Yesterday Goodyear Tire & Rubber Co. announced it expects to reduce its reported net income by $65 million between 1997 and 2003. This was the result of its investigation into its overseas accounting practices. $10 million of this stems from the European arm.
The company identified adjustments previously disclosed in its Sept. 30, 2003 annual report, including:
$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;
$10 million to other items.
The investigation began in December 2003, at the request of the company’s Audit Committee. On March 9, Goodyear took disciplinary action against several senior managers in its European operations as a result of the investigation.
Goodyear will not file its 2003 annual report by next Monday, as required by its lenders, but is in negotiations to extend the deadline.
Goodyear states that it is cooperating with the U.S. Securities and Exchange Commission on the government’s own investigation.