AMERCO Reports Third Quarter Fiscal 2013 Financial Results

06 Feb, 2013, 16:20 ET from AMERCO

RENO, Nev., Feb. 6, 2013 /PRNewswire/ -- AMERCO (Nasdaq: UHAL), parent of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company, today reported net earnings available to common shareholders for its third quarter ended December 31, 2012, of $36.8 million, or $1.89 per share, compared with $0.7 million, or $0.04 per share, for the same period last year.  Included in the results for December 31, 2011, was an after-tax charge of $1.61 per share associated with Repwest's excess workers' compensation reserve strengthening.  Taking into account this after-tax charge, adjusted earnings were $1.65 per share for the three months ended December 31, 2011.

For the nine-month period ended December 31, 2012, net earnings available to common shareholders were $226.8 million, or $11.62 per share, compared with net earnings of $171.1 million, or $8.79 per share for the same period last year.  Included in the results for December 31, 2011, was the after-tax charge of $1.61 per share associated with Repwest's excess workers' compensation reserve strengthening. Taking into account this after-tax charge, adjusted earnings were $10.40 per share for the nine months ended December 31, 2011. The first nine months of the last fiscal year also included a $0.30 per share one time charge related to the redemption of our Series A 8½% Preferred Stock.

"We continue to perform well with each of our segments reporting improvements for the quarter," stated Joe Shoen, chairman of AMERCO. "Mild winter weather in most of the country has contributed to strong performance in our U-Move segment," concluded Shoen.

Highlights of Third-Quarter Fiscal 2013 Results

  • Self-moving equipment rental revenues increased $19.2 million during the third quarter of fiscal 2013 compared with the third quarter of fiscal 2012 led by continued transaction growth.  While Hurricane Sandy affected portions of our operations in the Northeast United States, we believe the overall effect on revenues was immaterial.
  • Self-storage revenues increased $5.3 million during the third quarter of fiscal 2013, compared with the third quarter of fiscal 2012.  The increase was due to our expansion efforts combined with occupancy improvement at existing locations.  Average monthly occupancy during the third quarter of fiscal 2013 increased by 1.8 million square feet compared to the same period last year.  Over the last twelve months we have added approximately 2.1 million net rentable square feet with nearly 0.8 million of that during the third quarter of fiscal 2013.
  • Operating earnings at the Life Insurance segment increased $0.6 million during the third quarter of fiscal 2013, compared with the third quarter of fiscal 2012.  During the third quarter of fiscal 2012 we acquired a block of life insurance policies resulting in an $83.4 million one-time increase in premiums and a similar increase in benefits expense; the third quarter of fiscal 2013 did not include a similar acquisition.  New annuity deposits from customers increased $81.1 million compared to the same quarter last year as the focus of new sales has shifted from life products to fixed rate deferred annuities.
  • Operating earnings at the Property and Casualty Insurance segment increased $45.5 million for the third quarter of fiscal 2013, compared with the third quarter of fiscal 2012.  The third quarter of fiscal 2012 included $48.0 million of charges related to excess workers' compensation reserves and reinsurance contracts; these charges did not recur in fiscal 2013.
  • In the third quarter of fiscal 2013, the Company paid a special cash dividend of $5.00 per share on its common stock resulting in a $97.4 million cash outflow.  At December 31, 2012 cash and credit availability at the Moving and Storage operating segment was $841.6 million, compared with $628.2 million at March 31, 2012.

AMERCO will hold its investor call for the third quarter of fiscal 2013 on Thursday, February 7, 2013, 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 December 31, 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 third quarter of fiscal 2013 and 2012.

Quarter Ended

December 31,

2012

2011

(Unaudited)

(In thousands)

  Self-moving equipment rentals

$

394,945

$

375,744

  Self-storage revenues

39,111

33,846

  Self-moving and self-storage products and services sales                                           

44,491

43,206

  Property management fees

6,085

5,368

  Life insurance premiums

43,248

132,643

  Property and casualty insurance premiums

9,816

9,429

  Net investment and interest income

18,927

15,234

  Other revenue

22,188

17,619

    Consolidated revenue

$

578,811

$

633,089

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

Quarter Ended

December 31,

2012

2011

(Unaudited)

(In thousands)

Moving and storage

   Revenues

$

514,806

$

483,066

   Earnings from operations before equity in earnings of subsidiaries

72,781

61,766

Property and casualty insurance

   Revenues

11,865

11,666

   Earnings (loss) from operations

2,062

(43,444)

Life insurance

   Revenues

53,090

139,643

   Earnings from operations

7,181

6,599

Eliminations

  Revenues

(950)

(1,286)

 Earnings from operations before equity in earnings of subsidiaries

(78)

(48)

Consolidated results

  Revenues

578,811

633,089

  Earnings from operations

81,946

24,873

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

December 31,

2012

2011

(Unaudited)

(In thousands, except occupancy rate)

Room count as of December 31

441

420

Square footage as of December 31

39,575

37,464

Average number of rooms occupied

354

329

Average occupancy rate based on room count

80.6%

78.5%

Average square footage occupied

32,356

29,879

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

Nine Months Ended

December 31,

2012

2011

(Unaudited)

(In thousands)

  Self-moving equipment rentals

$

1,400,300

$

1,333,918

  Self-storage revenues

111,825

99,682

  Self-moving and self-storage products and service sales

173,399

167,352

  Property management fees

15,847

14,929

  Life insurance premiums

137,341

229,839

  Property and casualty insurance premiums

26,006

25,076

  Net investment and interest income

44,237

48,398

  Other revenue

76,589

60,041

    Consolidated revenue

$

1,985,544

$

1,979,235

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

Nine Months Ended

December 31,

2012

2011

(Unaudited)

(In thousands)

Moving and storage

   Revenues

$

1,793,224

$

1,697,683

   Earnings from operations before equity in earnings of subsidiaries

407,567

383,072

Property and casualty insurance

   Revenues

32,521

32,471

   Earnings (loss) from operations

6,991

(39,348)

Life insurance

   Revenues

162,396

252,834

   Earnings from operations

12,807

14,430

Eliminations

  Revenues

(2,597)

(3,753)

 Earnings from operations before equity in earnings of subsidiaries

(218)

(485)

Consolidated results

  Revenues

1,985,544

1,979,235

  Earnings from operations

427,147

357,669

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:

Nine Months Ended

December 31,

2012

2011

(Unaudited)

(In thousands, except occupancy rate)

Room count as of December 31

441

420

Square footage as of December 31

39,575

37,464

Average number of rooms occupied

351

330

Average occupancy rate based on room count

81.3%

79.3%

Average square footage occupied

31,949

29,990

 

 

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

March 31,

2012

2012

(Unaudited)

(In thousands, except share data)

ASSETS

Cash and cash equivalents

$

586,124

$

357,180

Reinsurance recoverables and trade receivables, net

226,340

297,974

Inventories, net

55,989

58,735

Prepaid expenses

55,148

41,858

Investments, fixed maturities and marketable equities

1,019,968

766,792

Investments, other

270,191

258,551

Deferred policy acquisition costs, net

93,533

63,914

Other assets

101,889

120,525

Related party assets

175,175

316,157

2,584,357

2,281,686

Property, plant and equipment, at cost:

Land

338,598

281,140

Buildings and improvements

1,155,754

1,087,119

Furniture and equipment

316,772

308,120

Rental trailers and other rental equipment

303,379

255,010

Rental trucks

2,044,639

1,856,433

4,159,142

3,787,822

Less: Accumulated depreciation

(1,524,194)

(1,415,457)

Total property, plant and equipment

2,634,948

2,372,365

Total assets

$

5,219,305

$

4,654,051

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Accounts payable and accrued expenses

$

326,182

$

335,326

Notes, loans and leases payable

1,667,008

1,486,211

Policy benefits and losses, claims and loss expenses payable

1,115,823

1,145,943

Liabilities from investment contracts

486,502

240,961

Other policyholders' funds and liabilities

6,348

7,273

Deferred income

27,840

31,525

Deferred income taxes

399,103

370,992

Total liabilities

4,028,806

3,618,231

Stockholders' equity:

Common stock

10,497

10,497

Additional paid-in capital

436,926

433,743

Accumulated other comprehensive loss

(22,192)

(45,436)

Retained earnings

1,444,757

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

(1,839)

(2,398)

Total stockholders' equity

1,190,499

1,035,820

Total liabilities and stockholders' equity

$

5,219,305

$

4,654,051

 

 

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended

December 31,

2012

2011

(Unaudited)

(In thousands, except share and per share amounts)

Revenues:

Self-moving equipment rentals

$

394,945

$

375,744

Self-storage revenues

39,111

33,846

Self-moving and self-storage products and service sales

44,491

43,206

Property management fees

6,085

5,368

Life insurance premiums

43,248

132,643

Property and casualty insurance premiums

9,816

9,429

Net investment and interest income

18,927

15,234

Other revenue

22,188

17,619

Total revenues

578,811

633,089

Costs and expenses:

Operating expenses

290,285

269,834

Commission expenses

51,130

47,864

Cost of sales

23,153

24,505

Benefits and losses

38,932

173,748

Amortization of deferred policy acquisition costs

3,391

3,666

Lease expense

27,575

32,325

Depreciation, net of (gains) on disposals of (($1,831) and ($699), respectively)

62,399

56,274

Total costs and expenses

496,865

608,216

Earnings from operations

81,946

24,873

Interest expense

(22,076)

(22,744)

Pretax earnings

59,870

2,129

Income tax expense

(23,024)

(1,401)

Earnings available to common shareholders

$

36,846

$

728

Basic and diluted earnings per common share

$

1.89

$

0.04

Weighted average common shares outstanding: Basic and diluted

19,523,794

19,481,614

 

 

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Nine Months Ended

December 31,

2012

2011

(Unaudited) 

(In thousands, except share and per share data)  

Revenues:  

Self-moving equipment rentals

$

1,400,300

$

1,333,918

Self-storage revenues

111,825

99,682

Self-moving and self-storage products and service sales

173,399

167,352

Property management fees

15,847

14,929

Life insurance premiums

137,341

229,839

Property and casualty insurance premiums

26,006

25,076

Net investment and interest income

44,237

48,398

Other revenue

76,589

60,041

Total revenues

1,985,544

1,979,235

Costs and expenses:

Operating expenses

883,892

836,149

Commission expenses

180,801

168,865

Cost of sales

86,292

89,729

Benefits and losses

130,682

268,140

Amortization of deferred policy acquisition costs

9,290

10,716

Lease expense

89,962

99,271

Depreciation, net of (gains) on disposals of (($14,879) and ($18,326), respectively)

177,478

148,696

Total costs and expenses

1,558,397

1,621,566

Earnings from operations

427,147

357,669

Interest expense

(67,680)

(68,340)

Pretax earnings

359,467

289,329

Income tax expense

(132,632)

(109,367)

Net earnings

226,835

179,962

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

$

226,835

$

171,141

Basic and diluted earnings per common share

$

11.62

$

8.79

Weighted average common shares outstanding: Basic and diluted

19,512,974

19,470,886

 

 

 

NON-GAAP FINANCIAL RECONCILIATION SCHEDULE

Quarter Ended

December 31, 2011

(In thousands, except share and per share amounts)

AMERCO and Consolidated Entities

Earnings per common share basic and diluted

$

0.04

Charge for strengthening reserves

1.61

Earnings per common share basic and diluted before charge for strengthening reserves

$

1.65

Charge for strengthening reserves

$

(48,250)

Income tax benefit

16,888

Charge for strengthening reserves, net of taxes

$

(31,362)

Charge for strengthening reserves, net of taxes, per common share basic and diluted

$

(1.61)

Weighted average shares outstanding: basic and diluted

19,481,614

Nine Months Ended

December 31, 2011

(In thousands, except share and per share amounts)

AMERCO and Consolidated Entities

Earnings per common share basic and diluted

$

8.79

Charge for strengthening reserves

1.61

Earnings per common share basic and diluted before charge for strengthening reserves

$

10.40

Charge for strengthening reserves

$

(48,250)

Income tax benefit

16,888

Charge for strengthening reserves, net of taxes

$

(31,362)

Charge for strengthening reserves, net of taxes, per common share basic and diluted

$

(1.61)

Weighted average shares outstanding: basic and diluted

19,470,886

       Impact of Redemption of Preferred Stock and Dividend Payment for Preferred Stock on Earnings Per Share for the Nine Months Ended December 31, 2011:

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

$5,908

    Weighted average common shares outstanding: Basic and diluted

19,470,886

    Earnings per share impact

$0.30

    Preferred stock dividends (In thousands)

$2,913

    Weighted average common shares outstanding: Basic and diluted

19,470,886

    Earnings per share impact

$0.15

 

 

SOURCE AMERCO



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