UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

February 8, 2012
Date of Report (Date of earliest event reported)


AMERCO
(Exact name of registrant as specified in its charter)


Nevada
1-11255
88-0106815
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

1325 Airmotive Way, Ste. 100
Reno, Nevada 89502-3239
(Address of Principal Executive Offices)

(775) 688-6300
(Registrant’s telephone number, including area code)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 

 

Item 2.02.  Results of Operations and Financial Condition

On February 9, 2012, AMERCO held its investor call for the third quarter of fiscal year 2012. During the investor call, information regarding our results of operations and financial condition for the completed quarterly period ended December 31, 2011, were discussed. A copy of the transcript of this investor call is attached as Exhibit 99.1. To hear a replay of the call, visit amerco.com. The audio transcript of the investor call will be available on the AMERCO web site for 30 days after the date of the call.

The information in this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this current report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.


 Item 9.01.  Financial Statements and Exhibits

 
(d)
Exhibits.

Exhibit No.
Description
99.1
Transcript of AMERCO’s Third Quarter Fiscal Year 2012 Investor Call
99.2
Earnings release issued February 8, 2012



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Dated: February 14, 2012
 
AMERCO


 
  /s/ Jason A. Berg
 
Jason A. Berg,
 
Principal Financial Officer and
 
Chief Accounting Officer



 
 

 



Exhibit Index


Exhibit No.
Description
99.1
Transcript of AMERCO’s Third Quarter Fiscal Year 2012 Investor Call
99.2
Earnings release issued February 8, 2012






EXHIBIT 99.1

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
Page 1




U-HAUL

Moderator:   Jennifer Flachman
February 9, 2012
8:00 a.m. ET


Operator:
Good morning and welcome to AMERCO Third Quarter Fiscal 2012 Investor’s Call.

 
All lines have been placed on mute to prevent any background noise.  After the speaker’s remarks, there will be a question and answer session.  If you would like to ask a question during this time, simply press star then the number one on your telephone keypad.  If you’d like to return a question, press the pound key.  Thank you.

 
I would now like to hand the call over to Jennifer Flachman.  You may begin.

Jennifer Flachman:
Good morning and thank you for joining us today and welcome to the AMERCO Third Quarter Fiscal 2012 Investor’s call.  Before we begin, I would like to remind everyone that certain of the statements during this call regarding general revenues, income and general growth of our business constitutes forward-looking statements contemplated under the Private Securities Litigation Reform Act of 1995 and certain factors could cause actual results to differ materially from those projected.

 
For a brief discussion of the risks and uncertainties that may affect AMERCO’s business and future operating results, please refer to form 10-Q for the quarter ended December 31, 2011, which is on file with the Securities and Exchange Commission.

 
Participating in the call today would be Joe Shoen, AMERCO’s Chairman.  I will now turn the call over to Joe.


 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
Page 2

Joe Shoen:
Thank you, and good morning, welcome to the AMERCO third quarter investor call.  I’m speaking to you from Phoenix, Arizona.  I have Jason Berg here with me and Gary Horton and Rocky Wardrip are participating via the telephone.

 
A week ago, we released very disappointing news regarding the reserve increases at Republic Western.  This is  discouraging news, in the face of what otherwise, is a solid third quarter.  Our various U-Haul teams across North America continue to merit the patronage of the self-moving customer.  As we can best measure, our customer satisfaction is high and is trending up.

 
Our truck fleet remains well positioned across the United States and Canada and in good operating condition.  Our trailer fleet likewise, is experiencing good growth and we will be manufacturing trailers for the rental fleet, going into the end of this year and into the first half of next year.  The U-Box product line continues to develop and of course, like in a lot of things, the more we learn, the more we find out we don’t know.  There are many subtleties to this business and we are gradually mastering them.

 
We currently offer the product at about 1,500 locations, and expect to add 500 more through the spring.

 
Our current good results; are the result of countless small initiatives coming together; additionally this quarter we have benefitted from a very mild winter.  I look forward to a good finish to our fiscal year.

 
I’m now going to let Jason walk you through the numbers.  Jason?

Jason Berg:
Thanks, Joe.  Yesterday, we reported third quarter earnings of 4 cents per share compared with 80 cents for the same period last year.  Included in this quarter’s results, is a $1.61 non-cash charge for the reserve strengthening at our property and casualty insurance subsidiary, Repwest.  I’ll go into a little more detail on that adjustment here in a few moments.


 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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Taking into account this charge, adjusted earnings would have been $1.65 per share, for the three months ended December 31, 2011.  Again that’s compared to 80 cents per share for the same period last year.

 
Excluding our insurance subsidiaries, operating earnings, at our core moving and storage segment increased $17 million, to nearly $62 million for the quarter.  For the nine months, we’ve generated a $62 million increase in operating earnings or approximately 19 percent, at the moving and storage segment.

 
U-Move revenues in the third quarter of fiscal 2012 increased almost $33 million or about 10 percent.  Transactions continue to increase for both our In-town and one way truck rental business.  In the quarter, we saw about an 8 percent increase in total transactions and for the nine months, we’re up just over 6 percent.  The average number of trucks in the fleet continues to be greater this year, versus the same time last year, by about 3 percent.

 
It’s worthwhile to note that this marks the ninth consecutive quarter of U-Move revenue growth for us.  Initial indications from January show that U-Move revenue results are continuing to trend positively compared to last year.

 
For the first nine months of this year, capital expenditures on new rental trucks and trailers increased nearly $74 million, to about $335 million compared to the same time last year.

 
Proceeds from the sale of retired equipment were a $138 million.  Our projections for rental equipment gross capital expenditures in fiscal 2012 are likely to be near $480 million, if production schedules work out as planned.  That number is before netting any sales proceeds against it.

 
Revenues for our storage program increased a little more than $3 million for the third quarter of this year compared to last year.  This also represents the ninth consecutive quarter of growth in self storage revenues.

 
Our occupancy gains, stemming from the acquisition of new facilities already in lease up as well as organic growth at our existing locations, pushed revenue

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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higher.  While we did see modest improvements in the average rate per square foot as well.

 
Our average all in occupancy rate increased from 75 percent to 76 percent for the quarter as compared to the same time last year.  Included in this occupancy rate is the addition of over 1.3 million net rentable square feet to the portfolio over the last 12 months.

 
Our spending on real estate related Cap-ex, including construction, renovation and acquisitions, was approximately $28 million during the quarter, bringing the nine month total to approximately $75 million.

 
While consolidated total costs and expenses increased nearly $130 million for the quarter, compared to the same time last year, it’s important to break this out amongst three of our key segments; moving and storage, life insurance and property and casualty.

 
First, total costs at the moving and storage segment increased nearly $26 million that’s about 6.5 percent, compared with revenues for the quarter which increased by $43 million or nearly 10 percent.  Of the $26 million increase, operating expenses at the moving and storage segment increased about $18 million for the third quarter compared to the same time last year.

 
A significant portion of that increase is tied into personnel expense and can be related to the increase in business activity.  Maintenance and repair costs did experience a moderate increase during the quarter; however, the rate of increase was substantially less than in the previous three quarters.

 
Our operating margins for moving and storage which is defined as operating earnings divided by total revenue, improved from 10.2 percent to 12.8 percent
for the quarter.  For the nine months, we’ve seen an improvement in operating margin of approximately two percent as well.  The reduction in lease expense associated with the truck and trailer fleet has contributed to the improvement in operating margin.

 
Oxford, our life insurance subsidiary entered into another re-insurance agreement in the third quarter of fiscal 2012, to assume a percentage portion

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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of a block of whole life insurance business.  The accounting for this type of transaction results in recording the assumption of the reserves for these policies as an increase in premium and benefits during the quarter, resulting in no material change to the period net income.

 
As you may recall, we closed a similar re-insurance transaction in the third quarter of last year along with the acquisition of a block of Medicare supplement policies.  Taking into account these transactions, Oxford’s premiums increased $58 million for the third quarter of fiscal 2012 compared to last year.  These transactions have similar effects on Oxford’s benefit line which increased $57 million during the quarter.

 
Oxford’s operating earnings improved by nearly $2 million for the quarter.  Oxford continues to pursue it’s strategy of optimizing it’s allocated capital through acquisitions of business that fall within it’s scope of expertise.

 
Repwest, our property and casualty insurance subsidiary, took an after tax charge of $31 million during the third quarter of fiscal 2012; this following an internal review of it’s excess workers’ compensation business.  This is business that was written by Repwest from 1983 to 2001 and then assumed from other insurance carriers from 2001 through 2003.

 
The underlying risks are in no way associated with U-Haul’s core moving and storage business or its customers.  The review found that claims have been developing much more adversely than previously anticipated, due in part to medical inflation, additional claimant treatment, longer claim terms and changes we found in ceding entity and third party administrator reporting practices.

 
It was these factors that led to a change in our underlying loss assumptions that culminated in the reserve strengthening.  The company has bolstered its routine review process to encourage a proactive assessment of the claims going forward and adjust projected claim costs in a timely manner.

 
While we believe that we’ve set our assumptions at a conservative level to properly estimate future costs, we cannot provide absolute assurance that future increases will not be necessary.  We will continue to focus on

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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identifying opportunities that may afford us a permanent solution to this block of business.

 
The result of all this was earnings from operations for the third quarter of fiscal 2012 of $25 million compared to $51 million last year.  For the nine months, we had operating earnings of $357 million compared to $337 million last year.

 
Also of note, on December 7th of this last year, the company declared a special cash dividend on our common stock of $1 per share that was subsequently paid on January 3rd of this year.

 
In wrapping up with our cash and short-term investments, excluding our insurance company balances, we had $406 million at December 31, 2011; we also had cash availability from the existing borrowing facilities of an additional $312 million.

 
With that, I’d like to hand the call back to Joe.


Joe Shoen:
Thanks, Jason.  We’ll go to the operator now and accept questions from anybody who’d like to offer us one.

Operator:
At this time, I would like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad.  Again, if you would like to ask a question, please press star and the number one.

 
The first question comes from the line of Gowshihan Sriharan with CL King and Associates.

Gowshihan Sriharan:
Hi, guys.  This is Gowshihan Sriharan with CL King and Associates for Jim Barrett.  My question is how has your pricing been?  Could you comment on that please?

Joe Shoen:
Sure, this is Joe speaking to it.  As you may be aware, we’ve spent a considerable effort, rolling out an entire new pricing matrix about four and a half years ago.  It took us two or three years to really master the implementation of it.  And now, we have a pricing system that allows us to

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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discriminate almost endlessly and it better matches our approach to the market, because we, unlike most of our competitors, we service the entire North American population – every small town in Canada and the United States, and so we need to be able to do very, very discriminating things with pricing which we are now able to do.

 
So I think that while industry pricing is sluggish, when you get down to point to point pricing, we are able to have them – have seen opportunities, and specific origin destinations; combinations that are unique to U-Haul.

 
So in other words, from a very small town in Alberta to some very small town in North Dakota, we’re able to price right to that, rather than in a more generalized function.  And I think that really helped our situation, but I think that’s probably a company phenomenon not an industry phenomenon.

Gowshihan Sriharan:
OK.  In terms of your average life of your trucks and the trends in used truck prices, could you comment on that please?

Joe Shoen:
Ask that one more time, could you?

Gowshihan Sriharan:
In terms of the trends in the used truck prices and the average life of your truck prices?

Joe Shoen:
Sure.  Used trucks prices are going to continue to inflate because vehicle manufacturers are under constant pressure to add features to new equipment.
And from a macro point of view, used truck prices are always going to kind of trend the way new truck prices are, which is up.  Of course, right now the economy is seeing a little bit of an upswing, so truck prices are a lot firmer than they were three years ago.  So, there is a kind of a macro and then with a very specific term, as is right now, used truck pricing is pretty decent.

Gowshihan Sriharan:
OK.  Could you provide me a little color on the U-Box part of your business?

Joe Shoen:
Sure.  Our strategy is to offer the product comprehensively, not just in the major metros.  So that gives us a different strategy than any other entrant that I’m familiar with in the business and you know we see lots of anecdotal information that the customer very much would like this product.  The

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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question is how to provide it, at a quality level that the customer considers acceptable and at the same time, make a profit to us.

 
So, at this time, I can say with no doubt that we’re not making any money.  But I also would say that we are pretty much expensing our cost in a responsible manner so we are not building a big bough-wave of unamortized cost ahead of us.  We are eating them as we go.  I think it’s going to be a success; it’s just a question of when.  I thought it would be successful by now and I could announce that to you all, but we are not there yet.  But we are definitely heading in that direction, in my judgment.

Gowshihan Sriharan:
OK.  Will the Cap-ex increase going forward on the U-Box business?

Joe Shoen:
You know it’s kind of gets buried a little bit in some of the real estate and in some of the equipment.

Gowshihan Sriharan:
OK.

Joe Shoen:
It’s not going to be a great big jump, no.  But, for an instance, if today I was to buy a new facility in the Albany area, or build a new facility, I’d put an accommodation for U-Box there, whether that would be – it would be a $200 to $500,000 accommodation, would be a pretty good guess.

Gowshihan Sriharan:
OK.

Joe Shoen:
So basically on a project that otherwise would may be a $3 million project or $2 million – so it might bump a new real estate project as much as 10 percent, but it’s not going to be- in my judgment at least, you’re not going to see a $50 million bump or something of that nature, no.

Gowshihan Sriharan:
OK.  And in terms of a general macro trend, you know there is reduced mobility in the society.  How do you reconcile that with your revenue growth?

Joe Shoen:
Well, we’re just trying to do a better job, and we have a 65-year history with people and a lot of people, give us a chance at their business, because they’ve been served acceptably in the past and as I mentioned our customer

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
Page 9

satisfaction index, which is hard to measure, but as near as I can measure it, it is up.

 
And I think that, the principle of free economies is people go to the highest value, least cost provider and we are attempting to do both.  It doesn’t always work out for us, but right now, we are getting a pretty good match up with the customer being both the highest value and lowest cost provider.

Gowshihan Sriharan:
Thanks.  Well thank you for your time and congratulations on your (annual) performance.

Operator:
Thank you, again.  To ask a question, please press star then number one on your telephone keypad.

 
Your next question comes from the line of Ross Haberman with Haberman Management.

Ross Haberman:
Morning, gentlemen, nice quarter, nice year.

Joe Shoen:
Hi, Ross.

Jason Berg:
Thanks, Ross.

Ross Haberman:
I just had two quick questions, the $406 million of cash, was that at the holding company, was that including the cash at the insurance companies as well?

Joe Shoen:
Yes, Rocky or Gary, you want to answer that?

Rocky Wardrip:
Actually Ross, it’s kind of split between the parent and U-Haul International, but that’s all held outside of the insurance companies.

Ross Haberman:
OK, the 406, OK.  I think I might have missed it, did you say how much you are spending on new trucks for the coming calendar year?

Joe Shoen:
No, we didn’t and what we do is kind of commit about 90 days at a time; and so I think our truck expenditures will be equal to or maybe up a little bit.  How

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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exactly flows into the financial statement, of course, depends on our split between lease and buy, so I mean, do you have a projection, Jason?

Jason Berg:
Yes, Ross, to wrap up the year, our projection for the 12 months was, gross Cap-ex of about $480 million with expected sales of round about $165 million, so that our net Cap-ex should be about $315 million for this year, as compared to $209 million net Cap-ex in fiscal ‘11.

 
And then for the fourth, I don’t have a projection yet for fiscal ‘13, but how that would flow through to the fourth quarter, would be net Cap-ex of $118 million in the fourth quarter, compared to $95 million last year.

Ross Haberman:
Got it, OK.  Just pricing for used trucks up, down or about the same?

Joe Shoen:
Well, you know, we are on a wide spectrum, as I think you know Ross, everything from year old pickups and vans to possibly as old as a 15-year old six wheel truck, so there’s not one statement, but pricing is firming up, and there is no indication that it’s going to fall off the edge of the Earth.  And if you just look at what the new – the vehicle manufacturers are having to do, they are having to add more content and more value, and so prices on new goes up and so to a certain extent over a period of time.

 
Used prices just simply follow the trend of new and new is going up, whether its, you know, the new fuel economy, standards that are being put through, they are going to raise the price of new vehicles.  Now, that’s good for used vehicle sales.  But we’re buying new all the time too, so not so good for new, so they kind of are proceeding in tandem.  We try real hard not to have ourselves in a position, where if sales go to hell for a 180-day period or something, that we’re all of sudden caught in some kind of a bind, you understand.

 
So we’re constantly trying to manage our position, so that, because, it’s a key economic factor managing this whole businesses, can you take out the bottom what you put in the top.

 
I have the same team in place, I had all last year and the year before I don’t have a new team or an in experienced team.  And they are managing this I

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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think, as well as we ever have in the last 30 years, so but, you know, we are subject to some big macroeconomic thing that happens and it beats down prices of used vehicles, we just simply will stop buying new and let them all age out another year.

 
You see we are not necessarily in a spot where everything has to flip every time.  Now, of course, but on the other hand, when you can flip, let’s keep them flipping, so we are busy selling trucks right now.

Ross Haberman:
Just one final question then, I know it’s sort of hypothetical.  How many years out do we await for you to convert over your fleet to natural gas, like we are hearing from other, I guess, maybe non-moving, but other fleets of …?

Joe Shoen:
Give or take 50 years.

Ross Haberman:
All right, I just …

Joe Shoen:
What you want is a baloney answer. I’ll say well we are very active about this.  We have a strong sustainability initiative and we are going to do everything we can to ensure a good life for my children and grandchildren, which I have plenty of.

Ross Haberman:
But you’re saying it’s a number of years away?

Joe Shoen:
Yes, sure.  Just log on to any manufacturers web site and see what they are selling.

Ross Haberman:
Right.

Joe Shoen:
Now if the government mandates this, this would be an economic catastrophe and lower the standard of living of most Americans and we’ll offer that truck.  But in the mean time that truck is not likely to happen, there’s no infrastructure to fuel that truck, there are no mechanics knowledgeable in maintaining that truck, pilot programs, which of course we engage in various pilot programs all the time.  Pilot programs are just that, they’re pilot programs.

Ross Haberman:
OK.

 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
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Joe Shoen:
And every one we do costs us money, it does not make us money.  Now that doesn’t mean – we are socially conscious, we got the idea and we are clearly doing that.  But I can impact carbon footprint of this company by a factor of 10 or 20 by other clearly known means than going to alt fuel right now.  So, now, when the alt fuel becomes reasonable, we are going to be all over it.

Ross Haberman:
Again I just mentioned because I’m hearing from other types of other non-moving fleets, that they are moving toward that, you know, within a year or two.

Joe Shoen:
I don’t want to be discouraging, but I don’t want to fool you either.

Ross Haberman:
OK.

Joe Shoen:
Of course, whatever works for the environment, we’re going to do.  But right now, we have ways, we know, we demonstrate, I have a PhD in sustainability on the payroll full time.  I don’t take a causal attitude towards it but I have real grandchildren, I want to breathe real air, not baloney, you understand.

 
And so a baloney program, I’m not for.  A program that gives clean air to my grandchildren, I’m very, very much in support of and we’re very aggressive on that.  So total carbon footprint, we’re reducing not increasing.  But it’s not true at this time, it’s not true alt fuels, alt fuels is still a tentative thing and even if the manufacturer you see the fiasco for the GM Company with their recent electric vehicle, I have no reason to believe they’re anything other than totally sincere and I know they’re competent hard working people and they got themselves an economic mess on their hands, so we’re monitoring it, we’re aware of it, but it’s still beyond the reach of anybody I have met.

Ross Haberman:
OK.  I appreciate it, guys.  Nice quarter, nice year and we’ll stay in touch.

Joe Shoen:
OK.

Jason Berg:
Thanks.


 
 

 

U-HAUL
Moderator: Jennifer Flachman
02-09-12/10:00 a.m. ET
Confirmation # 48794980
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Operator:
Thank you.  Again, to ask a question, please press star then the number one on your telephone keypad.  Again if you would like to ask a question, please press star then the number one on your telephone keypad.

 
At this time, there are no further questions.  I would like to turn the call back over to management for closing remarks.

Joe Shoen:
Well thank you again for your support over the prior 90 days or over the prior year, over the prior five years.  As you’ve heard me say before the business cycle at U-Haul isn’t one year which is good news, because present trends will probably continue for a while, but it also means the thing doesn’t turn on a dime.  The results you see today are the results of actions we took two, three, four and five years ago.

 
My thanks and look forward to talking to you again at our next earnings call.

Operator:
Thank you.  This concludes today’s conference.  You may now disconnect.

 
END





Contact:
Jennifer Flachman
Director of Investor Relations
AMERCO
(602) 263-6601
Flachman@amerco.com

AMERCO REPORTS THIRD QUARTER FISCAL 2012 FINANCIAL RESULTS

RENO, Nev. (February 8, 2012) --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 common shareholders for its third quarter ended December 31, 2011, of $0.7 million, or $0.04 per share, compared with $15.5 million, or $0.80 per share, for the same period last year.  Included in the results for December 31, 2011, was an after-tax charge of $1.61 per share associated with Repwest’s excess workers’ compensation reserve strengthening.  Taking into account this after-tax charge, adjusted earnings were $1.65 per share for the three months ended December 31, 2011.

For the nine-month period ended December 31, 2011, net earnings available to common shareholders were $171.1 million, or $8.79 per share, compared with net earnings of $160.8 million, or $8.28 per share for the same period last year.  Included in the results for December 31, 2011, was an after-tax charge of $1.61 per share associated with Repwest’s excess workers’ compensation reserve strengthening.  Taking into account this after-tax charge, adjusted earnings were $10.40 per share for the nine months ended December 31, 2011.

“Of course it is a disappointment to have the strong results in our U-Haul business clouded by the additional reserving at Repwest,” stated Joe Shoen, chairman of AMERCO.  “I still expect the year to finish strong for the entire organization,” Shoen concluded.

 
Highlights of Third-Quarter Fiscal 2012 Results
 
·  
Self-moving equipment rental revenues increased $32.8 million during the third quarter of fiscal 2012 compared with the third quarter of fiscal 2011. In-Town and one-way rental transactions increased and utilization of the fleet improved.  The increase in revenues on a percentage basis for the quarter was greater than what we experienced last year at this time and it outpaced the nine month trend.
 
·  
Self-storage revenues increased $3.2 million during the third quarter of fiscal 2012, compared with the third quarter of fiscal 2011. The average number of occupied rooms during the quarter increased nearly 10% compared with the same period last year. We added more than 340,000 of net rentable square feet during the quarter and 1,335,000 of net rentable square feet over the last four quarters and are continuing to opportunistically pursue our growth strategy.

·  
Our life insurance segment continues to grow its business through acquisitions, completing another reinsurance transaction in the third quarter of fiscal 2012 for a block of whole life insurance policies leading to a net increase in premiums of $58.3 million for the quarter, compared to the same period last year.  This comes on top of the reinsurance agreement and acquisition that closed in the third quarter of fiscal 2011, which added final expense life insurance policies and Medicare supplement business.

 
 

 

 
·  
Repwest, our property and casualty insurance subsidiary, determined during the quarter that it was necessary to strengthen reserves on its book of excess workers’ compensation business that was written or assumed from 1983 through 2003.  This is discontinued business totally unrelated to U-Haul’s core moving and storage business.  The total non-cash after-tax charge for this reserve strengthening was $31.4 million or $1.61 per share.  Repwest continues to maintain sufficient capital to support its existing business.

 
·  
Total costs and expenses increased $129.5 million during the third quarter of fiscal 2012, compared with the third quarter of fiscal 2012. Life Insurance accounted for $58 million primarily from entering into the new reinsurance agreement. Property and Casualty’s portion was $45.9 million due to the reserve strengthening adjustment. Moving and Storage accounted for $25.7 million primarily due to variable costs associated with increased revenues.
 

AMERCO will hold its investor call for the third quarter of fiscal 2012 on Thursday, February 9, 2012, 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

Use of Non-GAAP Financial Information
The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, the Company uses certain non-GAAP performance measures, including adjusted earnings per share, to provide a better understanding of the Company’s underlying operational results . The Company uses adjusted earnings per share to present the impact of certain transactions or events that management expects to occur only infrequently.

About AMERCO
AMERCO is the parent company of Oxford Life and Repwest insurance companies, Amerco Real Estate Company and U-Haul International, Inc. 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.

About U-Haul
Since 1945, U-Haul has been the choice for the do-it-yourself mover. U-Haul customers' patronage has enabled the Company to maintain the largest rental fleet in the do-it-yourself moving industry which includes trucks, trailers and towing devices. U-Haul also offers storage throughout North America. U-Haul is the consumer’s number one choice as the largest installer of permanent trailer hitches in the automotive aftermarket industry. The Company supplies alternative-fuel for vehicles and backyard barbecues as one of the nation’s largest retailers of propane.

U-Haul was founded by a Navy veteran who grew up during the Great Depression. Tires and gas were still rationed or in short supply during the late 1940s when U-Haul began serving U.S. customers. Today, that background is central to the U-Haul Sustainability Program: Serving the needs of the present without compromising the ability of future generations to meet their own needs. Our commitment to reduce, reuse and recycle includes fuel-efficient moving vans, neighborhood proximity, moving box reuse, moving pads made from discarded material and packing peanuts that are 100% biodegradable.  Learn more about these facts and others at uhaul.com/sustainability.

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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, 2011, 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 2012 and 2011.

 
Quarter Ended December 31,
 
2011
    2010
 
(Unaudited)
 
(In thousands)
   
  Self-moving equipment rentals
  $ 375,744     $ 342,953  
  Self-storage revenues
    33,846       30,638  
  Self-moving and self-storage products and services sales                                            
    43,206       41,533  
  Property management fees
    5,368       5,129  
  Life insurance premiums
    132,643       74,306  
  Property and casualty insurance premiums
    9,429       8,998  
  Net investment and interest income
    15,234       13,213  
  Other revenue
    17,619       13,212  
    Consolidated revenue
  $ 633,089     $ 529,982  


Listed below are revenues and earnings (loss) from operations at each of our operating segments for the third quarter of fiscal 2012 and 2011.
 
   
Quarter Ended December 31,
 
   
2011
   
2010
 
   
(Unaudited)
 
   
(In thousands)
 
Moving and storage
     
   Revenues
  $ 483,066     $ 440,346  
   Earnings from operations before equity in earnings of subsidiaries
    61,766       44,778  
Property and casualty insurance
               
   Revenues
    11,666       11,117  
   Earnings (loss) from operations
    (43,444 )     1,876  
Life insurance
               
   Revenues
    139,643       79,858  
   Earnings from operations
    6,599       4,785  
Eliminations
               
  Revenues
    (1,286 )     (1,339 )
  Earnings from operations
    (48 )     (162 )
Consolidated results
               
  Revenues
    633,089       529,982  
  Earnings from operations
    24,873       51,277  








 
 

 

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. U-Haul also provides property management services for storage locations and earns a fee for these services. These storage centers are not owned by the Company and therefore are not reported on the balance sheet and the rental revenues are not reported in the statements of operations. Self-storage data for both our owned and managed locations follows:

   
Quarter Ended December 31,
 
   
2011
   
2010
 
   
(Unaudited)
 
   
(In thousands, except occupancy rate)
 
Room count as of December 31
    420       407  
Square footage as of December 31
    37,464       36,022  
Average number of rooms occupied
    329       313  
Average occupancy rate based on room count
    78.5 %     77.2 %
Average square footage occupied
    29,879       28,491  


Listed below on a consolidated basis are revenues for our major product lines for the first nine months of fiscal 2012 and 2011.

 
Nine Months Ended December 31,
 
 
2011
   
2010
 
 
(Unaudited)
 
 
(In thousands)
 
   
  Self-moving equipment rentals
  $ 1,333,918     $ 1,229,544  
  Self-storage revenues
    99,682       89,512  
  Self-moving and self-storage products and service sales
    167,352       161,644  
  Property management fees
    14,929       14,245  
  Life insurance premiums
    229,839       152,131  
  Property and casualty insurance premiums
    25,076       23,477  
  Net investment and interest income
    48,398       39,442  
  Other revenue
    60,041       42,910  
    Consolidated revenue
  $ 1,979,235     $ 1,752,905  



 


 
 

 

Listed below are revenues and earnings (loss) from operations at each of our operating segments for the first nine months of fiscal 2012 and 2011.
 
   
Nine Months Ended
December 31,
 
   
2011
 
2010
 
   
(Unaudited)
 
   
(In thousands)
 
Moving and storage
           
   Revenues
  $ 1,697,683     $ 1,558,136  
   Earnings from operations before equity in earnings of subsidiaries
    383,072       321,058  
Property and casualty insurance
               
   Revenues
    32,471       29,607  
   Earnings (loss) from operations
    (39,348 )     5,280  
Life insurance
               
   Revenues
    252,834       169,099  
   Earnings from operations
    14,430       11,556  
Eliminations
               
  Revenues
    (3,753 )     (3,937 )
  Earnings from operations
    (485 )     (387 )
Consolidated results
               
  Revenues
    1,979,235       1,752,905  
  Earnings from operations
    357,669       337,507  


The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. U-Haul also provides property management services for storage locations and earns a fee for these services. These storage centers are not owned by the Company and therefore are not reported on the balance sheet and the rental revenues are not reported in the statements of operations. Self-storage data for both our owned and managed locations follows:  

   
Nine Months Ended December 31,
 
   
2011
   
2010
 
   
(Unaudited)
 
   
(In thousands, except occupancy rate)
 
Room count as of December 31
    420       407  
Square footage as of December 31
    37,464       36,022  
Average number of rooms occupied
    330       315  
Average occupancy rate based on room count
    79.3 %     78.0 %
Average square footage occupied
    29,990       28,593  


 
 
 

 



AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS


   
December 31,
   
March 31,
 
   
2011
   
2011
 
   
(Unaudited)
       
   
(In thousands, except share data)
 
ASSETS
           
Cash and cash equivalents
  $ 438,277     $ 375,496  
Reinsurance recoverables and trade receivables, net
    351,828       205,371  
Inventories, net
    56,766       59,942  
Prepaid expenses
    54,941       57,624  
Investments, fixed maturities and marketable equities
    724,456       659,809  
Investments, other
    242,539       201,868  
Deferred policy acquisition costs, net
    62,384       52,870  
Other assets
    124,264       166,633  
Related party assets
    297,513       301,968  
      2,352,968       2,081,581  
Property, plant and equipment, at cost:
               
Land
    281,144       239,177  
Buildings and improvements
    1,058,932       1,024,669  
Furniture and equipment
    309,050       310,671  
Rental trailers and other rental equipment
    253,791       249,700  
Rental trucks
    1,766,847       1,611,763  
      3,669,764       3,435,980  
Less: Accumulated depreciation
    (1,388,730 )     (1,341,407 )
Total property, plant and equipment
    2,281,034       2,094,573  
Total assets
  $ 4,634,002     $ 4,176,154  
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Liabilities:
               
Accounts payable and accrued expenses
  $ 344,205     $ 304,006  
Notes, loans and leases payable
    1,507,976       1,397,842  
Policy benefits and losses, claims and loss expenses payable
    1,148,074       927,376  
Liabilities from investment contracts
    236,805       246,717  
Other policyholders' funds and liabilities
    5,382       8,727  
Deferred income
    28,218       27,209  
Deferred income taxes
    362,164       271,257  
Total liabilities
    3,632,824       3,183,134  
                 
Stockholders' equity:
               
Common stock
    10,497       10,497  
Additional paid-in capital
    432,846       425,212  
Accumulated other comprehensive loss
    (53,619 )     (46,467 )
Retained earnings
    1,291,659       1,140,002  
Cost of common shares in treasury, net
    (525,653 )     (525,653 )
Cost of preferred shares in treasury, net
    (151,997 )     (7,189 )
Unearned employee stock ownership plan shares
    (2,555 )     (3,382 )
Total stockholders' equity
    1,001,178       993,020  
Total liabilities and stockholders' equity
  $ 4,634,002     $ 4,176,154  
                 



 
 

 

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
Quarter Ended December 31,
 
 
2011
 
2010
 
 
(Unaudited)
 
 
(In thousands, except share and per share amounts)
 
 
Revenues:
         
Self-moving equipment rentals
  $ 375,744     $ 342,953  
Self-storage revenues
    33,846       30,638  
Self-moving and self-storage products and service sales
    43,206       41,533  
Property management fees
    5,368       5,129  
Life insurance premiums
    132,643       74,306  
Property and casualty insurance premiums
    9,429       8,998  
Net investment and interest income
    15,234       13,213  
Other revenue
    17,619       13,212  
Total revenues
    633,089       529,982  
                 
Costs and expenses:
               
Operating expenses
    269,834       252,986  
Commission expenses
    47,864       42,367  
Cost of sales
    24,505       22,586  
Benefits and losses
    173,748       70,312  
Amortization of deferred policy acquisition costs
    3,666       2,480  
Lease expense
    32,325       37,159  
Depreciation, net of (gains) on disposals of (($699) and ($1,655), respectively)
    56,274       50,815  
Total costs and expenses
    608,216       478,705  
                 
Earnings from operations
    24,873       51,277  
Interest expense
    (22,744 )     (22,236 )
Pretax earnings
    2,129       29,041  
Income tax expense
    (1,401 )     (10,433 )
Net earnings
    728       18,608  
Less: Preferred stock dividends
    -       (3,079 )
Earnings available to common shareholders
  $ 728     $ 15,529  
Basic and diluted earnings per common share
  $ 0.04     $ 0.80  
Weighted average common shares outstanding: Basic and diluted
    19,481,614       19,439,622  



 
 

 

AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   
Nine Months Ended December 31,
 
   
2011
 
2010
 
   
(Unaudited)
 
   
(In thousands, except share and per share data)
 
Revenues:
     
Self-moving equipment rentals
  $ 1,333,918     $ 1,229,544  
Self-storage revenues
    99,682       89,512  
Self-moving and self-storage products and service sales
    167,352       161,644  
Property management fees
    14,929       14,245  
Life insurance premiums
    229,839       152,131  
Property and casualty insurance premiums
    25,076       23,477  
Net investment and interest income
    48,398       39,442  
Other revenue
    60,041       42,910  
Total revenues
    1,979,235       1,752,905  
                 
Costs and expenses:
               
Operating expenses
    836,149       776,379  
Commission expenses
    168,865       152,149  
Cost of sales
    89,729       83,854  
Benefits and losses
    268,140       143,117  
Amortization of deferred policy acquisition costs
    10,716       6,549  
Lease expense
    99,271       113,789  
Depreciation, net of (gains) on disposals of (($18,326) and ($18,964), respectively)
    148,696       139,561  
Total costs and expenses
    1,621,566       1,415,398  
                 
Earnings from operations
    357,669       337,507  
Interest expense
    (68,340 )     (65,488 )
Pretax earnings
    289,329       272,019  
Income tax expense
    (109,367 )     (101,690 )
Net earnings
    179,962       170,329  
Less: Excess of redemption value over carrying value of preferred shares redeemed
    (5,908 )     (171 )
Less: Preferred stock dividends
    (2,913 )     (9,336 )
Earnings available to common shareholders
  $ 171,141     $ 160,822  
Basic and diluted earnings per common share
  $ 8.79     $ 8.28  
Weighted average common shares outstanding: Basic and diluted
    19,470,886       19,427,294  



 
 

 


NON-GAAP FINANCIAL RECONCILIATION SCHEDULE
   
Quarter Ended
 
   
December 31, 2011
 
(In thousands, except share and per share amounts)
     
       
AMERCO and Consolidated Entities
     
Earnings per common share basic and diluted
  $ 0.04  
Charge for strengthening reserves
    1.61  
Earnings per common share basic and diluted before charge for strengthening reserves
  $ 1.65  
         
Charge for strengthening reserves
  $ (48,250 )
Income tax benefit
    16,888  
Charge for strengthening reserves, net of taxes
  $ (31,362 )
Charge for strengthening reserves, net of taxes, per common share basic and diluted
  $ (1.61 )
Weighted average shares outstanding: basic and diluted
    19,481,614  
         
         
   
Nine Months Ended
 
   
December 31, 2011
 
(In thousands, except share and per share amounts)
       
         
AMERCO and Consolidated Entities
       
Earnings per common share basic and diluted
  $ 8.79  
Charge for strengthening reserves
    1.61  
Earnings per common share basic and diluted before charge for strengthening reserves
  $ 10.40  
         
Charge for strengthening reserves
  $ (48,250 )
Income tax benefit
    16,888  
Charge for strengthening reserves, net of taxes
  $ (31,362 )
Charge for strengthening reserves, net of taxes, per common share basic and diluted
  $ (1.61 )
Weighted average shares outstanding: basic and diluted
    19,470,886  


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