According to the third quarter results, Interpublic wrote down the value of Octagon by $221m.
Said the financial statement: “[The third quarter net loss included] a non-cash goodwill impairment charge of $221m at Octagon Worldwide.
“This charge arose in connection with the annual impairment test required by SFAS 142.
“Octagon’s projected growth and performance no longer support the carrying value of the goodwill associated with these assets This charge represents all of the remaining goodwill within Octagon.”
The report also revealed that despite making massive improvements on last year, Brands Hatch Circuits – formerly Octagon Motorsports – still made a heavy loss.
After making a loss of $162.9m in the third quarter of 2002, the unit – which comprises of four UK race tracks, and the contract to handle the British Formula One Grand Prix – made an operating loss of $19m, with operating costs dramatically reduced and revenues showing a slight rise.
However, the four tracks are currently in the process of being sold – and expected to achieve a price tag of in excess of $100m. A decision on the sale is expected next week.
Overall, the Interpublic Group reported a net loss of $327.1m for the third quarter – blaming company restructuring, shareholder lawsuits and the dip in value of Octagon.
Octagon refused to comment on the findings.
