Farm equipment maker Deere & Co. said it plans to take a noncash charge in the fourth quarter of approximately $300 million, after-tax, for impairment of the value of goodwill related to reduction of the value of the John Deere Landscapes reporting unit.
In a filing with the Securities Exchange Commission the Moline,
Ill.-based company said that the charge reflect a decline in John
Deere Landscapes' forecasted financial performance as a result of
weak economic conditions.
The conclusion was made in connection with the company's annual
impairment testing of goodwill in connection with the preparation of
the financial statements to be included in its Annual Report for
Deere said it does not expect to be required to make any current or
future cash expenditures as a result of the impairment.
In August, while announcing the financial results for the third
quarter, the company did not include the charge in its net income
outlook of about $1.1 billion for 2009.
However, for the fourth quarter, Deere projected equipment net sales
to decline about 34%. The company noted that its fourth-quarter
results would be affected by significant production cutbacks that are
being made in line with retail demand. The quarter also will include
previously announced costs related to rationalizing of operations.