U-Haul 2008 Annual Report Download - page 30

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Listed below are revenues and earnings from operations at each of our four operating segments for fiscal 2007 and
fiscal 2006; for the insurance companies years ended are December 31, 2006 and 2005:
2007 2006
Moving and storage
Revenues $ 1,861,751 $ 1,886,328
Earnings from operations 217,937 292,774
Property and casualty insurance
Revenues 38,486 37,358
Earnings from operations 5,741 1,144
Life insurance
Revenues 148,820 148,080
Earnings from operations 14,521 13,933
SAC Holding II
Revenues 46,603 46,239
Earnings from operations 13,854 13,643
Eliminations
Revenues (26,362) (30,480)
Earnings from operations (16,825) (16,113)
Consolidated Results
Revenues 2,069,298 2,087,525
Earnings from operations 235,228 305,381
Year Ended March 31,
(In thousands)
Total costs and expenses increased $51.9 million in fiscal 2007, compared with fiscal 2006. This is due primarily
to increases in depreciation expense associated with the acquisition of new trucks and the fleet rotation. Beginning
in the second half of fiscal 2006, the Company began utilizing debt to finance the majority of new truck purchases
rather than operating lease arrangements which were used primarily during the previous ten years. While the
Company generates a cash flow benefit from utilizing the depreciation deduction for income taxes, as compared to
what the lease expense would have been, the consolidated statement of operations reflects an increase in
depreciation expense greater than what the corresponding lease expense would have been had we leased this
equipment instead. For additional information on the Company’ s depreciation policy refer to “Critical Accounting
Policies and Estimates”.
As a result of the aforementioned changes in revenues and expenses, earnings from operations decreased to
$235.2 million for fiscal 2007, compared with $305.4 million for fiscal 2006.
Interest expense for fiscal 2007 was $89.4 million, compared with $105.1 million in fiscal 2006. The interest
expense related to the increase in average borrowings was partially offset by a reduction in the average borrowing
rate resulting from the refinancing activities in fiscal 2006. Fiscal 2007 results included a one-time, non-recurring
charge of $7.0 million before taxes related to the full amortization of deferred debt issuance costs related to a loan
that was amended. The refinancing related charge had the effect of decreasing on a non-recurring basis, earnings for
the year ended March 31, 2007 by $0.33 per share before taxes, in which the tax effect was approximately $0.13 per
share. Fiscal 2006 results included a one-time, non-recurring charge of $35.6 million before taxes which includes
fees for early extinguishment of debt of $21.2 million and the write-off of $14.4 million of debt issuance costs. The
refinancing costs had the effect of decreasing, on a non-recurring basis, earnings for the year ended March 31, 2006
by $1.71 per share before taxes, in which the tax effect was approximately $0.63 per share.
Income tax expense was $55.3 million in fiscal 2007, compared with $79.1 million in fiscal 2006.
Dividends accrued on our Series A preferred stock were $13.0 million in both fiscal 2007 and 2006, respectively.
As a result of the above mentioned items, net earnings available to common shareholders were $77.6 million in
fiscal 2007, compared with $108.2 million in fiscal 2006.
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