts relate solely to continuing operations), including capitalized interest of $118.9 million ia 1989,8128.2 million in 1988 and S 104.5 million in 1987. Of said amounts, $486.8 million in 1989, 8586.3 million in 1988 and 84808 million hi 1987 were expended on facilities located In the United States. The Company estimates that It will spend approximately $700.0 million for capital expenditures during 1990, inducting approximately 820.0 million of capitalized interest During most of 1988 and the first half of 1989, the Company's radial passenger and truck tire plants in the United States were operated at or near capacity. In the second half of 1989 and in early 1990, reduced production schedules at certain of the Company's radial tire plants in the United States reflected reduced vehicle production which resulted in lower demand for tires by the Company's original equipment customers and weaker than expected demand tor the Company's tires in the United States replacement market. In general, the Company's foreign plants were operated at or near capacity. In July of 1988, Goodyear commenced construction of the Napanee, Ontario, radial passen ger and tight truck tire plant, which a scheduled to be completed and ready for full production in 1991, with production startup planned for mid-1990. Giving effect to the new radial tire plant under construction ia Napanee, and to plant expansions and modernizations recently completed or presently underway or planned, the Company's manufacturing facilities are expected. In general, to have production capacity sufficient to satisfy existing and presently anticipated demand for the Company's tires and other products. In addition to its manufacturing facilities, the Company owns and operates rubber pUwtytiona in the Philippines, Indonesia, Brazil and Guatemala (76,122 acres) and operates two rubber plantations in the Philippines (4306 acres). Goodyear also owns substantial interests In plants located In Australia (tires and retreading), Japan (earthmover tires), Brazil (synthetic rubber), Taiwan (V-belts) and New Zealand (tires and retreading). -- The Company owns and operates research and development facilities and technical centers la Akron, Ohio, Gohnar-Berg, Luxembourg, and Orsay, France. These facilities occupy more than 336,000 square feet of floor space. In addition, the Company owns its Corporate Headquarters complex in Akron, Ohio, which has approximately 1.8 million square feet of usable floor space. The Company also owns and operates tire proving grounds in Akron, Ohio (82 acres). Colmar- 17 Berg, Luxembourg (126 acres), Mireval, Francs (460 acne), and San Angelo, Texas (7,243 aoss). In December, 1969, the Company commenced constriction of the Irst phase of a tire tachnicai canter in Tsukuba, Japan. The Ccrnpany operates approximately 1,380 retail outlets for the sale of Its tins and other products to consumers in the United States and approximately 474 retail outlets in foreign anmtries. Worldwide, the Company also operates approximately 80 retread plants and approxi mately 280 warehouse and distribution facilities. Substantially all of these facilities are leased. Many of the lease agreements contain renewal options. The Company does not consider any one of these leased properties to be material to its operations. For additional information regarding laaasd properties, sea the Notes to Financial Statements captioned "Properties and Plants" and "Leased Assets" set forth in Item 8 of this Annual Report at pages 38 and 41, respectively. Reference Is mads to the information set forth in Item 1 under the caption "Oil Transporta tion" beginning at page 8, and to the Maps at page 9, which describe the nature and location of the All American Pipeline System (Map 1) and the San Joaquin Valley Pipeline (Map 2), the principal assets of Celeron used in conducting the business activities of the Oil Transportation ITEM 2. LEGAL PROCEEDINGS. At March 20, 1990, Goodyear waa a party to the following material legal proceedings, as defined hr the Instructions to Item 108 of Regulation S-K: (A) In December of 1966, Smith Barney, Harris Upham 4 Co. Incorporated and GVM Partners filed a civil action. Smith Barmy, etoLv. Goodyear, at al, 86 Civ. 9367, in the United States District Court for the Southern District of New York against Registrant and Robert E. Mercer, then the Chairman of the Board and Chief Executive Officer of Registrant, and against James Goldsmith ("Goldsmith") and three corporations and two partnerships affiliated with Goldsmith. The complaint alleges that plaintiffs purchased shares of the Common Stock of Registrant in reliance on public statements and filings with the Securities and Exchange Commission by one or more of the defendants to the effect that, among ocher things, Registrant would not pay and Goldsmith would not accept "greenmail" and that Goldsmith would make a tender offer for shares of Registrant's Common Stock at $49 per share unless the "market" values Registrant's Common Stock at $60 per share or more after any restructuring. The complaint charges that these alleged statements were false when made, violate Sections 10(b), 13 and 18 of the Securities Exchange Act of 1934 (the "Exchange Act") and amount to common law hand. The plaintiffs seek damages totaling more than 817 million and coots, including attorneys' fees. Registrant will indemnify, to the extent permitted by law, the retired director for all reasonable expenses, including attorneys' fees, incurred by him in defending this dvil action. (B) In November of 1968, two civil actions. SwiMk v. Goodyear, et oL, CA 88-8633, and PM&P* v. Goodyear, et aL. CA 88-8636, were filed in the United States District Court for the Eastern District of Pennsylvania against Registrant, Robed: E. Mercer, then the Chairman of the Board and Chief Executive Officer of Registrant, and Tom H. Barrett, then the President and Chief Operating Officer and a director of Registrant, on behalf of a purported consisting of all purchasers of shares of the Common Stock of Registrant during the period March 24, 1988 ~ through October 6,1988. The complaints allege, among other things, that daring the March 24, 1988 to October 6, 1988 period Registrant misrepresented, or railed to disclose in a timely manner certain material information concerning, its business id operations in violation of Section 10(b) of, and Rule 10(b)-6 promulgated under, the Exchange Act, ami that such conduct also constituted common law fraud and deceit and negligent misrepresentation. 18 Tha plaintiffs an staking damages in m unspecified mount and Mich farther relief as may be determined c* be Just end proper. Registrant will indemnify, to foe extent permitted by lew, the director end retired director who are also defendant! for all reaaoaahfr apaaw, including attorney*' fee*, incorred by them in defending these civil action* CO Since November 2,1987, eeventeen dvil action have been filed again* Registrant in the United States District Court for the District of Maryland relating to the death* of, or the development of center or other diaeoeea by, former employee* of The Uly-SjprtBffiakl Tire Company ("Xelly-SpringfleUi"), a wholly-owned subsidiary of Registrant, alleged to be the result of erpoeure to certain allegedly toxic or carcinogenic chemical* while working at the Cumberland, Maryland tire plant of Idly-Springfield, which waa dosed in 1987. The plaintilfe allege, among other things, that Registrant, as the manufacturer or seller of certain process chemical*, negligently foiled to warn employees of KeUy-Springfidd ofthe danger of exposure to sneh chemical*, concealed the hazards posed by such chemicals, and waa grossly aegllgent in foiling to implement procedures to preserve their health and safety. The plaintilfe in these civil action* ace seeking an aggregate of $180 million in compensatory damages and $1.80 billion la (D) On January 19,1990, a aeries of 43 dvil actioas were glad against Registrant in foe United State* District Court for the District of Maryland minting to the development of lung disease, cancer and other dieeaeea by former employees of Kelly-Springfield, alleged to be the reault oif exposure to sllegodly toxic substances, including asbestos and certain chemical*, while working at the Cumberland, Maryland tire plant of KeUy-Sprlng&eUl, which was closed in 1987. The plaintiffs allege, among other things, that Registrant, at foe manufacturer or seller cf certain materials, negligently foiled to warn Kelly employees of the health risks associated with their employment at the Cumberland plant and foiled to implement procedures tn preserve their health and safety. The plaintilfe in these civil actions are seeking an aggregate of $596 million in compensatory damages and 15.96 billion in punitive damages. (E) On September 29, 1988, (he United 8tates Environmental Protection Agency (foe "SPA") served a Complaint and Notice of Opportunity for Hearing (Docket No. 1SCA-III-366) against Registrant under the Toxic Substances Control Act (foe "TSC Act**), whereunder foe EPA alleged several violations of the TSC Act at the Registrant's polyester resin plant in Pl Pleasant (Apple Grove), West Virginia, and proposed to assess dvil penalties against Registrant in respect of aakl alleged violations of the TSC Act in an aggregate amount of $314,750.00. In accordance with a Consent Agreement between Registrant and the EPA, Registrant agreed to pay, and pursuant to a Consent Order paid, a dvil penalty of $145,700.00 in November of 1989. (F) The United State* Environmental Protection Agency and similar agencies of various States have klentifled for remedial investigation and cleanup several waste disposal sites which Goodyear is alleged to have used in the past for the disposal of industrial waste. It is not possible at this time to determine the ultimate cost* associated with any necessary remedial investigation* and cleanup of contaminants which may be required or the extent to which Goodyear will be required to bear such costs. (O) In addition to the legal proceedings described above, as of March 20, 1990, various legal actions, claims and governmental investigations and proceedings covering a wide range of matters were pending against Registrant and its subsidiaries. Although foe ultimate outcome and Unsocial impact of such proceedings cannot be predicted at this time, no such action, claim, investigation or proceeding is considered material (as specified by the Instructions to Item 103 of Regulation. S-K) or is expected to result in liability to Registrant which would be material relative to Registrant's consolidated financial position. 19 rrEM i. SUBMISSION OF MATTERS TO A VOTE OP SBCU1UTY HOLDERS. No matter was 1 to a vote of the security holders of dm Registrant during the REM 4(A). 1IVE OFFICERS OF REGISTRANT. Set forth below, In accordance with bftruction 3 to Item 401(b) of Regulation S-K, are: (l) the names and ages of all executive officers (indadlng executive officers who an also directors) of the Beglstrant as of March 20,1090, (2) all positions with the Registrant presently held by eneh such person and (3) the positions held by. and principal areas of responsibility of, each nch person during the last five years. S Tost H. Baxxxtt Chairman of the Board, President, Chief SO Mr. Barrett joined Goodyear in 1963. After serving in various posts, he eras elected an Executive Vice President of Beglstrant on October 3, 1978, serving la such capacity ae the executive officer responsible for manufacturing and related services. Mr. Barrett was elected President and Chief Operating Officer of Registrant effective December 31,1982. Mr. Barrett eras elected President and Chief Executive Officer of Beglstrant effective December 31, 1988 and Chairman of dm Board, President and Chief Executive Officer of Registrant effective March 31, 1989. Mr. Barrett has been a Director of Registrant since April 2,1979. JooQuaa L Saidas Executive Vice President and Director 60 Mr. Sordas Joined Goodyear in 1967. He served in various poata around the world until elected an Executive Vice President of Registrant effective January 1, 1981. Prom January 1, 1981 to September 6, 1984, he was the executive officer of Registrant responsible for North American operations. From September 6,1984 to August 16, 1988, he served as the executive officer of the Registrant responsible for Goodyear's international operations. Since August 16, 1988, Mr. Sordas has served as the Chief Operating Officer -- Tires end, as such, lathe executive officer of the Registrant responsible for the worldwide tire operations of the Registrant and its subsidiaries. Mr. Sordas has been a Director of Registrant since January 1,1981. F. Vreanrr Pus Executive Vice President and Director 83 Mr. Pres joined Goodyear in 1949. After serving in various posts, he was elected an Executive Vice President of Registrant effective January 1, 1981. He is the executive officer of Registrant responsible for Goodyear's research, development and product design activities. Mr. Prua has been a Director of Registrant since June L, 1982. Onmi G. Surm Executive Vice President and Director 47 Mr. Shaffer joined Goodyear in 1968, serving in various posts around the world until elected an Assistant Comptroller of Registrant on January 1, 1983. Effective August 1, 1986, he was elected a Vice President and the Treasurer of Registrant. On June 2, 1987, Mr. Shaffer was elected an Executive Vice President of Registrant. He is the principal financial officer of the Registrant. Mr. Shaffer has been a Director of Registrant since June 2,1987. 20 Director Mr. Wells Joined Goodyear in 1951, serving in various manafactnrtng and sales posts until JunsS, I960, when he was elected a Vice President of Registrant, serving in such capacity as the executive officer responsible for worldwide general products manufacturing operations, until February 11,1987, when he became the executive officer responsible for special projects for the worldwide general products group. On June 2,1987, he was elected an Executive Vice President of Registrant and, as such, is the executive officer of Registrant responsible for Goodyear's worldwide general products operations. Sloes August 15, 1988, Mr. Weds has served m an Executive Vice President of Registrant and as Chief Operating Officer -- General Products and, as such, is the executive officer of the Registrant responsible for the worldwide general products operations of Registrant and its subsidiaries. Mr. Wells has bean a Director of Registrant since December 6,1988. `' Sonar W. Mu Executive Flea Prasidont 6S Mr. Milk was elected a Vice President of Registrant on May 6,1980, serving aa the executive officer responsible for Registrant's general products development activities uadi January, 1982, when he became the executive officer responsible for product quality and safety. From March 1, 1964 to November 4, 1965, he served as the executive officer responsible for materials management. On November 4, 1986, Mr. Milk was elected an Executive Vice President of RegMtrant and, in such capacity, served as the executive officer of Registrant responsible ror Goodyear's materials management operations throughout the world. On November 11,1987, Mr. Milk area also elected President end Chief Executive Officer of Celeron. Corporation, a whollyowned subsidiary of Registrant. Shies November 11,1987, Mr. Milk has served as the executive officer of Registrant responsible for the construction and operation of the All American Pipeline System and Goodyear's other Oil Transportation Industry Segment activities. Mr. Milk has been an employee of Goodyear since 1960. Braun R. duxes, Ja. Executive Vice President 51 Mr. Culler served in various capacities until June of 1984, when he was elected the Vice President -- Europe of Goodyear International Corporation, a wholly-owned subsidiary of Registrant ("GIC*j. On November 6, 1986, he was elected a Vice President of Registrant, in which capacity he served as the executive officer of the Registrant responsible for worldwide tire marketing until January 1, 1987, when he became the executive officer of Registrant responsible for Goodyear's worldwide original equipment tire sales. On August 2, 1988, Mr. Culler was elected an Executive Vice President of the Registrant and, ae such, is the executive officer of Registrant responsible for Goodyear's North American Tire Operations. Mr. Culler has been an employee of Goodyear since 1961. _ Plant R. Ttnur Executive Vice President 6S Mr. Tolly served in various capacities until June 3, 1980, whan he was elected a Vice President of Registrant, serving in such capacity as the executive officer responsible for Goodyear's human resources. Mr. Tully was elected an Executive Vice President of Registrant on December 5,1989, and, as such, is the executive officer of Registrant responsible for Goodyear's human resources and total quality systems. Mr. Tully has been an employee of Goodyear since 1961. Pxkdbeicx J. Kovac Vice President 69 "" Mr. Kovac served in various posts in the Tire Technology end Tire Departments until 1977, when he became Director ofGoodyear's International Technical Center in Luxembourg. He was elected a Vice President of Registrant on June 3,1980. Mr. Kovac is the executive officer of Registrant responsible for Goodyear's tire design and development activities. Mr. Kovac has been an employee of Goodyear since 1966. 21 M. Hm Dr. Hridr Joined Goodyear la Afigwt; of I960 m Director of Cownaattl Ecrtronment, Safety and Health Assurance Programs. On August 4,1981, he was eiaetod a Vice President of Registrant. Dr. Hehir is the executive officer of Registrant responsible Her Goodyear's environ mental improvement and occupational safety and health compHanre programs. Ylee President 1 llr. Dahl served in various tire engineering and caatnmer and technical service posts until appointed Director of Tire Engineering in 1976. He was eppoiatcd Director of Tire Programs in 1982. He was elected a Vice President of BegUtrant effective March 1,1984 and Is the executive officer of Registrant reapooffible for product quality and safety. Mr. Dahl has been an employee of Goodyear since 1981. D--ns B. Dkx 71k President 60 Ur. Dick served in various reseirch and development and production poets until appointed Director of General Products Development fbrCHC in 1981. On June 16,1983, he was appointed Director of Chemical Heasarch and Development. Ur. Dick was elected a Vice President of Registrant on April 9,1984 snd is the executive officer of Registrant responsible for Goodyear's technology management activities worldwide. Ur. Dick has been an employee of Goodyear since 1964. Jana W. Babhrt Vice President 88 Ur. Barnett served in various posts in Goodyear's replacement tire sales organisation until elected a Vice President of Registrant on September 6, 1964, serving in such capacity as the executive officer of Registrant responsible for Registrant's domestic replacement tires sales and marketing until August 15,1688. Since August 15,1988, Ur. Barnett hat saved as the executive officer of Registrant responsible for Goodyear's worldwide original equipment tire sales. Mr. Barnett has been an employee of Goodyear sinoe 1960. ,, Nona CALoxnoK Vice President 56 Dr. Calderon served as Manager of General Purpose Rubber Research from Hay of 1978 until January 1, 1963, when he was appointed Manager of Tire Materials Research. He was elected a Vice President of Registrant on April 7,1986. He is the executive officer of Registrant responsible for Goodyear's research programs. Dr. Calderon has been an employee of Goodyear since 1962. Wujlxam J. Skabp Vice President 48 Ur. Sharp served in various tire production posts until appointed Director of Domestic Tire Production in July of 1983. Be was elected the Production Dtiector-Europe of GIC in August of 1984. Mr. Sharp was elected a Vice President of Registrant on January 6, 1987. He is the executive officer of Registrant responsible for Goodyear's worldwide tire manufacturing opera tions. Mr. Sharp has been an employee of Goodyear since 1964. . Welton Bixdwbu. vice President 54 - Hr. Birdwell served in various production posts in the tire and general products divisions until appointed Director of Hose and Foam Products Manufacturing in May of 1964. On February 10,1987, he was elected a Vice President of Registrant. He Is the executive officer of Registrant responsible for Goodyear's worldwide general products manufacturing operations. Mr. Birdwell has been an employee of Goodyear since 1967. Joan M. Rosa Vice President and General Conned 68 Mr. Roes served as an Assistant Secretary and the Assistant General Counsel of Btgiwryn from 1973 to June 2,1987, when he was elected a Vice President and the General Counsel of Registrant. Mr. Ross joined the Registrant as a member of its legal staff in 1966. Mr. Ross has been a member of the Ohio Bar since 1666. 22 Jambs Botaxh & Tlet PntUtat ul Stcnlacj Bt Mr. Boyaris served la various posts until April 11,1963, whan he waa elected Secretary and Counsel of Goodyear Aerospace Corporation (then a wholly-owned operating subsidiary of Registrant). Proa January 1, 1986 to June 2, 1987, Mr. Boyaris served as a member of Registrant's legal staff. On Jaw 2, 1987, Mr. Boyaaris eras elected a Vice President and the Secretary of Registrant. He is alio the Associate General Counsel of Registrant. Mr. Boyads Joined Goodyear la 1963. flaona B. Hmswtwt Ja. Vice President and Treasurer M Mr. Hargreaves served in various flnandal posts until elected an Assistant Comptroller of Registrant in 1978, a post he held until February of 1981. He became the finance Director of Goodyear Great Britain limited, e wholly-owned subsidiary of Registrant, in February of 1981 nerving In riot post until mid-1987. Mr. Hargreaves was elected a Vice President and the Treasurer of Registrant on June 2, 1967. Mr. Hargreaves has been aa employee of Goodyear since 1971. Inn N. Fasnuu Vice Preeldent 48 ' Mr. Fiedler served in various general products posts until 1978, when be became the General Manager of DuoThena Corporation, then a wholly-owned operating subsidiary of Registrant, a post he held until March 12,1986, when he became Director of Purchasing. Mr. Fiedler was elected a Vice President of Registrant on June 2,1987. Mr. Fiedler served as the executive officer of Registrant responsible for Goodyear's worldwide purchasing operations until October 3,1989, when he became the executive officer of the Registrant responsible for Goodyear's worldwide Chemical Division operations. Mr. Fiedler has been an employee of Goodyear since 1963. Lddwig H. Sbdknthal Vies President and Comptroller 69 Mr. Seidenthai served in various flaancial poets in Europe until 1982, when he became the Finance Director -- Europe of G1C, a poet he held until July of 1988. On August 2,1988, Mr. Seidenthai was elected a Wee President and the Comptroller of Registrant. Mr. Seidenthai Is the principal accounting officer of Registrant. Mr. Seidenthai has been an employee of Goodyear since 1966. Jness T. Williams, Sb. Vice President 80 Mr. Williams served in various human resources poets until 1980, when he became the Registrant's Manager of Industrial Relations, a post he held November 18, 1986, when he became the Director of Industrial Relations for Goodyear Atomic Corporation, then a wholly- owned subsidiary of Registrant, a post held until September 30,1986. On October 1,1986, Mr. Williams waa appointed Registrant's Director -- Equal Employment Opportunity. On August 2, 1968, Mr. Williams was elected a Vice President of Registrant and, in such capacity, is the executive officer of Registrant responsible for Goodyear's compliance with equal employment opportunity laws and regulations. Mr. Williams has been an employee of Goodyear 1962. John P. Fnncnm Vice President 80 Mr. Perduyn served la various public relations posts uatil appointed Director of Public Information in 1980, serving in that post until June 1, 1989. Mr Perduyn was elected a Vice President of Registrant effective June 1, 1989, and is the executive officer of Registrant responsible for Goodyear's public affairs activities. Mr. Perduyn has been an employee of Goodyear since 1970. 23 Loom & Miaou 1*1 Vice President . Mr. DIPasqua served in various tire sales and marketing ports until June of 1984, when be became the Chairman and Director of Goodyear Great Britain Limited, a wholly- owned subsidiary of Registrant. He became President and Chief Executive Officer of Kelly- SpcingflaldTire Company, a wholly-owned subsidiary of Registrant, in May of 1988. Effective September 1, 1989, Mr. DIPasqua was elected a Vice President of Regtotraat and, in such capacity, is the executive officer of Registrant responsible for Goodyear's North American replacement tire sale* and marketing. Mr. DiPaaqua has been an employee of Goodyear since 1982. J. Dana Vow Vice Prenlilrnt 88 Mr. Wolf served in various post* in the General Products Division until 1978, when he was appointed general manager of Goodyear's Chemctal Division. Mr. Wolf wee elected a Vice President of Registrant on October 3, 1989 and, in such capacity, is the executive officer of Registrant responsible for Goodyear's worldwide purchasing operations. Mr. Wolf has been an employee of Goodyear since 1961. No family relationship exists between sny of the above named executive officers or between said executive officers and say other director or nominee tar director of Registrant. Each executive officer is elected by the Board of Directors at its annual meeting to a term of one year or until his or her successor is duly elected, except In those instances where the person is elected at other than an annual meeting of the Board of Directors in which event such person's tenure will expire at the next annual meeting of the Board of Directors unless such person is reelected. The next annual meeting of the Board of Directors h scheduled to be held on April 9, 1990. PARTIL ITEM g. MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS. , The principal market for Registrant's Common Stock is the New York Stock Exchange (Stock Exchange Symbol GT). Registrant's Common Stock is also listed an the Midwest Stock Exchange and The Pacific Stock Exchange. Overseas listings include the Tokyo Stock Information relating to the high and low sale prices of Registrant's Common Stock and the frequency and amount of dividends paid on such shares Airing 1988 and 1988 appears under the caption "Quarterly Data and Market Price Information" in Item 8 of this Annual Report, at page 62, and is incorporated herein by specific reference. The first quarter cash dividend for 1990, paid on March 16, 1990 to shareholders of record at February 16, 1990, was $.46 per share. At February 16, 1990, there were 44,664 record holders of the 67,962,494 shares of the Common Stock of Registrant then outstanding. Approximately 1,613,646 shares of the Common Stock of Registrant were beneficially owned by approximately 29,696 participants in the six Employee Savings Plana sponsored by the Registrant and certain of its subsidiaries. Bankers Trust Company is the Trustee for said Employee Savings Pleas. 24 ITEM ft. SELECTED FINANCIAL DATA. *** m i-- mw ^uw ' Net Sales......................................... tfMM {ran coutinuine ooerationa before extraordinary Hem......... $103693 180.4 ______ -- 189.4 $10310.4 360.1 ______ -- 360.1 $0306.2 613.9 26T.0 770.9 $0340.0 $8341.1 2163 (02.7) 124.1 227.1 1863 412.4 Tex benefit of loae carryovers .. Net 1~~..................................... $ 17.4 ______ -- _____ -- _____ -- _____ 2063 $ 360.1 I 770.9 $ 124.1 $ 412.4 Per Share of Common Stock: Income from eontinuinfl operations before uxtrnordtowy item......... Discontinued operations................ Income before extraordinary item Extraordinary item -- Ter benefit of lorn carryovers .. Net Income..................................... $ 338 ............-- 338 30 > 338 $ All ______ ~ 6.11 --- saBJsn $ 8.49 $ 4.24 12.73 2.02 (36) 1.16 _____ -- _____ -- $ 12.73 fl^JUW $ All 1.73 334 _____ -- 8 3.84 Dividends......................................... t 130 $ 1.70 $ 130 $ 1.60 $ 1.60 am Total Assets................................... Loag Term Debt and Capital Leases........................................... Shareholders' Equity..................... $ 8,4603 2,963.4 2,1433 urn 8,6183 3,0443 2,027.1 MW $83963 3.282.4 1334.4 use 893393 2314.9 3,002.6 MM $7,6373 1,678.0 8,507.4 Note: Financial information hee been restated where necessary to reflect the dispoeition of the shares of Motor Wheel Corporation end certain related assets in 1986, the assets of Goodyear Aerospace Corporation and certain related issets in March of 1987, certain oil and fas reserves in July of 1987, and the shares of Celeron Oil and Gaa Company in December of 1987, all of which were accounted for as discontinued operations. The information has also been restated to reflect the adoption of Statement of Financial Accounting Standards No. 94, "Consolidation of All Majority-owned Subsidiaries" in 1987. See Accounting Policies in respect of the Financial Statements in Item 8 captioned "Principles of Consolidation'' at page 36. ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDI TION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS Consolidated Sales for 1989 of 8103 billion increased less then one percent from 1988 and rase 9.7 percent above 1987 levels. Income of 1470.9 million from continuing operations before income and extraordinary item declined 12.4 percent from the 86373 million recorded in 1988 and 46 percent from the 26 9872.4 wllBoa recorded in 1967. la 1969, this lead of income reflected nmeuei charges of 1109.7 million (1106.9 million after tarn) renaming of 943 million hne from the Bale of the Company's South Africa subsidiary, a >48.3 million loss from the sale of unused pipe held by the All Amerlcaa Pipeline subsidiary and charges of 918.4 million In the fourth quarter resulting from the planned reduction of biao->pty truck tire capacity at the Gadsden, Alabama plant, and from die realignment of the Canadian operations. For 1968, rasulta were adversely affected by """I charges totaling 979.8 million (926.8 million after tax), including <60.9 million from the peneinn settlement/Meet reversion and 927.9 million from an employee reduction program. Basalts for 1987 included unusual income of <136 million (973.6 million after tax), the major portion of which was the gain on the sale of the Arizona properties. Further discussion of these transactions is contained in the note to the financial statements mottled Unusual Items. The Coaqmny began, effective October l, 1989, recognizing depredation, other net operating expenses and Interest **!" of the All American Pipeline Systma, which had previously been capitalised. The recognition of these items reduced the Company's 1989 pretax results by 941.2 million (926.4 million after tax), consisting of 99.1 million of segment operating looses end 932.1 --Min" of Increased consolidated interest expense. Assuming that fourth quarter 1989 operating levels and interest rates continue, the recognition of these costs for all of 1990 are expected so amount to approximately $176 million before taxes. Improved grots margins resulting primarily from lower raw material costs during 1969 failed to fully offset increased selling, administrative and general expenses, resulting primarily from higher compensation and benefit costs. Benefit cost increases resulted in part from less investment income due to the 1988 pension asset reversion. The results also reflect lower tire unit sales, especially in the U.S., caused by increased price competition in the replacement market and reduced vehicle production by original equipment customers. In 1989, income taxes increased over 1988 by 994.1 million due principally to higher foreign taxes, the tax impact of the Sooth Africa subsidiary sale, additional U.S. taxes on foreign source income and the reduction of 1988 taxes due to the pension asset reversion. The higher foreign taxes included a 917.4 million charge equivalent to the tax benefit of foreign lose carryovers realized. The Company expects the higher effective tax rate to continue in 1990. Further information is contained in the note to the financial statements entitled Income Taxes. The Financial Accounting Standards Board has again extended the required implementation date of Statement of Financial Accounting Standards No. 96 "Accounting for income Taxes". The Company does not intend to adopt this Statement until the required implementation date, currently 1992. Because of continued uncertainty relating to implementation guidelines and interpretations, the Company is not certain as to the impact this Statement will have on future financial The 1989 net income of 9206.8 million or 93.58 per share decreased from 1988 net income of 9360.1 million or $6.11 per share aad 1987 net income of 9770.9 million or 912.73 per share. Included in 1989 net income is a tax benefit of loss carryovers on prior foreign losses amon^ing to 917.4 million or 9.30 per share, which was accounted for aa an extraordinary item. The 1987 net income included 9267 million or 94.24 per share from discontinued operations, discussed further in the note to the financial statements entitled Discontinued Operations. Worldwide, Goodyear is being challenged by the enlarged competitors that have emerged from the consolidation of tire manufacturers. The Company expects to face continued pricing competition in both the replacement and original equipment tire businesses as competitors position themselves to increase share in a global market that is expected to continue to grow at a tow rate. 26 - The louver production levels is the auto industry axperienred is the fourth quarter are expected to continue into 1990, sad are "r*^ to affect sales and income of both our tire and feral products huaina--sa tha 1989 research and development expenditures of <303.3 million centered on new product development and manufacturing proeeas Improvements. The research and development Operating income for 1989 of <996.3 mlUon included 1109.7 milfion of tha previously described unusual charges. The 1968 operating income of <1,009 mflliou Included <27.9 million of unusual charges. The 1987 operating income of <1,077.3 mUllna was not affected by unusual Tinas omf SataUd Bales of <89 billion were down slightly Oram 1968 levels and up 7 percent from 1987. (ZMUff* *4 *4 S77 736 7J <722.6 ndUon In 1989, <736.4 million In 1988 and <877.4 miSian in 1967. Operat ing Income in the U.S. portion of this segment incresaed compared to 1988 but was below 1987, while foreign results decreased compared to both periods. In 1989, this segment's operating income was reduced by <519 million resulting from the previously mentioned sale of the Company's South Africa subsidiary, the planned reduction of bias-ply truck tire capacity and tha realignment of the Canadian operations. Employee reduc tion expenses of <26.1 million were charged to this segment in 1988. *7 9 7 SB *9 During 1989, the favorable impact of reduced raw material costs sad im proved pricing and mix was mors than offset by lower overall unit sales and Increased selling, administrative and general expense. A relatively stronger U.S. dollar also reduced foreign earnings. The following table presents changes in tire unit sales: Ivtii (Dmnm) hllnlhttSilHkratlMr UMwllS U9. ......... Foreign .. Worldwide (7.6)% (.1)% (4.2)% ISUnlNT 9)% The lower U.S. unit sales in 1989 reflected reduced demand for the Company's tires in the replacement market until the second half of the year sad reduced famiml for tires in the original equipment market in the latter part of the year. Price increases early in the year to recover prior increases in raw material costs, a realignment of the Company's distribution channels and competitive pressures contributed to the lo<arer U.S. replacement unit sales. Modest growth sad continued competitive pressures are anticipated in the U.S. replacement market which may affect pricing and mix as the Company targets improved unit wafa* in 1990. 27 Sales of 12 billion wereup 5.4 percent from 1988 and 24.2 peroent from 1967. Oper ating income of 1260.5 million In 1989 was reduced by 9j6 million as a result of the loss on the sale of the Company's South Africa subsidiary. Operating in come of 9260JB million in 1968 was re duced by 82JI mlllioB of employee reduction expenses. Operating income in 1967 was $198.6 million. ii s b i S7 so The 1989 results reflect increased sales volume in most product groups. Operating income was flat compared to 1988 levels as lower foreign results off set U.S. gains. While engineered prod ucts showed improved income for the year, industrial products income de clined due to lower foreign results. Chemical products income was impacted by highly competitive pricing. OH Transportation Sales were SI 1.8 million for 1989 and $7.9 million for 1988. Seles for this segment consist of tariffs charged by the All American Pipeline System and revenues, net of acquisition costs, resulting from various erode oil gathering and trading activities. Acquisition costa associated with the gathering and trading activities amounted to $706.2 million in 1989 and $389.7 million in 1988. The 1989 operating lose of $56.8 million was primarily the result of the aforementioned unusual lose of $48.3 million on the sale of unused pipe. Operating income in 1988 was $6.1 million. On October I, 1989, the Company began recognizing depredation and other net operating expenses of the All American Pipeline System which reduced operating income by 89.1 million, an effect which is expected to continue in future periods. These charges had previously been capitalised. During 1989, approximately 90,000 barrels per day, on average, of onshore California and Alaska North Slope crude oil were transported through the System, which level of throughput is not expected to change significantly in the near future. Production of California outer continental shelf (OCS) crude oil continues to be behind schedule due to various regulatory, construction and other delays. The fiwp-y expects that limited quantities of OCS crude oil may be available for transportation in 1990 ami that significant quantities of OCS crude oil will eventually be produced and available for transporter tion through the System. Right-of-way activity along the environmentally approved route for the pimmed eastern leg extending from McCamey, Texas, to the Gulf coast, evaluation of projections of availability of OCS oil and the demand for it at Gulf Corot refineries continues. The eastern leg will be constructed only when it is determined that there will be sufficient demand fir OCS at refineries along the Gulf Coast and that the oil will be available in substantial quantities for transportation through the All American Pipeline System. 28 UJS. Optratunu Saits were $6.5 billion in 1989, $6.4 blltton in 1988 and $6.9 billion in 1987. Operating Income far 1969 of $490.7 million indndedthe $68.8 million charge from the sale of anuaed pipe and the planned reduction of Mas-ply truck tire capacity. Operating income for 1988 of $439.4 million included the $27.2 million charge for employee reduction costs. Operating income for 1987 wn $617.2 million. During 1969, United States tire operating Income improved primarily as a result of lower raw material prices and improvedpricing and mix that partially offsetthe 7.6 percent lower unit sales. The previously mmitioned increases in railing, administrative and general expenses also affected UJS. operations. In addition, operating income was adversely affected by the inclusion of the All America Pipeline System expenses in the results, which effect is expected to continue in future periods. Foreign, Operations Sales were $4.4 billkm in 1989, $44 billion In 1968 and $4 billion in 1987. Operating income of $4349 million for 1989 included the 160.9 million charge tor the loss on the sale of the Company's South Africa subsidiary and the expenses related to the realignment of Canadian operations. Also adversely affecting 1989 foreign results was the relatively stronger U.S. dollar. Operating,income for 1988 was $6624 million and for 1687 was $468.9 aeillion. In Europe, sales and operaring income decreased due to lower replacement tire shipments and the stronger U.S. dollar. In Larin America, sain increased due to higher tire unit sales, however, operating income decreased due to unstable economic conditions. In Asia/Africa, sales aad operating income were down in 1969 due primarily to the absence of the South Africa operating results in the second half of 1989 end the $43 million loss recorded on rite second quarter sale of that subsidiary. In Canada, sales increased but operating profit decreased due to the previously mentioned realignment charges, competitive pricing and Napanee, Ontario plant start-up expenses of approximately $6.9 million. Start-up expenses for this plant are expected hi continue during 1690. Pull production levels are expected U> be reached in 1991. Further discussion of industry and geographic segments is contained in the note to the Inandal statements entitled Business Segments. LIQUIDITY AND CAPITAL IBSOUKES Cash and cash equivalents of $122.6 million declined $111.6 million from December 31, 1988, principally due to a conversion of cash equivalents in T-rin America to longer term investments pending remittance or reinvestment. Net cash provided by operation of $8174 million was the primary source of Goodyear's liquidity during 1989 as reported in the Consolidated Statement of Cash Flows. A igniflmt decrease was recorded in accounts and notes receivable, as discussed below. Capital expenditures of $775.7 million, including capitalised interest of $118.9 million, were the primary use of rash tor investing activities. At December 31, 1986, the Company had binding commitments for land, buildings and equipment of approximately $260 miiiwi. Capital expenditures are expected to approximate $700 million in 1990, of which $20 million is estimated for capitalised interest. Capital expenditures in 1990 win be for the new Napanee, Ontario, Canada tire plant, other plant expansions and modernizations, new tire molds and other continuing activities. 29 . Consolidated debt at December 31* 1968 nt $3.35 billion, a reduction of $225.8 miUon bum December 31, 1988. This debt represents 60.9 percent of total debt pins shareholders' equity, compared to 63.8 percent at year end 1988. The reduction in consolidated debt during 1989 was due primarily to several asset sales. Throughout the year, Goodyear sold certain domestic accounts receivable under a continu ous purchase program whereby, aa these receivables were collected, new amounts were sold to maintain a level of approximately $350 million. New agreements entered into in December, 1989 increased this level to $600 million. Under these agreements, undivided Interests in designated receivable pools are sold to purchasers with recourse limited to the receivables purchased. The Company sold accounts and notes receivable under these and other agreements totaling $3.1 billion, $2.6 billion and $1.2 billion during 1989,1988 and 1987, respectively. These receivable sales offer a long term, cost-effective means of providing improved liquidity. The Company also received cash proceeds of approximately $111 million from the sales of its South Africa subsidiary and unused pipe held by All American Pipeline Company. Certain foreign currency exchange agreements which hedged outstanding Ten bond obliga tions were sold, generating cash proceeds of $75.4 million. The resulting 25 billion Ten exposure was subsequently rehedged. During the second half of the year, the Company entered into separate credit agreements with 47 domestic and international banks providing revolving credit lines of approximately $2.25 billion under improved terms and conditions. Thereafter, the Company terminated the $1.5 billion Multi-bank Revolving Credit Facility and $700 million of other bank revolving credit agreements. The new revolving credit agreements are noncsnceiahle for an initial commitment period of three years and, thereafter, are automatically renewed for successive one year terms, until the required prior notice of termination is given. In April 1989, Goodyear entered into a $50.0 million floating rate, seven year bank term loan agreement. In May 1989, the Company issued an aggregate of $lt8.4 million of its 10.26% promissory notes due 1900. A bank term loon in the principal amount of 5 billion Ten, fully hedged via a separate currency exchange agreement, provided a $35 million, five year at 8.68% in December 1980. In 1989, the Company increased the authorized level of issuance under its Euro-commerical paper program to $1 billion from $800 million. In April 1989, the $657.5 million Celeron pipeline facility was repaid in advance of its 1994 final maturity and replaced by various shorter term, lower coat facilities. At December 31,1969, interest rate swaps totaling $1.57 billion were in place to protea the Company against upward movements in interest rates. As a resalt, the effective interest rate on approximately 92 percent of the Company's debt at December 31, 1989 was fixed by either the nature of the obligation or through interest rate swaps. The weighted average fixed race associated with the $1.67 billion notional principal of the swap portfolio was 8.71% at December 31, 1989. Substantial short term and long term credit sources are available to the Company globally under normal commercial practices. At December 31,1969, there were worldwide credit sources ..totaling $5.45 billion of which $2.10 billion or 38-5 percent were unused. Further discussion is included in the note to the financial statements entitled Credit Arrangements. Funds generated by operations, together with available unused credit sources, are expected to be sufficient to meet currently anticipated funding requirements. 30 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. INDEX CONSOLIDATED FINANCIAL STATEMENTS--FINANCIAL STATEMENT SCHEDULES Report of Independent Accountant*................................................................... Consolidated Statement of Income -- yean coded December 31,1989, 1988 and 1987 .................................................................................... :............ Consolidated Balance Sheet -- December 31,1989 and 19B8.......................... Consolidated Statement of Shareholders' Equity -- yean ended December 31,1989,1988 and 1987.................................................................. Consolidated Statement of Cash Flows -- yean ended December 31,1989.1988 and 1987.................................................................. Accounting Policies............................................................................................... Notes to Financial Statements............................................................................ Supplementary Data (unaudited)................................................. Financial Statement Schedules .......................................................................... 31 32 33 34 35 36 37 62 FS-t to FS-6 REPOST OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of The Goodyear Tire A Rubber Company In our opinion, the consolidated financial statements listed in the index on this page present fairly, in all material respects, the financial position of The Goodyear Tire A Rubber Company and subsidiaries at December 31, 1989 and 1988, and the results of their operations and their cash flows for each of the three years in the period ended December 31,1989, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the ove*all financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PaiCX WATCKHOtfeU: Cleveland, Ohio February 12,1990 31 TkCmJparTmiikMtrOmptwj^Sttkn-iimkj ffUWi m miSitmL oaf*f*r ifod Net Saks Other bcome Cost and Eiptwii: Cost ofgoods told Selling, administrative tod geoenl expense Imaatexpetue Unusual items Foreign currency exchange Minority interest in net income of subsidiaries Income fan Coobnuing Operation* before Income trees sad Extraordinary Item United States and Foreign lares on income ' Income from Condoning Operations before Extraordinary Item Discontinued Operations Income before Extraordinary Item Extraordinary tern--Tar Benefit ofLorn Carryovers Net Income Per Share of Common Stock: Income Iran continuing operations before extraordinary item Discontinued operations Income before extraordinary item Extraordinary item--tax benefit of toes carryovers *9^ 1*0.869.3 *7V4 *M44-7 JL 19W 810.8104 *987 8 9.9>3 * *4-3 >-9949 *79-9 0,0834 Mm-7 *J6j.7 *7M 109.7 7V7 18.6 *0.573-8 8491.0 *.7432 2)8.0 76-8 85-3 194 MJ74 47-9 381.; 7-5 1874 *9-4 . 35CJ -- >89-4 <7-4 S 206.8 3JC4 S 3jcj 7.374-8 *.634-9 282.3 (135JO) ** 166 9-2U-7 8724 33 3*39 257-0 7709 __ S 770J9 86ji 38-49 -- -- 4-** 308 641 *2-73 JO -- Net income Avenge Shares Outstanding Tbr W 57.727,577 S641 t ' 57.322463 MUMuzptttim Waflki tntn Mkgrdpm tfAilfmaacmiammo* 32 8*27.3 60.364.981 Ci--iHliiBjliii till The GWpur Tire* RaMtr Cmp*ay ami Sukstdients (DtUmi m mittimil Dmaitrji ______tf&fp68 Cancm Aam: , Cadi sod dull equivalents Shore renn securities Accoudb and nows receivable inventories Prepaid expenses and other current assets Total Current Assets Ocher Assets: . . investmena in affiliates, ar equity Long term accounts and notes receivable Deferred charges and othec miscellaneous assets Properties and Plana S WM4-* W&4*- 170.7 3471-9 S 334-1 10-7 3.318-4 L63V3 ____m 3,357 9 **W *9-* 258.0 m* 03.3 3*3-7 197 c 633-C dAn 88460.5 4427-4 tt.618.3 I 1 Current Liabilttiet: Accounts payable--tt2.de Accrued payrolls and other compensation Other current liabilities United Stairs and foreign cases Notes payiblc banks and uverdtafes Lung term debt due within one yeat Total Current Liabilities LoopTerm Debt and Capital Leases Other LongTerm Liabilities Deferred Income Taxes Mummy Equity in Subsidiaries Shareholders' Equity: Preferred stuck, no par value: Authorued. yo.ooc.000 shafts, unissued Common stock, no par value: Authuraed, iyo.ooo.ooo shuns Omsunding share. y7.H06.Kfi9 ly7.4iO.y16 in 19881 Capital surplus Retained earnings Foreign currency translation adjustment Ini Shareholders' Equity 7Ar n* ^nuagg/m/km Watte n * rtncruifvn *<fc fmtmtd Uuhmmt. 33 * 9*4-0 395-6 178.9 *9-3 J16.0 tt-4 UOOJ 3*63-4 364-7 68l8 *>6-4 S 78tj 4*2-3 347-3 39*- 354-2 172.6 3-158.5 3.044-8 435-7 5554 96.8 57-8 464 24784 3*383-7 (338.9) 3443-8 88460-3 574 39-3 3475-4 3462.1 (235.0) ir.i 58.618.3 CmiriMHitlrt.... ................................... ...... TMt Gm4ynrTrt* it todiu Ctmftmy md Sahifoiiu (Ptfm krmittkm. maprpn dun) Common Stock Shares Amount Capital Surplus Keminrd Fsnip Currency Traaihoon Adjusnneet Tool Shanhaldm' Equity MaMtfDaMtollf 19M after deducting 13,904,338 treasury shares Net income for 987 Cadi dividends 987--Jl6o per share Common node purchased far omuiy: lestnicturing plan Other acquired sham Common ssock issued (ineluding 383,800 treasury sham): Dividend reuvemmenc and stock purchase plan Stock option pirns Key Feaosmei Incentive Profit Sharing Plan Forego currency translation adjustment 97,080,482 1971 S U44 $3,024 770.9 (91.0) U0433.764) U9.593) (40.3) -- C74) -- (t.877-1) (2.4) 02,324 237409 ).65i J 3 -- 7-0 6.6 .6 K320.9) 1 3,002.6 770.9 (9L0) <2.024.8) <24) *4-5 72 6.9 .6 164.3 '91,1M7 slier deducting 344103,823 treasury shares Net income for 98B Cash dividends 1988--S1.70 per share Common stock issued (including 443,962 treasury sham): Dividend ranvesonem and stock purchase plan Stuck option plans Key Personnel Incentive Profit Sharing Plan Foreign currency translation adjustment 56.986,579 238463 172.313 32,969 57-0 .2 .2 -- 04 1.922.6 3501 <973) U564> l8344 3504 <97-3) 0.3 *2-5 51 54 .6 .6 178.6) <78.6) dMdDaSMborSl, IMS after deducting 33,361,863 treasury shares Net income for 1989 Cash dividends 1989--$1.80 per share Gummun stock issued (including 376.369 treasury sham): Dividend reinvestment and stock purchase plan Stuck option plans Key Peiionncl Incentive Profit Sharing Plan Foreign currency translation adjustment Divestiture uf Saudi Africa subsidiary 57430.526 574 *9*813 5U98 3.3" 3 4 -- *93 *4754 206.B 1103.8) 4-9 1.7 .6 (233.0) <65.7) 61.8 2.0274 206.8 <10*8) 1*2 1.8 .6 <6*7) 6l8 deducting 33483^94 treasury shares 57.806.869 $57.8 S 46.5 82478.4 Thr^amfmfmg m--m pttiau ami tun art <m mugmiftrttflbii/jmWimwr. 34 ><236.9) S 2043.8 *#* ' <iwrftolnirtwi^f^iiw Tbt Cmtfpm Tin St BMtr Cttmparj amd laka/dtmkt Net Income Adjustments to reconcile net income m act cask: Depmriakon Unusual toms Deferred income ax Asset dispositions--gain Accounts and notes receivable inventories Deterred pension plan cost Prepaid expenses and other current assets Other assets Accounts payable--trade Other liabilities _ local adjustments Vet cash provided by operating activities - Vmrb+iD*mnrji. 19*9 4*8 1987 $ m6l8 S 330J S 770.9 3fe* 109.7 * -- ao Uaoj) -- *74-*) *74 169.5 Max) 6tu> 817J 357* 70.7 (37-3) -- (13x8) <169.0) 36X2 -- (004) (9x1 138.0 449-3 7994 38x4 4-* t36.6 (447.7) 628.9 >6j (JXJ) 16.C 46X (48.C) <103.4) 39-4 U369-3 Capital tspenditwes Asset dispositions Short term securities acquired Short term securities redeemed Other transacoixu Net cadi (toed ini provided by investing activities tvyh ririrs fc-- rbfthi Idtrlilan Proceeds ftvtn sale of foreign currency exchange agreements Shun term debr incurred Short term debt paid Long term debt incurred Long term debt and capital leases paid Cncnmnn mxk issued Gnomon mdc acquired Dividends paid Vi* cash used in financing activities Effect of' Exchange Rue Changes on Cash and Cash Equivalents Cash anc Cash Equivalents at Beginning ofthe Period .. t77V7> 164X (126.31 44-3 (91) (70x6) (7437) 41.7 <M3> 3-9 17.0 (693.6I (757-8) 1.304.8 <2.6) 23.0 (82.31 686.0 754 XJB9* (2x83.31 *379 (708.1) 17.6 -- (103J) (*4.7) -- I.664X (ljoco.7) 386.7 (1.008.3) 18.3 -- (97.3) (67.1) -- 1,629.8 12x15.01 3-071.7 (*-348-3) M-6 (XC27-2) <9(.0) (1,965.6) (2X1) (3.1) l6 (mi) .............*34- 336 200.3 9'-3 109X S 12x5 5 2lf.l S 200.3 Tt* diu^mm mmuwj-pUm aadmm un A ia*pal/art *f /in iiaaauat M*M. 35 ii j1 1 1 2 AmvrilaaMUw Tbt Gradyrar Ttrt fc tMtr Ctmfmj *W Sukidimiu A summary of the significant accounting polices uscdu the psepnadoo of the accompanying financial statements follows: 4 The consofidned financial wiwnwo include the accounts of ifi majority-owned subsidiaries. AH significant intercompany traosaettons have been dimiaared. The Company's investments m ra 50** owned ;mpoiucs in which it has the ability to cnetcise significant influence oner operating and financial policies are accounted for on the equity method. Accordingly; the Company's share of the earnings of these companies it included in consolidated net incume. Investments in ocher companies are carried at coat. 4 Cash and cash equivalents include cash on hand and in die fannk as wefl as a& short term securities held for the primary purpose of general liquidity. Such securities normaSy mature within dime months from the das of acquiiibon Cash flows asaoeaxd with items intended as hedges of identifiable transactions or events are classified in the same category as the cadi flows from the items being hedged. Inventories are sated at the lower ofcost or market Cost is determined using the Usrin. fusooui <UFOi method for substantially all domestic inventories and average cos or standani cost approximating avenge cost for all other inventories. Properties and piano arc stared at cost. Depreciation is computed on the straight Ime method. Accelerated depreciation is used for income tax purposes, whetr permitted. Income taxes are recognised during the year in which transactions enter into the determination of financial stxtrment income with deferred taxes being provided for ciming differences. ftf share amounts have been computed based on the 1veriest number of common shares outstanding, including for this purpuae only, those treasury sham allocated tor ifsinbutton under the incentive profit sharing plan. 4 Certain items previously reported in specific financial statement captions have been reclassified to tontbnn with the 19H9 presentation. 3fi Tit Cmdytmr Tfor ft HMtr Ctmftnt) mi Sodni'j n m A summary of the pretax unusual charges (credits) follows: lit Sale of facilities Sale ofassets Realignment hnsion sccdement/assec revetsion Employee reductions Asset writedown 9" t-- 8.J *4 -- -- -- 50.9 -- 279 ---- ____________ *SfcZ.. 978.8 *(4*J) -- -- -- -- ** *13*0) VM9 The Compaty 10IJ in South Africa rise tad general products manufacturing subsidiary far S41.0 mibon. A lots ofS43.0 million ($3x0 million after taxi u recorded in (be second quarrel (be majority of whidi was due m dte leoogaioon ofthe decreased value of dieCompany$ assess m South Africt arising from (be devaluation of (he Sooth African Rand during die past metal yon. The Company's oil transportation subsidiary All American Pipeline Company sold aboot 433 mies of unused 30-inch pipe far S70.0 million in the second quartet. A loss ofI4&.3 milhoa (S43.0 million after os) es recorded on the tale. The Company accrued expenses of $18.4 million lSto.9 miHion after tax) far the reduction of bias-ply track twe capacity at the Gadsden. Alabama plant and 60m the reabgnmem of the Canadian operations. I98S The Company settled its pension liability for the principal domestic salary plan for al benefits accrued toJune 30,1988. through die purchase ofannuity contracts from major imuraocc companies during the fourth quartet A loss of Sic.9 million was recorded. In a related transaction excess assets of S400.0 million before taxes were reverted to the Company Exk tax of S40.0 milion u incurred on die asaet reversion making the total charge to Unusual Items $30.9 milion. The combined effect of these transactions, together with the reversal of deterred tax recorded an the 1986 pension settlement, resulted in an after tax charge ofS9.7 mifoon in 1988. Proceeds to die Company amounted to S21C.0 milion after deducting excise tax and federal and sore income taxes. For further information regarding die tax effaces on the transaction, see die note m die financial statements enrided Income lues The Company in an effort go reduce'operating expenses, consolidated asks and dtnunared duplicate job responsibilities at a case of $27.9 million (Scj l million after taxi in the fourth quartet. WIT The Company sold the assets of two Arizona subsidiaries involved in ipicufeuraJ products, real estate development and a resort howl. for a toed price of Szzo.i million in December 1986. In older to effect the sale, die Company purchased certain assets for S40.0 million which were included in die sale of die Arizona properties. The rale was accounted for as an nrnUment sale and resulted in die recognition of a gain of $134.3 milion <$73.4 million after taxi in 1987. A combined gain of S9.7 million was recorded from the sales of the Zaire and T.E.I. subsidiaries, die Company's glint venture insrretr in Ibyobo tacoid ofjapan and certain plant cloture teserve adjustments. An asset write-down of$9.2 million wss chaqpd against income from die termination of a currency exchange rate protection agreement in Mexico 37 A Other income includes moresr income of11324 miIlio<i, $130.6 nuKon sod $87.* million far 1989,1988 tod 1987, respectively 00 rirp**" The primary source of interest income not fundi invested in erne deposits in Lada America, pending remittance or reinvestment in the region The higher interest income as due to higher nomiual interest mtes on local currency deposim and was parmly offset by related foreign currency nriaap lostes on rime deposits. Ommilbm) Accounts and notes receivable Less alouaoce for doubdui accounts $14834 38-6 ______________________ Si,64.o 33-6 $L57-4 Throughout die yeac the Company sold certain domestic accounts receivable under a coonnuous purchase program maintained at a level ofapproximately $350.0 milion. New agreements pur into effect in December. 1989 increased this level 10 $600.0 million. Under these agreements, undivided interests io designated receivable pools ate told 10 purchasers with recourse limited to the reoetvsbht purchased. The Company sold accounts and awes recrmMc under these and other agreemems sealing $3,08.8 million, $2451.6 million and Suort milion during 1989,1988 and 1987, respectively At December 31.1989 and 1988 the balance of the uncollected portion ofthese receivables was $718.5 million and $453.6 milion, respectively ttm mitirmt________________________________________________________________________ jggy Raw materials and supplies Wirk in process Fuushed product $ 330-5 904 14214 $1,642.0 $4398 93-4 ua.3 The cost ofinventories using the last-ia, first-out (LIFO) method lappro*mutely 44.7** of consolidated inventones in 1989 and 34.5% in 1988) was less than the appraimaie current cost of inventories by $330.6 million at December 31,1989 and S358.6 milion at December 31. 1988. llm miflimv Land and improvements Buildings Machinery and equipment Pipeline Consoucrton in progress Properties and pfcinis, at cost Less accumulated depreciation Owned N* Capital Leases Total $ 279.8 $ 94 S J69.2 14032.3 76.2 M08.5 4.611-* X.L2 . .5654 1241 4.7359 -- 1.351-4 -- _____ 73403 209.7 84300 .. $ 74-8 *4.6x53 Owned $ S84.O 1,0282 4408.7 -- 1.7408 746t7 3J20.0 $ 4.34X7 HUM Capuai Leasts Total * 95 82.8 07.7 -- * 495 5 MILO 4.5364 -- L7408 220.0 7.681.7 Ji4i____ 23+3 S 85.' S44r?4 The amortization fur capital leasts included in the depredation provision for 1989.1988 and 1987 was $10.1 million. SitJ million and $il.( milion, respectively 38 (CWMMrf A At December ji, 1989, die Company hd than *rra credit lias and cwdnfc amngrinrnta erasing Si.384.3 Bullion. ofwhich 8979a nOioa were unused. fimm&ami Sinking hiod debentures: 8.60% due 1991-1994 *55 A* 1992*199? Promissory notes: 04318 due 1991-2000 Q.90% due 994-1999 1006% due 1999 Yen bonds: 6.875% due 1994 7-OJ* due 1993 6.623% due 1996 Swiss Franc bauds: 5.373% due aooo 5.373* due 2006 6.873% Coavadbie Debentures due 200) Bank teem loans due 1991-1996 Eunxonunercial paper Bank revolving credit agreements Celeron pipeline facility Other domestic debt Foreign subsidiary debt Capital lease obligations Industrial revenue bonds Other Leu pornon due within one year raw % *J0 J7-5 I 32.0 n* 50.0 90-0 118-4 30.0 30.0 -- *9 173J 695 *54J 129.5 (30J> 152J6 516.3 -- -- 708.2 3064 99-* 9A 795 *574 1311 130.0 79-3 248x1 230x3 390x1 1755 574-0 4-5 *1* tiual 66.4 ___________________ Safe1, bo 31J 3*7-4 172-6 At December 31.1989, the Company kid available long term credit unites totaling 83,863.7 miUion of which 11,123c million were unused. The fen bonds (47.5 billion Vfenl due in 1994,1993 and 1996 and the Swim Franc bonds (438 million Swiss Franc) due in aoco and 2006 ace hedged by contracts to protect against Suauadom io sudi foreign cut racy exchange nos. During die third and fourth quaram of 1989, hedge coeuaas covering 23 billion fen were sold generating cash proceeds of$73.4 miUion. The resulting fen bond exposure was tubstaatialy cdudgtd in 1989, with the remainder rehedged io January 199c. At December 31,1989, S14U million asMxiaifd with these hedge contracts was recorded in certain receivable accounts on die Cotsalidiitd Balance Sheet. 3 A frt^l hlHWMrtl (rmtrtwd) The CoMcttibfe Debentures due 200) ut convexdble into common Anns of (he Company at $80.23 per (hue. The bank term <" due 1991 through 1996 amiit of vinous agrecmeacs which provide far nttmt at fined met ranging between B percent and 8.68 percent or Aomiag rates bawd on LIBOR phis freed spreads. During 1989. die Company enteted into new revolving credit agreements totaling $2433-0 milion with 47 domestic and international banks and die $1,300.0 milion Muki-bardt Credit Fatality and $700.0 million of other bank revolving credit agreements wete terminated. The new (evolving ccodir agreement* ate non cancelable far an initial commitment period of three years and, thereafter, ate automatically renewed for successive one year terms. until the required prior notice ofrenniaamu is given. Generally, the revolving credit agreements provide that the Company may obtain loans bearing ituerere at LOOK plus y percent, a defined Certificate of Deposit rare plus 3/8 percent or other quoted mss and require a commitment foe of 1/8 percent on unused pumons of the lines. These agreements contain certain covenants which among other dungs, indude interest coverage ratio and current ado testa, a net worth minimum and a limitation on total debt. Amounts outstanding under the Company's Eunxammeitial paper program and other short term faciiocs are supported by these revolving credit agreements. In April 1989, the >757.7 million then outsanding under the Celeron pipeline facility was repaid in advance of ns 1994 final maturity and replaced by various shorter term, lower cost facilities. Certain dutnesrk and foreign subsidiary debt obligations nmoundi^ to $1,174.8 million and $289.5 million. respccaweiy. at December 31,19H9 ($998.6 milium and $132.9 miIkon at December 31,1988). which by their terms are due widun one yean are classified as long term. Suck obligations are incurred under or supponed by ooncancelabie big term credit agreements, and it is the Company's intent to maintain them as long term. Shore trrm obligations reclassified to long reran at December 31.1989. consist primarily of Euro-commercial paper and shore term bade borrowings Refer to die nute to the financial statements entitled Leased Assets for additional information on capital lease obligations. The Company has interest rate swaps for a total notional amount of$1,569J million at December 31.1989, which convert floating inrerest ares on various floating rare debt obligations to fired rare*. The annual aggregate maturities of long term debt for the five yean subsequent to 1989 ate presented before Maturities of debt incurred under or supported by revolving credit agreement* have been repotted on die basis thar these agreements will be terminated at the end of dietr initial terms. (fa mtUmati Debt incurred under or supported by revolving credit agreements Other w rijvx $-- S-- $120.0 $1467.8 $- _ *3 8jj6 80.3 70.0 $63.8 $82.6 $200.3 $1437-8 Si95 Certain manufacturing, retail store, transportation, data processing and other facilities and equipment are bekl under leases which generally expire within ten years but may be renewed by the Company Many ofthe bases provide thar the Company will pay taxes assessed against leased property and (he can of insurance and maintenance. 40 HlM t H--dd H ! (GmtimA Minimum lease comma e follow: (ImmUSmt 99 *99* 99s >993 994 1999 and drerta&er Total minimum lease payments l mi executory casts Net minimum lease payments Less amounts caomated so represent interest Present value ofner minimum lease obligation! Lew portion due within one year Capital Laws 1 17.5 17.6 *M IL2 n.i 93-8 K9.6 .8 t68.8 67-2 iol6 ____________________ 15 *-22 Opetaring 8*43-* OB* U40 88.6 39 222.6 *9*&8 Total rental expense charged to income and cotiringenr renab included therein foOesr. (lamUttml Minimum rentals Contingent rentals Less sublease rentals *9* ggO&S u 49-3 8237.9 SifHH $270.0 U 42J 8229.0 9* Si88a *3 35-1 8*34* The Campus's 1972.1982 and 1987 Employer*' Snxk Option Phot and the 1989 Goodyear Performance and Equity Incentive Plan provide for the granting of cock options and nock apprrcn&un right* (SARsl. For opnaiu previously granted with SARs, dr exercise of an SA& cancels the stock option; convene!y, the csrcisc of the stock option cancels the SAR. The 1972,1982 and 1987 Plans aspired on December 51,1981 and 1986 and April to, 989. respective^ except for opoons and SARs then outstanding. The 1989 Plan was adopted at the April 1989 shsichatden' meeting. The 1989 Plan empowen the Company to award or grant from time to rime until December 31. 1998. when the ^89 Plan expires except with respect to Awards then outstanding, to officer* and other key managerial, administrativt and professional employees of the Company and us subsidiaries Inctfltive Nun-Qualified and Deterred Compensation Stock Opttoos. Stock Appreciation Rights. Restricted Stock and Restricted Unit Grams. Performance Equity and Performance Unit Giants, any other Stock-Based Awards authorized by the Committcr which adnunmrs the 1989 Plan, and any combination of any or all of such Awards, whether m tandem with each other or otherwise. Assuming thar there wil be full utilisa tion of the shares of Common Stock available for Awards during the term ofthe 1989 Plan, and that no other increases or decreases in the number of shores of Common Stock outstanding would occur during die term of the 1989 Plan, approximately ic.roo.coc shares of the Common Stock would be available for the grant of Awards. 41 A Outstanding at January 1 Greneed Opoont without SARs rtrrrisrd Oprioos with SARs exercised SAlsemtacd Oprioos withoucSAls optred Options with SARs expired SARs expired Outstanding at December 31 Exexctsaole at December 31 Available for grant at December 31 Sham SARs 1,78o.349 99,900 n3v4> -- . (2.75*1 (2,752) 84.S0) <5f^oo) (*4*3JO) -- (too) boo) -- (7%M0) U9$4.$ aw03 M54.M __i22^-_ Sham SARa M59^9 567.*30 (*82.932) (5.7*8) (37,550) (20,300) -- -- 3*2*05 --* -- (5.768) (37.530> -- -- (n.ooo> *,780.349 308487 *035,799 3.714,600 303487 Opriooi u December 31,1989 and 1988 were esidublr at plica tanging (torn $12.0010 $67.30. All oprioos were granted at an opaan price of not leu than the Gur market value ofdie Common Stock at the date ofgiant. Research and development cost included in cott ofgoods told fix 1989.1988 and 1981 was $303.3 million. $304.8 million and $266.3 miJhoa, respectively. The Company and its subsidiaries provide substantial? all domestic and foreign employees with pension benefits. Far 1989. all domeaic and substantially al foreign plans were accounted fix within the provisions ofStatement ofFinancial Accounting Standards No. 8?<SFAS No. 87). "Employers' Accounting for fanions**. Fix 1988 and 1987, all domestic but only certain foreign plans were accounted for in accordance with SFAS No. 8?. The principal domestic huuriy plan provides benefits based on length of service. The principal domestic plans covering salaried rmpliiyees provide benefits bused on career avetagr earnings formulas. Employees making voluntary contributions to these plans receive higher benefks. Other plans provide benefits similar to the principal domestic plans as well as termtnanor indemnity plans at certain foreign subsidiaria The Gunpany's domestic funding policy complies with the requirements of Federal laws and regulations. Plan assets are invested primarily in common stocks, fined incume securities and real estate. Net periodic pension cost (credit) from cuoanumg operations follows: ilamiUmmsi Service cost-benefits earned during die period (merest cnst an protected benefit obliganon Actual return on assets Ner amortutation aad deferrals Net pervitin pension cox (credit) 19* U)HS $ 494 *29.7 39 9 064 094-8) (*S79) **3-$ 33-3 ____________ *_2Z=L_ $ 31." nj*- $ 37-0 379 (32.ll 028.3) $ (5 3) In addition, duting >988 and 1987, pension expense for forcign locations not adopting the Standard was SK.i mittiiM and $8.6 milion. respectively. 42 (GmtiwmJ) The following able sets forth the funded stems and unoums recognised in die Company's Consokdamd Balance Sheet u December 51,1989 and 1988 At ike end of 1989 and 1988, assets acreded acnunulmsed benefits is certain plant and accumulaiEd beeefia exceeded Mtea in abets. This able includes amounts for difcoadttied openaons. /ft mUhtmt aft___________________ ftSL Amem Exceed AceumuUmd Asms Exceed Accumuktcd Buafin Exceed Assets Exceed Assets Amaral proem value of benefit obligabom: bticfit obligatioii 1*66.8) S (2f34) $(074) * 19*4.9) Accumulated benefit obligation <W75-5) S (277.0) $0324) $(1,038.6) Projected benefit obligation Plan assets $(1408.7) 144&1 $(386.0) OL6 $d)6.l) 1)6.6 $ U.13LO) 864.9 Plan assets in excess of (or leu than) projected benefit obligation Unrecopuerd net (gaanl loss Prior service cost not yet recognised in net periodic pension cost Unrecopiiacd net (asset) obligation at transition Adjustment required to retognue minimum liability Prepaid (accrued! and deferred pennon cos recojpiucd in die Consolidated Balance Sheer 394 784 (17.9) -- 74> 366 94* 26.7 (61.3) 5 20.1 79 (2LO) -- (266.1) 3-3 170-7 03 <73 $ 4.$ t Iryu) > 7.3 S (qyq) Assumptions: Discount mte Rate of increase in compensation levels Expected long tetm tact of return on assets tUny* 9-0* M* 90* ftrefe--re* 0* 20.0* * 18.0* 3.0* Q.O* US-HjW 9.0* 15* 9.0* fuugaigMt 7.0* IO O* 3.3* 6jff 8.0* 11. off The actuarially computed value of unfunded vested benefits at December 31.1988. for foreign locations due had not adopted die Snmktd was $21.3 million. In the fourth quarter of 1988, the Company completed a pension settlement and an asset irmniw for the principal domestic salary plan in accordance with Statement of Financial Accounting SfA4c No. 88. "Employers' Accounting for Setdcmrnts and Curad/netm of Defined Benefit Pension Plans and for Terminatnm Benefits '. Further discussion is included in the note to the financial statements entitled Unusual items. Substantially al domestic employees are eligible to participate in savings plans. Under these plans employer* elect to contribute a percentage of cheir pay In 1989. most plans provided fot the Comptny matching an emplo)re's contributioiis (up to a maximum of6 percent ofthe employee's annual pay oc, if less. S7.A27.co) at the rate of yo percent. Company contributions were fej.y million. I21.1 million and S9.7 million for 1989.1988 and 1987. respectively. 43 (Cmbmm0 The Company and ki subsidiaries provide subttaaaaly all dnmrnir employees and employees at cena'm foreign luhtiitaha with health cue and life insurance benefit! npon fenrement. Substantial portions of heakh cue beeefiq fof domestic return aie nor named and ate paid by the Company The life insurance benefits and certain hcakh care henefin ue providedby nuance companies through premiums baud m expected benefits to be paid during die yeac The Company rocopiws the coat of Aero benefits by expens ing the annual weunnee pcerawea and the amonne id health care costa inclined by rearees during the year The coat of providing these benefits for retirees for 1989,1988 and 1987 etas *93.9 mOlion. S&2-5 million and *72.8 miRiou, respcchvciy Intense expense includes intettst and xmoctimion ofdebt thsconu stsd expense lea amomts capitalised as Upk th mtMmmf Interest expense before capitalisation Capitalized intetesc *b *393 nf ^ $37t4 n*8 $364^ 126.2 >3380 itfitr *3*7-0 no **82.3 The Company made cash payments for imetesc in 1989,198* and 1987 of*383.6 million. *331.2 million and S378j naUxm. respectively The componena of income 60m continuing operations bcfoie income taxes and extraordinary item follow; (! mtllirnut Domestic Operations Foreipi Opemiuni tfU9 S 168.2 jna.7 *470.9 ryHH S 189.6 347-9 *537-1 rgtf* *571-0 3M **7M The effective mcoroc ax rote information follows: U Federal statutory income tax rote Differences applicable to foreign operations: Adduiqtial ox on foreign source income Tut benefit on prior foreign limn Tut ate differences and other variations Safe ofSouth Africa subsidiary Pension aster reversion Excise ox on pension asset reversion Other items Elfecnre rote on income from continuing pennons before income axes, minority interest and extraordinary item Discontinued Dpcnnons Extraordinary item--tax benefit ot loss carryovers Effective rare reflecting discontinued operations and extraordinary item 44 *9 34*% 9* -- 7-9 4-* **3 ... nm L3 lyUM 340* 6.2 <3J) *3 5-3 (6.6) 4 (Ml 57-5 33-1 <3*> -- ____as*. --&7* fo*40.o9t *9 -5) (l6) U) 5 40-3 (6.8) The components of the pnmaon for income cut* by axing juradicnoo follow: rt mtftimil Currently payable: Federal Foreign iocome and withhokkag taxes Stare ** fata P-9 U Deferred: Federal Foreign Sate aj-7 167 (xa) Charge equivalent to the effects offoreign operating lorn cxiryowm utiliatd United Stares and foreign cases on income *7-4 Safes <PK 19*? t a?.o *P4J tt-5 H*.7 * (Z4> *x8 (X7> 37-7 (476) *>9 (ao.fi) (37 3) *2.8 a-3 200.8 ---- 1*7.4 -Jig* Prepaid and deferred taxes rekdng to timing differences of lescnwu and expenses for tax and financial repotting purposes follow: tlm mitltuat Depreciation Plant closures Capitalised interest Realignmenc/resinjcruring Pension Sale of fecilides Salt of foreign currency contracts Other items 19W re*7 *194 $78.0 S 8x4 *4^ 4-3 *9 393 43* (X9> 46 -7 feS -- <tfi*3) -- (9.1) fixo (90J) -- -- _ 3-6 (iya) 7.9 IsSj _*ZL2L boat The Company made cash payments foe income axes in 1989,1988 tad 1987 ofl*U.6 million. 8214.^ million and SE74J million, respeandy No prawisian for Federal income tax or foreign withholding out on named earniggi of foreign subsidiarits of S1J42.& million it iet|uired because din amount has been ramesred in properties end piaats end working capital. The Financial Accounting Standards Board has again emended die letptimd implementation ly of Statement of Financial Accouacmg Standards Nd 96 "Accounting for Income lanes**. The Company does not intend to adopt this Statement until the required implcmcnaiion due; cuncady 1992. Because of continued uncertainty relating to implementation guidelines and maerpraadona, the Company it not certain as to the impact this Statement will hare on foture financial statements. (Cmtwmfi i|hwb|M* Ik Company changed its indmrey tegmenta during 198910 rtahgr exrenwl repotting to the internal structure of the worldwide Toe Division, worldwide Geaenl Products Diviaon and Celeron subsidiaries. The Tim and related transponaooc products segment bns been renamed Tires end related. The Industrial rabbet chemical and plastic product! segment has been renamed General products. Certain rubber tad plastic automotive products formerly reported in the Tim sod tdated ttBasportanoa products segment now are included m the General products segment. Industry segment information hat been rewared for 1988 and 987. Tiles and related is the principal industry segment, which involves the dewfopment, manufocture. distributian and sale ofTiros and (dated products. These products indude tires, tube*, retreads, automowe repair services and mmhandae purchased for resale. The General products segment includes various bads of brio, hose, molded peoduas. (bam cushioning accessories, tank cracks, oigank cbetmcais used in robber and plastic processing, synthetic rubber and rubber latkes, polyester resins, films, vinyl products, roofing membrane and graphic products. The Oil transportation segment consists primarily ofthe AH American Pipeline Sprem, a common carrier crude oil pipeline extending from California to Tacas. This segment, which also includes a crude oil gathering pipeline hi California, crude oil storage frolines, bnefiB and related assets, also eogages in various crude oil gathering and trading activities. Segment sales consist of tarift charged by the All American Pipeline System and revenues, net of acquisition cows, resulting from various crude oil gathering and ending activities. Acquisition costs associated with the gathering and ending activities amounted to Syovs million in 1989 and $389.7 million in 1988. On October 1.1989, the Company began recognizing depreciation and other net operating expenses of the All American Pipeline System. These charges, as weO as interest associated with the System, had previously been capitalised. Operating income for each industry segment consists oftotal revenues less applicable costs and expenses. Transfen between industry segments were insignificant. Operating income for each geographic region consists of total revenues leu applicable costs and expenses. Inreryographic sales were at cost plus a negotiated mark up Net income from foreign operations (mduding export sales) was S109.0 rmUioo, $193.9 million and $177.3 million for 1989.1988 and 1987, respectively. Dividends received by the Company and domestic subsidiaries from its foreign operations for 1989. 1988 and 1987 were 1x>V5 million, $182.3 million and $123.1 million, respectively. Net foreign assets were $14910 million at December 31,1989 <$1,497.1 million ar December y, 1988) after deducting minority shareholders equity 44) (CmmmR Porbotn ofdie unusual hems described in the Unusual Items bos wen chatpd apuut operaring income ofboth die iadusny tad geographic segments as fallows: ffauaflUoiJ Tilts aad cchced General ptodoen Oil Ifaad Sole of facilities Sole of assets Realignment ryfW Employee reduaioM *-4 -- ___________________ *4____ 4yJ 4 *9* -- -- M 4aJ 4-- 4*3 -- S4s 1 43- 4*3 _______34 l7 4- 4 27.9 (fn milimml ' Geographic Segments United States Canada Ash/ Africa Tbtal Sale of facilities Sole of assets Realignment 19H8 Employee reductions -- _ ..... -5 StS.8 1272 4-- -- 79 *7 Sqyo -- -- *43- S-- 4 4}-o 4-J 4*09-7 4 27 9 The following item* have been excluded from die determination of operating income: imcten expense. Mp currency exchange, equity in net income of affiliated companies, minority interest in net income of subsidiaries, corporate revenues and expenses, income taxes, discontinued operations, and unusual wans other than the charges mentioned above. Corporate revenues and expenses were those items not identifiable with the operations of a sepnenc. Corporate revenues were primarily from certain royalty and reditucal agreements, Corporate expenses were primarily central adnuiuMrabwe expenses. Assets of industry and geographic segments represent those assets that were identified with the operations of each segment. Corporate assets consist of cash and cad) equivalents, short term irainties, prepaid expenses and other current assets, deferred charges and other nuscellaneout asses. 47 Btetaato fCsmmwd) flmmOms) Sales to UnafFUiated Customers Tices Mated products and services Tuts and related OSaansponadon Net sales income Tires and rebred General products Oil aansponadon loal operating income Interest expense Foreign currency crefcange Equity in net income of affiliated compames Minority interest in net income Corporate revenues and expenses Income from condoning operations before income taxes and cxnaordinary item Assets Tires and related Genera] products Oil cansponadon Total identifiable assets Corporate assets Investments in affiliated companies, at equity Arects m December v , Capital Expenditures Tuts and related General products Oil transportation For the year Depredation Tires and related Genoa! products Oil transportation For the tear ___________ aft-- 198* *7.880,7 968.3 It ftaft ft nJ tolfo! 87.9*M 9n4 8.897 a *9053 79 8*1.8104 *7.5604 910.7 &,m.t L6nJ TTA S 71x6 2604 (964) 9*6.3 (*7M) 7V7 10.9 (4.6) (100.6) S 7364 2603 6lI LOOJ.O (238.O) (*5J) 8.6 (19.2) (1314) 8 8774 198.6 3 1.077 5 (282.5) <38.9> **9 (16.8) oy * 470.9 3 5375 5 8724 8 5406.7 *574 I.596.0 7^304 74-* 125.9 _____ 8*460-3 8 5.35*4 850.6 *49*5 7.674.3 821.7 B2.3 8 8.61S4 *5.3439 736.9 *.5304 74904 9981 107.6 8*395.9 S 5764 68.3 *3*-* 8 775.7 9 478.9 103.2 161.6 9 743-7 9 3*54 967 **}? S 667.6 S 33** 4U m.6 8A 9 3*0-9 454 .8 9 357* S 303.7 444 2.0 S Ji25 48 (Cmtamut) (ItmBmu) Stlw m UmfftlbirH Cuanmets United Sates Europe Loon Aoctia Asia/Africa Net ales Intet-Gcognpiuc Sales United Stuet Ciudt Europe Latin America Am/Africa Toot Revenue United Sam Canada Europe Latin America Asia/Africa Adjustments and eliminations Total Operating Income United Sates Canada Europe Latin America Asta/Afrtca Adjustments and eliminations Total Assets United States Canada Europe Latin America Asia/Africa Adpiscments and eliminations Tixai Kienafuble tacts Investments in affiliated companics, at equity Assets ar December 31 49 *9 * taJ SJMOuO gloi 6*6 Rm36p-) 96,360.7 53-* I,lV^ W-a 676 a *10,810.4 83,908.0 47*-3 *.90*-3 1,002.9 6&3 *9.905-2 1 *4*5 *9-3 <9-3 5*-7 * 44-9 9 02.8 98.3 78.6 63.6 jo-9 5 406.4 9 236-4 38-8 93-5 3*J *? * 470.3 * 6.905^ 74^-9 uA) *449-9 *79-3 <440-9) llpftjftl <6483.5 644.6 2442.8 uas8.8 7*7.i <406.4) 610.810.4 *6444-4 330-3 1,996.8 1.034-0 630.2 U70-5> 99.905-2 * 490-7 9- *5*-7 *44-* 4S.6 7 * 9*3 * 4394 *73 1R4-4 262.3 88.9 -7 lUXH.O 9 617.2 2J4> I896 *74.7 71.6 L2 9 1,077-3 9 54*7-* 337-6 *45*9 9*3-5 363.8 <*44) 9-334-4 1*5-9 9 9460.3 *5442-2 388.1 M>3-3 87641 400.0 <13-6) 953983 286.1 1 J9ft ft 788.6 399* <B.9> 84964) 122.3 84883 107.6 9 8.618.3 -!*? AIa4ywHMMy<M|NNllw Goodyear Financial Corporation (GFO. a wholly o--ai subsidiary purauses cenain secetvables from Goodyear and domestic subsidiaries. A niflunaty of the tesaks ofopesanoos and financial positron ofGFC as mthidtd in die Company's consolidated financial statements is pteseaotd below. OmmtiBmt Ptetaa locame Income tax proviuon Nswont Total assets Tbtal liabilities (includes debc of $20.0 million in sq68> 'focal equity jyfo S JDJ T14 * SM S au *M Isoyii 1 703 M-o S <6.3 *4*9-4 43-3 $ 426.1 9*1 S 16.7 6.6 S toj OnJuly 24,1987, dir Company sold approximately 6 Vi percent of in oil and pa reserve* to a subaukary of International Paper lor >70.0 million. On December 4.1987. die Company sold substantially all of its temaming oil and gas reserves in die sale of all of the shares of Celeron Oil and Gas Company to an Eason subsidiary lot 56cyc million. On March 13, [987. the Company sold substantially all of the assets of Goodyear Aerospace Corpondon and certain related assets to Loral Corporation for $388.0 million. On April l 1987. the Company sold the capital stock of Motor Wheel Canada and cenain other atsets to MWC. Inc. The ttanaacnona have been accounted for as sales of discontinued operations and accordingly the accompanying financial information has been reseated where requited. Operating results and the gain on sale of discontinued operations (blow: (in widow, acaptftr 1bmt)jytf* Net Sales Loss before income cam United Stases and fotngn taxes on income Lou from discontinued 0pentions Gain on sale of discontinued operations (net of income tarns ofS46.3 million) Discontinued operations Per Sham of Common Stock: Lois from discontinued operations Gain on sale of discomiaaied operations4.17 Discontinued operations__________________________________________ Satd.0 $ (7.8) (6.2) U6I 378.6 __________ *2212 5 (.031 S 4.44 50 At December 31.1989, die Company bad binding coramitmcna far investment* m lead, buildings and equipment ofapproximately S23OJO miliaoo. Minou* legal aatoos, claims and gorenuncnol ioianganoas aad proceedings comrmg a vide range of mattes are pending against the Company and ns subaidiatiea. In the opinion of management, afar reviewing suck matters and consulting with the Company's General Counsel any liability which may ultimately be incurred would not materially affect the consolidated financial position of die Company although an advene final determination in certain instances could material? affect dir Company's consolidated net income far tbe period in which such determination occur. In February 1987, die Company purchased 40,433.764 of is shares at $30 act per share in cash pursuant to a tender offer announced in November 1986. The offer was made and completed as s pan of the Company's comprehensive program far the restructuring of its capitalisation and business opennans The aggregate purchase price ofthe shares and related expenses was 83,024.8 iraKon. In 1986, the Company aiuhorired 3,000,000 shares ofSeries A Sic.00 Preferred Stock ("Senes A Preferred"! issuable only upon the exercise of rights ("Rights"! issued under the Preferred Stock Purchase Rights nan adopted in July 1986. Each share of Series A Preferred issued would be non-redeemable, non-voting and entitled to cumulative quarterly dividends equal to the greater of 810.00 at. subject to adjustment, too rimes the per share amount of dividends declared on Goudyear common stock during the preceding quartet and would also be entitled n> a liquidation preference. Under the Rights Plan, each shareholder of record on July 28,1986 received a dividend ofone Right per share ofGoodyear common stock. When exercisable, each Right entitles the holder to buy one one-hundredth of a diare of Series A Preferred at an exercise prior of J100. The Rights wi8 be exercisable only after 10 days following die earlier of a public announcement that person or group has acquired 20 percent or mote of Goodyear common stock or the commencement of a tender offer far 20 percent or more of Goodyear com mon stock by a person or group. The Rights are non-voting and may be redeemed by the Company at S.03 po Right under certain circumstances. If not redeemed or exercised, die Rights will expire onJuly 28,1996. If a person or group accumulates 13 percent or more of Goodyear common stock, or a merger takes place with an acquiring person or group and the Company is the surviving corporation, or an acquiring person or group engages in certain self-dealing transactions, each Right (except those held by such acquiring person ur groupi will entitle the holder 00 purchase Goodyear common stork having a market value then equal to raw times the exercise price. If the Company is acquired or a sale or transfer of 30 percent or more of the Company's assets ur eamiqg power is made each right (except those held by the acquiring person or group* will entitle me holder to purchase common stock of (hr acquiring entity having a market value then equal to nu nates the exercise price 51 7> Gradyrar Ttn & gaffer Cmfmy aW SthiAmu fla m&mmt.ixaftfirrim) *#9 Net Saks ________________ Qwwr Fir* --jB-C--O---f-M1 Third fe&xSI tajfeo 82,679-* Fourth 2.73^} Veur 810J69.3 Gross Profit lucerne before Extraordinary kern Extraordinary ken Net Income &4BJ 90J 4-4 * 94-5 7*92 au 9 * r-* 6524 66j 6a6J no 44 . 3-7 * 7-5 *4-7 2^34-6 *894 *74 S 10U Avenge Shares Outstanding hr Share ofCommon Seock; Income before extraordinary item Extraordinary item Net Income Price Range* High Low Dividends Pud 576 57-7 J7-8 57-9 ' S 146 * 39 * *J4 S .08 .08 .08 jo6 S 1.&4 8 47 8 iji J5 r-7 * 3J 40 1+ S 53**4 45 45 * 57-34 454* 45 * 5W4 9-3* 45 54*34 42-f/B 45 * 59-34 4M* l8o The Giniohdatrc) Statement of Income for the First three quartrn of 1989 has been restated to reflect the extractthrury itrm--ax benefit of loss carryovers. The fecund quarter included after ax unusual expenses of S410 million ($.7) per share) due to the ale of unused pipe. Abo in the second quarter the Company recorded an after tax loss of 552.0 million ($.90 per share) in connection with the sale of ns South Africa subsidiary. The fourth quarter included after tax charges of S10.9 milion ($19 per share) for the reduction of biaa-piy truck tire capacity at the Gadsden, Alabama plant and from die realignment of the Canadian operations. The inclusion of depreciation, other net operanog expenses and interest expense of the All American Pipeline System in the fourth quarter reduced net income by S26.4 million UjHK Net Sales Fit* 82,5)4.7 Quarter Second Third 82,792-5 $2.6564} Fourth 82,8272 Year 8 10.81)4 Grass Profit Net tncnme Average Shares Outstanding Net Income Per Share Price Range* High Low Dividends hid 6)2-5 8 951 573 S t.67 681.) 8 1549 57-5 8 2.35 5927 8 6)5 57 3 $ i.n 612.9 8 564 574 8 .98 2.5*94 8 350.1 T*3 8 6.11 8 67-02 54-dH 40 5 67-718 58-114 40 8 65 561/4 -45 8 57-7/8 47 41 8 67-7/8 47 *70 The fimrth quarter included after tax unusual expenses of S17.1 miHion (S. 50 per share) due tn the consolidation of tasks nd the ckmi- nadun of duplicate job responsibilities. Abo in the fourth quarter the Company completed a settlement nf its principal domestic salary pennon plan and an asset reversion recording an after tax charge of $9.7 million CS.ry per share). "New Ybrk brock Exchange--Composite Tiansac (kmu 52 ITEM ft. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON AC COUNTING AND FINANCIAL DISCLOSURE. None. PART m. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information required by Item 401 of Regulation. 8-K in respect of director* of Registrant is, pursuant to General Instruction G(3) to Form 10-K, incorporated herein by specific reference to the text set forth muter the caption "Election of Directors" et pages 8 through 22, inclnafre, of Registrant's Proxy Statement, dated February 26,1900, for its Annual Meeting of Stakeholders to be held on April 9,1990 (the "Proxy Statement"). For information regarding the executive officers of Registrant, reference is made to Pert I, Item 4(A), at pages 20 through 24, inclusive, of this Annual Report. ITEM II. EXECUTIVE COMPENSATION. Information required by Item 402 of Regulation 8-K in respect of management of Registrant ii, pursuant to General Instruction G(3) to Form 10-K, incorporated herein by specific reference to the text set forth in the Proxy Statement wider the caption "Compensation of Executive Officers" at pages 37 through 64, inclusive, thereof. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information reqaired by Item 403 of Regulation S-K relating to the ownership of Regis trant's Common Stock by certain beneficial owners and management is, pursuant to General Instruction G(3) to Form 10-K, incorporated herein by specific reference to the text set forth in the Proxy Statement under the caption "Beneficial Ownership of Common Stock" at pages 35 through 37, inclusive, thereof. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Information required by Item 404 of Regulation S-K relating to certain transactions by and relationships of management is, pursuant to General Instruction G(3) to Form 10-K, incorpo rated herein by specific reference to the text set forth in the Proxy Statement under the caption "Compensation of Executive Officers" at pages 37 through 64, inclusive, thereof. PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM ML A. LIST OF DOCUMENTS FILED AS FART OF THIS REPORT: 1. Financial Statements: See Index on page 31 of this Annual Report. 2. Financial Statement Schedules: See Index To Financial Statement Schedules attached to this Annual Report at page FS-1, which Financial Statement Schedules, at pages FS-2 through FS-6, inclusive, are by specific reference hereby incorporated into and made a part of this Annual Report. 3. Exhibits required to be filed by Item 601 of Regulation S-K: See the Index of Exhibits at pages X-l through X-5, inclusive, which is by specific reference hereby incorporated into and made a pan of this Annual Report ft. REPORTS ON FORM S-K: No Current Reports on Form 8-K were Sled by the Registrant with the Securities and Exchange Commission during the quarter ended December 31, 1989. A Current Report on Form 8-K dated March 22, 1990, wherein cenain information was reported at Item 6 ("Other Events") and attached to which were certain exhibits, was filed by Registrant. No fimwiai statements were included in or filed with said Current Report. 53 SIGNATURES Pgnuit to the requirements of Section IS or lf(d) of the Beenittiee Exchange Act of 1934, the Registrant has inij canoed this Animal Report to be signed on Its behalf by the undersigned, thereunto duly authorised. THE GOODYEAR TIRE A RUBBER COMPANY Onto: March 27, 1990 Pnildm wd Chief Bmocw Qtor Pnnnant to the requirements of the Securities Exchange Act of 1984, this Anneal Report baa been signed below by the following persons on behalf of tbe Registrant aad is the capacities and on tbe datea Indicated. Date: March 27,1990 Date: March 27,1990 Barrett Chairmen dr che Board. Prwlden t Chief Esecuttve OEcer and Director (Principal Execalive OEcer) Date: March 27. 1990 Comptroller (Principal Arcoanting Oficer) Date: March 27,1990 f Thomas H. Ckuikshank, Director Stanley C. Gault, Director Gertrude G. Michelson, Director Steven A. Mimtek, Director Charles W. Parky. Director Robert H. Platt, Director F. Vincent Prcs, Director Agnab Pytte, Director Jacques R. Sardas, Director Lloyd B. Smith, Director William C. Turner, Director , Hoyt M. Weus, Director A Power of Attorney, dated February 13, 1990, authorizing Oren G. Shaffer to sign this Annual Report on Form 10-K for the fiscal year ended December 31,19S9 on behalf of certain of the directors of the Registrant is filed as Exhibit D to this Annual Report. 54 THE QOOOYEAR TIRE 4 RUBBER COMPANY FINANCIAL STATEMENT SCHEDULES ITEMS 8 AND 14(a)(2) OF FORM 10-K FOR CORPORATIONS SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT FOR THE TEAR ENDED DECEMBER 81,1888 INDEX TO FINANCIAL STATEMENT SCHEDULES Properties, Plants and Equipment.................................. Accumulated Depreciation, Depletion and Amortiza tion of Properties, Plants and Equipment.................. Valuation and Qualifying Accounts................................ Short-Term Borrowings................................................... Supplementary Income Statement Information............. V VI vm IX X PS-t PM FS-4 FM FS-6 AU other schedules arc omitted because they ire not applicable or the required information is shown in the finandsl statements or notes thereto. Financial statements and schedules relating to 60 percent or less owned companies, the investments in which are accounted Cor by the equity method, have been omitted as permitted because, considered in the aggregate as s single subsidiary, these companies would not constitute a significant subsidiary. FS-l THE GOODYEAR TUB & KJBBBZ COMPANY AMD SUKHXAUB8 SCHEDULE V --PBOPERTBS, PLANTS AMD EQUIPMENT TearBaMDecMherll, --) 1989 attaglM Land and improvements.............. ... Buildings......................................... Machinery and equipment........... ... Pipeline Systems........................... ... Construction in progress.............. ... $ 893.6 4,514.2 22.2 1.7406 $7,681.7 *ssr \wmmnM ftod____ $ 8.7 (d) $ (96) 43.2 (d) (40.1) 435.5 (d) (226.8) 1,4706 (f) (11B6) (1,176.0)(b)(f) .7 <e) S$B^SK7G8H2SE.6B 8(3946) $ (3.7) (6.6) (0.4) -- (16) $ (20.0) Land and improvements.............. ... Ruililhip................................................... ... Machinery and equipment........... ... Pipeline Systems........................... ... Construction in progress.............. ... $ 2776 1,0726 4683.7 146 1600.7 $7.268.0 1988 $ 20.6 666 4166 (d) 76 236.1 (b) $ 746.6 $ (2.1) (180) (180.7) -- (26)(C) 3(222.1) $ (26) (8.7) (86.6) -- (2.7) 3(1006) natd $ 289.2 1,1086 4,7136 1,373.6 665.2 $8.060.0 $ 293.5 1,111.0 46146 226 1.7406 $7,681.7 Land and improvements................ .. Buildings.......................................... .. Machinery snd equipment............. .. Pipeline Systems............................ .. Oil and gas exploration snd development properties.............. .. Construction in progress................ .. $ 266.7 1,0426 4,221.8 -- 1M7 $ 8.0 37.7 392.8 14.3 t (6.6) (48.4) (3896) -- $ 10.6 41.0 168.3 -- 762.1 1690.4 $7682.2 92.2 212.8 (b) $ 757.8 (864.3) (2.6)(c) $(16010) 9.1 $ 219.0 $ 2776 1,0726 4,383.7 146 AM 1609.7 $7,268.0 Notes: (a) Indodes transfers, and for L987 consists primarily of properties, plant and equipment of discontinued operations. (b) Net change for the year. (c) Includes redassiflcatioiL (d) Includes additions with related reserve for depreciation or $6.9 million and $2.9 million for the yean ended December 31,1989 and 1988, respectively. (e) Includes additions at cost for discontinued operations of $92.2 million for the year ended December 31. 1987. (O Effective October 1, 1989, the All American Pipeline System was transferred from Construction in progress to Pipeline Systems and depreciation commenced. FS-2 IBB 6Q0PT1A1TM A BPIBP COMPANY AMP SOlWimAUKS SCHEDULE VI-- ACCUMULATED DBPBECIATION, DEPLETION AND AMOETBATION OP PBOPKKTBS, PLAim AND EQUIPMENT Tmt n. Laad improvement! .................... .... Buildings....................................... .... Machinery and equipment......... .... Pipeline Systems......................... .... 6 793 623.1 2,660.6 .7 >3.2643 6i 43.7 223.6 103 1383.6 6-- .1 .7 -- 13 6 (*.4) (323) (1T0.4) -- 1(2063) * (3) (18) 4.7 -- > 2.4 < 82.9 631.6 23093 11.0 63,434.7 Land improvements.................... .... Buildings....................................... Machinery and equipment......... .... Pipeline Systems......................... .... 6 753 23473 .2 63.129.7 19S8 6 53 373 313.2 3 6357.1 6-- -- 3 -- 6 .8 6 (.2) (16.4) (162.6) -- 6 179.2) 6 (13) (4.7) (48.1) -- 6 79.9 623.1 2,660.6 .7 63,2643 Land impronemanta............ Buildings................................ Machinery and equipment .. Pipeline Systems.................. Oil end gas exploration and development properties... 6 68.1 471.4 2383.9 -- 75.4 62,9983 1267 6 63 41.3 302.4 3 323 6382.4 -- 6 (13) 6 33 6 753 -- (26.8) 19.4 6063 -- (240.7) 101.7 2,6473 -- ---- 3 (107.9) 6(3763) 6124.4 63,129.7 Notes: (s) Include* transfers, and for 1987 consists primarily, of properties, plant end equipment of dfrmnriimgd operations. (b) Includes additions charged to coet and expenses for discontinued operations of 132.5 million for the year ended December 31,1987. It is impractical to state the economic useful lives used in arriving at the amounts of depreciation provided because of the large number of property classifications and the wide range of depreciation rates. FS-3 THE GOODYEAK TOE A KUBIEK COMPACT AND 8UB8TOIAK1BS SCHEDULE Vin--VALUATION AND QCAUFTIN6 ACCOUNTS Year Ended December 81, Ommhmmy IMS _. .53. (wSSl) Deducted from accounts and notes receivable: For doubtful accounts.................................. $36.6 $174 Deducted from accounts and nates receivable For doubtful accounts.................................. IMS $424 $ 74 Deducted from accounts and notes receivable For doubtful accounts.................................. 1M7 $364 $16.2 1(14.0) $(13.1) $(114) mbIm $ (4) $ (14) $ 2.7 Mane $38.6 $36.6 642.8 Note (a) Accounts and notes receivable charged off. FS-4 SCHEDULE IX--8H01X-TESM S0BBDW1NC8 SCHEDULE X--SUPPUSMENTAKYINCOME STATEMENT INHUMATION 1988 1987 10.5% 9.6 9.9 Note*: The balance at each year-end conaiated solely of bank loans and overdrafts. Short-term borrowings during the years covered by this schedule consisted primarily of commercial paper, bank loans and overdrafts. Safer to the Note to the Financial Statements in Iten 8 of this Annual Report captioned "Credit Arrangements", beginning at page 39, for additional discussion of short-term The avenge amount of short-term borrowings outstanding during the year represents an average of month-end balances. The weighted average Interest rate daring the year waa baaed on a weighting of interest rates associated with these balances. (h-UUeu) Maintenance and repairs.............................. Taste, other than payroll and income taxes Advertising................................................... Tear I 1-- 1607.1 9618.8 291.0 337.8 248.0 241.7 era. tsar 9681.9 269.8 209.2 THE GOODYEAR IBB ft ROBBER COMPANY Animal Report ob Form 10*K For Tear Ended December 31,1989 inihex or ExmBm<i> 3 Articles of Incorporation sad Bylm (a) Certificate of Amended Articles of Incorporation of The Goodyear Tbs A Rubber Company, dated Oscember 20, 1964, as father amended by the Certificate of Amendment to Amended Articles of Incorporation of The Goodyear Tbs ft Rubber Company, dated June 10, 1963, and by the Certificate of Amendment to Amended Articles of Incorpo ration or The Goodyear Tire ft Rubber Company, dated July 2, 1986 (incorporated by reference, filed with the Securities and Exchange Commission ae Exhibit A to Regietract's Quarterly Report on Form 1042 for the quarter ended June 30,1986, File No. 1*1927). (b) Code of Regulations of The Goodyear Tire ft Rubber Com* pony, adopted November 22,1966, and amended April 6, 1966, April 7, 1980, April 6, 1981 and April 13, 1987 (incorporated by reference, filed with the Securities and Exchange Commission as Exhibit A to Registrant's Quar terly Report on Form 1042 for the quarter ended March 31, 1987, File No. 1-1927). 4 Instruments defining the rights of security holders, including indentures. (a) Conformed copy of Rights Agreement, dated as of July 2, 1986, between Registrant and Manufacturers Hanover Trust Company, Rights Agent (incorporated by reference, filed with the Securities and Exchange Commission as Exhibit 4(a) to Registrant's Current Report on Form 8-K, . dated July 2, 1986, aad as Exhibit 2(a) to Registrant's Registration Statement on Form 8-A, dated July 3, 1986, File No. 1-1927) aad a copy of the Appointment of Succes sor Rights Agent, dated March 21,1990, whereunder Reg istrant appointed First Chicago Trust Company of New York as the Successor Rights Agent under the Rights Agreement (incorporated by reference, filed with the Secu rities and Exchange Commission as Exhibit A to Regis trant's Current Report on Fora 8-K, dated March 22, 1990, File No. 1-1927).1 2 (1) See tart IV, Item 14, Part A.I. (2) Pursuant to Item 601 of Regulation S-K. X-l (b) Specimen nondenomiaational Certificate for shares of th* Common Stock, Without Par Value, of the Registrant; one eertificite, First Chicago Timet Company of Mew York as transfer agent and registrar (incorporated by reference, fled with toe Seenrltias and Bwhange CommiMion as Exhibit 4.2(C) to Begiatrant'a Third Poat-Rfbcttee Amendment to Registration Statement on Form S-3, File Na 33-6111). Information concerning Goodyear's long-tom debt is set forth under the caption "Credit Arrangements'* and the sulxapdoa "Long Term Otoe and Capital lease*" in the Notes to Financial Statements at Item 8 of tide Annual Report, beginning at page 36 and ia Incorporated herein by specific reference. No instrument defining the rights of holders of long-term debt relates to securities haring an aggregate principal amount in excess of 10% of the consoli dated assets of Registrant and Its subsidiaries, hi accor dance with paragraph (lii) to Part 4 of Item 601 of Regulation S-K, the instruments defining the rights of holders of such long term debt of Registrant ere not filed herewith. The Registrant hereby agrees to furnish a copy of any such agreement or instrument to the Securities and Exchange Commission upon request. 10 Material Contracts (a) Conformed copy of Stock Purchase Agreement, dated as of December l, 1987, among Exxon Corporation, Registrant and Goodyear Energy, Inc. (incorporated by reference, filed with the Securities and Exchange Commission as Exhibit A to Registrant's Current Report on Form 8-K, dated December 17,1987, File Na 1-1927). (b) Conformed copy of Amendment to Stock Purchase Agree1 ment, dated as of December 3,1987, among Exxon Corpo ration, Registrant and Goodyear Energy, Inc. (incorporated by reference, lied with the Securities and Exchange Commission as Exhibit A-d to Registrant's Cur rent Report on Form 8-K, dated December 17, 1987, File No. 1-1927). (c) Conformed copy of Amended end Restated Agreement for Purchase and Sale of Assam, dated as of January 12,1906, among Registrant, Goodyear Aerospace Corporation and Loral Corporation (incorporated by reference, died with the Securities end Exchange Commission as Exhibit A to Registrant's Current Report on Form 8-K, dated March 20, 1987, File No. 1-1927). (2) Pursuant to Item 601 of Regulation S-K. X-2 (d) Conformed copy of lector of agreement, doted Muck 13, 1987, among Registrant, Goodyear Aerospace Corporation end Local Corporation (incorporated by reference, flltd with the Securities and Exchange Commission oa Exhibit A-U to Bcgiatrant'a Current Report oa Form H dated March 20,1987, File No. 1-1927). (o) Key Personnel hceatlw Proflt ShariagPlaa of Registrant, aa amended effective January 1,1989 and declared effec tive Cor calendar year 1989 by action of the Registrant's Board of Directors on November 1,1988 (incorporated by reference, Sled aa Exhibit A to Registrant'! Annual Report cm Form 10-K for year ended December 31, 1988, File NO. 1-1927). (f) Key Personnel Incentive Profit Sharing Plan of Registrant, aa amended effective January 1,1990 and declared effec tive Cor calendar year 1990 by aetion of the Registrant's Board of Directors on December 6, 1989 (incorporated by reference, filed with the Securities and Exchange Commis sion aa Exhibit B to Registrant's Current Report on Form 8-K, dated March 22,1990, File No. 1-1927). (g) 1972 Employees' Stock Option Plan of Registrant, aa amended effective April 3, 1978 (incorporated by refer ence, filed with theSecurities and Exchange Commission aa Exhibit 1 to Registrant's Fifth Post-Effective Amendment to its Registration Statement on Form S-8, File No. 2 47906). (h) 1982 Employees' Stock Option Plan of Registrant, as amended effective April 7, 1986 (incorporated by refer ence, filed with the Securities and Exchange Commission aa Exhibit A-II to Registrant's Anaoal Report on Form 10-K for the year ended December 31,1986, FUe No. 1-1927). (i) 1987 Employees' Stock Option Plan of Registrant, aa adopted try the Board of Directors of Registrant on Febru ary 10, 1987, and approved by Registrant's shareholders on April 13. 1987 (incorporated by reference, filed with the Securities and Exchange Commission aa Exhibit B to Registrant's Quarterly Report oa Form 1042 for the quar ter ended March 31,1987, FUe No. i-1927). (J) 1989 Goodyear Performance and Equity Incentive Plan of Registrant, aa adopted by the Board of Directors of Regia trant on December 6, 1988, and approved by the share holders of Registrant on April 10, 1989 (incorporated by reference, filed with the Securities and Commis sion as Exhibit A to Registrant's Quarterly Report an Form 10-Q for the quarter ended March 31, 1989, FUe No. 1 1927). (2) Pursuant to Item 601 of Regulation S-K. (k) Goodyear Supplementary Pension Flan, aa amended June 7, 1868 (Incorporated by reference, fllad with the Securi ties and Exchange Conunimion aa Exhibit B to bfiaiaet'i Quarterly Report an Form 10-Q for the quarter ended June 30,1868, FOe No. 1-1927). , (t) Goodyear Supplemental Pension Plan dated Juno 7,1966 (incorporated by reference, filed with the Securitiee and T.wiinflB Counleaton aa Exhibit C to Begisennfa Quar terly Report ea Form 10-Q for the quarter ended June 30, 1968, File No. 2-1827). (m) The Goodyear Tin&Rubber Company Betlremeat Plan for Outside Directors, adopted December 6,1983, aa emended November 13,1968 (incorporated by reference, Bled with the Securities and Exchange Co--nieeton as Exhibit F to Registrant's Current Beport on Form 8-C, dated March 20, 1887, File N& 1-1927). (n) Goodyear Employee Severance Pina, an adopted by the Board of Directors of Registrant on February 14, 1889 (Incorporated by reference, filed with the Securities end Exchange Commission aa Exhibit A-1I to Registrant's An nual Beport on Form 10-K for theyesr ended December 31, 1988). (o) Conformed copy of Trade Receivables Purchase and Sale Agreement, dated as of March 28,1986, among Registrant, Corporate Assets Funding Company, Inc, Citibank, NJL and Citicorp Industrial Credit, Inc. and the related Trade Receivables Purchase end Sale Agreement, dated as of March 28, 1986, among Registrant, Citibank, NA. and Citicorp industrial Credit Inc. (incorporated by reference, filed with the Securities and Exduuige Commission as Exhibit A to Registrant's Quarterly Beport on Form 10-Q for the quarter ended March31,1966, File No. 1-1927). (p) Conformed copy of Amendment Agreement, dated ea of December 11,1989, to the Restated and Amended Receiv ables Purchase and Sale Agreement, dated as of June 12, 1967, as amended by that certain Amendment Agreement dated as of December 23, 1967, among Registrant, Corpo rate Assets Funding Company, Inc. and Citicorp North America, Inc. (incorporated by reference filed with the Securities and Exchange Commission aa Exhibit C to Regis trant's Current Beport on Form 8-K, dated March 22,1990, File No. 1-1927). (2) Pursuant to Item 601 of Regulation S-K. (q) Conformed copy of Receivables Sale Agreement, dated as of December 12,1989, among Registrant, Asset Secarftisation Cooperative Corporation and Canadian Imperial Bank of Commerce (Incorporated by reference, filed with the Securities and Exchange Commlesion as Exhibit D lo Regis trant's Gment Report <m Form 8-K, dated March 22,1990, File No. 1*1927). (r) Agreement, dated Noeamber 20,1986, among Registrant, General Oriental (Bermuda I) Limited Partnership and General Oriental (Delaware I) Limited Partnership (incor porated by reference, Bled with the Securities sod Ex change Ccmndaskm as Exhibit A to Registrant's Current Report on Form 8-K, dated December 8,1986, Pile No. 1* 1927). 11 nr suit lit rr fNimtitlnn irf Pit ftherr (a) Computation of Earnings Per Share 22 Subsidiaries (a) List of subsidiaries of Registrant at March 20,1990. 24 Consents of Experts and Counsel (a) Consent of Price Waterhouse, independent accountants, to incorporation by reference of their report set forth on page 31 of this Annual Report in certain Registration State ments on Forms S-3 and S-8. 26 Power of Attorney (a) Power of Attorney, dated February 13, 1990, authorising Oren G. Shaffer, John M. Ross, George R. Hargreaves, Jr., James Boyaxis, or any one or more of them, to sign this Annual Report on behalf of certain directors of Registrant 28 Additional Exhibits (a) Registrant's definitive Proxy Statement dated February 26, 1990 (portions incorporated fay reference, filed with the Securities and Exchange Commission, File No. 1-1027). (2) Pursuant to Item 601 of Regulation S-K. COMPUTATION OP EARNINGS PER 8BAU Set forth below era computations, oa i primary basis sad on a fully diluted basis in x*"^**" with subparagraph (b)(ll) of Item 01 of Regulation S-K of the Securities and Errhynga Coctuniasiaa, of earnings per share of the Common Stock, without par vain*, of Registrant for each of the three peers ended December 31,1989,1988 and 1987, respectively: Net Income................................................ Average number of common shares agftaadiag ................. -........................ Primary earnings par share......................... $2064 67,727,577 t 348 8380.1 67422,165 8 All 770.9 80,664,981 812.73 Fully Diluted; Net Income................................................ Add after-tax interest expense applicable to A876% Convertible Debentures dne 2003 ...................................................... Adjusted Net Income.................................. Adjusted average number of shares outstanding............................................ Fully diluted earnings per share................. 82064 64 82134 68,712,967 8 347 1360.1 3.1 8363.2 68,419,416 8 8.06 $770.9 8770.9 80417,968 812.68 The foregoing complications do not reflect any aignillranl potentially dilutive effect Regis trant's Preferred Stock Purchase Rights Plan could have in the event such Rights become exercisable and any shares of either Series A Preferred Stock or CommonStock of Registrant are issued upon the exercise of such Rights. Reference is made to the Note captioned "Preferred Stock Purchase Rights Plan" In the Notes to Financial Statements set forth in Item 8 of the Registrant's Annual Report oa Form 10-K for the year ended December 31,1989, at page 61. X-A-l rr (D(t)(S) The aulmifflary companies of The Goodyear Tire 4 Bobber Company at March 20,1990, the places of incorporation or organisation thereof, are: Air Treads be. All American Pipeline Company Atonole Tin A Auto Sanrtoe Co. Bead **{*"1 tw* Cdun Corporation Celeron Gathering Corporation Celeron Trading A Transportation Company Co-Ex Plastics, Inc. Cornier, Inc. Delta Tin Co., be. OCR be. Diverted Atomic Corporation Divested Companies Bolding Company Divested Litchfield Park Properties, Inc. Goodyear Energy Inc. Goodyear Financial Corporation Goodyear International Corporation The Goodyear Bobber Plantations Company Goodyear Western Hemisphere Corporation The KaUy-Springfleld Tin Company Lee Tin A Rubber Company Retreading L, Inc. Retreading L, Inc of Oregon Mnzphy's Inc., Sales and Service Norton Tin Co. laneerFUma Corporation Rubber City Capital Corporation Wingfoot Corporation Wingfoot Films Corporation Wingfoot Ventures Seven Inc. , Wingfoot Ventures Eight Inc. Wingfoot Ventures Nine Inc. Conpenie Praocniae Goodyear S.A. Compania Aaonixna Goodyear da Venexuela Compania Goodyear Dei Peru, SA Companbia Goodyear do Branil Produtos de Borracha Ltda Compania Hulera Goodyear--Oxo, SA. deC.V. Corporadon Induatrialea Goodyear, SJL de C.V. Corporation bdnatrial Mercnrio, S.A. de C.V. Deutsche Goodyear GmbH Goodyear Australia limited Goodyear Canada Inc. Goodyear Chemdal Europe S.A. Goodyear de Chile S.A.LC. Goodyear de Colombia S.A. X-B-l Georgia Tens Delaware North Carotins. Delawan Debware Delaware Dabware Debware Kamaduuetts Dalaware Ariaoaa Arbona Dabware Dabware Debware Ohio Debware Maryland Ohio Debware Oregon California Debware Debware Delaware Debware Debware Debware Delaware Debware France Venexueb Peru Brasil Mexico Mexico West Germany Anstralb Canada France BepebUc of Quit Colombia Goodyear Export TJmitwd Goodyear Export Sales Corporation Goodyear Fnnoe (Pneumatiquea) S.A. Goodynr Finance Holding SA. Goodyear Great Britain Liaitod Goodyear Bdlas S.A.LC. Goodyear India Limited Goodyaar fcaliena S.pA. Goodyear Jamaica Limbed Goodyear Koree Co. Goodyear LastUcleri Turk Anontm Sirtseti. Goodyear Malaysia Bechad Goodyear Maroc SA. Goodyear Hear Zealand, Ltd. Goodyear Overseas Finance N.V. Goodyear S.A. Goodyear (Subee), SA. Goodyear Taiwan Limited Goodyear (Thailand) Limited Goodyear Zimbabwe (Private) Limited Gran Industrie de Namnaticoa Centroamericena, S.A. Graaford Manufacturing, Inc. Gammiarerke Fulda GmbH Neumatioos Goodyear S.A. Nippon Goodyear Kabusbild Kaisha Philippine Rubber Project Company, Inc. P.T. Goodyear Indonesia P.T. Goodyear Sumatra Plantations SA Goodyear N.V. Sveoska Goodyear Aktieboiag Goodyear Philippines lac. UJ&VLrgm Islands France Laxembcurg Greece India Italy Jamaica Korea Turkey Morocco New Zealand Netherlands Antilles Luxembourg Swttaeriaad Republic of China Thailand Zimbabwe ! Canada West Germany Argentina Japan Philippiaes Repahlic of Indonesia Sweden Republic of the Philippines (1) Each of the 76 subsidiaries named in the foregoing list conducts its business under its corporate name and, in a few instances, under a shortened form of its corporate name. (2) Each of the 76 subsidiaries named in the foregoing list is directly or indirectly whollyowned by Registrant, except that in respect of each of the following subsidiaries Registrant owns the indicated percentage of such subsidiary's equity capital: Brad Paffa" be 74.6%; Goodyear Canada Inc., 88.77%; Goodyear India Limited, 69.9%; Goodyear Jamaica Limited, 60%; Goodyear Lastikleri Turk Anonim Slrketi, 60.8%; Goodyear Malaysia Barbed, 61%; Goodyear Maroc S.A., 56%; Goodyear Taiwan limited, 75.5%; Goodyear (Thailand) Lim ited, 60%; Gran Iadustria de Neumnticos Centroaraencana, SA, 76.3%; P.T. Goodyear Indonesia, 86%; and Goodyear Philippines be., 69%. (3) In accordance with paragraph (11) of Part 22 of Item 601(b) of Regulation S-K, the names of approximately 98 subsidiaries have been omitted (tom the foregoing list. The unnamed subsidiaries, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary, as defined in the applicable regulations. X-B-2 EXHIBIT C CONSENT OP INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses constituting pert of the Begistration Statements an Tome S3 (Nos. 33-8111 and 2-73723) and Forms S-8 (Nos. 33-31B30, 33-17963, 2-63220, 2-60649, 286686, 2-62728, 2-49921, 2-46642, 2-79437, 2-47906 and 2-32639) of The Goodyear Tire A Rubber Company of our report dated February 12,1990 appearing on page 31 of this Form 10-K. Pmcn Vatebhousb Cleveland, Ohio March 27,1990 X-C-l r"TttTT tn oonBTBit th* a nun oavin wm or hwbb Bm m.t. MBI R wnm ntBBTS. that the ttadtriioud director* of THE G00D1ZU TIBS BOBBSB COMPJUST, a corporation organised and existing trader the laws of the State of Ohio (the Coa^any"), hereby constitute and appoint OBSB 6 SHAFFER, JOHN M BOSS, GEORGE B HARGREAVES, JB and JBKBS B0TBSX8, and each of than, their true and lawful attorneys-in-fact and agents, each one of than with foil power and authority to sign the nanea of the underaigned directora to the Cowpany* a Annoal Beport to the Securities and SxOhaage Coaraisaion on Font 10-K for its fiaeal year ended Deceaber 31, IBM, and to any and all anendnenta, sopplanente and exhibits thereto and any other instruaenta filed in eoxmeetlon therewith! provided, however, that said attorneysin-fact shall not sign tha naan of any dlxeetor unless and until the Annual laport shall have been duly executed by the officers of the Coapany then serving as the chief executive officer of the Coatpany, the principal financial officer of the Coa^any and the principal accounting officer of the Ccrapanyi and each of the underaigned hereby ratifies and confines all that the said attorneys-in-fact and aganta, or any one of than, shall do or cause to be done by virtue hereof. ft the undersigned have subscribed these presents this 13th day of February, 1990. ixector Jr tinceni true, director Lcheison, Di /ter /- 4(?even a Minter, btrector" hobert B Platt, Director William C turner. Director Us, birector Page 1 of 1 E-b-1