AMERCO : Reports Third Quarter Fiscal 2012 Financial Results
02/08/2012| 04:15pm US/Eastern
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RENO, Nev., Feb. 8, 2012 /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 common shareholders for its third quarter ended December 31, 2011, of $0.7 million, or $0.04 per share, compared with $15.5 million, or $0.80 per share, for the same period last year. Included in the results for December 31, 2011, was an after-tax charge of $1.61 per share associated with Repwest's excess workers' compensation reserve strengthening. Taking into account this after-tax charge, adjusted earnings were $1.65 per share for the three months ended December 31, 2011.
For the nine-month period ended December 31, 2011, net earnings available to common shareholders were $171.1 million, or $8.79 per share, compared with net earnings of $160.8 million, or $8.28 per share for the same period last year. Included in the results for December 31, 2011, was an after-tax charge of $1.61 per share associated with Repwest's excess workers' compensation reserve strengthening. Taking into account this after-tax charge, adjusted earnings were $10.40 per share for the nine months ended December 31, 2011.
"Of course it is a disappointment to have the strong results in our U-Haul business clouded by the additional reserving at Repwest," stated Joe Shoen, chairman of AMERCO. "I still expect the year to finish strong for the entire organization," Shoen concluded.
Highlights of Third-Quarter Fiscal 2012 Results
-- Self-moving equipment rental revenues increased $32.8 million during the
third quarter of fiscal 2012 compared with the third quarter of fiscal
2011. In-Town and one-way rental transactions increased and utilization
of the fleet improved. The increase in revenues on a percentage basis
for the quarter was greater than what we experienced last year at this
time and it outpaced the nine month trend.
-- Self-storage revenues increased $3.2 million during the third quarter of
fiscal 2012, compared with the third quarter of fiscal 2011. The average
number of occupied rooms during the quarter increased nearly 10%
compared with the same period last year. We added more than 340,000 of
net rentable square feet during the quarter and 1,335,000 of net
rentable square feet over the last four quarters and are continuing to
opportunistically pursue our growth strategy.
-- Our life insurance segment continues to grow its business through
acquisitions, completing another reinsurance transaction in the third
quarter of fiscal 2012 for a block of whole life insurance policies
leading to a net increase in premiums of $58.3 million for the quarter,
compared to the same period last year. This comes on top of the
reinsurance agreement and acquisition that closed in the third quarter
of fiscal 2011, which added final expense life insurance policies and
Medicare supplement business.
-- Repwest, our property and casualty insurance subsidiary, determined
during the quarter that it was necessary to strengthen reserves on its
book of excess workers' compensation business that was written or
assumed from 1983 through 2003. This is discontinued business totally
unrelated to U-Haul's core moving and storage business. The total
non-cash after-tax charge for this reserve strengthening was $31.4
million or $1.61 per share. Repwest continues to maintain sufficient
capital to support its existing business.
-- Total costs and expenses increased $129.5 million during the third
quarter of fiscal 2012, compared with the third quarter of fiscal 2012.
Life Insurance accounted for $58 million primarily from entering into
the new reinsurance agreement. Property and Casualty's portion was $45.9
million due to the reserve strengthening adjustment. Moving and Storage
accounted for $25.7 million primarily due to variable costs associated
with increased revenues.
AMERCO will hold its investor call for the third quarter of fiscal 2012 on Thursday, February 9, 2012, 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
Use of Non-GAAP Financial Information
The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, the Company uses certain non-GAAP performance measures, including adjusted earnings per share, to provide a better understanding of the Company's underlying operational results. The Company uses adjusted earnings per share to present the impact of certain transactions or events that management expects to occur only infrequently.
About AMERCO
AMERCO is the parent company of Oxford Life and Repwest insurance companies, Amerco Real Estate Company and U-Haul International, Inc. 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 choice for the do-it-yourself mover. U-Haul customers' patronage has enabled the Company to maintain the largest rental fleet in the do-it-yourself moving industry which includes trucks, trailers and towing devices. U-Haul also offers storage 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 our Form 10-Q for the quarter ended December 31, 2011, 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 2012 and 2011.
Quarter Ended December 31,
--------------------------
2011 2010
---- ----
(Unaudited)
(In thousands)
Self-moving equipment rentals $375,744 $342,953
Self-storage revenues 33,846 30,638
Self-moving and self-storage products
and services sales 43,206 41,533
Property management fees 5,368 5,129
Life insurance premiums 132,643 74,306
Property and casualty insurance premiums 9,429 8,998
Net investment and interest income 15,234 13,213
Other revenue 17,619 13,212
------ ------
Consolidated revenue $633,089 $529,982
======== ========
Listed below are revenues and earnings (loss) from operations at each of our operating segments for the third quarter of fiscal 2012 and 2011.
Quarter Ended December
31,
-----------------------
2011 2010
---- ----
(Unaudited)
(In thousands)
Moving and storage
Revenues $483,066 $440,346
Earnings from operations before equity in
earnings of subsidiaries 61,766 44,778
Property and casualty insurance
Revenues 11,666 11,117
Earnings (loss) from operations (43,444) 1,876
Life insurance
Revenues 139,643 79,858
Earnings from operations 6,599 4,785
Eliminations
Revenues (1,286) (1,339)
Earnings from operations (48) (162)
Consolidated results
Revenues 633,089 529,982
Earnings from operations 24,873 51,277
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 December 31,
--------------------------
2011 2010
---- ----
(Unaudited)
(In thousands, except
occupancy rate)
Room count as of December 31 420 407
Square footage as of December 31 37,464 36,022
Average number of rooms occupied 329 313
Average occupancy rate based on room count 78.5% 77.2%
Average square footage occupied 29,879 28,491
Listed below on a consolidated basis are revenues for our major product lines for the first nine months of fiscal 2012 and 2011.
Nine Months Ended December
31,
---------------------------
2011 2010
---- ----
(Unaudited)
(In thousands)
Self-moving equipment rentals $1,333,918 $1,229,544
Self-storage revenues 99,682 89,512
Self-moving and self-storage
products and service sales 167,352 161,644
Property management fees 14,929 14,245
Life insurance premiums 229,839 152,131
Property and casualty insurance
premiums 25,076 23,477
Net investment and interest income 48,398 39,442
Other revenue 60,041 42,910
------ ------
Consolidated revenue $1,979,235 $1,752,905
Listed below are revenues and earnings (loss) from operations at each of our operating segments for the first nine months of fiscal 2012 and 2011.
Nine Months Ended
December 31,
-----------------
2011 2010
---- ----
(Unaudited)
(In thousands)
Moving and storage
Revenues $1,697,683 $1,558,136
Earnings from operations before equity in
earnings of subsidiaries 383,072 321,058
Property and casualty insurance
Revenues 32,471 29,607
Earnings (loss) from operations (39,348) 5,280
Life insurance
Revenues 252,834 169,099
Earnings from operations 14,430 11,556
Eliminations
Revenues (3,753) (3,937)
Earnings from operations (485) (387)
Consolidated results
Revenues 1,979,235 1,752,905
Earnings from operations 357,669 337,507
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:
Nine Months Ended December 31,
------------------------------
2011 2010
---- ----
(Unaudited)
(In thousands, except occupancy
rate)
Room count as of December 31 420 407
Square footage as of December 31 37,464 36,022
Average number of rooms occupied 330 315
Average occupancy rate based on room count 79.3% 78.0%
Average square footage occupied 29,990 28,593
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2011 2011
---- ----
(Unaudited)
(In thousands, except
share data)
ASSETS
Cash and cash equivalents $438,277 $375,496
Reinsurance recoverables and
trade receivables, net 351,828 205,371
Inventories, net 56,766 59,942
Prepaid expenses 54,941 57,624
Investments, fixed maturities
and marketable equities 724,456 659,809
Investments, other 242,539 201,868
Deferred policy acquisition
costs, net 62,384 52,870
Other assets 124,264 166,633
Related party assets 297,513 301,968
2,352,968 2,081,581
--------- ---------
Property, plant and equipment,
at cost:
Land 281,144 239,177
Buildings and improvements 1,058,932 1,024,669
Furniture and equipment 309,050 310,671
Rental trailers and other rental
equipment 253,791 249,700
Rental trucks 1,766,847 1,611,763
--------- ---------
3,669,764 3,435,980
Less: Accumulated depreciation (1,388,730) (1,341,407)
---------- ----------
Total property, plant and
equipment 2,281,034 2,094,573
--------- ---------
Total assets $4,634,002 $4,176,154
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Accounts payable and accrued
expenses $344,205 $304,006
Notes, loans and leases payable 1,507,976 1,397,842
Policy benefits and losses,
claims and loss expenses
payable 1,148,074 927,376
Liabilities from investment
contracts 236,805 246,717
Other policyholders' funds and
liabilities 5,382 8,727
Deferred income 28,218 27,209
Deferred income taxes 362,164 271,257
------- -------
Total liabilities 3,632,824 3,183,134
--------- ---------
Stockholders' equity:
Common stock 10,497 10,497
Additional paid-in capital 432,846 425,212
Accumulated other comprehensive
loss (53,619) (46,467)
Retained earnings 1,291,659 1,140,002
Cost of common shares in
treasury, net (525,653) (525,653)
Cost of preferred shares in
treasury, net (151,997) (7,189)
Unearned employee stock
ownership plan shares (2,555) (3,382)
------ ------
Total stockholders' equity 1,001,178 993,020
--------- -------
Total liabilities and
stockholders' equity $4,634,002 $4,176,154
========== ==========
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Ended December 31,
2011 2010
---- ----
(Unaudited)
(In thousands, except
share and per share
amounts)
Revenues:
Self-moving equipment rentals $375,744 $342,953
Self-storage revenues 33,846 30,638
Self-moving and self-storage
products and service sales 43,206 41,533
Property management fees 5,368 5,129
Life insurance premiums 132,643 74,306
Property and casualty insurance
premiums 9,429 8,998
Net investment and interest
income 15,234 13,213
Other revenue 17,619 13,212
------ ------
Total revenues 633,089 529,982
------- -------
Costs and expenses:
Operating expenses 269,834 252,986
Commission expenses 47,864 42,367
Cost of sales 24,505 22,586
Benefits and losses 173,748 70,312
Amortization of deferred policy
acquisition costs 3,666 2,480
Lease expense 32,325 37,159
Depreciation, net of (gains) on
disposals of (($699) and
($1,655), respectively) 56,274 50,815
Total costs and expenses 608,216 478,705
------- -------
Earnings from operations 24,873 51,277
Interest expense (22,744) (22,236)
------- -------
Pretax earnings 2,129 29,041
Income tax expense (1,401) (10,433)
------ -------
Net earnings 728 18,608
Less: Preferred stock dividends - (3,079)
--- ------
Earnings available to common
shareholders $728 $15,529
==== =======
Basic and diluted earnings per
common share $0.04 $0.80
===== =====
Weighted average common shares
outstanding: Basic and diluted 19,481,614 19,439,622
========== ==========
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended
December 31,
2011 2010
---- ----
(Unaudited)
(In thousands, except
share and per share
data)
Revenues:
Self-moving equipment rentals $1,333,918 $1,229,544
Self-storage revenues 99,682 89,512
Self-moving and self-storage
products and service sales 167,352 161,644
Property management fees 14,929 14,245
Life insurance premiums 229,839 152,131
Property and casualty insurance
premiums 25,076 23,477
Net investment and interest income 48,398 39,442
Other revenue 60,041 42,910
------ ------
Total revenues 1,979,235 1,752,905
--------- ---------
Costs and expenses:
Operating expenses 836,149 776,379
Commission expenses 168,865 152,149
Cost of sales 89,729 83,854
Benefits and losses 268,140 143,117
Amortization of deferred policy
acquisition costs 10,716 6,549
Lease expense 99,271 113,789
Depreciation, net of (gains) on
disposals of (($18,326) and
($18,964), respectively) 148,696 139,561
Total costs and expenses 1,621,566 1,415,398
--------- ---------
Earnings from operations 357,669 337,507
Interest expense (68,340) (65,488)
------- -------
Pretax earnings 289,329 272,019
Income tax expense (109,367) (101,690)
-------- --------
Net earnings 179,962 170,329
Less: Excess of redemption value
over carrying value of preferred
shares redeemed (5,908) (171)
Less: Preferred stock dividends (2,913) (9,336)
Earnings available to common
shareholders $171,141 $160,822
======== ========
Basic and diluted earnings per
common share $8.79 $8.28
===== =====
Weighted average common shares
outstanding: Basic and diluted 19,470,886 19,427,294
========== ==========
NON-GAAP FINANCIAL RECONCILIATION SCHEDULE
Quarter Ended
December 31, 2011
-----------------
(In thousands, except share and per share amounts)
AMERCO and Consolidated Entities
Earnings per common share basic and diluted $0.04
Charge for strengthening reserves 1.61
----
Earnings per common share basic and diluted before
charge for strengthening reserves $1.65
=====
Charge for strengthening reserves $(48,250)
Income tax benefit 16,888
------
Charge for strengthening reserves, net of taxes $(31,362)
========
Charge for strengthening reserves, net of taxes,
per common share basic and diluted $(1.61)
======
Weighted average shares outstanding: basic and
diluted 19,481,614
==========
Nine Months Ended
December 31, 2011
-----------------
(In thousands, except share and per share amounts)
AMERCO and Consolidated Entities
Earnings per common share basic and diluted $8.79
Charge for strengthening reserves 1.61
----
Earnings per common share basic and diluted before
charge for strengthening reserves $10.40
======
Charge for strengthening reserves $(48,250)
Income tax benefit 16,888
------
Charge for strengthening reserves, net of taxes $(31,362)
========
Charge for strengthening reserves, net of taxes,
per common share basic and diluted $(1.61)
======
Weighted average shares outstanding: basic and
diluted 19,470,886
==========
SOURCE AMERCO
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