Amerco (NASDAQ:UHAL) Q3 2019 Earnings Conference Call - Final Transcript

Feb 07, 2019 • 10:00 am ET


Amerco (NASDAQ:UHAL) Q3 2019 Earnings Conference Call - Final Transcript


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Jason A. Berg

at the same statistic for December 31, 2017, last year, that number was 20,600 rooms. So we are increasing the pace of renting new rooms. We are continuing to see an improvement in our underlying revenue per square foot, as well from increasing rates.

Our real estate-related CapEx for the first nine months of this year was $639 million, compared to $400 million last year. From January 1, 2018 to December 31, 2018, we added just over 4.9 million net rentable square feet to the storage portfolio, about 1.1 million of that came online during the third quarter. Operating earnings at the moving and storage segment, excluding the net gains of the disposal of real estate last year, increased $27 million to $120 million for the quarter. And I'd like to touch on a few of the more significant items.

Fleet maintenance and repair declined $10 million during the quarter. To put that in perspective, last year, in this call, I was reporting a $32 million increase in repair and maintenance, primarily associated with the cargo, van and pickup fleet. While we feel we are continuing to make progress on this front, nearly all of the improvement for this quarter came from a reduction in the volume of the number of units being prepped for sale. We continue to work on lowering the cost incurred per truck.

Depreciation and lease expense associated with the rental fleet decreased $2 million, while depreciation on all other assets, primarily storage location assets, increased by about $5 million. The reduction in fleet depreciation may be short-lived as we're beginning production on more of our 26-foot trucks in the fourth quarter.

Property taxes, building maintenance and utilities are three of the larger non-personnel expense items associated with new properties that we've been buying. These costs were up about $16 million for the quarter. Properties purchased just over the last 12 months accounted for close to a third of this increase.

Some additional operating expenses that increased during the quarter included shipping and fuel costs associated with the delivery of our U-Boxes and legal fees and some litigation accruals. Personnel expense, while up over last year, was in line with revenue improvements.

In December, we declared a $0.50 per share of cash dividend that we paid in January. As of December 31, 2018, cash and availability from existing loan facilities that are moving to storage segment totaled $980 million. During the quarter, we entered into and drew down on two additional bank revolvers totaling $150 million and several other real estate loans totaling approximately $214 million. In January, we closed on the purchase of 13 properties from Sears Holding for a total purchase price of $62 million.

With that, I'd like to hand the call back to Allison, our operator, to begin the question-and-answer portion of the call.