Amerco Reports Operating Results (10-K)

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Jun 06, 2012
Amerco (UHAL, Financial) filed Annual Report for the period ended 2012-03-31.

Amerco Inc has a market cap of $1.6 billion; its shares were traded at around $88.23 with a P/E ratio of 7.3 and P/S ratio of 0.7. Amerco Inc had an annual average earning growth of 3.1% over the past 10 years.

Highlight of Business Operations:

We regularly perform reviews to determine whether facts and circumstances exist which indicate that the carrying amount of assets, including estimates of residual value, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. Reductions in residual values (i.e., the price at which we ultimately expect to dispose of revenue earning equipment) or useful lives will result in an increase in depreciation expense over the life of the equipment. Reviews are performed based on vehicle class, generally subcategories of trucks and trailers. We assess the recoverability of our assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining lives against their respective carrying amounts. We consider factors such as current and expected future market price trends on used vehicles and the expected life of vehicles included in the fleet. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. In fiscal 2010, the Company reduced the carrying value of certain older trucks by $9.1 million or $0.47 per share before taxes, in which the tax effect was $0.17 per share. If asset residual values are determined to be recoverable, but the useful lives are shorter or longer than originally estimated, the net book value of the assets is depreciated over the newly determined remaining useful lives.

Benefits and losses incurred were $173.2 million and $106.5 million for the years ended December 31, 2010 and 2009, respectively. Life insurance benefits increased $59.1 million, of which $19.7 million was due to expanded sales of the single premium life product, $6.6 million from increased sales of final expense life insurance, and $30.8 million from reserves that were transferred under the new coinsurance agreement. Medicare supplement increased by a net of $8.9 million, of which $14.9 million was due to the acquisition of a Medicare supplement block of business offset by policy lapses and terminations.

Life Insurance s stockholder s equity was $215.8 million, $188.7 million, and $173.2 million at December 31, 2011, 2010 and 2009, respectively. The increase in 2011 compared with 2010 resulted from earnings of $13.2 million and an increase in other comprehensive income of $13.9 million. Life Insurance does not use debt or equity issues to increase capital and therefore has no direct exposure to capital market conditions other than through its investment portfolio.

Net cash provided by operating activities was $128.6 million, $98.1 million and $31.3 million for the years ended December 31, 2011, 2010 and 2009, respectively. An increase of $28.3 million was due to additional cash received in the year ended December 31, 2011 from the coinsurance of a new block of life insurance business compared to the net cash received in the period ended December 31, 2010 for the assumption of a Medicare block of business and coinsurance of a block of final expense life insurance policies. Offsetting this was reduced sales of single premium life insurance policies.

These agreements along with notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $45.3 million, expenses of $2.4 million and cash flows of $41.8 million during fiscal 2012. Revenues and commission expenses related to the Dealer Agreements were $194.1 million and $41.7 million, respectively during fiscal 2012.

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