Massive goodwill charges at LP, Brookdale
Posted on March 2, 2009 at 6:52 amTime to brush up on FASB 142, the accounting rule that requires companies to take a close look at the goodwill on their books at the end of the year. Both Louisiana-Pacific and Brookdale Senior Living reported big fourth-quarter losses due in large goodwill impairment charges – $274 million and $215 million, respectively. That’s got both companies focusing in cash.
LP (Ticker: LPX) booked a Q4 loss of $341 million as revenue fell by a third to $250 million from late 2007. CEO Rick Frost said his team, which has been cutting costs big time, is “actively considering other financing and refinancing transactions to improve our overall liquidity.”
At Brookdale (Ticker: BKD), fourth-quarter losses totaled $279 million although revenues rose slightly to $487 million. CFO Mark Ohlendorf said “Brookdale is in a solid liquidity position” and will use its cash to slim its debt load. The company on Friday said it has pushed out the due dates for a chunk of that debt.
