AMERCO Reports Second Quarter Fiscal 2022 Financial Results

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Nov 03, 2021, 16:15 ET

RENO, Nev., Nov. 3, 2021 /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 second quarter ended September 30, 2021, of $409.9 million, or $20.90 per share, compared with net earnings of $266.4 million, or $13.58 per share, for the same period last year.

For the six-month period ended September 30, 2021, net earnings available to shareholders were $755.1 million, or $38.51 per share, compared with net earnings of $354.1 million, or $18.06 per share, for the same period last year.

"Demand for our do-it-yourself moving and storage products and services remains strong," stated Joe Shoen, chairman of AMERCO. "We are not able to purchase replacement rental trucks at the rate we want. We are making progress adding stores, self-storage, and U-Box facilities."

Highlights of Second Quarter Fiscal 2022 Results

Self-moving equipment rental revenues increased $248.0 million or 27% during the second quarter of fiscal 2022, compared with the second quarter of fiscal 2021. Transactions for both our In-town and one-way markets increased as did revenue per transaction. This quarter's 27% improvement is compared against a second quarter from last year where we reported a 16% revenue improvement. Compared to the same period last year, we increased the number of retail locations, independent dealers, box trucks, trailers and towing device in the rental fleet.
Self-storage revenues increased $38.2 million or 33% during the second quarter of fiscal 2022, compared with the second quarter of fiscal 2021. The average monthly number of occupied units increased by 103,000 units, during the second quarter of fiscal 2022 compared with the same period last year. Occupancy for all locations increased 12.4% to 84.3% from the second quarter of last year to this year while occupancy for the subsection of these locations that have been at 80% occupancy for the last two years was 96.5%. The growth in revenues and square feet rented comes from a combination of occupancy gains at existing locations, the addition of new capacity to the portfolio and from an improvement in average revenue per occupied feet. Over the last twelve months, we added approximately 3.9 million net rentable square feet.
For the second quarter of fiscal 2022 compared with the second quarter of fiscal 2021, depreciation, net of gains and losses on sales decreased $1.7 million. This was a combination of depreciation expense on the rental equipment fleet increasing $3.9 million while being more than offset by an increase on gains from the sales of rental trucks of $8.0 million from higher resale values. All other depreciation, primarily real estate related, increased $2.5 million.
For the first six months of fiscal 2022 and fiscal 2021 gross truck and trailer capital expenditures were approximately $548 million compared with $395 million, proceeds from the sales of rental equipment were $300 million compared with $310 million and spending on real estate related acquisitions and projects were approximately $444 million compared with $226 million.
Fleet maintenance and repair costs increased $28.5 million in the second quarter of fiscal 2022 compared with the same period last year due to preventative maintenance from higher customer activity combined with a slowdown in the rotation of new equipment into the fleet and older equipment out of the fleet.
Operating earnings at our Moving and Storage operating segment increased $182.0 million in the second quarter of fiscal 2022 compared with the same period last year. Total revenues climbed $331.7 million and total costs and expenses increased $149.6 million.
Cash and credit availability at the Moving and Storage operating segment was $2,485.8 million as of September 30, 2021 compared with $1,115.3 million as of March 31, 2021. During the quarter, the Company entered into a note purchase agreement to issue $600 million of fixed rate senior unsecured notes in a private placement offering at a weighted average interest rate of 2.59%.
On August 21, 2021, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on September 7, 2021. The dividend was paid on September 21, 2021.
On October 6, 2021, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on October 18, 2021. The dividend was paid on October 29, 2021.

AMERCO will hold its investor call for the second quarter of fiscal 2022 on Thursday, November 4, 2021, 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.

About U-Haul
Since 1945, U-Haul has been the No. 1 choice of do-it-yourself movers, with a network of more than 23,000 locations across all 50 states and 10 Canadian provinces. Our customers' patronage has enabled the U-Haul fleet to grow to approximately 176,000 trucks, 126,000 trailers and 46,000 towing devices. U-Haul is the third largest self-storage operator in North America and offers over 841,000 rentable storage units and 72.6 million square feet of self-storage space at owned and managed facilities. U-Haul is the largest retailer of propane in the U.S., and continues to be the largest installer of permanent trailer hitches in the automotive aftermarket industry.

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, 2021, 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 2022 and 2021.

		Quarter Ended September 30,
		2021		2020
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	1,179,061	$	931,030
Self-storage revenues		153,485		115,273
Self-moving and self-storage product and service sales		92,191		98,628
Property management fees		8,747		7,840
Life insurance premiums		28,913		31,057
Property and casualty insurance premiums		22,499		15,869
Net investment and interest income		36,780		33,333
Other revenue		142,578		91,878
Consolidated revenue	$	1,664,254	$	1,324,908

Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2022 and 2021.

		Quarter Ended September 30,
		2021		2020
		(Unaudited)
		(In thousands)
Moving and storage
Revenues	$	1,576,999	$	1,245,318
Earnings from operations before equity in earnings of subsidiaries		555,988		373,956
Property and casualty insurance
Revenues		29,539		22,673
Earnings from operations		15,189		12,069
Life insurance
Revenues		60,985		59,560
Earnings from operations		7,913		6,040
Eliminations
Revenues		(3,269)		(2,643)
Earnings from operations before equity in earnings of subsidiaries		(389)		(275)
Consolidated Results
Revenues		1,664,254		1,324,908
Earnings from operations		578,701		391,790

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 September 30,
	2021	2020
	(Unaudited)
	(In thousands, except occupancy rate)
Unit count as of September 30	568	520
Square footage as of September 30	47,903	43,985
Average monthly number of units occupied	476	373
Average monthly occupancy rate based on unit count	84.3%	71.9%
Average monthly square footage occupied	41,743	33,296

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2022 and 2021.

		Six Months Ended September 30,
		2021		2020
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	2,214,438	$	1,585,315
Self-storage revenues		290,878		224,228
Self-moving and self-storage product and service sales		197,076		189,978
Property management fees		17,196		15,187
Life insurance premiums		57,618		61,965
Property and casualty insurance premiums		39,368		29,603
Net investment and interest income		71,779		50,315
Other revenue		248,757		155,554
Consolidated revenue	$	3,137,110	$	2,312,145

Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2022 and 2021.

	Six Months Ended September 30,
	2021	2020
	(Unaudited)
	(In thousands)
Moving and storage
Revenues	2,970,253	2,171,618
Earnings from operations before equity in earnings of subsidiaries	1,038,983	525,617
Property and casualty insurance
Revenues	52,995	36,307
Earnings from operations	24,421	12,847
Life insurance
Revenues	119,644	109,213
Earnings from operations	10,279	7,960
Eliminations
Revenues	(5,782)	(4,993)
Earnings from operations before equity in earnings of subsidiaries	(774)	(548)
Consolidated Results
Revenues	3,137,110	2,312,145
Earnings from operations	1,072,909	545,876

	Six Months Ended September 30,
	2021	2020
	(Unaudited)
	(In thousands, except occupancy rate)
Unit count as of September 30	568	520
Square footage as of September 30	47,903	43,985
Average monthly number of units occupied	456	360
Average monthly occupancy rate based on unit count	82.1%	69.8%
Average monthly square footage occupied	40,207	32,153

AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED BALANCE SHEETS

		September 30,		March 31,
		2021		2021
		(Unaudited)
		(In thousands)
ASSETS
Cash and cash equivalents	$	2,430,233	$	1,194,012
Reinsurance recoverables and trade receivables, net		227,935		224,426
Inventories and parts, net		142,955		105,577
Prepaid expenses		202,339		469,144
Investments, fixed maturities and marketable equities		2,845,147		2,695,656
Investments, other		571,942		489,759
Deferred policy acquisition costs, net		97,138		89,749
Other assets		51,626		47,730
Right of use assets – financing, net		752,990		877,038
Right of use assets – operating, net		85,237		92,505
Related party assets		38,773		35,395
		7,446,315		6,320,991
Property, plant and equipment, at cost:
Land		1,172,648		1,075,813
Buildings and improvements		5,477,544		5,163,705
Furniture and equipment		811,337		786,505
Rental trailers and other rental equipment		536,814		477,921
Rental trucks		4,278,732		3,909,724
		12,277,075		11,413,668
Less: Accumulated depreciation		(3,386,162)		(3,083,053)
Total property, plant and equipment, net		8,890,913		8,330,615
Total assets	$	16,337,228	$	14,651,606
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	694,284	$	645,575
Notes, loans and finance leases payable, net		5,335,278		4,668,907
Operating lease liability		85,199		92,510
Policy benefits and losses, claims and loss expenses payable		1,016,505		997,701
Liabilities from investment contracts		2,276,829		2,161,530
Other policyholders' funds and liabilities		10,943		12,420
Deferred income		51,212		42,592
Deferred income taxes, net		1,312,281		1,178,489
Total liabilities		10,782,531		9,799,724

Common stock		10,497		10,497
Additional paid-in capital		453,819		453,819
Accumulated other comprehensive income		74,207		106,857
Retained earnings		5,693,824		4,958,359
Cost of common stock in treasury, net		(525,653)		(525,653)
Cost of preferred stock in treasury, net		(151,997)		(151,997)
Total stockholders' equity		5,554,697		4,851,882
Total liabilities and stockholders' equity	$	16,337,228	$	14,651,606

AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Quarter Ended September 30,
		2021		2020
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	1,179,061	$	931,030
Self-storage revenues		153,485		115,273
Self-moving and self-storage products and service sales		92,191		98,628
Property management fees		8,747		7,840
Life insurance premiums		28,913		31,057
Property and casualty insurance premiums		22,499		15,869
Net investment and interest income		36,780		33,333
Other revenue		142,578		91,878
Total revenues		1,664,254		1,324,908

Costs and expenses:
Operating expenses		696,074		574,083
Commission expenses		127,896		99,365
Cost of sales		66,491		60,933
Benefits and losses		44,630		45,452
Amortization of deferred policy acquisition costs		6,750		5,552
Lease expense		7,441		6,870
Depreciation, net of gains on disposals		135,748		137,438
Net losses on real estate		523		3,425
Total costs and expenses		1,085,553		933,118

Earnings from operations		578,701		391,790
Other components of net periodic benefit costs		(280)		(246)
Interest expense		(39,545)		(40,525)
Pretax earnings		538,876		351,019
Income tax expense		(128,978)		(84,654)
Earnings available to common shareholders	$	409,898	$	266,365
Basic and diluted earnings per common share	$	20.90	$	13.58
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,607,788

AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Six Months Ended September 30,
		2021		2020
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	2,214,438	$	1,585,315
Self-storage revenues		290,878		224,228
Self-moving and self-storage products and service sales		197,076		189,978
Property management fees		17,196		15,187
Life insurance premiums		57,618		61,965
Property and casualty insurance premiums		39,368		29,603
Net investment and interest income		71,779		50,315
Other revenue		248,757		155,554
Total revenues		3,137,110		2,312,145

Costs and expenses:
Operating expenses		1,310,603		1,066,745
Commission expenses		241,045		168,540
Cost of sales		136,406		113,764
Benefits and losses		91,928		85,029
Amortization of deferred policy acquisition costs		15,573		12,440
Lease expense		15,088		13,473
Depreciation, net of gains on disposals		257,465		303,109
Net (gains) losses on real estate		(3,907)		3,169
Total costs and expenses		2,064,201		1,766,269

Earnings from operations		1,072,909		545,876
Other components of net periodic benefit costs		(560)		(493)
Interest expense		(78,723)		(80,046)
Pretax earnings		993,626		465,337
Income tax expense		(238,553)		(111,246)
Earnings available to common shareholders	$	755,073		354,091
Basic and diluted earnings per common share	$	38.51	$	18.06
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,607,788

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 September 30, 2021, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during the first six months of fiscal 2022. The tables below show adjusted PPE as of September 30, 2021 and March 31, 2021, by including the ROU-financing. The assets included in the ROU-financing is not a true book value as some of the assets are recorded at between 70% and 100% of value based on the lease agreement.

						September 30,		March 31,
						2021		2021
		September 30,		ROU Assets		Property, Plant and Equipment		Property, Plant and Equipment
		2021		Financing		Adjusted		Adjusted
		(Unaudited)
		(In thousands)

Property, plant and equipment, at cost
Land	$	1,172,648	$	-	$	1,172,648	$	1,075,813
Buildings and improvements		5,477,544		-		5,477,544		5,163,705
Furniture and equipment		811,337		18,316		829,653		808,821
Rental trailers and other rental equipment		536,814		182,741		719,555		681,515
Rental trucks		4,278,732		1,325,624		5,604,356		5,403,822
Right-of-use assets, gross		12,277,075		1,526,681		13,803,756		13,133,676
Less: Accumulated depreciation		(3,386,162)		(773,691)		(4,159,853)		(3,926,023)
Total property, plant and equipment, net	$	8,890,913	$	752,990	$	9,643,903	$	9,207,653

						March 31,
						2021
		March 31,		ROU Assets		Property, Plant and Equipment
		2021		Financing		Adjusted
		(Unaudited)
		(In thousands)
Property, plant and equipment, at cost
Land	$	1,075,813	$	-	$	1,075,813
Buildings and improvements		5,163,705		-		5,163,705
Furniture and equipment		786,505		22,316		808,821
Rental trailers and other rental equipment		477,921		203,594		681,515
Rental trucks		3,909,724		1,494,098		5,403,822
Right-of-use assets, gross		11,413,668		1,720,008		13,133,676
Less: Accumulated depreciation		(3,083,053)		(842,970)		(3,926,023)
Total property, plant and equipment, net	$	8,330,615	$	877,038	$	9,207,653

SOURCE AMERCO

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