<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.
_______________________________________________________________________
0-7862 AMERCO 88-0106815
(A Nevada Corporation)
1325 Airmotive Way, Ste. 100
Reno, Nevada 89502-3239
Telephone (702) 688-6300
2-38498 U-Haul International, Inc. 86-0663060
(A Nevada Corporation)
2727 N. Central Avenue Phoenix, Arizona 85004
Telephone (602) 263-6645
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ].
29,513,492 shares of AMERCO Common Stock, $0.25 par value and 5,762,495 shares
of AMERCO Series A common stock, $0.25 par value were outstanding at January 22,
1996.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were
outstanding at January 22, 1996. U-Haul International, Inc. meets the
conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and
is therefore filing this form with the reduced disclosure format.
<PAGE> 2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
a) Consolidated Balance Sheets as of June 30, 1995,
March 31, 1995 and June 30, 1994............... 4
b) Consolidated Statements of Earnings for the
Quarters ended June 30, 1995 and 1994............ 6
c) Consolidated Statements of Changes in Stockholders'
Equity for the Quarters ended June 30, 1995
and 1994........................................... 7
d) Consolidated Statements of Cash Flows for the
Quarters ended June 30, 1995 and 1994............ 9
f) Notes to Consolidated Financial Statements -
June 30, 1995, March 31, 1995 and
June 30, 1994.................................. 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 17
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THIS PAGE LEFT
INTENTIONALLY BLANK
<PAGE> 4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
June 30, March 31, June 30,
ASSETS 1995 1995 1994
---------- --------- ------------------
(unaudited) (audited) (unaudited)
(in thousands)
<S> <C> <C> <C>
Cash and cash equivalents $ 29,604 35,286 19,617
Receivables 322,859 300,238 208,833
Inventories 52,422 50,337 41,920
Prepaid expenses 15,383 25,933 24,307
Investments, fixed maturities 761,115 705,428 718,438
Investments, other 146,618 135,220 94,392
Deferred policy acquisition costs 52,622 49,244 48,917
Other assets 29,684 30,057 30,283
--------- --------- ---------
Property, plant and equipment, at
cost:
Land 217,611 214,033 200,720
Buildings and improvements 734,061 735,624 693,041
Furniture and equipment 182,158 179,016 166,268
Rental trailers and other rental
equipment 256,730 245,892 218,445
Rental trucks 925,671 913,641 863,982
General rental items 51,058 51,890 55,186
--------- --------- ---------
2,367,289 2,340,096 2,197,642
Less accumulated depreciation 1,098,666 1,065,850 972,968
--------- --------- ---------
Total property, plant and
equipment 1,268,623 1,274,246 1,224,674
--------- --------- ---------
$ 2,678,930 2,605,989 2,411,381
========= ========= =========
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
June 30, March 31, June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1995 1994
--------- --------- --------
(unaudited) (audited) (unaudited)
(in thousands)
<S> <C> <C> <C>
Liabilities:
Accounts payable and accrued
liabilities $ 145,011 127,613 158,920
Notes and loans 866,132 881,222 725,565
Policy benefits and losses, claims 474,277 475,187 449,986
and loss expenses payable
Liabilities from premium deposits 347,718 304,979 308,408
Cash overdraft 23,291 31,363 14,569
Other policyholders' funds and
liabilities 34,320 20,378 6,617
Deferred income 9,521 7,426 8,714
Deferred income taxes 77,711 71,037 64,799
--------- --------- ---------
Stockholders' equity:
Serial preferred stock, with or
without par value, 50,000,000
shares authorized; 6,100,000
issued without par value and
outstanding as of June 30, 1995
March 31, 1995 and June 30, 1994 - - -
Serial common stock, with or with-
out par value, 150,000,000 shares
authorized - - -
Series A common stock of $.25 par
value, authorized 10,000,000 shares,
issued 5,762,495 shares as of
June 30, 1995 and March 31, 1995,
and 5,754,334 shares as of
June 30, 1994 1,441 1,441 1,438
Common stock of $.25 par value,
authorized 150,000,000 shares,
issued 34,237,505 shares as of
June 30, 1995 and March 31, 1995 and
34,245,666 shares as of June 30, 1994 8,559 8,559 8,562
Additional paid-in capital 165,675 165,675 165,651
Foreign currency translation (11,737) (12,435) (11,461)
Unrealized gain(loss) on investments (1,569) (6,483) (368)
Retained earnings 573,525 561,589 540,693
--------- --------- ---------
735,894 718,346 704,515
Less:
Cost of common shares in treasury,
(1,380,937 shares as of June 30,
1995 and 1,335,937 shares as of
March 31, 1995 and June 30, 1994) 11,457 10,461 10,461
Unearned employee stock
ownership plan shares 23,488 21,101 20,251
--------- --------- ---------
Total stockholders' equity 700,949 686,784 673,803
--------- --------- ---------
Contingent liabilities and commitments
--------- --------- ---------
$ 2,678,930 2,605,989 2,411,381
========= ========= =========
</TABLE>
<PAGE> 6
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
----------- ----------
(in thousands except
per share data)
<S> <C> <C>
Revenues
Rental and other revenue $ 235,311 228,962
Net sales 53,116 51,302
Premiums 30,702 31,559
Net investment income 11,380 10,510
---------- ----------
Total revenues 330,509 322,333
Costs and expenses
Operating expense 174,246 158,542
Advertising expense (see note 7) 16,869 6,999
Cost of sales 28,959 27,550
Benefits and losses 27,241 26,412
Amortization of deferred acquisition
costs 2,928 3,084
Depreciation 37,693 37,282
Interest expense 18,832 16,638
---------- ----------
Total costs and expenses 306,768 276,507
Pretax earnings from operations 23,741 45,826
Income tax expense (8,564) (16,413)
---------- ----------
Net earnings $ 15,177 29,413
========== ==========
Earnings per common share:
Net earnings $ 0.31 0.71
========== ==========
Weighted average common shares outstanding 37,958,426 37,107,536
========== ==========
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>7
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
--------- -------
(in thousands)
<S> <C> <C>
Series A common stock of $.25 par
value: Authorized 10,000,000 shares,
issued 5,762,495 as of June 30, 1995
and 5,762,495 as of March 31, 1995 and
5,754,334 as of June 30, 1994
Beginning and end of period $ 1,441 1,438
------- -------
Common stock of $.25 par value:
Authorized 150,000,000 shares, issued
34,237,505 as of June 30, 1995, and
as of March 31, 1995 and 34,245,666
as of June 30, 1994
Beginning and end of period 8,559 8,562
------- -------
Additional paid-in capital:
Beginning and end of period 165,675 165,651
------- -------
Foreign currency translation:
Beginning of period (12,435) (11,152)
Change during period 698 (309)
------- -------
End of period (11,737) (11,461)
------- -------
Unrealized gain (loss) on investments:
Beginning of period (6,483) 679
Change during period 4,914 (1,047)
------- -------
End of period (1,569) (368)
------- -------
Retained earnings:
Beginning of period 561,589 514,521
Net earnings 15,177 29,413
Dividends paid to stockholders:
Preferred stock: ($.53 per share
for 1995 and 1994, respectively) (3,241) (3,241)
------- -------
End of period 573,525 540,693
------- -------
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 8
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
-------- -------
(in thousands)
<S> <C> <C>
Treasury stock:
Beginning of period 10,461 10,461
Net increase (45,000 shares in 1995) 996 -
------- -------
End of period 11,457 10,461
------- -------
Unearned employee stock ownership
plan shares:
Beginning of period 21,101 17,451
Increase in loan 2,523 2,919
Proceeds from loan (136) (119)
------- -------
End of period 23,488 20,251
------- -------
Total stockholders' equity $ 700,949 673,803
======= =======
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 9
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 15,177 29,413
Depreciation and amortization 40,565 41,489
Provision for losses on accounts
receivable 1,568 736
Net gain on sale of real and personal
property (16) (131)
Gain on sale of investments (337) 30
Changes in policy liabilities and
accruals (4,960) 11,766
Additions to deferred policy
acquisition costs (7,109) (4,155)
Net change in other operating assets
and liabilities 24,326 43,182
-------- ---------
Net cash provided by operating activities 69,214 122,330
-------- ---------
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment (70,149) (144,794)
Fixed maturities (86,329) (31,098)
Real estate (653) (8)
Mortgage loans (4,662) (5,504)
Proceeds from sale of investments:
Property, plant and equipment 38,015 58,868
Fixed maturities 37,863 30,756
Real estate 691 220
Mortgage loans 6,177 1,442
Changes in other investments (8,802) (10,507)
-------- --------
Net cash used by investing activities (87,849) (100,625)
-------- --------
Cash flows from financing activities:
Net change in short-term borrowings 2,000 46,250
Loan to leveraged employee stock
ownership plan (2,523) (2,919)
Proceeds from leveraged employee stock
ownership plan 136 119
Principal payments on notes (17,090) (44,449)
Net change in cash overdraft (8,072) (11,990)
Dividends paid (3,241) (3,241)
Purchase of treasury shares (996) -
Investment contract deposits 60,383 6,966
Investment contract withdrawals (17,644) (11,266)
-------- ---------
Net cash provided (used) by
financing activities 12,953 (20,530)
-------- ---------
increase in cash and cash equivalents (5,682) 1,175
Cash and cash equivalents at
beginning of period 35,286 18,442
-------- ---------
Cash and cash equivalents at
end of period $ 29,604 19,617
======== =========
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 10
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1995, March 31, 1995 and June 30, 1994
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the parent
corporation, AMERCO, and its subsidiaries, all of which are wholly-owned.
All material intercompany accounts and transactions of AMERCO and its
subsidiaries (herein called the "Company" or the "consolidated group")
have been eliminated. The consolidated balance sheets as of June 30,
1995 and 1994, and the related consolidated statements of earnings,
changes in stockholders' equity and cash flows for the quarters ended
June 30, 1995 and 1994 are unaudited; in the opinion of management,
all adjustments necessary for a fair presentation of such financial
statements have been included. Such adjustments consisted only of
normal recurring items. Interim results are not necessarily indicative
of results for a full year.
The operating results and financial position of AMERCO's consolidated
insurance operations are determined on a quarter lag. There were no
effects related to intervening events which would significantly affect
consolidated position or results of operations for the financial
statements presented herein.
The financial statements and notes are presented as permitted by Form 10-Q
and do not contain certain information included in the Company's annual
financial statements and notes.
Earnings per share are computed based on the weighted average number of
shares outstanding, excluding shares of the employee stock ownership
plan that have not been committed to be released. Net income is
reduced for preferred dividends.
Certain reclassifications have been made to the financial statements
for the quarter ended June 30, 1994 to conform with the current year's
presentation.
<PAGE> 11
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
2. INVESTMENTS
<TABLE>
A comparison of amortized cost to market for fixed maturities is
as follows (in thousands, except for par value):
<CAPTION>
March 31, 1995
-------------- Par Value Gross Gross Estimated
Consolidated or number Amortized unrealized unrealized market
Held-to-Maturity of shares cost gains losses value
--------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
U.S. treasury
securities
and government
obligations $ 20,400 $ 20,284 918 (23) 21,179
U.S. government
agency mortgage
backed securities $ 65,381 64,797 321 (5,354) 59,764
Obligations of
states and
political
subdivisions $ 30,105 29,804 1,932 (425) 31,311
Corporate
securities $ 191,263 196,517 1,465 (5,671) 192,311
Mortgage-backed
securities $ 128,413 126,685 903 (8,042) 119,546
Redeemable preferred
stocks 33 1,966 303 (11) 2,258
------- ----- -------- -------
440,053 5,842 (19,526) 426,369
------- ----- -------- -------
<CAPTION>
March 31, 1995
-------------- Gross Gross Estimated
Consolidated Amortized unrealized unrealized market
Available-for-Sale Par Value cost gains losses value
<S> <C> <C> <C> <C> <C>
U.S. treasury
securities and
government
obligations $ 9,685 9,797 714 - 10,512
U.S. government
agency mortgage
backed securities $ 3,410 3,232 68 (206) 3,094
States,
municipalities
and political
subdivisions $ 5,825 6,098 109 (12) 6,195
Corporate
securities $ 262,874 262,628 4,157 (4,967) 261,818
Mortgage-backed
securities $ 41,699 41,431 358 (2,345) 39,443
------- ------ -------- -------
323,186 5,406 (7,530) 321,062
------- ------ -------- -------
Total $ 763,239 11,248 (27,056) 747,431
======= ====== ======== =======
</TABLE>
<PAGE> 12
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF PONDEROSA
HOLDINGS, INC. AND ITS SUBSIDIARIES
A summary consolidated balance sheet (unaudited) for Ponderosa
Holdings, Inc. and its subsidiaries is presented below:
June 30,
1995 1994
--------- ---------
(in thousands)
Investments - fixed maturities $ 761,115 718,438
Other investments 126,747 94,392
Receivables 142,643 132,944
Deferred policy acquisition costs 52,622 48,917
Due from affiliate 12,999 9,125
Deferred federal income taxes 8,720 8,195
Other assets 15,518 14,892
--------- ---------
Total assets $ 1,120,364 1,026,903
========= =========
Policy liabilities and accruals $ 407,632 385,539
Unearned premiums 66,645 64,292
Premium deposits 347,718 308,408
Other policyholders' funds and
liabilities 33,891 11,543
--------- ---------
Total liabilities 855,886 769,782
Stockholder's equity 264,478 257,121
--------- ---------
Total liabilities and
stockholder's equity $ 1,120,364 1,026,903
========= =========
<PAGE> 13
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF PONDEROSA
HOLDINGS, INC. AND ITS SUBSIDIARIES, continued
A summarized consolidated income statement (unaudited)
for Ponderosa Holdings, Inc. and its subsidiaries is
presented below:
Quarters ended June 30,
1995 1994
------ ------
(in thousands)
Premiums $ 30,097 34,352
Net investment income 11,531 10,554
Other income 1,601 1,267
------ ------
Total revenue 43,229 46,173
Benefits and losses 27,241 26,412
Amortization of deferred policy
acquisition costs 2,928 3,084
Other expenses 5,313 7,801
------ ------
Income from operations 7,747 8,876
Federal income tax expense (1,890) (2,742)
------ ------
Net income $ 5,857 6,134
======= ======
4. CONTINGENT LIABILITIES AND COMMITMENTS
During the three months ended June 30, 1995, U-Haul Leasing & Sales Co.,
a wholly-owned subsidiary of U-Haul International, Inc., entered into
one transaction, whereby they sold rental trucks and subsequently
leased them back. AMERCO has guaranteed $991,000 of residual values
at June 30, 1995 on these assets at the end of the lease term.
Following are the lease commitments for the lease executed during the
three months ended June 30, 1995, which have a term of more than one year
(in thousands):
Year ended Lease
March 31, Commitments
----------- -----------
1996 $ 1,164
1997 1,553
1998 1,553
1999 1,553
2000 1,553
Thereafter 3,493
-------
$ 10,869
=======
See discussion related to Stockholder Litigation under Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources.
<PAGE> 14
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
4. CONTINGENT LIABILITIES AND COMMITMENTS, continued
The Company is a defendant in a number of suits and claims incident to
the type of business conducted and several administrative
proceedings arising from state and local provisions that regulate
the removal and/or clean-up of underground fuel storage tanks. The
Company owns property within two state hazardous waste sites in the State
of Washington. At this time, the remedial clean-up cost or range of
costs for such sites cannot be estimated. Management's opinion is that
none of these suits or claims involving AMERCO and/or its subsidiaries is
expected to result in any material loss.
5. SUPPLEMENTAL CASH FLOWS INFORMATION
The (increase) decrease in receivables, inventories and accounts
payable and accrued liabilities net of other operating
and investing activities follows:
Quarters ended June 30,
1995 1994
---- ----
(in thousands)
Receivables $ (23,625) (14,042)
======== ========
Inventories $ (2,085) 7,092
======== ========
Accounts payable and
accrued liabilities $ 20,933 39,141
======= ========
Income taxes paid in cash amounted to none and $224,000 for 1995
and 1994, respectively.
Interest paid in cash amounted to $20,906,000 and $20,569,000 for
1995 and 1994, respectively.
6. RELATED PARTIES
Subsequent to March 31, 1995, a subsidiary of the Company continued
to loan TWO SAC Self-Storage Corporation (TWO SAC) funds for the
purchase of an additional 18 self-storage properties. As of June 30,
1995, $28,597,000 in principal was due from TWO SAC, while interest of
$797,000 has been accrued. No payment of principal or interest will be
made until the notes are finalized. Mark V. Shoen, a major
stockholder, director and officer of the Company owns all of the
issued and outstanding voting common stock of TWO SAC. The TWO SAC notes
will be secured by senior and junior mortgages and are expected to
mature in 2004 or 2005, or on demand. TWO SAC anticipates acquiring
approximately 28 properties from the Company that had been acquired
by the Company or its subsidiaries since June 1993.
On May 31, 1995, the Company purchased 45,000 shares of the Company's
Common Stock from Paul F. Shoen, a major stockholder of the Company, for
$996,000 or $22.125 per share. The transaction was effected on Nasdaq.
<PAGE> 15
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
7. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 114 - Accounting by Creditors
for Impairment of a Loan. Effective for years beginning after December
15, 1994, the standard requires that an impaired loan's fair value be
measured and compared to the recorded investment in the loan. If the fair
value of the loan is less than the recorded investment in the loan,
a valuation allowance is established. The Company adopted this statement
during the first quarter of fiscal 1996, with no material impact on
its financial condition or results of operations.
Statement of Financial Accounting Standards No. 121 - Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of. Effective for fiscal years beginning after December 15,
1995, the standard establishes accounting standards for the impairment
of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used and for long-lived assets and
certain identifiable intangibles to be disposed of. This Statement
requires that long-lived assets and certain identifiable intangibles to
be held and used by an entity be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. In performing the review for
recoverability, the entity should estimate the future cash flows
expected to result from the use of the asset and its eventual
disposition. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the
asset, an impairment loss is recognized. Otherwise, an impairment
loss is not recognized. Measurement of an impairment loss for
long-lived assets and identifiable intangibles that an entity expects to
hold and use should be based on the fair value of the asset. The
Company has not completed an evaluation of the effect of this standard.
<PAGE> 16
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
7. NEW ACCOUNTING STANDARDS, continued
Statement of Position 93-7, Reporting on Advertising Costs - as
issued by the Accounting Standards Executive Committee in
December 1993. This statement of position provides guidance
on financial reporting on advertising costs in annual
financial statements. The statement of position requires
reporting advertising costs as expenses when incurred or when
the advertising takes place, reporting the costs of direct
response advertising, and amortizing the amount of direct
response advertising reported as assets. The Company had been
recording deferred yellow page directory costs and amortizing
the costs over the duration of each listing. The majority of
listings last one year. The Company adopted this statement
effective April 1, 1995 recognizing additional advertising
expense of $8,647,000 upon implementation.
Other pronouncements issued by the Financial Standards Board with
future effective dates are either not applicable or not
material to the consolidated financial statements of the
Company.
<PAGE> 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The following table shows industry segment data from the Company's three
industry segments, rental operations, life insurance, and property and
casualty insurance, for the quarters ended June 30, 1995 and 1994. Rental
operations is composed of the operations of U-Haul and Amerco Real Estate
Company. Life insurance is composed of the operations of Oxford Life
Insurance Company. Property and casualty insurance is composed of the
operations of Republic Western Insurance Company (RWIC). The Company's
results of operations have historically fluctuated from quarter to
quarter. In particular, the Company's U-Haul rental operations are seasonal
and a majority of the Company's revenues and substantially all of its
earnings from its U-Haul rental operations are generated in the first and
second quarters each fiscal year (April through September).
<TABLE>
<CAPTION>
Property/ Adjustments
Rental Life Casualty And
Operations Insurance Insurance Eliminations Consolidated
---------- --------- --------- ------------ ------------
(in thousands)
<S> <C> <C> <C> <C> <C>
Quarter ended June 30, 1995
Revenues:
Outside $ 286,835 10,238 33,436 - 330,509
Intersegment - 367 (793) 426 -
--------- ------- ------- -------- ---------
Total revenues 286,835 10,605 32,643 426 330,509
========= ======= ======= ======== =========
Operating profit 34,826 2,622 5,125 - 42,573
========= ======= ======= ========
Interest expense 18,832
---------
Pretax earnings
from operations 23,741
=========
Identifiable assets 1,845,419 530,918 589,446 (286,853) 2,678,930
at June 30 ========= ======= ======= ======== =========
Quarter ended June 30, 1994
Revenues:
Outside $ 279,144 8,112 35,077 - 322,333
Intersegment - 372 2,627 (2,999) -
--------- ------- ------- -------- ---------
Total revenues 279,144 8,484 37,704 (2,999) 322,333
========= ======= ======= ======== =========
Operating profit 53,588 1,875 7,001 - 62,464
========= ======= ======= ========
Interest expense 16,638
---------
Pretax earnings
from operations 45,826
=========
Identifiable assets 1,659,617 461,407 565,496 (275,139) 2,411,381
at June 30 ========= ======= ======= ======== =========
</TABLE>
<PAGE> 18
QUARTER ENDED JUNE 30, 1995 VERSUS QUARTER ENDED JUNE 30, 1994
U-Haul
U-Haul revenues consist of (i) total rental and other
revenue and (ii) net sales. Total rental and other revenue
increased by $6.1 million, approximately 2.7%, to $233.9 million in
the first quarter of fiscal 1996. The increase reflects higher net
revenues from the rental of moving related equipment and
self-storage facilities which increased in the aggregate by $6.0
million due to growth (volume) in truck rental transactions,
additional rentable square footage, and improved self-storage
pricing.
Net sales revenues were $53.1 million in the first
quarter of fiscal 1996, which represents an increase of
approximately 3.5% from the first quarter of fiscal 1995 net sales
of $51.3 million. Revenue growth from the sale of moving support
items (i.e. boxes, etc.), hitches, and propane resulted in a $2.2
million increase during the quarter, which was offset by a $0.3
million decrease in gasoline sales consistent with the Company's
ongoing efforts to remove underground storage tanks and gradually
discontinue gasoline sales.
Cost of sales was $29.0 million in the first quarter of
fiscal 1996, which represents an increase of approximately 5.1%
from $27.6 million for the same period in fiscal 1995. This
increase in cost of sales primarily reflects higher material costs
from the sale of moving support items and propane which can
be primarily attributed to higher sales levels.
Operating expenses increased to $168.5 million in
the first quarter of fiscal 1996 from $153.7 million in the
first quarter of fiscal 1995, an increase of $14.8 million
(approximately 9.6%). The change from the prior year primarily
reflects higher rental equipment maintenance costs due to an
increase in fleet size and transaction levels ($6.0 million), an
increase in lease expense due to new leases originated during
the last twelve months ($2.2 million), and increased personnel
expense due to higher levels of business activity ($4.0
million). All other operating expense categories increased in
the aggregate by $2.5 million compared to the prior year.
Advertising expense increased to $16.9 million in the first
quarter of fiscal 1996 from $7.0 million in the first quarter of fiscal 1995.
The increase primarily reflects a one-time expense of $8.7 million recognized
during the first quarter of fiscal 1996, due to the adoption of
Statement of Position 93-7 which requires immediate recognition of advertising
costs not qualifying as direct-response.
Depreciation expense for the quarter was $37.7
million, as compared to $37.3 million during the same period of
the prior year, reflecting storage acquisitions and construction
in the past twelve months.
Oxford - Life Insurance
Premiums from Oxford's reinsurance lines
before intercompany eliminations were $4.1 million for the
quarter ended March 31, 1995, an increase of $0.3 million,
approximately 7.9% over 1994 and accounted for 66.9% of Oxford's
premiums for the period. Reinsurance premiums are primarily from
term life insurance, matured deferred annuity contracts, and credit
insurance business. This increase in premiums is primarily
attributable to the recent (fourth quarter 1994) reinsurance
agreement of credit insurance business.
<PAGE> 19
Premiums from Oxford's direct lines before
intercompany eliminations were $2.0 million for the quarter
ended March 31, 1995, an increase of $1.6 million from 1994.
This increase in direct premium is primarily attributable to
the credit insurance business ($1.5 million in premiums).
Oxford's direct business related to group life and disability
coverage issued to employees of the Company for the quarter
ended March 31, 1995 accounted for approximately 8.1% of
premiums. Other direct lines, including the credit insurance
business, accounted for approximately 25.0% of Oxford's
premiums for the quarter ended March 31, 1995.
Net investment income before intercompany
eliminations was $3.9 million and $3.6 million for the quarters
ended March 31, 1995 and 1994, respectively. This increase is
primarily due to increasing margins on the interest sensitive
business. Gains on the disposition of fixed maturity
investments were $0.2 million for both 1995 and 1994. Oxford
had $0.5 million of other income for both of the quarters ended
March 31, 1995 and 1994.
Benefits and expenses incurred were $8.0 million for
the quarter ended March 31, 1995, an increase of 21.2% over
1994. Comparable benefits and expenses incurred for 1994
were $6.6 million. This increase is primarily due to death
benefits incurred and Oxford's recent entrance into the credit
insurance business, partially offset by a decrease in the
amortization of deferred acquisition costs.
Operating profit before intercompany
eliminations increased by $0.7 million, or approximately 36.8%,
in 1995 to $2.6 million, primarily due to increased margins
on the interest sensitive business.
RWIC - Property and Casualty
RWIC gross premium writings for the quarter ended
March 31, 1995 were $36.2 million as compared to $47.7 million
in the first quarter of 1994. The rental industry market
accounts for a significant share of total premiums,
approximately 18.3% and 19.7% in the first quarters of 1995
and 1994, respectively. These writings include U-Haul customers,
fleetowners and U-Haul as well as other rental industry insureds
with similar characteristics. RWIC continues underwriting professional
reinsurance via broker markets. Premiums in this area decreased during
the first quarter of 1995 to $20.2 million, or 55.8% of total gross
premiums, from comparable 1994 figures of $29.1 million, or 61.0%
of total premiums. This decrease can be primarily attributed to
RWIC electing not to renew several treaties because of inadequate
pricing and market conditions. Premium writings in selected general
agency lines are expected to remain consistent with prior years as evidenced
by 17.4% share of written premiums in 1995 as compared to 14.9% share in
1994. RWIC expanded its direct business in 1995 to include multiple
peril coverage for a variety of commercial properties and businesses.
These premiums accounted for 6.4% of the total gross written premium during
first quarter 1995.
Net earned premiums decreased $6.1 million, or 20.3%,
to $24.0 million for the quarter ended March 31, 1995, compared
with premiums of $30.1 million for the quarter ended March 31,
1994. The premium decrease was primarily due to one time
changes in premium earning methodology and timing differences
related to runoff and start up programs.
<PAGE> 20
Underwriting expenses incurred were $27.5 million for
the quarter ended March 31, 1995, a decrease of $3.2 million, or
10.4% over1994. Comparable underwriting expenses incurred for
the first quarter of 1994 were $30.7 million. The decrease is due
to a reduction in acquisition expenses, which decreased
proportionately with written premiums.
Net investment income was $7.6 million for the
quarter ended March 31, 1995, an increase of 10.1% over 1994 net
investment income of $6.9 million. The marginal increase is the
result of the shift in types of securities held in the portfolio.
RWIC completed the first quarter of 1995 with
income before tax expense of $5.1 million as compared to $7.0
million for the comparable period ended March 31, 1994. This
represents a decrease of $1.9 million, or 27.1% over 1994.
Worse than expected underwriting results in the Company's
assumed reinsurance and rental industry liability lines were
offset by improved results in its general agency lines.
Interest Expense
Interest expense increased by $2.2 million to
$18.8 million for the quarter ended June 30, 1995, as compared
to $16.6 million for the quarter ended June 30, 1994. Higher
average debt levels outstanding caused the increase.
Consolidated Group
As a result of the foregoing, pretax earnings of
$23.7 million were realized in the quarter ended June 30,
1995, as compared to $45.8 million for the same period in
1994. After providing for income taxes, net earnings for the
quarter ended June 30, 1995 were $15.2 million, as compared to
$29.4 million for the same period of the prior year.
<PAGE> 21
QUARTERLY RESULTS
The following table presents unaudited quarterly
results for the nine quarters in the period beginning April 1,
1993 and ending June 30, 1995. The Company believes that
all necessary adjustments have been included in the amounts
stated below to present fairly, and when read in conjunction
with the consolidated financial statements incorporated
herein by accordance with generally accepted accounting principles,
the selected quarterly information. The Company's results of operations
have historically fluctuated from period to period, including on a
quarterly basis. In particular, the Company's U-Haul business
is seasonal and a majority of the Company's revenues and
substantially all of its net earnings from its U-Haul business
are generated in the first and second quarters of each fiscal
year (April through September). The operating results for the
periods presented are not necessarily indicative of results for
any future period.
Quarter Ended
-----------------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31, Jun 30,
1994 1994 1994 1995 1995 (3)
-----------------------------------------------
(in thousands, except per share data)
Total revenues $322,333 361,115 295,888 260,282 330,509
Net earnings (loss) 29,413 40,071 1,907 (11,359) 15,177
Net earnings (loss)
per common share .71 1.00 (.04) (.44) .31
(1), (2)
Quarter Ended
-------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31,
1993 1993 1993 1994
-------------------------------------
(in thousands, except per share data)
Total revenues $291,348 324,968 267,448 251,091
Net earnings (loss) 17,359 30,601 1,799 (9,575)
Net earnings (loss)
per common share .45 .79 (.02) (.33)
(1)
________________
(1)For the quarters ended December 31, 1993, March 31, June
30, September 30, December 31, 1994 , March 31, 1995, and
June 30, 1995, net earnings (loss) per common share
amounts were computed after giving effect to the dividend
on the Company's Series A 8 1/2% Preferred Stock.
(2)Reflects the adoption of Statement of Position 93-6,
"Employers' Accounting for Employee Stock Ownership Plan."
(3)Reflects the adoption of Statement of Position 93-7,
"Reporting on Advertising Costs."
<PAGE> 22
LIQUIDITY AND CAPITAL RESOURCES
U-Haul
To meet the needs of its customers, U-Haul must
maintain a large inventory of fixed asset rental items. At June 30, 1995,
net property, plant and equipment represented approximately 68.4% of total
U-Haul assets and approximately 47.2% of consolidated assets. In the
first quarter of fiscal 1996, capital expenditures were $70.1 million, as
compared to $144.8 million in the first quarter of fiscal 1995,
reflecting new rental truck acquisitions, purchase of trucks previously
leased, and real property acquisitions. The decrease in capital
expenditures from the prior year is due to a decrease in new rental truck
acquisitions. These acquisitions were funded with internally
generated funds from operations, and debt financings.
Cash flows from operations were $61.9 million in
the first quarter of fiscal 1996, as compared to $113.2 million
in the first quarter of fiscal 1995. The decrease of $51.3
million is primarily due to a decrease in net change of
operating assets and liabilities, specifically an increase in
receivables, and decreases in accounts payable and accrued
liabilities and deferred income taxes.
Oxford - Life Insurance
Oxford's primary sources of cash are premiums,
receipts from interest-sensitive products and investment
income. The primary uses of cash are operating costs and
benefit payments to policyholders. Matching the investment
portfolio to the cash flow demands of the types of insurance
being written is an important consideration. Benefit and
claim statistics are continually monitored to provide
projections of future cash requirements.
Cash provided by operating activities were $3.7
million and $0.8 million for the quarters ended March 31, 1995
and 1994, respectively. Cash flows from new annuity reinsurance
agreements increase investment contract deposits as well as the purchase
of fixed maturities. Cash flows from financing activities of
new annuity reinsurance agreements were approximately $55.0
million for the quarter ended March 31, 1995. In addition to
cash flow from operating and financing activities, a
substantial amount of liquid funds is available through Oxford's
short-term portfolio. At March 31, 1995 and 1994, short-term
investments amounted to $10.8 million and $18.5 million,
respectively. Management believes that the overall sources of
liquidity will continue to meet foreseeable cash needs.
Stockholder's equity of Oxford, excluding investment
of RWIC (in prior years), increased to $90.4 million in 1995
from $88.2 million in 1994. Ponderosa now holds 100% of the
common stock of RWIC as a result of a property dividend made by
Oxford on June 30, 1994.
<PAGE> 23
Applicable laws and regulations of the State of
Arizona require the Company's insurance subsidiaries to
maintain minimum capital determined in accordance with statutory
accounting practices in the amount of $400,000. In addition, the amount
of dividends that can be paid to stockholders by insurance
companies domiciled in the State of Arizona is limited. Any
dividend in excess of the limit requires prior regulatory
approval. As a result of the dividend of RWIC stock on June
30, 1994, the state of Arizona must approve future dividends
made through June 30, 1995. These restrictions are not
expected to have a material adverse effect on the ability of
the Company to meet its cash obligations.
RWIC - Property and Casualty
Cash flows from operating activities were $3.4
million and $8.2 million for the quarters ended March 31, 1995
and March 31, 1994, respectively. The change is due to
decreased net income and increased reserves related to premium
writings, offset by a small change in accounts receivable as
compared to a large increase during the first quarter of 1994.
RWIC's short-term investment portfolio was $17.1
million at March 31, 1995. This level of liquid assets,
combined with budgeted cash flow, is adequate to meet
periodic needs. This balance also reflects funds in transition from
maturity proceeds to long-term investments. The structure of the long-term
portfolio is designed to match future cash needs. Capital and
operating budgets allow RWIC to accurately schedule cash needs.
RWIC maintains a diversified investment
portfolio, primarily in bonds at varying maturity levels.
Approximately 95.7% of the portfolio consists of investment grade
securities. The maturity distribution is designed to provide sufficient
liquidity to meet future cash needs. Current liquidity is
adequate, with current invested assets equal to 96.7% of total
liabilities.
Stockholder's equity increased 3.6% from $168.1
million at December 31, 1994 to $174.1 million at March 31,
1995. RWIC considers current stockholder's equity to be adequate to
support future growth and absorb unforeseen risk events. RWIC
does not use debt or equity issues to increase capital and
therefore has no exposure to capital market conditions. RWIC
paid no stockholder's dividends during the quarter ended March
31, 1995.
Consolidated Group
At June 30, 1995, total notes and loans
payable outstanding was $866.1 million as compared to $881.2
million at March 31, 1995, and $725.6 million at June 30, 1994.
The increase from 1994 reflects the expansion in the rental
fleet and self-storage operation.
During each of the fiscal years ending March 31,
1996, 1997, and 1998, U-Haul estimates gross capital
expenditures will average approximately $350 million as a result
of the expansion of the rental fleet and self-storage operation.
This level of capital expenditures, combined with an average
of approximately $100 million in annual long-term debt
maturities during this same period, are expected to create
annual average funding needs of approximately $450 million.
Management estimates that U-Haul will fund approximately 60%
of these requirements with internally generated funds,
including proceeds from the disposition of older trucks and
other asset sales. The remainder of the anticipated capital
expenditures are expected to be financed through existing credit
facilities, new debt placements, and equity offerings.
<PAGE> 24
Credit Agreements
The Company's operations are funded by various credit
and financing arrangements, including unsecured long-term
borrowings, unsecured medium-term notes, and revolving lines of
credit with domestic and foreign banks. Principally to finance
its fleet of trucks and trailers, the Company routinely
enters into sale and leaseback transactions. As of June 30,
1995, the Company had $866.1 million in total notes and
loans payable outstanding and unutilized committed credit of
approximately $252.0 million.
Certain of the Company's credit agreements
contain restrictive financial and other covenants, including,
among others, covenants with respect to incurring
additional indebtedness, maintaining certain financial
ratios, and placing certain additional liens on its
properties and assets. In addition, these credit agreements
contain provisions that could result in a required
prepayment upon a "change in control" of the Company.
The Company is further restricted in the type and
amount of dividends and distributions that it may issue or pay,
and in the issuance of certain types of preferred stock. The
Company is prohibited from issuing shares of preferred stock
that provide for any mandatory redemption, sinking fund
payment, or mandatory prepayment, or that allow the holders thereof
to require the Company or a subsidiary of the Company to repurchase such
preferred stock at the option of such holders or upon the
occurrence of any event or events without the consent of its
lenders.
Stockholder Litigation
As disclosed in the Company's Form 10-K for the
year ended March 31, 1995, a judgment has been entered in the
Shoen Litigation against five of the Company's current directors
and one former director. The Company has agreed to
indemnify the defendants to the fullest extent permitted by law or the
Company's Articles of Incorporation or By-Laws for all expenses
and damages, if any, incurred by the defendants in this
proceeding, subject to certain exceptions. The five director-
defendants have filed for protection under Chapter 11 of the
federal bankruptcy laws and have filed, in cooperation with
the Company, amended plans of reorganization (collectively, the Plan),
all of which propose the same funding and treatment of the plaintiffs'
claims resulting from the judgment in the Shoen Litigation.
Under the Plan, the Company will transfer to
the stockholder plaintiffs $124.1 million of Series B 8.25%
Preferred Stock issued by the Company in exchange for their
AMERCO stock and will transfer to a trust (the Trust), property
having a stipulated or adjudicated value in excess of $338.7
million for the benefit of the non-stockholder plaintiffs.
Each of the non-stockholder plaintiffs will receive a
trust certificate representing an undivided, fractional beneficial
interest in the Trust. The property transferred to the Trust is
expected to consist of (i) $170.1 million in Series D Floating Rate
Preferred Stock issued by the Company; (ii) a 1993 REMIC certificate held
by the Company with a value of approximately $12.5 million evidencing
a pool of 61 commercial mortgage loans which are secured by
mortgages or deeds of trust on 60 self-storage properties;
(iii) mortgage notes with an aggregate principal balance of
approximately $100.9 million on property held by the Company,
<PAGE> 25
one or more of its subsidiaries, or two corporations;
and (iv) real property held free and clear of approximately
$55.3 million. The Company will establish a Contingency Fund
consisting of Company Common Stock or the proceeds therefrom to pay
post-petition interest to the plaintiffs if the court requires the
payment of such interest.
The Company expects the court to consider the Plan
during 1995. However, there is no assurance that the Plan
will be confirmed by the federal bankruptcy court or that
the Plan as confirmed will operate as described above.
The Company's participation in the Plan is subject to the approval of
the Board of Directors. Because of the Plan's complexity
and the alternatives provided to the plaintiffs under the Plan, and
because the Plan has not yet been confirmed, the Company is
unable to determine the Plan's impact on the Company's
financial condition, results of operations, or capital
expenditure plans. However, as a result of funding the Plan,
the Company is likely to incur additional costs in the
future in the form of dividends on preferred stock and/or
interest on borrowed funds. For example, dividends payable on
the Series B 8.25% Preferred Stock and on the Series D
Floating Rate Preferred Stock would equal approximately $22.6
million per year at current interest rates. In addition, the Company's
outstanding Common Stock would be reduced by 18,254,596 shares. These
and other features of the Plan as ultimately confirmed could result in
material changes in reported earnings and stockholder's equity per share
of Common Stock.
<PAGE> 26
SIGNATURES
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, thereunto duly
authorized.
AMERCO
___________________________________
(Registrant)
Dated: January 22, 1996 By: /S/ GARY B. HORTON
___________________________________
Gary B. Horton, Treasurer
(Principal Financial Officer)
