Quarterly Financial Information (Unaudited)



	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
For the year ended December 31, 2015 (1):
Total revenues	$	1,315	$	1,429	$	1,550	$	1,523	$	5,817
Gross profit	524		618		690		648		2,480
Operating income	300		375		446		397		1,518
Net income	115		86		215		169		585
Earnings per share—basic	1.19		0.89		2.28		1.82		6.14
Earnings per share—diluted (3)	1.16		0.88		2.25		1.81		6.07
For the year ended December 31, 2014 (2):
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

(1)

The fourth quarter of 2015 includes a decrease in stock compensation, net of $14 as compared to the fourth quarter of 2014 primarily due to lower than expected revenue and profitability. Additionally, as discussed in note 5 to our consolidated financial statements, in the fourth quarter of 2015, we initiated a restructuring program in response to recent challenges in our operating environment. Though we expect solid industry growth in 2016, the restructuring program was initiated in an effort to reduce costs in an environment with continuing pressures on volume and pricing. We expect to complete the restructuring program in 2016, and recognized $4 of costs for the program in the fourth quarter of 2015. Additionally, during the fourth quarter of 2015, we reached agreement on a settlement that will provide us with a $5 refund on previously paid property taxes. We recognized a reduction of $5 in cost of equipment rentals, excluding depreciation, associated with the settlement during the fourth quarter of 2015. Additionally, our provision for income taxes for the fourth quarter of 2015 includes the impact of a $5 increase in valuation allowances resulting from the enactment of Connecticut state limitations on net operating loss utilization.

(2)

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.


(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, 2015:
Merger related costs (4)	$	0.17		$	—		$	—		$	—		$	0.17
Merger related intangible asset amortization (5)	(0.32		)	(0.27		)	(0.28		)	(0.28		)	(1.15		)
Impact on depreciation related to acquired RSC fleet and property and equipment (6)	0.01			—			—			—			0.02
Impact of the fair value mark-up of acquired RSC fleet (7)	(0.04		)	(0.04		)	(0.04		)	(0.07		)	(0.19		)
Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (8)	0.01			—			—			—			0.02
Restructuring charge (9)	—			—			—			(0.03		)	(0.04		)
Loss on extinguishment of debt securities and amendment of ABL facility	(0.01		)	(0.76		)	—			—			(0.78		)
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		)


(4)	This primarily reflects transaction costs associated with the National Pump acquisition discussed above. The income during the year ended December 31, 2015 reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price. For additional information concerning the National Pump acquisition, see 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.


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