RENO, Nev., Feb. 5, 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 its third quarter ended December 31, 2019, of $30.9 million, or $1.58 per share, compared with net earnings of $78.6 million, or $4.01 per share, for the same period last year.

For the nine-month period ended December 31, 2019, net earnings available to shareholders were $319.7 million, or $16.31 per share, compared with net earnings of $370.0 million, or $18.89 per share, for the same period last year.

"We maintained our expected rate of renting new storage rooms while continuing our strategy of releasing new self-storage product in markets underserved by U-Haul," stated Joe Shoen, chairman of AMERCO. "As I cautioned in November, I expected our business with last mile delivery companies might be flat or down. We saw a decline in this segment of the business during the quarter. Business with our core residential moving customers improved, but as I indicated last quarter, there is room for more progress."

Highlights of Third Quarter Fiscal 2020 Results

  • Self-moving equipment rental revenues decreased $4.7 million or 1% during the third quarter of fiscal 2020, compared with the third quarter of fiscal 2019. The decline was a result of a reduction in our Corporate Account business. The third quarter of fiscal 2019 experienced a higher than usual volume of Corporate Account rentals. Outside of that portion of the business, we had revenue increases for both our In-town and one-way markets. We increased the number of retail locations, trucks, trailers and towing devices in the rental fleet compared with the same period last year.
  • Self-storage revenues increased $13.3 million during the third quarter of fiscal 2020, compared with the third quarter of fiscal 2019. The average monthly amount of occupied square feet increased by 16%, or 45,000 units, during the third quarter of fiscal 2020 compared with the same period last year. The growth in revenues comes from a combination of occupancy gains at existing locations and from the addition of new facilities to the portfolio. Over the last twelve months, we have added approximately 6.1 million net rentable square feet or an 18% increase to our owned self-storage portfolio with approximately 1.2 million of that coming on during the third quarter.
  • For the third quarter of fiscal 2020 compared with the third quarter of fiscal 2019, depreciation, net of gains and losses on sales increased $26.6 million. Depreciation expense on the rental equipment fleet increased $16.6 million primarily due to a larger fleet, while net losses on the disposals of rental equipment increased $2.9 million. All other depreciation increased $7.0 million due primarily to the increase in new moving and storage locations.
  • For the first nine months of fiscal 2020 and fiscal 2019 gross truck and trailer capital expenditures totaled approximately $1,161 million compared with $882 million, proceeds from the sales of rental equipment totaled $591 million compared with $559 million and spending on real estate related acquisitions and projects totaled approximately $600 million compared with $639 million, respectively.
  • Fleet maintenance and repair costs increased $13.6 million in the third quarter of fiscal 2020 compared with the same period last year.
  • Operating earnings at our Moving and Storage operating segment decreased $58.2 million in the third quarter of fiscal 2020 compared with the same period last year. Total revenues increased $7.4 million and total costs and expenses increased $65.6 million.
  • Cash and credit availability at the Moving and Storage operating segment was $659.2 million at December 31, 2019 compared with $724.5 million at March 31, 2019.
  • On December 4, 2019, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on December 19, 2019. The dividend was paid on January 6, 2020.

AMERCO will hold its investor call for the third quarter of fiscal 2020 on Thursday, February 6, 2020, 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.

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, 2019, 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 2020 and 2019.



Quarter Ended December 31,



2019


2018



(Unaudited)



(In thousands)

Self-moving equipment rentals

$

621,471

$

626,136

Self-storage revenues


106,701


93,392

Self-moving and self-storage product and service sales


54,454


55,665

Property management fees


9,098


7,899

Life insurance premiums


31,164


34,778

Property and casualty insurance premiums


19,267


17,668

Net investment and interest income


33,782


32,211

Other revenue


51,943


51,342

Consolidated revenue

$

927,880

$

919,091

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



Quarter Ended December 31,



2019


2018



(Unaudited)



(In thousands)

Moving and storage





Revenues

$

846,364

$

838,928

Earnings from operations before equity in earnings of subsidiaries


61,769


119,959

Property and casualty insurance 





Revenues


25,366


22,146

Earnings from operations


9,884


11,001

Life insurance  





Revenues


58,889


60,435

Earnings from operations


9,190


7,429

Eliminations





Revenues


(2,739)


(2,418)

Earnings from operations before equity in earnings of subsidiaries


(278)


(287)

Consolidated Results





Revenues


927,880


919,091

Earnings from operations


80,565


138,102

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 locations follows:



Quarter Ended December 31,



2019


2018



(Unaudited)



(In thousands, except occupancy rate)

Unit count as of December 31


487


411

Square footage as of December 31


40,835


34,693

Average monthly number of units occupied


323


277

Average monthly occupancy rate based on unit count


66.9%


68.0%

Average monthly square footage occupied


29,318


25,126

Listed below on a consolidated basis are revenues for our major product lines for the first nine months of fiscal 2020 and 2019.



Nine Months Ended December 31,



2019


2018



(Unaudited)



(In thousands)

Self-moving equipment rentals

$

2,174,392

$

2,124,451

Self-storage revenues


309,940


271,097

Self-moving and self-storage product and service sales


207,601


207,819

Property management fees


23,487


22,507

Life insurance premiums


96,229


107,586

Property and casualty insurance premiums


51,056


46,732

Net investment and interest income


102,629


85,043

Other revenue


192,009


177,940

Consolidated revenue

$

3,157,343

$

3,043,175

Listed below are revenues and earnings from operations at each of our operating segments for the first nine months of fiscal 2020 and 2019.



Nine Months Ended December 31,



2019


2018



(Unaudited)



(In thousands)

Moving and storage





Revenues

$

2,916,314


2,813,747

Earnings from operations before equity in earnings of subsidiaries


492,652


556,228

Property and casualty insurance 





Revenues


69,199


58,557

Earnings from operations


27,442


21,573

Life insurance   





Revenues


179,069


177,910

Earnings from operations


19,912


16,812

Eliminations





Revenues


(7,239)


(7,039)

Earnings from operations before equity in earnings of subsidiaries


(836)


(863)

Consolidated Results





Revenues


3,157,343


3,043,175

Earnings from operations


539,170


593,750

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 locations follows:



Nine Months Ended December 31,



2019


2018



(Unaudited)



(In thousands, except occupancy rate)

Unit count as of December 31


487


411

Square footage as of December 31


40,835


34,693

Average monthly number of units occupied


316


272

Average monthly occupancy rate based on unit count


68.2%


69.4%

Average monthly square footage occupied


28,646


24,553

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS




December 31,


March 31,



2019


2019



(Unaudited)





(In thousands)

ASSETS





Cash and cash equivalents

$

631,951

$

673,701

Reinsurance recoverables and trade receivables, net


200,164


224,785

Inventories and parts, net


103,003


103,504

Prepaid expenses


188,780


174,100

Investments, fixed maturities and marketable equities


2,469,468


2,235,397

Investments, other


336,727


300,736

Deferred policy acquisition costs, net


106,354


136,276

Other assets


71,821


78,354

Right of use assets – financing, net


1,130,473


-

Right of use assets - operating


107,974


-

Related party assets


47,988


30,889



5,394,703


3,957,742

Property, plant and equipment, at cost:





   Land


1,018,010


976,454

   Buildings and improvements


4,522,855


4,003,726

   Furniture and equipment


733,063


689,780

   Rental trailers and other rental equipment


511,872


590,039

   Rental trucks


3,454,759


4,762,028



10,240,559


11,022,027

Less: Accumulated depreciation


(2,640,940)


(3,088,056)

   Total property, plant and equipment, net


7,599,619


7,933,971

Total assets

$

12,994,322

$

11,891,713

LIABILITIES AND STOCKHOLDERS' EQUITY





Liabilities:





   Accounts payable and accrued expenses

$

551,770

$

556,873

   Notes, loans and finance/capital leases payable, net


4,548,609


4,163,323

   Operating lease liability


107,581


-

   Policy benefits and losses, claims and loss expenses payable


1,015,663


1,011,183

   Liabilities from investment contracts


1,753,428


1,666,742

   Other policyholders' funds and liabilities


12,924


15,047

   Deferred income


31,459


35,186

   Deferred income taxes, net


869,671


750,970

Total liabilities


8,891,105


8,199,324






Common stock


10,497


10,497

Additional paid-in capital


453,819


453,326

Accumulated other comprehensive income (loss)


39,517


(66,698)

Retained earnings


4,277,034


3,976,962

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


-


(4,048)

Total stockholders' equity


4,103,217


3,692,389

Total liabilities and stockholders' equity

$

12,994,322

$

11,891,713

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




Quarter Ended December 31,



2019


2018



(Unaudited)



(In thousands, except share and per share data)

Revenues:





Self-moving equipment rentals

$

621,471

$

626,136

Self-storage revenues


106,701


93,392

Self-moving and self-storage products and service sales


54,454


55,665

Property management fees


9,098


7,899

Life insurance premiums


31,164


34,778

Property and casualty insurance premiums


19,267


17,668

Net investment and interest income


33,782


32,211

Other revenue


51,943


51,342

     Total revenues


927,880


919,091






Costs and expenses:





Operating expenses


517,453


478,461

Commission expenses


66,542


67,493

Cost of sales


35,318


34,149

Benefits and losses


42,864


42,869

Amortization of deferred policy acquisition costs


8,046


6,654

Lease expense


6,490


7,890

Depreciation, net of (gains)/losses on disposal


170,074


143,473

Net losses on disposal of real estate


528


-

     Total costs and expenses


847,315


780,989






Earnings from operations


80,565


138,102

Other components of net periodic benefit costs


(263)


(253)

Interest expense


(39,973)


(34,827)

Pretax earnings


40,329


103,022

Income tax expense


(9,397)


(24,387)

Earnings available to common shareholders

$

30,932

$

78,635

Basic and diluted earnings per common share

$

1.58

$

4.01

Weighted average common shares outstanding: Basic and diluted


19,607,788


19,591,963

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




Nine Months Ended December 31,



2019


2018



(Unaudited)



(In thousands, except share and per share data)

Revenues:





Self-moving equipment rentals

$

2,174,392

$

2,124,451

Self-storage revenues


309,940


271,097

Self-moving and self-storage products and service sales


207,601


207,819

Property management fees


23,487


22,507

Life insurance premiums


96,229


107,586

Property and casualty insurance premiums


51,056


46,732

Net investment and interest income


102,629


85,043

Other revenue


192,009


177,940

     Total revenues


3,157,343


3,043,175






Costs and expenses:





Operating expenses


1,617,338


1,504,365

Commission expenses


233,540


232,084

Cost of sales


128,177


130,432

Benefits and losses


137,695


137,196

Amortization of deferred policy acquisition costs


20,625


18,584

Lease expense


19,882


24,229

Depreciation, net of gains on disposal


462,227


402,525

Net (gains) losses on disposal of real estate


(1,311)


10

     Total costs and expenses


2,618,173


2,449,425






Earnings from operations


539,170


593,750

Other components of net periodic benefit costs


(790)


(760)

Interest expense


(117,983)


(105,111)

Pretax earnings


420,397


487,879

Income tax expense


(100,717)


(117,853)

Earnings available to common shareholders

$

319,680

$

370,026

Basic and diluted earnings per common share

$

16.31

$

18.89

Weighted average common shares outstanding: Basic and diluted


19,602,484


19,591,282

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 December 31, 2019, the balance of ROU-Financing also included the rental equipment purchased under new financing liability leases during the first nine months of fiscal 2020. The table below shows adjusted property, plant and equipment, net as of December 31, 2019, 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.







December 31,









2019





December 31,


ROU
Assets


Property,
Plant and
Equipment


March 31,



2019


Financing


Adjusted


2019



(Unaudited)




(In thousands)










Property, plant and equipment, at cost









Land

$

1,018,010

$

-

$

1,018,010

$

976,454

Buildings and improvements


4,522,855


-


4,522,855


4,003,726

Furniture and equipment


733,063


27,309


760,372


689,780

Rental trailers and other rental equipment


511,872


117,987


629,859


590,039

Rental trucks


3,454,759


1,746,036


5,200,795


4,762,028

Right-of-use assets, gross


10,240,559


1,891,332


12,131,891


11,022,027

Less: Accumulated depreciation


(2,640,940)


(760,859)


(3,401,799)


(3,088,056)

Total property, plant and equipment, net

$

7,599,619

$

1,130,473

$

8,730,092

$

7,933,971

 

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SOURCE AMERCO

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