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

Nov 07, 2012, 17:35 ET from AMERCO

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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