Canada markets close in 4 hours 46 minutes

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.



Quarters Ended March 31,


Years Ended March 31,




2020


2019


2020


2019




(In thousands)

Self-moving equipment rentals

$

518,021

$

529,046

$

2,692,413

$

2,653,497


Self-storage revenues


108,801


96,179


418,741


367,276


Self-moving and self-storage product and service sales


57,490


56,327


265,091


264,146


Property management fees


6,919


6,641


30,406


29,148


Life insurance premiums


31,747


(44,098)


127,976


63,488


Property and casualty insurance premiums


14,997


14,121


66,053


60,853


Net investment and interest income


35,200


25,891


137,829


110,934


Other revenue


48,350


41,425


240,359


219,365


Consolidated revenue

$

821,525

$

725,532

$

3,978,868

$

3,768,707


 

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.



Quarters Ended March 31,


Years Ended March 31,



2020


2019


2020


2019



(In thousands)

Moving and storage









   Revenues

$

741,452

$

732,062

$

3,657,766

$

3,545,809

   Earnings (losses) from operations before equity in earnings of
       subsidiaries


(20,690)


13,013


471,962


569,241

Property and casualty insurance 









   Revenues


19,865


17,280


89,064


75,837

   Earnings from operations


15,442


5,833


42,884


27,406

Life insurance  









   Revenues


62,395


(23,196)


241,464


154,714

   Earnings from operations


6,482


8,669


26,394


25,481

Eliminations









   Revenues


(2,187)


(614)


(9,426)


(7,653)

   Earnings from operations before equity in earnings of subsidiaries


(276)


(278)


(1,112)


(1,141)

Consolidated Results









   Revenues


821,525


725,532


3,978,868


3,768,707

   Earnings from operations


958


27,237


540,128


620,987


 

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:



Quarters Ended March 31,



2020


2019



(In thousands, except occupancy rate)

Unit count as of March 31


503


428

Square footage as of March 31


42,082


36,237

Average monthly number of units occupied


329


283

Average monthly occupancy rate based on unit count


66.1%


66.9%

Average monthly square footage occupied


29,846


25,790

 



Years Ended March 31,



2020


2019



(In thousands, except occupancy rate)

Unit count as of March 31


503


428

Square footage as of March 31


42,082


36,237

Average monthly number of units occupied


319


275

Average monthly occupancy rate based on unit count


67.7%


68.7%

Average monthly square footage occupied


28,946


24,862

 


AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS




March 31,


March 31,



2020


2019



(In thousands)

ASSETS





Cash and cash equivalents

$

494,352

$

673,701

Reinsurance recoverables and trade receivables, net


186,672


224,785

Inventories and parts, net


101,083


103,504

Prepaid expenses


562,904


174,100

Investments, fixed maturities and marketable equities


2,492,738


2,235,397

Investments, other


360,373


300,736

Deferred policy acquisition costs, net


103,118


136,276

Other assets


71,956


78,354

Right of use assets - financing, net


1,080,353


-

Right of use assets - operating


106,631


-

Related party assets


34,784


30,889



5,594,964


3,957,742

Property, plant and equipment, at cost:





   Land


1,032,945


976,454

   Buildings and improvements


4,663,461


4,003,726

   Furniture and equipment


752,363


689,780

   Rental trailers and other rental equipment


511,520


590,039

   Rental trucks


3,595,933


4,762,028



10,556,222


11,022,027

Less: Accumulated depreciation


(2,713,162)


(3,088,056)

   Total property, plant and equipment


7,843,060


7,933,971

Total assets

$

13,438,024

$

11,891,713

LIABILITIES AND STOCKHOLDERS' EQUITY





Liabilities:





   Accounts payable and accrued expenses

$

554,353

$

556,873

   Notes, loans and finance/capital leases payable, net


4,621,291


4,163,323

   Operating lease liabilities


106,443


-

   Policy benefits and losses, claims and loss expenses payable


997,647


1,011,183

   Liabilities from investment contracts


1,802,217


1,666,742

   Other policyholders' funds and liabilities


10,190


15,047

   Deferred income


31,620


35,186

   Deferred income taxes


1,093,543


750,970

Total liabilities


9,217,304


8,199,324






Common stock


10,497


10,497

Additional paid-in capital


453,819


453,326

Accumulated other comprehensive income (loss)


34,652


(66,698)

Retained earnings


4,399,402


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


4,220,720


3,692,389

Total liabilities and stockholders' equity

$

13,438,024

$

11,891,713


 

 

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




Quarter Ended March 31,



2020


2019



(In thousands, except share and per share data)

Revenues:





   Self-moving equipment rentals

$

518,021

$

529,046

   Self-storage revenues


108,801


96,179

   Self-moving and self-storage products and service sales


57,490


56,327

   Property management fees


6,919


6,641

   Life insurance premiums


31,747


(44,098)

   Property and casualty insurance premiums


14,997


14,121

   Net investment and interest income


35,200


25,891

   Other revenue


48,350


41,425

      Total revenues


821,525


725,532






Costs and expenses:





   Operating expenses


499,810


476,815

   Commission expenses


54,792


56,324

   Cost of sales


35,841


31,710

   Benefits and losses


37,141


(36,919)

   Amortization of deferred policy acquisition costs


10,594


9,972

   Lease expense


7,000


8,929

   Depreciation, net of losses on disposals


174,836


151,518

   Net (gains) losses on real estate


553


(54)

      Total costs and expenses


820,567


698,295






Earnings from operations


958


27,237

   Other components of net periodic benefit costs


(264)


(253)

   Interest expense


(42,967)


(37,334)

Pretax losses


(42,273)


(10,350)

   Income tax benefit


164,641


11,181

Earnings available to common shareholders

$

122,368

$

831

Basic and diluted earnings per common share

$

6.24

$

0.04

Weighted average common shares outstanding: Basic and diluted


19,607,788


19,594,008


 

 

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




Twelve Months Ended March 31,



2020


2019



(In thousands, except share and per share data)

Revenues:





   Self-moving equipment rentals

$

2,692,413

$

2,653,497

   Self-storage revenues


418,741


367,276

   Self-moving and self-storage products and service sales


265,091


264,146

   Property management fees


30,406


29,148

   Life insurance premiums


127,976


63,488

   Property and casualty insurance premiums


66,053


60,853

   Net investment and interest income


137,829


110,934

   Other revenue


240,359


219,365

      Total revenues


3,978,868


3,768,707






Costs and expenses:





   Operating expenses


2,117,148


1,981,180

   Commission expenses


288,332


288,408

   Cost of sales


164,018


162,142

   Benefits and losses


174,836


100,277

   Amortization of deferred policy acquisition costs


31,219


28,556

   Lease expense


26,882


33,158

   Depreciation, net of (gains) losses on disposals


637,063


554,043

   Net gains on real estate


(758)


(44)

      Total costs and expenses


3,438,740


3,147,720






Earnings from operations


540,128


620,987

   Other components of net periodic benefit costs


(1,054)


(1,013)

   Interest expense


(160,950)


(142,445)

Pretax earnings


378,124


477,529

   Income tax benefit (expense)


63,924


(106,672)

Earnings available to common shareholders

$

442,048

$

370,857

Basic and diluted earnings per common share

$

22.55

$

18.93

Weighted average common shares outstanding: Basic and diluted


19,603,708


19,592,048

 

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.







March 31,









2020





March 31,


ROU
Assets


Property,
Plant and
Equipment


March 31,



2020


Financing


Adjusted


2019







(In thousands)










Property, plant and equipment, at cost









Land

$

1,032,945

$

-

$

1,032,945

$

976,454

Buildings and improvements


4,663,461


-


4,663,461


4,003,726

Furniture and equipment


752,363


21,113


773,476


689,780

Rental trailers and other rental equipment


511,520


116,072


627,592


590,039

Rental trucks


3,595,933


1,738,081


5,334,014


4,762,028

Right-of-use assets, gross


10,556,222


1,875,266


12,431,488


11,022,027

Less: Accumulated depreciation


(2,713,162)


(794,913)


(3,508,075)


(3,088,056)

Total property, plant and equipment, net

$

7,843,060

$

1,080,353

$

8,923,413

$

7,933,971











 

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.



Quarter Ended



March 31, 2020




(In thousands, except share and per share amounts)






AMERCO and Consolidated Subsidiaries



Earnings per common share: basic and diluted

$

6.24

CARES Act adjustment, per common share basic and diluted


(7.45)

Losses per common share: basic and diluted before CARES Act adjustment

$

(1.21)




CARES Act adjustment

$

(146,015)

CARES Act adjustment, per common share basic and diluted

$

(7.45)

Weighted average shares outstanding: basic and diluted


19,607,788

 



Year Ended



March 31, 2020




(In thousands, except share and per share amounts)






AMERCO and Consolidated Subsidiaries



Earnings per common share: basic and diluted

$

22.55

CARES Act adjustment, per common share basic and diluted


(7.45)

Earnings per common share: basic and diluted before CARES Act adjustment

$

15.10




CARES Act adjustment

$

(146,015)

CARES Act adjustment, per common share basic and diluted

$

(7.45)

Weighted average shares outstanding: basic and diluted


19,603,708

 

Cision

View original content:http://www.prnewswire.com/news-releases/amerco-reports-fiscal-2020-financial-results-301066469.html

SOURCE AMERCO