AMERCO REPORTS THIRD QUARTER FISCAL 2022 FINANCIAL RESULTS

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Feb 09, 2022, 16:15 ET

RENO, Nev., Feb. 9, 2022 /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, 2021, of $281.5 million, or $14.35 per share, compared with net earnings of $183.0 million, or $9.33 per share, for the same period last year.

For the nine-month period ended December 31, 2021, net earnings available to shareholders were $1,036.5 million, or $52.86 per share, compared with net earnings of $537.1 million, or $27.39 per share, for the same period last year.

"Productivity improvement is the name of the game," stated Joe Shoen, chairman of AMERCO. "Our technology is helping. Our vehicle acquisition future is muddled with low OEM production and the predicted demise of the internal combustion engine and migration to electric. We are bringing more newly constructed storage product online. This is a slow process and takes time."

Highlights of Third Quarter Fiscal 2022 Results

Self-moving equipment rental revenues increased $167.3 million or 21% during the third quarter of fiscal 2022, compared with the third quarter of fiscal 2021. Transactions for both our In-Town and one-way markets increased as did revenue per transaction. Compared with the same period last year, we increased the number of retail locations, independent dealers, trucks and towing devices in the rental fleet.
Self-storage revenues increased $36.4 million, or 30% during the third quarter of fiscal 2022, compared with the third quarter of fiscal 2021. The average monthly number of occupied units increased by 24%, or 95,000 units, during the third quarter of fiscal 2022 compared with the same period last year. Occupancy for all locations increased 10.2% to 83.6% from the third 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 95.7%. 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 foot. Over the last twelve months, we added approximately 3.9 million net rentable square feet, with approximately 0.9 million of that coming on during the third quarter of fiscal 2022.
Moving and Storage other revenues increased $30.4 million during the third quarter of fiscal 2022, compared with the third quarter of fiscal 2021 largely from increased moving and storage transactions within our U-Box program.
For the third quarter of fiscal 2022 compared with the third quarter of fiscal 2021, depreciation, net of gains on sales decreased $48.9 million. This was a combination of depreciation expense on the rental equipment fleet increasing $6.9 million while being more than offset by an increase on gains from the sales of rental trucks of $60.6 million from higher resale values. All other depreciation, primarily real estate related, increased $4.9 million.
For the first nine months of fiscal 2022 and fiscal 2021, gross rental equipment capital expenditures totaled approximately $809 million compared with $547 million, proceeds from the sales of rental equipment totaled $471 million compared with $430 million and spending on real estate related acquisitions and projects totaled approximately $783 million compared with $365 million, respectively.
Fleet maintenance and repair costs increased $31.9 million in the third quarter of fiscal 2022 compared with the same period last year due to preventative maintenance from higher customer activity. The reduced fleet acquisition activity associated with COVID-19 and manufacturer supply chain issues during fiscal year 2021 and the first six months of fiscal year 2022 has contributed to the increased need for preventative maintenance this year.
Operating earnings at our Moving and Storage operating segment increased $139.8 million in the third quarter of fiscal 2022 compared with the same period last year. Total revenues increased $236.3 million and total costs and expenses increased $96.5 million.
Cash and credit availability at the Moving and Storage operating segment was $2,344.2 million as of December 31, 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 2.71%. The notes funded in January 2022.
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 third quarter of fiscal 2022 on Thursday, February 10, 2022, 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.

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 855,000 rentable storage units and 73.6 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 December 31, 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 third quarter of fiscal 2022 and 2021.

		Quarter Ended December 31,
		2021		2020
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	975,552	$	808,215
Self-storage revenues		159,424		123,024
Self-moving and self-storage product and service sales		75,402		74,586
Property management fees		9,651		8,765
Life insurance premiums		27,010		29,993
Property and casualty insurance premiums		25,618		19,933
Net investment and interest income		31,184		35,580
Other revenue		100,495		69,886
Consolidated revenue	$	1,404,336	$	1,169,982

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

		Quarter Ended December 31,
		2021		2020
		(Unaudited)
		(In thousands)
Moving and storage
Revenues	$	1,321,580	$	1,085,281
Earnings from operations before equity in earnings of subsidiaries		403,853		264,004
Property and casualty insurance
Revenues		29,820		26,640
Earnings from operations		9,657		11,491
Life insurance
Revenues		56,417		61,077
Earnings from operations		3,603		8,724
Eliminations
Revenues		(3,481)		(3,016)
Earnings from operations before equity in earnings of subsidiaries		(389)		(273)
Consolidated Results
Revenues		1,404,336		1,169,982
Earnings from operations		416,724		283,946

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,
	2021	2020
	(Unaudited)
	(In thousands, except occupancy rate)
Unit count as of December 31	582	532
Square footage as of December 31	48,836	44,948
Average monthly number of units occupied	483	388
Average monthly occupancy rate based on unit count	83.6%	73.4%
Average monthly square footage occupied	42,239	34,802

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

		Nine Months Ended December 31,
		2021		2020
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	3,189,990	$	2,393,530
Self-storage revenues		450,302		347,252
Self-moving and self-storage product and service sales		272,478		264,564
Property management fees		26,847		23,952
Life insurance premiums		84,628		91,958
Property and casualty insurance premiums		64,986		49,536
Net investment and interest income		102,963		85,895
Other revenue		349,252		225,440
Consolidated revenue	$	4,541,446	$	3,482,127

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

		Nine Months Ended December 31,
		2021	2020
		(Unaudited)
		(In thousands)
Moving and storage
Revenues	$	4,291,833	3,256,899
Earnings from operations before equity in earnings of subsidiaries		1,442,836	789,621
Property and casualty insurance
Revenues		82,815	62,947
Earnings from operations		34,078	24,338
Life insurance
Revenues		176,061	170,290
Earnings from operations		13,882	16,684
Eliminations
Revenues		(9,263)	(8,009)
Earnings from operations before equity in earnings of subsidiaries		(1,163)	(821)
Consolidated Results
Revenues		4,541,446	3,482,127
Earnings from operations		1,489,633	829,822

	Nine Months Ended December 31,
	2021	2020
	(Unaudited)
	(In thousands, except occupancy rate)
Unit count as of December 31	582	532
Square footage as of December 31	48,836	44,948
Average monthly number of units occupied	465	369
Average monthly occupancy rate based on unit count	82.6%	71.0%
Average monthly square footage occupied	40,884	33,036

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		December 31,		March 31,
		2021		2021
		(Unaudited)
		(In thousands)
ASSETS
Cash and cash equivalents	$	2,327,462	$	1,194,012
Reinsurance recoverables and trade receivables, net		230,437		224,426
Inventories and parts, net		166,588		105,577
Prepaid expenses		211,449		469,144
Investments, fixed maturities and marketable equities		2,795,442		2,695,656
Investments, other		602,371		489,759
Deferred policy acquisition costs, net		101,770		89,749
Other assets		41,146		47,730
Right of use assets – financing, net		692,814		877,038
Right of use assets - operating		79,450		92,505
Related party assets		56,231		35,395
		7,305,160		6,320,991
Property, plant and equipment, at cost:
Land		1,264,742		1,075,813
Buildings and improvements		5,726,481		5,163,705
Furniture and equipment		841,957		786,505
Rental trailers and other rental equipment		569,150		477,921
Rental trucks		4,425,113		3,909,724
		12,827,443		11,413,668
Less: Accumulated depreciation		(3,544,525)		(3,083,053)
Total property, plant and equipment, net		9,282,918		8,330,615
Total assets	$	16,588,078	$	14,651,606
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	634,795	$	645,575
Notes, loans and finance leases payable, net		5,397,856		4,668,907
Operating lease liability		79,334		92,510
Policy benefits and losses, claims and loss expenses payable		1,003,895		997,701
Liabilities from investment contracts		2,302,591		2,161,530
Other policyholders' funds and liabilities		9,610		12,420
Deferred income		43,352		42,592
Deferred income taxes, net		1,301,229		1,178,489
Total liabilities		10,772,662		9,799,724

Common stock		10,497		10,497
Additional paid-in capital		453,819		453,819
Accumulated other comprehensive income		63,264		106,857
Retained earnings		5,965,486		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		5,815,416		4,851,882
Total liabilities and stockholders' equity	$	16,588,078	$	14,651,606

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Quarter Ended December 31,
		2021		2020
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	975,552	$	808,215
Self-storage revenues		159,424		123,024
Self-moving and self-storage products and service sales		75,402		74,586
Property management fees		9,651		8,765
Life insurance premiums		27,010		29,993
Property and casualty insurance premiums		25,618		19,933
Net investment and interest income		31,184		35,580
Other revenue		100,495		69,886
Total revenues		1,404,336		1,169,982

Costs and expenses:
Operating expenses		658,095		539,942
Commission expenses		105,155		86,891
Cost of sales		57,042		45,752
Benefits and losses		47,266		45,631
Amortization of deferred policy acquisition costs		7,947		6,572
Lease expense		7,394		7,522
Depreciation, net of gains on disposal		103,736		152,602
Net losses on disposal of real estate		977		1,124
Total costs and expenses		987,612		886,036

Earnings from operations		416,724		283,946
Other components of net periodic benefit costs		(280)		(247)
Interest expense		(44,042)		(42,128)
Fees on early extinguishment of debt		(956)		-
Pretax earnings		371,446		241,571
Income tax expense		(89,980)		(58,586)
Earnings available to common shareholders	$	281,466	$	182,985
Basic and diluted earnings per common share	$	14.35	$	9.33
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,607,788

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


		Nine Months Ended December 31,
		2021		2020
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	3,189,990	$	2,393,530
Self-storage revenues		450,302		347,252
Self-moving and self-storage products and service sales		272,478		264,564
Property management fees		26,847		23,952
Life insurance premiums		84,628		91,958
Property and casualty insurance premiums		64,986		49,536
Net investment and interest income		102,963		85,895
Other revenue		349,252		225,440
Total revenues		4,541,446		3,482,127

Costs and expenses:
Operating expenses		1,968,698		1,606,687
Commission expenses		346,200		255,431
Cost of sales		193,448		159,516
Benefits and losses		139,194		130,660
Amortization of deferred policy acquisition costs		23,520		19,012
Lease expense		22,482		20,995
Depreciation, net of gains on disposal		361,201		455,711
Net (gains) losses on disposal of real estate		(2,930)		4,293
Total costs and expenses		3,051,813		2,652,305

Earnings from operations		1,489,633		829,822
Other components of net periodic benefit costs		(840)		(740)
Interest expense		(122,765)		(122,174)
Fees on early extinguishment of debt		(956)		-
Pretax earnings		1,365,072		706,908
Income tax expense		(328,533)		(169,832)
Earnings available to common shareholders	$	1,036,539	$	537,076
Basic and diluted earnings per common share	$	52.86	$	27.39
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 December 31, 2021, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during the first nine months of fiscal 2022. The tables below show adjusted PPE as of December 31, 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.

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

Property, plant and equipment, at cost
Land	$	1,264,742	$	-	$	1,264,742	$	1,075,813
Buildings and improvements		5,726,481		-		5,726,481		5,163,705
Furniture and equipment		841,957		14,732		856,689		808,821
Rental trailers and other rental equipment		569,150		173,940		743,090		681,515
Rental trucks		4,425,113		1,243,830		5,668,943		5,403,822
Subtotal		12,827,443		1,432,502		14,259,945		13,133,676
Less: Accumulated depreciation		(3,544,525)		(739,688)		(4,284,213)		(3,926,023)
Total property, plant and equipment, net	$	9,282,918	$	692,814	$	9,975,732	$	9,207,653

						March 31,
						2021
		March 31,		ROU Assets		Property, Plant and Equipment
		2021		Financing		Adjusted
		(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
Subtotal		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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AMERCO REPORTS THIRD QUARTER FISCAL 2022 FINANCIAL RESULTS

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