United Rentals Board Acts Upon Special Committee Report; Company Provides Update on Restatements

• Published in: Business Wire p. 1
• Format: Newsletter
• Language: English
• Published: New York Business Wire 26.01.2006
• Subjects: Accounting; Balance sheets; Boards of directors; Business combinations; Committees; Cooperation; Corporate profits; Employees; Financial statements; Gross income; Intangible assets; Leasebacks; Pasta; Rentals; Sales; Used equipment; Valuation; GREENWICH, Conn

Minor Sale-Leaseback Transactions. The committee reviewed seven minor sale-leaseback transactions entered into between December 2000 and March 2002. Consistent with the preliminary conclusions previously reported, the committee concluded that the accounting for six of these transactions involved irregularities and that critical information associated with these transactions was concealed from the company's auditors. These six transactions accounted for reported gross profit of $12.2 million, $20.2 million and $1.0 million in 2000, 2001 and 2002, respectively. The committee concluded that the company improperly recognized revenue from these transactions, and that the impact on quarterly earnings per share during the relevant quarters ranged from $.01 to $.08. As previously announced, the company expects to restate its results for applicable periods for these six transactions. The effect of restating for these transactions is described below under Update on Restatements for Prior Periods. Certain statements contained in this press release are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "plans," "intends," "projects," "forecasts," "may," "will," "should," "on track" or "anticipates" or the negative thereof or comparable terminology, or by discussions of strategy or outlook. The company's business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) the audits of the company's 2004 and 2005 results have not yet been completed and, accordingly, previously announced data for these periods or portions thereof are preliminary and subject to change, (2) the evaluation and testing of the company's internal controls over financial reporting have not yet been completed and additional material weaknesses may be identified, (3) the company may incur significant expenses in connection with the SEC inquiry of the company, the related internal review and the class action lawsuits and derivative actions that were filed in light of the SEC inquiry, (4) there can be no assurance that the outcome of the SEC inquiry or internal review will not require changes in the company's accounting policies and practices, restatement of financial statements, revisions of preliminary results or guidance, and/or otherwise be adverse to the company, (5) the SEC inquiry is ongoing, and there is no assurance that the SEC or its staff will concur with the conclusions of the special committee or the company, (6) the company may be unable to deliver financial statements and/or make SEC filings within the time period required by its lenders or the indentures governing various securities, as amended, (7) the company may not be able to file its 2004 10-K by March 31, 2006 (the expiration date of an extension granted by the New York Stock Exchange), in which case the Exchange will initiate suspension and delisting procedures, and (8) the estimated impact of expected restatements is preliminary and may change based upon additional analysis by the company or its auditors. Certain of these risks and uncertainties, as well as others, are discussed in greater detail in the company's filings with the SEC. The company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.