AKRON (June 22, 2005) — Goodyear is issuing $400 million aggregate principal amount of senior notes to help pay down debt, the company said.
The notes will be senior unsecured obligations of the company, bearing 9-percent annual interest and maturing July 1, 2015. The Akron-based tire maker said it intends to use the net proceeds to repay $200 million in debt and to replace $190 million of the cash it used to pay toward other debt maturing June 6. Goodyear said it may then use the $190 million to repay other debt obligations or for general corporate purposes.
In a separate move, Goodyear also filed information with the Securities and Exchange Commission to reclassify some of its financial information for this year's first quarter plus the three years ended Dec. 31. Goodyear said it integrated its Chemical Products business into North American Tire, effective Jan. 1.
The company said 53.4 percent of Chemical's sales and 75.2 percent of its segment operating income resulted from intercompany sales. With the integration, Goodyear's total segment sales no longer reflect these intercompany deals. Also, Chemical's segment operating income is no longer included in the total segment operating income.
With the reclassification, Goodyear revised its 2004 North American Tire segment operating income to $73.5 million from $31.5 million reported earlier this year. In March, Goodyear said Chemical's segment operating income was $177 million. But total segment operating income for 2004 was lowered to $945.5 million from $1.1 billion.