UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
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, Set. 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 [ ].
22,614,087 shares of AMERCO Common Stock, $0.25 par value
were outstanding at February 19, 1997.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01
par value, were outstanding at February 19, 1997. 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 December 31,
1996, March 31, 1996 and December 31, 1995........... 4
b) Consolidated Statements of Earnings for the Nine
Months ended December 31, 1996 and 1995.............. 6
c) Consolidated Statements of Changes in Stockholders'
Equity for the Nine Months ended December 31, 1996
and 1995............................................. 7
d) Consolidated Statements of Earnings for the
Quarters ended December 31, 1996 and 1995............ 9
e) Consolidated Statements of Cash Flows for the
Nine Months ended December 31, 1996 and 1995......... 10
f) Notes to Consolidated Financial Statements -
December 31, 1996, March 31, 1996 and
December 31, 1995.................................... 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 19
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................... 29
<PAGE> 3
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INTENTIONALLY BLANK
<PAGE> 4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
December 31, March 31, December 31,
ASSETS 1996 1996 1995
-------------------------------------
(unaudited) (audited) (unaudited)
(in thousands)
Cash and cash equivalents $ 20,873 31,168 39,043
Receivables 237,866 340,564 336,358
Inventories 54,857 45,891 49,645
Prepaid expenses 16,922 16,415 17,824
Investments, fixed maturities 885,865 879,702 830,594
Investments, other 117,684 126,587 141,291
Deferred policy acquisition costs 52,919 49,995 53,162
Other assets 72,811 20,941 19,945
-------------------------------
Property, plant and equipment, at
cost:
Land 215,566 212,593 214,384
Buildings and improvements 811,008 769,380 752,704
Furniture and equipment 196,248 188,734 185,504
Rental trailers and other rental
equipment 149,136 256,411 256,139
Rental trucks 940,701 968,131 933,727
General rental items 22,007 24,197 47,345
-------------------------------
2,334,666 2,419,446 2,389,803
Less accumulated depreciation 1,088,618 1,102,731 1,128,870
-------------------------------
Total property, plant and
equipment 1,246,048 1,316,715 1,260,933
-------------------------------
$ 2,705,845 2,827,978 2,748,795
===============================
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 5
December 31, March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996 1995
------------------------------------
(unaudited) (audited) (unaudited)
(in thousands)
Liabilities:
Accounts payable and accrued
liabilities $ 106,518 151,754 132,043
Notes and loans 933,410 998,220 890,633
Policy benefits and losses, claims
and loss expenses payable 484,254 483,561 487,652
Liabilities from premium deposits 435,838 410,787 393,572
Cash overdraft 24,620 32,159 28,847
Other policyholders' funds and
liabilities 31,663 25,713 23,015
Deferred income 33,991 2,926 9,613
Deferred income taxes 22,580 73,310 88,246
-------------------------------
Stockholders' equity:
Serial preferred stock, with or
without par value, 50,000,000
shares authorized; 6,100,000 shares
issued without par value and
outstanding as of December 31, 1996,
March 31, 1996 and December 31, 1995 - - -
Series B preferred stock, with no par
value, 100,000 shares authorized;
100,000 shares issued and
outstanding as of December 31, 1996,
none issued and outstanding as of
March 31, 1996 and December 31, 1995 - - -
Serial common stock, with or
without par value, 150,000,000
shares authorized; none issued
and outstanding - - -
Series A common stock of $0.25 par
value, 10,000,000 shares authorized;
5,762,495 shares issued as of
December 31, 1996, March 31, 1996,
and December 31, 1995 1,441 1,441 1,441
Common stock of $0.25 par value,
150,000,000 shares authorized;
36,487,505 shares issued as of
December 31, 1996, and 34,237,505
issued as of March 31, 1996,
and December 31, 1995 9,122 8,559 8,559
Additional paid-in capital 338,528 165,756 165,756
Foreign currency translation (13,282) (11,877) (11,895)
Unrealized gain(loss) on investments 1,614 11,097 5,635
Retained earnings 665,210 609,019 610,076
-------------------------------
1,002,633 783,995 779,572
Less:
Cost of common shares in treasury,
(19,635,913 shares as of December 31,
1996, 7,209,077 shares as of
March 31, 1996, and 4,724,013
shares as of December 31, 1995) 348,923 111,118 61,069
Unearned employee stock
ownership plan shares 20,739 23,329 23,329
-------------------------------
Total stockholders' equity 632,971 649,548 695,174
Contingent liabilities and commitments
-------------------------------
$ 2,705,845 2,827,978 2,748,795
===============================
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 6
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Nine Months ended December 31,
(Unaudited)
1996 1995
-----------------------
(in thousands except
per share data)
Revenues
Rental and other revenue $ 776,414 721,835
Net sales 141,728 136,666
Premiums 116,671 116,256
Net investment income 36,803 34,078
----------------------
Total revenues 1,071,616 1,008,835
Costs and expenses
Operating expense 618,080 545,547
Advertising expense 24,752 31,759
Cost of sales 84,305 81,917
Benefits and losses 109,155 113,435
Amortization of deferred acquisition
costs 12,404 12,114
Depreciation 57,647 79,049
Interest expense 54,718 52,684
----------------------
Total costs and expenses 961,061 916,505
Pretax earnings from operations 110,555 92,330
Income tax expense (40,347) (34,120)
----------------------
Earnings from operations before
extraordinary loss on early
extinguishment of debt 70,208 58,210
Extraordinary loss on early
extinguishment of debt, net (2,319) -
----------------------
Net earnings $ 67,889 58,210
======================
Earnings per common share:
Earnings from operations before
extraordinary loss on early
extinguishment of debt $ 2.20 1.32
Extraordinary loss on early
extinguishment of debt, net (.09) -
----------------------
Net earnings $ 2.11 1.32
======================
Weighted average common shares outstanding 26,683,455 36,796,961
======================
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 7
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Nine Months ended December 31,
(Unaudited)
1996 1995
--------------------
(in thousands)
Series A common stock of $0.25 par value:
10,000,000 shares authorized; 5,762,495
shares issued as of December 31, 1996,
March 31, 1996 and December 31, 1995
Beginning and end of period $ 1,441 1,441
-------------------
Common stock of $0.25 par value:
150,000,000 shares authorized; 36,487,505
shares issued as of December 31, 1996,
34,237,505 shares issued as of
March 31, 1996 and December 31, 1995
Beginning period 8,559 8,559
Issuance of common stock 563 -
-------------------
End of period 9,122 8,559
-------------------
Additional paid-in capital:
Beginning of period 165,756 165,675
Issuance of common shares under ESOP 485 81
Issuance of common stock 73,665 -
Issuance of preferred stock 98,622 -
-------------------
End of period 338,528 165,756
-------------------
Foreign currency translation:
Beginning of period (11,877) (12,435)
Change during period (1,405) 540
-------------------
End of period (13,282) (11,895)
-------------------
Unrealized gain (loss) on investments:
Beginning of period 11,097 (6,483)
Change during period (9,483) 12,118
-------------------
End of period 1,614 5,635
-------------------
Retained earnings:
Beginning of period 609,019 561,589
Net earnings 67,889 58,210
Dividends paid to stockholders:
Preferred stock:
Series A ($1.59 per share
for 1996 and 1995, respectively) (9,723) (9,723)
Series B ($19.75 per share
for 1996) (1,975) -
-------------------
End of period 665,210 610,076
-------------------
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 8
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity,
continued
Nine Months ended December 31,
(Unaudited)
1996 1995
--------------------
(in thousands)
Less Treasury stock:
Beginning of period 111,118 10,461
Net increase (12,426,836 shares in 1996
and 3,388,076 in 1995) 237,805 50,608
-------------------
End of period 348,923 61,069
-------------------
Less Unearned employee stock ownership
plan shares:
Beginning of period 23,329 21,101
Increase in loan 1 4,576
Proceeds from loan (2,591) (2,348)
-------------------
End of period 20,739 23,329
-------------------
Total stockholders' equity $ 632,971 695,174
===================
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 9
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Quarters ended December 31,
(Unaudited)
1996 1995
-----------------------
(in thousands except
per share data)
Revenues
Rental and other revenue $ 221,359 217,406
Net sales 34,536 33,991
Premiums 43,922 44,871
Net investment income 11,663 10,791
---------------------
Total revenues 311,480 307,059
Costs and expenses
Operating expense 211,950 192,362
Advertising expense 8,738 7,698
Cost of sales 21,666 23,916
Benefits and losses 42,439 45,336
Amortization of deferred acquisition
costs 4,347 4,315
Depreciation 18,928 2,774
Interest expense 19,436 17,130
---------------------
Total costs and expenses 327,504 293,531
Pretax earnings (loss) from operations (16,024) 13,528
Income tax benefit (expense) 6,486 (5,827)
---------------------
Earnings (loss) from operations before
extraordinary loss on early
extinguishment of debt (9,538) 7,701
Extraordinary loss on early
extinguishment of debt, net (315) -
---------------------
Net earnings (loss) $ (9,853) 7,701
=====================
Earnings (loss) per common share:
Earnings (loss) from operations before
extraordinary loss on early
extinguishment of debt $ (.72) .13
Extraordinary loss on early
extinguishment of debt, net (.02) -
---------------------
Net earnings (loss) $ (.74) .13
=====================
Weighted average common shares outstanding 20,359,873 34,527,233
=====================
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 10
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months ended December 31,
(Unaudited)
1996 1995
-------------------
(in thousands)
Cash flows from operating activities:
Net earnings $ 67,889 58,210
Depreciation and amortization 71,813 92,525
Provision for losses on accounts
receivable 2,791 3,734
Net (gain) loss on sale of real and
personal property (6,461) 2,692
Loss on sale of investments (173) (4,525)
Changes in policy liabilities and
accruals 5,927 11,479
Additions to deferred policy
acquisition costs (11,873) (18,599)
Net change in other operating assets
and liabilities (59,078) 4,564
-------------------
Net cash provided by operating activities 70,835 150,080
-------------------
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment (159,744) (207,465)
Fixed maturities (132,855) (247,166)
Real estate (767) (7,151)
Mortgage loans (18,939) (7,384)
Proceeds from sale of investments:
Property, plant and equipment 214,411 139,881
Fixed maturities 106,564 145,068
Real estate 599 614
Mortgage loans 35,525 21,918
Changes in other investments (931) (1,466)
-------------------
Net cash provided (used) by investing
activities 43,863 (163,151)
-------------------
Cash flows from financing activities:
Net change in short-term borrowings (328,000) (28,500)
Proceeds from notes 487,800 140,141
Debt issuance costs (4,724) (1,628)
Loan to leveraged Employee Stock
Ownership Plan (1) (4,576)
Proceeds from leveraged Employee Stock
Ownership Plan 2,591 2,348
Principal payments on notes (224,610) (102,230)
Issuance of common stock 74,228 -
Issuance of preferred stock 98,622 -
Net change in cash overdraft (7,539) (2,516)
Dividends paid (11,698) (9,723)
Treasury stock acquisitions (237,805) (65,081)
Investment contract deposits 68,705 133,096
Investment contract withdrawals (42,562) (44,503)
-------------------
Net cash provided (used) by
financing activities (124,993) 16,828
-------------------
Increase (decrease)in cash and
cash equivalents (10,295) 3,757
Cash and cash equivalents at
beginning of period 31,168 35,286
-------------------
Cash and cash equivalents at
end of period $ 20,873 39,043
===================
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE> 11
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1996, March 31, 1996 and December 31, 1995
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
AMERCO, a Nevada corporation (the Company), is the holding
company for U-Haul International, Inc. (U-Haul), Ponderosa Holdings,
Inc. (Ponderosa), and Amerco Real Estate Company (AREC).
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 have been eliminated.
The consolidated balance sheets as of December 31, 1996 and 1995,
and the related consolidated statements of earnings, changes in
stockholders' equity and cash flows for the nine months ended December
31, 1996 and 1995 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 one quarter lag.
There were no effects related to intervening events which would
significantly affect consolidated financial position or results of
operations for the financial statements presented herein.
Based on an in-depth market analysis, the Company increased the
estimated salvage value of certain rental trucks during the third and
fourth quarters of fiscal year ended March 31, 1996. The effect of
the change increased net income for the nine months ended December 31,
1995 by $21,959,000 ($0.60 per share).
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.
Certain reclassifications have been made to the financial
statements for the nine months ended December 31, 1995 to conform with
the current year's presentation.
<PAGE> 12
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
2. INVESTMENTS
A comparison of amortized cost to market for fixed maturities is
as follows (in thousands except for par value):
September 30, 1996 Par Value Gross Gross Estimated
- ------------------
Consolidated or number Amortized unrealized unrealized market
Held-to-Maturity of shares cost gains losses value
-------------------------------------------------------
U.S. treasury
securities
and government
obligations $ 17,805 $ 17,708 1,117 - 18,825
U.S. government
agency mortgage
backed securities $ 56,618 56,233 510 (2,163) 54,580
Obligations of
states and
political
subdivisions $ 31,940 31,711 1,055 (101) 32,665
Corporate
securities $ 187,196 191,500 2,463 (3,171) 190,792
Mortgage-backed
securities $ 96,052 94,307 1,296 (2,610) 92,993
Redeemable preferred
stocks 350 10,778 275 (170) 10,883
----------------------------------------
402,237 6,716 (8,215) 400,738
----------------------------------------
September 30, 1996 Par Value Gross Gross Estimated
- ------------------
Consolidated or number Amortized unrealized unrealized market
Available-for-Sale of shares cost gains losses value
------------------------------------------------------
U.S. treasury
securities and
government
obligations $ 11,685 11,776 870 - 12,646
U.S. government
agency mortgage
backed securities $ 26,154 25,639 172 (295) 25,516
States,
municipalities
and political
subdivisions $ 9,900 10,062 483 (144) 10,401
Corporate
securities $ 340,495 345,370 5,223 (5,131) 345,462
Mortgage-backed
securities $ 85,061 84,514 1,094 (1,263) 84,345
Redeemable preferred
stocks 208 5,161 98 (1) 5,258
----------------------------------------
482,522 7,940 (6,834) 483,628
----------------------------------------
Total $ 884,759 14,656 (15,049) 884,366
========================================
<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
A summary consolidated balance sheet (unaudited) for Ponderosa
Holdings, Inc. and its subsidiaries is presented below:
December 31,
1996 1995
----------------------
(in thousands)
Investments - fixed maturities $ 885,865 830,594
Other investments 96,374 114,113
Receivables 145,191 150,889
Deferred policy acquisition costs 52,919 53,162
Due from affiliate 52,806 21,984
Deferred federal income taxes 17,573 3,621
Other assets 10,313 16,216
----------------------
Total assets $ 1,261,041 1,190,579
======================
Policy liabilities and accruals $ 418,020 417,583
Unearned premiums 66,433 70,074
Premium deposits 435,838 393,572
Other policyholders' funds and
liabilities 45,053 25,848
----------------------
Total liabilities 965,344 907,077
Stockholder's equity 295,697 283,502
----------------------
Total liabilities and
stockholder's equity $ 1,261,041 1,190,579
======================
A summarized consolidated income statement (unaudited) for
Ponderosa Holdings, Inc. and its subsidiaries is presented below:
Nine months ended December 31,
1996 1995
-----------------------
(in thousands)
Premiums $ 129,708 126,420
Net investment income 36,651 34,234
Other income 2,548 6,884
Total revenue 168,907 167,538
---------------------
Benefits and losses 109,155 113,435
Amortization of deferred policy
acquisition costs 12,404 12,114
Other expenses 25,712 15,597
---------------------
Income from operations 21,636 26,392
Federal income tax expense (6,924) (8,715)
---------------------
Net income $ 14,712 17,677
=====================
Effective January 7, 1997, Ponderosa Holdings, Inc. merged with
and into AMERCO.
<PAGE> 14
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
4. NOTES AND LOANS
On July 18, 1996, the Company extinguished debt of approximately
$76,250,000 by irrevocably placing cash into a trust of U.S. Treasury
securities to be used to satisfy scheduled payments of principal and
interest.
In August 1996, the Company extinguished $86,167,000 of its long-
term notes originally due in fiscal 1997 through fiscal 1999.
The above transactions resulted in an extraordinary loss of
$2,319,000, net of tax of $1,391,000 ($0.09 per share).
Pursuant to a shelf registration statement, from September 13,
1996 through December 31, 1997, the Company issued $287,500,000 of
fixed rate medium-term notes ranging from 6.71% to 8.04% with maturity
dates ranging from 1998 to 2006, and a $25,000,000 floating rate
medium-term note with a maturity date of October 1997. Subsequent to
December 31, 1996, the Company issued $74,500,000 of fixed rate medium-
term notes ranging from 7.23% to 8.08% with maturity dates from 2017
to 2027.
5. STOCKHOLDERS' EQUITY
On July 19, 1996, pursuant to the judgment in the Shoen
Litigation, the Company paid CEMAR, Inc. (Cemar) approximately
$15,857,000 to repurchase 2,331,984 shares of Common Stock held by
Cemar. On the same date the Company paid damages to Cecilia M. Hanlon
of approximately $43,139,000 and statutory post-judgment pre-petition
interest on the above amounts of approximately $129,000. On August 6,
1996, the Company funded approximately $8,283,000 of post-petition
date interest by depositing the same into an escrow account pending
the outcome of a dispute involving the entitlement of the plaintiffs
in the Shoen Litigation to post-petition date interest. The Common
Stock held by Cemar was transferred into the Company treasury.
Cecilia M. Hanlon, the sole voting stockholder of Cemar, is the sister
of Edward J., Mark V., and James P. Shoen, who are major stockholders
and directors of the Company.
On August 30, 1996, the Company issued 100,000 shares of its
Series B Preferred Stock with no par value for $100,000,000.
Dividends are cumulative with the rate being reset quarterly and have
priority as to dividends over the Company's common stock. The Series
B Preferred will be convertible, in certain events, at the holder's
option, into either shares of the Company's Series B Common Stock,
$0.25 par value or all of the outstanding shares of Picacho Peak
Investment Co., a subsidiary of AMERCO.
On September 6, 1996, pursuant to the judgment in the Shoen
Litigation, the Company paid Katabasis International, Inc. (Katabasis)
approximately $27,485,000 to repurchase 4,041,924 shares of Common
Stock held by Katabasis. The Company also paid damages to Samuel W.
Shoen of approximately $74,771,000 and statutory post-judgment pre-
petition interest on the above amounts of approximately $224,000. The
Company also funded approximately $15,726,000 of post-petition date
interest by depositing the same into an escrow account pending the
outcome of a dispute involving the entitlement of the plaintiffs in
the Shoen Litigation to post-petition date interest. The Common Stock
held by Katabasis was transferred into the Company treasury. Samuel
W. Shoen, the sole voting stockholder of Katabasis, is the brother of
Edward J., Mark V., and James P. Shoen, who are major stockholders and
directors of the Company.
<PAGE> 15
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
5. STOCKHOLDERS' EQUITY, continued
On September 20, 1996, pursuant to the judgment in the Shoen
Litigation, the Company paid Kattydid, Inc. (Kattydid) approximately
$8,719,000 to repurchase 1,282,248 shares of Common Stock held by
Kattydid. The Company paid damages to Katrina (Shoen) Carlson of
approximately $37,305,000 and statutory post-judgment pre-petition
interest on the above amounts of approximately $112,000. The Company
also paid Katrina (Shoen) Carlson approximately $4,994,000 to
repurchase 734,376 shares of Common Stock held by her and funded
approximately $8,041,000 of post-petition date interest by depositing
the same into an escrow account pending the outcome of a dispute
involving the entitlement of the plaintiffs in the Shoen Litigation to
post-petition date interest. The Common Stock held by Kattydid and
Katrina (Shoen) Carlson was transferred into the Company treasury.
Katrina (Shoen) Carlson, the sole voting stockholder of Kattydid, is
the sister of Edward J., Mark V., and James P. Shoen, who are major
stockholders and directors of the Company.
On October 1, 1996, pursuant to the judgment in the Shoen
Litigation, the Company paid Mickl, Inc. (Mickl) approximately
$27,444,000 to repurchase 4,035,924 shares of Common Stock held by
Mickl. On the same date the Company paid net damages to Michael L.
Shoen of approximately $73,158,000 and statutory post-judgment pre-
petition interest on the above amounts of approximately $224,000. On
the same date, the Company paid Michael L. Shoen approximately $3,000
to repurchase 380 shares of Common Stock held by him and funded
approximately $16,184,000 of post-petition date interest by depositing
the same into an escrow account pending the outcome of a dispute
involving the entitlement of the plaintiffs in the Shoen Litigation to
post-petition date interest. The Common Stock held by Mickl and
Michael L. Shoen was transferred into the Company treasury. Michael
L. Shoen, the sole voting stockholder of Mickl, is the brother of
Edward J., Mark V., and James P. Shoen, who are major stockholders and
directors of the Company.
On October 14, 1996, the Company paid an additional $15,000,000
to L.S. Shoen in settlement of all outstanding disputes pursuant to a
Settlement, Mutual Release of All Claims and Confidentiality Agreement
(Settlement Agreement), dated October 15, 1996 with the Company
resolving the lawsuit in the District Court of Clark County, Nevada.
The settlement resolves a long-standing dispute between the Company
and L.S. Shoen regarding L.S. Shoen's entitlement to compensation
pursuant to an alleged lifetime employment contract.
On December 18, 1996, the Company sold 2,250,000 shares of Common
Stock, $0.25 par value, to the public for $35.00 per share, receiving
net proceeds of $74,228,000.
<PAGE> 16
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
6. EARNINGS PER SHARE
Earnings per share are computed based on the weighted average
number of shares outstanding for the nine month and three month
periods, excluding shares of the employee stock ownership plan that
have not been committed to be released. Net income is reduced for
preferred dividends for purposes of the calculation.
The following table reflects the calculation of the earnings per
share for the nine months as if the treasury acquisitions disclosed in
Note 5 of Notes to Consolidated Financial Statements had taken place
as of the beginning of the year (in thousands except per share data):
Earnings per share calculation
------------------------------
Weighted As adjusted
average for treasury
per share acquisitions
Earnings from operations
before extraordinary
loss on early
extinguishment of debt $ 70,208
Less dividends
on preferred shares 11,698
--------
58,510 $ 2.20 2.95
Extraordinary loss on
early extinguishment
of debt (2,319) (.09) (.12)
-------- ---------- ----------
Net Earnings for per share
calculation $ 56,191 $ 2.11 2.83
======== ========== ==========
Weighted average common shares outstanding 26,683,455 19,849,398
========== ==========
7. CONTINGENT LIABILITIES AND COMMITMENTS
During the nine months ended December 31, 1996, U-Haul Leasing &
Sales Co., a wholly-owned subsidiary of U-Haul International, Inc.,
entered into twelve transactions, whereby the Company sold rental
trucks or trailers and subsequently leased them back. AMERCO has
guaranteed $15,351,000 of residual values at December 31, 1996 on the
rental trucks and trailers at the end of the lease term. U-Haul
entered into one transaction, whereby the Company sold rental trailers
and subsequently leased them back. Also, U-Haul entered into five
transactions, whereby the Company sold and subsequently leased back
computer equipment. Following are the lease commitments for the
leases executed during the nine months ended December 31, 1996, which
have a term of more than one year (in thousands):
Year ended Lease
March 31, Commitments
------------------------
1997 $ 17,990
1998 25,926
1999 25,926
2000 25,926
2001 24,795
Thereafter 116,341
-------
$ 236,904
=======
<PAGE> 17
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
7. CONTINGENT LIABILITIES AND COMMITMENTS, continued
In the normal course of business, the Company is a defendant in
a number of suits and claims. The Company is also a party to several
administrative proceedings arising from state and local provisions
that regulate the removal and/or clean-up of underground fuel storage
tanks. It is the opinion of management that none of such suits,
claims, or proceedings involving the Company, individually or in the
aggregate are expected to result in a material loss.
8. SUPPLEMENTAL CASH FLOWS INFORMATION
The (increase) decrease in receivables, inventories and accounts
payable and accrued liabilities net of other operating and investing
activities follows:
Nine months ended December 31,
1996 1995
----------------------
(in thousands)
Receivables $ 86,194 (38,947)
======================
Inventories $ (8,966) 692
======================
Accounts payable and
accrued liabilities $ (82,175) 4,425
======================
Income taxes paid in cash amounted to $4,780,000 and $368,000 for
the nine months ended December 31, 1996 and 1995, respectively.
Interest paid in cash amounted to $55,631,000 and $53,361,000 for
the nine months ended December 31, 1996 and 1995, respectively.
9. RELATED PARTIES
During the nine months ended December 31, 1996, a subsidiary of
the Company received principal payments of $84,001,000, interest
payments of $4,090,000 and management fees of $1,112,000 from Three
SAC Self-Storage Corporation (Three SAC). Three SAC's voting common
stock is owned by SAC Holding Corporation (SAC Holding) and the non-
voting preferred stock is owned by SAC Non-Business Trust. The voting
common stock of SAC Holding is held by Mark V. Shoen, a major
stockholder and officer of the Company. Three SAC properties are
currently managed by the Company pursuant to a management agreement,
under which the Company receives a management fee equal to 6% of the
gross receipts from the properties. The management fee percentage is
consistent with the fee received by the Company for other properties
managed by the Company.
On June 27, 1996, Three SAC senior notes with a principal of
$86,000,000 were sold to an outside party.
As of December 31, 1996, a subsidiary of the Company funded the
purchase of twenty-six properties, with one additional property funded
subsequent to the quarter end, by Four SAC Self-Storage Corporation
(Four SAC) for an amount of approximately $26,290,000. Four SAC is
owned by SAC Holding. The voting common stock of SAC Holding is held
by Mark V. Shoen, a major stockholder and officer of the Company.
Four SAC acquired eight of the properties from a subsidiary of the
Company at a purchase price equal to the Company's acquisition cost
plus capitalized costs. Such properties are currently managed by the
Company for which the Company will receive a management fee equal to
6% of the gross receipts from the properties. The management fee
percentage is consistent with the fee received by the Company for
other properties managed by the Company. During the nine months ended
December 31, 1996, a subsidiary of the Company received management
fees of $105,000 from Four SAC.
<PAGE> 18
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
10. NEW ACCOUNTING STANDARDS
On April 1, 1996, the Company adopted 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. The adoption of this
statement had no impact on the financial condition or results of
operations of the Company.
On April 1, 1995, the Company implemented Statement of Position
93-7, "Reporting on Advertising Costs", 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. Upon implementation, the Company
recognized additional advertising expense of $8,647,000 for
advertising costs not qualifying as direct-response. The adoption had
the effect of reducing net income by $5,474,000 ($0.15 per share) for
the nine months ended December 31, 1995.
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.
11. SUBSEQUENT EVENTS
On February 4, 1997, the Company declared a cash dividend of
$3,241,000 ($0.531250 per share) to Series A 8 1/2% Preferred Stock
shareholders of record as of February 14, 1997.
<PAGE> 19
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 nine months ended December 31,
1996 and 1995. 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 (Oxford). 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 proportionately
more of the Company's revenues and net earnings are generated in the
first and second quarters each fiscal year (April through September).
Property/ Adjustments
Rental Life Casualty and
Operations Insurance Insurance Eliminations Consolidated
------------------------------------------------------------
(in thousands)
Nine months ended
December 31, 1996
Revenues:
Outside $ 916,243 35,680 119,693 - 1,071,616
Intersegment - 1,235 12,334 (13,569) -
----------------------------------------------------------
Total revenues 916,243 36,915 132,027 (13,569) 1,071,616
==========================================================
Operating profit $ 143,637 8,772 12,864 - 165,273
===========================================
Interest expense 54,718
Pretax earnings -------
from operations $ 110,555
=======
Identifiable assets $1,774,139 635,254 625,787 (329,335) 2,705,845
==========================================================
Property/ Adjustments
Rental Life Casualty and
Operations Insurance Insurance Eliminations Consolidated
------------------------------------------------------------
(in thousands)
Nine months ended
December 31, 1995
Revenues:
Outside $ 851,910 36,319 120,606 - 1,008,835
Intersegment (656) 1,074 9,580 (9,998) -
----------------------------------------------------------
Total revenues 851,254 37,393 130,186 (9,998) 1,008,835
==========================================================
Operating profit $ 117,966 10,069 16,323 656 145,014
===========================================
Interest expense 52,684
Pretax earnings -------
from operations $ 92,330
=======
Identifiable assets $1,867,323 582,043 608,536 (309,107) 2,748,795
==========================================================
<PAGE> 20
NINE MONTHS ENDED DECEMBER 31, 1996 VERSUS NINE MONTHS ENDED DECEMBER
31, 1995
U-Haul
U-Haul revenues consist of (i) total rental and other revenue and
(ii) net sales. Total rental and other revenue increased by $59.3
million, approximately 8.3%, to $774.4 million during the nine months
ended December 31, 1996. The increase reflects higher net revenues
from the rental of moving related equipment and self-storage
facilities which increased in the aggregate by $37.9 million over the
comparable period in fiscal 1996. Moving related rental revenues
benefited from increased truck rental revenues due to improved
utilization (volume), an increase in the fleet size and higher average
dollars per transaction (pricing). Revenues from the rental of self-
storage facilities were positively impacted by additional rentable
square footage, and an increase in management fees from storage
facilities managed for others. Other revenue increased in the
aggregate by $21.4 million. Contributing to the increase in other
revenues was an increase in net gains on the sale of real and personal
property of $9.2 million over the comparable period for fiscal 1996.
Net sales revenues were $141.7 million during the nine months
ended December 31, 1996, which represents an increase of approximately
3.7% from $136.7 million for the comparable period in fiscal 1996.
Revenue growth from the sale of moving support items, hitches and
propane resulted in a $6.8 million increase during the nine months,
which was partially offset by a 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 $84.3 million for the nine months ended
December 31, 1996, which represents an increase of approximately 2.9%
from $81.9 million for the comparable period in fiscal 1996. The
increase in cost of sales reflects a $3.0 million increase in material
costs from the sale of moving support items, hitches and propane which
can be primarily attributed to higher sales levels.
Operating expenses increased to $605.9 million for the nine
months ended December 31, 1996 from $540.6 million for the comparable
period in fiscal 1996, an increase of approximately 12.1%. The change
from the prior year reflects a $24.2 million increase in rental
equipment maintenance costs which reflects truck rental fleet
expansion and transactional growth, a $19.3 million increase in
personnel costs due to the increase in rental, sales and repair
activity, and a $10.6 million increase in lease expense for rental
equipment. All other operating expense categories increased in the
aggregate by $11.2 million compared to the prior year.
Advertising expense for the nine months ended December 31, 1996
declined by $7.0 million to $24.8 million from $31.8 million in the
comparable period of the prior year. The decrease primarily reflects
a one-time expense of $8.7 million recognized during the nine months
ended December 31, 1995, 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 nine months ended December 31, 1996
declined to $57.6 million, as compared to $79.0 million during the
comparable period of the prior year. During the third and fourth
quarters of fiscal 1996, based on the Company's in-depth market
analysis, the Company increased the estimated salvage value of certain
rental trucks.
Oxford - Life Insurance
Premiums from Oxford's reinsurance lines before intercompany
eliminations were $15.6 million for the nine months ended September
30, 1996, or 73.4% of total premiums for that period. This represents
an increase of $1.8 million over the comparable period in 1995 or an
increase of 13.0%. Reinsurance premiums are primarily from term life
insurance, deferred annuity contracts that have matured, and credit
insurance business. Increases in premiums are primarily from the
anticipated increase in annuitizations as a result of the maturing of
deferred annuities and from additional production in the credit life
and credit accident and health business.
Premiums from Oxford's direct lines before intercompany
eliminations were $5.7 million for the nine months ended September 30,
1996, an increase of $0.2 million. Oxford's direct business related
to group life and disability coverage issued to employees of the
Company for the nine months ended September 30, 1996 accounted for
approximately 7.7% of premiums. Other direct lines, including the
credit insurance business, accounted for approximately 18.9% of
Oxford's premiums for the nine months ended September 30, 1996.
<PAGE> 21
Net investment income before intercompany eliminations was $13.9
million and $12.1 million for the nine month periods ended September
30, 1996 and 1995, respectively. This increase is primarily due to
increases in deposit funds from additional production and increasing
margins on the interest sensitive business.
Other income is comprised of gains(losses) on the disposition of
investments and income on the surrender of deferred annuity products.
Gains(losses) on the disposition of investments were ($0.1) million
and $4.4 million for the nine months ended September 30, 1996 and
1995, respectively. Oxford had $1.9 million and $1.5 million of
surrender charge income for the nine month periods ended September 30,
1996 and 1995, respectively.
Benefits and expenses incurred were $28.1 million for the nine
months ended September 30, 1996, an increase of 2.9% from 1995.
Comparable benefits and expenses incurred for 1995 were $27.3 million.
This increase is primarily due to the increase in annuitizations
discussed above.
Operating profit before intercompany eliminations decreased by
$1.3 million, or approximately 12.9%, in 1996 to $8.7 million,
primarily due to a decrease in gains on the disposition of fixed
maturity investments.
RWIC - Property and Casualty
RWIC gross premium writings for the nine months ended September
30, 1996 were $133.0 million as compared to $138.7 million in the nine
months ended September 30, 1995. This represents a decrease of $5.7
million, or 4.1%. As in prior years, the rental industry market
accounts for a significant share of total premiums, approximately
48.2% and 44.4% in the nine months ended September 30, 1996 and 1995,
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 nine
months ended September 30, 1996 to $37.1 million, or 27.9% of total
gross premiums, from comparable 1995 figures of $42.7 million, or
30.8% of total premiums. Premium writings in selected general agency
lines are expected to remain consistent with prior years. Premiums
from selected general agency lines accounted for 14.3% of written
premiums for the nine months ended September 30, 1996 as compared to
16.1% in the comparable period of 1995. This decrease is attributable
to the withdrawal from a regional commercial multiple peril market.
RWIC continued its direct multiple peril coverage of various
commercial properties and businesses in 1996. These premiums
accounted for 9.5% of the total gross written premium during the nine
months ended September 30, 1996, as compared to 8.0% for the nine
months ended September 30, 1995.
Net earned premiums increased $1.3 million, or 1.2%, to $108.4
million for the nine months ended September 30, 1996, compared with
premiums of $107.1 million for the nine months ended September 30,
1995. The premium increase was primarily the result of improved
policy processing.
Underwriting expenses incurred were $119.2 million for the nine
months ended September 30, 1996, an increase of $5.3 million, or 4.7%
over the nine months ended September 30, 1995. Comparable
underwriting expenses incurred for the nine months of 1995 were $113.9
million. The increase is attributed to increased commission expense
offset by decreased loss and loss adjusting expenses. The increased
commission expense resulted from a smaller adjustment to realize a
margin on a canceled general agency program, combined with increased
acquisition expense on assumed treaty reinsurance business. The
reduction in loss and loss adjusting expenses occurred in the rental
industry liability and assumed treaty reinsurance lines.
Net investment income was $22.7 million for the nine months ended
September 30, 1996, an increase of 2.7% from the nine months ended
September 30, 1995 net investment income of $22.1 million.
RWIC completed the nine months ended September 30, 1996 with
income before tax expense of $12.9 million as compared to $16.3
million for the comparable period ended September 30, 1995. This
represents a decrease of $3.4 million, or 20.9% from the nine months
ended September 30, 1995. Increased premium earnings were offset by
increased commission expense to produce this change.
Interest Expense
Interest expense increased by $2.0 million to $54.7 million for
the nine months ended December 31, 1996, as compared to $52.7 million
for the nine months ended December 31, 1995. The increase resulted
from higher average debt levels during the current period.
<PAGE> 22
Extraordinary Loss on Extinguishment of Debt
During the second quarter of fiscal 1997, the Company
extinguished debt of approximately $76.3 million by irrevocably
placing cash into a trust of U.S. Treasury securities to be used to
satisfy scheduled payments of principal and interest. The Company
also extinguished $86.2 million of its long-term notes originally due
in fiscal 1997 through fiscal 1999. These transactions resulted in an
extraordinary loss of $2.3 million, net of tax of $1.4 million ($0.09
per share).
Consolidated Group
As a result of the foregoing, pretax earnings of $110.6 million
were realized during the nine months ended December 31, 1996, as
compared to $92.3 million for the comparable period in 1995. After
providing for income taxes and extraordinary loss on the
extinguishment of debt, net earnings for the nine months ended
December 31, 1996 were $67.9 million, as compared to $58.2 million for
the comparable period of the prior year.
<PAGE> 23
QUARTERLY RESULTS
The following table presents unaudited quarterly results for the
eleven quarters in the period beginning April 1, 1994 and ending
December 31, 1996. The Company believes that all necessary
adjustments have been included in the amounts stated below to present
fairly, and in accordance with generally accepted accounting
principles, the selected quarterly information when read in
conjunction with the consolidated financial statements incorporated
herein by reference. The Company's U-Haul rental operations are
seasonal and proportionally more of the Company's revenues and net
earnings from its U-Haul rental operations 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 (in thousands except for
per share data).
Quarter Ended
---------------------------------
Jun 30, Sep 30, Dec 31,
1996 1996 1996
---------------------------------
Total revenues $ 359,708 400,428 311,480
Net earnings (loss) 40,005 37,737 (9,853)
Weighted average common
shares outstanding (4) 32,015,301 27,675,192 20,359,873
Net earnings (loss)
per common share (1) (4)(5) 1.15 1.22 (.74)
Quarter Ended
----------------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31,
1995 1995 1995 1996
----------------------------------------------
Total revenues $ 330,509 371,267 307,059 285,195
Net earnings (loss) (2) (3) 15,177 35,332 7,701 2,184
Weighted average common
shares outstanding (4) 37,958,426 37,905,225 34,527,233 32,554,458
Net earnings (loss)
per common share (1) (4) 0.31 0.85 0.13 (0.04)
Quarter Ended
-----------------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31,
1994 1994 1994 1995
-----------------------------------------------
Total revenues $ 322,333 359,520 294,858 259,521
Net earnings (loss) 29,413 40,071 1,907 (11,359)
Weighted average common
shares outstanding 37,107,536 37,053,707 37,025,575 38,072,543
Net earnings (loss)
per common share (1) 0.71 1.00 (0.04) (0.44)
________________
(1) 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 and Series B Preferred Stock.
(2) Reflects the adoption of Statement of Position 93-7, "Reporting on
Advertising Costs."
(3) Reflects the change in estimated salvage value during the third
and fourth quarters of fiscal 1996.
(4) Reflects the acquisition of treasury shares acquired pursuant to
the Shoen Litigation. Due to the timing of the acquisition of treasury
shares, it is not appropriate to sum the quarterly net earnings (loss)
per common share to arrieve at an annualized calculation.
(5) During second quarter fiscal 1997, the Company extinguished $76.3
million of debt and $86.2 million of its long-term notes
originally due in fiscal 1997 through fiscal 1999. This resulted
in an extraordinary charge of $2.3 million, net of a $1.4 million
tax benefit ($0.09 per share).
<PAGE> 24
QUARTER ENDED DECEMBER 31, 1996 VERSUS QUARTER ENDED DECEMBER 31, 1995
U-Haul
U-Haul revenues consist of (i) total rental and other revenue and
(ii) net sales. Total rental and other revenue increased by $5.2
million, approximately 2.4%, to $220.2 million in the third quarter of
fiscal 1997. The increase reflects a $10.4 million increase in net
revenues from the rental of moving related equipment and self-storage
facilities.
Net sales revenues were $34.5 million in the third quarter of
fiscal 1997, which represents an increase of approximately 1.6% from
$34.0 million for the comparable period in fiscal 1996. Revenue growth
from the sale of moving support items (i.e. boxes, etc.), hitches and
propane resulted in a $1.8 million increase during the quarter which
was offset by a decrease in outside repair income and a
decrease in gasoline sales.
Cost of sales was $21.7 million in the third quarter of fiscal
1997, which represents a decrease of approximately 9.4% from $23.9
million for the comparable period in fiscal 1996. This decrease in
cost of sales reflects a reduction in inventory reserves based on
actual physical counts taken which is offset by an increase in
material costs from the sale of propane, hitches and moving support
items which can be primarily attributed to higher sales levels.
Operating expenses increased to $207.9 million in the third
quarter of fiscal 1997 from $194.2 million in the third quarter of
fiscal 1996, an increase of approximately 7.1%. The change from the
prior year primarily is attributable to a $5.6 million increase in
personnel costs and a $5.2 million increase in lease expense due to
new leases initiated in the past nine months.
Depreciation expense for the quarter was $18.9 million, as
compared to $2.8 million during the comparable period of the prior
year. During the third and fourth quarters of fiscal 1996, based on
the Company's in-depth market analysis, the Company increased the
estimated salvage value of certain rental trucks.
Oxford - Life Insurance
Premiums from Oxford's reinsurance lines before intercompany
eliminations were $5.0 million for the quarter ended September 30,
1996, or 72.0% of total premiums for that period. This represents an
increase of $0.1 million over the comparable period in 1995 or an
increase of 2.0%. Reinsurance premiums are primarily from term life
insurance, deferred annuity contracts that have matured, and credit
insurance business. Increases in premiums are primarily from the
anticipated increase in annuitizations as a result of the maturing of
deferred annuities and from additional production in the credit life
and credit accident and health business.
Premiums from Oxford's direct lines before intercompany
eliminations were $2.0 million for the quarter ended September 30,
1996, a increase of $0.5 million. This increase in direct premium is
primarily attributable to the credit insurance business. Oxford's
direct business related to group life and disability coverage issued
to employees of the Company for the quarter ended September 30, 1996
accounted for approximately 8.2% of premiums. Other direct lines,
including the credit insurance business, accounted for approximately
19.8% of Oxford's premiums for the quarter ended September 30, 1996.
<PAGE> 25
Net investment income before intercompany eliminations was $4.5
million and $4.0 million for the quarters ended September 30, 1996 and
1995, respectively. This increase is primarily due to increases in
deposit funds from additional production and increasing margins on the
interest sensitive business.
Other income is comprised of gains on the disposition of
investments and income on the surrender of deferred annuity products.
Gains on the disposition of investments were $0.2 million and $1.4
million for the quarters ended September 30, 1996 and 1995,
respectively. Oxford had $0.7 million and $0.5 million of surrender
charge income for the quarters ended September 30, 1996 and 1995,
respectively.
Benefits and expenses incurred were $9.2 million for both
quarters ended September 30, 1996 and 1995.
Operating profit before intercompany eliminations remained at
$3.2 for both quarters ended September 30, 1996 and 1995.
RWIC - Property and Casualty
RWIC gross premium writings for the quarter ended September 30,
1996 were $43.6 million as compared to $57.3 million in the third
quarter of 1995. The rental industry market accounts for a
significant share of total premiums, approximately $23.0 million or
52.7% and $27.7 million or 48.4% in the third quarters of 1996 and
1995, 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 third quarter of 1996 to $8.2 million, or 18.9% of total
gross premiums, from comparable 1995 figures of $14.8 million, or
25.9% of total premiums. Premium writings in selected general agency
lines are expected to remain consistent with prior years. Premiums
from selected general agency lines accounted for $7.0 million or 15.9%
share of written premiums in the third quarter of 1996 as compared to
$8.6 million or 15.0% share in the third quarter of 1995. RWIC
continued its direct multiple peril coverage of various commercial
properties and businesses in 1996. These premiums accounted for 12.0%
of total gross written premium during third quarter of 1996, as
compared to 10.4% during the third quarter of 1995. The increase is
the result of improved policy processing.
Net earned premiums increased $0.1 million or 0.2% to $43.7
million for the quarter ended September 30, 1996, compared to $43.6
million for the quarter ended September 30, 1995.
Underwriting expenses incurred were $48.6 million for the quarter
ended September 30, 1996, an increase of $4.6 million, or 10.5% over
the quarter ended September 30, 1995. Comparable underwriting
expenses incurred for the third quarter of 1995 were $44.0 million.
The increase is due to commission expense, specifically from a smaller
adjustment to realize a margin on a canceled general agency program
and an increase in acquisition expense on assumed treaty reinsurance
business.
Net investment income was $7.6 million for the quarter ended
September 30, 1996, an increase of 11.8% over third quarter 1995 net
investment income of $6.8 million. The increase is due to adjusted
mortgage interest rates for 1995 which effectively understated the
quarter ending September 30, 1995 net investment income.
RWIC completed the third quarter of 1996 with income before tax
expense of $3.2 million as compared to $6.8 million for the comparable
period ended September 30, 1995. This represents a decrease of $3.6
million, or 52.9% from 1995. The decrease resulted from increased
commission expense, partially offset by increased investment income.
Interest Expense
Interest expense increased by $2.3 million to $19.4 million for
the quarter ended December 31, 1996. An increase in average debt
outstanding was primarily responsible for the increase.
<PAGE> 26
Consolidated Group
As a result of the foregoing, a pretax loss of $16.0 million was
incurred during the quarter ended December 31, 1996, as compared to
pretax earnings of $13.5 million for the comparable period in 1995.
After providing for income taxes and extraordinary loss on the
extinguishment of debt, the net loss for quarter ended December 31,
1996 was $9.9 million, as compared to net earnings of $7.7 million for
the comparable period of the prior year.
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 December 31, 1996, net
property, plant and equipment represented approximately 70.2% of total
U-Haul assets and approximately 46.0% of consolidated assets. During
the nine months ended December 31, 1996, capital expenditures were
$159.7 million, as compared to $207.5 million during the nine months
ended December 31, 1995, reflecting expansion of the rental truck
fleet and real property acquisitions. These acquisitions were funded
with internally generated funds from operations, operating leases,
equity placements and debt financings.
Cash flows from operations were $76.1 million during the nine
months ended December 31, 1996, as compared to $135.6 million during
the nine months ended December 31, 1995. The decrease of $59.5
million is primarily due to an increase in other assets, with
decreases in accounts payable and accrued liabilities offset by the
sale of mortgage note receivables. Cash flows from investing
activities were affected by the sale and subsequent leaseback of
rental trailers for net proceeds of $97.4 million.
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 $9.3 million and $5.1
million for the nine months ended September 30, 1996 and 1995,
respectively. Cash flows from financing activities were $22.7 million
and $62.1 million for the nine months ended September 30, 1996 and
1995, respectively. Cash flows from deferred annuity sales increase
investment contract deposits which are a component of financing
activities, as well as the purchase of fixed maturities which are a
component of investing activities. In addition to cash flows from
operating and financing activities, a substantial amount of liquid
funds is available through Oxford's short-term portfolio. At
September 30, 1996 and 1995, short-term investments amounted to $9.5
million and $18.0 million, respectively. Management believes that the
overall sources of liquidity will continue to meet foreseeable cash
needs.
Stockholder's equity of Oxford decreased to $97.3 million in 1996
from $99.6 million in 1995. During the nine months ended September
30, 1996, Oxford paid dividends to Ponderosa of $3.9 million.
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. Statutory surplus that can be distributed
as dividends without prior regulatory approval is $7,080,000. 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 provided (used) by operating activities were ($19.0)
million for the nine months ended September 30, 1996, as compared to
$16.9 million for the comparable period in 1995. The change is due to
temporary increases in accounts receivable and due from affiliates.
RWIC's short-term investment portfolio was $4.4 million at
September 30, 1996. This level of liquid assets is considered
adequate to meet periodic needs as well as any near term shortfall.
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.
<PAGE> 27
RWIC maintains a diversified investment portfolio. Approximately
96.8% 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 94.5% of total liabilities.
Stockholder's equity increased 3.8% from $188.2 million at
December 31, 1995 to $195.3 million at September 30, 1996. 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 dividends during
the nine months ended September 30, 1996, however it did declare a
$6.7 million dividend to Ponderosa, which was paid during December
1996.
Consolidated Group
At December 31, 1996, total notes and loans payable outstanding
was $933.4 million as compared to $998.2 million at March 31, 1996,
and $890.6 million at December 31, 1995.
During each of the fiscal years ending March 31, 1997, 1998, and
1999, U-Haul estimates gross capital expenditures will average
approximately $290 million as a result of the expansion of the rental
truck 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 comparable period, are
expected to create annual average funding needs of approximately $390
million. Management estimates that U-Haul will fund approximately 75%
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,
lease fundings and equity offerings.
On August 30, 1996, the Company issued 100,000 shares of its
Series B Preferred Stock with no par value for $100 million.
Dividends are cumulative with the rate being reset quarterly and have
priority as to dividends over the Company's common stock. The Series
B Preferred will be convertible, in certain events, at the holder's
option, into either shares of the Company's Series B Common Stock,
$0.25 par value or all of the outstanding shares of Picacho Peak
Investment Co., a subsidiary of AMERCO.
On October 1, 1996, the Company paid the last portion of a total
of approximately $448.1 million to the plaintiffs (non-management
members of the Shoen family and their affiliates) in a long-standing
legal dispute involving the Shoen family and related to control of the
Company. As a result, the plaintiffs were required to transfer all of
their 18,254,976 shares of Common Stock to the Company. The Company
plans to deduct for income tax purposes approximately $324.0 million
of the payments made to the plaintiffs, which will reduce the
Company's income tax liability. While the Company believes that such
income tax deductions are appropriate, there can be no assurance that
such deductions ultimately will be allowed in full.
<PAGE> 28
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 December 31, 1996, the Company had
$933.4 million in total notes and loans payable outstanding and
unutilized committed lines of credit of approximately $487.0 million.
In May 1996, the Company issued $175.0 million of 7.85% Senior
Notes Due May 15, 2003. The Company has applied and will continue to
apply the net proceeds from the sale of the notes to pay down, at
maturity, a portion of the Company's long-term debt.
Pursuant to a shelf registration statement, from September 13,
1996 through December 31, 1997, the Company issued $287,500,000 of
fixed rate medium-term notes ranging from 6.71% to 8.04% with maturity
dates ranging from 1998 to 2006, and a $25,000,000 floating rate
medium-term note with a maturity date of October 1997. Subsequent to
December 31, 1996, the Company issued $74,500,000 of fixed rate medium-
term notes ranging from 7.23% to 8.08% with maturity dates from 2017
to 2027.
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. At December 31, 1996, the Company was in
compliance with these covenants.
<PAGE> 29
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
2.1 Order Confirming Plan (1)
2.2 Second Amended and Restated Debtor's Plan of
Reorganization Proposed by Edward J. Shoen (1)
3.1 Restated Articles of Incorporation as of January 23,1997
3.2 Restated By-Laws of AMERCO as of August 27, 1996 (2)
27 Financial Data Schedule
b. Reports on Form 8-K.
No report on Form 8-K was filed for the quarter ended
December 31, 1996.
_____________________________________
(1) Incorporated by reference to the Company's Registration Statement on
Form S-3, Registration No. 333-1195.
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996, file no. 0-7862.
<PAGE> 30
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.
U-Haul International, Inc.
___________________________________
(Registrant)
Dated: February 19, 1997 By: /S/ DONALD W. MURNEY
___________________________________
Donald W. Murney, Treasurer
(Principal Financial Officer)
<PAGE>
RESTATED
ARTICLES OF INCORPORATION
OF
AMERCO
The undersigned President and Secretary of AMERCO, in
accordance with Section 78.403 of the General Corporation Law of
Nevada, restate the Articles of Incorporation and to that end set
forth that:
1. The name of the Corporation is AMERCO.
2. The name and address of the resident agent is The
Corporation Trust Company of Nevada, One First Street, Reno,
Nevada 89501.
3. The nature of the business and the objects and purposes
to be transacted, promoted, or carried on by the Corporation are
to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Nevada
including but not in any way limited to acting as a holding
company, and acquiring by purchase, merger, or otherwise, wholly
or partially owned subsidiary corporations.
4. The Corporation shall have all the general and specific
powers authorized for corporations in the General Corporation Law
of Nevada as now or hereafter in effect.
5. The total number of shares of common stock which this
corporation is authorized to issue is (i) One Hundred and Fifty
Million (150,000,000) shares of common stock with a par value of
Twenty-five Cents ($0.25) per share ("Common Stock"), and (ii)
One Hundred and Fifty Million (150,000,000) shares of common
stock ("Serial Common Stock"), with the Board of Directors having
authority to issue shares of Serial Common Stock in one or more
series (the number of shares of each series being determined by
the Board of Directors), with or without par value, and with such
voting powers, designations, preferences, limitations,
restrictions, and relative rights as shall be stated or expressed
in the resolution regarding such Serial Common Stock adopted by
the Board of Directors pursuant to the authority expressly vested
in it by this provision of the Articles of Incorporation, or any
amendment thereto. For purposes of these Articles of
Incorporation, the term "common stock" includes Common Stock and
Serial Common Stock.
In addition to the common stock authorized to be issued by
the foregoing paragraph, this corporation is authorized to issue
Fifty Million (50,000,000) shares of Preferred Stock, with the
Board of Directors having authority to issue such shares in one
or more series (the number of shares of each series being
determined by the Board of Directors), with or without par value,
and with such voting powers, designations, preferences
limitations, restrictions, and relative right as shall be stated
<PAGE>
or expressed in the resolution regarding such preferred stock
adopted by the Board of Directors pursuant to the authority
expressly vested in it by this provision of the Articles of
Incorporation, or any amendment thereto.
6. For the management of the business, and for the conduct
of the affairs of the Corporation, and for the further
definition, limitation, and regulation of the powers of the
Corporation and its directors and stockholders, it is further
provided:
A. BOARD OF DIRECTORS. The Board of Directors shall
consist of not less than 4 nor more than 8 directors, the
exact number of directors to be determined from time to time
solely by a resolution adopted by an affirmative vote of a
majority of the entire Board of Directors. The directors
shall be divided into four classes, designated Class I,
Class II, Class III and Class IV. Subject to applicable
law, each class shall consist, as nearly as may be possible,
of one-fourth of the total number of directors constituting
the entire Board of Directors. At the 1990 Annual Meeting
of Stockholders, Class I directors shall be elected for a
one-year term, Class II directors for a two-year term, Class
III directors for a three-year term, and Class IV directors
for a four-year term. At each succeeding annual meeting of
stockholders, commencing in 1991, successors to the class of
directors whose term expires at the annual meeting shall be
elected or reelected for a four-year term.
If the number of directors is changed, any increase or
decrease shall be apportioned among the classes of directors
so as to maintain the number of directors in each class as
nearly equal as possible, but in no case will a decrease in
the number of directors shorten the term of any incumbent
director. When the number of directors is increased by the
Board of Directors and any newly created directorships are
filled by the Board of Directors, there shall be no
classification of the additional directors until the next
annual meeting of stockholders.
A director shall hold office until the meeting for the
year in which his or her term expires and until his or her
successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement,
disqualification or removal from office.
Directors need not be stockholders. The names and
addresses of the current members of the board of Directors
are:
NAME ADDRESS
Edward J. Shoen 2727 N. Central Ave.
Phoenix, AZ 85004
Mark V. Shoen 2727 N. Central Ave.
Phoenix, AZ 85004
James P. Shoen 2727 N. Central Ave.
<PAGE>
Phoenix, AZ 85004
Richard J. Herrera 2727 N. Central Ave.
Phoenix, AZ 85004
John M. Dodds 2727 N. Central Ave.
Phoenix, AZ 85004
Charles J. Bayer 2727 N. Central Ave.
Phoenix, AZ 85004
W.E. Carty 2727 N. Central Ave.
Phoenix, AZ 85004
Aubrey K. Johnson 2727 N. Central Ave.
Phoenix, AZ 85004
B. POWERS OF BOARD. In furtherance and not in
limitation of the powers conferred by the laws of the State
of Nevada, the Board of Directors is expressly authorized
and empowered:
(i) To make, alter, amend, and repeal the By-Laws,
subject to the power of the Stockholders to amend the
By-laws, which power may be exercised only by the
affirmative vote of two-thirds of all of the
outstanding shares of common stock of the Corporation
entitled to vote, which vote must be by ballot at a
duly constituted meeting of the Stockholders, the
notice of which meeting must include the proposed
amendment. This Article 6.B(i) may be amended only by
the affirmative vote of two-thirds of all of the
outstanding shares of common stock of the Corporation
entitled to vote, which vote must be by ballot at a
duly constituted meeting of the stockholders, the
notice of which meeting must include the proposed
amendment.
(ii) Subject to the applicable provisions of the By-
Laws then in effect, to determine, from time to time,
whether and to what extent, and at what times and
places, and under what conditions and regulations, the
accounts and books of the Corporation, or any of them,
shall be open to stockholder inspection. No
stockholder shall have any right to inspect any of the
accounts, books or documents of the Corporation, except
as permitted by law, unless and until authorized to do
so by resolution of the Board of Directors or of the
Stockholders of the Corporation;
(iii) To authorize and issue, without stockholder
consent, obligations of the Corporation, secured and
unsecured, under such terms and conditions as the
Board, in its sole discretion, may determine, and to
pledge or mortgage, as security therefor, any real or
<PAGE>
personal property of the Corporation, including after-
acquired property;
(iv) To determine whether any and, if so, what part, of
the earned surplus of the Corporation shall be paid in
dividends to the stockholders, and to direct and
determine other use and disposition of any such earned
surplus;
(v) To fix, from time to time, the amount of the
profits of the Corporation to be reserved as working
capital or for any other lawful purpose;
(vi) To establish bonus, profit-sharing, stock option,
or other types of incentive compensation plans for the
employees, including officers and directors, of the
Corporation, and to fix the amount of profits to be
shared or distributed, and to determine the persons to
participate in any such plans and the amount of their
respective participations;
(vii) To designate, by resolution or resolutions
passed by a majority of the whole Board, one or more
committees, each consisting of two or more directors,
which, to the extend permitted by law and authorized by
the resolution or the By-Laws, shall have and may
exercise the powers of the Board;
(viii)To provide for the reasonable compensation of
its own members by By-Laws, and to fix the terms and
conditions upon which such compensation will be paid;
(ix) In addition to the powers and authority
hereinbefore, or by statute, expressly conferred upon
it, the Board of Directors may exercise all such powers
and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the
provisions of the laws of the State of Nevada, of these
Articles of Incorporation, and of the By-Laws of the
Corporation.
C. A directors or officer of the corporation shall not be
personally liable to this corporation or its stockholders
for damages for beach of fiduciary duty as a director or
officer, but this article shall not eliminate or limit the
liability of a director or officer for (i) acts of omissions
which involve intentional misconduct, fraud or a knowing
violation of law or (ii) the unlawful payment of dividends.
Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the
personal liability of a director or officer of the
corporation for acts or omissions prior to such repeal or
modification.
7. [Intentionally Omitted as provided for in N.R.S.
SECTION 78.403(3)].
<PAGE>
8. Except as otherwise provided by the Board of Directors,
no holder of any shares of the stock of the Corporation shall
have any preemptive right to purchase, subscribe for, or
otherwise acquire any shares of stock of the Corporation of any
class now or hereafter authorized, or any securities exchangeable
for or convertible into such shares, or any warrants or other
instruments evidencing rights or options to subscribe for,
purchase or otherwise acquire such shares.
9. No contract or other transaction between this
Corporation and any other Corporation shall be void or voidable
because of the fact that any of the directors of this Corporation
are interested in, or are directors of, such other Corporation,
provided that the fact that he or such other Corporation is so
interested shall be disclosed or shall have been known to the
Board of Directors of this Corporation; and any director of the
Corporation who is also a director or officer of such other
Corporation, or is so interested, may be counted in determining
the existence of a quorum at any meeting of the Board of
Directors of the Corporation which shall authorize such contract
or transaction, and may vote thereat to authorize any such
contract or transaction, with like force and effect as if he were
not such director or officer of such other corporation or not so
interested.
10. The duration of this Corporation shall be perpetual.
11. The affirmative vote of the holders of two-thirds (2/3)
of the outstanding shares of common stock of this corporation
entitled to vote shall be required to approve, adopt or
authorize:
(A) Any agreement for the merger, consolidation,
amalgamation or combination of this corporation with or
into any other corporation which is an Interested
Stockholder (as hereafter defined);
(B) Any sale, lease, exchange or other disposition to
or with this corporation of any assets of any
Interested Stockholder;
(C) Any sale, lease, exchange or other disposition by
this corporation of all or substantially all of the
assets of this corporation to or with an Interested
Stockholder;
(D) Any plan or proposal for liquidation or
dissolution of this corporation if any Shareholder of
this corporation is an Interested Stockholder; or
(E) Any reclassification of securities (including any
reverse stock split) or recapitalization of this
corporation which has the effect, directly or
indirectly, of increasing the proportionate share of
the outstanding shares of any class of stock or
convertible securities of this corporation, directly or
indirectly owned by an Interested Stockholder.
<PAGE>
As used herein, Interested Stockholder shall mean any
person, firm, corporation or other entity which, as of the record
date for the determination of Shareholders entitled to notice of
and to vote on any of the above transactions, is the beneficial
owner, directly or indirectly, of more than five percent (5%) of
any class of voting stock of this corporation. For the purposes
hereof, any person, firms, corporation or other entity shall be
deemed to be the beneficial owner of any shares of voting stock
of this corporation which (i) it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights,
warrants or options, or otherwise, or (ii) are owned, directly or
indirectly (including shares deemed owned through the application
of clause (i) above), by any other person, firm, corporation or
other entity with which it has any agreement, arrangement or
understanding with respect to the acquisition, holding, voting or
disposition of stock of this corporation, or which is its
"affiliate" or "associate" as those terms are defined in the
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.
The Board of Directors of this corporation shall have the
power and duty, by resolution adopted by the affirmative vote of
a majority of the whole Board of Directors, to determine (and
such determination shall be conclusive) for the purposes of this
Article 11, on the basis of information known to it, whether (i)
any person, firm, corporation or other entity is the beneficial
owner, directly or indirectly, of more than five percent (5%) of
any class of voting stock of this corporation, (ii) any proposed
sale, lease, exchange or other disposition involves all or
substantially all of the assets of this corporation, or (iii) any
person, firm, corporation or other entity has any agreement,
arrangement or understanding with respect to the acquisition,
holding, voting or disposition of stock of this corporation with
any other person, firm, corporation or other entity.
Notwithstanding any other provision of these Articles of
Incorporation, the affirmative vote of the holders of two-thirds
(2/3) of the outstanding shares of common stock of this
corporation entitled to vote shall be required to amend, alter,
change or repeal, or to adopt any provision inconsistent with,
this Article 11.
The respective two-thirds voting requirements specified
above for any of the transactions referred to in any one or more
of paragraphs A through E above, or to amend, alter, change or
repeal, or to adopt any provision inconsistent with, this Article
11, shall not be applicable to a proposed action which has been
approved or recommended by majority of the Disinterested
Directors. As used herein, a "Disinterested Director" means (i)
any Director of the corporation who was a Director as of July 24,
1988, or (ii) was thereafter elected by the Shareholders or
appointed by the Board of Directors of this corporation and was
not at the time of such election or appointment associated with
or an affiliate of an Interested Stockholder directly or
indirectly involved in the transaction or proposal before the
Board of Directors, or (iii) a person designated, before his
election or appointment as a Director, as a Disinterested
Director by a majority of Disinterested Directors then on the
Board.
<PAGE>
12. Stockholder action by written consent is prohibited.
This Article 12 may be amended only by the affirmative vote of
two-thirds of all of the outstanding shares of common stock of
the Corporation entitled to vote, which vote must be by ballot at
a duly constituted meeting of the Stockholders, the notice of
which meeting must include the proposed amendment.
In Witness Whereof, we have executed the foregoing Restated
Articles of Incorporation of AMERCO this 23rd day of January,
1997.
/S/ EDWARD J. SHOEN
------------------------------
Edward J. Shoen, President
/S/ GARY V. KLINEFELTER
------------------------------
Gary V. Klinefelter, Secretary
<PAGE>
CERTIFICATE OF RESTATED ARTICLES OF INCORPORATION
OF
AMERCO
The undersigned, being the President and Secretary of
AMERCO, a Nevada corporation, do hereby certify as follows:
1. That on November 5, 1996, the Directors of
the corporation adopted and consented to the adoption
of a resolution setting forth a proposed amendment to
the Articles of Incorporation of the corporation, as
hereinafter set forth, declaring the advisability
thereof, and calling a meeting of the shareholders for
the purpose of considering and voting upon the proposed
amendments.
2. Said resolution called for the following
amendment to said Articles of Incorporation attached as
Exhibit A hereto and by this reference incorporated
herein.
3. That on January 17, 1997, the shareholders of
the corporation at a meeting, by vote of stockholders
entitled to exercise at least two-thirds of the voting
power of the corporation, adopted and consented to the
adoption of a resolution setting forth the proposed
amendment to the Articles of Incorporation as
hereinabove set forth.
4. That the Articles of Incorporation of AMERCO,
are hereby amended as set forth above and the
undersigned make this certificate pursuant to Sections
78.385 and 78.390 of the Nevada Revised Statutes.
5. That the President and Secretary of AMERCO
have been authorized to execute the Restated Articles
of Incorporation of AMERCO by resolution of the
Directors of the corporation adopted on November 5,
1996.
6. That the Restated Articles of Incorporation
of AMERCO, pursuant to Section 78.403 of the Nevada
Revised Statutes, correctly set forth the text of the
Articles of Incorporation as amended to the date
hereof.
Dated: January 23, 1997
AMERCO, a Nevada corporation
/S/ EDWARD J. SHOEN /S/ GARY V. KLINEFELTER
By: ---------------------- By: ------------------------
Edward J. Shoen Gary V. Klinefelter
President Secretary
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this
23rd day of January, 1997, by Edward J. Shoen, President of
AMERCO, a Nevada corporation, on behalf of the corporation.
/S/ NANCY JO BEILEY
----------------------------
Notary Public
My commission expires:
MAY 22, 1999
- -----------------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this
23rd day of January, 1997, by Gary V. Klinefelter, Secretary of
AMERCO, a Nevada corporation, on behalf of the corporation.
/S/ NANCY JO BEILEY
----------------------------
Notary Public
My commission expires:
MAY 22, 1999
- -----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 20,873
<SECURITIES> 0
<RECEIVABLES> 237,866<F1>
<ALLOWANCES> 0
<INVENTORY> 54,857
<CURRENT-ASSETS> 0<F2>
<PP&E> 2,334,666
<DEPRECIATION> 1,088,618
<TOTAL-ASSETS> 2,705,846
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 933,410
0
0
<COMMON> 10,563
<OTHER-SE> 622,408
<TOTAL-LIABILITY-AND-EQUITY> 2,705,846
<SALES> 141,728
<TOTAL-REVENUES> 1,071,616
<CGS> 84,305
<TOTAL-COSTS> 819,247
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,791
<INTEREST-EXPENSE> 54,718
<INCOME-PRETAX> 110,555
<INCOME-TAX> 40,347
<INCOME-CONTINUING> 70,208
<DISCONTINUED> 0
<EXTRAORDINARY> ( 2,319 )
<CHANGES> 0
<NET-INCOME> 67,889
<EPS-PRIMARY> 2.11
<EPS-DILUTED> 2.11
<FN>
<F1>THE VALUE FOR RECEIVABLES REPRESENTS THEIR AMOUNT NET OF THEIR ALLOWANCES.
<F2>AN UNCLASSIFIED BALANCE SHEET EXISTS IN THE REGISTRANT'S FINANCIAL STATEMENTS.
</FN>
</TABLE>
