Harris Corp. reported a $98 million second-quarter “impairment charge,” or goodwill writedown, related to the pending sale of its broadcast business.
Since the fourth quarter of its previous fiscal year, Harris has been reporting results for Broadcast Communications under “discontinued operations.” The manufacturer lists the latest “additional non-cash impairment charge” in results for its second quarter of 2013. In the first quarter, it reported a total of $222 million in such charges for its Cyber Integrated Solutions and Broadcast Communications businesses.
An impairment charge is a reduction on a company’s balance sheet that adjusts the value of its goodwill, according to several investment references, and is often used when a company purchases another for more than the value of the latter’s net assets.
Gores is buying the Harris broadcast business for $160 million in cash at closing, and an total estimated value of $225 million, according to the announcement in December. Harris makes radio and TV equipment including transmitters, STL equipment, consoles and other systems. The Gores Group is a private equity firm that has a variety of holdings including a stake in Dial Global.