United Rentals today announced total revenue for the fourth quarter of 2013 increased 9.4 percent year over year to $1.338 billion. Rental revenue was $1.133 billion, compared with $1.249 billion and $1.036 billion, respectively, for the same period the prior year. On a GAAP basis, the company reported fourth-quarter net income of $140 million, or $1.31 per diluted share, compared with $41 million, or $0.40 per diluted share, for the same period the prior year.
Adjusted earnings per share for the quarter were $1.59 per diluted share, compared with $1.27 per diluted share for the same period the prior year. Adjusted EBITDA was $651 million and adjusted EBITDA margin was 48.7 percent for the quarter.
Within rental revenue, owned equipment rental revenue increased 9.6 percent for the quarter, reflecting year-over-year increases of 8.2 percent in the volume of equipment on rent and 4.0 percent in rental rates.
For the full year 2013, total revenue increased 6.2 percent to $4.955 billion compared with $4.664 billion for full-year 2012. Full-year rental revenue (which includes owned equipment rental revenue, re-rent revenue and ancillary items) was $4.196 billion, a 7.0-percent increase compared with $3.920 billion for 2012. On a GAAP basis, full year net income was $387 million, or $3.64 per diluted share.
Adjusted EPS for the full year was $4.91 per diluted share, compared with $3.76 per diluted share for 2012. Adjusted EBITDA was $2.293 billion and adjusted EBITDA margin was 46.3 percent for the full year.
Within rental revenue, owned equipment rental revenue increased 7.8 percent for the full year, reflecting year-over-year increases of 6.9 percent in the volume of equipment on rent and 4.2 percent in rental rates.
“2013 was a year of unparalleled achievement for our company, both operationally and in terms of value creation,” said Michael Kneeland, CEO of United Rentals. “We reported record results for full-year revenue, EBITDA, EBITDA margin and EPS, due to the disciplined execution of our strategy and our successful integration of RSC. We also generated $421 million of operational free cash flow, while continuing to grow our fleet in an improving marketplace. We ended on a strong note, with year-over-year increases in rate and time utilization, positioning us well for 2014."
Fourth-quarter 2013 adjusted EBITDA and adjusted EBITDA margin increased $98 million and 440 basis points, respectively, from the same period in 2012. Full-year 2013 adjusted EBITDA and adjusted EBITDA margin increased $305 million and 370 basis points, respectively, from 2012.
Time utilization increased 60 basis points year-over-year to 69.3 percent for the fourth quarter of 2013. Full-year time utilization increased 70 basis points to a company record 68.2 percent.
The company realized $59 million of cost synergies in the fourth quarter of 2013, and $236 million for the full year, related to the integration of RSC.
In its 2014 outlook, United Rentals said it expects total revenue in a range of $5.25 billion to $5.45 billion; adjusted EBITDA in a range of $2.45 billion to $2.55 billion; an increase in rental rates of approximately 4.0 percent year-over-year; and time utilization of approximately 68.5 percent. In addition, the company included net rental capital expenditures of approximately $1.15 billion, after gross purchases of approximately $1.65 billion in its 2014 outlook.
“This year, we will continue to implement our strategy to profitably grow the business, drive down leverage and return cash to shareholders,” Kneeland said. “We expect our growth to be supported by higher rental rates, free cash flow generation and an increase in demand from our end markets. We agree with industry forecasts that the bulk of the recovery in non-residential construction lies ahead, and equipment rental is still in the early stages of a multi-year growth cycle.”
For the full year 2013, free cash flow was $383 million after total rental and non-rental capital expenditures of $1.684 billion, and aggregate cash payments of $38 million related to merger and restructuring activities.
The size of the rental fleet was $7.73 billion of original equipment cost at Dec. 31, 2013, compared with $7.23 billion at Dec. 31, 2012. The age of the rental fleet was 45.2 months on an OEC-weighted basis at Dec. 31, 2013, compared with 47.2 months at Dec. 31, 2012.
During the fourth quarter of 2013, the company repurchased $9 million of common stock as part of the $500 million share repurchase program that was announced in October 2013. The company’s current intention is to complete the repurchases within 18 months of the October announcement.
Stamford, Conn.-based United Rentals is No. 1 on the RER 100.