Jessica T. Graziano
Executive Vice President and Chief Financial Officer at United Rentals
Thanks, Matt, and good morning, everyone. When we increased our 2021 guidance back in April, we expected a strong second quarter supported by the momentum we were seeing to start the year. We're pleased to see that play out as anticipated with the second quarter results. And importantly, we're also pleased to see the momentum accelerate in our core business and support another raise to our guidance for the year. We've also added the impact from our acquisitions, notably the General Finance deals. And I'll give a little bit more color on our guidance in a few minutes, but let's start now with the results for the second quarter.
Rental revenue for the second quarter was $1.95 billion, that's an increase of $309 million or 19%. If I exclude the impact of acquisitions on that number, rental revenue from the core business grew a healthy 16% year-over-year. Within rental revenue, OER increased $231 million or 16.5%. The biggest driver in that change with fleet productivity, which was up 17.8% or $250 million, that's primarily due to stronger fleet absorption on higher volumes in part as we comp the COVID-impacted second quarter last year. Our average fleet size was up 0.2% or a $3 million tailwind to revenue and rounding out OER, the inflation impact of 1.5% cost us $22 million. Also within rental, ancillary revenues in the quarter were up about $65 million or 31% and rerent was up $30 million. And we'll talk more about the increase in ancillary revenues in a moment.
Used equipment sales came in at $194 million, that's an increase of $80 million or about 10%. Pricing at retail in the quarter increased over 7% versus last year and supported robust adjusted used margins of 47.9%, and that represents a sequential improvement of 520 basis points and is 190 basis points higher than the second quarter of 2020. Used sales proceeds for the quarter represented a strong recovery of about 59% of the original cost of fleet that was on an average over seven years old.
Let's move to EBITDA. Adjusted EBITDA for the quarter was $999 million, an increase of 11% year-over-year or $100 million, that included $13 million of one-time costs for acquisition activity. The dollar change includes a $141 million increase from Rentals and in that, OER was up $125 million, ancillary contributed $10 million and rerent added $6 million. Used sales were tailwind to adjusted EBITDA of $12 million and other non-rental lines of business provided $6 million. The impact of SG&A and adjusted EBITDA was a headwind for the quarter of $59 million, which came mostly from the resetting of bonus expense. We also had higher commissions on better revenue performance and higher discretionary expenses like T&E that continue to normalize. Our adjusted EBITDA margin in the quarter was 43.7%, down 270 basis points year-over-year and flow-through as reported was about 29%.
Let's take a closer look at margin and flow-through this quarter. Importantly, you'll recall that our COVID response last year included a swift and significant pullback in certain operating and discretionary costs that was especially pronounced in the second quarter and is impacting flow-through this year as activity continues to ramp and costs continue to normalize. We expect this will play through the rest of the year, notably in the third quarter.
And specific to the second quarter, we've shared in previous calls that one of the costs that will reset this year is bonus expense from the low levels incurred last year. As a result, we had an expected drag in flow-through in the second quarter as we reset and now true up this year's expense. Flow-through and margins were also impacted as anticipated by acquisition activity, including the one-time costs I mentioned earlier.
I also mentioned higher ancillary revenue in the second quarter, which represents in part the recovery of higher delivery costs. Delivery has been an area where we've seen the most inflation pressure, including higher costs for fuel and third-party hauling. While recovering a portion of that increase in ancillary protected gross profit dollars, it impacted flow-through and margin this quarter as a pass-through, and we expect to see that play out over the next couple of quarters as well. Adjusting for these few items, the implied flow-through for the second quarter was about 46% with implied margins flat versus last year. With our expenses normalizing, that reflects the cost performance across the core that came in as expected.
I'll shift to adjusted EPS, which was $4.66 for the second quarter, including a $0.13 drag from one-time costs. That's up $0.98 versus last year, primarily on higher net income.
Looking at capex and free cash flow. For the quarter, gross rental capex was a robust $913 million. Our proceeds from used equipment sales were $194 million, resulting in net capex in the second quarter of $719 million, that's up $750 million versus the second quarter last year. Even as we've invested in significantly higher capex spending so far this year, our free cash flow remains very strong at just under $1.2 billion generated through June 30th.
Now turning to ROIC, which was a healthy 9.2% on a trailing 12-month basis. Notably, our ROIC continues to run comfortably above our weighted average cost of capital. Our balance sheet remains rock solid. Year-over-year, net debt is down 4% or about $454 million. That's after funding over $1.4 billion of acquisition activity this year with the ABL. Leverage with 2.5 times at the end of the second quarter. That's flat to where we were at the end of the second quarter of 2020, and an increase of 20 basis points from the end of the first quarter this year, mainly due to the acquisition of General Finance in May. I'll look at our liquidity, which is very strong. We finished the quarter with over $2.8 billion in total liquidity. That's made up of ABL capacity of just under $2.4 billion and availability on our AR facility of $106 million. We also had $336 million in cash.
Looking forward, I'll share some color on our revised 2021 guidance. We've raised our full year guidance ranges at the midpoint by $350 million in total revenue and $100 million in adjusted EBITDA, as we now expect stronger double-digit growth for the core business in the back half of the year. Our current guidance also includes the impact of acquisition activity since our last update, predominantly to include General Finance. That increase for acquisitions reflects $250 million in total revenue and $60 million in adjusted EBITDA, which includes $15 million of expected full year one-time costs. Additional capex investment will help support higher demand. To that end, we raised our growth capex guidance by $300 million, a good portion of which reflects fleet we are purchasing from Acme Lift. While the fleet will provide some contribution in 2021 and is assumed in our guidance, we expect to see the full benefit next year. Finally, our update to free cash flow reflects the additional capex we'll buy as well as the puts and takes from the changes I mentioned. It remains a robust $1.7 billion at the midpoint and we'll continue to earmark our free cash flow this year towards debt reduction to enhance the firepower we have to grow our business.
Now let's get to your questions. Jonathan, would you please open the line.