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