UHAL

AMERCOAn Undervalued $7Billion Company

Hidden in Plain Sight

Long Investment Idea

Price Target: $502/share

Alexandra Esparza
MBA Candidate at the Yale School of Management,
May 4, 2016
 Company Background
Staying Power: Founded by Schoen family in 1945

Largest DIY mover in the US, with ~ 50% market share; one of the largest
storage players nationally as well

High brand recognition; name synonymous with moving

Focused on improving core DIY business and track record of execution

Business Segments

Moving and Storage: comprised of AMERCO, U-Haul, and Real

Estate and the subsidiaries of U- Haul and Real Estate

Property and Casualty Insurance/ Repwest

Life Insurance, comprised of Oxford and its subsidiaries

 Key Metrics
Market Cap: $6.90B
P/E ~14x on Consensus Fiscal Year 16
Generated $22.74 in the 12 months ending 12/31/2015, trailing PE of
15.61
LTM EV/EBITDA of 0.24
Thinly traded (average 3 month volume is 60k shares per day)

*Fiscal year ends 3/31/16 , FY 15 denotes full year ending on 12/31/15

Based on Closing Values as of 5/02/2016
Value Creation, but Under the Radar
Virtually uncovered by the Street only one sell-side analyst covers
Orphaned company, doesnt fall into a distinct coverage bucket
Thin volumes and limited institutional interest
Market sees a company in the unattractive Moving Industry in reality it is a differentiated DIY company with
other optionality attracting a different customer

3 year CAGR of 7%

Earnings in 9 months ended 12/31/15 up 25.6% y/y

Margin Expansion since 2010 and ongoing: EBITDA Margin +33% in 2015, +36% in LTM; Profit
margin ~14% in LTM

Founding family has ~50% stake, speaks to skin in the game, have been able to execute

Relatively clean balance sheet, and a special dividend every year since 2011

 The Best at What They Do
- The most storage coverage in NA, 50% market
share in otherwise fragmented DIY moving
space

- Competitive moat from largest network, best-

of-breed product, entrenched brand awareness
and goodwill.

- Ryder and Penske now focused on B2B space

not B2B, U-Haul continues to dominate

- High barriers to entry given real estate portfolio

and largest fleet of trucks of any mover

- Not just another moving company : owns the

DIY ecosystem, lots of profitable add-ons

Source:AMERCO - Innovating on secular trends in the moving
industry (i.e. Pick-up U-Boxes)

Millennial Engagement Drives Growth
Millennials are now the largest US demographic segment, with ~75mm, and a median age of 25

Millennials increasingly moving in cities; evidence that they delayed marriage but may follow Gen Z
to suburbs, potential great market for DIY movers that is underappreciated. Set to capture any
uptick in family formation or moving in this demographic as there is pessimism around this group.

High affinity for DIY, and can be expected to prefer U-Hauls lower prices relative to full service
movers
Evidence suggests this generation is more willing to take on DIY projects vs. previous generations
DIY makes sense for anyone with fewer positions, smaller apartments, no need for a full service mover

U-Haul especially practical for short-distance moves in in urban environments, where millennials
tend to live.

Way for the consumer to save money, but brand isnt just a low-end solution

Ongoing negative customer perception of big moving companies/brokers/carriers, strong brand is

reassuring to this demographic first in Google search for moving truck
#UHAULFAMOUS: >7,200 Posts
U-Haul Positioned to Take Advantage
of Demographic Shifts
Building out tech presence: app UX is strong and easy to use

Implemented marketplace for moving helpers, with room for tech integration

Can continue to consolidate fragmented DIY space which is appropriate for this large demographic

Seamless moving experience (cited as one of the most stressful life experiences)
Storage units delivered to customers door
Scheduling via app
All supplies and add-ons available at U-Haul point of sale

Limited opportunity for Uberization of this need in sharing economy:

I dont have a truck, a hitch and a storage box lying around and neither do any of my friends, company working on having
a best of breed consumer interface, fleet utilization tech pretty commoditized

Engaging millennial users with Instagram truck graphics campaign; improves the user experience and promotes
brand awareness in a very effective and clever way
UI is Easy to Use and Differentiating
 High Brand Awareness is Extremely
Valuable
Convenience:
Consumers are generally ignorant about the moving industry, too many options, lots of
scams, unwilling to do research
Preference for known, safe brand
Moving is a huge pain-point, and the most seamless experience wins
Point of Sale supply purchases; one-stop experience

Pricing:
Packing supplies are cheaper vs. competitors, and experience significantly cheaper vs. full-
service movers
Still, U-Haul can afford a high markup on supplies

Real Competitive Differentiation:

Penske and Ryder mostly focuses on business rentals; U-Haul is the only large player in
the DIY space.
Storage centers also act as rental centers/creates an integrated solution, only full supply
chain solution for the consumer

Other Businesses

Oxford Life Insurance caters to aging boomer demographic

AMERCO Real Estate Company manages the storage units

Repwest - Property and Casualty Insurance serves moving

consumers
Strong cross-selling platform at point-of-sale
 Revenue Growth By Segment
2012 2013 2014 2015

Self Moving Equipment Rentals 8.48% 5.32% 10.63% 9.77%

Self-Storage Revenues 11.33% 13.61% 19.08% 16.14%

Self-Moving and Self-Storage Products 4.03% 3.40% 5.91% 4.27%

Property Management Fees 5.12% 4.78% 0.47% 3.46%

Life Insurance 34.09% -35.83% -11.34% -1.15%

Property and Casualty Insurance 6.28% 5.24% 19.54% 13.16%

Investment and Interest Income 17.22% 12.71% -4.00% 6.45%
Other Revenue 41.49% 24.22% 64.83% -0.37%
Totals 11.58% 1.85% 10.81% 8.44%
Valuation and Upside
Limited direct comps, but industry analysis suggests opportunity for multiple
expansion by 4+ turns

Rental providers such as MINI trading at ~21x FY16 estimates

Storage peers such as CUBE trading at 23.34x EV/EBITDA estimates

Current discount valuation:

14x FY16 street P/E estimates
12x FY17* estimates of $29.55/share

17x on FY17 yields price target of $502/share, plus potential for other
corporate actions

*Ending 3/15/17
 Catalysts
Additional Wall Street coverage, re-rating, greater visibility of the
company

Potential opportunity to spin-off real estate assets or insurance

businesses
Spin-real estate into REIT, but maintain operating benefits (potentially
analogous to recent DRI/FCPT spin)

Uptick in dynamism and increased moving activity in the US and

Canada

Risks

Slowdown in moving or homebuilding generally

Americans overall may be moving for jobs less, and Millennials

may not ultimately move out of cities as they form households

Disruptive tech-driven innovation in the logistics space by

competitors

High concentration of family ownership and thin volume