Goodyear Tire: $1.1 Billion 2002 Loss

AKRON, Ohio, April 2, 2003;The AP is reporting that Goodyear Tire & Rubber Co. said it expects to post a record loss of about $1.1 billion for 2002, mostly due to a big charge related to tax deductions.

The tiremaker plans to release its financial report on Thursday.

The release had been delayed as Goodyear worked with bankers to refinance its debt on more favorable terms. The completion of the refinancing was announced Tuesday.

Analysts had forecast a loss for the year.

At $1.1 billion, the loss for last year would amount to $6.62 per share, Goodyear told the Securities and Exchange Commission on Tuesday in explaining the delay in reporting its 2002 results. Goodyear lost about $204 million, or $1.27 per share, in 2001.

The bigger loss was primarily due to Goodyear's previously announced one-time $1.1 billion charge against its assets for the fourth quarter, reflecting a cut in its allowable tax deductions, the company said. That charge amounts to $6.17 per share.

Analysts surveyed by Thomson First Call had expected a loss of 3 cents a share for the year before one-time items.

The refinancing replaced mostly unsecured $2.94 billion in financing with $3.3 billion in secured, longer-term credit lines.

"These new agreements will provide Goodyear with additional financial flexibility and liquidity," said Robert J. Keegan, president and chief executive.

"They give us both the time and the opportunity to turn around our North American tire business," Keegan said.

In February, Goodyear's board eliminated its dividend, which had been paid for 66 consecutive years.

Goodyear shares were up 23 cents at $5.40 in morning trading Wednesday on the New York Stock Exchange.