25.01.2009

United to take $billion write off

United Rentals, the world’s largest rental company has announced that is planning to take a $1.1 billion non-cash write off in its 2008 accounts, related to goodwill arising out of acquisitions made by the company between 1997 and 2000.

The company said 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.

The company has also revised its full year 2008 revenue guidance downwards to $3.27 billion, from previous forecasts of $3.3 to $3.4 billion. At the same time it anticipates free cash flow will fall within a range of $330 to $340 million, compared to earlier forecasts of $350 to $400 million.

United said that both of these changes reflect a further deterioration in the company’s markets.

Michael Kneeland, United’s chief executive said: “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. 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.”