AKRON (April 12, 2004) — Goodyear will reduce its net income from 1997 to 2003 about another $65 million on top of last year's $84.7 million restatement when it files its 2003 and amended 2002 annual reports by mid-May following the completion of its overseas accounting investigation.
In the meantime, the Akron-based tire maker is talking with its lenders to get an extension on its filing requirements under the loan agreements.
Akron-based Goodyear said it still is reviewing the results of the four-month overseas investigation, but the company expects it to result in a reduction of net income between 1997 and 2003 of about $10 million, with most of the impact in Goodyear's European Union business.
In addition to the $10 million from the investigation, Goodyear said the rest of the $65 million reduction companywide will include: $20 million related to workers' compensation claims, $10 million to fixed assets, $8 million to product liability, $7 million to intercompany profit elimination in inventory and $10 million to other items.
In November 2003, Goodyear said net income would be reduced by about $84.7 million following an earnings restatement. The Securities Exchange Commission in February launched a formal investigation into this restatement. Goodyear began its European investigation in December and in February reported it had been extended to other overseas operations. In March the company said it took disciplinary actions against several senior managers in the European Union operation.
While it works to prepare the annual reports, Goodyear also is in talks with its lenders to extend its April 19 deadline for filing as outlined in the loan agreements. Goodyear hopes to extend the deadline until May 19. The tire maker said it does not expect to need to access the loan facilities during this 30-day period, but if an extension is not won the company would not be able to access them. If Goodyear does not file its financials by May 19, it could be in default under the loan agreements.