AMERCO Reports Second Quarter Fiscal 2011 Financial Results
RENO, Nev., Nov. 3, 2010 /PRNewswire-FirstCall/ -- AMERCO (Nasdaq: UHAL), parent of U-Haul International, Inc., North America's largest "do-it-yourself" moving and storage operator, today reported net earnings available to common shareholders for its second quarter ending September 30, 2010, of $82 million, or $4.22 per share, compared with net earnings of $41.5 million, or $2.14 per share, for the same period last year.
For the six-month period ending September 30, 2010, net earnings available to common shareholders were $145.3 million, or $7.48 per share, compared with net earnings of $61.0 million, or $3.15 per share for the same period last year.
"Demand for our products and services have been up, and our team is doing a good job of earning our share of this increase," stated Joe Shoen, chairman of AMERCO. "We are now focused on making it through the fall and winter months."
Highlights of Second-Quarter Fiscal 2011 Results
- Self-moving equipment rental revenue increased $39.9 million for the second quarter of fiscal 2011 compared with the second quarter of fiscal 2010. In-town and one-way transactions both increased during the quarter. These gains came from increased demand for our services as well as from enhancements to our customer service capabilities.
- Self-storage revenues increased $3.2 million for the second quarter of fiscal 2011 compared with the second quarter of fiscal 2010 from growth in occupied rooms. Our average occupancy during the second quarter of fiscal 2011 increased by just over 601,000 square feet compared to the same period last year. We have added over 620,000 of net rentable square feet to the portfolio over the last twelve months, including 168,000 net rentable square feet during the quarter.
- Operating expenses at the Moving and Storage segment decreased $5.5 million for the second quarter of fiscal 2011 compared with the second quarter of fiscal 2010. Liability costs related to the equipment fleet continue to trend lower than last year.
- For the second quarter of fiscal 2011 net gains from the disposal of property plant and equipment were $8.9 million compared with $3.1 million in the second quarter of fiscal 2010. Fiscal 2011 included gains from the disposal of real estate of $1.2 million with the remaining portion coming from equipment. Excluding these disposal gains and losses, total depreciation decreased $6.8 million for the second quarter of fiscal 2011 compared with the same period last year.
AMERCO will hold its investor call for the second quarter of fiscal 2011 on Thursday, November 4, 2010, at 8 a.m. Arizona Time (11 a.m. ET). 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., North America's largest "do-it-yourself" moving and storage operator, AMERCO Real Estate Company, Republic Western Insurance Company and Oxford Life Insurance Company.
Since 1945, U-Haul has been the choice for the do-it-yourself mover, with a network of more than 16,300 locations in all 50 States and 10 Canadian provinces. U-Haul customers' patronage has enabled the Company to maintain the largest rental fleet in the do-it-yourself moving industry with approximately 98,000 trucks, 77,000 trailers and 34,000 towing devices. U-Haul offers more than 404,000 rooms and 35.8 million square feet of storage space at nearly 1,100 owned and managed facilities throughout North America. U-Haul is the consumer's number one choice as the largest installer of permanent trailer hitches in the automotive aftermarket industry. The Company supplies alternative-fuel for vehicles and backyard barbecues as one of the nation's largest retailers of propane.
U-Haul was founded by a Navy veteran who grew up during the Great Depression. Tires and gas were still rationed or in short supply during the late 1940s when U-Haul began serving U.S. customers. Today, that background is central to the U-Haul Sustainability Program: "Serving the needs of the present without compromising the ability of future generations to meet their own needs." Our commitment to reduce, reuse and recycle includes fuel-efficient moving vans, neighborhood proximity, moving box reuse, moving pads made from discarded material and packing peanuts that are 100 % biodegradable. Learn more about these facts and others at uhaul.com/sustainability.
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 Form 10-Q for the quarter ended September 30, 2010, 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 2011 and 2010.
Quarter Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands) |
|||||
Revenue: |
|||||
Self-moving equipment rentals |
$ |
467,128 |
$ |
427,203 |
|
Self-storage revenues |
30,647 |
27,412 |
|||
Self-moving and self-storage products and service sales |
56,821 |
55,522 |
|||
Property management fees |
4,580 |
4,478 |
|||
Life insurance premiums |
40,022 |
28,738 |
|||
Property and casualty insurance premiums |
8,300 |
7,046 |
|||
Net investment and interest income |
12,874 |
12,539 |
|||
Other revenue |
16,604 |
10,986 |
|||
Consolidated revenue |
$ |
636,976 |
$ |
573,924 |
|
Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2011 and 2010.
Quarter Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands) |
|||||
Moving and storage |
|||||
Revenues |
$ |
582,632 |
$ |
532,412 |
|
Earnings from operations |
156,444 |
93,889 |
|||
Property and casualty insurance |
|||||
Revenues |
10,396 |
8,859 |
|||
Earnings from operations |
2,007 |
1,623 |
|||
Life insurance |
|||||
Revenues |
45,399 |
33,735 |
|||
Earnings from operations |
3,368 |
4,011 |
|||
Eliminations |
|||||
Revenues |
(1,451) |
(1,082) |
|||
Earnings from operations |
(3,698) |
(3,705) |
|||
Consolidated results |
|||||
Revenues |
636,976 |
573,924 |
|||
Earnings from operations |
158,121 |
95,818 |
|||
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, |
||||
2010 |
2009 |
|||
(Unaudited) |
||||
(In thousands, except occupancy rate) |
||||
Room count as of September 30 |
405 |
399 |
||
Square footage as of September 30 |
35,799 |
35,163 |
||
Average number of rooms occupied |
321 |
313 |
||
Average occupancy rate based on room count |
79.4% |
78.6% |
||
Average square footage occupied |
29,063 |
28,307 |
||
Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2011 and 2010.
Six Months Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands) |
|||||
Revenue: |
|||||
Self-moving equipment rentals |
$ |
886,591 |
$ |
800,144 |
|
Self-storage revenues |
58,874 |
54,416 |
|||
Self-moving and self-storage products and service sales |
120,111 |
113,344 |
|||
Property management fees |
9,116 |
8,928 |
|||
Life insurance premiums |
77,825 |
56,342 |
|||
Property and casualty insurance premiums |
14,479 |
13,261 |
|||
Net investment and interest income |
26,229 |
26,219 |
|||
Other revenue |
29,698 |
21,929 |
|||
Consolidated revenue |
$ |
1,222,923 |
$ |
1,094,583 |
|
Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2011 and 2010.
Six Months Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands) |
|||||
Moving and storage |
|||||
Revenues |
$ |
1,117,790 |
$ |
1,012,085 |
|
Earnings from operations |
282,879 |
151,666 |
|||
Property and casualty insurance |
|||||
Revenues |
18,490 |
16,910 |
|||
Earnings from operations |
3,404 |
3,050 |
|||
Life insurance |
|||||
Revenues |
89,241 |
67,607 |
|||
Earnings from operations |
6,771 |
6,589 |
|||
Eliminations |
|||||
Revenues |
(2,598) |
(2,019) |
|||
Earnings from operations |
(6,824) |
(6,291) |
|||
Consolidated results |
|||||
Revenues |
1,222,923 |
1,094,583 |
|||
Earnings from operations |
286,230 |
155,014 |
|||
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, |
||||
2010 |
2009 |
|||
(Unaudited) |
||||
(In thousands, except occupancy rate) |
||||
Room count as of September 30 |
405 |
399 |
||
Square footage as of September 30 |
35,799 |
35,163 |
||
Average number of rooms occupied |
316 |
310 |
||
Average occupancy rate based on room count |
78.4% |
78.0% |
||
Average square footage occupied |
28,643 |
27,985 |
||
AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
September 30, 2010 |
March 31, 2010 |
||||
(Unaudited) |
|||||
ASSETS |
(In thousands) |
||||
Cash and cash equivalents |
$ |
329,830 |
$ |
244,118 |
|
Reinsurance recoverables and trade receivables, net |
204,274 |
198,283 |
|||
Notes and mortgage receivables, net |
1,344 |
1,461 |
|||
Inventories, net |
55,659 |
52,837 |
|||
Prepaid expenses |
48,404 |
53,379 |
|||
Investments, fixed maturities and marketable equities |
643,351 |
549,318 |
|||
Investments, other |
159,795 |
227,486 |
|||
Deferred policy acquisition costs, net |
37,255 |
39,194 |
|||
Other assets |
145,304 |
145,864 |
|||
Related party assets |
294,733 |
302,126 |
|||
1,919,949 |
1,814,066 |
||||
Property, plant and equipment, at cost: |
|||||
Land |
226,238 |
224,904 |
|||
Buildings and improvements |
1,006,101 |
970,937 |
|||
Furniture and equipment |
330,786 |
323,334 |
|||
Rental trailers and other rental equipment |
242,455 |
244,131 |
|||
Rental trucks |
1,559,732 |
1,529,817 |
|||
3,365,312 |
3,293,123 |
||||
Less: Accumulated depreciation |
(1,345,861) |
(1,344,735) |
|||
Total property, plant and equipment |
2,019,451 |
1,948,388 |
|||
Total assets |
$ |
3,939,400 |
$ |
3,762,454 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
Liabilities: |
|||||
Accounts payable and accrued expenses |
$ |
328,761 |
$ |
296,057 |
|
Notes, loans and leases payable |
1,278,555 |
1,347,635 |
|||
Policy benefits and losses, claims and loss expenses payable |
856,001 |
816,909 |
|||
Liabilities from investment contracts |
257,275 |
268,810 |
|||
Other policyholders' funds and liabilities |
6,624 |
8,155 |
|||
Deferred income |
27,596 |
25,207 |
|||
Deferred income taxes |
238,674 |
186,770 |
|||
Total liabilities |
2,993,486 |
2,949,543 |
|||
Stockholders' equity: |
|||||
Common stock |
10,497 |
10,497 |
|||
Additional paid-in capital |
416,326 |
419,811 |
|||
Accumulated other comprehensive loss |
(65,604) |
(56,207) |
|||
Retained earnings |
1,114,310 |
969,017 |
|||
Cost of common shares in treasury, net |
(525,653) |
(525,653) |
|||
Unearned employee stock ownership plan shares |
(3,962) |
(4,554) |
|||
Total stockholders' equity |
945,914 |
812,911 |
|||
Total liabilities and stockholders' equity |
$ |
3,939,400 |
$ |
3,762,454 |
|
AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
Quarter Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands, except share and per share amounts) |
|||||
Revenues: |
|||||
Self-moving equipment rentals |
$ |
467,128 |
$ |
427,203 |
|
Self-storage revenues |
30,647 |
27,412 |
|||
Self-moving and self-storage products and service sales |
56,821 |
55,522 |
|||
Property management fees |
4,580 |
4,478 |
|||
Life insurance premiums |
40,022 |
28,738 |
|||
Property and casualty insurance premiums |
8,300 |
7,046 |
|||
Net investment and interest income |
12,874 |
12,539 |
|||
Other revenue |
16,604 |
10,986 |
|||
Total revenues |
636,976 |
573,924 |
|||
Costs and expenses: |
|||||
Operating expenses |
270,259 |
273,730 |
|||
Commission expenses |
57,613 |
51,098 |
|||
Cost of sales |
29,603 |
28,359 |
|||
Benefits and losses |
37,383 |
25,807 |
|||
Amortization of deferred policy acquisition costs |
1,876 |
2,296 |
|||
Lease expense |
37,964 |
40,026 |
|||
Depreciation, net of (gains) losses on disposals |
44,157 |
56,790 |
|||
Total costs and expenses |
478,855 |
478,106 |
|||
Earnings from operations |
158,121 |
95,818 |
|||
Interest expense |
(21,788) |
(23,938) |
|||
Pretax earnings |
136,333 |
71,880 |
|||
Income tax expense |
(51,114) |
(27,189) |
|||
Net earnings |
85,219 |
44,691 |
|||
Excess (loss) of carrying amount of preferred stock over consideration paid |
(140) |
48 |
|||
Less: Preferred stock dividends |
(3,101) |
(3,212) |
|||
Earnings available to common shareholders |
$ |
81,978 |
$ |
41,527 |
|
Basic and diluted earnings per common share |
$ |
4.22 |
$ |
2.14 |
|
Weighted average common shares outstanding: |
|||||
Basic and diluted |
19,427,595 |
19,382,101 |
|||
AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
Six Months Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands, except share and per share amounts) |
|||||
Revenues: |
|||||
Self-moving equipment rentals |
$ |
886,591 |
$ |
800,144 |
|
Self-storage revenues |
58,874 |
54,416 |
|||
Self-moving and self-storage products and service sales |
120,111 |
113,344 |
|||
Property management fees |
9,116 |
8,928 |
|||
Life insurance premiums |
77,825 |
56,342 |
|||
Property and casualty insurance premiums |
14,479 |
13,261 |
|||
Net investment and interest income |
26,229 |
26,219 |
|||
Other revenue |
29,698 |
21,929 |
|||
Total revenues |
1,222,923 |
1,094,583 |
|||
Costs and expenses: |
|||||
Operating expenses |
523,393 |
532,231 |
|||
Commission expenses |
109,782 |
95,509 |
|||
Cost of sales |
61,268 |
58,809 |
|||
Benefits and losses |
72,805 |
53,501 |
|||
Amortization of deferred policy acquisition costs |
4,069 |
4,213 |
|||
Lease expense |
76,630 |
79,299 |
|||
Depreciation, net of (gains) losses on disposals |
88,746 |
116,007 |
|||
Total costs and expenses |
936,693 |
939,569 |
|||
Earnings from operations |
286,230 |
155,014 |
|||
Interest expense |
(43,252) |
(47,159) |
|||
Pretax earnings |
242,978 |
107,855 |
|||
Income tax expense |
(91,257) |
(40,732) |
|||
Net earnings |
151,721 |
67,123 |
|||
Excess (loss) of carrying amount of preferred stock over consideration paid |
(171) |
371 |
|||
Less: Preferred stock dividends |
(6,257) |
(6,453) |
|||
Earnings available to common shareholders |
$ |
145,293 |
$ |
61,041 |
|
Basic and diluted earnings per common share |
$ |
7.48 |
$ |
3.15 |
|
Weighted average common shares outstanding: |
|||||
Basic and diluted |
19,421,205 |
19,375,846 |
|||
AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
Six Months Ended September 30, |
|||||
2010 |
2009 |
||||
(Unaudited) |
|||||
(In thousands) |
|||||
Cash flow from operating activities: |
|||||
Net earnings |
$ |
151,721 |
$ |
67,123 |
|
Adjustments to reconcile net earnings to cash provided by operations: |
|||||
Depreciation |
106,055 |
117,779 |
|||
Amortization of deferred policy acquisition costs |
4,069 |
4,213 |
|||
Change in allowance for losses on trade receivables |
(24) |
397 |
|||
Change in allowance for losses on mortgage notes |
- |
(6) |
|||
Change in allowance for inventory reserves |
840 |
1,344 |
|||
Net gain on sale of real and personal property |
(17,309) |
(1,772) |
|||
Net gain on sale of investments |
(1,329) |
(401) |
|||
Deferred income taxes |
57,091 |
40,431 |
|||
Net change in other operating assets and liabilities: |
|||||
Reinsurance recoverables and trade receivables |
(5,969) |
11,917 |
|||
Inventories |
(3,662) |
7,334 |
|||
Prepaid expenses |
4,975 |
(2,928) |
|||
Capitalization of deferred policy acquisition costs |
(7,377) |
(6,533) |
|||
Other assets |
649 |
6,998 |
|||
Related party assets |
6,710 |
7,481 |
|||
Accounts payable and accrued expenses |
20,102 |
(5,893) |
|||
Policy benefits and losses, claims and loss expenses payable |
39,452 |
11,991 |
|||
Other policyholders' funds and liabilities |
(1,531) |
(3,311) |
|||
Deferred income |
2,399 |
(1,946) |
|||
Related party liabilities |
693 |
(551) |
|||
Net cash provided by operating activities |
357,555 |
253,667 |
|||
Cash flows from investing activities: |
|||||
Purchases of: |
|||||
Property, plant and equipment |
(274,240) |
(175,827) |
|||
Short term investments |
(109,785) |
(144,306) |
|||
Fixed maturities investments |
(122,504) |
(77,106) |
|||
Equity securities |
(9,043) |
- |
|||
Preferred stock |
(11,902) |
- |
|||
Real estate |
(1,784) |
(466) |
|||
Mortgage loans |
(1,308) |
(525) |
|||
Proceeds from sale of: |
|||||
Property, plant and equipment |
122,157 |
88,942 |
|||
Short term investments |
178,461 |
159,307 |
|||
Fixed maturities investments |
56,841 |
83,667 |
|||
Equity securities |
133 |
- |
|||
Preferred stock |
- |
2,236 |
|||
Real estate |
683 |
- |
|||
Mortgage loans |
1,421 |
4,053 |
|||
Payments from notes and mortgage receivables |
117 |
464 |
|||
Net cash used by investing activities |
(170,753) |
(59,561) |
|||
Cash flows from financing activities: |
|||||
Borrowings from credit facilities |
134,556 |
51,921 |
|||
Principal repayments on credit facilities |
(209,420) |
(72,695) |
|||
Debt issuance costs |
(89) |
(277) |
|||
Capital lease payments |
(8,369) |
(1,168) |
|||
Leveraged Employee Stock Ownership Plan-repayments from loan |
592 |
533 |
|||
Preferred stock dividends paid |
(6,257) |
(6,453) |
|||
Investment contract deposits |
5,875 |
5,564 |
|||
Investment contract withdrawals |
(17,409) |
(28,417) |
|||
Net cash used by financing activities |
(100,521) |
(50,992) |
|||
Effects of exchange rate on cash |
(569) |
1,250 |
|||
Increase in cash equivalents |
85,712 |
144,364 |
|||
Cash and cash equivalents at the beginning of period |
244,118 |
240,587 |
|||
Cash and cash equivalents at the end of period |
$ |
329,830 |
$ |
384,951 |
|
SOURCE AMERCO
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