AMERCO Reports Second Quarter Fiscal 2023 Financial Results

RENO, Nev., Nov. 9, 2022 /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, 2022, of $352.0 million, or $17.95 per share, compared with net earnings of $409.9 million, or $20.90 per share, for the same period last year.

For the six-month period ended September 30, 2022, net earnings available to shareholders were $686.0 million, or $34.99 per share, compared with net earnings of $755.1 million, or $38.51 per share, for the same period last year.

"Our customers face the same challenges we all hear about in the media every day. The public is stressed. We aim to be their best choice when they need our products and services," stated Joe Shoen, chairman of AMERCO. "The Company recently announced several corporate actions reflecting feedback from shareholders. I am excited by the potential positive impact these decisions will have on all constituents of the Company."

Highlights of Second Quarter Fiscal 2023 Results

• Self-moving equipment rental revenues decreased $17.0 million or 1% during the second quarter of fiscal 2023, compared with the second quarter of fiscal 2022. Transactions and revenue for In-Town business increased but were offset by declines in one-way business. Compared to the same period last year, we increased the number of retail locations, independent dealers, trucks, and trailers in the rental fleet.
• Self-storage revenues increased $32.1 million or 21% during the second quarter of fiscal 2023, compared with the second quarter of fiscal 2022. The average monthly number of occupied units increased by 64,500 units, during the second quarter of fiscal 2023 compared with the same period last year. Occupancy for all locations increased 1.1% to 85.4% from the second quarter of last year to this year while occupancy for the subsection of these locations that have been at 80% occupancy for the last two years was 96.1%. The growth in revenues and square feet rented comes from a combination of occupancy gains at existing locations, the addition of new capacity to the portfolio and from an improvement in average revenue per occupied feet. Over the last twelve months, we added approximately 5.4 million net rentable square feet, an increase of 1.5 million from this time last year.
• For the second quarter of fiscal 2023 compared with the second quarter of fiscal 2022, depreciation, net of gains and losses on sales decreased $18.4 million . This was a combination of depreciation expense on the rental equipment fleet increasing $3.9 million while being more than offset by an increase on gains from the sales of rental trucks of $28.3 million from higher resale values. All other depreciation, primarily real estate related, increased $6.0 million .
• For the first six months of fiscal 2023 and fiscal 2022 gross rental equipment capital expenditures were approximately $718 million compared with $564 million, proceeds from the sales of rental equipment were $325 million compared with $300 million and spending on real estate related acquisitions and projects were approximately $584 million compared with $444 million .
• Fleet maintenance and repair costs increased $33.7 million in the second quarter of fiscal 2023 compared with the same period last year due to preventative maintenance resulting from higher fleet activity combined with the slower rotation of new equipment into the fleet and older equipment out of the fleet.
• Operating earnings at our Moving and Storage operating segment decreased $41.0 million in the second quarter of fiscal 2023 compared with the same period last year. Total revenues climbed $59.9 million and total costs and expenses increased $100.9 million .
• Cash and credit availability at the Moving and Storage operating segment was $3,175.4 million as of September 30, 2022 compared with $2,723.2 million as of March 31, 2022.

Corporate Actions

After the quarter-end, the Company announced several corporate actions taken by an Independent Special Committee of its Board of Directors. This included changing the name of AMERCO to U-Haul Holding Company, the creation of a class of non-voting common stock, and a 9-for-1 dividend of these shares to all existing AMERCO shareholders of record as of November 3, 2022 . The Company anticipates trading of the 176,470,092 shares of non-voting common (Nasdaq: UHALB) to begin on November 10, 2022 . Subsequently, the Board announced a regular dividend policy for the new class of shares of $0.04 per share per quarter.

AMERCO will hold its investor call for the second quarter of fiscal 2023 on Thursday, November 10, 2022, 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. AMERCO will change its name to U-Haul Holding Company by the end of calendar year 2022.

About U-Haul
Founded in 1945, U-Haul is the No. 1 choice of do-it-yourself movers, with a network of more than 23,000 locations across all 50 states and 10 Canadian provinces. U-Haul Truck Share 24/7 offers secure access to U-Haul trucks every hour of every day through the customer dispatch option on their smartphones and our proprietary Live Verify technology. Our customers' patronage has enabled the U-Haul fleet to grow to approximately 186,000 trucks, 128,000 trailers and 46,000 towing devices. U-Haul is the third largest self-storage operator in North America and offers over 913,000 rentable storage units and 78.1 million square feet of self-storage space at owned and managed facilities. U-Haul is the largest retailer of propane in the U.S., and continues to be the largest installer of permanent trailer hitches in the automotive aftermarket industry. U-Haul has been recognized repeatedly as a leading "Best for Vets" employer and was recently named one of the 15 Healthiest Workplaces in America.

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, 2022, 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 2023 and 2022.

		Quarter Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	1,162,025	$	1,179,061
Self-storage revenues		185,586		153,485
Self-moving and self-storage product and service sales		96,864		92,191
Property management fees		9,277		8,747
Life insurance premiums		25,456		28,913
Property and casualty insurance premiums		25,718		22,499
Net investment and interest income		30,509		36,780
Other revenue		167,429		142,578
Consolidated revenue	$	1,702,864	$	1,664,254

Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2023 and 2022.

		Quarter Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands)
Moving and storage
Revenues	$	1,636,858	$	1,576,999
Earnings from operations before equity in earnings of subsidiaries		514,943		555,988
Property and casualty insurance
Revenues		23,363		29,539
Earnings from operations		5,686		15,189
Life insurance
Revenues		45,696		60,985
Earnings from operations		1,852		7,913
Eliminations
Revenues		(3,053)		(3,269)
Earnings from operations before equity in earnings of subsidiaries		(386)		(389)
Consolidated Results
Revenues		1,702,864		1,664,254
Earnings from operations		522,095		578,701

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,
		2022		2021
		(Unaudited)
		(In thousands, except occupancy rate)
Unit count as of September 30		638		568
Square footage as of September 30		53,303		47,903
Average monthly number of units occupied		540		476
Average monthly occupancy rate based on unit count		85.4 %		84.3 %
Average monthly square footage occupied		46,538		41,743

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2023 and 2022.

		Six Months Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	2,252,800	$	2,214,438
Self-storage revenues		358,763		290,878
Self-moving and self-storage product and service sales		206,215		197,076
Property management fees		18,416		17,196
Life insurance premiums		51,237		57,618
Property and casualty insurance premiums		45,690		39,368
Net investment and interest income		64,082		71,779
Other revenue		303,501		248,757
Consolidated revenue	$	3,300,704	$	3,137,110

Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2023 and 2022.

		Six Months Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands)
Moving and storage
Revenues		3,160,456		2,970,253
Earnings from operations before equity in earnings of subsidiaries		996,560		1,038,983
Property and casualty insurance
Revenues		46,445		52,995
Earnings from operations		14,037		24,421
Life insurance
Revenues		99,799		119,644
Earnings from operations		3,425		10,279
Eliminations
Revenues		(5,996)		(5,782)
Earnings from operations before equity in earnings of subsidiaries		(768)		(774)
Consolidated Results
Revenues		3,300,704		3,137,110
Earnings from operations		1,013,254		1,072,909

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:

		Six Months Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands, except occupancy rate)
Unit count as of September 30		638		568
Square footage as of September 30		53,303		47,903
Average monthly number of units occupied		529		456
Average monthly occupancy rate based on unit count		85.0 %		82.1 %
Average monthly square footage occupied		45,692		40,207

AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED BALANCE SHEETS
		September 30,		March 31,
		2022		2022
		(Unaudited)
		(In thousands)
ASSETS
Cash and cash equivalents	$	3,065,115	$	2,704,137
Reinsurance recoverables and trade receivables, net		203,202		229,343
Inventories and parts, net		166,136		158,888
Prepaid expenses		236,035		236,915
Investments, fixed maturities and marketable equities		2,615,758		2,893,399
Investments, other		548,198		543,755
Deferred policy acquisition costs, net		146,778		103,828
Other assets		47,900		60,409
Right of use assets - financing, net		529,000		620,824
Right of use assets - operating, net		68,208		74,382
Related party assets		48,337		47,851
		7,674,667		7,673,731
Property, plant and equipment, at cost:
Land		1,427,781		1,283,142
Buildings and improvements		6,390,317		5,974,639
Furniture and equipment		876,515		846,132
Rental trailers and other rental equipment		727,953		615,679
Rental trucks		5,087,235		4,638,814
		14,509,801		13,358,406
Less: Accumulated depreciation		(4,041,125)		(3,732,556)
Total property, plant and equipment, net		10,468,676		9,625,850
Total assets	$	18,143,343	$	17,299,581
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	706,402	$	677,785
Notes, loans and finance leases payable, net		6,298,831		6,022,497
Operating lease liabilities		67,858		74,197
Policy benefits and losses, claims and loss expenses payable		990,233		978,254
Liabilities from investment contracts		2,390,028		2,336,238
Other policyholders' funds and liabilities		12,126		10,812
Deferred income		56,871		49,157
Deferred income taxes, net		1,307,807		1,265,358
Total liabilities		11,830,156		11,414,298
Common stock		10,497		10,497
Additional paid-in capital		453,819		453,819
Accumulated other comprehensive income (loss)		(192,121)		46,384
Retained earnings		6,718,642		6,052,233
Cost of common stock in treasury, net		(525,653)		(525,653)
Cost of preferred stock in treasury, net		(151,997)		(151,997)
Total stockholders' equity		6,313,187		5,885,283
Total liabilities and stockholders' equity	$	18,143,343	$	17,299,581

AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Quarter Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	1,162,025	$	1,179,061
Self-storage revenues		185,586		153,485
Self-moving and self-storage products and service sales		96,864		92,191
Property management fees		9,277		8,747
Life insurance premiums		25,456		28,913
Property and casualty insurance premiums		25,718		22,499
Net investment and interest income		30,509		36,780
Other revenue		167,429		142,578
Total revenues		1,702,864		1,664,254
Costs and expenses:
Operating expenses		811,594		696,074
Commission expenses		125,341		127,896
Cost of sales		72,625		66,491
Benefits and losses		37,363		44,630
Amortization of deferred policy acquisition costs		6,972		6,750
Lease expense		7,684		7,441
Depreciation, net of gains on disposals		117,318		135,748
Net losses on real estate		1,872		523
Total costs and expenses		1,180,769		1,085,553
Earnings from operations		522,095		578,701
Other components of net periodic benefit costs		(304)		(280)
Interest expense		(57,193)		(39,545)
Fess on early extinguishment of debt		(959)		-
Pretax earnings		463,639		538,876
Income tax expense		(111,624)		(128,978)
Earnings available to common shareholders	$	352,015	$	409,898
Basic and diluted earnings per common share	$	17.95	$	20.90
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,607,788

AMERCO AND CONSOLIDATED ENTITIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Six Months Ended September 30,
		2022		2021
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	2,252,800	$	2,214,438
Self-storage revenues		358,763		290,878
Self-moving and self-storage products and service sales		206,215		197,076
Property management fees		18,416		17,196
Life insurance premiums		51,237		57,618
Property and casualty insurance premiums		45,690		39,368
Net investment and interest income		64,082		71,779
Other revenue		303,501		248,757
Total revenues		3,300,704		3,137,110
Costs and expenses:
Operating expenses		1,544,761		1,310,603
Commission expenses		243,834		241,045
Cost of sales		152,296		136,406
Benefits and losses		81,463		91,928
Amortization of deferred policy acquisition costs		14,644		15,573
Lease expense		15,159		15,088
Depreciation, net of gains on disposals		231,114		257,465
Net (gains) losses on real estate		4,179		(3,907)
Total costs and expenses		2,287,450		2,064,201
Earnings from operations		1,013,254		1,072,909
Other components of net periodic benefit costs		(608)		(560)
Interest expense		(106,992)		(78,723)
Fess on early extinguishment of debt		(959)		-
Pretax earnings		904,695		993,626
Income tax expense		(218,678)		(238,553)
Earnings available to common shareholders	$	686,017		755,073
Basic and diluted earnings per common share	$	34.99	$	38.51
Weighted average common shares outstanding: Basic and diluted		19,607,788		19,607,788

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, 2022, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during fiscal 2023. The tables below show adjusted PPE as of September 30, 2022 and March 31, 2022, by including the ROU-financing. 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. This non-GAAP measure is intended as a supplemental measure of our balance sheet that is neither required by, nor presented in accordance with, GAAP. We believe that the use of this non-GAAP measure provides an additional tool for investors to use in evaluating our financial condition. This non-GAAP measure should not be considered in isolation or as a substitute for other measures calculated in accordance with GAAP.

						September 30,		March 31,
						2022		2022
		September 30,		ROU Assets		Property, Plant and Equipment		Property, Plant and Equipment
		2022		Financing		Adjusted		Adjusted
		(Unaudited)
		(In thousands)
Property, plant and equipment, at cost
Land	$	1,427,781	$	-	$	1,427,781	$	1,283,142
Buildings and improvements		6,390,317		-		6,390,317		5,974,639
Furniture and equipment		876,515		14,731		891,246		860,863
Rental trailers and other rental equipment		727,953		153,020		880,973		785,193
Rental trucks		5,087,235		996,946		6,084,181		5,753,062
Right-of-use assets, gross		14,509,801		1,164,697		15,674,498		14,656,899
Less: Accumulated depreciation		(4,041,125)		(635,697)		(4,676,822)		(4,410,225)
Total property, plant and equipment, net	$	10,468,676	$	529,000	$	10,997,676	$	10,246,674

						March 31,
						2022
		March 31,		ROU Assets		Property, Plant and Equipment
		2022		Financing		Adjusted
		(Unaudited)
		(In thousands)
Property, plant and equipment, at cost
Land	$	1,283,142	$	-	$	1,283,142
Buildings and improvements		5,974,639		-		5,974,639
Furniture and equipment		846,132		14,731		860,863
Rental trailers and other rental equipment		615,679		169,514		785,193
Rental trucks		4,638,814		1,114,248		5,753,062
Right-of-use assets, gross		13,358,406		1,298,493		14,656,899
Less: Accumulated depreciation		(3,732,556)		(677,669)		(4,410,225)
Total property, plant and equipment, net	$	9,625,850	$	620,824	$	10,246,674

SOURCE AMERCO