William Grace
Executive Vice President and Chief Financial Officer at United Rentals
Thanks, Matt, and good morning, everyone. As Matt just shared, we had a strong finish to the year, setting both 4th-quarter and full-year records for total revenue, rental revenue, EBITDA and EPS, which supported the attractive returns and significant free-cash flow we also generated in 2024. So with that said, let's jump into the numbers. 4th-quarter rental revenue was a record at $3.42 billion. That's a year-on-year increase of $303 million or 9.7%, supported again by growth from large projects and key verticals.
Within rental revenue, OER increased by $177 million or 6.9%. Breaking this down, growth in our average fleet size contributed 4.1% to OER, while fleet productivity added another 4.3%, partially offset by assumed fleet inflation of 1.5%. Also within rental, ancillary and re-rent grew by 22% and 30% respectively, adding a combined $126 million to revenue, driven primarily by strong growth in specialty and hurricane-related work-in the quarter.
Turning to our used results, as Matt mentioned, we took advantage of a strong market to sell a record amount of fleet in the 4th-quarter, generating proceeds of $452 million at an adjusted margin of 48.9% and a recovery rate of 53% on assets that were almost eight years-old on average. Moving to EBITDA, as I mentioned, adjusted EBITDA was a 4th-quarter record at $1.9 billion, translating to an increase of $91 million or 5%. Within this, rental gross profit increased 7%, contributing an additional $136 million year-on-year. This was partially offset by used where the ongoing normalization of the market drove a 9% decline in used gross profit dollars, translating to a $21 million headwind to adjusted EBITDA in the quarter. SG&A increased by $36 billion year-over-year, which was in-line with revenue growth, so good efficiency there. And finally, the EBITDA contribution from other non-rental lines of businesses increased $12 million driven largely by strong new equipment sales.
Looking at profitability, our 4th-quarter adjusted EBITDA margin was 46.4%, implying 210 basis-points of compression. I'm sure we'll dig into this during Q&A, so I thought it might be helpful to frame some of the key factors here. The combination of used and stronger-than-expected new equipment sales were together about 80 basis-points of year-on-year headwind. Said another way, excluding these two factors, our adjusted EBITDA margin would have been down about 130 basis-points with flow-through a little better than 33%.
Closer to the core, and as you just heard me highlight, we had higher-growth in ancillary and re-rent revenue that, as you know, come with lower margins. If we also adjust for these, our EBITDA margin would have been down about 60 basis-points with implied flow-through of roughly 40%. While this is modestly below our long-term goal, it reflects our continued investment in key aspects of our strategy, including specialty, technology and capacity to support the long-term growth of our business during what we view as a slower phase of the cycle. And lastly, our adjusted earnings per share was a 4th-quarter record at $11.59. Shifting to capex, 4th-quarter gross rental capex was $469 million.
Moving to returns and free-cash flow. Our return on invested capital of 13% remained well-above our weighted-average cost-of-capital, while full-year free-cash flow totaled a robust $2.06 billion. Our balance sheet remains very strong with net leverage of 1.8 times at the end of December and total liquidity of over $2.8 billion. I'll note, this was after returning a record of over $1.9 billion to shareholders in 2024, including $434 million via dividend and $1.5 billion through repurchases that reduced our share count by over 2.1 million shares.
So to wrap-up both the quarter and the full-year, we were very pleased with the results our team achieved in 2024. Now let's look-forward and talk about our 2025 guidance, which I'll remind you is standalone, meaning it does not include any contribution from H&E. As you've seen from the press release, we anticipate another record year. Total revenue is expected in the range of $15.6 billion to $16.1 billion, implying full-year growth of 3.3% at midpoint.
Within total revenue, I'll note that our used sales guidance is implied roughly $1.45 billion or a mid-single-digit year-on-year decline on a percentage basis. This in-turn implies a little faster growth within our core rental revenue, Call-IT mid-single digit on a percentage basis. Within used, I'll add that we expect to sell around $2.8 billion of OEC translating to a recovery rate in the low-50s versus the mid 50s in 2024, but in-line with pre-pandemic norms. Our adjusted EBITDA range is $7.2 billion to $7.45 billion.
At the midpoint, excluding the impact of used, this implies flow-through in the 40s and flattish adjusted EBITDA margins versus as-reported flow-through of around 30% and approximately 50 basis-points of margin compression at the midpoint of guidance. On the fleet side, our gross capex guidance is $3.65 billion to $3.95 billion with net capex of $2.2 billion to $2.5 billion. Within this, we peg our 2025 maintenance capex at around $3.3 billion, implying growth CapEx of roughly $500 million at midpoint. And finally, we are guiding to another year of strong free-cash flow-in the range of $2 billion to $2.2 billion.
Turning to capital allocation, one of the benefits of our balance sheet strategy and free-cash generation are the flexibility they provide to invest in growth opportunities when they arise. As you know, we intend to capitalize on this through the pending acquisition of H&E, where we will invest almost $5 billion at targeted returns well-above our cost-of-capital.
As previously shared, we are pausing our buyback program ahead of H&E and we intend to utilize our free-cash flow-in 2025 to reduce our leverage from roughly 2.3 times on a pro-forma basis to a goal of around two times within 12 months of close. Finally, consistent with our strategy to return excess capital to our shareholders, I am very pleased to reiterate that we are increasing our quarterly dividend by 10% to $1.79 per share, translating to an annualized dividend of $7.16.
So with that, let me turn the call over to the operator for Q&A. Operator, please open the line.
