1
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, 2000
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 [ ].
21,973,537 shares of AMERCO Common Stock, $0.25 par value were outstanding at
February 12, 2001.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were
outstanding at February 12, 2001. 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.
2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
a) Condensed Consolidated Balance Sheets as of
December 31, 2000 (unaudited) and March 31, 2000............... 4
b) Condensed Consolidated Statements of Earnings for the
Nine months ended December 31, 2000 and 1999 (unaudited)....... 6
c) Condensed Consolidated Statements of Comprehensive Income for
the Nine months ended December 31, 2000 and 1999 (unaudited)... 7
d) Condensed Consolidated Statements of Earnings for the
Quarters ended December 31, 2000 and 1999 (unaudited).......... 8
e) Condensed Consolidated Statements of Cash Flows for the
Nine months ended December 31, 2000 and 1999 (unaudited)....... 9
f) Notes to Condensed Consolidated Financial Statements -
December 31, 2000 (unaudited), March 31, 2000 and
December 31, 1999 (unaudited).................................. 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 20
Item 3. Quantitative and Qualitative Disclosures About Market Risk......... 28
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................. 29
Item 6. Exhibits and Reports on Form 8-K................................... 30
3
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INTENTIONALLY BLANK
4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERCO AND CONSOLIDATED SUBSIDIARIES
Condensed Consolidated Balance Sheets
December 31, March 31,
Assets 2000 2000
-----------------------
(Unaudited)
(in thousands)
Cash and cash equivalents $ 25,047 48,435
Notes and mortgage, net 75,986 49,866
Inventories, net 81,393 84,614
Investments, fixed maturities 878,037 884,824
Investments, other 550,190 320,695
Other assets 343,019 354,129
----------------------
Property, plant and equipment, at cost:
Buildings and improvements 821,448 853,403
Rental trucks 1,005,134 1,035,585
Other property, plant, and equipment 650,241 672,122
----------------------
2,476,823 2,561,110
Less accumulated depreciation 1,159,212 1,178,448
----------------------
Total property, plant and equipment 1,317,611 1,382,662
----------------------
Total Assets $ 3,271,283 3,125,225
======================
The accompanying notes are an integral part of these consolidated financial
statements.
5
December 31, March 31,
Liabilities and Stockholders' Equity 2000 2000
-----------------------
(Unaudited)
(in thousands)
Liabilities:
Notes and loans payable $ 1,182,073 1,137,840
Policy benefits and losses, claims and
loss expenses payable 547,124 548,043
Liabilities from premium deposits 469,393 461,673
Deferred income taxes 161,298 109,413
Other liabilities 248,910 282,962
----------------------
Total liabilities 2,608,798 2,539,931
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 9,122 9,122
Additional paid-in capital 311,804 275,242
Accumulated other comprehensive income (44,828) (42,317)
Retained earnings 805,065 755,172
Cost of common shares in treasury, net (404,946) (397,000)
Unearned ESOP shares (15,173) (16,366)
----------------------
Total stockholders' equity 662,485 585,294
Contingent liabilities and commitments
----------------------
Total Liabilities and Stockholders' Equity $ 3,271,283 3,125,225
======================
The accompanying notes are an integral part of these consolidated financial
statements.
6
AMERCO AND CONSOLIDATED SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Nine months ended December 31,
(Unaudited)
2000 1999
-------------------------
(in thousands, except
share and per share data)
Revenues
Rental revenue $ 951,058 907,802
Net sales 155,078 148,669
Premiums 210,102 167,020
Net investment and interest income 72,082 61,545
-----------------------
Total revenues 1,388,320 1,285,036
Costs and expenses
Operating expenses 744,009 705,289
Cost of sales 87,600 87,737
Benefits and losses 170,678 126,944
Amortization of deferred policy acquisition costs 25,129 27,500
Lease expense 132,395 98,999
Depreciation, net 67,767 61,553
-----------------------
Total costs and expenses 1,227,578 1,108,022
Earnings from operations 160,742 177,014
Interest expense 65,234 61,038
-----------------------
Pretax earnings 95,508 115,976
Income tax expense (33,772) (40,867)
-----------------------
Earnings from operations before extraordinary
loss on early extinguishment of debt 61,736 75,109
Extraordinary loss on early extinguishment
of debt, net of tax of $1,160 (2,121) -
-----------------------
Net earnings $ 59,615 75,109
=======================
Basic earnings per common share:
Earnings from operations before extraordinary
loss on early extinguishment of debt 2.42 2.95
Extraordinary loss on early extinguishment
of debt, net (0.10) -
-----------------------
Net earnings $ 2.32 2.95
=======================
Diluted earnings per common share:
Earnings from operations before extraordinary
loss on early extinguishment of debt 2.42 2.93
Extraordinary loss on early extinguishment
of debt, net (0.10) -
-----------------------
Net earnings $ 2.32 2.93
=======================
Weighted average common shares outstanding:
Basic 21,539,821 21,964,513
=======================
Diluted 21,539,821 22,353,402
=======================
The accompanying notes are an integral part of these consolidated financial
statements.
7
AMERCO AND CONSOLIDATED SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
Nine months ended December 31,
(Unaudited)
2000 1999
-------------------
(in thousands)
Comprehensive income:
Net earnings $ 59,615 75,109
Changes in other comprehensive income:
Foreign currency translation (4,683) 4,100
Fair market value of cash flow hedge (861) 2,130
Unrealized gain (loss) on investments 3,033 (14,855)
-------------------
Total comprehensive income $ 57,104 66,484
===================
The accompanying notes are an integral part of these consolidated financial
statements.
8
AMERCO AND CONSOLIDATED SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Quarters ended December 31,
(Unaudited)
2000 1999
-------------------------
(in thousands, except
share and per share data)
Revenues
Rental revenue $ 270,775 264,772
Net sales 41,117 38,548
Premiums 88,607 59,217
Net investment and interest income 25,478 20,060
-----------------------
Total revenues 425,977 382,597
Costs and expenses
Operating expense 257,181 237,911
Cost of sales 21,626 25,003
Benefits and losses 74,863 42,929
Amortization of deferred policy acquisition costs 8,560 12,519
Lease expense 45,859 34,787
Depreciation, net 23,282 23,002
-----------------------
Total costs and expenses 431,371 376,151
Earnings (loss) from operations (5,394) 6,446
Interest expense 21,182 21,223
-----------------------
Pretax loss (26,576) (14,777)
Income tax benefit 9,467 5,452
-----------------------
Loss from operations before extraordinary
loss on early extinguishment of debt (17,109) (9,325)
Extraordinary loss on early extinguishment
of debt, net of tax of $1,160 (2,121) -
-----------------------
Net loss $ (19,230) (9,325)
=======================
Basic and diluted loss per common share:
Loss from operations before extraordinary
loss on early extinguishment of debt $ (0.95) (0.57)
Extraordinary loss on early extinguishment
of debt, net (0.10) -
-----------------------
Net loss $ (1.05) (0.57)
=======================
Basic and diluted average common shares outstanding: 21,406,688 21,975,889
=======================
The accompanying notes are an integral part of these consolidated financial
statements.
9
AMERCO AND CONSOLIDATED SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine months ended December 31,
(Unaudited)
2000 1999
--------------------
(in thousands)
Net cash provided by operating activities 98,868 131,304
--------------------
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment (280,024) (269,530)
Fixed maturities (84,808) (114,778)
Mortgage loans (21,654) (11,955)
Proceeds from sale of investments:
Property, plant and equipment 241,925 167,305
Fixed maturities 89,583 87,604
Mortgage loans 19,187 8,382
Changes in other investments (120,313) 21,351
--------------------
Net cash used by investing activities (156,104) (111,621)
--------------------
Cash flows from financing activities:
Net change in short-term borrowings 169,281 17,160
Proceeds from notes - 150,000
Principal payments on notes (125,048) (180,084)
Repurchase of preferred stock - (25,000)
Preferred stock dividends paid (9,722) (10,400)
Investment contract deposits 62,947 45,435
Investment contract withdrawals (55,763) (45,518)
Changes in other financing activities (7,847) 1,395
--------------------
Net cash provided (used) by financing activities 33,848 (47,012)
--------------------
Increase (decrease) in cash and cash equivalents (23,388) (27,329)
Cash and cash equivalents at beginning of period 48,435 44,505
--------------------
Cash and cash equivalents at end of period $ 25,047 17,176
====================
The accompanying notes are an integral part of these consolidated financial
statements.
10
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
December 31, 2000, March 31, 2000 and December 31, 1999
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
AMERCO, a Nevada corporation (AMERCO), is the holding company for U-Haul
International, Inc. (U-Haul), Amerco Real Estate Company (Real Estate), Republic
Western Insurance Company (RepWest) and Oxford Life Insurance Company (Oxford).
PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts of the
parent corporation, AMERCO, and its wholly-owned subsidiaries. All material
intercompany accounts and transactions of AMERCO and its subsidiaries have been
eliminated. The financial statements and notes are presented as permitted by
Form 10-Q and do not contain certain information included in AMERCO's annual
financial statements and notes.
The condensed consolidated balance sheet as of December 31, 2000 and the
related condensed consolidated statements of earnings for the three and nine
months ended December 31, 2000 and 1999 and the condensed consolidated
statements of comprehensive income and the condensed consolidated statements of
cash flows for the nine months ended December 31, 2000 and 1999 are unaudited.
In the opinion of management, all adjustments necessary for a fair presentation
of such condensed 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 materially affect the consolidated
financial position or results of operations for the financial statements
presented herein.
Certain reclassifications have been made to the financial statements for
the three and nine months ended December 31, 1999 to conform with the current
year's presentation.
NEW ACCOUNTING STANDARDS
During the quarter ended September 30, 2000, AMERCO adopted Staff
Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial
Statements", which provides guidance on the recognition, presentation and
disclosure of revenue in the financial statements filed with the Securities and
Exchange Commission. The adoption of SAB 101 was not material to AMERCO's
condensed consolidated financial statements.
11
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
2. INVESTMENTS
A comparison of amortized cost to market for fixed maturities is as
follows:
September 30, 2000
------------------ Par Value Gross Gross Estimated
Consolidated or number Amortized unrealized unrealized market
Held-to-Maturity of shares cost gains losses value
------------------------------------------------------
(in thousands)
U.S. treasury
securities
and government
obligations $ 15,158 $ 14,503 141 (244) 14,400
U.S. government
agency mortgage-
backed securities $ 15,453 15,378 43 (290) 15,131
Corporate
securities $ 59,022 59,690 774 (3,769) 56,695
Mortgage-backed
securities $ 32,239 31,749 305 (365) 31,689
Redeemable preferred
stocks 4,561 115,174 - - 115,174
----------------------------------------
236,494 1,263 (4,668) 233,089
----------------------------------------
September 30, 2000
------------------ Par Value Gross Gross Estimated
Consolidated or number Amortized unrealized unrealized market
Available-for-Sale of shares cost gains losses value
------------------------------------------------------
(in thousands)
U.S. treasury
securities
and government
obligations $ 41,870 $ 42,450 988 (982) 42,456
U.S. government
agency mortgage-
backed securities $ 34,802 34,550 293 (341) 34,502
Obligations of
states and
political
subdivisions $ 16,355 16,548 527 (125) 16,950
Corporate
securities $ 504,676 503,057 4,018 (24,405) 482,670
Mortgage-backed
securities $ 35,122 34,885 640 (441) 35,084
Redeemable preferred
stocks 1,311 32,675 61 (2,855) 29,881
----------------------------------------
664,165 6,527 (29,149) 641,543
----------------------------------------
Total $ 900,659 7,790 (33,817) 874,632
========================================
12
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF INSURANCE SUBSIDIARIES
A summarized condensed consolidated balance sheet for RepWest is presented
below:
September 30,
-------------------
2000 1999
-------------------
(in thousands)
Investments, fixed maturities $ 407,265 413,845
Receivables 147,143 115,407
Deferred policy acquisition costs 21,844 12,720
Deferred federal income taxes 10,790 12,538
Other assets 78,506 64,561
-------------------
Total assets $ 665,548 619,071
===================
Policy liabilities and accruals $ 309,887 324,214
Unearned premiums 81,679 48,885
Other policyholders' funds and liabilities 61,908 29,872
-------------------
Total liabilities 453,474 402,971
Stockholder's equity 212,074 216,100
-------------------
Total liabilities and stockholder's equity $ 665,548 619,071
===================
A summarized condensed consolidated income statement for RepWest is
presented below:
Quarter ended Nine months ended
September 30, September 30,
----------------------------------------
2000 1999 2000 1999
----------------------------------------
(in thousands)
Premiums $ 63,386 35,721 135,718 100,289
Net investment income 7,966 8,141 23,718 24,830
---------------- -----------------
Total revenue 71,352 43,862 159,436 125,119
Benefits and losses 56,331 28,674 116,432 82,387
Amortization of deferred
policy acquisition costs 3,776 3,312 10,147 10,304
Operating expenses 18,049 7,775 37,766 23,351
---------------- -----------------
Total expenses 78,156 39,761 164,345 116,042
Income (loss) from operations (6,804) 4,101 (4,909) 9,077
Income tax benefit (expense) 2,379 (1,217) 1,789 (2,783)
---------------- -----------------
Net income (loss) $ (4,425) 2,884 (3,120) 6,294
================ =================
13
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF INSURANCE SUBSIDIARIES,
continued
A summarized condensed consolidated balance sheet for Oxford is presented
below:
September 30,
-------------------
2000 1999
-------------------
(in thousands)
Investments, fixed maturities $ 470,772 491,279
Investments, other 167,208 129,900
Deferred policy acquisition costs 77,867 70,270
Other assets 15,780 36,284
-------------------
Total assets $ 731,627 727,733
===================
Policy liabilities and accruals $ 152,358 141,995
Premium deposits 469,393 457,677
Other policyholders' funds and liabilities 19,958 40,741
-------------------
Total liabilities 641,709 640,413
Stockholder's equity 89,918 87,320
-------------------
Total liabilities and stockholder's equity $ 731,627 727,733
===================
A summarized condensed consolidated income statement for Oxford is
presented below:
Quarter ended Nine months ended
September 30, September 30,
----------------------------------------
2000 1999 2000 1999
----------------------------------------
(in thousands)
Premiums $ 26,750 24,334 78,274 71,541
Net investment income 5,807 5,774 18,170 16,015
---------------- ----------------
Total revenue 32,557 30,108 96,444 87,556
Benefits and losses 18,532 14,255 54,246 44,557
Amortization of deferred
policy acquisition costs 4,784 6,147 14,982 17,196
Operating expenses 6,626 5,910 19,857 15,541
---------------- ----------------
Total expenses 29,942 26,312 89,085 77,294
Income from operations 2,615 3,796 7,359 10,262
Income tax expense (753) (1,180) (1,878) (3,352)
---------------- ----------------
Net income $ 1,862 2,616 5,481 6,910
================ ================
14
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
4. CONTINGENT LIABILITIES AND COMMITMENTS
During the nine months ended December 31, 2000, a subsidiary of U-Haul
entered into 33 transactions whereby the subsidiary sold rental trucks, trailers
and support rental items which were subsequently leased back. AMERCO has
guaranteed $60,725,000 of residual values at December 31, 2000 for these assets
at the end of the respective lease terms. U-Haul also entered into one
transaction where it leased computer equipment and one transaction where it
leased general rental items. Following are the lease commitments for the leases
executed during the nine months ended December 31, 2000, and subsequently which
have a term of more than one year (in thousands):
Net activity
Year ended Lease subsequent to
March 31, Commitments period end Total
--------------------------------------------------------
2001 $ 27,325 - 27,325
2002 40,044 - 40,044
2003 39,993 - 39,993
2004 39,643 - 39,643
2005 39,626 - 39,626
Thereafter 84,448 - 84,448
------------------------------------
$ 271,079 - 271,079
====================================
In the normal course of business, AMERCO is a defendant in a number of
suits and claims. AMERCO 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 AMERCO, individually or in
the aggregate are expected to result in a material loss.
5. SUPPLEMENTAL CASH FLOWS INFORMATION
The (increase) decrease in receivables, inventories, investments, other and
accounts payable and accrued liabilities net of other operating and investing
activities follows:
Nine months ended
December 31,
2000 1999
-------------------
(in thousands)
Receivables $ 9,560 (3,394)
===================
Investments, other (refer to Note 7) $ (98,351) -
===================
Inventories $ 3,221 (422)
===================
Accounts payable and accrued expenses $ (42,701) (24,365)
===================
15
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
6. EARNINGS PER SHARE
The following table reflects the calculation of the earnings per share:
Weighted Average
Common Shares
Income Outstanding Per Share
(Numerator) (Denominator) Amount
----------- ---------------- ---------
(in thousands, except share
and per share data)
Quarter ended December 31, 2000:
Loss from operations before
extraordinary loss on early
extinguishment of debt $ (17,109)
Less preferred stock dividends 3,241
------
Loss from operations before
extraordinary loss on early
extinguishment of debt available
to common stockholders (20,350) 21,406,688 $ (0.95)
Extraordinary loss on early
extinguishment of debt, net (2,121) (0.10)
------ ----
Basic and diluted loss
per common share (22,471) 21,406,688 $ (1.05)
====== ========== ====
Quarter ended December 31, 1999:
Loss from operations $ (9,325)
Less preferred stock dividends 3,241
------
Basic and diluted loss
per common share (12,566) 21,975,889 $ (0.57)
====== ========== ====
Nine months ended December 31, 2000:
Earnings from operations before
extraordinary loss on early
extinguishment of debt $ 61,736
Less preferred stock dividends 9,722
------
Earnings from operations before
extraordinary loss on early
extinguishment of debt available
to common stockholders 52,014 21,539,821 $ 2.42
Extraordinary loss on early
extinguishment of debt, net (2,121) (0.10)
------ ----
Basic and diluted earnings
per common share 49,893 21,539,821 $ 2.32
====== ========== ====
Nine months ended December 31, 1999:
Earnings from operations $ 75,109
Less preferred stock dividends 10,259
------
Basic earnings per common share 64,850 21,964,513 $ 2.95
Effect of dilutive securities
Series B preferred shares 537 388,889
------ ----------
Diluted earnings per common share 65,387 22,353,402 $ 2.93
====== ========== ====
16
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
7. RELATED PARTIES
During the nine months ended December 31, 2000, subsidiaries of AMERCO held
various senior and junior notes with SAC Holding Corporation and its
subsidiaries (SAC Holdings). The voting common stock of SAC Holdings is held by
Mark V. Shoen, a major stockholder of AMERCO. AMERCO's subsidiaries received
interest payments of $26,318,000 and principal payments of $795,000 from SAC
Holdings during the nine months ended December 31, 2000. The terms of the notes
with SAC Holdings are consistent with the terms of notes held by U-Haul for
other properties owned by unrelated parties and managed by U-Haul. These
amounts are reflected in Investments, other of the condensed consolidated
balance sheet. During the nine months ended December 31, 2000, a subsidiary of
AMERCO funded through a note the purchase of properties and construction costs
for SAC Holdings of approximately $182,576,000. This amount is reflected in
Investments, other of the condensed consolidated balance sheet.
U-Haul currently manages the properties owned by SAC Holdings pursuant to a
management agreement, under which U-Haul receives a management fee equal to 6%
of the gross receipts from the properties. Management fees of $4,523,000 and
$3,348,000 were received during the nine months ended December 31, 2000 and
1999, respectively. The management fee percentage is consistent with the fees
received by U-Haul for other properties owned by unrelated parties and managed
by U-Haul.
In June 2000, Real Estate completed the sale of twenty-four storage
properties to Twelve SAC Self-Storage Corporation, Thirteen SAC Self-Storage
Corporation and Fourteen SAC Self-Storage Corporation, subsidiaries of SAC
Holding Corporation, for $98,351,000. Real Estate received cash and notes from
the sale. The gain is reflected in the equity section of the condensed
consolidated balance sheet.
Management believes that the foregoing transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions.
17
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
8. INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA
Industry Segment Data - AMERCO has four industry segments represented by
Moving and Storage Operations (U-Haul), Real Estate (AREC), Property and
Casualty Insurance (RepWest) and Life Insurance (Oxford).
Information concerning operations by industry segment follows:
Moving and Property/ Adjustments
Storage Real Casualty Life and
Operations Estate Insurance Insurance Eliminations Consolidated
----------------------------------------------------------------
(in thousands)
Nine months ended
December 31, 2000
-----------------
Revenues:
Outside $1,126,987 9,343 156,609 95,381 - 1,388,320
Intersegment - 52,599 2,827 1,063 (56,489) -
--------------------------------------------------------------
Total
revenues $1,126,987 61,942 159,436 96,444 (56,489) 1,388,320
Depreciation/
amortization $ 77,721 8,144 10,208 15,449 - 111,522
Interest
expense $ 65,234 32,870 - - (32,870) 65,234
Pretax
earnings
(loss) $ 80,818 12,240 (4,909) 7,359 - 95,508
Income tax $ (29,399) (4,284) 1,789 (1,878) - (33,772)
Extraordinary
loss on early
extinguishment
of debt, net $ (2,121) - - - - (2,121)
Identifiable
assets $1,451,659 761,149 665,548 731,627 (338,700) 3,271,283
Nine months ended
December 31, 1999
-----------------
Revenues:
Outside $1,069,592 7,579 121,254 86,611 - 1,285,036
Intersegment - 53,075 3,865 945 (57,885) -
--------------------------------------------------------------
Total
revenues $1,069,592 60,654 125,119 87,556 (57,885) 1,285,036
Depreciation/
amortization $ 62,278 7,664 10,529 17,486 - 97,957
Interest
expense $ 61,038 30,926 - - (30,926) 61,038
Pretax
earnings $ 78,245 18,392 9,077 10,262 - 115,976
Income tax $ (28,294) (6,438) (2,783) (3,352) - (40,867)
Identifiable
assets $1,385,918 705,396 619,071 727,733 (340,074) 3,098,044
18
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
8. INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA, continued
Moving and Property/ Adjustments
Storage Real Casualty Life and
Operations Estate Insurance Insurance Eliminations Consolidated
----------------------------------------------------------------
(in thousands)
Quarter ended
December 31, 2000
-----------------
Revenues:
Outside $ 320,572 3,025 70,191 32,189 - 425,977
Intersegment - 17,754 1,161 368 (19,283) -
--------------------------------------------------------------
Total
revenues $ 320,572 20,779 71,352 32,557 (19,283) 425,977
Depreciation/
amortization $ 29,034 2,760 3,453 4,824 - 40,071
Interest
expense $ 21,182 10,626 - - (10,626) 21,182
Pretax
earnings
(loss) $ (26,527) 4,140 (6,804) 2,615 - (26,576)
Income tax $ 9,290 (1,449) 2,379 (753) - 9,467
Extraordinary
loss on early
extinguishment
of debt, net $ (2,121) - - - - (2,121)
Identifiable
assets $1,451,659 761,149 665,548 731,627 (338,700) 3,271,283
Quarter ended
December 31, 1999
-----------------
Revenues:
Outside $ 307,882 1,583 43,347 29,785 - 382,597
Intersegment - 17,777 515 323 (18,615) -
--------------------------------------------------------------
Total
revenues $ 307,882 19,360 43,862 30,108 (18,615) 382,597
Depreciation/
amortization $ 21,862 2,623 3,544 6,129 - 34,158
Interest
expense $ 21,223 10,653 - - (10,653) 21,223
Pretax
earnings $ (27,150) 4,476 4,101 3,796 - (14,777)
Income tax $ 9,416 (1,567) (1,217) (1,180) - 5,452
Identifiable
assets $1,385,918 705,396 619,071 727,733 (340,074) 3,098,044
19
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
(Unaudited)
8. INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA, continued
Geographic Segment Data - AMERCO has two geographic segments represented by
the United States and Canada.
Information concerning operations by geographic segment follows:
United United
States Canada Consolidated States Canada Consolidated
------------------------------ ------------------------------
Nine months ended Quarter ended
------------------------------ ------------------------------
(in thousands of U.S. dollars)
December 31, 2000
-----------------
Total revenues $1,357,483 30,837 1,388,320 418,421 7,556 425,977
Depreciation/
amortization $ 108,244 3,278 111,522 38,963 1,108 40,071
Interest expense $ 65,221 13 65,234 21,176 6 21,182
Pretax earnings
(loss) $ 91,281 4,227 95,508 (25,588) (988) (26,576)
Income tax $ (33,766) (6) (33,772) 9,467 - 9,467
Extraordinary
loss, net $ (2,121) - (2,121) (2,121) - (2,121)
Identifiable
assets $3,220,700 50,583 3,271,283 3,220,700 50,583 3,271,283
December 31, 1999
-----------------
Total revenues $1,256,823 28,213 1,285,036 375,238 7,359 382,597
Depreciation/
amortization $ 95,261 2,696 97,957 33,162 996 34,158
Interest expense $ 61,022 16 61,038 21,218 5 21,223
Pretax earnings
(loss) $ 113,047 2,929 115,976 (13,930) (847) (14,777)
Income tax $ (40,867) - (40,867) 5,452 - 5,452
Identifiable
assets $3,051,332 46,712 3,098,044 3,051,332 46,712 3,098,044
9. SUBSEQUENT EVENTS
On February 6, 2001, AMERCO declared a cash dividend of $3,241,000
($0.53125 per preferred share) to preferred stockholders of record as of
February 16, 2001.
On November 13, 2000, Oxford completed the acquisition of Christian
Fidelity Life Insurance Company (CFLIC) for $37.6 million in cash. CFLIC is a
Texas-based insurance company specializing in providing Medicare supplement
insurance. The acquisition will be accounted for under the purchase method of
accounting whereby the purchase price will be allocated to the underlying assets
and liabilities based on their estimated fair values. The source of funds for
the acquisition was from Oxford's available cash and short-term funds.
20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements. Additional written or
oral forward-looking statements may be made by AMERCO from time to time in
filings with the Securities and Exchange Commission or otherwise. Management
believes such forward-looking statements are within the meaning of the safe-
harbor provisions. Such statements may include, but not be limited to,
projections of revenues, income or loss, estimates of capital expenditures,
litigation results, plans for future operations, products or services and
financing needs or plans, as well as assumptions relating to the foregoing. The
words "believe", "expect", "anticipate", "estimate", "project" and similar
expressions identify forward-looking statements, which speak only as of the date
the statement was made. Forward-looking statements are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified.
Future events and actual results could differ materially from those set forth
in, contemplated by or underlying the forward-looking statements. The following
disclosures, as well as other statements in this report and in the Notes to
AMERCO's Consolidated Financial Statements, describe factors, among others, that
could contribute to or cause such differences, or that could affect AMERCO's
stock price.
GENERAL
Information on industry segments is incorporated by reference from "Item 1.
Financial Statements - Notes 1, 3 and 8 of Notes to Consolidated Financial
Statements". The notes discuss the principles of consolidation, summarized
consolidated financial information and industry segment and geographical area
data, respectively. In consolidation, all intersegment premiums are eliminated
and the benefits, losses and expenses are retained by the insurance companies.
RESULTS OF OPERATIONS
NINE MONTHS ENDED DECEMBER 31, 2000 VERSUS NINE MONTHS ENDED DECEMBER 31, 1999
Moving and Storage Operations
Revenues consist of rental revenues, net sales and investment and interest
income. Total rental revenue was $951.1 million and $907.8 million for the nine
months ended December 31, 2000 and 1999, respectively. Net revenues from the
rental of moving related equipment increased by $35.8 million. This increase is
primarily attributable to higher truck and trailer rental revenues. Storage
revenues increased $8.2 million due to increases in rates and in the number of
storage rooms rented.
Net sales revenues were $155.1 million and $148.7 million for the nine
months ended December 31, 2000 and 1999, respectively. Revenue growth resulted
from the sale of moving support items (i.e. boxes, etc.), which led to the
majority of the increase, and from an increase in the sale of hitches.
Net investment and interest income was $22.4 million and $15.0 million for
the nine months ended December 31, 2000 and 1999, respectively. The increase is
due to increased investments.
Cost of sales was $87.6 million and $87.7 million for the nine months ended
December 31, 2000 and 1999, respectively.
Operating expenses before intercompany eliminations were $742.8 million and
$721.0 million for the nine months ended December 31, 2000 and 1999,
respectively. Increased expenditure levels for personnel and rental equipment
maintenance, due to an increase in truck rental transactions and in fleet size,
were primarily responsible.
Net depreciation expense was $59.8 million and $54.8 million for the nine
months ended December 31, 2000 and 1999, respectively. The increase reflects
depreciation on the rental truck fleet.
Operating profit before tax and intercompany elimination was $103.5 million
and $98.2 million for the nine months ended December 31, 2000 and 1999,
respectively.
21
Real Estate Operations
Rental revenue before intercompany eliminations was $54.1 million and $55.0
million for the nine months ended December 31, 2000 and 1999, respectively.
Intercompany revenue was $52.6 million and $53.1 million for the nine months
ended December 31, 2000 and 1999, respectively.
Net investment and interest income was $7.8 million and $5.7 million for
the nine months ended December 31, 2000 and 1999, respectively. This increase
correlates to an increase in investments in notes and mortgages.
Net depreciation expense was $8.0 million and $6.8 million for the nine
months ended December 31, 2000 and 1999, respectively. The increase is due to
the build out of storage facilities.
Operating profit before tax and intercompany elimination was $12.2 million
and $18.4 million for the nine months ended December 31, 2000 and 1999,
respectively. The decrease reflects increases in lease expenses.
Property and Casualty
RepWest's premiums were $135.7 million and $100.3 million for the nine
months ended September 30, 2000 and 1999, respectively. General agency premiums
were $37.5 million and $11.6 million for the nine months ended September 30,
2000 and 1999, respectively. Assumed treaty reinsurance premium was $50.5
million and $35.0 million for the nine months ended September 30, 2000 and 1999,
respectively. Rental industry revenue was $28.2 million and $35.6 million for
the nine months ending September 30, 2000 and 1999, respectively. This change
was caused by the restructuring of the rental industry Business Auto General
Liability Policy.
Net investment income was $23.7 million and $24.8 million for the nine
months ended September 30, 2000 and 1999, respectively. The reduction is
attributable to decreased gains and decreased invested assets.
Benefits and losses were $116.4 million and $82.4 million for the nine
months ended September 30, 2000 and 1999, respectively. This increase is due to
new agency programs in Non-Standard Auto and Transportation, as well as in
assumed treaty reinsurance business.
The amortization of deferred acquisition costs (DAC) was $10.1 million and
$10.3 for the nine months ended September 30, 2000 and 1999, respectively.
Operating expenses were $37.8 million and $23.4 million for the nine months
ended September 30, 2000 and 1999, respectively. The increase is a result of
commissions on new agency business premium writings as well as assumed
reinsurance treaties, increased personnel expenses and changes in claims
handling procedures.
Operating profit (loss) before tax and intercompany elimination was $(4.9)
million and $9.1 million for the nine months ended September 30, 2000 and 1999,
respectively. The decrease is the result of additional incurred losses and
operating expense, and decreased investment income, offset by an increase in
earned premiums.
22
Life Insurance
Net premiums were $78.3 million and $71.5 million for the nine months ended
September 30, 2000 and 1999, respectively. The difference was primarily due to
a $2.5 million increase in the credit insurance lines and a $4.1 million
increase in the Medicare supplement line. Premiums related to other health
insurance products increased $0.4 million. Earned premiums from life insurance
and annuitizations decreased $0.2 million.
Net investment income before intercompany eliminations was $18.2 million
and $16.0 million for the nine months ended September 30, 2000 and 1999,
respectively. The increase was due to improved interest rate spreads on the
interest sensitive products and a larger invested asset base.
Benefits were $54.2 million and $44.6 million for the nine months ended
September 30, 2000 and 1999, respectively. Medicare supplement benefits
increased $6.4 million from 1999 and credit insurance benefits increased $2.0
million from 1999. Other health insurance benefits increased $1.6 million for
the year primarily from one-time charges and poor group disability experience.
Annuity benefits increased $0.8 million from 1999. The life insurance lines
have had better mortality experience in 2000, resulting in a $1.2 million
decrease in benefits from 1999.
Amortization of DAC was $15.0 million and $17.2 million for the nine months
ended September 30, 2000 and 1999, respectively. The decrease is due to credit
reinsurance.
Operating expenses were $19.9 million and $15.5 million for the nine
months ended September 30, 2000 and 1999, respectively. The increase is due to
premium volume increases.
Operating profit before tax and intercompany eliminations was $7.4 million
and $10.3 million for the nine months ended September 30, 2000 and 1999,
respectively. The decrease is due to loss ratios on the Medicare supplement
business and Credit insurance business.
Interest Expense
Interest expense was $65.2 million and $61.0 million for the nine months
ended December 31, 2000 and 1999, respectively. The increase can be attributed
to increases in the average debt outstanding and in the average cost of debt.
Consolidated Group
As a result of the foregoing, pretax earnings totaled $95.5 million and
$116.0 million for the nine months ended December 31, 2000 and 1999,
respectively. After providing for income taxes, net earnings from operations
were $61.7 million and $75.1 million for the nine months ended December 31, 2000
and 1999, respectively. Following deductions for an extraordinary loss from the
early extinguishment of debt, net earnings were $59.6 million and $75.1 million
for the nine months ended December 31, 2000 and 1999, respectively.
23
QUARTER ENDED DECEMBER 31, 2000 VERSUS QUARTER ENDED DECEMBER 31, 1999
Moving and Storage Operations
Revenues consist of rental revenues, net sales and investment and interest
income. Total rental revenue was $270.8 million and $264.8 million for the
quarters ended December 31, 2000 and 1999, respectively. Net revenues from the
rental of moving related equipment increased by $4.0 million. This increase is
primarily attributable to higher truck and trailer rental revenues. Storage
revenues increased $2.0 million due to increases in rates and in the number of
storage rooms rented.
Net sales revenues was $41.1 million and $38.5 million for the quarters
ended December 31, 2000 and 1999, respectively. Revenue growth resulted from
the sale of moving support items (i.e. boxes, etc.) which led to the majority of
the increase during the quarter.
Net investment and interest income was $8.9 million and $5.2 million for
the quarters ended December 31, 2000 and 1999, respectively. The increase is
due to increased investments.
Cost of sales was $21.6 million and $25.0 million for the quarters ended
December 31, 2000 and 1999, respectively.
Operating expenses before intercompany elimination were $251.0 million and
$244.6 million for the quarters ended December 31, 2000 and 1999, respectively.
The increase reflects higher personnel and rental equipment maintenance
expenditures associated with an increase in truck rental transactions and
inventory levels.
Net depreciation expense was $20.6 million and $20.8 million for the
quarters ended December 31, 2000 and 1999, respectively.
Operating loss before tax and intercompany elimination was $18.0 million
and $19.7 million for the quarters ended December 31, 2000 and 1999,
respectively.
Real Estate Operations
Rental revenue before intercompany eliminations was $18.0 million and
$18.4 million for the quarters ended December 31, 2000 and 1999, respectively.
Intercompany revenue remained constant at $17.8 million for the quarters ended
December 31, 2000 and 1999.
Net investment and interest income was $2.8 million and $0.9 million for
the quarters ended December 31, 2000 and 1999, respectively. This increase
correlates to an increase in investments in notes and mortgages.
Net depreciation expense was $2.7 million and $2.2 million for the
quarters ended December 31, 2000 and 1999, respectively.
Operating profit before tax and intercompany elimination was $4.1 million
and $4.5 million for the quarters ended December 31, 2000 and 1999,
respectively. The decrease reflects increases in lease expenses.
24
Property and Casualty
RepWest's premiums were $63.4 million and $35.7 million for the quarters
ended September 30, 2000 and 1999, respectively. The increase is directly
related to general agency premiums, which were $17.3 million and $3.4 million
for the quarters ended September 30, 2000 and 1999, respectively. Assumed
treaty reinsurance premium were $27.5 million and $14.1 million for the quarters
ended September 30, 2000 and 1999, respectively.
Net investment income was $8.0 million and $8.1 million for the quarters
ended September 30, 2000 and 1999, respectively.
Benefits and losses incurred were $56.3 million and $28.7 million for the
quarters ended September 30, 2000 and 1999, respectively. The increase is a
result of new general agency business writings in Non-Standard Auto and
Transportation, as well as in assumed treaty reinsurance business.
The amortization of deferred acquisition costs (DAC) was $3.8 million and
$3.3 million for the quarters ended September 30, 2000 and 1999, respectively.
The increase is due to the increase in new business.
Operating expenses were $18.0 million and $7.8 million for the quarters
ended September 30, 2000 and 1999, respectively. The change is due to increased
commission expense resulting from new agency business premium writings on Non
Standard Auto and Transportation coverages, as well as assumed treaty business.
General and administrative expenses also increased due to an increase in
personnel and overhead required to support new business expansion.
Operating profit (loss) before tax and intercompany elimination was $(6.8)
million and $4.1 million for the quarters ended September 30, 2000 and 1999,
respectively. This decrease is the result of increased incurred losses and
operating expense, offset by an increase in earned premiums.
25
Life Insurance
Net premiums were $26.8 million and $24.3 million for the quarters ended
September 30, 2000 and 1999, respectively. The change is primarily due to a
$0.3 million increase in the credit insurance line and a $1.5 million increase
in the Medicare supplement line. Annuitizations and premiums from other health
and life insurance products increased $0.7 million.
Net investment income before intercompany eliminations remained constant
at $5.8 million for the quarters ended September 30, 2000 and 1999.
Benefits were $18.5 million and $14.3 million for the quarters ended
September 30, 2000 and 1999, respectively. Medicare supplement benefits
increased $2.7 million from 1999 due to higher loss ratios. Other health
insurance benefits increased $0.9 million due to poor group disability
experience. Annuity benefits increased $0.6 million.
Amortization of DAC was $4.8 million and $6.1 million for the quarters
ended September 30, 2000 and 1999, respectively. Amortization from annuities
decreased $0.5 million, other health insurance amortization decreased $0.2
million and the credit insurance amortization decreased $0.6 million for the
quarter.
Operating expenses were $6.6 million and $5.9 million for the quarters
ended September 30, 2000 and 1999, respectively. This increase included $1.6
million in Medical Supplement commissions to agents, partially offset by a
decrease of $0.8 million in administration costs and surrender charge income of
$0.2 million.
Operating profit before tax and intercompany eliminations was $2.6 million
and $3.8 million for the quarters ended September 30, 2000 and 1999,
respectively. The decrease is due to loss ratios on the Medicare supplement
business.
Interest Expense
Interest expense was unchanged at $21.2 million for the quarters ended
December 31, 2000 and 1999.
Consolidated Group
As a result of the foregoing, pretax loss was $26.6 million and $14.8
million for the quarters ended December 31, 2000 and 1999, respectively. After
providing for income taxes, net loss from operations was $17.1 million and $9.3
million for the quarters ended December 31, 2000 and 1999, respectively.
Following deductions for an extraordinary loss from the early extinguishment of
debt, net loss was $19.2 million and $9.3 million for the quarters ended
December 31, 2000 and 1999, respectively.
26
LIQUIDITY AND CAPITAL RESOURCES
Moving and Storage Operations
To meet the needs of its customers, U-Haul maintains a large inventory of
rental items. In the nine months ended December 31, 2000 and 1999, capital
expenditures were $280.0 million and $269.5 million, respectively. These
expenditures primarily reflect the expansion of the rental truck fleet. The
capital required to fund these acquisitions was obtained through internally
generated funds from operations and through lease financings.
Cash provided (used) by operating activities was ($33.4) million and
$128.6 million for the nine months ended December 31, 2000 and 1999,
respectively. The decrease resulted primarily from an increase in receivables.
At December 31, 2000, total outstanding notes and loans payable was
$1,182.1 million as compared to $1,137.8 million at March 31, 2000.
Real Estate Operations
Cash provided by operating activities was $75.8 million and $6.3 million
for the nine months ended December 31, 2000 and 1999, respectively. The
increase resulted from an increase in accounts payable.
Property and Casualty
Cash provided (used) by operating activities was $20.3 million and $(9.2)
million for nine months ended September 30, 2000 and 1999, respectively. This
change resulted from increases in unearned premium, funds withheld and decreased
accounts receivable from December 1999 to September 2000. The increase was
offset by a decrease in loss and loss adjusting expense reserves from December
1999 to September 2000 and decreased net income.
RepWest's cash and cash equivalents and short-term investment portfolio
were $12.0 million and $1.4 million at September 30, 2000 and 1999,
respectively. The increase is a result of $5.4 million in short-term assets
that were on hand at September 2000 to cover a pending securities settlement.
In addition, short-term assets were increased during the period due to increased
claim payments generated by new business.
RepWest maintains a diversified securities investment portfolio, primarily
in bonds, at varying maturity levels with 88.0% of the fixed-income securities
consisting of investment grade securities. The maturity distribution is
designed to provide sufficient liquidity to meet future cash needs. Current
liquidity remains strong with current invested assets equal to 97.2% of total
liabilities.
The liability for reported and unreported losses is based upon company
historical and industry averages. Unpaid loss adjustment expenses are based on
historical ratios of loss adjustment expenses paid to losses paid. Unpaid loss
and loss expenses are not discounted.
27
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.
Cash provided (used) by operating activities was ($0.3) million and $5.6
million for the nine months ended September 30, 2000 and 1999, respectively.
The decrease is due to higher benefit payouts in relation to collected premium.
Cash provided (used) by financing activities was $7.1 million and ($0.1) million
for the nine months ended September 30, 2000 and 1999, respectively. The
increase is due to a better ratio of annuity deposits to withdrawals.
In addition to cash flows from operating and financing activities, a
substantial amount of liquid funds is available through Oxford's short-term
portfolio. Short-term investments were $59.7 million and $52.1 million for the
nine months ending September 30, 2000 and 1999, respectively. Management
believes that the overall sources of liquidity will continue to meet foreseeable
cash needs.
Consolidated Group
During each of the fiscal years ended March 31, 2001, 2002 and 2003, AMERCO
estimates gross capital expenditures will average approximately $313 million
primarily reflecting rental fleet rotation. This level of capital expenditures,
combined with an average of approximately $72 million in annual long-term debt
maturities during this same period, are expected to create annual average
funding needs of approximately $385 million.
Credit Agreements
AMERCO'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, AMERCO routinely enters
into sale and leaseback transactions. As of December 31, 2000, AMERCO had
$1,182.1 million in total notes and loans payable outstanding and unutilized
lines of credit of approximately $67.2 million.
Certain of AMERCO'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, assets and restricting the issuance
of certain types of preferred stock. At December 31, 2000, AMERCO was in
compliance with these covenants.
Reference is made to Note 5 of Notes to Consolidated Financial Statements
in AMERCO's Annual Report on Form 10-K for the fiscal year ended March 31, 2000
for additional information about AMERCO's credit agreements.
28
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Reference is made to Part II, Item 7A, Quantitative and Qualitative
Disclosure About Market Risk, in AMERCO's Annual Report on Form 10-K for the
fiscal year ended March 31, 2000.
29
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the normal course of business, AMERCO is a defendant in a number of
suits and claims. AMERCO is also a party to several administrative proceedings
arising from state and local provisions that regulate the removal and/or cleanup
of underground fuel storage tanks. It is the opinion of management that none of
the suits, claims or proceedings involving AMERCO, individually or in the
aggregate, are expected to result in a material loss.
Reference is made to Part I, Item 1, Business, in AMERCO's Annual Report on
Form 10-K for the fiscal year ended March 31, 2000 for a discussion of certain
environmental proceedings.
On June 24, 1997, five (5) current and/or former Moving Center General
Managers (GMs) and one (1) Area Field Manager (AFM) filed suit in Marin County
Superior Court, Case No. BC 203532, entitled Sarah Saunders, et. al. vs. U-Haul
----------------------- ------
Company of California, Inc., claiming that they were entitled to be compensated
- ---------------------------
for all overtime hours worked. In addition, these Plaintiffs sought class
action status purporting to represent all persons employed in California as
either a salaried GM or AFM since September 1993. On September 30, 1997, a
virtually identical lawsuit was filed in Los Angeles County Superior Court, Case
No. BC 178775, entitled Wyatt Crandall vs. U-Haul International, Inc. and U-Haul
-------------- -------------------------------------
Co. of California. This action did not include AFMs, but did purport to be
- -----------------
brought on behalf of GMs and GM trainees. These cases were consolidated by the
Court in Los Angeles on October 15, 1998. On June 10, 1999, Plaintiff's motion
to certify the AFMs as a class was denied and the motion to certify the GMs as a
class was granted. Notice of certification was mailed on or about August 24,
1999. The class opt-out period ended on October 11, 1999. The case was
bifurcated and the liability portion of the case was tried to the Court
beginning in November 2000. The Court found for the Plaintiffs on January 8,
2001. The damage portion of the case will be tried to the Court beginning
April 9, 2001. Management does not expect the Plaintiffs' damage claims to
result in a material loss; however, there remains the possibility that an
adverse outcome could have a material adverse effect on AMERCO's results of
operations for the year in which the judgment is rendered.
30
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
3.1 Restated Articles of Incorporation (1)
3.2 Restated By-Laws of AMERCO as of August 27, 1997 (2)
10.1 Management Agreement between Fifteen SAC Self Storage
Corporation and a subsidiary of AMERCO
10.2 Management Agreement between Sixteen SAC Self Storage
Corporation and a subsidiary of AMERCO
(b) Reports on Form 8-K.
No report on Form 8-K was filed during the quarter ended December 31,
2000.
_________________
(1) Incorporated by reference to AMERCO's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1992, file no. 1-11255.
(2) Incorporated by reference to AMERCO's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1997, file no. 1-11255.
31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERCO
____________________________________
(Registrant)
Dated: February 13, 2001 By: /S/ GARY B. HORTON
____________________________________
Gary B. Horton, Treasurer
(Principal Financial Officer)