AMERCO Reports Fiscal 2020 Financial Results

RENO, Nev., May 27, 2020 /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 shareholders for the year ended March 31, 2020, were $442.0 million, or $22.55 per share, compared with $370.9 million, or $18.93 per share for the same period last year. Included in the results for the year ended March 31, 2020, was a $7.45 per share, or $146.0 million tax benefit resulting from the CARES Act. Excluding this item, adjusted earnings were $15.10 per share for the year ended March 31, 2020. This adjustment to our net earnings and earnings per share provides a reconciliation for comparison of our financial performance for the periods presented.

For the quarter ended March 31, 2020, the Company reported net earnings available to shareholders of $122.4 million, or $6.24 per share compared with net earnings of $0.8 million, or $0.04 per share for the same period last year. Included in the results for the quarter ended March 31, 2020, was a $7.45 per share, or $146.0 million tax benefit resulting from the CARES Act, excluding this, adjusted losses were ($1.21) per share for the quarter ended March 31, 2020.

"As a critical essential business, U-Haul has continued to serve customers throughout the COVID-19 pandemic," stated Joe Shoen, chairman of AMERCO. "We had a good year filling storage units and are poised to improve our equipment rental business once we clear the COVID-19 hurdle. I am proud of how our team has responded during this time."

Highlights of Fiscal Year and Fourth Quarter 2020 Results

• Self-moving equipment rental revenues decreased $11.0 million or 2.1% in the fourth quarter of fiscal 2020 compared with the fourth quarter of fiscal 2019 and finished the full year up $38.9 million or 1.5% compared with fiscal 2019. For the year, revenue for both our In-town and one-way markets improved for trucks and trailers. In the fourth quarter, these improvements were more than offset by a reduction in the volume of Corporate Account rentals along with the decline in overall rental activity in the second half of March 2020 due to the COVID-19 related stay-at-home orders. We increased the number of retail locations, trucks and trailers in the rental fleet compared to the same period last year.

• Self-storage revenues increased $12.6 million or 13.1% in the fourth quarter of fiscal 2020 compared with the fourth quarter of fiscal 2019 and for the full year increased $51.5 million or 14% compared with fiscal 2019. The average monthly number of occupied units increased by 16.5%, or 47,000 units during the fourth quarter of fiscal 2020 compared with the same period last year. The growth in revenues and units rented comes from a combination of occupancy gains at existing locations and from the additions of new facilities to the portfolio. In fiscal 2020, we added approximately 5.8 million net rentable square feet, or a 16% increase, with approximately 1.2 million of that occurring during the fourth quarter of fiscal 2020.

• For the quarter, depreciation, net of gains and losses on sales increased $23.3 million. Depreciation on the rental equipment fleet increased $13.0 million primarily due to a larger fleet while losses on the sales of rental trucks increased $3.3 million. All other depreciation increased $7.0 million from the increase in new moving and storage locations. For the full fiscal year, depreciation, net of gains and losses on sales, increased $83.0 million. Depreciation on the rental equipment fleet increased $55.1 million primarily due to a larger fleet. All other depreciation increased $28.0 million largely from the increase in new moving and storage locations.

• Fleet maintenance and repair costs increased $4.5 million in the fourth quarter of fiscal 2020 compared with the same period last year and $19.5 million for the full year of fiscal 2020 due to an increase in the number of rental trucks and trailers.

• Operating earnings at our Moving and Storage operating segment decreased $33.7 million in the fourth quarter of fiscal 2020 compared with the same period last year. Total revenues increased $9.4 million and total costs and expenses increased $43.1 million.

• Our Life Insurance subsidiary's premiums increased $75.8 million in the fourth quarter fiscal 2020 compared with fiscal 2019 primarily due to a terminated reinsurance agreement in the fourth quarter of fiscal 2019, which reduced their Life Insurance premiums $78.4 million and their Benefits and Losses expense by $76.4 million.

• Gross truck and trailer capital expenditures for fiscal 2020 were approximately $1,374 million compared with approximately $1,163 million for fiscal 2019. Capital expenditures for the rental fleet are expected to decline in fiscal 2021. Proceeds from the sales of rental equipment were approximately $678 million for fiscal 2020 compared with $603 million in fiscal 2019. Spending on real estate related acquisitions and projects decreased approximately $252 million to $751 million in fiscal 2020 compared with fiscal 2019. In April and May of 2020, we have opted to slow the development of new self-storage projects to preserve liquidity. We will calibrate our capital spending based in part upon the evolving effects of COVID-19.

• Towards the end of March and into April and May, COVID-19 has negatively affected operating cash flows through lower self-moving equipment rental revenues along with a near total reduction in equipment sales proceeds stemming from the closures of commercial auto auctions. However, cash and credit availability at the Moving and Storage operating segment was $498.1 million at March 31, 2020 and in excess of $400 million as of April 30, 2020. In May 2020, we have entered into a $200 million term loan to further strengthen our liquidity position.

• We continue to examine the impact the CARES Act may have on our business, financial condition, results of operations or liquidity in fiscal 2021. To date we have availed ourselves of the provisions related to deferring certain payroll taxes, carrybacks of net operating losses, and will utilize the technical corrections to tax depreciation methods. We estimate that the net operating loss carrybacks combined with the depreciation adjustments for our fiscal 2020 federal income tax return will result in a refund of approximately $381 million.

AMERCO will hold its investor call for fiscal 2020 on Thursday, May 28, 2020, at 8 a.m. Arizona Time (11 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.  

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-K for the year ended March 31, 2020, 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 fourth quarter and the full year of fiscal 2020 and 2019.

Listed below are revenues and earnings from operations at each of our operating segments for the fourth quarter and the full year of fiscal 2020 and 2019.

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. Self-storage data for our owned storage locations follows:

NON-GAAP FINANCIAL RECONCILIATION SCHEDULE

As of April 1, 2019, we adopted the new accounting standard for leases. Part of this adoption resulted in approximately $1 billion of property, plant and equipment, net ("PPE") being reclassed to Right-of-Use Assets - Financing, net ("ROU-Financing"). As of March 31, 2020, the balance of ROU-Financing also included the rental equipment purchased under new financing liability leases during fiscal 2020. The table below shows adjusted property, plant and equipment, net as of March 31, 2020, by including the ROU-Financing to help compare our PPE assets with our March 2019 fiscal year end. The assets included in ROU-Financing are not a true book value as some of the assets are recorded at between 70% and 100% of value based on the lease agreement.

This adjustment to earnings per share for the quarter and year ended fiscal 2020, provides a reconciliation for comparison of our financial performance for the periods presented.

SOURCE AMERCO