Quarterly Financial Information (Unaudited)



	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
For the year ended December 31, 2014 (1):
Total revenues	$	1,178	$	1,399	$	1,544	$	1,564	$	5,685
Gross profit	448		589		688		707		2,432
Operating income	218		325		422		426		1,391
Net income	60		94		192		194		540
Earnings per share—basic	0.63		0.98		1.95		1.96		5.54
Earnings per share—diluted (3)	0.56		0.90		1.84		1.88		5.15
For the year ended December 31, 2013 (2):
Total revenues	$	1,100	$	1,206	$	1,311	$	1,338	$	4,955
Gross profit	385		471		564		567		1,987
Operating income	149		250		337		342		1,078
Net income	21		83		143		140		387
Earnings per share—basic	0.22		0.89		1.53		1.49		4.14
Earnings per share—diluted (3)	0.19		0.78		1.35		1.31		3.64

(1)

The fourth quarter of 2014 includes an increase in bad debt expense of $8 as compared to the fourth quarter of 2013 primarily due to improved receivable aging which reduced the expense in the fourth quarter of 2013. Additionally, the fourth quarter of 2014 includes an increase in stock compensation, net of $14 as compared to the fourth quarter of 2013 primarily due to improved profitability which resulted in increased performance based stock compensation.


(2)	The fourth quarter of 2013 includes a reduction in bad debt expense of $17 as compared to the fourth quarter of 2012 primarily due to improved receivable aging. In the fourth quarter of 2013, we recognized a benefit of $3 in cost of equipment rentals, excluding depreciation related to our provision for self-insurance reserves.


(3)	Diluted earnings per share includes the after-tax impacts of the following:



	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Full Year
For the year ended December 31, 2014:
Merger related costs (4)	$	(0.01	)	$	(0.05	)	$	(0.02	)	$	0.02		$	(0.06	)
Merger related intangible asset amortization (5)	(0.22		)	(0.29		)	(0.29		)	(0.30		)	(1.10		)
Impact on depreciation related to acquired RSC fleet and property and equipment (6)	—			0.01			0.01			0.01			0.03
Impact of the fair value mark-up of acquired RSC fleet (7)	(0.05		)	(0.06		)	(0.05		)	(0.05		)	(0.21		)
Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (8)	0.01			0.01			—			0.01			0.03
Restructuring charge (9)	(0.01		)	0.01			0.01			—			0.01
Loss on extinguishment of debt securities	(0.06		)	(0.38		)	(0.02		)	—			(0.46		)
For the year ended December 31, 2013:
Merger related costs (4)	$	(0.03	)	$	(0.01	)	$	—		$	—		$	(0.05	)
Merger related intangible asset amortization (5)	(0.24		)	(0.24		)	(0.23		)	(0.24		)	(0.94		)
Impact on depreciation related to acquired RSC fleet and property and equipment (6)	0.01			0.01			0.01			0.01			0.04
Impact of the fair value mark-up of acquired RSC fleet (7)	(0.08		)	(0.07		)	(0.05		)	(0.06		)	(0.25		)
Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (8)	0.01			0.01			0.01			0.01			0.04
Restructuring charge (9)	(0.04		)	(0.03		)	(0.01		)	—			(0.07		)
Asset impairment charge (10)	(0.01		)	(0.01		)	—			—			(0.02		)
Loss on extinguishment of debt securities, including subordinated convertible debentures	(0.01		)	—			(0.01		)	—			(0.02		)


(4)	This reflects transaction costs associated with the RSC and National Pump acquisitions discussed in note 3 to our consolidated financial statements.


(5)	This reflects the amortization of the intangible assets acquired in the RSC and National Pump acquisitions.


(6)	This reflects the impact of extending the useful lives of equipment acquired in the RSC acquisition, net of the impact of additional depreciation associated with the fair value mark-up of such equipment.


(7)	This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC acquisition and subsequently sold.


(8)	This reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the RSC acquisition. See note 12 to our consolidated financial statements for additional detail on the acquired debt.


(9)	As discussed in note 5 to our consolidated financial statements, this reflects severance costs and branch closure charges associated with the RSC merger and our closed restructuring program.


(10)	As discussed in note 5 to our consolidated financial statements, this charge primarily reflects write-offs of leasehold improvements and other fixed assets in connection with the RSC acquisition and our closed restructuring program.