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CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Revenues:                      
Equipment rentals                 $ 4,196 $ 3,455 $ 2,151
Sales of rental equipment                 490 399 208
Sales of new equipment                 104 93 84
Contractor supplies sales                 87 87 85
Service and other revenues                 78 83 83
Total revenues 1,338 [1] 1,311 [1] 1,206 [1] 1,100 [1] 1,249 [2] 1,219 [2] 993 [2] 656 [2] 4,955 [1] 4,117 [2] 2,611
Cost of revenues:                      
Cost of equipment rentals, excluding depreciation                 1,634 1,392 992
Depreciation of rental equipment                 852 699 423
Cost of rental equipment sales                 314 274 142
Cost of new equipment sales                 84 74 67
Cost of contractor supplies sales                 59 62 58
Cost of service and other revenues                 25 29 31
Total cost of revenues                 2,968 2,530 1,713
Gross profit 567 [1] 564 [1] 471 [1] 385 [1] 495 [2] 505 [2] 374 [2] 213 [2] 1,987 [1] 1,587 [2] 898
Selling, general and administrative expenses                 642 588 407
RSC merger related costs                 9 111 19
Restructuring charge                 12 99 19
Non-rental depreciation and amortization                 246 198 57
Operating income 342 [1] 337 [1] 250 [1] 149 [1] 236 [2] 222 [2] 46 [2] 87 [2] 1,078 [1] 591 [2] 396
Interest expense, net                 475 512 228
Interest expense—subordinated convertible debentures                 3 4 7
Other income, net                 (5) (13) (3)
Income before provision for income taxes                 605 88 164
Provision for income taxes                 218 13 63
Net income $ 140 [1] $ 143 [1] $ 83 [1] $ 21 [1] $ 41 [2] $ 73 [2] $ (52) [2] $ 13 [2] $ 387 [1] $ 75 [2] $ 101
Basic earnings per share (in dollars per share) $ 1.49 [1] $ 1.53 [1] $ 0.89 [1] $ 0.22 [1] $ 0.45 [2] $ 0.78 [2] $ (0.63) [2] $ 0.21 [2] $ 4.14 [1] $ 0.91 [2] $ 1.62
Diluted earnings per share (in dollars per share) $ 1.31 [1],[3] $ 1.35 [1],[3] $ 0.78 [1],[3] $ 0.19 [1],[3] $ 0.40 [2],[3] $ 0.70 [2],[3] $ (0.63) [2],[3] $ 0.17 [2],[3] $ 3.64 [1],[3] $ 0.79 [2],[3] $ 1.38
[1] 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.
[2] During the fourth quarter of 2012, we recognized $13 of charges associated with the RSC acquisition. Additionally, during the quarter, we recognized restructuring charges of $6, primarily reflecting branch closure charges associated with the RSC acquisition. During the quarter, we also recognized asset impairment charges of $2 which are primarily reflected in non-rental depreciation and amortization and principally relate to write-offs of leasehold improvements and other fixed assets. During the fourth quarter of 2012, we redeemed our 10 7/8 percent Senior Notes and all of our outstanding 1 7/8 percent Convertible Senior Subordinated Notes were converted. Upon redemption/conversion, we recognized a loss of $72 in interest expense, net. The loss represents the difference between the net carrying amount and the total purchase/conversion price of these securities. During the quarter, we also recognized a benefit of $6 in cost of equipment rentals, excluding depreciation related to our provision for self-insurance reserves. Additionally, operating income for the fourth quarter 2012 included $8 of costs, in the aggregate, primarily related to the merger, which should have been recognized in the second and third quarters of 2012. There was no impact on 2012 full year operating income.
[3] Diluted earnings (loss) per share includes the after-tax impacts of the following: First Quarter Second Quarter Third Quarter Fourth Quarter Full YearFor the year ended December 31, 2013: RSC merger related costs (4)$(0.03) $(0.01) $— $— $(0.05)RSC merger related intangible asset amortization (5)(0.24) (0.24) (0.23) (0.24) (0.94)Impact on depreciation related to acquired RSC fleet and property and equipment (6)0.01 0.01 0.01 0.01 0.04Impact of the fair value mark-up of acquired RSC fleet and inventory (7)(0.08) (0.07) (0.05) (0.06) (0.25)Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (9)0.01 0.01 0.01 0.01 0.04Restructuring charge (10)(0.04) (0.03) (0.01) — (0.07)Asset impairment charge (11)(0.01) (0.01) — — (0.02)Loss on extinguishment of debt securities, including subordinated convertible debentures(0.01) — (0.01) — (0.02)For the year ended December 31, 2012: RSC merger related costs (4)$(0.09) $(0.60) $(0.05) $(0.08) $(0.72)RSC merger related intangible asset amortization (5)— (0.21) (0.25) (0.25) (0.74)Impact on depreciation related to acquired RSC fleet and property and equipment (6)— 0.02 0.02 — 0.03Impact of the fair value mark-up of acquired RSC fleet and inventory (7)— (0.05) (0.09) (0.09) (0.24)Pre-close RSC merger related interest expense (8)(0.10) (0.12) — — (0.19)Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (9)— 0.01 0.01 0.01 0.03Restructuring charge (10)— (0.39) (0.23) (0.03) (0.64)Asset impairment charge (11)— (0.02) (0.06) (0.01) (0.10)Loss on extinguishment of debt securities, including subordinated convertible debentures— — — (0.41) (0.45)Gain on sale of software subsidiary (12)— 0.07 — (0.01) 0.05