05.04.2009

Oshkosh takes goodwill write down

Oshkosh says that it anticipates taking a $1.2 to $1.5 billion non-cash goodwill write-down/impairment, in its second quarter. While the write down will relate to several of its business units, the largest by far will relate to the reduced value of JLG.

The Company says that it expects the impairment charges to be largely non-deductible for income tax purposes.

Oshkosh chairman, Robert G. Bohn, said: “While the impairment charges are being driven by the short-term economic environment, we believe the long-term prospects remain promising for our market-leading businesses. The impairment charges are entirely non-cash. Oshkosh remains a strong company and continues to have sufficient liquidity.”

Under the Statement of Financial Accounting Standards (SFAS), the company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate an impairment may have occurred.

Oshkosh is working with a third-party valuation firm to assess the fair values of the company’s reporting units and plans to complete the impairment analysis prior to the release of its second fiscal quarter results.

These non-cash charges will have no direct impact on the company’s cash flows or liquidity, and they are excluded from the calculations of the company’s financial covenant ratios contained in its amended credit agreement.

Oshkosh paid $3.2 billion for JLG in late 2006.