Avis Budget Sees 'Substantial' Goodwill Impairment Charge

Avis Budget Group recently said it will likely record a “substantial,” one-time, non-cash charge for goodwill impairment as a result of the decline in its stock price.

The Parsippany, N.J.-based vehicle rental company said it was unable to estimate the charge, which is unrelated to Avis Budget's long-term growth view.

Avis Budget estimated adjusted 2007 earnings before interest, taxes, depreciation and amortization of $405 million to $410 million and income of between $193 million and $198 million.

The EBITDA and income figures do not include the impairment charge or separation costs, the company said. Both figures are inline with the company's prior view.

The company also authorized an initial repurchase of up to $50 million of its common stock.

Avis Budget's stock closed the regular session up 57 cents, or 6.03%, at $10.03 and rose to $10.25 in after-hours trading.

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