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 September 30, 2002
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. | ||
| 1-11255 | AMERCO | 88-0106815 | ||
| (A Nevada Corporation) | ||||
| 1325 Airmotive Way, Ste. 100 | ||||
| Reno, Nevada 89502-3239 | ||||
| Telephone (775) 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 [ ].
20,514,958 shares of AMERCO Common Stock, $0.25 par value were outstanding at September 30, 2002.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were outstanding at November 11, 2002.
TABLE OF CONTENTS
| PART I | FINANCIAL INFORMATION | |||
| Item 1. | Financial Statements | |||
| a) Condensed Consolidated Balance Sheets as of September 30, 2002 (unaudited) and March 31, 2002 | 4 | |||
| b) Condensed Consolidated Statements of Earnings for the Six months ended September 30, 2002 and 2001 (unaudited) | 6 | |||
|
c) Condensed Consolidated Statements of Comprehensive Income for the
Six months ended September 30, 2002 and 2001 (unaudited) |
7 | |||
| d) Condensed Consolidated Statements of Earnings for the Quarters ended September 30, 2002 and 2001 (unaudited) | 8 | |||
|
e) Condensed Consolidated Statements of Comprehensive Income for the
Quarters ended September 30, 2002 and 2001 (unaudited) |
9 | |||
| f) Condensed Consolidated Statements of Cash Flows for the Six months ended September 30, 2002 and 2001 (unaudited) | 10 | |||
| g) Notes to Condensed Consolidated Financial Statements | 11 | |||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 33 | ||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 | ||
| Item 4. | Controls and Procedures | 41 | ||
| PART II | OTHER INFORMATION | |||
| Item 1. | Legal Proceedings | 42 | ||
| Item 3. | Defaults Upon Senior Securities | 43 | ||
| Item 4. | Submission of Matters to a Vote of Security Holders | 43 | ||
| Item 6. | Exhibits and Reports on Form 8-K | 44 |
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3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERCO AND CONSOLIDATED SUBSIDIARIES AND
Condensed Consolidated Balance Sheets
| September 30, | March 31, | ||||||||
| Assets | 2002 | 2002 | |||||||
| (Unaudited) | |||||||||
| (in thousands) | |||||||||
Cash and cash equivalents |
$ | 83,530 | $ | 97,672 | |||||
Receivables |
284,512 | 279,914 | |||||||
Inventories, net |
69,687 | 76,519 | |||||||
Prepaid expenses |
43,916 | 31,069 | |||||||
Investments, fixed maturities |
894,295 | 994,875 | |||||||
Investments, other |
198,212 | 200,437 | |||||||
Other assets |
150,708 | 178,066 | |||||||
| 1,724,860 | 1,858,552 | ||||||||
Property, plant and equipment, at cost: |
|||||||||
Buildings and improvements |
716,346 | 703,841 | |||||||
SACH Buildings and improvements |
468,804 | 458,077 | |||||||
Rental trucks |
1,119,666 | 1,071,604 | |||||||
Other property, plant and equipment |
624,188 | 626,391 | |||||||
SACH other property, plant and equipment |
266,778 | 266,172 | |||||||
| 3,195,782 | 3,126,085 | ||||||||
Less accumulated depreciation |
(1,257,013 | ) | (1,211,182 | ) | |||||
Total property, plant and equipment |
1,938,769 | 1,914,903 | |||||||
Total Assets |
$ | 3,663,629 | $ | 3,773,455 | |||||
The accompanying notes are an integral part of these consolidated financial statements.
4
AMERCO AND CONSOLIDATED SUBSIDIARIES AND
Condensed Consolidated Balance Sheets, Continued
| September 30, | March 31, | |||||||||
| Liabilities and Stockholders' Equity | 2002 | 2002 | ||||||||
| (Unaudited) | ||||||||||
| (in thousands) | ||||||||||
Liabilities: |
||||||||||
AMERCO’s notes and loans payable |
$ | 908,509 | $ | 1,045,802 | ||||||
SAC Holdings notes and loans payable |
579,403 | 557,761 | ||||||||
Policy benefits and losses, claims and
loss expenses payable |
703,304 | 729,343 | ||||||||
Liabilities from premium deposits |
610,248 | 572,793 | ||||||||
Other liabilities |
295,032 | 368,650 | ||||||||
Total liabilities |
3,096,496 | 3,274,349 | ||||||||
Commitments and Contingent Liabilities |
||||||||||
Stockholders’ equity: |
||||||||||
Serial preferred stock - |
||||||||||
Series A preferred stock |
— | — | ||||||||
Series B preferred stock |
— | — | ||||||||
Serial common stock -
|
||||||||||
Series A common stock |
1,441 | 1,441 | ||||||||
Common stock |
9,822 | 9,122 | ||||||||
Additional paid-in capital |
261,217 | 267,712 | ||||||||
Accumulated other comprehensive loss |
(48,418 | ) | (32,384 | ) | ||||||
Retained earnings |
792,484 | 716,614 | ||||||||
Cost of common shares in treasury, net |
(435,555 | ) | (449,247 | ) | ||||||
Unearned ESOP shares |
(13,858 | ) | (14,152 | ) | ||||||
Total stockholders’ equity |
567,133 | 499,106 | ||||||||
Total Liabilities and Stockholders’ Equity |
$ | 3,663,629 | $ | 3,773,455 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
AMERCO AND CONSOLIDATED SUBSIDIARIES AND
Condensed Consolidated Statements of Earnings
Six months ended September 30,
| 2002 | 2001 | |||||||||
| (in thousands, except share and per share data) | ||||||||||
Revenues |
||||||||||
Rental revenue |
$ | 788,904 | $ | 746,907 | ||||||
Net sales |
130,635 | 130,592 | ||||||||
Premiums |
163,016 | 202,880 | ||||||||
Net investment and interest income |
25,356 | 31,482 | ||||||||
Total revenues |
1,107,911 | 1,111,861 | ||||||||
Costs and expenses |
||||||||||
Operating expenses |
546,267 | 558,647 | ||||||||
Cost of sales |
65,522 | 71,171 | ||||||||
Benefits and losses |
140,433 | 180,773 | ||||||||
Amortization of deferred policy
acquisition costs |
21,642 | 20,933 | ||||||||
Lease expense |
88,055 | 91,213 | ||||||||
Depreciation, net |
64,904 | 45,707 | ||||||||
Total costs and expenses |
926,823 | 968,444 | ||||||||
Earnings from operations |
181,088 | 143,417 | ||||||||
Interest expense |
54,887 | 52,517 | ||||||||
Pretax earnings |
126,201 | 90,900 | ||||||||
Income tax expense |
(45,108 | ) | (34,261 | ) | ||||||
Net earnings |
81,093 | 56,639 | ||||||||
Less: Preferred Stock Dividends |
6,482 | 6,482 | ||||||||
Earnings available to common shareholders |
74,611 | 50,157 | ||||||||
Basic and diluted earnings per common share: |
$ | 3.59 | $ | 2.37 | ||||||
Basic and diluted average common shares
outstanding: |
20,779,543 | 21,192,166 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
AMERCO AND CONSOLIDATED SUBSIDIARIES AND
Condensed Consolidated Statements of Comprehensive Income
Six months ended September 30,
| 2002 | 2001 | ||||||||||
| (in thousands) | |||||||||||
Comprehensive income: |
|||||||||||
Net earnings |
$ | 81,093 | $ | 56,639 | |||||||
Changes in other comprehensive income: |
|||||||||||
Foreign currency translation |
(3,381 | ) | (4,617 | ) | |||||||
Fair market value of cash flow hedge |
— | (647 | ) | ||||||||
Unrealized loss on investments |
(12,653 | ) | (4,374 | ) | |||||||
Total comprehensive income |
$ | 65,059 | $ | 47,001 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
AMERCO AND CONSOLIDATED SUBSIDIARIES AND
Condensed Consolidated Statements of Earnings
Quarters ended September 30,
| 2002 | 2001 | |||||||||
| (in thousands, except share and per share data) | ||||||||||
Revenues |
||||||||||
Rental revenue |
$ | 413,050 | $ | 390,467 | ||||||
Net sales |
62,447 | 61,803 | ||||||||
Premiums |
75,466 | 102,550 | ||||||||
Net investment and interest income |
11,591 | 16,387 | ||||||||
Total revenues |
562,554 | 571,207 | ||||||||
Costs and expenses |
||||||||||
Operating expense |
283,481 | 293,100 | ||||||||
Cost of sales |
32,219 | 34,733 | ||||||||
Benefits and losses |
64,015 | 89,341 | ||||||||
Amortization of deferred policy
acquisition costs |
11,314 | 11,139 | ||||||||
Lease expense |
47,232 | 44,571 | ||||||||
Depreciation, net |
32,820 | 13,162 | ||||||||
Total costs and expenses |
471,081 | 486,046 | ||||||||
Earnings from operations |
91,473 | 85,161 | ||||||||
Interest expense |
27,955 | 27,008 | ||||||||
Pretax earnings |
63,518 | 58,153 | ||||||||
Income tax expense |
(22,964 | ) | (22,415 | ) | ||||||
Net earnings |
40,554 | 35,738 | ||||||||
Less: Preferred Stock Dividends |
(3,241 | ) | (3,241 | ) | ||||||
Earnings available to common shareholders |
37,313 | 32,497 | ||||||||
Basic and diluted earnings per common share: |
$ | 1.79 | $ | 1.54 | ||||||
Basic and diluted average common shares
outstanding: |
20,804,016 | 21,106,343 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
8
AMERCO AND CONSOLIDATED SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
Quarters ended September 30,
| 2002 | 2001 | ||||||||||
| (in thousands) | |||||||||||
Comprehensive income: |
|||||||||||
Net earnings |
$ | 40,554 | $ | 35,738 | |||||||
Changes in other comprehensive income: |
|||||||||||
Foreign currency translation |
(4,416 | ) | (6,114 | ) | |||||||
Fair market value of cash flow hedge |
— | (1,004 | ) | ||||||||
Unrealized loss on investments |
(9,315 | ) | (13,163 | ) | |||||||
Total comprehensive income |
$ | 26,823 | $ | 15,457 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
9
AMERCO AND CONSOLIDATED SUBSIDIARIES AND
Condensed Consolidated Statements of Cash Flows
Six months ended September 30,
| 2002 | 2001 | |||||||||
| (in thousands) | ||||||||||
Net cash provided by operating activities |
$ | 111,477 | $ | 43,912 | ||||||
Cash flows from investing activities: |
||||||||||
Purchases of investments: |
||||||||||
Property, plant and equipment |
(122,918 | ) | (108,224 | ) | ||||||
Fixed maturities |
(134,993 | ) | (92,465 | ) | ||||||
Real estate |
(29,391 | ) | (36 | ) | ||||||
Mortgage loans |
— | (561 | ) | |||||||
Proceeds from sale of investments: |
||||||||||
Property, plant and equipment |
46,030 | 60,945 | ||||||||
Fixed maturities |
202,255 | 75,973 | ||||||||
Mortgage loans |
10,450 | 6,889 | ||||||||
Changes in other investments |
32,751 | |||||||||