AKRON, OH — Goodyear Tire & Rubber Co. will receive approximately $159 million from multiple insurance companies as settlement for a lawsuit previously filed by the tiremaker. The $159 million will be paid to the company in installments over the next 15 months.
While the specific terms of the settlement are confidential, the payments are being made to Goodyear in exchange for the company’s releasing the insurers from certain past, present and future environmental claims. Goodyear filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission yesterday regarding this settlement.
The lawsuit, which Goodyear filed in 1993, sought to have the insurers honor their policies to pay the company’s liability and defense costs in regard to certain environmental claims.
In other Goodyear news, the tiremaker is working with its Australian partner, South Pacific Tyres (SPT), on the treatment of a transaction under U.S. generally accepted accounting principles (U.S. GAAP).
According to Goodyear, an “accounting issue in Australia arose in the course of preparing these additional disclosures.” Goodyear said the amount in question is presently estimated at about $8 million and relates to the accounting treatment of a 10-year supply agreement between Goodyear and SPT.
This issue may or may not result in the company recognizing up to the entire amount as a pre-tax expense in 2000 rather than amortizing it over 10 years, depending on the resolution. It is also possible that other items having an impact on Goodyear’s profit or loss for prior periods will be identified in the course of the review of SPT’s financial statements, the company said.
Additional disclosures in Goodyear’s financial statements related to certain overseas affiliates, including SPT, are required before the tiremaker can file an amended Annual Report on Form 10-K for 2003.
In a separate announcement, SPT informed the U.S. Securities and Exchange Commission that its report on Form 20-F will be delayed.
Goodyear and its partner in SPT, along with their respective auditors, are working to reach an agreement and finalize SPT’s financial results, said Goodyear in a statement. The tire company did not predict when it will file its amended 2003 Form 10-K or whether the 2004 10-K will be delayed.
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