United Rentals Inc. of Greenwich has revised guidance, repurchased notes in anticipation of recording a non-cash goodwill impairment charge for its 2008 results.
“Our revised full year guidance reflects external factors such as the current construction cycle and the macro-economy, as well as our decision to accelerate branch closures into the fourth quarter of 2008,” said Michael Kneeland, CEO of United Rentals.
The company currently expects the total charge, in connection with year-end market conditions, to be approximately $1.1 billion. Kneeland said all of the impairment charge relates to goodwill arising out of acquisitions made by the company between 1997 and 2000. The impairment charge will not result in any cash expenditures and will not affect the company”™s cash position, cash flow from operating activities, free cash flow, liquidity position or availability under its credit facilities, Kneeland said.
“While we see 2009 as undoubtedly challenging, we are confident that with our ample liquidity, as well as our continued focus on cost reduction and other ongoing initiatives, we are well positioned to manage through this downturn and benefit from the eventual recovery,” Kneeland said.
United Rentals during its fourth quarter made open market repurchases of an aggregate $130 million in notes. Kneeland said, in connection with the repurchases of the notes, the company anticipates recognizing a pre-tax gain of approximately $45 million in the fourth quarter of 2008. The company revised its full year 2008 guidance for total revenues to $3.27 billon, as compared to the previous range of $3.3 billion to $3.4 billion. United Rentals also revised its free cash flow to a range of $330 million to $340 million, previously a range of $350 million to $400 million.
The company expects to report its 2008 financial results at the end of February
