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AMERCO Reports First Quarter Fiscal 2017 Financial Results

RENO, Nev., Aug. 3, 2016 -- AMERCO , 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 first quarter ended June 30, 2016, of $147.2 million, or $7.51 per share, compared with net earnings of $171.3 million, or $8.74 per share, for the same period last year. 

"Our moving and storage business remains strong.  People are still moving," stated Joe Shoen, chairman of AMERCO. "We are seeing the strong truck chassis cost increases put through by Ford and General Motors reflected in our bottom line."

Highlights of First Quarter Fiscal 2017 Results

  • Self-moving equipment rental revenues increased $17.1 million, or 2.7% for the first quarter of fiscal 2017 compared with the first quarter of fiscal 2016. We increased the number of trucks in our rental equipment fleet, expanded the number of independent dealers in our distribution network and added Company-owned locations compared with the same period last year. Revenue increased primarily from transaction gains.
  • Self-storage revenues increased $10.5 million, or 18.4% for the first quarter of fiscal 2017 compared with the first quarter of fiscal 2016. The average monthly amount of occupied square feet increased by 14.2% during the first quarter of fiscal 2017 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of improved occupancy at existing locations as well as the addition of new facilities to the portfolio. Over the last twelve months we have added approximately 4.2 million net rentable square feet to the self-storage portfolio with approximately 1.0 million of that coming on during the first quarter.
  • Depreciation, net of gains and losses on disposals increased $44.4 million due to increased costs of acquisition, the sale of fewer trucks in the period and lower relative sales values compared to the same period last year.
  • For the first quarter of fiscal 2017 compared with the first quarter of fiscal 2016 gross truck and trailer capital expenditures were approximately $419 million compared with approximately $310 million. Proceeds from sales of rental equipment were $146 million compared with $193 million and spending on real estate related acquisitions and projects were approximately $124 million compared with $113 million, respectively.
  • As a result of changes in IRS regulations regarding the capitalization of low value assets, the Company has changed its policy. This shift in procedure results in the immediate recognition of reported operating costs with a lagging decrease in depreciation expense over the term that these assets would have been depreciated. For the first quarter of fiscal 2017 this resulted in an additional $4.7 million of operating expenses. This change is expected to benefit the Company through the immediate recognition of tax deductible costs.
  • Cash and credit availability at the Moving and Storage segment was $719.7 million at June 30, 2016 compared with $633.7 million at March 31, 2016.
  • On March 15, 2016, we declared a cash dividend on our Common Stock of $1.00 per share to holders of record on April 5, 2016. The dividend was paid on April 21, 2016.
  • Gary Horton, AMERCO's long serving and valued Treasurer, passed away suddenly on March 9, 2016. Jason Berg, our former Chief Accounting Officer, has been promoted to Chief Financial Officer. Mary Thompson, Treasurer of Repwest, has succeeded Jason as Chief Accounting Officer.
  • We are holding our 10th Annual Virtual Analyst and Investor meeting on Thursday, August 25, 2016 at 11:00 a.m. Arizona Time (2:00 p.m. Eastern). This is an opportunity to interact directly with Company representatives through a live video webcast. A brief presentation by the Company will be followed by a question and answer session.

AMERCO will hold its investor call for the first quarter of fiscal 2017 on Thursday, August 4, 2016, 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-Q for the quarter ended June 30, 2016, 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 first quarter of fiscal 2017 and 2016.



Quarter Ended June 30,



2016


2015



(Unaudited)



(In thousands)

 Self-moving equipment rentals

$

646,336

$

629,286

 Self-storage revenues


67,722


57,191

 Self-moving and self-storage product and service sales


77,303


77,258

 Property management fees


6,604


6,111

 Life insurance premiums


40,892


40,266

 Property and casualty insurance premiums


11,255


10,556

 Net investment and interest income


27,549


21,972

 Other revenue


45,748


42,165

 Consolidated revenue

$

923,409

$

884,805

 

Listed below are revenues and earnings from operations at each of our operating segments for the first quarter of fiscal 2017 and 2016.



Quarter Ended June 30,



2016


2015



(Unaudited)



(In thousands)

 Moving and storage





 Revenues

$

845,831

$

814,840

 Earnings from operations before equity in earnings of subsidiaries


248,505


280,579

 Property and casualty insurance  





 Revenues


16,885


14,890

 Earnings from operations


7,503


6,478

 Life insurance   





 Revenues


61,795


56,069

 Earnings from operations


3,916


4,211

 Eliminations





 Revenues


(1,102)


(994)

 Earnings from operations before equity in earnings of subsidiaries


(149)


(160)

 Consolidated Results





 Revenues


923,409


884,805

 Earnings from operations


259,775


291,108

 

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 June 30,



2016


2015



(In thousands, except occupancy rate)

Room count as of June 30


287


237

Square footage as of June 30


24,941


20,735

Average monthly number of rooms occupied


219


194

Average monthly occupancy rate based on room count


77.4%


82.5%

Average monthly square footage occupied


19,791


17,334

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS




June 30,


March 31,



2016


2016



(Unaudited)





(In thousands)

ASSETS





Cash and cash equivalents

$

646,188

$

600,646

Reinsurance recoverables and trade receivables, net


189,317


175,210

Inventories, net


82,923


79,756

Prepaid expenses


94,540


134,300

Investments, fixed maturities and marketable equities


1,656,159


1,510,538

Investments, other


280,860


310,072

Deferred policy acquisition costs, net


126,830


136,386

Other assets


80,467


77,210

Related party assets


80,812


85,734



3,238,096


3,109,852

Property, plant and equipment, at cost:





Land


603,246


587,347

Buildings and improvements


2,289,715


2,187,400

Furniture and equipment


422,404


399,943

Rental trailers and other rental equipment


479,071


462,379

Rental trucks


3,702,784


3,514,175



7,497,220


7,151,244

Less: Accumulated depreciation


(2,191,507)


(2,133,733)

Total property, plant and equipment


5,305,713


5,017,511

Total assets

$

8,543,809

$

8,127,363

LIABILITIES AND STOCKHOLDERS' EQUITY





Liabilities:





Accounts payable and accrued expenses

$

480,116

$

502,613

Notes, loans and leases payable


2,827,052


2,665,396

Policy benefits and losses, claims and loss expenses payable


1,072,728


1,071,412

Liabilities from investment contracts


1,016,653


951,490

Other policyholders' funds and liabilities


8,891


8,650

Deferred income


31,506


22,784

Deferred income taxes


687,576


653,612

Total liabilities


6,124,522


5,875,957






Common stock


10,497


10,497

Additional paid-in capital


451,773


451,629

Accumulated other comprehensive loss


(40,125)


(60,525)

Retained earnings


2,680,814


2,533,641

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


(6,022)


(6,186)

Total stockholders' equity


2,419,287


2,251,406

Total liabilities and stockholders' equity

$

8,543,809

$

8,127,363

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




Quarter Ended June 30,



2016


2015



(Unaudited)



(In thousands, except share and per share data)

Revenues:





Self-moving equipment rentals

$

646,336

$

629,286

Self-storage revenues


67,722


57,191

Self-moving and self-storage products and service sales


77,303


77,258

Property management fees


6,604


6,111

Life insurance premiums


40,892


40,266

Property and casualty insurance premiums


11,255


10,556

Net investment and interest income


27,549


21,972

Other revenue


45,748


42,165

Total revenues


923,409


884,805






Costs and expenses:





Operating expenses


385,082


363,169

Commission expenses


73,816


73,058

Cost of sales


43,362


41,255

Benefits and losses


47,003


43,391

Amortization of deferred policy acquisition costs


7,942


4,778

Lease expense


11,048


17,064

Depreciation, net of (gains) losses on disposals


95,381


50,982

Total costs and expenses


663,634


593,697






Earnings from operations


259,775


291,108

Interest expense


(26,644)


(22,100)

Pretax earnings


233,131


269,008

Income tax expense


(85,958)


(97,723)

Earnings available to common shareholders

$

147,173

$

171,285

Basic and diluted earnings per common share

$

7.51

$

8.74

Weighted average common shares outstanding: Basic and diluted


19,586,069


19,596,129

 

SOURCE AMERCO

CONTACT: Sebastien Reyes, Director of Investor Relations, AMERCO, (602) 263-6601, Sebastien_Reyes@uhaul.com

RELATED LINKS
http://www.amerco.com