Ted Grace
Executive Vice President & Chief Financial Officer at United Rentals
Thanks, Matt, and good morning, everyone. As you saw in our first quarter press release, our team again produced excellent results that were consistent with our expectations and, importantly, position us well for the full year. And I think Matt framed things well in saying that we continue to feel good about both 2023 and beyond, given the market opportunity we see, our strategy, our team's consistently strong execution and our customers' knowledge that we are here to serve them with unmatched capabilities.
One quick note before I jump into the numbers. The figures I'll be discussing are as reported, except in a few instances where I'll call them out as pro forma, which are adjusted to include Ahern's first quarter 2022 standalone results in the year ago period.
So, with that said, first quarter rental revenue was a record at $2.74 billion. That's an increase of $565 million or 26% year-over-year. Within rental revenue, OER increased by $469 million or 26.1%. Our average fleet size increased by 25.6%, providing a $460 million benefit and fleet productivity increased by 2% as reported, adding another $36 million. This was partially offset by our usual fleet inflation of 1.5% or $27 million. Also within rental, ancillary revenues were higher by $93 million or 28.3%, and re-rent provided an additional $3 million or 6.1%. I'll note that on a pro forma basis, rental revenue is up a robust 16.6%, and fleet productivity increased by a healthy 5.9%.
First quarter used sales increased by 84% to $388 million as we return to a more normalized volume after holding onto fleet throughout much of 2022. Adjusted used margins increased by 170 basis points to 59.5%, supported by continued strong retail pricing.
Moving to EBITDA. Adjusted EBITDA in the quarter exceeded $1.5 billion, another first quarter record, reflecting an increase of $364 million or 32%. The dollar change includes a $313 million increase from rental, within which OER contributed $285 million, ancillary added $29 million and re-rent was down $1 million. Outside of rental, used sales added about $109 million to adjusted EBITDA, while other non-rental lines of businesses contributed another $5 million.
SG&A increased by $63 million due primarily to higher commissions and the continued normalization of certain discretionary costs. As a percentage of sales, however, SG&A declined by 120 basis points year-on-year to 11.6% of total revenue.
Looking at first quarter profitability, our adjusted EBITDA margin increased 70 basis points on an as-reported basis and 160 basis points on a pro forma basis to a first quarter record of 45.8%. This translates to 48% flow through on an as reported basis and better than 53% on a pro forma basis. And finally, adjusted EPS was $7.95, another first quarter record. That's a year-over-year increase of $2.22 per share or almost 39%.
Turning to capex. Gross rental capex was $797 million, and net rental capex was $409 million. This represents an increase of $138 million in net capex year-over-year and positions us well for the growth we see in 2023.
Looking at return on invested capital and free cash flow, ROIC set a new record at 13.1% on a trailing 12-month basis. That's up 40 basis points sequentially and 220 basis points year-on-year. I'll add, that was 310 basis points above our current weighted average cost of capital. Free cash flow was another good story, with the quarter coming in at $478 million or an LTM free cash margin of 13.5%, all while continuing to fund significant growth.
Turning to the balance sheet, our leverage ratio at the end of the quarter improved to 1.9 times, representing a 10 basis point reduction both sequentially and year-over-year. And our liquidity at the end of March exceeded $2.65 billion with no long-term note maturities until 2027. Notably, all of this was after returning $353 million to shareholders in the quarter, including $103 million via dividends and $250 million through share repurchases.
Looking forward, you saw last night that we reaffirmed our guidance across all metrics. Based on the diverse momentum we see across our markets and what we hear from our customers, we remain confident that 2023 will be a record year for the company.
Just to review, total revenue is expected in the range of $13.7 billion to $14.2 billion, implying full year growth of approximately 20% at midpoint and pro forma growth of 12%. Within total revenue, I'll remind you that our used guidance is implied at $1.3 billion.
Our adjusted EBITDA range remains $6.6 billion to $6.85 billion. On an as reported basis, at midpoint, this implies roughly flat full year adjusted EBITDA margins and flow through of around 48%. On a pro forma basis, however, which we think is the appropriate way to think about it, our guidance continues to imply about 80 basis points of EBITDA margin expansion and flow through in the mid-50s.
On the fleet side, our gross capex guidance remains $3.3 billion to $3.55 billion, with net capex of $2 billion to $2.25 billion. And finally, our free cash guidance is $2.1 billion to $2.35 billion, which is before dividends, repurchases and bolt-on M&A.
So with that, let me turn the call over to the operator for Q&A. Operator, please open the line.
