AMERCO Reports Second Quarter Fiscal 2013 Financial Results; Board Declares Special Cash Dividend Of $5.00 Per Share

RENO, Nev., Nov. 7, 2012 /PRNewswire/ -- AMERCO (Nasdaq: UHAL), parent of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company, today reported its financial results for the second quarter ended September 30, 2012 and its Board of Directors declared a special cash dividend of $5.00 per share, payable on November 30, 2012 to stockholders of record as of November 19, 2012.

AMERCO's net earnings available to common shareholders for its second quarter ended September 30, 2012, were $109.4 million, or $5.61 per share, compared with net earnings of $101.2 million, or $5.20 per share, for the same period last year.

For the six-month period ended September 30, 2012, net earnings available to common shareholders were $190 million, or $9.74 per share compared with net earnings of $170.4 million, or $8.75 per share, for the same period last year. The first six months of the last fiscal year included a $0.30 per share one-time charge related to the redemption of our Series A 8½% Preferred Stock.

"Our Moving and Self-Storage segment continues to produce strong results," stated Joe Shoen, chairman of AMERCO.  "We will continue to work hard to build on this success as we enter our traditionally slower fall and winter quarters.

"Hurricane Sandy affected operations at about 100 Company operated locations, all but one are now open. We have storm-damaged buildings, rental equipment and customer's belongings. It will be weeks before we can assess the storm's financial impact," concluded Shoen.

Highlights of Second Quarter Fiscal 2013 Results

  • Self-moving equipment rental revenues increased $26.7 million during the second quarter of fiscal 2013, compared with the second quarter of fiscal 2012 on continued growth in moving transactions.
  • Self-storage revenues increased $4.0 million during the second quarter of fiscal 2013, compared with the second quarter of fiscal 2012.  We are increasing both the number of rooms rented through acquisitions and by improving occupancy at existing locations.  Over the last twelve months we have added approximately 1.6 million net rentable square feet with nearly 0.6 million of that during the second quarter of fiscal 2013. 
  • Operating expenses for the Moving and Self-Storage operating segment increased $14.3 million with a significant portion of this coming from spending on personnel, legal expense and liability costs. Depreciation expense, net, increased $10.9 million while lease expense decreased $3.1 million as a result of the Company's shift in financing new equipment on the balance sheet versus through operating leases.
  • During the first quarter of fiscal 2013, SAC Holdings repaid AMERCO $127.3 million for notes and interest outstanding. These notes carried interest rates of 9%. This loss of yield caused a $2.9 million decline in interest income for the second quarter of fiscal 2013.

AMERCO will hold its investor call for the second quarter of fiscal 2013 on Thursday, November 8, 2012, at 8 a.m. Arizona Time (10 a.m. Eastern). The call will be broadcast live over the Internet at www.amerco.com. To hear a simulcast of the call, or a replay, visit www.amerco.com.

Use of Non-GAAP Financial Information
The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, the Company uses certain non-GAAP performance measures, including adjusted earnings per share, to provide a better understanding of the Company's underlying operational results. The Company uses adjusted earnings per share to present the impact of certain transactions or events that management expects to occur only infrequently.

About AMERCO
AMERCO is the parent company of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company. U-Haul is in the shared use business and was founded on the fundamental philosophy that the division of use and specialization of ownership is good for both U-Haul customers and the environment.

Certain of the statements made in this press release regarding our business constitute forward-looking statements as contemplated under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of various risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. For a brief discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to our Form 10-Q for the quarter ended September 30, 2012, which is on file with the SEC.

Report on Business Operations

Listed below on a consolidated basis are revenues for our major product lines for the second quarter of fiscal 2013 and 2012.



Quarter Ended

September 30,



2012


2011


(Unaudited)

(In thousands)


Revenue:





  Self-moving equipment rentals

$

538,361

$

511,626

  Self-storage revenues


37,978


34,008

  Self-moving and self-storage products and service sales                                            


61,730


59,768

  Property management fees


4,902


4,826

  Life insurance premiums


47,667


46,197

  Property and casualty insurance premiums


8,947


8,749

  Net investment and interest income


13,053


15,901

  Other revenue


28,679


22,106

    Consolidated revenue

$

741,317

$

703,181

 

Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2013 and 2012.



Quarter Ended September 30,



2012


2011



(Unaudited)



(In thousands)

Moving and self-storage





 Revenues

$

675,569

$

639,618

 Earnings from operations before equity in earnings of subsidiaries


187,827


176,636

Property and casualty insurance





 Revenues


11,213


11,673

 Earnings from operations


2,342


2,197

Life insurance





 Revenues


55,424


53,192

 Earnings from operations


4,222


5,796

Eliminations





 Revenues


(889)


(1,302)

 Earnings from operations before equity in earnings of subsidiaries


(69)


(196)

Consolidated results





 Revenues


741,317


703,181

 Earnings from operations


194,322


184,433

 

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. U-Haul also provides property management services for storage locations and earns a fee for these services. These storage centers are not owned by the Company and therefore are not reported on the balance sheet and the rental revenues are not reported in the statements of operations. Self-storage data for both our owned and managed locations follows:


Quarter Ended

September 30,


2012


2011


(Unaudited)


(In thousands, except occupancy rate)

Room count as of September 30

435


417

Square footage as of September 30

38,818


37,064

Average number of rooms occupied

359


337

Average occupancy rate based on room count

83.3%


81.0%

Average square footage occupied

32,603


30,508






 

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2013 and 2012.



Six Months Ended September 30,



2012


2011



(Unaudited)


      (In thousands)

Revenue:





 Self-moving equipment rentals

$

1,005,355

$

958,174

 Self-storage revenues


72,714


65,836

 Self-moving and self-storage products and services                                           


128,908


124,146

 Property management fees


9,762


9,561

 Life insurance premiums


94,093


97,196

 Property and casualty insurance premiums


16,190


15,647

 Net investment and interest income


25,310


33,164

 Other revenue


54,401


42,422

  Consolidated revenue

$

1,406,733

$

1,346,146








 

Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2013 and 2012.



Six Months Ended September 30,



2012


2011



(Unaudited)



(In thousands)

Moving and self-storage





 Revenues

$

1,278,418

$

1,214,617

 Earnings from operations before equity in earnings of subsidiaries


334,786


321,306

Property and casualty insurance





 Revenues


20,656


20,805

 Earnings from operations


4,929


4,096

Life insurance





 Revenues


109,306


113,191

 Earnings from operations


5,626


7,831

Eliminations





 Revenues


(1,647)


(2,467)

 Earnings from operations before equity in earnings of subsidiaries


(140)


(437)

Consolidated results





 Revenues


1,406,733


1,346,146

 Earnings from operations


345,201


332,796

 

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. U-Haul also provides property management services for storage locations and earns a fee for these services. These storage centers are not owned by the Company and therefore are not reported on the balance sheet and the rental revenues are not reported in the statements of operations. Self-storage data for both our owned and managed locations follows:


Six Months Ended September 30,


2012


2011


(Unaudited)


(In thousands, except occupancy rate)

Room count as of September 30

435


417

Square footage as of September 30

38,818


37,064

Average number of rooms occupied

350


330

Average occupancy rate based on room count

81.6%


79.7%

Average square footage occupied

31,745


29,911

 

 

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 



September 30, 2012


March 31, 2012



(Unaudited)

ASSETS


(In thousands)

  Cash and cash equivalents

$

645,821

$

357,180

  Reinsurance recoverables and trade receivables, net


264,563


297,974

  Inventories, net


58,659


58,735

  Prepaid expenses


41,444


41,858

  Investments, fixed maturities and marketable equities


904,446


766,792

  Investments, other


293,585


258,551

  Deferred policy acquisition costs, net


79,868


63,914

  Other assets


103,498


120,525

  Related party assets


173,505


316,157



2,565,389


2,281,686

  Property, plant and equipment, at cost:





    Land


309,654


281,140

    Buildings and improvements


1,130,852


1,087,119

    Furniture and equipment


310,516


308,120

    Rental trailers and other rental equipment


293,735


255,010

    Rental trucks


2,008,602


1,856,433



4,053,359


3,787,822

  Less: Accumulated depreciation


(1,481,784)


(1,415,457)

    Total property, plant and equipment


2,571,575


2,372,365

  Total assets

$

5,136,964

$

4,654,051






LIABILITIES AND STOCKHOLDERS' EQUITY










Liabilities:





  Accounts payable and accrued expenses

$

372,756

$

335,326

  Notes, loans and leases payable


1,556,891


1,486,211

  Policy benefits and losses, claims and loss expenses payable


1,128,929


1,145,943

  Liabilities from investment contracts


395,620


240,961

  Other policyholders' funds and liabilities


11,403


7,273

  Deferred income


30,886


31,525

  Deferred income taxes


404,558


370,992

Total liabilities


3,901,043


3,618,231






Stockholders' equity:





  Common stock


10,497


10,497

  Additional paid-in capital


435,376


433,743

  Accumulated other comprehensive loss


(35,552)


(45,436)

  Retained earnings


1,505,332


1,317,064

  Cost of common shares in treasury, net


(525,653)


(525,653)

  Cost of preferred shares in treasury, net


(151,997)


(151,997)

  Unearned employee stock ownership plan shares


(2,082)


(2,398)

Total stockholders' equity


1,235,921


1,035,820

Total liabilities and stockholders' equity

$

5,136,964

$

4,654,051

 

 

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 



Quarter Ended

September 30,



2012


2011



(Unaudited)



(In thousands, except share and per share amounts)

Revenues:





 Self-moving equipment rentals

$

538,361

$

511,626

 Self-storage revenues


37,978


34,008

 Self-moving and self-storage products and service sales


61,730


59,768

 Property management fees


4,902


4,826

 Life insurance premiums


47,667


46,197

 Property and casualty insurance premiums


8,947


8,749

 Net investment and interest income


13,053


15,901

 Other revenue


28,679


22,106

   Total revenues


741,317


703,181






Costs and expenses:





 Operating expenses


310,214


294,340

 Commission expenses


68,564


64,049

 Cost of sales


30,912


32,446

 Benefits and losses


45,672


44,462

 Amortization of deferred policy acquisition costs


3,088


2,675

 Lease expense


29,591


32,712

 Depreciation, net of (gains) on disposals of (($5,532) and  ($7,917),respectively)

58,954


48,064

    Total costs and expenses


546,995


518,748






Earnings from operations


194,322


184,433

  Interest expense


(22,113)


(22,963)

Pretax earnings


172,209


161,470

  Income tax expense


(62,789)


(60,459)

Net earnings


109,420


101,011

   Less: Preferred stock dividends


-


164

Earnings available to common shareholders

$

109,420

$

101,175

Basic and diluted earnings per common share

$

5.61

$

5.20

Weighted average common shares outstanding: Basic and diluted


19,512,550


19,470,948







 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 



Six Months Ended September 30,



2012


2011



(Unaudited)



(In thousands, except share and per share amounts)

Revenues:





 Self-moving equipment rentals

$

1,005,355

$

958,174

 Self-storage revenues


72,714


65,836

 Self-moving and self-storage products and service sales


128,908


124,146

 Property management fees


9,762


9,561

 Life insurance premiums


94,093


97,196

 Property and casualty insurance premiums


16,190


15,647

 Net investment and interest income


25,310


33,164

 Other revenue


54,401


42,422

   Total revenues


1,406,733


1,346,146






Costs and expenses:





 Operating expenses


593,607


566,315

 Commission expenses


129,671


121,001

 Cost of sales


63,139


65,224

 Benefits and losses


91,750


94,392

 Amortization of deferred policy acquisition costs


5,899


7,050

 Lease expense


62,387


66,946

 Depreciation, net of (gains) on disposals of (($13,048) and ($17,627), respectively)


115,079


92,422

    Total costs and expenses


1,061,532


1,013,350






Earnings from operations


345,201


332,796

  Interest expense


(45,604)


(45,596)

Pretax earnings


299,597


287,200

  Income tax expense


(109,608)


(107,966)

Net earnings


189,989


179,234

   Less: Excess of redemption value over carrying value of preferred shares redeemed


-


(5,908)

   Less: Preferred stock dividends


-


(2,913)

Earnings available to common shareholders

$

189,989

$

170,413

Basic and diluted earnings per common share

$

9.74

$

8.75

 Weighted average common shares outstanding: Basic and diluted


19,507,456


19,465,530










 

Non-GAAP Financial Measure
Impact of Redemption of Preferred Stock and Dividend Payment for Preferred Stock on Earnings Per Share for the Six Months Ended September 30, 2011:



    Excess of redemption value over carrying value of preferred shares redeemed (In thousands)

$5,908



    Weighted average common shares outstanding: Basic and diluted

19,465,530



    Earnings per share impact

$0.30





    Preferred stock dividends (In thousands)

$2,913



    Weighted average common shares outstanding: Basic and diluted

19,465,530



    Earnings per share impact

$0.15

 

SOURCE AMERCO



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