Amerco Reports Second Quarter Fiscal 2021 Financial Results

RENO, Nev., Nov. 4, 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 its second quarter ended September 30, 2020, of $266.4 million, or $13.58 per share, compared with net earnings of $156.3 million, or $7.97 per share, for the same period last year.

For the six-month period ended September 30, 2020, net earnings available to shareholders were $354.1 million, or $18.06 per share, compared with net earnings of $288.7 million, or $14.73 per share, for the same period last year.

"We drastically cut rental equipment additions in March as OEM plants closed and we prepared for the worst. Likewise, we cut real estate acquisition and development investment. It will take about two years to normalize rental equipment investment, probably longer on real estate investment," stated Joe Shoen, chairman of AMERCO. "In both self-storage and self-move, we are in very competitive markets. This remains a close game. We are committed to winning. Over the last 7 months, we have simply outworked our peer group. No one knows what next year will bring."

Highlights of Second Quarter Fiscal 2021 Results

Self-moving equipment rental revenues increased $126.7 million or 16% during the second quarter of fiscal 2021, compared with the second quarter of fiscal 2020. As government-imposed restrictions on public activity have lessened and customer behavior has evolved, revenue and transactions for both our In-town and one-way markets improved for trucks and trailers. For July, August and September revenues increased by approximately 11%, 14% and 24%, respectively. Compared to the same period last year, we increased the number of retail locations, independent dealers, box trucks and trailers in the rental fleet.
Self-storage revenues increased $10.3 million or 10% during the second quarter of fiscal 2021, compared with the second quarter of fiscal 2020. The average monthly number of occupied units increased by 15%, or 50,000 units, during the second quarter of fiscal 2021 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of occupancy gains at existing locations and from the addition of new capacity to the portfolio. Over the last twelve months, we added approximately 4.4 million net rentable square feet, or an 11% increase, with approximately 0.6 million of that coming on during the second quarter of fiscal 2021.
Sales of self-moving and self-storage products and services increased $25.5 million, or 35% compared with the second quarter of fiscal 2020 due to increased sales of hitches, moving supplies and propane.
For the second quarter of fiscal 2021 compared with the second quarter of fiscal 2020, depreciation, net of gains and losses on sales decreased $14.1 million. Depreciation expense on the rental equipment fleet decreased $10.5 million as new truck production has been slowed by COVID-19 related delays at manufacturers, while gains on the sales of rental trucks increased $10.1 million from higher resale values and additional box truck sales. All other depreciation increased $6.5 million from the increase in new moving and storage locations.
For the first six months of fiscal 2021 and fiscal 2020 gross truck and trailer capital expenditures were approximately $395 million compared with $1,037 million, proceeds from the sales of rental equipment were $310 million compared with $397 million and spending on real estate related acquisitions and projects were approximately $226 million compared with $423 million.
Fleet maintenance and repair costs decreased $6.8 million in the second quarter of fiscal 2021 compared with the same period last year.
Operating earnings at our Moving and Storage operating segment increased $145.0 million in the second quarter of fiscal 2021 compared with the same period last year. Total revenues climbed $175.8 million and total costs and expenses increased $30.8 million.
Cash and credit availability at the Moving and Storage operating segment was $1,293.3 million at September 30, 2020 compared with $498.1 million at March 31, 2020.
On August 20, 2020, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on September 7, 2020. The dividend was paid on September 21, 2020.

AMERCO will hold its investor call for the second quarter of fiscal 2021 on Thursday, November 5, 2020, 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.

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 September 30, 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 second quarter of fiscal 2021 and 2020.

		Quarter Ended September 30,
		2020		2019
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	931,030	$	804,325
Self-storage revenues		115,273		104,965
Self-moving and self-storage product and service sales		98,628		73,121
Property management fees		7,840		7,233
Life insurance premiums		31,057		32,355
Property and casualty insurance premiums		15,869		18,365
Net investment and interest income		33,333		33,098
Other revenue		91,878		76,752
Consolidated revenue	$	1,324,908	$	1,150,214

Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2021 and 2020.

		Quarter Ended September 30,
		2020		2019
		(Unaudited)
		(In thousands)
Moving and storage
Revenues	$	1,245,318	$	1,069,552
Earnings from operations before equity in earnings of subsidiaries		373,956		228,987
Property and casualty insurance
Revenues		22,673		23,528
Earnings from operations		12,069		9,092
Life insurance
Revenues		59,560		59,859
Earnings from operations		6,040		6,941
Eliminations
Revenues		(2,643)		(2,725)
Earnings from operations before equity in earnings of subsidiaries		(275)		(280)
Consolidated Results
Revenues		1,324,908		1,150,214
Earnings from operations		391,790		244,740

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 September 30,
	2020	2019
	(Unaudited)
	(In thousands, except occupancy rate)
Unit count as of September 30	520	471
Square footage as of September 30	43,985	39,629
Average monthly number of units occupied	373	323
Average monthly occupancy rate based on unit count	71.9%	69.5%
Average monthly square footage occupied	33,296	29,200

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2021 and 2020.

		Six Months Ended September 30,
		2020		2019
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	1,585,315	$	1,552,921
Self-storage revenues		224,228		203,239
Self-moving and self-storage product and service sales		189,978		153,147
Property management fees		15,187		14,389
Life insurance premiums		61,965		65,065
Property and casualty insurance premiums		29,603		31,789
Net investment and interest income		50,315		68,847
Other revenue		155,554		140,066
Consolidated revenue	$	2,312,145	$	2,229,463

Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2021 and 2020.

	Six Months Ended September 30,
	2020	2019
	(Unaudited)
	(In thousands)
Moving and storage
Revenues	2,171,618	2,069,950
Earnings from operations before equity in earnings of subsidiaries	525,617	430,883
Property and casualty insurance
Revenues	36,307	43,833
Earnings from operations	12,847	17,558
Life insurance
Revenues	109,213	120,180
Earnings from operations	7,960	10,722
Eliminations
Revenues	(4,993)	(4,500)
Earnings from operations before equity in earnings of subsidiaries	(548)	(558)
Consolidated Results
Revenues	2,312,145	2,229,463
Earnings from operations	545,876	458,605

	Six Months Ended September 30,
	2020	2019
	(Unaudited)
	(In thousands, except occupancy rate)
Unit count as of September 30	520	471
Square footage as of September 30	43,985	39,629
Average monthly number of units occupied	360	313
Average monthly occupancy rate based on unit count	69.8%	69.0%
Average monthly square footage occupied	32,153	28,310

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		September 30,		March 31,
		2020		2020
		(Unaudited)
		(In thousands)
ASSETS
Cash and cash equivalents	$	1,215,568	$	494,352
Reinsurance recoverables and trade receivables, net		213,397		186,672
Inventories and parts, net		100,595		101,083
Prepaid expenses		447,073		562,904
Investments, fixed maturities and marketable equities		2,495,342		2,492,738
Investments, other		425,527		360,373
Deferred policy acquisition costs, net		93,407		103,118
Other assets		71,314		71,956
Right of use assets – financing, net		970,361		1,080,353
Right of use assets - operating		101,946		106,631
Related party assets		32,397		34,784
		6,166,927		5,594,964
Property, plant and equipment, at cost:
Land		1,052,205		1,032,945
Buildings and improvements		4,863,590		4,663,461
Furniture and equipment		767,290		752,363
Rental trailers and other rental equipment		531,465		511,520
Rental trucks		3,644,674		3,595,933
		10,859,224		10,556,222
Less: Accumulated depreciation		(2,902,673)		(2,713,162)
Total property, plant and equipment, net		7,956,551		7,843,060
Total assets	$	14,123,478	$	13,438,024
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	630,666	$	554,353
Notes, loans and finance/capital leases payable, net		4,701,225		4,621,291
Operating lease liability		101,976		106,443
Policy benefits and losses, claims and loss expenses payable		1,015,189		997,647
Liabilities from investment contracts		1,838,280		1,802,217
Other policyholders' funds and liabilities		5,426		10,190
Deferred income		41,715		31,620
Deferred income taxes, net		1,183,370		1,093,543
Total liabilities		9,517,847		9,217,304

Common stock		10,497		10,497
Additional paid-in capital		453,819		453,819
Accumulated other comprehensive income		78,156		34,652
Retained earnings		4,740,809		4,399,402
Cost of common stock in treasury, net		(525,653)		(525,653)
Cost of preferred stock in treasury, net		(151,997)		(151,997)
Unearned employee stock ownership plan stock		-		-
Total stockholders' equity		4,605,631		4,220,720
Total liabilities and stockholders' equity	$	14,123,478	$	13,438,024

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Quarter Ended September 30,
		2020		2019
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	931,030	$	804,325
Self-storage revenues		115,273		104,965
Self-moving and self-storage products and service sales		98,628		73,121
Property management fees		7,840		7,233
Life insurance premiums		31,057		32,355
Property and casualty insurance premiums		15,869		18,365
Net investment and interest income		33,333		33,098
Other revenue		91,878		76,752
Total revenues		1,324,908		1,150,214

Costs and expenses:
Operating expenses		574,083		565,413
Commission expenses		99,365		86,099
Cost of sales		60,933		43,930
Benefits and losses		45,452		45,825
Amortization of deferred policy acquisition costs		5,552		6,515
Lease expense		6,870		6,356
Depreciation, net of gains on disposals		137,438		151,553
Net (gains) losses on real estate		3,425		(217)
Total costs and expenses		933,118		905,474

Earnings from operations		391,790		244,740
Other components of net periodic benefit costs		(246)		(264)
Interest expense		(40,525)		(39,122)
Pretax earnings		351,019		205,354
Income tax expense		(84,654)		(49,028)
Earnings available to common shareholders	$	266,365	$	156,326
Basic and diluted earnings per common share	$	13.58	$	7.97
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,602,566

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Six Months Ended September 30,
		2020		2019
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	1,585,315	$	1,552,921
Self-storage revenues		224,228		203,239
Self-moving and self-storage products and service sales		189,978		153,147
Property management fees		15,187		14,389
Life insurance premiums		61,965		65,065
Property and casualty insurance premiums		29,603		31,789
Net investment and interest income		50,315		68,847
Other revenue		155,554		140,066
Total revenues		2,312,145		2,229,463

Costs and expenses:
Operating expenses		1,066,745		1,099,885
Commission expenses		168,540		166,998
Cost of sales		113,764		92,859
Benefits and losses		85,029		94,831
Amortization of deferred policy acquisition costs		12,440		12,579
Lease expense		13,473		13,392
Depreciation, net of gains on disposals		303,109		292,153
Net (gains) losses on real estate		3,169		(1,839)
Total costs and expenses		1,766,269		1,770,858

Earnings from operations		545,876		458,605
Other components of net periodic benefit costs		(493)		(527)
Interest expense		(80,046)		(78,010)
Pretax earnings		465,337		380,068
Income tax expense		(111,246)		(91,320)
Earnings available to common shareholders	$	354,091		288,748
Basic and diluted earnings per common share	$	18.06	$	14.73
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,600,211

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 September 30, 2020, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during the first six months of fiscal 2021. The table below shows adjusted PPE as of September 30, 2020 and March 31, 2020, 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.

						September 30,		March 31,
						2020		2020
		September 30,		ROU Assets		Property, Plant and Equipment		Property, Plant and Equipment
		2020		Financing		Adjusted		Adjusted
		(Unaudited)
		(In thousands)

Property, plant and equipment, at cost
Land	$	1,052,205	$	-	$	1,052,205	$	1,032,945
Buildings and improvements		4,863,590		-		4,863,590		4,663,461
Furniture and equipment		767,290		20,965		788,255		773,476
Rental trailers and other rental equipment		531,465		115,875		647,340		627,592
Rental trucks		3,644,674		1,637,456		5,282,130		5,334,014
Right-of-use assets, gross		10,859,224		1,774,296		12,633,520		12,431,488
Less: Accumulated depreciation		(2,902,673)		(803,935)		(3,706,608)		(3,508,075)
Total property, plant and equipment, net	$	7,956,551	$	970,361	$	8,926,912	$	8,923,413