Photo by United Rentals
United Rentals posted total revenue of $6.641 billion for the full year of 2017, compared to $5.762 billion in 2016, a 15.3-percent increase. Rental revenue was $5.715 billion compared with $4.941 billion a year ago, a 15.7-percent jump. On a GAAP basis, full year net income was $1.346 billion, or $15.3 per diluted share, compared with $566 million or $6.45 per diluted share a year ago.
Within rental revenue, owned equipment rental revenue increased 15.3 percent, an increase of 18.2 percent in the volume of equipment on rent, partially offset by a 0.2-percent decrease in rental rates year over year.
Pro forma rental revenue leaped 7.6 percent year over year, reflecting growth of 7.1 percent in the volume of equipment on rent and a 0.4 percent increase in rental rates.
Time utilization increased 160 basis points year over year to 69.5 percent. On a pro forma basis, time utilization increased 150 basis points year over year to 69.1 percent. Time utilization was a full year record for the company on both an actual and a pro forma basis.
The company's Trench, Power and Pump specialty segment's rental revenue increased by 27.5 percent year over year, primarily on a same store basis, while the segment's rental gross margin improved by 260 basis points to 49.6 percent.
For the fourth quarter of 2017, total revenue was $1.922 billion compared with $1.523 billion for the fourth quarter a year ago, a 26.2-percent hike. Rental revenue was $1.646 billion compared to $1.298 billion in the fourth quarter of 2016, a 26.8-percent leap. The benefit of the income of NES Rental and Neff Rentals contributed to United's fourth quarter jump.
Within rental revenue, owned equipment rental revenue increased 26.5 percent, reflecting increases of 28.7 percent in the volume of equipment on rent and 1.1 percent in rental rates.
Pro forma rental revenue increased 11.5 percent year-over-year, reflecting growth of 8.8 percent in the volume of equipment on rent and a 2.0 percent increase in rental rates.
Time utilization increased 70 basis points year-over-year to 70.0 percent. On a pro forma basis, time utilization increased 100 basis points year-over-year.
The company's Trench, Power and Pump specialty segment's rental revenue increased by 38.7 percent year over year, primarily on a same store basis, while the segment's rental gross margin improved by 230 basis points to 47.5 percent.
The company completed the acquisitions of NES Rentals Holdings II and Neff Corp. in April 2017 and October 2017, respectively. NES and Neff are included in the company's results subsequent to the acquisition dates. Pro forma results reflect the combination of United Rentals, NES and Neff for all periods presented.
"We capped a year of record results with a strong fourth quarter finish on the back of broad-based demand," said Michael Kneeland, United Rentals CEO. "Pro forma volume increased nearly 9 percent year over year in the quarter, and rental rates were up 2 percent. For the full year, we exceeded the upper-band of guidance on total revenue, adjusted EBITDA and free cash flow, and increased our ROIC by 50 basis points year over year to its highest level since 2015.
"Our 2018 guidance reflects the confidence we feel in our operating environment based on what we hear from customers and see in key leading indicators. Our optimism is further supported by the tailwinds we expect from leveraging our 2017 acquisitions and our ongoing investments in people and technology, as well as the recent U.S. tax reform. Our strategy remains focused on balancing growth and returns to maximize our long-term value."
For the full year 2017, net cash provided by operating activities was $2.230 billion, and free cash flow was $907 million after total rental and non-rental gross capital expenditures of $1.889 billion. For the full year 2016, net cash provided by operating activities was $1.953 billion, and free cash flow was $1.182 billion after total rental and non-rental gross capital expenditures of $1.339 billion. Free cash flow for the full years 2017 and 2016 included aggregate merger and restructuring related payments of $76 million and $13 million, respectively.
The size of the rental fleet was $11.51 billion of original equipment cost at Dec. 31, 2017, compared with $8.99 billion at Dec. 31, 2016. The age of the rental fleet was 47.0 months on an OEC-weighted basis on Dec. 31, 2017, compared with 45.2 months on Dec. 31, 2016.
Stamford, Conn.-based United Rentals is No. 1 on the RER 100, and now has 997 branches in 49 U.S. states and every Canadian province.