| Quarterly Financial Information (Unaudited) |
Quarterly Financial Information (Unaudited) | | | | | | | | | | | | | | | | | | | | | | First
Quarter | | Second
Quarter | | Third
Quarter | | Fourth
Quarter | | Full
Year | For the year ended December 31, 2012 (1): | | | | | | | | | | Total revenues | $ | 656 |
| | $ | 993 |
| | $ | 1,219 |
| | $ | 1,249 |
| | $ | 4,117 |
| Gross profit | 213 |
| | 374 |
| | 505 |
| | 495 |
| | 1,587 |
| Operating income | 87 |
| | 46 |
| | 222 |
| | 236 |
| | 591 |
| Income (loss) from continuing operations | 13 |
| | (52 | ) | | 73 |
| | 41 |
| | 75 |
| Earnings (loss) per share from continuing operations—basic | 0.21 |
| | (0.63 | ) | | 0.78 |
| | 0.45 |
| | 0.91 |
| Earnings (loss) per share from continuing operations—diluted (3) | 0.17 |
| | (0.63 | ) | | 0.70 |
| | 0.40 |
| | 0.79 |
| Net income (loss) | 13 |
| | (52 | ) | | 73 |
| | 41 |
| | 75 |
| For the year ended December 31, 2011 (2): | | | | | | | | | | Total revenues | $ | 523 |
| | $ | 629 |
| | $ | 713 |
| | $ | 746 |
| | $ | 2,611 |
| Gross profit | 138 |
| | 211 |
| | 274 |
| | 275 |
| | 898 |
| Operating income | 30 |
| | 95 |
| | 156 |
| | 115 |
| | 396 |
| (Loss) income from continuing operations | (20 | ) | | 28 |
| | 65 |
| | 28 |
| | 101 |
| (Loss) earnings per share from continuing operations—basic | (0.34 | ) | | 0.45 |
| | 1.04 |
| | 0.45 |
| | 1.62 |
| (Loss) earnings per share from continuing operations—diluted (3) | (0.34 | ) | | 0.38 |
| | 0.91 |
| | 0.39 |
| | 1.38 |
| Net (loss) income | (20 | ) | | 27 |
| | 65 |
| | 29 |
| | 101 |
|
| | (1) | During the fourth quarter of 2012, we recognized $13 of charges related to the RSC merger. Additionally, during the quarter, we recognized restructuring charges of $6, primarily reflecting branch closure charges associated with the RSC merger. 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 includes $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 is no impact on 2012 full year operating income. |
| | (2) | During the fourth quarter of 2011, we recognized $19 of charges associated with the RSC acquisition. Additionally, during the quarter, we closed 18 branches and recognized restructuring charges of $14. During the quarter, we also recognized asset impairment charges of $3 which are primarily reflected in non-rental depreciation and amortization and principally relate to write-offs of leasehold improvements and other fixed assets in connection with our closed restructuring program. In the quarter, we also purchased an aggregate of $32 of QUIPS for $32. In connection with this transaction, we retired $32 principal amount of our subordinated convertible debentures and recognized a loss of $1 in interest expense-subordinated convertible debentures, net, inclusive of the write-off of capitalized debt issuance costs. Interest expense, net for the fourth quarter of 2011 also includes a loss of $3 reflecting write-offs of debt issuance costs associated with the amendment of our ABL facility discussed above. During the quarter, we also recognized a benefit of $8 in cost of equipment rentals, excluding depreciation related to our provision for self-insurance reserves. |
| | (3) | Diluted earnings (loss) per share from continuing operations includes the after-tax impacts of the following: |
| | | | | | | | | | | | | | | | | | | | | | First
Quarter | | Second
Quarter | | Third
Quarter | | Fourth
Quarter | | Full
Year | 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 |
| | — |
| | 0.03 |
| Impact 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 |
| | 0.03 |
| Restructuring 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, and ABL amendment (12) | — |
| | — |
| | — |
| | (0.41 | ) | | (0.45 | ) | Gain on sale of software subsidiary (13) | — |
| | 0.07 |
| | — |
| | (0.01 | ) | | 0.05 |
| For the year ended December 31, 2011: | | | | | | | | | | RSC merger related costs (4) | — |
| | $ | — |
| | $ | — |
| | $ | (0.25 | ) | | $ | (0.25 | ) | Restructuring charge (10) | (0.01 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) | | $ | (0.12 | ) | | $ | (0.16 | ) | Asset impairment charge (11) | — |
| | (0.01 | ) | | — |
| | (0.03 | ) | | (0.04 | ) | Loss on extinguishment of debt securities, including subordinated convertible debentures, and ABL amendment (12) | (0.01 | ) | | — |
| | — |
| | (0.03 | ) | | (0.04 | ) |
| | (4) | This reflects transaction costs associated with the RSC acquisition discussed in note 3 to our consolidated financial statements. |
| | (5) | This reflects the amortization of the intangible assets acquired in the RSC acquisition. |
| | (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, cost of equipment rentals, excluding depreciation, and cost of contractor supplies sales associated with the fair value mark-up of rental equipment and inventory acquired in the RSC acquisition. The costs relate to equipment and inventory acquired in the RSC acquisition and subsequently sold. |
| | (8) | As discussed in note 12 to our consolidated financial statements, in March 2012, we issued $2,825 of debt in connection with the RSC merger. The pre-close RSC merger related interest expense reflects the interest expense recorded on this debt prior to the acquisition date. |
| | (9) | 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. |
| | (10) | 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. |
| | (11) | 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. |
| | (12) | This reflects losses on the extinguishment of certain debt securities, including subordinated convertible debentures, and write-offs of debt issuance costs associated with the October 2011 amendment of our ABL facility. |
| | (13) | This reflects a gain recognized upon the sale of a former subsidiary that developed and marketed software. |
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