-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K1ODrpSb+x9PgN4Zlp04RR71Ti2mkMH/+MhFcuZJay95+l2Q0wsgqJ31fU/7zdNy JJavzx5Mm102ybB6pK9l2A== 0000950152-96-002276.txt : 19960514 0000950152-96-002276.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950152-96-002276 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOODYEAR TIRE & RUBBER CO /OH/ CENTRAL INDEX KEY: 0000042582 STANDARD INDUSTRIAL CLASSIFICATION: TIRES AND INNER TUBES [3011] IRS NUMBER: 340253240 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01927 FILM NUMBER: 96560510 BUSINESS ADDRESS: STREET 1: 1144 E MARKET ST CITY: AKRON STATE: OH ZIP: 44316 BUSINESS PHONE: 2167962121 MAIL ADDRESS: STREET 1: 1144 E MARKET ST CITY: AKRON STATE: OH ZIP: 44316 10-Q 1 EXHIBIT 10-Q 1 _______________________________________________________________________________ _______________________________________________________________________________ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 COMMISSION FILE NUMBER: 1-1927 THE GOODYEAR TIRE & RUBBER COMPANY (Exact name of registrant as specified in its charter) OHIO 34-0253240 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1144 EAST MARKET STREET, AKRON, OHIO 44316-0001 (Address of principal executive offices) (Zip Code) (330) 796-2121 (Registrant's telephone number, including area code) ___________________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------- ___________________________________ Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Number of Shares of Common Stock, Without Par Value, Outstanding at April 30, 1996: 155,052,952 ________________________________________________________________________________ ________________________________________________________________________________ 2 The Goodyear Tire & Rubber Company and Subsidiaries Consolidated Statement of Income and Retained Earnings Unaudited
(Dollars in millions, except per share) Three Months Ended March 31, 1996 1995 -------- --------- Net Sales $3,245.5 $3,243.3 Cost of Goods Sold 2,481.2 2,487.4 Selling, Administrative and General Expense 471.0 483.5 Interest Expense 32.0 32.0 Other Expense 14.0 2.9 Foreign Currency Exchange 1.9 24.9 Minority Interest in Net Income of Subsidiaries 11.9 7.5 ------ -------- Income before Income Taxes 233.5 205.1 United States and Foreign Taxes on Income 81.7 71.8 ------ -------- Net Income 151.8 133.3 Retained Earnings at Beginning of Period 2,661.0 2,194.5 Cash Dividends 38.6 30.3 -------- -------- Retained Earnings at End of Period $2,774.2 $2,297.5 ======== ======== Per Share of Common Stock: Net Income $0.98 $0.88 ======== ======== Cash Dividends $0.25 $0.20 ======== ======== Average Shares Outstanding 154,263,097 151,465,262
The accompanying notes are an integral part of this financial statement. - 1 - 3 The Goodyear Tire & Rubber Company and Subsidiaries Consolidated Balance Sheet Unaudited
(Dollars in millions) March 31, December 31, 1996 1995 -------- ------------ Assets Current Assets: Cash and cash equivalents $322.0 $268.3 Accounts and notes receivable, less allowance (1996-$59.6, 1995-$56.2) 1,945.9 1,615.0 Inventories: Raw materials 326.9 309.8 Work in process 88.5 75.4 Finished product 1,565.3 1,380.0 --------- -------- 1,980.7 1,765.2 Prepaid expenses and other current assets 205.8 193.1 --------- -------- Total Current Assets 4,454.4 3,841.6 Investments in Affiliates, at equity 147.1 183.8 Long Term Accounts and Notes Receivable 238.3 252.0 Deferred Charges 827.6 793.3 Other Assets 158.8 157.7 Properties and Plants, less accumulated depreciation (1996-$4,880.1, 1995-$4,788.7) 4,656.9 4,561.2 --------- -------- Total Assets $10,483.1 $9,789.6 ========= ======== Liabilities Current Liabilities: Accounts payable-trade $1,123.4 $1,170.7 Compensation and benefits 777.0 711.9 Other current liabilities 261.8 263.9 United States and foreign taxes 396.0 363.1 Notes payable to banks 669.7 211.1 Long term debt due within one year 20.1 15.6 --------- -------- Total Current Liabilities 3,248.0 2,736.3 Long Term Debt and Capital Leases 1,305.4 1,320.0 Compensation and Benefits 1,971.1 1,976.5 Other Long Term Liabilities 291.7 312.2 Minority equity in subsidiaries 233.4 162.9 --------- -------- Total Liabilities 7,049.6 6,507.9 Shareholders' Equity Preferred Stock, no par value: Authorized 50,000,000 shares, unissued - - Common Stock, no par value: Authorized 300,000,000 shares Outstanding shares 154,948,642 (153,524,311 in 1995) after deducting 40,730,026 treasury shares (42,154,357 in 1995) 154.9 153.5 Capital Surplus 1,019.5 975.2 Retained Earnings 2,774.2 2,661.0 Foreign Currency Translation Adjustment (489.8) (481.7) Minimum Pension Liability Adjustment (25.3) (26.3) --------- -------- Total Shareholders' Equity 3,433.5 3,281.7 --------- -------- Total Liabilities and Shareholders' Equity $10,483.1 $9,789.6 ========= ========
The accompanying notes are an integral part of this financial statement. - 2 - 4 The Goodyear Tire & Rubber Company and Subsidiaries Consolidated Statement of Cash Flows Unaudited
(Dollars in millions) Three Months Ended March 31, 1996 1995 Cash Flows from Operating Activities: ----- ----- Net Income $151.8 $133.3 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 111.6 105.2 Accounts and notes receivable (317.5) (320.8) Inventories (197.4) (173.6) Accounts payable-trade (51.2) 5.5 Other assets and liabilities 69.0 3.9 -------- -------- Total adjustments (385.5) (379.8) -------- -------- Net cash used in operating activities (233.7) (246.5) Cash Flows from Investing Activities: Capital expenditures (127.9) (101.4) Other transactions (41.7) 7.0 -------- -------- Net cash used in investing activities (169.6) (94.4) Cash Flows from Financing Activities: Short term debt incurred 494.5 447.6 Short term debt paid (56.4) (93.9) Long term debt incurred 14.1 84.0 Long term debt and capital leases paid (2.5) (14.7) Common stock issued 45.7 4.0 Dividends paid (38.6) (30.3) -------- -------- Net cash provided by financing activities 456.8 396.7 Effect of Exchange Rate Changes on Cash and Cash Equivalents 0.2 (4.5) -------- -------- Net Change in Cash and Cash Equivalents 53.7 51.3 Cash and Cash Equivalents at Beginning of the Period 268.3 250.9 -------- -------- Cash and Cash Equivalents at End of the Period $322.0 $302.2 ======== ========
The accompanying notes are an integral part of this financial statement. - 3 - 5 The Goodyear Tire & Rubber Company and Subsidiaries Notes to Consolidated Financial Statements ADJUSTMENTS - ----------- All adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of these unaudited interim periods have been included. PER SHARE OF COMMON STOCK - ------------------------- Per share amounts have been computed based on the average number of common shares outstanding. INFORMATION ABOUT NONCASH INVESTING AND FINANCING ACTIVITIES - ------------------------------------------------------------ In 1995 the Company acquired, for cash, 32.7 percent of the outstanding shares of a Polish tire manufacturer from the Polish government and agreed to purchase original issue shares. The investment was accounted for using the equity method. In the first quarter of 1996, the Company purchased original issue shares of this tire manufacturer, bringing its ownership to 50.8 percent. This investment is now accounted for as a consolidated subsidiary. Information in the Consolidated Statement of Cash Flows is presented net of the effects of the consolidation. - 4 - 6 The Goodyear Tire & Rubber Company and Subsidiaries Segment Information Unaudited
(Dollars in millions) Three Months Ended March 31, 1996 1995 ----- ----- INDUSTRY SEGMENTS Sales to Unaffiliated Customers: Tires $2,516.3 $2,493.1 Related products and services 257.5 245.9 -------- -------- Total Tires 2,773.8 2,739.0 General products 439.8 473.7 Oil transportation 31.9 30.6 -------- -------- Net Sales $3,245.5 $3,243.3 ======== ======== Income: Tires $252.4 $246.7 General products 41.7 42.8 Oil transportation 16.7 7.9 -------- -------- Total operating income 310.8 297.4 Exclusions from operating income (77.3) (92.3) -------- -------- Income before income taxes $233.5 $205.1 ======== ======== GEOGRAPHIC SEGMENTS Sales to Unaffiliated Customers: United States $1,730.7 $1,810.0 Europe 763.8 672.9 Latin America 381.4 407.0 Asia 203.0 181.3 Canada 166.6 172.1 -------- --------- Net Sales $3,245.5 $3,243.3 ======== ========= Operating Income: United States $128.5 $122.5 Europe 79.4 68.2 Latin America 71.2 77.1 Asia 25.5 23.4 Canada 6.2 6.2 -------- -------- Total $310.8 $297.4 ======== ========
- 5 - 7 The Goodyear Tire & Rubber Company and Subsidiaries Management's Discussion and Analysis Of Financial Condition and Results of Operations RESULTS OF OPERATIONS --------------------- CONSOLIDATED - ------------ Sales were $3.25 billion in the first quarter of 1996, compared to $3.24 billion in the 1995 period. Net income was $151.8 million or $.98 per share, increasing 13.9 percent from $133.3 million or $.88 per share in the 1995 period. Sales reflected increased tire unit volume in Europe and Asia, but were adversely affected by reduced demand resulting from lower production volume by original equipment vehicle manufacturers in North America (U.S. and Canada), competitive pricing pressures, and a difficult economic environment in Latin America. Worldwide tire unit sales increased 2 percent from the 1995 period. Despite higher raw material costs and unchanged sales revenues, cost of goods sold decreased to 76.5 percent of sales from 76.7 percent in the 1995 period. The improvement reflected increased sales in Europe and Asia, where gross margins were higher than in North America, improved gross margins in the chemical and oil transportation businesses, improved worldwide productivity and efficiencies resulting from continued high levels of capacity utilization. Selling, administrative and general expense decreased to 14.5 percent of sales from 14.9 percent in the 1995 period, primarily as a result of ongoing cost containment measures. Other expense was higher due primarily to a charge of $6.5 million related to workforce reductions in Latin America, and lower interest income on time deposits. Foreign currency exchange expense decreased significantly compared to the 1995 period, during which period European currencies strengthened versus the U.S. dollar. In order to better reflect the effects of foreign currency exchange expense on results of operations, in 1996 subsidiaries in countries with highly inflationary economies began recording such expense in the income statement captions to which it related, the effect which is not material. SEGMENT INFORMATION - ------------------- Segment operating income of $310.8 million increased 4.5 percent from $297.4 million in the 1995 period. Segment operating margin increased to 9.6 percent of sales from 9.2 percent in the 1995 period, due primarily to increased sales in Europe and Asia, improved results in the chemical and oil transportation businesses and lower selling, administrative and general expenses. - 6 - 8 INDUSTRY SEGMENTS - ----------------- Tires - ----- Sales of $2.77 billion increased 1.3 percent from $2.74 billion in the 1995 period, and operating income of $252.4 million increased 2.3 percent from $246.7 million in the 1995 period. Sales revenues were favorably affected by increased tire unit sales volume in Europe and Asia and a shift in sales mix towards the replacement market, but were adversely impacted by reduced demand resulting from lower production volume by original equipment vehicle manufacturers in North America and competitive pricing pressures. Competitive pricing pressures are expected to continue during 1996. Worldwide tire unit sales increased 2 percent from the 1995 period. The following table presents changes in tire unit sales:
Increase (Decrease) in Company Tire Unit Sales -- First Quarter --------------------------------------------------------------- 1996 vs. 1995 ------------- U.S. (5) % International 11 % Worldwide 2 %
Although original equipment tire unit sales increased in Europe and Asia, worldwide original equipment tire unit sales were lower due primarily to reduced production volume by vehicle manufacturers in North America. Worldwide replacement tire unit sales were higher, increasing in the United States, Europe and Asia. Despite higher raw material costs and a workforce reduction charge of $5.6 million related to production rationalization in Latin America, operating income increased due to improved results in Europe and Asia, lower selling, administrative and general expenses, improved worldwide productivity and efficiencies resulting from continued high levels of capacity utilization. General Products - ---------------- Sales of $439.8 million decreased 7.2 percent from $473.7 million in the 1995 period. Operating income of $41.7 million decreased 2.5 percent from $42.8 million in the 1995 period. Operating income in the 1996 period included a charge of $.9 million related to the previously mentioned workforce reductions in Latin America. Sales and operating income in engineered products decreased due to reduced production volume by original equipment vehicle manufacturers in North America. Sales in chemical products - 7 - 9 decreased due to lower selling prices and reduced unit sales volume. Operating income increased, however, on lower raw material costs. Oil Transportation - ------------------ Sales of $31.9 million and operating income of $16.7 million were recorded in the first quarter of 1996, compared to $30.6 million and $7.9 million, respectively, in the 1995 period. Operating income in the 1995 period was adversely affected by a charge of $5.0 million for the writedown of surplus pipe and equipment. Higher average tariffs and ongoing cost containment measures contributed to the improvement. GEOGRAPHIC SEGMENTS - ------------------- U.S. Operations - --------------- Sales of $1.73 billion decreased 4.4 percent from $1.81 billion in the 1995 period. Operating income of $128.5 million increased 5.1 percent from $122.5 million in the 1995 period. Sales decreased due primarily to reduced demand by original equipment vehicle manufacturers, competitive tire pricing pressures and lower selling prices and reduced volume in chemical products. Despite lower sales and higher raw material costs, operating income increased due primarily to lower raw material costs in chemical products, improved results in oil transportation activities (which in the 1995 period were affected by the aforesaid $5.0 million charge), lower selling, administrative and general expenses, improved productivity and efficiencies resulting from continued high levels of capacity utilization. U.S. operations accounted for 53.3 percent of consolidated sales and 41.4 percent of consolidated operating income, compared to 55.8 percent and 41.2 percent, respectively, in the 1995 period. International Operations - ------------------------ Sales of $1.52 billion increased 5.7 percent from $1.43 billion in the 1995 period. Operating income of $182.3 million increased 4.1 percent from $174.9 million in the 1995 period. In Europe, sales of $763.8 million increased 13.5 percent from $672.9 million in the 1995 period. Operating income of $79.4 million increased 16.5 percent from $68.2 million in the 1995 period. Sales and operating income in Europe increased due primarily to higher tire unit sales and the acquisition of a majority - 8 - 10 ownership interest in a tire manufacturing facility in Poland. Results were also favorably impacted by productivity improvements and the effects of cost containment measures. In Latin America, sales of $381.4 million decreased 6.3 percent from $407.0 million in the 1995 period. Operating income of $71.2 million decreased 7.7 percent from $77.1 million in the 1995 period. Sales in Latin America decreased and operating income was adversely affected by difficult economic conditions in the region and lower tire unit sales in Brazil. Operating income reflected lower selling, administrative and general expenses and improved productivity, but decreased due primarily to a workforce reduction charge of $6.5 million related to production rationalization. In Asia, sales of $203.0 million increased 12.0 percent from $181.3 million in the 1995 period. Operating income of $25.5 million increased 8.7 percent from $23.4 million in the 1995 period. Sales and operating income in Asia increased due primarily to higher tire unit sales. Operating income also benefited from lower selling, administrative and general expenses and improved productivity. In Canada, sales of $166.6 million decreased 3.2 percent from $172.1 million in the 1995 period. Operating income of $6.2 million was unchanged from $6.2 million in the 1995 period. Sales and operating income in Canada were adversely impacted by lower production volume by original equipment vehicle manufacturers, although operating income was favorably affected by productivity improvements and the effects of cost containment measures. International operations accounted for 46.7 percent of consolidated sales and 58.6 percent of consolidated operating income, compared to 44.2 percent and 58.8 percent, respectively, in the 1995 period. - 9 - 11 LIQUIDITY AND CAPITAL RESOURCES ------------------------------- Net cash used in operating activities was $233.7 million during the first three months of 1996, as reported on the Consolidated Statement of Cash Flows. Working capital requirements increased for accounts receivable, reflecting longer average terms resulting from increased sales in Europe and a shift in sales mix towards replacement tires. Working capital requirements also increased for inventories, reflecting increased finished goods quantities. Net cash used in investing activities was $169.6 million during the first three months of 1996, which consisted primarily of capital expenditures for plant modernizations and expansions and new tire molds totaling $127.9 million. Capital expenditures are expected to total $650 million in 1996. Cash was also used for the acquisition of a lightweight conveyor belting manufacturer in the United States and an investment in a retail chain in Sweden. Net cash provided by financing activities was $456.8 million during the first three months of 1996, primarily to support the previously mentioned operating and investing activities. Consolidated debt at March 31, 1996 was $1,995.2 million and amounted to 36.8 of debt and equity, compared to $1,546.7 million and 32.0 percent, respectively, at the end of 1995. The Company enters into interest rate swap contracts in order to manage the impact of fluctuations in interest rates on consolidated results of operations and future cash outflows for interest. During the first quarter, the Company entered into floating rate contracts with notional principal amounts totaling $110 million, which increase its exposure to fluctuations in short term interest rates. A summary of contracts in place and related weighted average interest rates follows:
(Dollars in millions) Fixed Rate Floating Rate Contracts Contracts ---------- ------------- March 31, 1996: - Notional principal amount $ 275.0 $ 160.0 - Pay fixed rate 8.95% - - Receive variable LIBOR 5.59% - - Pay variable LIBOR - 5.38% - Receive fixed rate - 6.38% - Average years to maturity 0.92 5.77 - Fair value: (unfavorable) $ (7.90) $ (0.50) First quarter - Rate paid 8.95% 5.65% - Rate received 5.76% 6.43%
Fixed rate contracts with notional principal amounts totaling $120 million matured in the first quarter of 1996. - 10 - 12 Substantial short term and long term credit sources are available to the Company globally under normal commercial practices. At March 31, 1996 the Company had short term uncommitted credit arrangements totaling $1.8 billion, of which $493.0 million were unused. The Company also had available long term credit arrangements at March 31, 1996 totaling $1.9 billion, of which $1.2 billion were unused. Funds generated by operations, together with funds available under existing credit arrangements, are expected to exceed the Company's currently anticipated funding requirements. - 11 - 13 PART II. OTHER INFORMATION --------------------------- ITEM 1. LEGAL PROCEEDINGS - ------ ----------------- Reference is made to the Annual Report of The Goodyear Tire & Rubber Company (the "Registrant") on Form 10-K for the year ended December 31, 1995 (the "Annual Report"), wherein at Item 3, pages 14, 15, 16 and 17, Registrant reported certain legal proceedings. Registrant reports the following developments in respect of one of the legal proceedings described at Item 3 of the Annual Report. As reported at paragraph (G) of Item 3, at page 16, of the Annual Report, a civil action, Orion Tire Corporation, et al v Goodyear, et al, in the United States District Court for the Central District of California was filed on March 15, 1995 against Registrant, Goodyear International Corporation, a wholly-owned subsidiary of Registrant ("GIC"), Samir F. Gibara, President and Chief Executive Officer of Registrant, a retired Vice President of Registrant and three other employees of Registrant by Orion Tire Corporation ("Orion"), China Tire Holdings Limited ("China Tire"), and China Strategic Holdings Limited ("China Strategic"). In their complaint, plaintiffs alleged, among other things, that in connection with Registrant's 1994 acquisition of a 75% equity interest in a tire manufacturing facility in Dalian, People's Republic of China (the "Dalian Facility"), Registrant and GIC engaged in tortious interference with certain contractual relationships of plaintiffs involving the Dalian Facility, committed tortious interference with certain prospective economic advantages of plaintiffs, violated the California Cartwright Act and committed trade libel and defamation in respect of the plaintiffs. In addition, all defendants were alleged to have engaged in civil racketeering and in a civil conspiracy to induce the entities that owned the Dalian Facility to breach their contracts with the plaintiffs. On March 22, 1996, the Court, ruling on motions filed by Registrant, issued an order dismissing the individual defendants from the proceedings for lack of personal jurisdiction and dismissing with prejudice the causes of action of China Tire against the defendants regarding alleged tortious interference with prospective economic advantage, tortious interference with certain contractual relationships, conspiracy to induce breach of contract, and civil racketeering. In addition, the Court dismissed without prejudice the causes of action of Orion and China Tire regarding alleged violations of the California Cartwright Act and the cause of action of China Strategic regarding alleged trade libel and defamation (and, as a result, China Strategic is no longer a party to the litigation). Finally, the Court dismissed, with leave to file an amended complaint by April 22, 1996, the claim of Orion regarding an alleged conspiracy to induce breach of contract, the claims of Orion and China Tire regarding alleged trade libel and defamation and the claim of Orion regarding alleged civil racketeering. On April 19, 1996, Orion and China Tire filed a First Amended Complaint - 12 - 14 against Registrant and GIC (the individual defendants having been dismissed from the litigation for lack of personal jurisdiction) whereunder: (i) Orion alleges that Registrant and GIC tortiously interfered with the prospective economic advantage of Orion by wrongfully obstructing and interfering with Orion's alleged prospective business ventures involving the Dalian Facility and tortiously interfered with Orion's alleged prospective contractual relationships with the Dalian Facility regarding the supply of tires and an alleged option to purchase an equity interest in the Dalian Facility; and (ii) each of Orion and China Tire alleges that Registrant and GIC committed trade libel and defamation by knowingly publishing untrue statements regarding Orion and China Tire, respectively, to various officials of the Dalian Facility and various governmental bodies in the People's Republic of China. The Amended Complaint indicates that the plaintiffs are seeking an aggregate of $1.085 billion in actual damages and $3.255 billion in punitive damages, prejudgment interest, and such further relief as the Court deems appropriate. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------ --------------------------------------------------- The Annual Meeting of Shareholders of Registrant was held on April 15, 1996 (the "Annual Meeting"). Proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Act"), there was no solicitation in opposition to the four nominees of the Board of Directors listed in the Proxy Statement of Registrant, dated February 27, 1996, for the Annual Meeting (the "Proxy Statement"), filed with the Securities and Exchange Commission, and said four nominees were elected. The following matters were acted upon by the shareholders of Registrant at the Annual Meeting, at which 136,686,313 shares of the Common Stock, without par value, of Registrant (the "Common Stock", the only class of voting securities of Registrant outstanding), or approximately 88.49 percent of the 154,470,955 shares of Common Stock outstanding and entitled to vote at the Annual Meeting, were present in person or by proxies: 1. ELECTION OF DIRECTORS. Four persons were nominated by the Board of Directors of Registrant for election as directors of Registrant. Samir F. Gibara, William J. Hudson, Jr., and William C. Turner were nominated as Class I directors, each to hold office for a three year term expiring at the 1999 Annual Meeting of Shareholders and until his successor shall have been duly elected and qualified. Gertrude G. Michelson was nominated as a Class III director, to hold office for a one year term expiring at the 1997 Annual Meeting of Shareholders and until her successor shall have been duly elected and qualified. Each nominee was an incumbent director. No other person was nominated. Each nominee was elected. The votes cast for, or withheld or abstained with respect to, each nominee were as follows: - 13 - 15
Shares of Common Shares of Common Stock Name of Director Stock Voted For Withheld or Abstained ---------------- ---------------- --------------------- Class I Directors ----------------- Samir F. Gibara 134,980,347 1,705,966 William J. Hudson, Jr. 134,999,475 1,686,838 William C. Turner 134,828,937 1,857,376 Class III Director ------------------ Gertrude G. Michelson 134,981,167 1,705,146
The seven directors whose terms of office continue after the Annual Meeting are: (A) Thomas H. Cruikshank, Steven A. Minter and Agnar Pytte, whose terms expire in 1997; and (B) John G. Breen, William E. Butler, Stanley C. Gault and George H. Schofield, whose terms expire in 1998. 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS. A resolution proposed by the Board of Directors of Registrant that the shareholders ratify the action of the Board of Directors in selecting and appointing Price Waterhouse LLP as independent accountants for Registrant for the year ending December 31, 1996 was submitted to, and voted upon by, the shareholders of Registrant. There were 135,701,758 shares of Common Stock voted in favor of, and 606,755 shares of Common Stock voted against, said resolution. The holders of 377,800 shares of Common Stock abstained. There were no "broker non-votes". The resolution, having received the affirmative vote of the holders of a majority of the shares of Common Stock outstanding and entitled to vote at the Annual Meeting, was adopted and the appointment of Price Waterhouse LLP as the independent accountants for Registrant for 1996 was ratified by the shareholders. The resolution and related information are set forth under the caption "Ratification of Appointment of Independent Accountants" at page 7 of the Proxy Statement. 3. SHAREHOLDER PROPOSAL. A resolution submitted by a shareholder requesting the Registrant to prepare a report describing its programs, progress, and future plans relative to the environment and the Coalition of Environmentally Responsible Economies ("CERES") Principles and using the standard CERES Report Form as a Guide was submitted to the shareholders. There were 10,594,668 shares of Common Stock voted in favor of, and 107,553,561 shares of Common Stock voted against, said resolution. In addition, the holders of 8,998,143 shares of Common Stock abstained from voting on said resolution and there were "broker non-votes" in respect of 9,539,941 shares of Common Stock. The resolution, having failed to receive the affirmative vote of at least a majority of the shares of Common Stock entitled to vote at the Annual Meeting, was not adopted. The resolution and related - 14 - 16 statements in support thereof and in opposition thereto are set forth under the captions "Shareholder Proposal" and "Statement of Board of Directors Opposing The Shareholder Proposal" at pages 7, 8 and 9 of the Proxy Statement. ITEM 5. OTHER INFORMATION - ------ ----------------- On March 26, 1996, Registrant filed with the Securities and Exchange Commission a Rule 415 shelf Registration Statement under the Securities Act of 1933, as amended, on Form S-3 (Commission File No. 333-1955) relating to the offer and sale from time to time of up to $500,000,000 of debt securities consisting of debentures, notes and/or other unsecured evidences of indebtedness in one or more series. The Registration Statement was declared effective by the Securities and Exchange Commission on April 3, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------ -------------------------------- (a) A list of the exhibits required to be filed as a part of this Quarterly Report on Form 10-Q is set forth at the Index of Exhibits at page E-1, which is by specific reference incorporated into and made a part of this Quarterly Report on Form 10-Q. (b) No current report on Form 8-K was filed by Registrant during the quarter ended March 31, 1996. S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE GOODYEAR TIRE & RUBBER COMPANY (Registrant) Date: May 10, 1996 By /s/ George E. Strickler -------------------------------------- George E. Strickler, Vice President and Comptroller (Signing on behalf of Registrant as a duly authorized officer of Registrant and as the Principal Accounting Officer of Registrant.) - 15 - 17 THE GOODYEAR TIRE & RUBBER COMPANY QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996
INDEX OF EXHIBITS (1) EXHIBIT EXHIBIT - ------------- ------------- Table Item No.* Description of Exhibit Number Page - --------------- ----------------------------------------------------- ------- ---- 4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES ----------------------------------------------------- Certificate of Amended Articles of 4.1 Incorporation of Registrant, dated December 20, 1954, and Certificate of Amendment to Amended Articles of Incorporation of Registrant, dated April 6, 1993, two documents comprising Registrant's Articles of Incorporation as amended (incorporated by reference, filed as Exhibit 4.1(A) to Registrant's Registration Statement on Form S-3, File No. 333-1955). Code of Regulations of The Goodyear 4.2 Tire & Rubber Company, adopted November 22, 1955, as amended April 5, 1965, April 7, 1980, April 6, 1981 and April 13, 1987 (incorporated by reference, filed as Exhibit 4.1(B) to Registrant's Registration Statement on Form S-3, File No. 333-1955). Conformed Copy of Rights Agreement, dated 4.3 as of July 2, 1986, between Registrant and Manufacturers Hanover Trust Company, Rights Agent and a copy of the Appointment of Successor Rights Agent, dated March 21, 1990, whereunder Registrant appointed First Chicago Trust Company of New York as the Successor Rights Agent under the Rights Agreement, as amended by that certain Amendment to Rights Agreement dated __________ *Pursuant to Item 601 of Regulation S-K.
E-1 18
EXHIBIT EXHIBIT - ------------- ------------- Table Item No.* Description of Exhibit Number Page - --------------- ----------------------------------------------------------------- ------ ----- as of April 6, 1993 between Registrant and First Chicago Trust Company of New York (incorporated by reference, filed as Exhibit 4.3 to Registrant's Registration Statement on Form S-8, File No. 33-65187). Specimen nondenominational Certificate for shares 4.4 of the Common Stock, Without Par Value, of Registrant; one certificate, First Chicago Trust Company of New York as transfer agent and registrar (incorporated by reference, filed as Exhibit 4.2 to Registrant's Registration Statement on Form S-8, File No. 33-65187). Conformed copy of Revolving Credit Facility Agreement, 4.5 dated as of July 15, 1994, among Registrant, the Lenders named therein and Chemical Bank, as Agent (incorporated by reference, filed as Exhibit A to Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, File No. 1-1927). No other instrument defining the rights of holders of long-term debt which relates to securities having an aggregate principal amount in excess of 10% of the consolidated assets of Registrant and its subsidiaries was entered into during the quarter ended March 31, 1996. In accordance with paragraph (iii) to Part 4 of Item 601 of Regulation S-K, agreements and instruments, if any, defining the rights of holders of long term debt entered into during the quarter ended March 31, 1996 which relate to securities having an aggregate principal amount less than 10% of the consolidated assets of Registrant and its Subsidiaries are not filed herewith. The Registrant hereby agrees to furnish a copy of any such agreements or instruments to the Securities and Exchange Commission upon request. __________ *Pursuant to Item 601 of Regulation S-K.
E-2 19
EXHIBIT EXHIBIT - ------------- ------------- Table Item No.* Description of Exhibit Number Page - --------------- ------------------------------------------------------ ------- ---- 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS -------------------------------------------- Statement setting forth the computation of 11 X-11-1 per share earnings. 27 FINANCIAL DATA SCHEDULE 27 X-27-1 ----------------------- 28 ADDITIONAL EXHIBITS ------------------- Registrant's definitive Proxy Statement, 28 dated February 27, 1995 (incorporated by reference, filed with the Securities and Exchange Commission, File No. 1-1927). __________ *Pursuant to Item 601 of Regulation S-K.
E-3 EX-11 2 EXHIBIT 11 1 EXHIBIT 11 The Goodyear Tire & Rubber Company and Subsidiaries Computation of Earnings per Share Set forth below are computations, on a primary basis and on a fully diluted basis in accordance with subparagraph (b) (11) of Item 601 of Regulation S-K of the Securities and Exchange Commission, of earnings per share of the Common Stock, without par value, of Registrant.
(Dollars in millions, except per share) Three Months Ended March 31, 1996 1995 --------- --------- Primary: Net Income $151.8 $133.3 Adjusted average number of shares outstanding 156,218,470 152,686,846 Primary earnings per share $0.97 $0.88 Fully Diluted: Net Income $151.8 $133.3 Adjusted average number of shares outstanding 156,554,062 152,759,788 Fully diluted earnings per share $0.97 $0.87
The foregoing computations do not reflect any significant potentially dilutive effect Registrant's Preferred Stock Purchase Rights Plan could have in the event such Rights become exercisable and any such shares of either Series A Preferred Stock or Common Stock of Registrant are issued upon the exercise of such Rights. Reference is made to Note 18, captioned "Preferred Stock Purchase Rights Plan", in the Notes to Financial Statements set forth in Item 8 of the Registrant's Annual Report on form 10-K for the year ended December 31, 1995 at page 49. X - 11 - 1 EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION ABSTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS AND THE CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 322 0 2,006 60 1,981 4,454 9,537 4,880 10,483 3,248 1,305 155 0 0 3,279 10,483 3,245 3,245 2,481 2,481 0 0 32 234 82 152 0 0 0 152 0.98 0 This schedule shall not be deemed filed for purposes of Section 11 of the Securities Act or Section 18 of the Securities Exchange Act.
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