U-HAUL HOLDING CO /NV/, 10-Q filed on 08 Nov 23
v3.23.3
Document and Entity Information
3 Months Ended
Sep. 30, 2023
shares
Document and Entity Information [Abstract]  
Entity Registrant Name  U-Haul Holding Company
Entity Central Index Key 0000004457
Entity Current Reporting Status Yes
Entity Small Business false
Current Fiscal Year End Date --03-31
Entity Filer Category Large Accelerated Filer
Entity Emerging Growth Company false
Document Fiscal Year Focus 2024
Document Type 10-Q
Document Fiscal Period Focus Q2
Document Period End Date Sep. 30, 2023
Amendment Flag false
Entity Shell Company false
Entity Interactive Data Current Yes
Entity File Number 001-11255
Entity Tax Identification Number 88-0106815
Entity address, address line one 5555 Kietzke Lane
Entity address, address line two Suite 100
Entity address, City or Town Reno
Entity address, State or Province NV
Entity address, postal zip code 89511
City Area Code 775
Local Phone Number 688-6300
Entity Incorporation, State or Country Code NV
Document Quarterly Report true
Document Transition Report false
Common Stock [Member]  
Document and Entity Information [Abstract]  
Trading Symbol UHAL
Entity Common Stock, Shares Outstanding 19,607,788
Title of 12(b) Security Common Stock, $0.25 par value
Security Exchange Name NYSE
Nonvoting Common Stock [Member]  
Document and Entity Information [Abstract]  
Trading Symbol UHAL.B
Entity Common Stock, Shares Outstanding 176,470,092
Title of 12(b) Security Series N Non-Voting Common Stock, $0.001 par value
Security Exchange Name NYSE
v3.23.3
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2023
Mar. 31, 2023
ASSETS:    
Cash and cash equivalents $ 2,145,131 $ 2,060,524
Reinsurance recoverables and trade receivables, net 212,565 189,498
Inventories, net 161,535 151,474
Prepaid expenses 263,541 241,711
Investments, fixed maturities and marketable equities 2,534,164 2,770,394
Investments, other 650,151 575,540
Deferred policy acquisition costs, net 121,365 128,463
Other assets 52,769 51,052
Right of use Assets - Financing 377,733 474,765
Right of use Assets - Operating 65,316 58,917
Related Parties Amounts Due 40,140 48,308
Subtotal assets 6,624,410 6,750,646
Property, plant and equipment, at cost:    
Land 1,613,871 1,537,206
Buildings and improvements 7,649,849 7,088,810
Furniture and equipment 966,211 928,241
Property, plant and equipment (gross) 17,063,484 15,660,293
Less: Accumulated depreciation (4,666,444) (4,310,205)
Total property, plant and equipment 12,397,040 11,350,088
Total assets 19,021,450 18,100,734
Liabilities:    
Accounts payable and accrued expenses 757,988 761,039
Notes, loans and leases payable 6,400,899 6,108,042
Operating lease liability 64,580 58,373
Policy benefits and losses, claims and loss expenses payable 865,397 880,202
Liabilities from investment contracts 2,393,590 2,398,884
Other policyholders' funds and liabilities 7,677 8,232
Deferred income 56,821 52,282
Deferred income taxes, net 1,444,120 1,329,489
Total liabilities 11,991,072 11,596,543
Commitments and contingencies (notes 4, 8 and 9)
Stockholders' equity:    
Common stock, value, issued   176
Additional paid-in capital 453,643 453,643
Accumulated other comprehensive loss (275,664) (285,623)
Retained earnings 7,519,376 7,003,148
Total stockholders' equity 7,030,378 6,504,191
Total liabilities and stockholders' equity 19,021,450 18,100,734
Series A Preferred Stock [Member]    
Stockholders' equity:    
Preferred stock, value, issued 0 0
Series B Preferred Stock [Member]    
Stockholders' equity:    
Preferred stock, value, issued 0 0
Serial Common Stock [Member]    
Stockholders' equity:    
Common stock, value, issued 0 0
Amerco Common Stock [Member]    
Stockholders' equity:    
Common stock, value, issued 10,497 10,497
Nonvoting Common Stock [Member]    
Stockholders' equity:    
Common stock, value, issued 176 176
Common Stock in Treasury [Member]    
Stockholders' equity:    
Treasury stock, value (525,653) (525,653)
Preferred Stock in Treasury [Member]    
Stockholders' equity:    
Treasury stock, value (151,997) (151,997)
Rental Trailers and Other Rental Equipment [Member]    
Property, plant and equipment, at cost:    
Property subject to or available for operating lease, gross 912,046 827,696
Rental Trucks [Member]    
Property, plant and equipment, at cost:    
Property subject to or available for operating lease, gross $ 5,921,507 $ 5,278,340
v3.23.3
Condensed Consolidated Balance Sheets Parenthetical
Sep. 30, 2023
$ / shares
shares
Sep. 30, 2023
د.إ / shares
shares
Series Preferred Stock With or Without Par Value [Member]    
Preferred stock:    
Preferred stock, shares authorized 50,000,000 50,000,000
Series A Preferred Stock [Member]    
Preferred stock:    
Preferred stock, shares authorized 6,100,000 6,100,000
Preferred stock, shares issued 6,100,000 6,100,000
Series B Preferred Stock [Member]    
Preferred stock:    
Preferred stock, shares authorized 100,000 100,000
Serial Common Stock With or Without Par Value [Member]    
Common stock:    
Common stock, shares authorized 250,000,000 250,000,000
Common stock, par or stated value per share | $ / shares $ 0.25  
Serial Common Stock [Member]    
Common stock:    
Common stock, shares authorized 10,000,000 10,000,000
Common Stock [Member]    
Common stock:    
Common stock, shares authorized 250,000,000 250,000,000
Common stock, par or stated value per share | $ / shares $ 0.25  
Amerco Common Stock [Member]    
Common stock:    
Common stock, shares authorized 250,000,000 250,000,000
Common stock, shares, issued 41,985,700 41,985,700
Common stock, shares, outstanding 19,607,788 19,607,788
Common stock, par or stated value per share | $ / shares $ 0.25  
Nonvoting Common Stock [Member]    
Common stock:    
Common stock, shares authorized 250,000,000 250,000,000
Common stock, shares, outstanding 176,470,092 176,470,092
Common stock, par or stated value per share | د.إ / shares   د.إ 0.001
Common Stock in Treasury [Member]    
Treasury stock:    
Treasury Stock Common Shares 22,377,912 22,377,912
Preferred Stock in Treasury [Member]    
Treasury stock:    
Treasury Stock Common Shares 6,100,000 6,100,000
v3.23.3
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenues:        
Self-moving equipment rentals $ 1,069,405 $ 1,162,025 $ 2,068,611 $ 2,252,800
Self-storage revenues 208,890 185,586 407,851 358,763
Self moving and self-storage products and service sales 91,571 96,864 192,443 206,215
Property management fees 9,267 9,277 18,444 18,416
Life insurance premiums 22,498 25,456 45,629 51,237
Property and casualty insurance premiums 25,571 25,718 45,893 45,690
Net investment and Interest income 64,738 30,509 129,330 64,082
Other revenue 157,920 167,429 281,967 303,501
Total revenues 1,649,860 1,702,864 3,190,168 3,300,704
Costs and expenses:        
Operating expenses 835,258 811,594 1,598,499 1,544,761
Commission expenses 111,961 125,341 218,888 243,834
Cost of sales 66,620 72,625 137,295 152,296
Benefits and losses 42,553 39,512 87,897 79,269
Amortization of deferred policy acquisition costs 6,826 6,972 14,871 14,644
Lease expense 8,450 7,684 16,033 15,159
Depreciation, net of (gains) losses on disposals 154,122 117,318 291,936 231,114
Net (gains) losses on disposal of real estate 1,715 1,872 2,736 4,179
Total costs and expenses 1,227,505 1,182,918 2,368,155 2,285,256
Earnings from operations 422,355 519,946 822,013 1,015,448
Other components of net periodic benefit costs (364) (304) (729) (608)
Interest expense (63,943) (57,193) (124,541) (106,992)
Fees and amortization on early extinguishment of debt 0 (959) 0 (959)
Pretax earnings 358,048 461,490 696,743 906,889
Income tax expense (84,540) (111,624) (166,397) (218,678)
Earnings available to common stockholders 273,508 349,866 530,346 688,211
Common Stock [Member]        
Costs and expenses:        
Earnings available to common stockholders $ 0 $ 0 $ 0 $ 0
Basic and diluted earnings per common share $ 1.36 $ 2.23 $ 2.63 $ 4.41
Weighted average common shares outstanding: basic and diluted 19,607,788 19,607,788 19,607,788 19,607,788
Nonvoting Common Stock [Member]        
Costs and expenses:        
Earnings available to common stockholders $ 0 $ 0 $ 0 $ 0
Basic and diluted earnings per common share $ 1.40 $ 1.73 $ 2.71 $ 3.41
Weighted average common shares outstanding: basic and diluted 176,470,092 176,470,092 176,470,092 176,470,092
Nonvoting Common Stock [Member] | Common Stock [Member]        
Costs and expenses:        
Weighted average common shares outstanding: basic and diluted 196,077,880 196,077,880 196,077,880 196,077,880
v3.23.3
Condensed Consolidated Statements of Operations Parenthetical - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Depreciation:        
Net gain on sale of real and personal property $ (46,803) $ (64,342) $ (102,464) $ (128,690)
Related party:        
Related party, costs and expenses, net of eliminations $ 25,607 $ 26,989 $ 49,263 $ 52,475
v3.23.3
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Comprehensive income (loss) (pretax):        
Pretax earnings (loss) $ 358,048 $ 461,490 $ 696,743 $ 906,889
Comprehensive income (loss) (tax effect):        
Income tax expense (84,540) (111,624) (166,397) (218,678)
Comprehensive income (loss) (net of tax):        
Net earnings 273,508 349,866 530,346 688,211
Other comprehensive income (loss):        
Foreign currency translation (pretax) (2,849) (739) (2,380) (542)
Foreign currency translation (tax effect) 0 0 0 0
Foreign currency translation (net of tax) (2,849) (739) (2,380) (542)
Unrealized gain (loss) on investments (pretax) (16,867) (137,836) 8,676 (310,882)
Unrealized gain (loss) on investments (tax effect) 3,570 29,392 (1,629) 66,056
Unrealized gain (loss) on investments (net of tax) (13,297) (108,444) 7,047 (244,826)
Change in fair value cash flow hedges (pretax) 4,418 8,336 9,511 8,506
Change in fair value of cash flow hedges (tax effect) (1,085) (2,047) (2,336) (2,089)
Change in fair value of cash flow hedges, (net of tax) 3,333 6,289 7,175 6,417
Amounts reclassified into earnings on hedging activities (pre tax) (1,345) 24 (2,495) 590
Amounts reclassified into earnings on hedging activities (tax effect) 330 (5) 612 (144)
Amounts reclassified into earnings on hedging activities (net of tax) (1,015) 19 (1,883) 446
Total other comprehensive income (loss) (pretax) (16,643) (130,215) 13,312 (302,328)
Total other comprehensive income (loss) (tax effect) 2,815 27,340 (3,353) 63,823
Total other comprehensive income (loss) (net of tax) (13,828) (102,875) 9,959 (238,505)
Total comprehensive income (loss) (pretax) 341,405 331,275 710,055 604,561
Total comprehensive income (loss) (tax effect) (81,725) (84,284) (169,750) (154,855)
Total comprehensive income (loss) (net of tax) $ 259,680 $ 246,991 $ 540,305 $ 449,706
v3.23.3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Retained Earnings [Member]
Less: Treasury Common Stock [Member]
Less: Treasury Preferred Stock [Member]
Less: Unearned Employee Stock Ownership Plan Shares [Member]
Nonvoting Common Stock [Member]
Balance, beginning of period at Mar. 31, 2022 $ 5,894,075 $ 10,497 $ 453,819 $ (4,992) $ 6,112,401 $ (525,653) $ (151,997)   $ 0
Cosolidated statement of change in equity                  
Foreign currency translation (542) 0 0 (542) 0 0 0   0
Unrealized net gain (loss) on investments, net of tax (244,826) 0 0 (244,826) 0 0 0   0
Change in fair value of cash flow hedges 6,417 0 0 6,417 0 0 0   0
Amounts reclassified into earnings on hedging activities, net 446 0 0 446 0 0 0   0
Net earnings 688,211 0 0 0 688,211 0 0   0
Common stock dividends (19,608) 0 0 0 (19,608) 0 0   0
Net activity 430,098 0 0 (238,505) 668,603 0 0   0
Balance, end of period at Sep. 30, 2022 6,324,173 10,497 453,819 (243,497) 6,781,004 (525,653) (151,997)   0
Balance, beginning of period at Jun. 30, 2022 6,086,986 10,497 453,819 (140,622) 6,440,942 (525,653) (151,997)   0
Cosolidated statement of change in equity                  
Foreign currency translation (739) 0 0 (739) 0 0 0   0
Unrealized net gain (loss) on investments, net of tax (108,444) 0 0 (108,444) 0 0 0   0
Change in fair value of cash flow hedges 6,289 0 0 6,289 0 0 0   0
Amounts reclassified into earnings on hedging activities, net 19 0 0 19 0 0 0   0
Net earnings 349,866 0 0 0 349,866 0 0   0
Common stock dividends (9,804) 0 0 0 (9,804) 0 0   0
Net activity 237,187 0 0 (102,875) 340,062 0 0   0
Balance, end of period at Sep. 30, 2022 6,324,173 10,497 453,819 (243,497) 6,781,004 (525,653) (151,997)   0
Balance, beginning of period at Mar. 31, 2023 6,504,191 10,497 453,643 (285,623) 7,003,148 (525,653) (151,997)   176
Cosolidated statement of change in equity                  
Foreign currency translation (2,380) 0 0 (2,380) 0 0 0 $ 0 0
Unrealized net gain (loss) on investments, net of tax 7,047 0 0 7,047 0 0 0 0 0
Change in fair value of cash flow hedges 7,175 0 0 7,175 0 0 0 0 0
Amounts reclassified into earnings on hedging activities, net (1,883) 0 0 (1,883) 0 0 0 $ 0 0
Net earnings 530,346 0 0 0 530,346 0 0   0
Common stock dividends (14,118) 0 0 0 (14,118) 0 0   0
Net activity 526,187 0 0 9,959 516,228 0 0   0
Balance, end of period at Sep. 30, 2023 7,030,378 10,497 453,643 (275,664) 7,519,376 (525,653) (151,997)   176
Balance, beginning of period at Jun. 30, 2023 6,777,757 10,497 453,643 (261,836) 7,252,927 (525,653) (151,997)   176
Cosolidated statement of change in equity                  
Foreign currency translation (2,849) 0 0 (2,849) 0 0 0   0
Unrealized net gain (loss) on investments, net of tax (13,297) 0 0 (13,297) 0 0 0   0
Change in fair value of cash flow hedges 3,333 0 0 3,333 0 0 0   0
Amounts reclassified into earnings on hedging activities, net (1,015) 0 0 (1,015) 0 0 0   0
Net earnings 273,508 0 0 0 273,508 0 0   0
Common stock dividends (7,059) 0 0 0 (7,059) 0 0   0
Net activity 252,621 0 0 (13,828) 266,449 0 0   0
Balance, end of period at Sep. 30, 2023 $ 7,030,378 $ 10,497 $ 453,643 $ (275,664) $ 7,519,376 $ (525,653) $ (151,997)   $ 176
v3.23.3
Condensed Consolidated Statements of Changes in Stockholders' Equity Parenthetical - $ / shares
3 Months Ended 6 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Common Stock, Dividends, Per Share, Declared $ 0.04 $ 0.50 $ 0.08 $ 1.00
v3.23.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flow from operating activities:    
Net earnings $ 530,346 $ 688,211
Adjustments to reconcile net earnings to cash provided by operations:    
Depreciation 394,400 359,804
Amortization of deferred policy acquisition costs 14,871 14,644
Amortization of premiums and accretion of discounts related to investments, inc 8,441 10,249
Amortization of debt issuance costs 3,427 3,356
Interest credited to policyholders 36,329 24,690
Change in allowance for losses on trade receivables 578 (5,494)
Change in allowance for inventory reserves 3,461 7,125
Net gain on sale of real and personal property (102,464) (128,690)
Net losses on disposal of real estate 2,736 4,179
Net (gain) loss on sale of investments (917) 7,207
Net losses on equity investments (2,745) 7,963
Deferred income tax 107,751 103,828
Net change in other operating assets and liabilities:    
Reinsurance recoverables and trade receivables (23,402) 32,342
Inventories (13,520) (14,416)
Prepaid expenses (21,824) 3
Capitalization of deferred policy acquisition costs (7,773) (14,900)
Other assets (8,751) 2,432
Related party assets 7,403 (1,640)
Accounts payable and accrued expenses 23,248 64,297
Policy benefits and losses, claims and loss expenses payable (18,553) 11,460
Other policyholders' funds and liabilities (554) 1,314
Deferred income 4,115 9,458
Related party liabilities 828 742
Net cash provided by operating activities 937,431 1,188,164
Cash flow from investing activities:    
Escrow deposits 573 9,688
Purchase of:    
Property, plant and equipment (1,664,387) (1,335,528)
Short term investments (44,903) (36,173)
Fixed maturity investments (106,777) (202,265)
Equity securities (309) (4,356)
Real estate (537) (4,931)
Mortgage loans (97,702) (75,635)
Proceeds from sale of:    
Property, plant and equipment 408,279 329,611
Short term investments 15,959 33,373
Fixed maturity investments 389,216 106,527
Equity securities 300 717
Preferred stock 913 717
Mortgage loans 13,049 74,165
Net cash used by investing activities (1,086,326) (1,104,807)
Cash flow from financing activities:    
Borrowings from credit facilities 704,960 792,654
Principal repayments on credit facilities (351,893) (441,019)
Payment of debt issuance costs (4,018) (3,942)
Capital lease payments (59,752) (65,831)
Securitization deposits 151 49
Common stock dividends paid (14,118) (19,608)
Investment contract deposits 132,630 169,017
Investment contract withdrawals (174,256) (139,917)
Net cash provided by (used in) financing activities 233,704 291,403
Effects on exchange rate on cash (202) (13,782)
Increase (decrease) in cash and cash equivalents 84,607 360,978
Cash and cash equivalents at the beginning of period 2,060,524 2,704,137
Cash and cash equivalents at the end of period $ 2,145,131 $ 3,065,115
v3.23.3
Basis of Presentation
3 Months Ended
Sep. 30, 2023
Disclosure Text Block [Abstract]  
1. Basis of Presentation

U-Haul Holding Company, a Nevada corporation (“U-Haul Holding Company”), has a second fiscal quarter that ends on the 30th of September for each year that is referenced. Our insurance company subsidiaries have a second quarter that ends on the 30th of June for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the presentation of consolidated financial position or consolidated results of operations. We disclose material events, if any, occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 2023 and 2022 correspond to fiscal 2024 and 2023 for U-Haul Holding Company.

Accounts denominated in non-U.S. currencies have been translated into U.S. dollars.

The accompanying interim consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with the accounting principles generally accepted in the United States of America (“GAAP”). Interim results are not necessarily indicative of full year performance. Except for balances affected by the adoption of Accounting Standards Update (“ASU”) 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”) noted below, the year-end consolidated balance sheet data was derived from audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023, which include all disclosures required by GAAP. Therefore, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

In our opinion, all adjustments necessary for the fair presentation of such consolidated financial statements have been included. Such adjustments consist only of normal recurring items.

Intercompany accounts and transactions have been eliminated.

Tax regulations may require items to be included in our tax return at different times than when those items are reflected in our financial statements.  Some of the differences are permanent, such as expenses that are not deductible on our tax return, and some are temporary differences, such as the timing of depreciation expense.  Temporary differences create deferred tax assets and liabilities.  Deferred tax assets generally represent items that will be used as a tax deduction or credit in our tax return in future years which we have already recorded in our financial statements.  Deferred tax liabilities generally represent deductions taken on our tax return that have not yet been recognized as an expense in our financial statements.  We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is more likely than not to allow for the use of the deduction credit. Our effective tax rates for the six months ended September 30, 2023 and 2022 was a provision of 23.9% and 24.17%, respectively.  Such rates differed from the Federal Statutory rate of 21.0% primarily due to state and local income taxes for both periods.

Description of Legal Entities

U-Haul Holding Company is the holding company for:

U-Haul International, Inc. (“U-Haul”);

Amerco Real Estate Company (“Real Estate”);

Repwest Insurance Company (“Repwest”); and

Oxford Life Insurance Company (“Oxford”).

Unless the context otherwise requires, the terms “Company,” “we,” “us” or “our” refer to U-Haul Holding Company and all of its legal subsidiaries.

Description of Operating Segments

U-Haul Holding Company has three (3) reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance.

The Moving and Storage operating segment (“Moving and Storage”) includes U-Haul Holding Company, U-Haul and Real Estate and the wholly owned subsidiaries of U-Haul and Real Estate. Operations consist of the rental of trucks and trailers, sales of moving supplies, sales of towing accessories, sales of propane, and the rental of fixed and portable moving and storage units to the “do-it-yourself” mover and management of self-storage properties owned by others. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

The Property and Casualty Insurance operating segment (“Property and Casualty Insurance”) includes Repwest and its wholly owned subsidiaries and ARCOA Risk Retention Group (“ARCOA”). Property and Casualty Insurance provides loss adjusting and claims handling for U-Haul® through regional offices in the United States and Canada. Property and Casualty Insurance also underwrites components of the Safemove®, Safetow®, Safemove Plus®, Safestor® and Safestor Mobile® protection packages to U-Haul customers. The business plan for Property and Casualty Insurance includes offering property and casualty insurance products in other U-Haul-related programs. ARCOA is a group captive insurer owned by us and our wholly owned subsidiaries whose purpose is to provide insurance products related to our moving and storage business.

The Life Insurance operating segment (“Life Insurance”) includes Oxford and its wholly owned subsidiaries. Life Insurance provides life and health insurance products primarily to the senior market through the direct writing and reinsuring of life insurance, Medicare supplement and annuity policies.

Accounting Policy Updates: 

The following accounting policies were updated since the filing of our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 due to the adoption of ASU 2018-12. Please refer to Note 17, Accounting Pronouncements for additional information on the financial statement impacts related to the adoption of this standard.

Deferred Policy Acquisition Costs

Certain costs of acquiring new insurance business are deferred and recorded as an asset. These costs are capitalized on a grouped contract basis and amortized over the expected term of the related contracts and are essential for the acquisition of new insurance business. Deferred acquisition costs (“DAC“) are directly related to the successful issuance of an insurance contract, and primarily include sales commissions, policy issue costs, direct to consumer advertising costs, and underwriting costs. Additionally, DAC includes the value of business acquired (“VOBA“), which are the costs of acquiring blocks of insurance from other companies or through the acquisition of other companies. These costs represent the difference between the fair value of the contractual insurance assets acquired and liabilities assumed, compared against the assets and liabilities for insurance contracts that the Company issues or holds measured in accordance with GAAP.

DAC is amortized on a constant-level basis over the expected term of the grouped contracts, with the related expense included in amortization of deferred acquisition costs. The in-force metric used to compute the DAC amortization rate is premium deposit in-force for deferred annuities, policy count in-force for health insurance, and face amount in-force for life insurance. The assumptions used to amortize acquisition costs include mortality, morbidity, and persistency. These assumptions are reviewed at least annually and revised in conjunction with any change in the future policy benefit assumptions. The effect of changes in the assumptions are recognized over the remaining expected contract term as a revision of future amortization amounts.

Policy Benefits and Losses, Claims and Loss Expenses Payable

The liability for future policy benefits for traditional and limited-payment long duration life and health products comprises approximately 83% of the total liability for future policy benefits. The liability is determined each reporting period based on the net level premium method. This method requires the liability

 for future policy benefits be calculated as the present value of estimated future policyholder benefits and the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders. Net level premiums reflect a recomputed net premium ratio using actual experience since the issue date or the Transition Date of April 1, 2021 and expected future experience. The liability is accrued as premium revenue and is recognized and adjusted for differences between actual and expected experience. Long-duration insurance contracts issued by the Company are grouped into cohorts based on the contract issue year, distribution channel, legal entity and product type.

Both the present value of expected future benefit payments and the present value of expected future net premiums are based primarily on assumptions of discount rates, mortality, morbidity, lapse, and persistency. Each quarter, the Company remeasures its liability for future policy benefits using current discount rates with the effect of the change recognized in Other Comprehensive Income, a component of stockholders’ equity. In addition, the Company recognizes a liability remeasurement gain or using original discount rates, and relating to actual experience under the net premium calculation, as compared to the prior reporting period expected cash flows.

The Company reviews, and updates as necessary, its cash flow assumptions (mortality, morbidity, lapses and persistency) used to calculate the change in the liability for future policy benefits at least annually. These cash flow assumptions are reviewed at the same time every year, or more frequently, if suggested by experience. If cash flow assumptions are changed, the net premium ratio is recalculated from the original issue date, or the Transition Date, using actual experience and projected future cash flows. When the expected future net premiums exceed the expected future gross premiums, or the present value of future policyholder benefits exceeds the present value of expected future gross premiums, the liability for future policy benefits is adjusted with changes recognized in policyholder benefits. The cash flow assumptions do not include an adjustment for adverse deviation. Mortality tables used for individual life insurance include various industry tables and reflect modifications based on Company experience. Morbidity assumptions for individual health are based on Company experience and industry data. Lapse and persistency assumptions are based on Company experience.

The liability for future policy benefits is discounted as noted above, using a current upper-medium grade fixed-income instrument yield that reflects the duration characteristics of the liability for future policy benefits. The methodology for determining current discount rates consists of constructing a discount rate curve intended to be reflective of the currency and tenor of the insurance liability cash flows. The methodology is designed to prioritize observable inputs based on market data available in the local debt markets denominated in the same currency as the policies. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company will use estimation techniques consistent with the fair value guidance in Accounting Standards Codification (“ASC“) 820, Fair Value Measurement. We further accrete interest as a component of policyholder benefits using the original discount rate that is locked-in during the year of contract issuance. The original discount rates (or the locked-in discount rates) are used for interest accretion purposes and for the determination of net premiums, whereas the current discount rates are used for purposes of valuing the liability.

The liability for future policy benefits for annuity and interest sensitive life-type products is represented by policy account value. For limited-payment contracts, a deferred profit liability is also recorded, with changes recognized in income over the life of the contract in proportion to the amount of insurance in-force.

v3.23.3
Earnings Per Share
3 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
2. Earnings Per Share We calculate earnings per share using the two-class method in accordance with ASC Topic 260, Earnings Per Share. The two-class method allocates the undistributed earnings available to common stockholders to the Company’s outstanding common stock, $0.25 par value (the “Voting Common Stock”) and the Series N Non-Voting Common Stock, $0.001 par value (the “Non-Voting Common Stock”) based on each share’s percentage of total weighted average shares outstanding. The Voting Common Stock and Non-Voting Common Stock are allocated 10% and 90%, respectively, of our undistributed earnings

 available to common stockholders. This represents earnings available to common stockholders less the dividends declared for both the Voting Common Stock and Non-Voting Common Stock.

Our undistributed earnings per share is calculated by taking the undistributed earnings available to common stockholders and dividing this number by the weighted average shares outstanding for the respective stock. If there was a dividend declared for that period, the dividend per share is added to the undistributed earnings per share to calculate the basic and diluted earnings per share. The process is used for both Voting Common Stock and Non-Voting Common Stock.

The calculation of basic and diluted earnings per share for the quarters ended September 30, 2023 and 2022 for our Voting Common Stock and Non-Voting Common Stock were as follows:

 

 

For the Quarters Ended

 

 

September 30,

 

 

2023

2022

 

 

(Unaudited)

 

 

(In thousands, except share and per share amounts)

 

 

 

 

 

Weighted average shares outstanding of Voting Common Stock

 

19,607,788

 

19,607,788

Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock

 

196,077,880

 

196,077,880

Percent of weighted average shares outstanding of Voting Common Stock

 

10%

 

10%

 

 

 

 

 

Net earnings available to common stockholders

$

273,508

$

349,866

Voting Common Stock dividends declared and paid

 

 

(9,804)

Non-Voting Common Stock dividends declared and paid

 

(7,059)

 

Undistributed earnings available to common stockholders

$

266,449

$

340,062

Undistributed earnings available to common stockholders allocated to Voting Common Stock

$

26,645

$

34,006

 

 

 

 

 

Undistributed earnings per share of Voting Common Stock

$

1.36

$

1.73

Dividends declared per share of Voting Common Stock

$

$

0.50

Basic and diluted earnings per share of Voting Common Stock

$

1.36

$

2.23

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding of Non-Voting Common Stock

 

176,470,092

 

176,470,092

Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock

 

196,077,880

 

196,077,880

Percent of weighted average shares outstanding of Non-Voting Common Stock

 

90%

 

90%

 

 

 

 

 

Net earnings available to common stockholders

$

273,508

$

349,866

Voting Common Stock dividends declared and paid

 

 

(9,804)

Non-Voting Common Stock dividends declared and paid

 

(7,059)

 

Undistributed earnings available to common stockholders

$

266,449

$

340,062

Undistributed earnings available to common stockholders allocated to Non-Voting Common Stock

$

239,804

$

306,056

 

 

 

 

 

Undistributed earnings per share of Non-Voting Common Stock

$

1.36

$

1.73

Dividends declared per share of Non-Voting Common Stock

$

0.04

$

Basic and diluted earnings per share of Non-Voting Common Stock

$

1.40

$

1.73

 

The calculation of basic and diluted earnings per share for the six months ended September 30, 2023 and 2022 for our Voting Common Stock and Non-Voting Common Stock were as follows:

 

 

For Six Months Ended

 

 

September 30,

 

 

2023

2022

 

 

(Unaudited)

 

 

(In thousands, except share and per share amounts)

 

 

 

 

 

Weighted average shares outstanding of Voting Common Stock

 

19,607,788

 

19,607,788

Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock

 

196,077,880

 

196,077,880

Percent of weighted average shares outstanding of Voting Common Stock

 

10%

 

10%

 

 

 

 

 

Net earnings available to common stockholders

$

530,346

$

688,211

Voting Common Stock dividends declared and paid

 

 

(19,608)

Non-Voting Common Stock dividends declared and paid

 

(14,118)

 

Undistributed earnings available to common stockholders

$

516,228

$

668,603

Undistributed earnings available to common stockholders allocated to Voting Common Stock

$

51,623

$

66,860

 

 

 

 

 

Undistributed earnings per share of Voting Common Stock

$

2.63

$

3.41

Dividends declared per share of Voting Common Stock

$

$

1.00

Basic and diluted earnings per share of Voting Common Stock

$

2.63

$

4.41

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding of Non-Voting Common Stock

 

176,470,092

 

176,470,092

Total weighted average shares outstanding for Voting Common Stock and Non-Voting Common Stock

 

196,077,880

 

196,077,880

Percent of weighted average shares outstanding of Non-Voting Common Stock

 

90%

 

90%

 

 

 

 

 

Net earnings available to common stockholders

$

530,346

$

688,211

Voting Common Stock dividends declared and paid

 

 

(19,608)

Non-Voting Common Stock dividends declared and paid

 

(14,118)

 

Undistributed earnings available to common stockholders

$

516,228

$

668,603

Undistributed earnings available to common stockholders allocated to Non-Voting Common Stock

$

464,605

$

601,743

 

 

 

 

 

Undistributed earnings per share of Non-Voting Common Stock

$

2.63

$

3.41

Dividends declared per share of Non-Voting Common Stock

$

0.08

$

Basic and diluted earnings per share of Non-Voting Common Stock

$

2.71

$

3.41

v3.23.3
Investments
3 Months Ended
Sep. 30, 2023
Investments Debt Equity Securities [Abstract]  
3. Investments We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $21.2 million and $23.4 million as of September 30, 2023 and March 31, 2023, respectively.

Available-for-Sale Investments

Available-for-sale investments as of September 30, 2023 were as follows:

 

 

Amortized

Cost

 

Gross

Unrealized

Gains

 

Gross

Unrealized

Losses More than 12 Months

 

Gross

Unrealized

Losses Less than 12 Months

 

Allowance for Expected Credit Losses

 

Fair Market

Value

 

 

(Unaudited)

 

 

(In thousands)

U.S. treasury securities and government obligations

$

172,987

$

335

$

(2,315)

$

(116)

$

$

170,891

U.S. government agency mortgage-backed securities

 

99,230

 

1

 

(3,703)

 

(5,009)

 

 

90,519

Obligations of states and political subdivisions

 

154,547

 

441

 

(4,261)

 

(5,064)

 

 

145,663

Corporate securities

 

1,817,003

 

983

 

(154,177)

 

(47,305)

 

(1,697)

 

1,614,807

Mortgage-backed securities

 

514,679

 

206

 

(40,394)

 

(24,243)

 

 

450,248

 

$

2,758,446

$

1,966

$

(204,850)

$

(81,737)

$

(1,697)

$

2,472,128

Available-for-sale investments as of March 31, 2023 were as follows:

 

 

Amortized

Cost

 

Gross

Unrealized

Gains

 

Gross

Unrealized

Losses More than 12 Months

 

Gross

Unrealized

Losses Less than 12 Months

 

Allowance for Expected Credit Losses

 

Fair Market

Value

 

 

 

 

 

(In thousands)

U.S. treasury securities and government obligations

$

353,189

$

3,061

$

(7,639)

$

(3,935)

$

$

344,676

U.S. government agency mortgage-backed securities

 

34,126

 

40

 

(6,707)

 

(228)

 

 

27,231

Obligations of states and political subdivisions

 

161,960

 

649

 

(4,014)

 

(8,090)

 

 

150,505

Corporate securities

 

2,086,432

 

1,491

 

(60,224)

 

(156,365)

 

(2,101)

 

1,869,233

Mortgage-backed securities

 

370,880

 

78

 

(40,359)

 

(13,207)

 

 

317,392

 

$

3,006,587

$

5,319

$

(118,943)

$

(181,825)

$

(2,101)

$

2,709,037

We sold available-for-sale securities with a fair value of $165.4 million and $105.5 million during the first six months of fiscal 2024 and 2023, respectively. The gross realized gains on these sales totaled $1.5 million and $0.8 million during the first six months of fiscal 2024 and 2023, respectively. The gross realized losses on these sales totaled $1.1 million and $0.3 million during the first six months of fiscal 2024 and 2023, respectively. In the first six months of fiscal 2024, we received $225.0 million from the Moving and Storage Treasuries that matured.

For available-for-sale debt securities in an unrealized loss position, we first assess whether the security is below investment grade.  For securities that are below investment grade, we evaluate whether the decline in fair value has resulted from credit losses or other factors such as the interest rate environment. Declines in value due to credit are recognized as an allowance. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse market conditions specifically related to the security, among other factors.  If this assessment indicates that a credit loss exists, cumulative default rates based on ratings are used to determine the potential cost of default, by year.  The present value of these potential costs is then compared to the amortized cost of the security to determine the credit loss, limited by the amount that the fair value is less than the amortized cost basis.

Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through accumulated other comprehensive income, net of applicable taxes. If we intend to sell a security, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, the security is written down to its fair value and the write down is charged against the allowance for credit losses, with any incremental

 impairment reported in earnings. Reversals of the allowance for credit losses are permitted and should not exceed the allowance amount initially recognized.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. There was a ($0.4) million and $1.9 million net impairment charge recorded in the first six months ended September 30, 2023 and 2022, respectively.

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The adjusted cost and estimated market value of available-for-sale investments by contractual maturity were as follows:

 

 

September 30, 2023

 

March 31, 2023

 

 

Amortized

Cost

 

Fair Market

Value

 

Amortized

Cost

 

Fair Market

Value

 

 

(Unaudited)

 

 

 

 

(In thousands)

Due in one year or less

$

251,106

$

249,366

$

354,875

$

354,184

Due after one year through five years

 

599,626

 

569,012

 

754,175

 

717,552

Due after five years through ten years

 

659,400

 

590,567

 

736,089

 

665,708

Due after ten years

 

733,486

 

612,788

 

790,568

 

654,201

 

 

2,243,618

 

2,021,733

 

2,635,707

 

2,391,645

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

514,828

 

450,395

 

370,880

 

317,392

 

$

2,758,446

$

2,472,128

$

3,006,587

$

2,709,037

Equity investments of common stock and non-redeemable preferred stock were as follows:

 

 

September 30, 2023

 

March 31, 2023

 

 

Amortized

Cost

 

Fair Market

Value

 

Amortized

Cost

 

Fair Market

Value

 

 

(Unaudited)

 

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

Common stocks

$

29,602

$

42,045

$

29,577

$

39,375

Non-redeemable preferred stocks

 

25,144

 

19,991

 

26,054

 

21,982

 

$

54,746

$

62,036

$

55,631

$

61,357

Investments, other

The carrying value of the other investments was as follows:

 

 

September 30,

 

March 31,

 

 

2023

 

2023

 

 

(Unaudited)

 

 

 

 

(In thousands)

 

 

 

 

 

Mortgage loans, net

$

550,913

$

466,531

Short-term investments

 

 

15,921

Real estate

 

72,036

 

72,178

Policy loans

 

10,986

 

10,921

Other equity investments

 

16,216

 

9,989

 

$

650,151

$

575,540

v3.23.3
Borrowings
3 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
4. Borrowings

Long Term Debt

Long term debt was as follows:

 

Fiscal Year 2024 Interest Rates

 

 

Maturities

 

Weighted Avg Interest Rates (c)

 

September 30, 2023

 

March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Real estate loans (amortizing term) (a)

4.30

%

-

6.80

%

 

2027

-

2037

 

5.89

%

$

283,707

$

289,647

Senior mortgages

2.70

%

-

5.66

%

 

2024

-

2042

 

4.18

%

 

2,487,320

 

2,371,231

Real estate loans (revolving credit)

-

%

-

-

%

 

-

-

2027

 

-

%

 

 

Fleet loans (amortizing term)

1.61

%

-

5.68

%

 

2024

-

2029

 

3.76

%

 

90,071

 

111,856

Fleet loans (revolving credit) (b)

2.36

%

-

6.68

%

 

2026

-

2028

 

5.97

%

 

593,889

 

615,000

Finance leases (rental equipment)

2.39

%

-

5.01

%

 

2023

-

2026

 

4.00

%

 

163,453

 

223,205

Finance liabilities (rental equipment)

1.60

%

-

6.48

%

 

2024

-

2031

 

4.38

%

 

1,544,608

 

1,255,763

Private placements

2.43

%

-

2.88

%

 

2029

-

2035

 

2.65

%

 

1,200,000

 

1,200,000

Other obligations

1.50

%

-

8.00

%

 

2023

-

2049

 

6.10

%

 

73,752

 

76,648

Notes, loans and finance leases payable

 

 

 

 

 

 

 

 

 

 

 

 

6,436,800

 

6,143,350

Less: Debt issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,901)

 

(35,308)

Total notes, loans and finance leases payable, net

 

 

 

 

 

 

 

$

6,400,899

$

6,108,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Certain loans have interest rate swaps fixing the rate for the relevant loans between 2.72% and 2.86% based on current margin. The weighted average interest rate calculation for these loans was 4.10% using the swap adjusted interest rate.

 

(b) A loan has an interest rate swap fixing the rate $100 million of the relevant loan at 4.71% based on current margin. The weighted average interest rate calculation for these loans was 5.87% using the swap adjusted interest rate.

 

(c) Weighted average rates as of September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Backed Loans

Real Estate Loans (Amortizing Term)

Certain subsidiaries of Real Estate and U-Haul Company of Florida are borrowers under real estate loans. These loans require monthly or quarterly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. These loans are secured by various properties owned by the borrowers. The interest rates, per the provisions of $202.1 million of these loans, are the applicable Secured Overnight Funding Rate (“SOFR”) plus the applicable margins and a credit spread adjustment of 0.10%. As of September 30, 2023, the applicable SOFR was 5.33% and applicable margin was between 0.65% and 1.38%, the sum of which, including the credit spread, was between 6.08% and 6.80%. The remaining $81.6 million of these loans was fixed with an interest rate of 4.30%. The default provisions of these real estate loans include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023.

Senior Mortgages

Various subsidiaries of Real Estate and U-Haul are borrowers under certain senior mortgages. The senior mortgages require monthly principal and interest payments. The senior mortgages are secured by certain properties owned by the borrowers. Certain senior mortgages have an anticipated repayment date and a maturity date. If these senior mortgages are not repaid by the anticipated repayment date, the interest rate on these mortgages would increase from the current fixed rate. Real Estate and U-Haul have provided limited guarantees of the senior mortgages. The default provisions of the senior mortgages include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023. There are limited restrictions regarding our use

 of the funds.

Real Estate Loans (Revolving Credit)

U-Haul Holding Company is a borrower under a multi-bank syndicated real estate loan. As of September 30, 2023, the maximum credit commitment is $465.0 million. As of September 30, 2023, the full capacity was available to borrow. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. If there was a loan outstanding as of September 30, 2023, the applicable SOFR would be 5.33% and applicable margin would be 1.55% the sum of which would be 6.88% This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023. There is a 0.30% fee charged for unused capacity.

Fleet Loans

Rental Truck Amortizing Loans

The amortizing loans require monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. These loans were used to purchase new trucks. The interest rates are fixed rates.  All of our rental truck amortizing loans are collateralized by the rental equipment purchased.  The majority of these loans are funded at 70%, but some may be funded at 100%. U-Haul Holding Company, and in some cases U-Haul, is guarantor of these loans. The default provisions of these loans include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023. The net book value of the corresponding rental equipment was $202.6 million and $213.1 million as of September 30, 2023 and March 31, 2023, respectively.

Rental Truck Revolvers

Various subsidiaries of U-Haul entered into three revolving fleet loans with an aggregate borrowing capacity of $615.0 million. The interest rates are SOFR plus the applicable margin and a credit spread adjustment of 0.10%. As of September 30, 2023, SOFR was between 5.31% and 5.33% and the margin was between 1.15% and 1.25%, the sum of which, including the credit spread, was between 6.56% and 6.68%. Of the $593.9 million outstanding, $88.9 million was fixed with an interest rate of 2.36%. Only interest is paid on the loans until the last nine months of the respective loan terms when principal becomes due monthly. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023. These fleet loans are collateralized by the rental equipment purchased. The net book value of the corresponding rental equipment was $772.3 million and $822.0 million as of September 30, 2023 and March 31, 2023, respectively.

Finance Leases

The Finance Lease balance represents our sale-leaseback transactions of rental equipment. The agreements are generally seven (7) year terms.  All of our finance leases are collateralized by our rental fleet. The net book value of the corresponding rental equipment was $377.7 million and $474.8 million as of September 30, 2023 and March 31, 2023, respectively. There were no new financing leases entered into during the first six months of fiscal 2024. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023.

Finance Liabilities

Finance liabilities represent our rental equipment financing transactions, and we assess if these sale-leaseback transactions qualify as a sale at initiation by determining if a transfer of ownership occurs.  We have determined that our equipment sale-leasebacks do not qualify as a sale, as the buyer-lessors do not obtain control of the assets in our ongoing sale-leaseback arrangements. As a result, these sale-leasebacks are accounted for as a financial liability and the leased assets are capitalized at cost.   Our finance liabilities have an average term of seven (7) years. These finance liabilities are collateralized by the related assets of our rental fleet. The net book value of the corresponding rental equipment was $1,815.2 million and $1,499.1 million as of September 30, 2023 and March 31, 2023, respectively. The default provisions of these loans include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023.

Private Placements

In September 2021, U-Haul Holding Company entered into a note purchase agreement to issue $600.0 million of fixed rate senior unsecured notes in a private placement offering.  These notes consist of four tranches each totaling $150.0 million and funded in September 2021.  The fixed interest rates range between 2.43% and 2.78% with maturities between 2029 and 2033.  Interest is payable semiannually. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023.

In December 2021, U-Haul Holding Company entered into a note purchase agreement to issue $600.0 million of fixed rate senior unsecured notes in a private placement offering. These notes consist of three tranches each totaling $100.0 million and two tranches each totaling $150.0 million.  The fixed interest rates range between 2.55% and 2.88% with maturities between 2030 and 2035.  Interest is payable semiannually. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. We are in compliance with the covenants as of September 30, 2023.

Other Obligations

In February 2011, U-Haul Holding Company and U.S. Bank Trust Company, NA, as successor in interest to U.S. Bank National Association (the “Trustee”), entered into the U-Haul Investors Club® Indenture.  U-Haul Holding Company and the Trustee entered into this indenture to provide for the issuance of notes by us directly to investors over our proprietary website, uhaulinvestorsclub.com (“U-Notes®”). The U-Notes® are secured by various types of collateral, including, but not limited to, certain rental equipment and real estate.  U-Notes® are issued in smaller series that vary as to principal amount, interest rate and maturity.  U-Notes® are obligations of the Company and secured by the associated collateral; they are not guaranteed by any of the Company’s affiliates or subsidiaries.

As of September 30, 2023, the aggregate outstanding principal balance of the U-Notes® issued was $75.4 million, of which $1.7 million is held by our insurance subsidiaries and eliminated in consolidation.

Annual Maturities of Notes, Loans and Finance Leases Payable

The annual maturities of our notes, loans and finance leases payable, before debt issuance costs, as of September 30, 2023 for the next five years and thereafter are as follows:

 

 

Year Ending September 30,

 

 

2024

 

2025

 

2026

 

2027

 

2028

 

Thereafter

 

Total

 

 

(Unaudited)

 

 

 

 

(In thousands)

 

 

Notes, loans and finance leases payable

$

657,998

$

487,551

$

829,219

$

1,023,289

$

513,160

$

2,925,583

$

6,436,800

Interest on Borrowings

Interest Expense

Components of interest expense included the following:

 

 

Quarter Ended September 30,

 

 

2023

 

2022

 

 

(Unaudited)

 

 

(In thousands)

Interest expense

$

67,524

$

57,604

Capitalized interest

 

(3,669)

 

(2,248)

Amortization of transaction costs

 

1,432

 

1,814

Interest expense resulting from cash flow hedges

 

(1,344)

 

23

Total interest expense

$

63,943

$

57,193

 

 

 

Six Months Ended September 30,

 

 

2023

 

2022

 

 

(Unaudited)

 

 

(In thousands)

Interest expense

$

131,924

$

108,009

Capitalized interest

 

(7,732)

 

(4,866)

Amortization of transaction costs

 

2,843

 

3,260

Interest expense resulting from cash flow hedges

 

(2,494)

 

589

Total interest expense

$

124,541

$

106,992

Interest paid in cash was $74.2 million and $63.1 million for the second quarter of fiscal 2024 and 2023, respectively, and $129.7 million and $104.8 million for the first six months of fiscal 2024 and 2023, respectively. Interest paid (received) in cash on derivative contracts was ($1.3) million and $0.0 million for the second quarter of fiscal 2024 and 2023, respectively.  Interest paid (received) in cash on derivative contracts was ($2.3) million and $0.6 million for the first six months of fiscal 2024 and 2023, respectively.

Interest Rates

Interest rates and Company borrowings related to our revolving credit facilities were as follows:

 

 

 

Revolving Credit Activity

 

 

 

Quarter Ended September 30,

 

 

 

2023

 

2022

 

 

 

(Unaudited)

 

 

 

(In thousands, except interest rates)

 

Weighted average interest rate during the quarter

 

6.51

%

3.32

%

Interest rate at the end of the quarter

 

6.61

%

3.80

%

Maximum amount outstanding during the quarter

$

605,000

$

1,102,000

 

Average amount outstanding during the quarter

$

596,322

$

877,522

 

Facility fees

$

306

$

111

 

 

 

 

Revolving Credit Activity

 

 

 

Six Months Ended September 30,

 

 

 

2023

 

2022

 

 

 

(Unaudited)

 

 

 

(In thousands, except interest rates)

 

Weighted average interest rate during the period

 

6.38

%

2.66

%

Interest rate at the end of the period

 

6.61

%

3.80

%

Maximum amount outstanding during the period

$

715,000

$

1,105,000

 

Average amount outstanding during the period

$

628,151

$

984,464

 

Facility fees

$

571

$

169

 

v3.23.3
Derivatives
3 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
5. Derivatives

We manage exposure to changes in market interest rates. We have used interest rate swap agreements and forward swaps to reduce our exposure to changes in interest rates. Our use of derivative instruments is limited to highly effective interest rate swaps to hedge the risk of changes in cash flows (future interest payments) attributable to changes in SOFR swap rates with the designated benchmark interest rate being hedged on certain of our SOFR indexed variable rate debt. The interest rate swaps effectively fix our interest payments on certain SOFR indexed variable rate debt through July 2032. We monitor our positions and the credit ratings of our counterparties and do not currently anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes. These fair values are determined using pricing valuation models which include broker quotes for which significant inputs are observable. They include adjustments for counterparty credit quality and other deal-specific factors, where appropriate and are classified as Level 2 in the fair value hierarchy.