PART I FINANCIAL INFORMATION Item 1. Financial Statements This section presents AMERCO's unaudited condensed consolidated financial statements, showing total assets increased to $12.86 billion and total liabilities to $8.80 billion, with six-month revenues rising to $2.23 billion while net earnings slightly decreased to $288.7 million Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 (Unaudited) | Mar 31, 2019 | | :--- | :--- | :--- | | Total Assets | $12,856,202 | $11,891,713 | | Cash and cash equivalents | $525,231 | $673,701 | | Total property, plant and equipment, net | $7,589,572 | $7,933,971 | | Total Liabilities | $8,798,134 | $8,199,324 | | Notes, loans and finance/capital leases payable, net | $4,497,912 | $4,163,323 | | Total Stockholders' Equity | $4,058,068 | $3,692,389 | - The company adopted new lease accounting standards (ASC 842), resulting in the recognition of Right of use assets of $1.29 billion and corresponding lease liabilities of $104.8 million (operating) and inclusion in finance leases payable as of September 30, 2019, which were not on the balance sheet as of March 31, 2019128184 Condensed Consolidated Statements of Operations Quarterly Results of Operations (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | | :--- | :--- | :--- | | Total Revenues | $1,150,214 | $1,104,507 | | Self-moving equipment rentals | $804,325 | $781,713 | | Self-storage revenues | $104,965 | $91,493 | | Earnings from operations | $244,740 | $250,944 | | Earnings available to common stockholders | $156,326 | $163,542 | | Basic and diluted EPS | $7.97 | $8.35 | Six-Month Results of Operations (in thousands, except per share data) | Metric | Six Months Ended Sep 30, 2019 | Six Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Total Revenues | $2,229,463 | $2,124,084 | | Self-moving equipment rentals | $1,552,921 | $1,498,315 | | Self-storage revenues | $203,239 | $177,705 | | Earnings from operations | $458,605 | $455,648 | | Earnings available to common stockholders | $288,748 | $291,391 | | Basic and diluted EPS | $14.73 | $14.87 | Condensed Consolidated Statements of Cash Flows Six-Month Cash Flow Summary (in thousands) | Cash Flow Category | Six Months Ended Sep 30, 2019 | Six Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $737,764 | $702,677 | | Net cash used by investing activities | $(1,251,889) | $(867,711) | | Net cash provided by financing activities | $361,371 | $59,869 | | Decrease in cash and cash equivalents | $(148,470) | $(106,948) | - The significant increase in cash used by investing activities was primarily driven by a substantial rise in purchases of property, plant, and equipment, which grew to $1.59 billion from $1.11 billion year-over-year31 Notes to Condensed Consolidated Financial Statements - The company operates through three reportable segments: Moving and Storage (U-Haul), Property and Casualty Insurance (Repwest), and Life Insurance (Oxford)38394041 - Total long-term debt, including finance/capital leases, increased to $4.50 billion as of September 30, 2019, from $4.16 billion as of March 31, 2019, primarily through senior mortgages and fleet loans5456 - The company adopted the new lease accounting standard (Topic 842) on April 1, 2019, which resulted in the recognition of Right-of-Use assets and lease liabilities on the balance sheet for leases with terms greater than 12 months, increasing total assets and liabilities by approximately $105.4 million for property operating leases and reclassifying $948.2 million from PP&E to ROU assets for vehicle financing leases14915284 - Related party transactions primarily involve management fees received from and lease/commission expenses paid to entities controlled by major stockholders, including entities under Blackwater Investments, Inc929495 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's performance, highlighting revenue growth in self-moving equipment rentals and self-storage, driven by increased transactions and expansion of storage capacity, with consolidated revenues growing to $1.15 billion but earnings from operations decreasing slightly to $244.7 million due to higher operating expenses and increased depreciation, while maintaining strong liquidity Results of Operations Q2 FY2020 vs Q2 FY2019 Revenue Performance (in millions) | Revenue Stream | Q2 FY2020 | Q2 FY2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Self-moving equipment rentals | $804.3 | $781.7 | +$22.6 | +2.9% | | Self-storage revenues | $105.0 | $91.5 | +$13.5 | +14.8% | | Total Consolidated Revenue | $1,150.2 | $1,104.5 | +$45.7 | +4.1% | - Self-moving equipment rental revenue growth was driven by improved transactions in both In-town and one-way markets for trucks and trailers, supported by an increase in retail locations and fleet size201 - Self-storage revenue increased significantly due to a 17% rise in the average monthly number of occupied units and the addition of 6.1 million net rentable square feet over the last twelve months202 - Despite revenue growth, Q2 earnings from operations decreased by $6.2 million year-over-year, primarily due to a $51.9 million increase in total costs and expenses, led by higher operating expenses for the Moving and Storage segment (personnel, liability costs, property taxes) and increased depreciation206207 Liquidity and Capital Resources - As of September 30, 2019, the company had cash and cash equivalents of $525.2 million, down from $673.7 million at March 31, 2019, with the Moving and Storage segment holding the majority of this cash at $499.0 million258 Net Capital Expenditures (Six Months Ended Sep 30, in thousands) | Category | 2019 | 2018 | | :--- | :--- | :--- | | Purchases of rental equipment | $1,037,365 | $787,234 | | Purchases of real estate, construction and renovations | $423,366 | $481,024 | | Net capital expenditures | $1,187,920 | $684,634 | - Net cash from operating activities increased to $737.8 million for the first six months of fiscal 2020, up from $702.7 million in the prior year period, due to improved operations and timing of settlements26031 - The company plans to reinvest approximately $710 million (net of sales) in its truck and trailer rental fleet during fiscal 2020, funded largely through debt financing, external leasing, and cash from operations264 Fiscal 2020 Outlook - The company will continue to focus on increasing transaction volume, pricing, and utilization for self-moving equipment rentals284 - In the self-storage business, the focus is on acquiring new locations, completing current development projects, and increasing occupancy in the existing portfolio285 - The company will continue to invest capital and resources in the U-Box® program throughout fiscal 2020285 Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from changes in interest rates and foreign currency exchange rates, with interest rate risk primarily related to $1.12 billion in variable rate debt partially mitigated by interest rate swaps, and foreign currency risk from Canadian operations considered immaterial - The primary market risk is interest rate risk associated with $1.12 billion of variable rate debt obligations, which the company mitigates using interest rate swaps288289 - A hypothetical 100 basis point (1%) increase in LIBOR would result in an $8.7 million annual increase in interest expense, negatively impacting earnings and cash flows289 - Foreign currency exchange rate risk from Canadian operations is considered immaterial, as Canadian revenue constitutes approximately 4.9% of total revenue293 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of the end of the quarter, with no material changes to internal control over financial reporting during the period - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report300 - There were no changes in internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls302 PART II OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various litigation and claims arising from the normal course of business, none of which management believes will have a material effect on the company's financial position or results of operations - The company is a defendant in various litigation and claims arising from its normal course of business, but management does not expect these to have a material effect on financial results90304 Item 1A. Risk Factors There have been no material updates to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 - No material updates to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2019, were reported305 Item 6. Exhibits This section lists the documents filed as part of the report, including certifications by the CEO and CFO as required by the Sarbanes-Oxley Act of 2002, and XBRL data files - The report includes required certifications from the CEO (Edward J. Shoen) and CFO (Jason A. Berg) pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act308309
U-Haul pany(UHAL_B) - 2020 Q2 - Quarterly Report