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06.02.2019 22:15:00
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AMERCO Reports Third Quarter Fiscal 2019 Financial Results
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 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 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 |
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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