U-Haul 2005 Annual Report Download - page 29

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28 I AMERCO ANNUAL REPORT
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Fiscal 2004 Compared With Fiscal 2003
Listed฀below฀on฀a฀consolidated฀basis฀are฀revenues฀for฀our฀major฀product฀lines฀for฀fiscal฀2004฀and฀fiscal฀2003:
Fiscal 2004 Compared With Fiscal 2003
Listed below on a consolidated basis are revenues for our major product lines for fiscal 2004 and fiscal
2003:
Year Ended March 31,
2004 2003
(In thousands)
Self-moving equipment rentals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,381,208 $1,293,732
Self-storage revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 247,640 238,938
Self-moving and self-storage product and service sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 232,965 223,677
Property management fees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 259 89
Life insurance premiumsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 145,082 158,719
Property and casualty insurance premiums ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 92,036 149,206
Net investment and interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,281 40,731
Other revenueÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,523 36,252
Consolidated revenueÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,175,994 $2,141,344
During fiscal 2004 we built our self-moving equipment rentals through steady transaction volume, price
increases and improved mix. Self-storage revenues were driven by an increase in the number of rooms
available for rent, higher occupancy rates and modest price increases. Sales of moving and self storage related
products and services followed our growth in self-moving equipment rentals.
RepWest began to exit non U-Haul related lines of business and as a result, its premium revenues
declined approximately $57.2 million. Oxford's premium revenues declined approximately $13.6 million,
primarily as a result of the effects of its rating downgrade by A.M. Best in 2003.
As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were
$2,176.0 million for fiscal 2004, compared with $2,141.3 million for fiscal 2003.
Total costs and expenses rose $16.9 million in fiscal 2004, compared with fiscal 2003.
Increases in expenses were primarily driven by payroll and benefit inflation and $37.5 million of
additional restructuring costs. Benefits and losses fell as a result of fewer outstanding policies at RepWest and
Oxford, and increased as a result of adverse development and reserve strengthening at RepWest. Expenses fell
as a result of productivity initiatives at U-Haul and downsizing activities at RepWest and Oxford.
As a result of the above mentioned changes in revenues and expenses, earnings from operations improved
16.2% to $126.9 million in fiscal 2004, compared with $109.2 million for fiscal 2003.
20
During฀fiscal฀ 2004฀we฀built฀our฀self-moving฀equipment฀
rentals฀through฀steady฀transaction฀volume,฀price฀increases฀
and฀improved฀mix.฀Self-storage฀revenues฀were฀driven฀by฀
an฀ increase฀ in฀ the฀ number฀ of฀ rooms฀ available฀ for฀ rent,฀
higher฀occupancy฀rates฀and฀modest฀price฀increases.฀Sales฀
of฀moving฀and฀self฀storage฀related฀products฀and฀services฀
followed฀our฀growth฀in฀self-moving฀equipment฀rentals.
RepWest฀ began฀ to฀ exit฀ non฀ U-Haul฀ related฀ lines฀ of฀
business฀and฀ as฀ a฀ result,฀its฀ premium฀revenues฀declined฀
approximately฀$57.2฀million.฀Oxford’s฀premium฀revenues฀
declined฀ approximately฀ $13.6฀ million,฀ primarily฀ as฀ a฀
result฀of฀the฀effects฀of฀its฀rating฀downgrade฀by฀A.M.฀Best฀
in฀2003.
As฀ a฀ result฀ of฀ the฀ items฀ mentioned฀ above,฀ revenues฀ for฀
AMERCO฀ and฀ its฀ consolidated฀ entities฀ were฀ $2,176.0฀
million฀for฀fiscal฀2004,฀compared฀with฀$2,141.3฀million฀
for฀fiscal฀2003.
Total฀ costs฀ and฀ expenses฀ rose฀ $16.9฀ million฀ in฀ fiscal฀
2004,฀compared฀with฀fiscal฀2003.
Increases฀ in฀ expenses฀ were฀ primarily฀ driven฀ by฀ payroll฀
and฀ benefit฀ inflation฀ and฀ $37.5฀ million฀ of฀ additional฀
restructuring฀costs.฀Benefits฀and฀losses฀fell฀as฀a฀result฀of฀
fewer฀ outstanding฀ policies฀ at฀ RepWest฀ and฀ Oxford,฀ and฀
increased฀as฀a฀result฀of฀adverse฀development฀and฀reserve฀
strengthening฀ at฀ RepWest.฀ Expenses฀ fell฀ as฀ a฀ result฀
of฀ productivity฀ initiatives฀ at฀ U-Haul฀ and฀ downsizing฀
activities฀at฀RepWest฀and฀Oxford.
As฀a฀result฀of฀the฀above฀mentioned฀changes฀in฀revenues฀
and฀expenses,฀earnings฀from฀operations฀improved฀16.2%฀
to฀$126.9฀million฀in฀fiscal฀ 2004,฀compared฀with฀$109.2฀
million฀for฀fiscal฀2003.