UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from __________________ to __________________
Commission File Number 001-11255
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State or other jurisdiction of incorporation or organization |
Registrant, State of Incorporation, Address and Telephone Number |
I.R.S. Employer Identification No. |
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|
Nevada |
U-Haul Holding Company |
88-0106815 |
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(A Nevada Corporation) |
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5555 Kietzke Lane Suite 100 |
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Reno , Nevada 89511 |
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Telephone ( 775 ) 688-6300 |
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AMERCO |
|
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
Common Stock, $0.25 par value |
UHAL |
NYSE |
Series N Non-Voting Common Stock, $0.001 par value |
UHAL.B |
NYSE |
|
|
|
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
19,607,788 shares of Common Stock, $0.25 par value, were outstanding as of February 4, 2023.
176,470,092 shares of Series N Non-Voting Common Stock, $0.001 par value, were outstanding as of February 4, 2023.
TABLE OF CONTENTS
Part i Financial information
Item 1. Financial Statements
U-Haul Holding Company AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED balance sheets
|
|
December 31, |
|
March 31, |
|
|
2022 |
|
2022 |
|
|
(Unaudited) |
|
|
|
|
(In thousands, except share data) |
||
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
2,510,619 |
$ |
2,704,137 |
Reinsurance recoverables and trade receivables, net |
|
208,182 |
|
229,343 |
Inventories and parts, net |
|
150,140 |
|
158,888 |
Prepaid expenses |
|
228,260 |
|
236,915 |
Investments, fixed maturities and marketable equities |
|
2,723,201 |
|
2,893,399 |
Investments, other |
|
518,455 |
|
543,755 |
Deferred policy acquisition costs, net |
|
159,924 |
|
103,828 |
Other assets |
|
57,272 |
|
60,409 |
Right of use assets - financing, net |
|
504,640 |
|
620,824 |
Right of use assets - operating, net |
|
63,856 |
|
74,382 |
Related party assets |
|
75,549 |
|
47,851 |
|
|
7,200,098 |
|
7,673,731 |
Property, plant and equipment, at cost: |
|
|
|
|
Land |
|
1,504,507 |
|
1,283,142 |
Buildings and improvements |
|
6,728,424 |
|
5,974,639 |
Furniture and equipment |
|
898,468 |
|
846,132 |
Rental trailers and other rental equipment |
|
784,394 |
|
615,679 |
Rental trucks |
|
5,167,168 |
|
4,638,814 |
|
|
15,082,961 |
|
13,358,406 |
Less: Accumulated depreciation |
|
(4,166,731) |
|
(3,732,556) |
Total property, plant and equipment, net |
|
10,916,230 |
|
9,625,850 |
Total assets |
$ |
18,116,328 |
$ |
17,299,581 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Accounts payable and accrued expenses |
$ |
703,412 |
$ |
677,785 |
Notes, loans and finance leases payable, net |
|
6,200,397 |
|
6,022,497 |
Operating lease liabilities |
|
63,402 |
|
74,197 |
Policy benefits and losses, claims and loss expenses payable |
|
980,200 |
|
978,254 |
Liabilities from investment contracts |
|
2,396,702 |
|
2,336,238 |
Other policyholders' funds and liabilities |
|
12,579 |
|
10,812 |
Deferred income |
|
45,222 |
|
49,157 |
Deferred income taxes, net |
|
1,301,037 |
|
1,265,358 |
Total liabilities |
|
11,702,951 |
|
11,414,298 |
|
|
|
|
|
Commitments and contingencies (notes 4, 8, 9 and 10) |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Series preferred stock, with or without par value, 50,000,000 shares authorized: |
|
|
|
|
Series A preferred stock, with no par value, 6,100,000 shares authorized; |
|
|
|
|
6,100,000 shares issued and none outstanding as of December 31 and March 31, 2022 |
|
– |
|
– |
Series B preferred stock, with no par value, 100,000 shares authorized; none |
|
|
|
|
issued and outstanding as of December 31 and March 31, 2022 |
|
– |
|
– |
Serial common stock, with or without par value, 250,000,000 shares authorized: |
|
|
|
|
Serial common stock of $ 0.25 par value, 10,000,000 shares authorized; |
|
|
|
|
none issued and outstanding as of December 31 and March 31, 2022 |
|
– |
|
– |
Common stock, with $ 0.25 par value, 250,000,000 shares authorized: |
|
|
|
|
Common stock of $ 0.25 par value, 250,000,000 shares authorized; 41,985,700 |
|
|
|
|
issued and 19,607,788 outstanding as of December 31 and March 31, 2022 |
|
10,497 |
|
10,497 |
Series N Non-Voting Common Stock, with $ 0.001 par value, 250,000,000 shares authorized |
|
|
|
|
Series N Non-Voting Common Stock, with $0.001 par value, 250,000,000 shares authorized |
|
|
|
|
176,470,092 issued and outstanding as of December 31, 2022 |
|
176 |
|
– |
Additional paid-in capital |
|
453,643 |
|
453,819 |
Accumulated other comprehensive income (loss) |
|
(284,116) |
|
46,384 |
Retained earnings |
|
6,910,827 |
|
6,052,233 |
Cost of common stock in treasury, net ( 22,377,912 shares as of December 31 and March 31, 2022) |
|
(525,653) |
|
(525,653) |
Cost of preferred stock in treasury, net ( 6,100,000 shares as of December 31 and March 31, 2022) |
|
(151,997) |
|
(151,997) |
Total stockholders' equity |
|
6,413,377 |
|
5,885,283 |
Total liabilities and stockholders' equity |
$ |
18,116,328 |
$ |
17,299,581 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
U-HAUL HOLDING COMPANY AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED Statements of operations
|
|
Quarter Ended December 31, |
||
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
||
|
|
(In thousands, except share and per share amounts) |
||
Revenues: |
|
|
|
|
Self-moving equipment rentals |
$ |
898,819 |
$ |
975,552 |
Self-storage revenues |
|
190,483 |
|
159,424 |
Self-moving and self-storage products and service sales |
|
74,851 |
|
75,402 |
Property management fees |
|
10,080 |
|
9,651 |
Life insurance premiums |
|
24,399 |
|
27,010 |
Property and casualty insurance premiums |
|
26,852 |
|
25,618 |
Net investment and interest income |
|
52,294 |
|
31,184 |
Other revenue |
|
97,558 |
|
100,495 |
Total revenues |
|
1,375,336 |
|
1,404,336 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Operating expenses |
|
733,469 |
|
658,095 |
Commission expenses |
|
95,980 |
|
105,155 |
Cost of sales |
|
54,616 |
|
57,042 |
Benefits and losses |
|
41,372 |
|
47,266 |
Amortization of deferred policy acquisition costs |
|
6,979 |
|
7,947 |
Lease expense |
|
7,792 |
|
7,394 |
Depreciation, net of gains on disposal of $70,506 and $71,582, respectively |
|
113,866 |
|
103,736 |
Net losses on disposal of real estate |
|
859 |
|
977 |
Total costs and expenses |
|
1,054,933 |
|
987,612 |
|
|
|
|
|
Earnings from operations |
|
320,403 |
|
416,724 |
Other components of net periodic benefit costs |
|
(304) |
|
(280) |
Interest expense |
|
(59,041) |
|
(44,042) |
Fees on early extinguishment of debt |
|
(50) |
|
(956) |
Pretax earnings |
|
261,008 |
|
371,446 |
Income tax expense |
|
(61,764) |
|
(89,980) |
Earnings available to common stockholders |
$ |
199,244 |
$ |
281,466 |
Basic and diluted earnings per share of Common Stock |
$ |
0.98 |
$ |
1.89 |
Weighted average shares outstanding of Common Stock: Basic and diluted |
|
19,607,788 |
|
19,607,788 |
Basic and diluted earnings per share of Series N Non-Voting Common Stock |
$ |
1.02 |
$ |
1.39 |
Weighted average shares outstanding of Series N Non-Voting Common Stock: Basic and diluted |
|
176,470,092 |
|
176,470,092 |
Related party revenues for the third quarter of fiscal 2023 and 2022, net of eliminations, were $10.1 million and $9.7 million, respectively.
Related party costs and expenses for the third quarter of fiscal 2023 and 2022, net of eliminations, were $20.6 million and $21.7 million, respectively.
Please see Note 10, Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements for more information on the related party revenues and costs and expenses.
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
U-HAUL HOLDING COMPANY AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED Statements of operations
|
|
Nine Months Ended December 31, |
||
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
||
|
|
(In thousands, except share and per share amounts) |
||
Revenues: |
|
|
|
|
Self-moving equipment rentals |
$ |
3,151,619 |
$ |
3,189,990 |
Self-storage revenues |
|
549,246 |
|
450,302 |
Self-moving and self-storage products and service sales |
|
281,066 |
|
272,478 |
Property management fees |
|
28,496 |
|
26,847 |
Life insurance premiums |
|
75,636 |
|
84,628 |
Property and casualty insurance premiums |
|
72,542 |
|
64,986 |
Net investment and interest income |
|
116,376 |
|
102,963 |
Other revenue |
|
401,059 |
|
349,252 |
Total revenues |
|
4,676,040 |
|
4,541,446 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Operating expenses |
|
2,278,230 |
|
1,968,698 |
Commission expenses |
|
339,814 |
|
346,200 |
Cost of sales |
|
206,912 |
|
193,448 |
Benefits and losses |
|
122,835 |
|
139,194 |
Amortization of deferred policy acquisition costs |
|
21,623 |
|
23,520 |
Lease expense |
|
22,951 |
|
22,482 |
Depreciation, net of gains on disposal of $199,196 and $157,980, respectively |
|
344,980 |
|
361,201 |
Net (gains) losses on disposal of real estate |
|
5,038 |
|
(2,930) |
Total costs and expenses |
|
3,342,383 |
|
3,051,813 |
|
|
|
|
|
Earnings from operations |
|
1,333,657 |
|
1,489,633 |
Other components of net periodic benefit costs |
|
(912) |
|
(840) |
Interest expense |
|
(166,033) |
|
(122,765) |
Fees on early extinguishment of debt |
|
(1,009) |
|
(956) |
Pretax earnings |
|
1,165,703 |
|
1,365,072 |
Income tax expense |
|
(280,442) |
|
(328,533) |
Earnings available to common stockholders |
$ |
885,261 |
$ |
1,036,539 |
Basic and diluted earnings per share of Common Stock |
$ |
5.38 |
$ |
6.64 |
Weighted average shares outstanding of Common Stock: Basic and diluted |
|
19,607,788 |
|
19,607,788 |
Basic and diluted earnings per share of Series N Non-Voting Common Stock |
$ |
4.42 |
$ |
5.14 |
Weighted average shares outstanding of Series N Non-Voting Common Stock: Basic and diluted |
|
176,470,092 |
|
176,470,092 |
Related party revenues for the first nine months of fiscal 2023 and 2022, net of eliminations, were $28.5 million and $26.8 million, respectively.
Related party costs and expenses for the first nine months of fiscal 2023 and 2022, net of eliminations, were $73.1 million and $72.3 million, respectively.
Please see Note 10, Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements for more information on the related party revenues and costs and expenses.
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
U-HAUL HOLDING COMPANY AND CONSOLIDATED SUBSIDIARIES
Condensed consolidatED statements of COMPREHENSIVE INCOME (loss)
Quarter Ended December 31, 2022 |
|
Pre-tax |
|
Tax |
|
Net |
|
|
(Unaudited) |
||||
|
|
(In thousands) |
||||
Comprehensive income: |
|
|
|
|
|
|
Net earnings |
$ |
261,008 |
$ |
(61,764) |
$ |
199,244 |
Other comprehensive income (loss): |
|
|
|
|
|
|
Foreign currency translation |
|
(215) |
|
– |
|
(215) |
Unrealized net loss on investments |
|
(116,073) |
|
24,523 |
|
(91,550) |
Change in fair value of cash flow hedges |
|
153 |
|
(38) |
|
115 |
Amounts reclassified into earnings on hedging activities |
|
(455) |
|
110 |
|
(345) |
Total other comprehensive income (loss) |
|
(116,590) |
|
24,595 |
|
(91,995) |
|
|
|
|
|
|
|
Total comprehensive income |
$ |
144,418 |
$ |
(37,169) |
$ |
107,249 |
Quarter Ended December 31, 2021 |
|
Pre-tax |
|
Tax |
|
Net |
|
|
(Unaudited) |
||||
|
|
(In thousands) |
||||
Comprehensive income: |
|
|
|
|
|
|
Net earnings |
$ |
371,446 |
$ |
(89,980) |
$ |
281,466 |
Other comprehensive income (loss): |
|
|
|
|
|
|
Foreign currency translation |
|
112 |
|
– |
|
112 |
Unrealized net loss on investments |
|
(15,187) |
|
3,195 |
|
(11,992) |
Change in fair value of cash flow hedges |
|
235 |
|
(57) |
|
178 |
Amounts reclassified into earnings on hedging activities |
|
1,007 |
|
(248) |
|
759 |
Total other comprehensive income (loss) |
|
(13,833) |
|
2,890 |
|
(10,943) |
|
|
|
|
|
|
|
Total comprehensive income |
$ |
357,613 |
$ |
(87,090) |
$ |
270,523 |
Nine Months Ended December 31, 2022 |
|
Pre-tax |
|
Tax |
|
Net |
|
|
(Unaudited) |
||||
|
|
(In thousands) |
||||
Comprehensive income: |
|
|
|
|
|
|
Net earnings |
$ |
1,165,703 |
$ |
(280,442) |
$ |
885,261 |
Other comprehensive income (loss): |
|
|
|
|
|
|
Foreign currency translation |
|
(757) |
|
– |
|
(757) |
Unrealized net loss on investments |
|
(426,955) |
|
90,579 |
|
(336,376) |
Change in fair value of cash flow hedges |
|
8,659 |
|
(2,127) |
|
6,532 |
Amounts reclassified into earnings on hedging activities |
|
134 |
|
(33) |
|
101 |
Total other comprehensive income (loss) |
|
(418,919) |
|
88,419 |
|
(330,500) |
|
|
|
|
|
|
|
Total comprehensive income |
$ |
746,784 |
$ |
(192,023) |
$ |
554,761 |
Nine Months Ended December 31, 2021 |
|
Pre-tax |
|
Tax |
|
Net |
|
|
(Unaudited) |
||||
|
|
(In thousands) |
||||
Comprehensive income: |
|
|
|
|
|
|
Net earnings |
$ |
1,365,072 |
$ |
(328,533) |
$ |
1,036,539 |
Other comprehensive income (loss): |
|
|
|
|
|
|
Foreign currency translation |
|
(2,288) |
|
– |
|
(2,288) |
Unrealized net loss on investments |
|
(55,113) |
|
11,476 |
|
(43,637) |
Change in fair value of cash flow hedges |
|
93 |
|
(22) |
|
71 |
Amounts reclassified into earnings on hedging activities |
|
2,997 |
|
(736) |
|
2,261 |
Total other comprehensive income (loss) |
|
(54,311) |
|
10,718 |
|
(43,593) |
|
|
|
|
|
|
|
Total comprehensive income |
$ |
1,310,761 |
$ |
(317,815) |
$ |
992,946 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
U-Haul Holding Company and consolidated subsidiaries
condensed consolidated statements of changes in stockholders’ equity
|
|
Common Stock |
|
Series N Non-Voting Common Stock |
|
Additional Paid-In Capital |
|
Accumulated Other Comprehensive Income (Loss) |
|
Retained Earnings |
|
Less: Treasury Common Stock |
|
Less: Treasury Preferred Stock |
|
Total Stockholders' Equity |
|
(Unaudited) |
|||||||||||||||
|
(In thousands) |
|||||||||||||||
Balance as of September 30, 2022 |
$ |
10,497 |
$ |
– |
$ |
453,819 |
$ |
(192,121) |
$ |
6,718,642 |
$ |
(525,653) |
$ |
(151,997) |
$ |
6,313,187 |
Common stock dividend |
|
– |
|
176 |
|
(176) |
|
– |
|
– |
|
– |
|
– |
|
– |
Foreign currency translation |
|
– |
|
– |
|
– |
|
(215) |
|
– |
|
– |
|
– |
|
(215) |
Unrealized net loss on investments, net of tax |
|
– |
|
– |
|
– |
|
(91,550) |
|
– |
|
– |
|
– |
|
(91,550) |
Change in fair value of cash flow hedges, net of tax |
|
– |
|
– |
|
– |
|
115 |
|
– |
|
– |
|
– |
|
115 |
Amounts reclassified into earnings on hedging activities |
|
– |
|
– |
|
– |
|
(345) |
|
– |
|
– |
|
– |
|
(345) |
Net earnings |
|
– |
|
– |
|
– |
|
– |
|
199,244 |
|
– |
|
– |
|
199,244 |
Series N Non-Voting Common Stock dividends: ($0.04 per share) |
|
– |
|
– |
|
– |
|
– |
|
(7,059) |
|
– |
|
– |
|
(7,059) |
Net activity |
|
– |
|
176 |
|
(176) |
|
(91,995) |
|
192,185 |
|
– |
|
– |
|
100,190 |
Balance as of December 31, 2022 |
$ |
10,497 |
$ |
176 |
$ |
453,643 |
$ |
(284,116) |
$ |
6,910,827 |
$ |
(525,653) |
$ |
(151,997) |
$ |
6,413,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2021 |
$ |
10,497 |
$ |
– |
$ |
453,819 |
$ |
74,207 |
$ |
5,693,824 |
$ |
(525,653) |
$ |
(151,997) |
$ |
5,554,697 |
Foreign currency translation |
|
– |
|
– |
|
– |
|
112 |
|
– |
|
– |
|
– |
|
112 |
Unrealized net loss on investments, net of tax |
|
– |
|
– |
|
– |
|
(11,992) |
|
– |
|
– |
|
– |
|
(11,992) |
Change in fair value of cash flow hedges, net of tax |
|
– |
|
– |
|
– |
|
178 |
|
– |
|
– |
|
– |
|
178 |
Amounts reclassified into earnings on hedging activities |
|
– |
|
– |
|
– |
|
759 |
|
– |
|
– |
|
– |
|
759 |
Net earnings |
|
– |
|
– |
|
– |
|
– |
|
281,466 |
|
– |
|
– |
|
281,466 |
Common Stock dividends: ($0.50 per share) |
|
– |
|
– |
|
– |
|
– |
|
(9,804) |
|
– |
|
– |
|
(9,804) |
Net activity |
|
– |
|
– |
|
– |
|
(10,943) |
|
271,662 |
|
– |
|
– |
|
260,719 |
Balance as of December 31, 2021 |
$ |
10,497 |
$ |
– |
$ |
453,819 |
$ |
63,264 |
$ |
5,965,486 |
$ |
(525,653) |
$ |
(151,997) |
$ |
5,815,416 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
U-Haul Holding Company and consolidated subsidiaries
condensed consolidated statements of changes in stockholders’ equity
|
|
Common Stock |
|
Series N Non-Voting Common Stock |
|
Additional Paid-In Capital |
|
Accumulated Other Comprehensive Income (Loss) |
|
Retained Earnings |
|
Less: Treasury Common Stock |
|
Less: Treasury Preferred Stock |
|
Total Stockholders' Equity |
|
(Unaudited) |
|||||||||||||||
|
(In thousands) |
|||||||||||||||
Balance as of March 31, 2022 |
$ |
10,497 |
$ |
– |
$ |
453,819 |
$ |
46,384 |
$ |
6,052,233 |
$ |
(525,653) |
$ |
(151,997) |
$ |
5,885,283 |
Common stock dividend |
|
– |
|
176 |
|
(176) |
|
– |
|
– |
|
– |
|
– |
|
– |
Foreign currency translation |
|
– |
|
– |
|
– |
|
(757) |
|
– |
|
– |
|
– |
|
(757) |
Unrealized net loss on investments, net of tax |
|
– |
|
– |
|
– |
|
(336,376) |
|
– |
|
– |
|
– |
|
(336,376) |
Change in fair value of cash flow hedges, net of tax |
|
– |
|
– |
|
– |
|
6,532 |
|
– |
|
– |
|
– |
|
6,532 |
Amounts reclassified into earnings on hedging activities |
|
– |
|
– |
|
– |
|
101 |
|
– |
|
– |
|
– |
|
101 |
Net earnings |
|
– |
|
– |
|
– |
|
– |
|
885,261 |
|
– |
|
– |
|
885,261 |
Common Stock dividends: ($1.00 per share) |
|
– |
|
– |
|
– |
|
– |
|
(19,608) |
|
– |
|
– |
|
(19,608) |
Series N Non-Voting Common Stock dividends: ($0.04 per share) |
|
– |
|
– |
|
– |
|
– |
|
(7,059) |
|
– |
|
– |
|
(7,059) |
Net activity |
|
– |
|
176 |
|
(176) |
|
(330,500) |
|
858,594 |
|
– |
|
– |
|
528,094 |
Balance as of December 31, 2022 |
$ |
10,497 |
$ |
176 |
$ |
453,643 |
$ |
(284,116) |
$ |
6,910,827 |
$ |
(525,653) |
$ |
(151,997) |
$ |
6,413,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2021 |
$ |
10,497 |
$ |
– |
$ |
453,819 |
$ |
106,857 |
$ |
4,958,359 |
$ |
(525,653) |
$ |
(151,997) |
$ |
4,851,882 |
Foreign currency translation |
|
– |
|
– |
|
– |
|
(2,288) |
|
– |
|
– |
|
– |
|
(2,288) |
Unrealized net loss on investments, net of tax |
|
– |
|
– |
|
– |
|
(43,637) |
|
– |
|
– |
|
– |
|
(43,637) |
Change in fair value of cash flow hedges, net of tax |
|
– |
|
– |
|
– |
|
71 |
|
– |
|
– |
|
– |
|
71 |
Amounts reclassified into earnings on hedging activities |
|
– |
|
– |
|
– |
|
2,261 |
|
– |
|
– |
|
– |
|
2,261 |
Net earnings |
|
– |
|
– |
|
– |
|
– |
|
1,036,539 |
|
– |
|
– |
|
1,036,539 |
Common Stock dividends: ($1.50 per share) |
|
– |
|
– |
|
– |
|
– |
|
(29,412) |
|
– |
|
– |
|
(29,412) |
Net activity |
|
– |
|
– |
|
– |
|
(43,593) |
|
1,007,127 |
|
– |
|
– |
|
963,534 |
Balance as of December 31, 2021 |
$ |
10,497 |
$ |
– |
$ |
453,819 |
$ |
63,264 |
$ |
5,965,486 |
$ |
(525,653) |
$ |
(151,997) |
$ |
5,815,416 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
U-Haul Holding Company AND CONSOLIDATED subsidiaries
Condensed consolidatED statements of cash flows
|
|
Nine Months Ended December 31, |
||
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
||
|
|
(In thousands) |
||
Cash flows from operating activities: |
|
|
|
|
Net earnings |
$ |
885,261 |
$ |
1,036,539 |
Adjustments to reconcile net earnings to cash provided by operations: |
|
|
|
|
Depreciation |
|
544,176 |
|
519,181 |
Amortization of deferred policy acquisition costs |
|
21,623 |
|
23,520 |
Amortization of premiums and accretion of discounts related to investments, net |
|
15,232 |
|
14,486 |
Amortization of debt issuance costs |
|
5,694 |
|
4,200 |
Interest credited to policyholders |
|
39,048 |
|
47,181 |
Provision for allowance (recoveries) for losses on trade receivables, net |
|
(4,617) |
|
1,243 |
Provision for allowance for inventories and parts reserves |
|
6,991 |
|
9,799 |
Net gains on disposal of personal property |
|
(199,196) |
|
(157,980) |
Net (gains) losses on disposal of real estate |
|
5,038 |
|
(2,930) |
Net (gains) losses on sales of investments |
|
8,695 |
|
(3,495) |
Net (gains) losses on equity investments |
|
10,906 |
|
(3,695) |
Deferred income taxes, net |
|
121,707 |
|
130,760 |
Net change in other operating assets and liabilities: |
|
|
|
|
Reinsurance recoverables and trade receivables |
|
25,853 |
|
(7,371) |
Inventories and parts |
|
1,682 |
|
(70,796) |
Prepaid expenses |
|
7,867 |
|
257,591 |
Capitalization of deferred policy acquisition costs |
|
(20,406) |
|
(25,703) |
Other assets |
|
2,683 |
|
1,178 |
Related party assets |
|
(26,775) |
|
(18,683) |
Accounts payable and accrued expenses |
|
62,430 |
|
33,258 |
Policy benefits and losses, claims and loss expenses payable |
|
3,490 |
|
6,411 |
Other policyholders' funds and liabilities |
|
1,767 |
|
(2,810) |
Deferred income |
|
(2,168) |
|
(526) |
Related party liabilities |
|
(1,301) |
|
(2,207) |
Net cash provided by operating activities |
|
1,515,680 |
|
1,789,151 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Escrow deposits |
|
159 |
|
5,695 |
Purchases of: |
|
|
|
|
Property, plant and equipment |
|
(2,076,424) |
|
(1,652,984) |
Short term investments |
|
(49,801) |
|
(31,074) |
Fixed maturities investments |
|
(491,431) |
|
(448,283) |
Equity securities |
|
(4,828) |
|
(1,380) |
Preferred stock |
|
– |
|
(8,000) |
Real estate |
|
(7,854) |
|
(190) |
Mortgage loans |
|
(148,017) |
|
(131,633) |
Proceeds from sales and paydowns of: |
|
|
|
|
Property, plant and equipment |
|
533,595 |
|
483,783 |
Short term investments |
|
67,062 |
|
20,669 |
Fixed maturities investments |
|
148,290 |
|
284,347 |
Equity securities |
|
1,187 |
|
2,026 |
Preferred stock |
|
– |
|
2,000 |
Mortgage loans |
|
156,292 |
|
28,064 |
Net cash used by investing activities |
|
(1,871,770) |
|
(1,446,960) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Borrowings from credit facilities |
|
975,966 |
|
1,202,412 |
Principal repayments on credit facilities |
|
(695,321) |
|
(333,419) |
Payment of debt issuance costs |
|
(4,962) |
|
(8,006) |
Finance lease payments |
|
(95,290) |
|
(129,150) |
Securitization deposits |
|
137 |
|
– |
Common Stock dividend paid |
|
(19,608) |
|
(29,412) |
Series N Non-Voting Common Stock dividends paid |
|
(7,059) |
|
– |
Investment contract deposits |
|
258,157 |
|
271,657 |
Investment contract withdrawals |
|
(236,742) |
|
(177,777) |
Net cash provided by financing activities |
|
175,278 |
|
796,305 |
|
|
|
|
|
Effects of exchange rate on cash |
|
(12,706) |
|
(5,046) |
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
(193,518) |
|
1,133,450 |
Cash and cash equivalents at the beginning of period |
|
2,704,137 |
|
1,194,012 |
Cash and cash equivalents at the end of period |
$ |
2,510,619 |
$ |
2,327,462 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
U-Haul Holding Company and consolidated subsidiaries
notes to condensed consolidated financial statements
1.Basis of Presentation
U-Haul Holding Company, a Nevada corporation formerly known as AMERCO (“U-Haul Holding Company”), has a third fiscal quarter that ends on the 31st of December for each year that is referenced. Our insurance company subsidiaries have a third quarter that ends on the 30 th of September for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the presentation of financial position or results of operations. We disclose material events, if any, occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 2022 and 2021 correspond to fiscal 2023 and 2022 for U-Haul Holding Company.
Accounts denominated in non-U.S. currencies have been translated into U.S. dollars.
The condensed consolidated balance sheet as of December 31, 2022, and the related condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity for the third quarter and first nine months of fiscal 2023 and 2022 and cash flows for the first nine months of fiscal 2023 and 2022 are unaudited.
In our opinion, all adjustments necessary for the fair presentation of such condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results for a full year. The information in this Quarterly Report on Form 10-Q (“Quarterly Report”) should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022.
Intercompany accounts and transactions have been eliminated.
Description of Legal Entities
U-Haul Holding Company is the holding company for:
U-Haul International, Inc. (“U-Haul”);
Amerco Real Estate Company (“Real Estate”);
Repwest Insurance Company (“Repwest”); and
Oxford Life Insurance Company (“Oxford”).
Unless the context otherwise requires, the terms “Company,” “we,” “us” or “our” refer to U-Haul Holding Company and all of its legal subsidiaries.
Description of Operating Segments
U-Haul Holding Company has three ( 3 ) reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance.
The Moving and Storage operating segment (“Moving and Storage”) includes U-Haul Holding Company, U-Haul and Real Estate and the wholly owned subsidiaries of U-Haul and Real Estate. Operations consist of the rental of trucks and trailers, sales of moving supplies, sales of towing accessories, sales of propane, and the rental of fixed and portable moving and storage units to the “do-it-yourself” mover and management of self-storage properties owned by others. Operations are conducted under the registered trade name U-Haul ® throughout the United States and Canada.
The Property and Casualty Insurance operating segment (“Property and Casualty Insurance”) includes Repwest and its wholly owned subsidiaries and ARCOA Risk Retention Group (“ARCOA”). Property and Casualty Insurance provides loss adjusting and claims handling for U-Haul® through regional offices in the United States and Canada. Property and Casualty Insurance also underwrites components of the Safemove®, Safetow®, Safemove Plus®, Safestor® and Safestor Mobile® protection packages to U-Haul customers. The business plan for Property and Casualty Insurance includes offering property and casualty insurance products in other U-Haul-related programs. ARCOA is a group captive insurer owned by us and our wholly owned subsidiaries whose purpose is to provide insurance products related to our moving and storage business.
8
U-Haul Holding Company and consolidated subsidiaries
notes to condensed consolidated financial statements – (continued)
The Life Insurance operating segment (“Life Insurance”) includes Oxford and its wholly owned subsidiaries. Life Insurance provides life and health insurance products primarily to the senior market through the direct writing and reinsuring of life insurance, Medicare supplement and annuity policies.
2. Earnings per Share
We calculate earnings per share using the two-class method in accordance with Accounting Standards Codification Topic 260, Earnings Per Share . The two-class method allocates the undistributed earnings available to common stockholders to the Company’s outstanding common stock, $ 0.25 par value (the “Voting Common Stock”) and the Series N Non-Voting Common Stock, $ 0.001 par value (the “Non-Voting Common Stock”) based on each share’s percentage of total weighted average shares outstanding. The Voting Common Stock and Non-Voting Common Stock are allocated 10 % and 90 %, respectively, of our undistributed earnings available to common stockholders. This represents earnings available to common stockholders less the dividends declared for both the Voting Common Stock and Non-Voting Common Stock.
Our undistributed earnings per share is calculated by taking the undistributed earnings available to common stockholders and dividing this number by the weighted average shares outstanding for the respective stock. If there was a dividend declared for that period, the dividend per share is added to the undistributed earnings per share to calculate the basic and diluted earnings per share. The process is used for both Voting Common Stock and Non-Voting Common Stock.
9
U-Haul Holding Company and consolidated subsidiaries
notes to condensed consolidated financial statements – (continued)
The calculation of basic and diluted earnings per share for the quarter and nine months ended December 31, 2022 and 2021 for our Voting Common Stock and Non-Voting Common Stock were as follows:
|
|
For the Quarter Ended |
||
|
|
December 31, |
||
|
|
2022 |
2021 |
|
|
|
(Unaudited) |
||
|
|
(In thousands, except share and per share amounts) |
||
|
|
|
|
|
Weighted average shares outstanding of Voting Common Stock |
|
19,607,788 |
|
19,607,788 |
Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock |
|
196,077,880 |
|
196,077,880 |
Percent of weighted average shares outstanding of Voting Common Stock |
|
10% |
|
10% |
|
|
|
|
|
Net earnings available to common stockholders |
$ |
199,244 |
$ |
281,466 |
Voting Common Stock dividends declared |
|
– |
|
(9,804) |
Non-Voting Common Stock dividends declared |
|
(7,059) |
|
– |
Undistributed earnings available to common stockholders |
$ |
192,185 |
$ |
271,662 |
Undistributed earnings available to common stockholders allocated to Voting Common Stock |
$ |
19,219 |
$ |
27,166 |
|
|
|
|
|
Undistributed earnings per share of Voting Common Stock |
$ |
0.98 |
$ |
1.39 |
Dividends declared per share of Voting Common Stock |
$ |
– |
$ |
0.50 |
Basic and diluted earnings per share of Voting Common Stock |
$ |
0.98 |
$ |
1.89 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Non-Voting Common Stock |
|
176,470,092 |
|
176,470,092 |
Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock |
|
196,077,880 |
|
196,077,880 |
Percent of weighted average shares outstanding of Non-Voting Common Stock |
|
90% |
|
90% |
|
|
|
|
|
Net earnings available to common stockholders |
$ |
199,244 |
$ |
281,466 |
Voting Common Stock dividends declared |
|
– |
|
(9,804) |
Non-Voting Common Stock dividends declared |
|
(7,059) |
|
– |
Undistributed earnings available to common stockholders |
$ |
192,185 |
$ |
271,662 |
Undistributed earnings available to common stockholders allocated to Non-Voting Common Stock |
$ |
172,967 |
$ |
244,496 |
|
|
|
|
|
Undistributed earnings per share of Non-Voting Common Stock |
$ |
0.98 |
$ |
1.39 |
Dividends declared per share of Non-Voting Common Stock |
$ |
0.04 |
$ |
– |
Basic and diluted earnings per share of Non-Voting Common Stock |
$ |
1.02 |
$ |
1.39 |
10
U-Haul Holding Company and consolidated subsidiaries
notes to condensed consolidated financial statements – (continued)
|
|
For the Nine Months Ended |
||
|
|
December 31, |
||
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
||
|
|
(In thousands, except share and per share amounts) |
||
|
|
|
|
|
Weighted average shares outstanding of Voting Common Stock |
|
19,607,788 |
|
19,607,788 |
Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock |
|
196,077,880 |
|
196,077,880 |
Percent of weighted average shares outstanding of Voting Common Stock |
|
10% |
|
10% |
|
|
|
|
|
Net earnings available to common stockholders |
$ |
885,261 |
$ |
1,036,539 |
Voting Common Stock dividends declared |
|
(19,608) |
|
(29,412) |
Non-Voting Common Stock dividends declared |
|
(7,059) |
|
– |
Undistributed earnings available to common stockholders |
$ |
858,594 |
$ |
1,007,127 |
Undistributed earnings available to common stockholders allocated to Voting Common Stock |
$ |
85,859 |
$ |
100,713 |
|
|
|
|
|
Undistributed earnings per share of Voting Common Stock |
$ |
4.38 |
$ |
5.14 |
Dividends declared per share of Voting Common Stock |
$ |
1.00 |
$ |
1.50 |
Basic and diluted earnings per share of Voting Common Stock |
$ |
5.38 |
$ |
6.64 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Non-Voting Common Stock |
|
176,470,092 |
|
176,470,092 |
Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock |
|
196,077,880 |
|
196,077,880 |
Percent of weighted average shares outstanding of Non-Voting Common Stock |
|
90% |
|
90% |
|
|
|
|
|
Net earnings available to common stockholders |
$ |
885,261 |
$ |
1,036,539 |
Voting Common Stock dividends declared |
|
(19,608) |
|
(29,412) |
Non-Voting Common Stock dividends declared |
|
(7,059) |
|
– |
Undistributed earnings available to common stockholders |
$ |
858,594 |
$ |
1,007,127 |
Undistributed earnings available to common stockholders allocated to Non-Voting Common Stock |
$ |
772,735 |
$ |
906,414 |
|
|
|
|
|
Undistributed earnings per share of Non-Voting Common Stock |
$ |
4.38 |
$ |
5.14 |
Dividends declared per share of Non-Voting Common Stock |
$ |
0.04 |
$ |
– |
Basic and diluted earnings per share of Non-Voting Common Stock |
$ |
4.42 |
$ |
5.14 |
Please see note 7, Stockholders’ Equity, of the Notes to Condensed Consolidated Financial Statements for more information on the Non-Voting Common Stock.
3. Investments
Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $21.4 million and $27.1 million as of December 31, 2022 and March 31, 2022, respectively.
11
U-Haul Holding Company and consolidated subsidiaries
notes to condensed consolidated financial statements – (continued)
Available-for-Sale Investments
Available-for-sale investments as of December 31, 2022 were as follows:
|
|
Cost Amortized |
|
Unrealized Gains Gross |
|
Unrealized Losses More than 12 Months Gross |
|
Unrealized Losses Less than 12 Months Gross |
|
Allowance for Expected Credit Losses |
|
Market Value Estimated |
|
|
(Unaudited) |
||||||||||
|
|
(In thousands) |
||||||||||
U.S. treasury securities and government obligations |