AMERCO Reports Third Quarter Fiscal 2019 Financial Results

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February 6, 2019 4:15 PM EST

RENO, Nev., Feb. 6, 2019 /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, 2018, of $78.6 million, or $4.01 per share, compared with net earnings of $528.9 million, or $27.00 per share, for the same period last year. Included in the results for the quarter ended December 31, 2017, was a $17.32 per share, or $339.2 million benefit resulting from the Tax Cuts and Jobs Act and an additional after-tax benefit of $7.34 per share or $143.8 million resulting from the sale of a portion of our Chelsea, NY property.  Excluding these items, adjusted earnings were $2.34 per share for the quarter ended December 31, 2017. These adjustments to our net earnings and earnings per share provide a reconciliation for comparison of our financial performance for the periods presented.

For the nine-month period ended December 31, 2018, net earnings available to shareholders were $370.0 million, or $18.89 per share, compared with net earnings of $779.7 million, or $39.81 per share, for the same period last year. Included in the results for the nine-month period ended December 31, 2017, was a $17.32 per share, or $339.2 million benefit resulting from the Tax Cuts and Jobs Act and an additional after-tax benefit of $7.34 per share or $143.8 million resulting from the sale of a portion of our Chelsea, NY property.  Excluding these items, adjusted earnings were $15.15 per share for the nine-month period ended December 31, 2017.  

"Cutting through all of the unique financial events from the third quarter of last fiscal year, we have made progress towards improving profitability," stated Joe Shoen, chairman of AMERCO. "I believe that we can do better. Discretionary personnel bonus amounts that were recognized in the second quarter last year have yet to be determined. Fleet repair and maintenance is still not where I want it."

Highlights of Third Quarter Fiscal 2019 Results

  • Self-moving equipment rental revenues increased $51.3 million or 9% during the third quarter of fiscal 2019, compared with the third quarter of fiscal 2018. Improvements came from One-way and in-town markets and both experienced transaction growth combined with increased revenue per transaction. Corporate account rentals also contributed to the overall increase. Compared to the same period last year, we increased the number of Company-owned locations along with the number of box trucks, trailers and towing devices in the rental fleet.
  • Self-storage revenues increased $11.3 million during the third quarter of fiscal 2019, compared with the third quarter of fiscal 2018. The average monthly amount of occupied square feet increased by 12% during the third quarter of fiscal 2019 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of improved rates per square feet, occupancy gains at existing locations and from the addition of new facilities to the portfolio. Over the last twelve months, we have added approximately 4.9 million net rentable square feet or a 16% increase to our owned self-storage portfolio with approximately 1.1 million of that coming on during the third quarter.
  • For the third quarter of fiscal 2019 compared with the third quarter of fiscal 2018, depreciation, net of gains and losses on sales increased $6.4 million. Depreciation expense on the rental equipment fleet decreased $1.6 million and gains on the sales of rental trucks decreased $3.4 million. We sold fewer used trucks but the average sales proceeds per trucks improved in the third quarter of fiscal 2019, compared with the same period last year. All other depreciation increased $4.5 million due primarily to the increase in new moving and storage locations.
  • Net gains on the sale of real estate decreased $192.4 million. The decrease is the result of the sale of a portion of our Chelsea, NY property which resulted in a pre-tax gain of $190.7 million in the third quarter of fiscal 2018.
  • For the first nine months of fiscal 2019 and fiscal 2018 gross truck and trailer capital expenditures totaled approximately $882 million compared with $788 million, proceeds from the sales of rental equipment totaled $559 million compared with $389 million and spending on real estate related acquisitions and projects totaled approximately $639 million compared with $400 million, respectively.
  • Fleet maintenance and repair costs decreased $10.3 million in the third quarter of fiscal 2019 compared with the same period last year primarily related to the decrease in the number of trucks sold.
  • Operating earnings at our Moving and Storage operating segment, excluding the net gains on disposal of real estate, increased $26.6 million in the third quarter of fiscal 2019 compared with the same period last year. Total revenues climbed $76.4 million and total costs and expenses increased $49.8 million.
  • The effective federal income tax rate for third quarter of fiscal 2019 benefited from the Tax Cuts and Jobs Act. Had this rate been in effect for the third quarter of fiscal 2018 it would have increased adjusted earnings by $17.6 million or $0.90 per share, to $63.5 million, or $3.24 per share for the quarter.
  • Cash and credit availability at the Moving and Storage operating segment was $980.3 million at December 31, 2018 compared with $882.0 million at March 31, 2018.
  • On December 5, 2018, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on December 20, 2018. The dividend was paid on January 7, 2019.

AMERCO will hold its investor call for the third quarter of fiscal 2019 on Thursday, February 7, 2019, 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 AMERCOAMERCO 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, 2018, 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 2019 and 2018.

Quarter Ended December 31,

2018

2017

(Unaudited)

(In thousands)

Self-moving equipment rentals

$

626,136

$

574,801

Self-storage revenues

93,392

82,127

Self-moving and self-storage product and service sales

55,665

53,130

Property management fees

7,899

9,881

Life insurance premiums

34,778

38,957

Property and casualty insurance premiums

17,668

16,093

Net investment and interest income

32,211

28,821

Other revenue

51,342

39,072

Consolidated revenue

$

919,091

$

842,882

Listed below are revenues and earnings from operations at each of our operating segments for the third quarter of fiscal 2019 and 2018.

Quarter Ended December 31,

2018

2017

(Unaudited)

(In thousands)

Moving and storage

Revenues

$

838,928

$

762,487

Earnings from operations before equity in earnings of subsidiaries

119,959

285,687

Property and casualty insurance 

Revenues

22,146

20,399

Earnings from operations

11,001

7,595

Life insurance  

Revenues

60,435

62,379

Earnings from operations

7,429

10,382

Eliminations

Revenues

(2,418)

(2,383)

Earnings from operations before equity in earnings of subsidiaries

(287)

(296)

Consolidated Results

Revenues

919,091

842,882

Earnings from operations

138,102

303,368

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,

2018

2017

(Unaudited)

(In thousands, except occupancy rate)

Room count as of December 31

411

352

Square footage as of December 31

34,693

29,780

Average monthly number of rooms occupied

277

247

Average monthly occupancy rate based on room count

68.0%

70.9%

Average monthly square footage occupied

25,126

22,401

Listed below on a consolidated basis are revenues for our major product lines for the first nine months of fiscal 2019 and 2018.

Nine Months Ended December 31,

2018

2017

(Unaudited)

(In thousands)

Self-moving equipment rentals

$

2,124,451

$

1,985,217

Self-storage revenues

271,097

239,317

Self-moving and self-storage product and service sales

207,819

205,309

Property management fees

22,507

23,474

Life insurance premiums

107,586

116,910

Property and casualty insurance premiums

46,732

42,934

Net investment and interest income

85,043

82,507

Other revenue

177,940

147,825

Consolidated revenue

$

3,043,175

$

2,843,493

Listed below are revenues and earnings from operations at each of our operating segments for the first nine months of fiscal 2019 and 2018.

Nine Months Ended December 31,

2018

2017

(Unaudited)

(In thousands)

Moving and storage

Revenues

$

2,813,747

$

2,610,222

Earnings from operations before equity in earnings of subsidiaries

556,228

723,589

Property and casualty insurance 

Revenues

58,557

55,704

Earnings from operations

21,573

19,118

Life insurance  

Revenues

177,910

183,465

Earnings from operations

16,812

20,536

Eliminations

Revenues

(7,039)

(5,898)

Earnings from operations before equity in earnings of subsidiaries

(863)

(999)

Consolidated Results

Revenues

3,043,175

2,843,493

Earnings from operations

593,750

762,244

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,

2018

2017

(Unaudited)

(In thousands, except occupancy rate)

Room count as of December 31

411

352

Square footage as of December 31

34,693

29,780

Average monthly number of rooms occupied

272

245

Average monthly occupancy rate based on room count

69.4%

72.6%

Average monthly square footage occupied

24,553

22,064

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

March 31,

2018

2018

(Unaudited)

(In thousands)

ASSETS

Cash and cash equivalents

$

984,385

$

759,388

Reinsurance recoverables and trade receivables, net

191,764

193,538

Inventories and parts, net

96,187

89,877

Prepaid expenses

177,918

166,129

Investments, fixed maturities and marketable equities

2,127,342

1,919,860

Investments, other

332,532

399,064

Deferred policy acquisition costs, net

140,673

124,767

Other assets

83,839

244,782

Related party assets

38,156

33,276

4,172,796

3,930,681

Property, plant and equipment, at cost:

   Land

910,919

827,649

   Buildings and improvements

3,762,491

3,140,713

   Furniture and equipment

674,535

632,803

   Rental trailers and other rental equipment

572,645

545,968

   Rental trucks

4,532,134

4,390,750

10,452,724

9,537,883

Less: Accumulated depreciation

(2,979,760)

(2,721,142)

   Total property, plant and equipment

7,472,964

6,816,741

Total assets

$

11,645,760

$

10,747,422

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

   Accounts payable and accrued expenses

$

517,360

$

511,115

   Notes, loans and leases payable, net

3,975,764

3,513,076

   Policy benefits and losses, claims and loss expenses payable

1,087,742

1,248,033

   Liabilities from investment contracts

1,583,885

1,364,066

   Other policyholders' funds and liabilities

12,907

10,040

   Deferred income

29,226

34,276

   Deferred income taxes, net

746,836

658,108

Total liabilities

7,953,720

7,338,714

Common stock

10,497

10,497

Additional paid-in capital

453,116

452,746

Accumulated other comprehensive loss

(74,707)

(4,623)

Retained earnings

3,985,927

3,635,561

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

(5,143)

(7,823)

Total stockholders' equity

3,692,040

3,408,708

Total liabilities and stockholders' equity

$

11,645,760

$

10,747,422

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended December 31,

2018

2017

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals

$

626,136

$

574,801

Self-storage revenues

93,392

82,127

Self-moving and self-storage products and service sales

55,665

53,130

Property management fees

7,899

9,881

Life insurance premiums

34,778

38,957

Property and casualty insurance premiums

17,668

16,093

Net investment and interest income

32,211

28,821

Other revenue

51,342

39,072

     Total revenues

919,091

842,882

Costs and expenses:

Operating expenses

478,461

437,840

Commission expenses

67,493

63,487

Cost of sales

34,149

33,995

Benefits and losses

42,869

45,168

Amortization of deferred policy acquisition costs

6,654

5,952

Lease expense

7,890

8,415

Depreciation, net of gains on disposal

143,473

137,061

Net gains on disposal of real estate

-

(192,404)

     Total costs and expenses

780,989

539,514

Earnings from operations

138,102

303,368

Other components of net periodic benefit costs

(253)

(231)

Interest expense

(34,827)

(31,558)

Pretax earnings

103,022

271,579

Income tax (expense) benefit

(24,387)

257,315

Earnings available to common shareholders

$

78,635

$

528,894

Basic and diluted earnings per common share

$

4.01

$

27.00

Weighted average common shares outstanding: Basic and diluted

19,591,963

19,589,218

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Nine Months Ended December 31,

2018

2017

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals

$

2,124,451

$

1,985,217

Self-storage revenues

271,097

239,317

Self-moving and self-storage products and service sales

207,819

205,309

Property management fees

22,507

23,474

Life insurance premiums

107,586

116,910

Property and casualty insurance premiums

46,732

42,934

Net investment and interest income

85,043

82,507

Other revenue

177,940

147,825

     Total revenues

3,043,175

2,843,493

Costs and expenses:

Operating expenses

1,504,365

1,346,782

Commission expenses

232,084

222,203

Cost of sales

130,432

124,456

Benefits and losses

137,196

139,997

Amortization of deferred policy acquisition costs

18,584

18,217

Lease expense

24,229

25,277

Depreciation, net of gains on disposal

402,525

396,540

Net (gains) losses on disposal of real estate

10

(192,223)

     Total costs and expenses

2,449,425

2,081,249

Earnings from operations

593,750

762,244

Other components of net periodic benefit costs

(760)

(695)

Interest expense

(105,111)

(93,926)

Pretax earnings

487,879

667,623

Income tax (expense) benefit

(117,853)

112,117

Earnings available to common shareholders

$

370,026

$

779,740

Basic and diluted earnings per common share

$

18.89

$

39.81

Weighted average common shares outstanding: Basic and diluted

19,591,282

19,588,558

 

NON-GAAP FINANCIAL RECONCILIATION SCHEDULE

Quarter Ended

December 31, 2017

(In thousands, except share and per share amounts)

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

27.00

Tax Cuts and Jobs Act adjustment, per common share basic and diluted

(17.32)

Earnings per common share: basic and diluted before Tax Cuts and Jobs Act adjustment

$

9.68

Tax Cuts and Jobs Act adjustment

$

339,221

Tax Cuts and Jobs Act adjustment, per common share basic and diluted

$

17.32

Weighted average shares outstanding: basic and diluted

19,589,218

Quarter Ended

December 31, 2017

(In thousands, except share and per share amounts)

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

27.00

Gain on sale of Chelsea property, per common share basic and diluted

(7.34)

Earnings per common share: basic and diluted before gain on sale of Chelsea property

$

19.66

Gain on sale of Chelsea property

$

190,712

Income tax expense

(46,915)

Gain on sale of Chelsea property, net of taxes

$

143,797

Gain on sale of Chelsea property, net of taxes, per common share basic and diluted

$

7.34

Weighted average shares outstanding: basic and diluted

19,589,218

Cumulative adjustments:

Quarter Ended

December 31, 2017

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

27.00

Tax Cuts and Jobs Act adjustment, per common share basic and diluted

(17.32)

Gain on sale of Chelsea property, per common share basic and diluted

(7.34)

Earnings per common share: basic and diluted after cumulative adjustments

$

2.34

Nine Months Ended

December 31, 2017

(In thousands, except share and per share amounts)

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

39.81

Tax Cuts and Jobs Act adjustment, per common share basic and diluted

(17.32)

Earnings per common share: basic and diluted before Tax Cuts and Jobs Act adjustment

$

22.49

Tax Cuts and Jobs Act adjustment

$

339,221

Tax Cuts and Jobs Act adjustment, per common share basic and diluted

$

17.32

Weighted average shares outstanding: basic and diluted

19,588,558

Nine Months Ended

December 31, 2017

(In thousands, except share and per share amounts)

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

39.81

Gain on sale of Chelsea property, per common share basic and diluted

(7.34)

Earnings per common share: basic and diluted before gain on sale of Chelsea property

$

32.47

Gain on sale of Chelsea property

$

190,712

Income tax expense

(46,915)

Gain on sale of Chelsea property, net of taxes

$

143,797

Gain on sale of Chelsea property, net of taxes, per common share basic and diluted

$

7.34

Weighted average shares outstanding: basic and diluted

19,588,558

Cumulative adjustments:

Nine Months Ended

December 31, 2017

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

39.81

Tax Cuts and Jobs Act adjustment, per common share basic and diluted

(17.32)

Gain on sale of Chelsea property, per common share basic and diluted

(7.34)

Earnings per common share: basic and diluted after cumulative adjustments

$

15.15

 

Cision View original content:http://www.prnewswire.com/news-releases/amerco-reports-third-quarter-fiscal-2019-financial-results-300791168.html

SOURCE AMERCO


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