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001-11255
NV
88-0106815
AMERCO
5555 Kietzke Lane
Ste. 100
Reno
NV
89511
775
688-6300
Common stock, $0.25 par value
UHAL
NASDAQ
Yes
No
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Note 1. Basis of Presentation
AMERCO, a Nevada Corporation (“AMERCO”), has a fiscal year that ends on the 31
st
of March for each year that is referenced. Our insurance company subsidiaries have fiscal years that end on the 31
st
of December 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 financial position or results of operations. We disclose material events, if any, occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 2021, 2020 and 2019 correspond to fiscal 2022, 2021 and 2020 for AMERCO.
Accounts denominated in non-U.S. currencies have been translated into U.S. dollars. Certain amounts reported in previous years have been reclassified to conform to the current presentation. Please see Note 3, Accounting Policies –
Adoption of New Accounting Pronouncements
, of the Notes to Consolidated Financial Statements.
Note 2. Principles of Consolidation
We apply Accounting Standards Codification (“ASC”) 810 -
Consolidation
(“ASC 810”) in our principles of consolidation. ASC 810 addresses arrangements where a company does not hold a majority of the voting or similar interests of a variable interest entity (“VIE”). A company is required to consolidate a VIE if it has determined it is the primary beneficiary, which is the entity with the power to direct activities that most significantly affect the economic performance of the VIE and has the obligation absorbs the majority of the losses or benefits. ASC 810 also addresses the policy when a company owns a majority of the voting or similar rights and exercises effective control.
A VIE is not self-supportive due to having one or both of the following conditions: (i) it has an insufficient amount of equity for it to finance its activities without receiving additional subordinated financial support or (ii) its owners do not hold the typical risks and rights of equity owners. This determination is made upon the creation of a variable interest and is re-assessed on an on-going basis should certain changes in the operations of a VIE, or its relationship with the primary beneficiary trigger a reconsideration. After a reconsideration event occurs the most recent facts and circumstances are utilized in determining whether or not a company is a VIE, which other company(ies) have a variable interest in the entity, and whether or not the company’s interest is such that it is the primary beneficiary.
We will continue to monitor our relationships with the other entities regarding who is the primary beneficiary, which could change based on facts and circumstances of any reconsideration events. Please see Note 19, Related Party Transactions, of the Notes to Consolidated Financial Statements.
The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, which are consolidated under the voting interest model. Intercompany accounts and transactions have been eliminated.
Description of Legal Entities
AMERCO 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 AMERCO and all of its legal subsidiaries.
Description of Operating Segments
AMERCO has three (
3
) reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance.
Moving and Storage includes AMERCO, 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.
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 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.
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.
3
Use of Estimates
The preparation of financial statements in conformity with the generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting policies that we deem most critical to us and that require management’s most difficult and subjective judgments include the principles of consolidation, the recoverability of property, plant and equipment, the adequacy of insurance reserves, the recognition and measurement of impairments for investments accounted for under ASC 320 -
Investments
-
Debt and Equity Securities
and the recognition and measurement of income tax assets and liabilities. The actual results experienced by us may materially differ from management’s estimates.
Cash and Cash Equivalents
We consider cash equivalents to be highly liquid debt securities with insignificant interest rate risk with original maturities from the date of purchase of three months or less.
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash deposits. Accounts at each United States financial institution are insured by the Federal Deposit Insurance Corporation up to $
250,000
. Accounts at each Canadian financial institution are insured by the Canada Deposit Insurance Corporation up to $
100,000
CAD per account. As of March 31, 2022 and March 31, 2021, we held cash equivalents in excess of these insured limits. To mitigate this risk, we select financial institutions based on their credit ratings and financial strength.
250000
100000
Investments
Fixed Maturities and Marketable Equities. Fixed maturity investments consist of either marketable debt, equity or redeemable preferred stocks. As of the balance sheet dates, all of our investments in these securities were classified as available-for-sale. Available-for-sale investments are reported at fair value, with unrealized gains or losses recorded net of taxes and applicable adjustments to deferred policy acquisition costs in stockholders’ equity. We adopted ASC Topic 326, Financial Instruments Credit Losses (“Topic 326”) as of April 1, 2020, for available-for-sale debt securities. This new standard requires the use of forward-looking information to estimate credit losses and requires credit losses for available for sale debt securities to be recorded through an allowance for credit losses rather than a reduction in the amortized cost basis. Changes in the market value of common stocks are recognized in earnings. Fair
value for these investments is based on quoted market prices, dealer quotes or discounted cash flows. The cost of investments sold is based on the specific identification method. See Note 23, Allowance for Credit Losses, of the Notes to Consolidated Financial Statements.
Mortgage Loans and Notes on Real Estate.
Mortgage loans and notes on real estate are reported at their unpaid balance, net of any allowance for expected losses and any unamortized premium or discount. See Note 23, Allowance for Credit Losses, of the Notes to Consolidated Financial Statements.
Recognition of Investment Income.
Interest income from bonds and mortgage notes is recognized when earned. Dividends on common and preferred stocks are recognized on the ex-dividend dates. Realized gains and losses on the sale or exchange of investments are recognized at the trade date.
Accrued Interest Receivable
Accrued interest receivables on available-for-sale securities totaled $28.7 million as of December 31, 2021 and are excluded from the estimate of credit losses.
We have elected not to measure an allowance on accrued interest receivables as our practice is to write off the uncollectible balance in a timely manner. Furthermore, we have elected to write off accrued interest receivables by reversing interest income.
Derivative Financial Instruments
Our objective for holding derivative financial instruments is to manage interest rate risk exposure primarily through entering interest rate swap agreements and call options. We do not enter into these instruments for trading purposes. Counterparties to the interest rate swap agreements are major financial institutions. Derivatives are recognized at fair value on the balance sheet and are classified as prepaid expenses (asset) or accrued expenses (liability). Derivatives that are not designated as cash flow hedges for accounting purposes must be adjusted to fair value through income. If the derivative qualifies and is designated as a cash flow hedge, changes in its fair value will be recorded in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. See Note 10, Derivatives, of the Notes to Consolidated Financial Statements.
Inventories and parts, net
Inventories and parts, net were as follows:
March 31,
2022
2021
(In thousands)
Truck and trailer parts and accessories (a)
$
148,237
$
95,976
Hitches and towing components (b)
32,508
19,972
Moving supplies and propane (b)
16,623
12,877
Subtotal
197,368
128,825
Less: LIFO reserves
(37,400)
(21,832)
Less: excess and obsolete reserves
(1,080)
(1,416)
Total
$
158,888
$
105,577
(a) Primarily held for internal usage, including equipment manufacturing and repair
(b) Primarily held for retail sales
Inventories consist primarily of truck and trailer parts and accessories used to manufacture and repair rental equipment as well as products and accessories available for retail sale. Inventory is held at our owned locations; our independent dealers do not hold any of our inventory. Inventories are stated at the lower cost or net realizable value.
Inventory cost is primarily determined using the last-in first-out method (“LIFO”). Inventories valued using LIFO consisted of approximately
93
% and
96
% of the total inventories for March 31, 2022 and 2021, respectively. Had we utilized the first-in first-out method (“FIFO”), stated inventory balances would have been $
37.4
million and $
21.8
million higher as of March 31, 2022 and 2021, respectively. In fiscal 2022, the negative effect on income due to liquidation of a portion of the LIFO inventory was $
0.1
million.
March 31,
2022
2021
(In thousands)
Truck and trailer parts and accessories (a)
$
148,237
$
95,976
Hitches and towing components (b)
32,508
19,972
Moving supplies and propane (b)
16,623
12,877
Subtotal
197,368
128,825
Less: LIFO reserves
(37,400)
(21,832)
Less: excess and obsolete reserves
(1,080)
(1,416)
Total
$
158,888
$
105,577
(a) Primarily held for internal usage, including equipment manufacturing and repair
(b) Primarily held for retail sales
148237000
95976000
32508000
19972000
16623000
12877000
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128825000
37400000
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1080000
1416000
158888000
105577000
0.93
0.96
37400000
21800000
100000
Property, Plant and Equipment
Our Property, plant and equipment is stated at cost. Interest expense, if any, incurred during the initial construction of buildings is considered part of cost. Depreciation is computed for financial reporting purposes using the straight line or an accelerated method based on a declining balance formula over the following estimated useful lives: rental equipment 2-20 years and buildings and non-rental equipment 3-55 years. Routine maintenance costs are charged to operating expense as they are incurred. Gains and losses on dispositions of property, plant and equipment, other than real estate (“personal property”), are netted against depreciation expense when realized. The net amount of gains, netted against depreciation expense, were $
214.2
million, $
54.1
million and $
27.1
million during fiscal 2022, 2021 and 2020, respectively. Equipment depreciation is recognized in amounts expected to result in the recovery of estimated residual values upon disposal, i.e., minimize gains or losses. In determining the depreciation rate, historical disposal experience, holding periods and trends in the market for vehicles are reviewed. As a result of changes in Internal Revenue Service (“IRS”) regulations regarding the capitalization of assets, beginning in the first quarter of fiscal 2017, we raised the value threshold before certain assets are capitalized within our depreciation policy. This change in threshold, results in the immediate recognition of reported operating costs with a lagging decrease in depreciation expense over the term that these assets would have been depreciated. Due to this change, we had operating expenses of $
28.7
million, $
22.8
million and $
26.9
million in fiscal 2022, 2021 and 2020, respectively. This change in threshold benefited us through the immediate recognition of tax deductible costs.
We regularly perform reviews to determine whether facts and circumstances exist which indicate that the carrying amount of assets, including estimates of residual value, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. Reductions in residual values (i.e., the price at which we ultimately expect to dispose of revenue earning equipment) or useful lives will result in an increase in depreciation expense over the remaining life of the equipment. Reviews are performed based on vehicle class, generally subcategories of trucks and trailers. We assess the recoverability of our assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining lives against their respective carrying amounts. We consider factors such as current and expected future market price trends on used vehicles and the expected life of vehicles included in the fleet. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If asset residual values are determined to be recoverable, but the useful lives are shorter or longer than originally estimated, the net book value of the assets is depreciated over the newly determined remaining useful lives.
For our box truck fleet we utilize an accelerated method of depreciation based upon a declining formula. Under the declining balances method (2.4 times declining balance), the book value of a rental truck is reduced approximately
16
%,
13
%,
11
%,
9
%,
8
%,
7
%, and
6
% during years one through seven, respectively and then reduced on a straight line basis to a salvage value of
15
% by the end of year fifteen. Comparatively, a standard straight line approach would reduce the book value by approximately
5.7
% per year over the life of the truck.
Although we intend to sell our used vehicles for prices approximating book value, the extent to which we realize a gain or loss on the sale of used vehicles is dependent upon various factors including, but not limited to, the general state of the used vehicle market, the age and condition of the vehicle at the time of its disposal and the depreciation rates with respect to the vehicle
.
We typically sell our used vehicles at our sales centers throughout the United States and Canada, on our website at uhaul.com/trucksales or by phone at 1-866-404-0355. Additionally, we sell a large portion of our pickup and cargo van fleet at automobile dealer auctions.
In addition to our property, plant and equipment, we had real estate held for future development or use of $67.8 million and $68.8 million for fiscal 2022 and 2021, respectively and is included in Investments, other.
214200000
54100000
27100000
28700000
22800000
26900000
0.16
0.13
0.11
0.09
0.08
0.07
0.06
0.15
0.057
67800000
68800000
Receivables
Trade receivables include trade accounts from moving and self-storage customers and dealers, insurance premiums and amounts due from re-insurers, less management’s estimate of expected losses.
Moving and Storage has two (2) primary components of trade receivables, receivables from corporate customers and credit card receivables from sales and rentals of equipment.
For credit card receivables, the Company uses a trailing 13 months average historical chargeback percentage of total credit card receivables. The Company rents equipment to corporate customers in which payment terms are 30 days.
The Company performs ongoing credit evaluations of its customers and assesses each customer’s credit worthiness. In addition, the Company monitors collections and payments from its customers and maintains an allowance based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar high risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions. Delinquent account balances are written off after management has determined that the likelihood of collection is remote.
Management believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables because the composition of trade receivables as of that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its lending practices have not changed significantly over time). To adjust the historical loss rates to reflect the effects of these differences in current conditions and forecasted changes, management assigns a rating to each customer which varies depending on the assessment of risk.
Management estimated the loss rate at approximately 6%. Management developed this estimate based on its knowledge of past experience. As a result, management applied the applicable credit loss rates to determine the expected credit loss estimate for each aging category.
Insurance premiums receivable for policies that are billed through contracted agents are recorded net of commissions payable. A commission payable is recorded as a separate liability for those premiums that are billed direct.
Reinsurance recoverables include case reserves and actuarial estimates of claims incurred but not reported ("IBNR"). These receivables are not expected to be collected until after the associated claim has been adjudicated and billed to the re-insurer. The reinsurance recoverables may have little or no allowance for credit losses due to the fact that reinsurance is typically procured from carriers with strong credit ratings. Furthermore, we do not cede losses to a re-insurer if the carrier is deemed financially unable to perform on the contract. Reinsurance recoverables also include insurance ceded to other insurance companies.
The allowance for expected credit losses on trade receivables as of March 31, 2022 was $8.6 million.
Notes and mortgage receivables include accrued interest and are reduced by discounts and amounts considered by management to be uncollectible.
Policy Benefits and Losses, Claims and Loss Expenses Payable
Liabilities for future policy benefits related to life insurance, Medical supplement insurance, and deferred annuities are determined by management utilizing the net premium valuation methodology and are accrued when premium revenue is recognized. The liability, which represents the present value of future benefits to be paid to policyholders and related expenses less the present value of future net premiums, is estimated using assumptions applicable at the time the insurance contracts are written, with provisions for the risk of adverse deviation, as appropriate. Assumptions include expected mortality and morbidity experience, policy lapses and surrenders, current asset yields and expenses, and expected interest rate yields. The Company periodically performs a gross premium valuation and reviews original assumptions, including capitalized expenses which reduce the gross premium valuation, to evaluate whether the assets and liabilities are adequate and whether a loss reserve should be recognized. Liabilities for health, disability and other policies include estimates of payments to be made on insurance claims for reported losses and estimates of IBNR losses. Oxford’s liabilities for deferred annuity contracts consist of contract account balances that accrue to the benefit of the policyholders.
Property and Casualty Insurance’s liability for reported and unreported losses is based on Repwest’s historical data along with industry averages. The liability for unpaid loss adjustment expenses is based on historical ratios of loss adjustment expenses paid to losses paid. Amounts recoverable from re-insurers on unpaid losses are estimated in a manner consistent with the claim liability associated with the re-insured policy. Adjustments to the liability for unpaid losses and loss expenses as well as amounts recoverable from re-insurers on unpaid losses are charged or credited to expense in the periods in which they are made.
Due to the nature of the underlying risks and high degree of uncertainty associated with the determination of the liability for future policy benefits and claims, the amounts to be ultimately paid to settle these liabilities cannot be precisely determined and may vary significantly from the estimated liability, especially for long-tailed casualty lines of business such as excess workers’ compensation.
As a result of the long-tailed nature of the excess workers’ compensation policies written by Repwest during 1983 through 2001, it may take a number of years for claims to be fully reported and finally settled.
On a regular basis insurance reserve adequacy is reviewed by management to determine if existing assumptions need to be updated. In determining the assumptions for calculating workers’ compensation reserves, management considers multiple factors including the following:
Claimant longevity
Cost trends associated with claimant treatments
Changes in ceding entity and third party administrator reporting practices
Changes in environmental factors including legal and regulatory
Current conditions affecting claim settlements
Future economic conditions including inflation
We have reserved each claim based upon the accumulation of current claim costs projected through each claimant’s life expectancy and then adjusted for applicable reinsurance arrangements.
Management reviews each claim bi-annually or more frequently, if there are changes in facts or circumstances to determine if the estimated life-time claim costs have increased and then adjusts the reserve estimate accordingly at that time.
We have factored in an estimate of what the potential cost increases could be in our IBNR liability.
We have not assumed settlement of the existing claims in calculating the reserve amount, unless it is in the final stages of completion.
Continued increases in claim costs, including medical inflation and new treatments and medications could lead to future adverse development resulting in additional reserve strengthening.
Conversely, settlement of existing claims or if injured workers return to work or expire prematurely, could lead to future positive development.
Self-Insurance Reserves
U-Haul retains the risk for certain public liability and property damage programs related to our rental equipment. The consolidated balance sheets include $
418.9
million and $
427.1
million of liabilities related to these programs as of March 31, 2022 and 2021, respectively. These liabilities are recorded in Policy benefits and losses, claims and loss expenses payable. Management takes into account losses incurred based upon actuarial estimates, past experience, current claim trends, as well as social and economic conditions. This liability is subject to change in the future based upon changes in the underlying assumptions including claims experience, frequency of incidents, and severity of incidents.
Additionally, as of March 31, 2022 and 2021, the consolidated balance sheets include liabilities of $
19.7
million and $
17.5
million, respectively, related to medical plan benefits we provide for eligible employees. We estimate this liability based on actual claims outstanding as of the balance sheet date as well as an actuarial estimate of IBNR claims. These amounts are recorded in Accounts payable and accrued expenses on the consolidated balance sheets.
418900000
427100000
19700000
17500000
Revenue Recognition
Self-moving rentals are recognized for the period that trucks and moving equipment are rented. Self-storage revenues, based upon the number of paid storage contract days, are recognized as earned during the period.
Sales of self-moving and self-storage related products are recognized at the time that title passes and the customer accepts delivery. Property and casualty insurance premiums are recognized as revenue over the policy periods. Traditional life and Medicare supplement insurance premiums are recognized as revenue over the premium-paying periods of the contracts when due from the policyholders. For products where premiums are due over a significantly shorter duration than the period over which benefits are provided, such as our single premium whole life product, premiums are recognized when received and excess profits are deferred and recognized in relation to the insurance in force. Interest and investment income are recognized as earned.
Amounts collected from customers for sales tax are recorded on a net basis. Please see Note 22, Revenue Recognition, of the Notes to Consolidated Financial Statements.
Advertising
All advertising costs are expensed as incurred. Advertising expense was $
13.7
million, $
18.0
million and $
13.7
million in fiscal 2022, 2021 and 2020, respectively.
13700000
18000000.0
13700000
Deferred Policy Acquisition Costs
Commissions and other costs that fluctuate with and are primarily related to the successful acquisition or renewal of certain insurance premiums are deferred. For our Life Insurance’s life and health insurance products, these costs are amortized, with interest, in relation to revenue such that costs are realized as a constant percentage of revenue. For its annuity insurance products the costs are amortized, with interest, in relation to the present value of actual and expected gross profits.
Starting in fiscal 2014, new annuity contract holders were provided with a sales inducement in the form of a premium bonus (the “Sales Inducement Asset”).
Sales inducements are recognized as an asset with a corresponding increase to the policyholder liability and are amortized in a similar manner to Deferred Policy Acquisition Costs.
As of December 31, 2021 and 2020, the Sales Inducement Asset included with Deferred Policy Acquisition Costs amounted to $
15.7
million and $
16.0
million, respectively on the consolidated balance sheet and amortization expense totaled $
4.7
million, $
4.3
million and $
5.5
million for the periods ended December 31, 2021, 2020 and 2019, respectively.
15700000
16000000.0
4700000
4300000
5500000
Environmental Costs
Liabilities are recorded when environmental assessments and remedial efforts, if applicable, are probable and the costs can be reasonably estimated. The amount of the liability is based on management’s best estimate of undiscounted future costs. Certain recoverable environmental costs related to the removal of underground storage tanks or related contamination are capitalized and amortized over the estimated useful lives of the properties. These costs are capitalized if they improve the safety or efficiency of the property or are incurred in preparing the property for sale.
Income Taxes
AMERCO files a consolidated tax return with all of its legal subsidiaries. The provision for income taxes reflects deferred income taxes resulting from changes in temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements.
Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when it is more likely than not that the deferred tax assets will not be realized.
Earnings Per Share
Our earnings per share is calculated by dividing our earnings available to common stockholders by the weighted average common shares outstanding, basic and diluted.
The weighted average common shares outstanding exclude post-1992 shares of the employee stock ownership plan that have not been committed to be released.
As of March 31, 2022 and 2021 all of these shares have been released. There are no dilutive securities for fiscal years 2022, 2021 and 2020.
Comprehensive Income (Loss)
Comprehensive income (loss) consists of net earnings, foreign currency translation adjustments, unrealized gains and losses on investments, the change in fair value of cash flow hedges and the change in postretirement benefit obligations.
Debt Issuance Costs
We defer costs directly associated with acquiring third-party financing. Debt issuance costs are deferred and amortized to interest expense using the effective interest method. Debt issuance costs related to our long-term debt are reflected as a direct deduction from the carrying amount of the debt. Please see Note 8, Borrowings, of the Notes to Consolidated Financial Statements.
Adoption of New Accounting Pronouncements
On April 1, 2021, we adopted ASU 2020-08, Clarifying Guidance on Amortization of the Excess of the Cost Basis of Certain Callable Debt Securities Over the Amount Repayable.
This standard requires that, for each reporting period, callable debt securities be reevaluated to determine if they remain subject to the guidance, which will depend on the amortized cost basis of the security and the terms of the next call option.
The guidance is effective for fiscal years beginning after December 15, 2020. The adoption of the standard did not have a material impact on our consolidated financial statements.
On April 1, 2021, we adopted, ASU 2020-04, Reference Rate Reform (Topic 848),
Facilitation of the Effects of Reference Rate Reform on Financial Reporting
(“ASU 2020-04”). This standard provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Inter-Bank Offer Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. The guidance is effective upon issuance and generally can be applied through December 31, 2022. We adopted this standard and there was no impact to our consolidated financial statements.
In January 2021, FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), (“ASU 2021-01”).
The amendments in ASU 2021-01 provide optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform.
We adopted ASU 2021-01 on a prospective basis effect and there was no impact to our consolidated financial statements.
Recent Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-12,
Targeted Improvements to the Accounting for Long-Duration Contracts
(“ASU 2018-12”). The amendments in this update require insurance companies to annually review and update the assumptions used for measuring the liability under long-duration contracts, such as life insurance, disability income, and annuities. The amendment prescribes standardized liability discount rate, consistency in measurement of market risk benefits, simplified amortization of deferred acquisition costs and enhanced disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2020. In November 2020, FASB issued ASU 2020-11,
Financial Services – Insurance (Topic 944)
, which deferred the effective date of ASU 2018-12 to years beginning after December 15, 2022. We are currently in the process of evaluating the impact of the adoption of ASU 2018-12 on our financial statements; however, the adoption of ASU 2018-12 will impact the statements of operations because the effect of any update to the assumptions we used at the inception of the contracts will be recorded in net income.
From time to time, new accounting pronouncements are issued by the FASB or the Securities and Exchange Commission (“SEC”) that are adopted by us as of the specified effective date. Unless otherwise discussed, these ASUs entail technical corrections to existing guidance or affect guidance related to specialized industries or entities and therefore will have minimal, if any, impact on our financial position or results of operations upon adoption.
Note 4.
Reinsurance Recoverables and Trade Receivables, Net
Reinsurance recoverables and trade receivables, net were as follows:
March 31,
2022
2021
(In thousands)
Reinsurance recoverable
$
50,586
$
66,386
Trade accounts receivable
150,285
121,251
Paid losses recoverable
345
276
Accrued investment income
28,689
27,883
Premiums and agents' balances
1,650
2,546
Independent dealer receivable
73
258
Other receivables
6,364
10,247
237,992
228,847
Less: Allowance for credit losses
(8,649)
(4,421)
$
229,343
$
224,426
March 31,
2022
2021
(In thousands)
Reinsurance recoverable
$
50,586
$
66,386
Trade accounts receivable
150,285
121,251
Paid losses recoverable
345
276
Accrued investment income
28,689
27,883
Premiums and agents' balances
1,650
2,546
Independent dealer receivable
73
258
Other receivables
6,364
10,247
237,992
228,847
Less: Allowance for credit losses
(8,649)
(4,421)
$
229,343
$
224,426
50586000
66386000
150285000
121251000
345000
276000
28689000
27883000
1650000
2546000
73000
258000
6364000
10247000
237992000
228847000
8649000
4421000
229343000
224426000
Note 5.
Investments
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.
We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $
27.1
million and $
27.7
million for December 31, 2021 and 2020, respectively.
Available-for-Sale Investments
Available-for-sale investments as of March 31, 2022 were as follows:
Cost
Amortized
Unrealized
Gains
Gross
Unrealized
Losses More than 12 Months
Gross
Unrealized
Losses Less than 12 Months
Gross
Allowance for Expected Credit Losses
Value
Fair
(In thousands)
U.S. treasury securities and government obligations
$
128,078
$
7,984
$
–
$
(969)
$
–
$
135,093
U.S. government agency mortgage-backed securities
44,678
280
(42)
(3,111)
–
41,805
Obligations of states and political subdivisions
178,040
15,450
–
(508)
–
192,982
Corporate securities
1,989,212
138,909
(402)
(6,604)
(60)
2,121,055
Mortgage-backed securities
324,029
7,671
(1)
(1,542)
–
330,157
$
2,664,037
$
170,294
$
(
445
)
$
(
12,734
)
$
(
60
)
$
2,821,092
Available-for-sale investments as of March 31, 2021 were as follows:
Cost
Amortized
Unrealized
Gains
Gross
Unrealized
Losses More than 12 Months
Gross
Unrealized
Losses Less than 12 Months
Gross
Allowance for Expected Credit Losses
Value
Fair
(in thousands)
U.S. treasury securities and government obligations
$
92,429
$
12,941
$
–
$
–
$
–
$
105,370
U.S. government agency mortgage-backed securities
61,427
911
(1)
(132)
–
62,205
Obligations of states and political subdivisions
230,521
25,249
(59)
(3)
–
255,708
Corporate securities
1,846,507
199,447
(163)
(640)
(1,320)
2,043,831
Mortgage-backed securities
174,728
11,706
(1)
(8)
–
186,425
$
2,405,612
$
250,254
$
(
224
)
$
(
783
)
$
(
1,320
)
$
2,653,539
We sold available-for-sale securities with a fair value of $
352.3
million, $
523.9
million and $
264.5
million in fiscal 2022, 2021 and 2020, respectively. The gross realized gains on these sales totaled $
9.5
million, $
9.6
million and $
6.4
million in fiscal 2022, 2021 and 2020, respectively. We realized gross losses on these sales of $
1.4
million, $
2.1
million and $
0.2
million in fiscal 2022, 2021 and 2020, respectively.
We adopted Topic 326
as of April 1, 2020. 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 were no incremental impairment charges recorded during fiscal year 2022.
The adjusted cost and estimated market value of available-for-sale investments by contractual maturity, were as follows:
March 31, 2022
March 31, 2021
Cost
Amortized
Value
Fair
Cost
Amortized
Value
Fair
(In thousands)
Due in one year or less
$
97,969
$
99,432
$
90,142
$
91,190
Due after one year through five years
541,840
570,135
562,442
601,818
Due after five years through ten years
704,295
765,073
672,733
754,536
Due after ten years
995,904
1,056,295
905,567
1,019,570
2,340,008
2,490,935
2,230,884
2,467,114
Mortgage backed securities
324,029
330,157
174,728
186,425
$
2,664,037
$
2,821,092
$
2,405,612
$
2,653,539
Equity investments of common stock and non-redeemable preferred stock were as follows:
March 31, 2022
March 31, 2021
Cost
Amortized
Value
Fair
Cost
Amortized
Value
Fair
(In thousands)
Common stocks
$
27,674
$
46,212
$
9,775
$
20,440
Non-redeemable preferred stocks
26,054
26,095
20,034
21,677
$
53,728
$
72,307
$
29,809
$
42,117
Investments, other
The carrying value of other investments was as follows:
March 31,
2022
2021
(In thousands)
Mortgage loans, net
$
423,163
$
391,230
Short-term investments
30,916
7,234
Real estate
67,824
68,813
Policy loans
10,309
11,163
Other equity investments
11,543
11,319
$
543,755
$
489,759
Mortgage loans are carried at the unpaid balance, less an allowance for expected losses net of any unamortized premium or discount. The portfolio of mortgage loans is principally collateralized by self-storage facilities and commercial properties. The interest rate range on the mortgage loans is
3.5
% to
5.9
% with maturities between
2022
and
2036
. The allowance for expected losses was $
0.5
million for both March 31, 2022 and 2021. These loans represent first lien mortgages held by us. Mortgage loans are reviewed on an ongoing basis and analysis may include market analysis, estimated valuations of the underlying collateral, loan to value ratios, tenant creditworthiness and other factors. For our mortgage loans, no specifically identified loans were impaired as of March 31, 2022. We have not experienced any material losses related to the notes from individual or groups of notes in any particular industry or geographic area.
Short-term investments consist primarily of investments in money market funds, mutual funds and any other investments with short-term characteristics that have original maturities of less than one year at acquisition. These investments are recorded at cost, which approximates fair value.
Real estate held for future development or use is carried at the lower of fair value at time of acquisition or current estimated fair value less cost to sell. Other equity investments are carried at cost and assessed for impairment.
Insurance policy loans are carried at their unpaid balance.
27100000
27700000
Amortized
Gross
Gross
Gross
Allowance for Expected Credit Losses
Fair
(In thousands)
U.S. treasury securities and government obligations
$
128,078
$
7,984
$
–
$
(969)
$
–
$
135,093
U.S. government agency mortgage-backed securities
44,678
280
(42)
(3,111)
–
41,805
Obligations of states and political subdivisions
178,040
15,450
–
(508)
–
192,982
Corporate securities
1,989,212
138,909
(402)
(6,604)
(60)
2,121,055
Mortgage-backed securities
324,029
7,671
(1)
(1,542)
–
330,157
$
2,664,037
$
170,294
$ (
445
)$ (
12,734
)$ (
60
)$
2,821,092
128078000
7984000
0
969000
0
135093000
44678000
280000
42000
3111000
0
41805000
178040000
15450000
0
508000
0
192982000
1989212000
138909000
402000
6604000
60000
2121055000
324029000
7671000
1000
1542000
0
330157000
2664037000
170294000
445000
12734000
60000
2821092000
Amortized
Gross
Gross
Gross
Allowance for Expected Credit Losses
Fair
(in thousands)
U.S. treasury securities and government obligations
$
92,429
$
12,941
$
–
$
–
$
–
$
105,370
U.S. government agency mortgage-backed securities
61,427
911
(1)
(132)
–
62,205
Obligations of states and political subdivisions
230,521
25,249
(59)
(3)
–
255,708
Corporate securities
1,846,507
199,447
(163)
(640)
(1,320)
2,043,831
Mortgage-backed securities
174,728
11,706
(1)
(8)
–
186,425
$
2,405,612
$
250,254
$(
224
)$(
783
)$(
1,320
)$
2,653,539
92429000
12941000
0
0
0
105370000
61427000
911000
1000
132000
0
62205000
230521000
25249000
59000
3000
0
255708000
1846507000
199447000
163000
640000
1320000
2043831000
174728000
11706000
1000
8000
0
186425000
2405612000
250254000
224000
783000
1320000
2653539000
352300000
523900000
264500000
9500000
9600000
6400000
1400000
2100000
200000
March 31, 2022
March 31, 2021
Amortized
Fair
Amortized
Fair
(In thousands)
Due in one year or less
$
97,969
$
99,432
$
90,142
$
91,190
Due after one year through five years
541,840
570,135
562,442
601,818
Due after five years through ten years
704,295
765,073
672,733
754,536
Due after ten years
995,904
1,056,295
905,567
1,019,570
2,340,008
2,490,935
2,230,884
2,467,114
Mortgage backed securities
324,029
330,157
174,728
186,425
$
2,664,037
$
2,821,092
$
2,405,612
$
2,653,539
97969000
99432000
90142000
91190000
541840000
570135000
562442000
601818000
704295000
765073000
672733000
754536000
995904000
1056295000
905567000
1019570000
2340008000
2490935000
2230884000
2467114000
324029000
330157000
174728000
186425000
2664037000
2821092000
2405612000
2653539000
March 31, 2022
March 31, 2021
Amortized
Fair
Amortized
Fair
(In thousands)
Common stocks
$
27,674
$
46,212
$
9,775
$
20,440
Non-redeemable preferred stocks
26,054
26,095
20,034
21,677
$
53,728
$
72,307
$
29,809
$
42,117
27674000
46212000
9775000
20440000
26054000
26095000
20034000
21677000
53728000
72307000
29809000
42117000
March 31,
2022
2021
(In thousands)
Mortgage loans, net
$
423,163
$
391,230
Short-term investments
30,916
7,234
Real estate
67,824
68,813
Policy loans
10,309
11,163
Other equity investments
11,543
11,319
$
543,755
$
489,759
423163000
391230000
30916000
7234000
67824000
68813000
10309000
11163000
11543000
11319000
543755000
489759000
0.035
0.059
2022
2036
500000
Note 6.
Other Assets
Other assets were as follows:
March 31,
2022
2021
(In thousands)
Deposits (debt-related)
$
37,588
$
33,952
Cash surrender value of life insurance policies
–
567
Deposits (real estate related)
22,821
13,211
$
60,409
$
47,730
March 31,
2022
2021
(In thousands)
Deposits (debt-related)
$
37,588
$
33,952
Cash surrender value of life insurance policies
–
567
Deposits (real estate related)
22,821
13,211
$
60,409
$
47,730
37588000
33952000
0
567000
22821000
13211000
60409000
47730000
Note 7.
Net Investment and Interest Income
Net investment and interest income, were as follows:
Years Ended March 31,
2022
2021
2020
(In thousands)
Fixed maturities
$
111,625
$
102,021
$
107,434
Real estate
5,648
5,769
7,304
Insurance policy loans
705
829
974
Mortgage loans
25,850
18,248
17,164
Short-term, amounts held by ceding reinsurers, net and other investments
11,713
3,103
9,807
Investment income
155,541
129,970
142,683
Less: investment expenses
(7,280)
(7,032)
(4,854)
Net investment and interest income
$
148,261
$
122,938
$
137,829
Years Ended March 31,
2022
2021
2020
(In thousands)
Fixed maturities
$
111,625
$
102,021
$
107,434
Real estate
5,648
5,769
7,304
Insurance policy loans
705
829
974
Mortgage loans
25,850
18,248
17,164
Short-term, amounts held by ceding reinsurers, net and other investments
11,713
3,103
9,807
Investment income
155,541
129,970
142,683
Less: investment expenses
(7,280)
(7,032)
(4,854)
Net investment and interest income$
148,261
$
122,938
$
137,829
111625000
102021000
107434000
5648000
5769000
7304000
705000
829000
974000
25850000
18248000
17164000
11713000
3103000
9807000
155541000
129970000
142683000
7280000
7032000
4854000
148261000
122938000
137829000
Note 8.
Borrowings
Long-Term Debt
Long-term debt was as follows:
March 31,
2022 Rates
Maturities
2022
2021
(In thousands)
Real estate loan (amortizing term)
1.83
%
2023
$
50,259
$
82,913
Senior mortgages
2.70
%
-
5.50
%
2023
-
2042
2,206,268
2,125,324
Real estate loans (revolving credit) (a)
1.58
%
-
3.14
%
2023
-
2025
535,000
535,000
Fleet loans (amortizing term)
1.61
%
-
4.66
%
2022
-
2028
124,651
176,295
Fleet loans (revolving credit)
1.30
%
-
2.36
%
2024
-
2026
560,000
535,000
Finance leases (rental equipment)
2.16
%
-
5.04
%
2022
-
2026
347,393
513,623
Finance liability (rental equipment)
1.60
%
-
4.68
%
2024
-
2030
949,936
644,375
Private placements
2.43
%
-
2.88
%
2029
-
2035
1,200,000
–
Other obligations
1.50
%
-
8.00
%
2022
-
2049
86,206
86,085
Notes, loans and finance leases payable
$
6,059,713
$
4,698,615
Less: Debt issuance costs
(37,216)
(29,708)
Total notes, loans and finance leases payable, net
$
6,022,497
$
4,668,907
(a) Certain loans have interest rate swaps fixing the rate between 3.03% and 3.14% based on current margin
Real Estate Backed Loans
Real Estate Loan
Real Estate and certain of its subsidiaries and U-Haul Company of Florida are borrowers under a real estate loan (the “Real Estate Loan”).
The Real Estate Loan requires monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. The Real Estate Loan is secured by various properties owned by the borrowers.
The interest rate, per the provisions of the amended loan agreement, is the applicable LIBOR plus the applicable margin. As of March 31, 2022, the applicable LIBOR was
0.33
% and the applicable margin was
1.50
%, the sum of which was
1.83
%. The default provisions of the Real Estate Loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.
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. The fixed interest rates, per the provisions of the senior mortgages, range between 2.70% and 5.50%. The weighted average interest rate of these loans as of March 31, 2022 was 4.0%. 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. We are using the anticipated repayment date for our maturity schedule. 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. There are limited restrictions regarding our use of the funds.
Real Estate Loans (Revolving Credit)
Various subsidiaries of Real Estate are borrowers under asset-backed real estate loans with an aggregate borrowing capacity of $
385.0
million. As of March 31, 2022, the outstanding balance of these loans in the aggregate was $
385.0
million. These loans are secured by certain properties owned by the borrowers. The loan agreements provide for term loans, subject to the terms of the loan agreements. The loans require monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The interest rate, per the provision of the loan agreements, is the applicable LIBOR plus the applicable margin. As of March 31, 2022, the applicable LIBOR was between
0.21
% and
0.45
% and the margin was between
1.25
% and
1.50
%, the sum of which was between
1.46
% and
1.85
%. AMERCO is the guarantor of these loans. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. These loan agreements contain fallback language for the replacement of LIBOR.
AMERCO is a borrower under a real estate loan. The current maximum credit commitment is $
200.0
million, which can be increased to $
300.0
million by bringing in other lenders. As of March 31, 2022, the outstanding balance was $
150.0
million. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. As of March 31, 2022, the applicable LIBOR was
0.21
% and the margin was
1.38
%, the sum of which was
1.59
%. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. There is a
0.30
% fee charged for unused capacity. This loan agreement contains fallback language for the replacement of LIBOR.
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, per the provision of the loan agreements, are carried at fixed rates ranging between
1.61
% and
4.66
%.
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%.
AMERCO, 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.
Rental Truck Revolvers
Various subsidiaries of U-Haul entered into three revolving fleet loans with an aggregate borrowing capacity of $
590.0
million. The outstanding balance for these revolvers is $
560.0
million. The interest rates, per the provision of the loan agreements, in aggregate of $
385.0
million, are the applicable LIBOR plus the applicable margin. As of March 31, 2022, the applicable LIBOR was
0.21
% and the margin was between
1.15
% and
1.25
%, the sum of which was between
1.36
% and
1.46
%. Of this $385.0 million outstanding, $
100.0
million was fixed with an interest rate of
2.36
%.
The other loan of $175.0 million uses the Secured Overnight Funding Rate which interest rate was 0.05% plus a margin of 1.25% totaling 1.30% as of March 31, 2022.
Only interest is paid on the loans until the last nine months of the respective loan terms when principal becomes due monthly. These loan agreements either contain fallback language for the replacement of LIBOR or are in the process of being amended to add updated language.
Finance Leases
The Finance Lease balance represents our sale-leaseback transactions of rental equipment. The agreements are generally seven (7) year terms with interest rates ranging from 2.16% to 5.04%. All of our finance leases are collateralized by our rental fleet. The net book value of the corresponding rental equipment was $620.8 million and $877.0 million as of March 31, 2022 and March 31, 2021, respectively. There were no new financing leases, as assessed under the new leasing guidance, entered into during fiscal 2022.
Finance Liabilities
Finance liabilities represent our rental equipment financing transactions, and we assess if 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, 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
and interest rates ranging from
1.60
% to
4.68
%. These finance liabilities are collateralized by our rental fleet.
The net book value of the corresponding rental equipment was $
1,068.3
million and $
718.3
million as of March 31, 2022 and March 31, 2021, respectively
Private Placements
In September 2021, AMERCO 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.
In December 2021, AMERCO entered into a note purchase agreement to issue $
600.0
million of fixed rate senior unsecured notes in a private placement offering. These notes funded in January 2022. 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.
Other Obligations
In February 2011, AMERCO and U.S. Bank, NA (the “Trustee”) entered into the U-Haul Investors Club
®
Indenture.
AMERCO 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, 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 March 31, 2022, the aggregate outstanding principal balance of the U-Notes
®
issued was $
88.5
million, of which $
2.3
million is held by our insurance subsidiaries and eliminated in consolidation. Interest rates range between
1.50
% and
8.00
% and maturity dates range between
2022
and
2049
.
Oxford is a member of the Federal Home Loan Bank (“FHLB”) and, as such, the FHLB has made deposits with Oxford. As of December 31, 2021, the deposits had an aggregate balance of $
60.0
million, for which Oxford pays fixed interest rates between
0.49
% and
1.72
% with maturities between September 30, 2022 and September 29, 2025. As of December 31, 2021, available-for-sale investments held with the FHLB totaled $
105.6
million, of which $
62.8
million were pledged as collateral to secure the outstanding advances. The balances of these advances are included within Liabilities from investment contracts on the consolidated balance sheets.
Annual Maturities of Notes, Loans and Finance Leases Payable
The annual maturities of our notes, loans and finance leases payable as of March 31, 2022 for the next five years and thereafter are as follows:
Years Ended March 31,
2023
2024
2025
2026
2027
Thereafter
Total
(In thousands)
Notes, loans and finance leases payable, secured
$
478,954
$
937,542
$
898,740
$
570,127
$
559,961
$
2,614,389
$
6,059,713
March 31,
2022 Rates
Maturities
2022
2021
(In thousands)
Real estate loan (amortizing term)
1.83
%
2023
$
50,259
$
82,913
Senior mortgages
2.70
%
-
5.50
%
2023
-
2042
2,206,268
2,125,324
Real estate loans (revolving credit) (a)
1.58
%
-
3.14
%
2023
-
2025
535,000
535,000
Fleet loans (amortizing term)
1.61
%
-
4.66
%
2022
-
2028
124,651
176,295
Fleet loans (revolving credit)
1.30
%
-
2.36
%
2024
-
2026
560,000
535,000
Finance leases (rental equipment)
2.16
%
-
5.04
%
2022
-
2026
347,393
513,623
Finance liability (rental equipment)
1.60
%
-
4.68
%
2024
-
2030
949,936
644,375
Private placements
2.43
%
-
2.88
%
2029
-
2035
1,200,000
–
Other obligations
1.50
%
-
8.00
%
2022
-
2049
86,206
86,085
Notes, loans and finance leases payable
$
6,059,713
$
4,698,615
Less: Debt issuance costs
(37,216)
(29,708)
Total notes, loans and finance leases payable, net
$
6,022,497
$
4,668,907
(a) Certain loans have interest rate swaps fixing the rate between 3.03% and 3.14% based on current margin
0.0183
2023
50259000
82913000
0.0270
0.0550
2023
2042
2206268000
2125324000
0.0158
0.0314
2023
2025
535000000
535000000
0.0161
0.0466
2022
2028
124651000
176295000
0.0130
0.0236
2024
2026
560000000
535000000
0.0216
0.0504
2022
2026
347393000
513623000
0.0160
0.0468
2024
2030
949936000
644375000
0.0243
0.0288
2029
2035
1200000000
0
0.0150
0.0800
2022
2049
86206000
86085000
6059713000
4698615000
37216000
29708000
6022497000
4668907000
0.0033
0.0150
0.0183
0.0270
0.0550
0.040
385000000.0
385000000.0
0.0021
0.0045
0.0125
0.0150
0.0146
0.0185
200000000.0
300000000.0
150000000.0
0.0021
0.0138
0.0159
0.0030
0.0161
0.0466
590000000.0
560000000.0
385000000.0
0.0021
0.0115
0.0125
0.0136
0.0146
100000000.0
0.0236
(7) year terms
0.0216
0.0504
620800000
877000000.0
(7) years
0.0160
0.0468
1068300000
718300000
600000000.0
150000000.0
0.0243
0.0278
2029
2033
600000000.0
100000000.0
150000000.0
0.0255
0.0288
2030
2035
88500000
2300000
0.0150
0.0800
2022
2049
60000000.0
0.0049
0.0172
105600000
62800000
Years Ended March 31,
2023
2024
2025
2026
2027
Thereafter
Total
(In thousands)
Notes, loans and finance leases payable, secured$
478,954
$
937,542
$
898,740
$
570,127
$
559,961
$
2,614,389
$
6,059,713
478954000
937542000
898740000
570127000
559961000
2614389000
6059713000
Note 9.
Interest on Borrowings
Interest Expense
Components of interest expense include the following:
Years Ended March 31,
2022
2021
2020
(In thousands)
Interest expense
$
167,618
$
165,484
$
180,444
Capitalized interest
(9,700)
(11,573)
(23,517)
Amortization of transaction costs
5,556
5,949
4,427
Interest expense resulting from cash flow hedges
3,950
3,642
(404)
Total interest expense
167,424
163,502
160,950
Interest paid in cash, including payments related to derivative contracts, amounted to $
147.9
million, $
153.2
million and $
168.1
million for fiscal 2022, 2021 and 2020, respectively.
Interest Rates
Interest rates and our revolving credit borrowings were as follows:
Revolving Credit Activity
Years Ended March 31,
2022
2021
2020
(In thousands, except interest rates)
Weighted average interest rate during the year
1.40
%
1.40
%
3.31
%
Interest rate at year end
1.49
%
1.40
%
2.86
%
Maximum amount outstanding during the year
$
1,105,000
$
1,175,000
$
1,086,000
Average amount outstanding during the year
$
1,085,074
$
1,088,293
$
1,002,081
Facility fees
$
253
$
261
$
193
Years Ended March 31,
2022
2021
2020
(In thousands)
Interest expense
$
167,618
$
165,484
$
180,444
Capitalized interest
(9,700)
(11,573)
(23,517)
Amortization of transaction costs
5,556
5,949
4,427
Interest expense resulting from cash flow hedges
3,950
3,642
(404)
Total interest expense
167,424
163,502
160,950
167618000
165484000
180444000
9700000
11573000
23517000
5556000
5949000
4427000
3950000
3642000
-404000
167424000
163502000
160950000
147900000
153200000
168100000
Revolving Credit Activity
Years Ended March 31,
2022
2021
2020
(In thousands, except interest rates)
Weighted average interest rate during the year
1.40
%
1.40
%
3.31
%
Interest rate at year end
1.49
%
1.40
%
2.86
%
Maximum amount outstanding during the year
$
1,105,000
$
1,175,000
$
1,086,000
Average amount outstanding during the year
$
1,085,074
$
1,088,293
$
1,002,081
Facility fees$
253
$
261
$
193
0.0140
0.0140
0.0331
0.0149
0.0140
0.0286
1105000000
1175000000
1086000000
1085074000
1088293000
1002081000
253000
261000
193000
Note 10.
Derivatives
We manage exposure to changes in market 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 LIBOR swap rates, with the designated benchmark interest rate being hedged on certain of our LIBOR indexed variable rate debt and a variable rate operating lease. The interest rate swaps effectively fix our interest payments on certain LIBOR indexed variable rate debt. We monitor our positions and the credit ratings of its 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.
The derivative fair values reflected in prepaid expense and accounts payable and accrued expenses in the consolidated balance sheet were as follows:
March 31, 2022
March 31, 2021
(In thousands)
Interest rate contracts designated as hedging instruments
Assets
$
–
$
–
Liabilities
587
5,141
Notional amount (debt)
235,000
235,000
The Effect of Interest Rate
Contracts on the Statements of Operations
Years Ended March 31,
2022
2021
2020
(In thousands)
(Gain) loss recognized in AOCI on interest rate contracts
$
(4,553)
$
(3,071)
$
8,355
(Gain) loss reclassified from AOCI into income
$
(
3,948
)
$
(
3,640
)
$
3
Gains or losses recognized in income on derivatives are recorded as interest expense in the consolidated statements of operations.
During fiscal year 2022, we recognized an increase in the fair value of our cash flow hedges of $0.5 million, net of taxes.
During fiscal year 2022, we reclassified $
3.9
million from accumulated other comprehensive income (loss) (“AOCI”) to interest expense.
As of March, 31 2022, we expect to reclassify $
1.2
million of net gains on interest contracts from AOCI to earnings as interest expense over the next twelve months.
We use derivatives to hedge our equity market exposure to indexed annuity products sold by our Life Insurance company. These contracts earn a return for the contractholder based on the change in the value of the S&P 500 index between annual index point dates. We buy and sell listed equity and index call options and call option spreads. The credit risk is with the party in which the options are written. The net option price is paid up front and there are no additional cash requirements or additional contingent liabilities. These contracts are held at fair value on our balance sheet. At December 31, 2021 and 2020, these derivative hedges had a fair value of $
7.5
million and $
6.6
million, with notional amounts of $
416.7
million and $
282.7
million, respectively. These derivative instruments are included in Investments, other; on the consolidated balance sheets. The fair values of these call options are determined based on quoted market prices from the relevant exchange and are classified as Level 1 in the fair value hierarchy.
Although the call options are employed to be effective hedges against our policyholder obligations from an economic standpoint, they do not meet the requirements for hedge accounting under GAAP. Accordingly, the changes in fair value of the call options are recognized each reporting date as a component of net investment and interest income. The change in fair value of the call options include the gains or losses recognized at the expiration of the option term and the changes in fair value for open contracts.
March 31, 2022
March 31, 2021
(In thousands)
Interest rate contracts designated as hedging instruments
Assets
$
–
$
–
Liabilities
587
5,141
Notional amount (debt)
235,000
235,000
0
0
587000
5141000
235000000
235000000
The Effect of Interest Rate
Contracts on the Statements of Operations
Years Ended March 31,
2022
2021
2020
(In thousands)
(Gain) loss recognized in AOCI on interest rate contracts
$
(4,553)
$
(3,071)
$
8,355
(Gain) loss reclassified from AOCI into income $(
3,948
)$(
3,640
)$
3
-4553000
-3071000
8355000
-3948000
-3640000
3000
3900000
1200000
7500000
6600000
416700000
282700000
Note 11.
Accumulated Other Comprehensive Income (Loss)
A summary of our AOCI components, net of tax, were as follows:
Foreign Currency Translation
Unrealized Net Gain on Investments
Fair Value of Cash Flow Hedges
Postretirement Benefit Obligation Net Loss
Accumulated Other Comprehensive Income (Loss)
(In thousands)
Balance as of March 31, 2019
$
(56,612)
$
(7,259)
$
107
$
(2,934)
$
(66,698)
Foreign currency translation
9,377
–
–
–
9,377
Unrealized net gain on investments
–
97,943
–
–
97,943
Change in fair value of cash flow hedges
–
–
(6,301)
–
(6,301)
Amounts reclassified into earnings on hedging activities
–
–
(2)
–
(2)
Change in post retirement benefit obligations
–
–
–
333
333
Other comprehensive income (loss)
9,377
97,943
(6,303)
333
101,350
Balance as of March 31, 2020
$
(47,235)
$
90,684
$
(6,196)
$
(2,601)
$
34,652
Foreign currency translation
(5,694)
–
–
–
(5,694)
Unrealized net gain on investments
–
76,969
–
–
76,969
Change in fair value of cash flow hedges
–
–
(429)
–
(429)
Amounts reclassified into earnings on hedging activities
–
–
2,746
–
2,746
Change in post retirement benefit obligations
–
–
–
(1,387)
(1,387)
Other comprehensive income (loss)
(5,694)
76,969
2,317
(1,387)
72,205
Balance as of March 31, 2021
$
(52,929)
$
167,653
$
(3,879)
$
(3,988)
$
106,857
Foreign currency translation
(2,828)
–
–
–
(2,828)
Unrealized net loss on investments
–
(62,626)
–
–
(62,626)
Change in fair value of cash flow hedges
–
–
457
–
457
Amounts reclassified into earnings on hedging activities
–
–
2,978
–
2,978
Change in post retirement benefit obligations
–
–
–
1,546
1,546
Other comprehensive income (loss)
(2,828)
(62,626)
3,435
1,546
(60,473)
Balance as of March 31, 2022
$
(
55,757
)
$
105,027
$
(
444
)
$
(
2,442
)
$
46,384
Foreign Currency Translation
Unrealized Net Gain on Investments
Fair Value of Cash Flow Hedges
Postretirement Benefit Obligation Net Loss
Accumulated Other Comprehensive Income (Loss)
(In thousands)
Balance as of March 31, 2019
$
(56,612)
$
(7,259)
$
107
$
(2,934)
$
(66,698)
Foreign currency translation
9,377
–
–
–
9,377
Unrealized net gain on investments
–
97,943
–
–
97,943
Change in fair value of cash flow hedges
–
–
(6,301)
–
(6,301)
Amounts reclassified into earnings on hedging activities
–
–
(2)
–
(2)
Change in post retirement benefit obligations
–
–
–
333
333
Other comprehensive income (loss)
9,377
97,943
(6,303)
333
101,350
Balance as of March 31, 2020
$
(47,235)
$
90,684
$
(6,196)
$
(2,601)
$
34,652
Foreign currency translation
(5,694)
–
–
–
(5,694)
Unrealized net gain on investments
–
76,969
–
–
76,969
Change in fair value of cash flow hedges
–
–
(429)
–
(429)
Amounts reclassified into earnings on hedging activities
–
–
2,746
–
2,746
Change in post retirement benefit obligations
–
–
–
(1,387)
(1,387)
Other comprehensive income (loss)
(5,694)
76,969
2,317
(1,387)
72,205
Balance as of March 31, 2021
$
(52,929)
$
167,653
$
(3,879)
$
(3,988)
$
106,857
Foreign currency translation
(2,828)
–
–
–
(2,828)
Unrealized net loss on investments
–
(62,626)
–
–
(62,626)
Change in fair value of cash flow hedges
–
–
457
–
457
Amounts reclassified into earnings on hedging activities
–
–
2,978
–
2,978
Change in post retirement benefit obligations
–
–
–
1,546
1,546
Other comprehensive income (loss)
(2,828)
(62,626)
3,435
1,546
(60,473)
Balance as of March 31, 2022$(
55,757
)$
105,027
$ (
444
)$ (
2,442
)$
46,384
-56612000
-7259000
107000
-2934000
-66698000
9377000
0
0
0
9377000
0
97943000
0
0
97943000
0
0
-6301000
0
-6301000
0
0
-2000
0
-2000
0
0
0
333000
333000
9377000
97943000
-6303000
333000
101350000
-47235000
90684000
-6196000
-2601000
34652000
-5694000
0
0
0
-5694000
0
76969000
0
0
76969000
0
0
-429000
0
-429000
0
0
2746000
0
2746000
0
0
0
-1387000
-1387000
-5694000
76969000
2317000
-1387000
72205000
-52929000
167653000
-3879000
-3988000
106857000
-2828000
0
0
0
-2828000
0
-62626000
0
0
-62626000
0
0
457000
0
457000
0
0
2978000
0
2978000
0
0
0
1546000
1546000
-2828000
-62626000
3435000
1546000
-60473000
-55757000
105027000
-444000
-2442000
46384000
Note 12. Stockholders’ Equity
The following table lists the dividends that have been declared and issued for fiscal years 2022 and 2021.
Common Stock Dividends
Declared Date
Per Share Amount
Record Date
Dividend Date
October 6, 2021
$
0.50
October 18, 2021
October 29, 2021
August 19, 2021
$
0.50
September 7, 2021
September 21, 2021
June 9, 2021
$
0.50
June 24, 2021
July 8, 2021
December 9, 2020
$
2.00
December 21, 2020
December 30, 2020
August 20, 2020
$
0.50
September 7, 2020
September 21, 2020
As of March 31, 2022, no awards had been issued under the 2016 AMERCO Stock Option Plan.
Common Stock Dividends
Declared Date
Per Share Amount
Record Date
Dividend Date
October 6, 2021
$
0.50
October 18, 2021
October 29, 2021
August 19, 2021
$
0.50
September 7, 2021
September 21, 2021
June 9, 2021
$
0.50
June 24, 2021
July 8, 2021
December 9, 2020
$
2.00
December 21, 2020
December 30, 2020
August 20, 2020$
0.50
September 7, 2020 September 21, 2020
2021-10-06
0.50
2021-10-18
2021-10-29
2021-08-19
0.50
2021-09-07
2021-09-21
2021-06-09
0.50
2021-06-24
2021-07-08
2020-12-09
2.00
2020-12-21
2020-12-30
2020-08-20
0.50
2020-09-07
2020-09-21
Note 13.
Provision for Taxes
Earnings before taxes and the provision for taxes consisted of the following:
Years Ended March 31,
2022
2021
2020
(In thousands)
Pretax earnings:
U.S.
$
1,431,155
$
773,030
$
372,687
Non-U.S.
44,342
23,628
5,437
Total pretax earnings
$
1,475,497
$
796,658
$
378,124
Current provision (benefit)
Federal
$
189,488
$
100,521
$
(373,817)
State
55,518
16,572
(9,600)
Non-U.S.
6,893
3,404
949
251,899
120,497
(382,468)
Deferred provision (benefit)
Federal
90,852
53,957
307,846
State
6,355
9,795
9,728
Non-U.S.
3,105
1,553
970
100,312
65,305
318,544
Provision for income tax expense (benefit)
$
352,211
$
185,802
$
(63,924)
Income taxes paid (net of income tax refunds received)
$
(
4,548
)
$
29,044
$
6,859
The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to income before taxes was as follows:
Years Ended March 31,
2022
2021
2020
(In percentages)
Statutory federal income tax rate
21.00
%
21.00
%
21.00
%
Increase (reduction) in rate resulting from:
NOL tax rate benefit
–
%
–
%
(38.62)
%
State taxes, net of federal benefit
3.24
%
2.53
%
0.02
%
Foreign rate differential
0.05
%
–
%
0.21
%
Federal tax credits
(0.19)
%
(0.99)
%
(0.53)
%
Transition tax
–
%
–
%
–
%
Tax-exempt income
(0.03)
%
(0.08)
%
(0.17)
%
Dividend received deduction
–
%
(0.01)
%
(0.01)
%
Other
(0.20)
%
0.87
%
1.19
%
Actual tax expense (benefit) of operations
23.87
%
23.32
%
(
16.91
)
%
Significant components of our deferred tax assets and liabilities were as follows:
March 31,
2022
2021
Deferred tax assets:
(In thousands)
Net operating loss and credit carry forwards
$
36,367
$
30,432
Accrued expenses
114,152
109,740
Policy benefit and losses, claims and loss expenses payable, net
30,572
26,799
Operating leases
15,540
19,370
Total deferred tax assets
$
196,631
$
186,341
Deferred tax liabilities:
Property, plant and equipment
$
1,395,216
$
1,280,703
Operating leases
15,540
19,370
Deferred policy acquisition costs
12,962
13,696
Unrealized gains
36,299
48,667
Other
1,972
2,394
Total deferred tax liabilities
1,461,989
1,364,830
Net deferred tax liability
$
1,265,358
$
1,178,489
On March 27, 2020, former President Trump signed into U.S. federal law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was aimed at providing emergency assistance and health care for individuals, families, and businesses affected by COVID-19 global pandemic and generally supporting the U.S. economy.
The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. In particular, the CARES Act allows for NOLs generated in 2018, 2019, or 2020 to be carried back 5 years.
As a result, we filed applicable forms with the IRS to carryback net operating losses. The statutory tax rate for the carryback years was 35% as compared to 21% at present.
Consequently, we recognized a benefit amount of $
146.0
million for fiscal year 2020.
These refund claims total approximately $
366
million, of which we have received approximately $
243
million in fiscal 2022 and are reflected in Prepaid expense. As refunds are received, they will reduce this amount. We have estimated and recorded
the overall effects of the CARES Act and do not anticipate a material change.
As a result, the NOL and credit carry-forwards in the above table are primarily attributable to state NOLs. As of March 31, 2022 and March 31, 2021, AMERCO had state NOLs of $
458.5
million and $
384.9
million, respectively, that will begin to expire March 31, 2023, if not utilized.
On March 3, 2021, the IRS notifiied us that our federal inome tax returns for the tax years March 31, 2014, 2015, 2016, 2018 and 2019 were selected for examination. The IRS agent in charged confirmed that this is a limited scope examination arising out of NOL carryback claims and is a standard procedure for the IRS to process the refund. As such, the scope of the exam is expected to be limited to the items reported on Forms 1139 and related schedules only. As of now, we are still working with the IRS agent and there is no audit adjustment for any of the above tax periods.
No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable.
The Company accounts for uncertainty in income taxes by recognizing the tax benefit or expense from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits and expenses recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.
A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period are as follows:
Unrecognized Tax Benefits
March 31,
2022
2021
(In thousands)
Unrecognized tax benefits beginning balance
$
31,069
$
29,632
Revaluation based on change in after tax benefit
–
–
Additions based on tax positions related to the current year
8,257
1,479
Reductions for tax positions of prior years
–
(42)
Additions for tax provisions of prior years
9,525
–
Unrecognized tax benefits ending balance
$
48,851
$
31,069
We recognize interest related to unrecognized tax benefits as interest expense, and penalties as income tax expenses. As of March 31, 2022 and 2021, the amount of interest accrued on unrecognized tax benefits was $
15.7
million and $
14.3
million, net of tax. During the current year we recorded expense from interest in the amount of $
1.4
million, net of tax.
We file income tax returns in the U.S. federal jurisdiction, and various states and Canadian jurisdictions. While the Company has ongoing audits in Canada and various state jurisdictions, there have been no proposed or anticipated adjustments that would materially impact the financial statements. With some exceptions, we are no longer subject to audit for years prior to the fiscal year ended March 31, 2019.
Years Ended March 31,
2022
2021
2020
(In thousands)
Pretax earnings:
U.S.
$
1,431,155
$
773,030
$
372,687
Non-U.S.
44,342
23,628
5,437
Total pretax earnings
$
1,475,497
$
796,658
$
378,124
Current provision (benefit)
Federal
$
189,488
$
100,521
$
(373,817)
State
55,518
16,572
(9,600)
Non-U.S.
6,893
3,404
949
251,899
120,497
(382,468)
Deferred provision (benefit)
Federal
90,852
53,957
307,846
State
6,355
9,795
9,728
Non-U.S.
3,105
1,553
970
100,312
65,305
318,544
Provision for income tax expense (benefit)
$
352,211
$
185,802
$
(63,924)
Income taxes paid (net of income tax refunds received)$(
4,548
)$
29,044
$
6,859
1431155000
773030000
372687000
44342000
23628000
5437000
1475497000
796658000
378124000
189488000
100521000
-373817000
55518000
16572000
-9600000
6893000
3404000
949000
251899000
120497000
-382468000
90852000
53957000
307846000
6355000
9795000
9728000
3105000
1553000
970000
100312000
65305000
318544000
352211000
185802000
-63924000
-4548000
29044000
6859000
Years Ended March 31,
2022
2021
2020
(In percentages)
Statutory federal income tax rate
21.00
%
21.00
%
21.00
%
Increase (reduction) in rate resulting from:
NOL tax rate benefit
–
%
–
%
(38.62)
%
State taxes, net of federal benefit
3.24
%
2.53
%
0.02
%
Foreign rate differential
0.05
%
–
%
0.21
%
Federal tax credits
(0.19)
%
(0.99)
%
(0.53)
%
Transition tax
–
%
–
%
–
%
Tax-exempt income
(0.03)
%
(0.08)
%
(0.17)
%
Dividend received deduction
–
%
(0.01)
%
(0.01)
%
Other
(0.20)
%
0.87
%
1.19
%
Actual tax expense (benefit) of operations
23.87
%
23.32
%(
16.91
)%
0.2100
0.2100
0.2100
0
0
-0.3862
0.0324
0.0253
0.0002
0.0005
0
0.0021
-0.0019
-0.0099
-0.0053
0
0
0
-0.0003
-0.0008
-0.0017
0
-0.0001
-0.0001
-0.0020
0.0087
0.0119
0.2387
0.2332
-0.1691
March 31,
2022
2021
Deferred tax assets:
(In thousands)
Net operating loss and credit carry forwards
$
36,367
$
30,432
Accrued expenses
114,152
109,740
Policy benefit and losses, claims and loss expenses payable, net
30,572
26,799
Operating leases
15,540
19,370
Total deferred tax assets
$
196,631
$
186,341
Deferred tax liabilities:
Property, plant and equipment
$
1,395,216
$
1,280,703
Operating leases
15,540
19,370
Deferred policy acquisition costs
12,962
13,696
Unrealized gains
36,299
48,667
Other
1,972
2,394
Total deferred tax liabilities
1,461,989
1,364,830
Net deferred tax liability$
1,265,358
$
1,178,489
36367000
30432000
114152000
109740000
30572000
26799000
15540000
19370000
196631000
186341000
1395216000
1280703000
15540000
19370000
12962000
13696000
36299000
48667000
1972000
2394000
1461989000
1364830000
1265358000
1178489000
146000000.0
366000000
243000000
458500000
384900000
Unrecognized Tax Benefits
March 31,
2022
2021
(In thousands)
Unrecognized tax benefits beginning balance
$
31,069
$
29,632
Revaluation based on change in after tax benefit
–
–
Additions based on tax positions related to the current year
8,257
1,479
Reductions for tax positions of prior years
–
(42)
Additions for tax provisions of prior years
9,525
–
Unrecognized tax benefits ending balance$
48,851
$
31,069
31069000
29632000
0
0
8257000
1479000
0
42000
9525000
0
48851000
31069000
15700000
14300000
1400000
Note 14.
Employee Benefit Plans
Profit Sharing Plans
We provide tax-qualified profit sharing retirement plans for the benefit of eligible employees, former employees and retirees in the United States and Canada. The plans are designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis and provide for annual discretionary employer contributions. Amounts to be contributed are determined by the President and Chairman of the Board of Directors (the “Board”) of the Company under the delegation of authority from the Board, pursuant to the terms of the Profit Sharing Plan. No contributions were made to the profit sharing plan during fiscal 2022, 2021 or 2020.
We also provide an employee savings plan which allows participants to defer income under Section 401(k) of the Internal Revenue Code of 1986.
ESOP Plan
We sponsor an Employee Stock Ownership Plan (“ESOP”) that generally covers all employees with one year or more of service. The ESOP began as a leveraged plan where shares were pledged as collateral for its debt which was originally funded by U-Haul. We made annual contributions to the ESOP equal to the ESOP’s debt service. As the debt was repaid, shares were released from collateral and allocated to active employees, based on the proportion of debt service paid in the year. ESOP shares were committed to be released monthly and ESOP compensation expense was recorded based on the current market price at the end of the month. These shares then become outstanding for the earnings per share computations. In fiscal 2020 we de-levered the plan and now contributions are made at the discretion of management with expense being recognized upon the decision to contribute. ESOP compensation expense was $23.0 million, $23.0 million and $10.3 million for fiscal 2022, 2021 and 2020,
respectively, which are included in operating expenses in the consolidated statements of operations.
Listed below is a summary of these financing arrangements as of fiscal year-end:
Outstanding as of
Interest Payments
Financing Date
March 31, 2022
2022
2021
2020
(In thousands)
July, 2009
–
–
–
9
February, 2016
–
–
–
229
Leveraged contributions to the Plan Trust during fiscal 2020 was $
5.6
million. There was no leveraged contribution in fiscal 2022 and 2021. In fiscal 2022, 2021 and 2020, the Company made non-leveraged contributions of $
23.0
million, $
23.0
and $
4.0
million, respectively to the Plan Trust.
Shares held by the ESOP were as follows:
Years Ended March 31,
2022
2021
(In thousands)
Allocated shares
890
951
Unreleased shares - leveraged
–
–
Fair value of unreleased shares - leveraged
$
–
$
–
Unreleased shares - non-leveraged
–
–
Fair value of unreleased shares - non-leveraged
$
–
$
–
The fair value of unreleased shares issued prior to 1992 is defined as the historical cost of such shares. The fair value of unreleased shares issued subsequent to December 31, 1992 is defined as the trading value of such shares as of March 31, 2022 and March 31, 2021, respectively. During fiscals 2022 and 2021, we released for allocation 33,954 and 38,015 of non-leveraged shares, respectively. As of March 31, 2022, it is estimated there will be no shares committed to be released.
Post Retirement and Post Employment Benefits
We provide a health reimbursement benefit to our eligible U.S. employees and their eligible dependents upon retirement from the Company. The retiree must have attained age sixty-five and earned twenty years of full-time service upon retirement to be awarded the health reimbursement benefit. The health reimbursement benefit is capped at a $
20,000
lifetime maximum per covered person. Reimbursements are coordinated with Medicare and any other medical policies in force.
In addition, retirees who have attained age sixty-five and earned at least twenty years of full-time service upon retirement from the Company are entitled to group term life insurance benefits. The life insurance benefit is $
3,000
plus $
100
for each year of employment over twenty years. The benefits are not funded, and claims are paid as they are incurred. We use a March 31 measurement date for our post retirement benefit disclosures.
The components of net periodic post retirement benefit cost were as follows:
Years Ended March 31,
2022
2021
2020
(In thousands)
Service cost for benefits earned during the period
$
1,401
$
1,267
$
1,055
Other components of net periodic benefit costs:
Interest cost on accumulated postretirement benefit
908
919
964
Other components
212
68
90
Total other components of net periodic benefit costs
1,120
987
1,054
Net periodic postretirement benefit cost
$
2,521
$
2,254
$
2,109
The fiscal 2022 and fiscal 2021 post retirement benefit liability included the following components:
Years Ended March 31,
2022
2021
(In thousands)
Beginning of year
$
30,755
$
27,503
Service cost for benefits earned during the period
1,401
1,267
Interest cost on accumulated post retirement benefit
908
919
Net benefit payments and expense
(1,021)
(841)
Actuarial (gain) loss
(1,837)
1,907
Accumulated postretirement benefit obligation
30,206
30,755
Current liabilities
1,449
1,334
Non-current liabilities
28,757
29,421
Total post retirement benefit liability recognized in statement of financial position
30,206
30,755
Components included in accumulated other comprehensive income (loss):
Unrecognized net loss
(3,237)
(5,286)
Cumulative net periodic benefit cost (in excess of employer contribution)
$
26,969
$
25,469
The discount rate assumptions in computing the information above were as follows:
Years Ended March 31,
2022
2021
2020
(In percentages)
Accumulated postretirement benefit obligation
3.76
%
2.93
%
3.37
%
In December 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 became law. Net periodic post retirement benefit cost above includes the effect of the subsidy. The discount rate represents the expected yield on a portfolio of high grade (AA to AAA rated or equivalent) fixed income investments with cash flow streams sufficient to satisfy benefit obligations under the plan when due. Fluctuations in the discount rate assumptions primarily reflect changes in U.S. interest rates. The assumed health care cost trend rate used to measure the accumulated postretirement benefit obligation as of the end of fiscal 2022 was
4.9
% in the initial year and was projected to decline annually to an ultimate rate of
4.0
% in fiscal 2046. The assumed health care cost trend rate used to measure the accumulated post retirement benefit obligation as of the end of fiscal 2021 (and used to measure the fiscal 2022 net periodic benefit cost) was
5.0
% in the initial year and was projected to decline annually to an ultimate rate of
4.0
% in fiscal 2046.
Post-employment benefits provided by us, other than upon retirement, are not material.
Future net benefit payments are expected as follows:
Future Net Benefit Payments
(In thousands)
Year-ended:
2023
$
1,369
2024
1,536
2025
1,733
2026
1,950
2027
2,170
2028 Through 2032
12,112
Total
$
20,870
23000000.0
23000000.0
10300000
Outstanding as of
Interest Payments
Financing Date
March 31, 2022
2022
2021
2020
(In thousands)
July, 2009
–
–
–
9
February, 2016
–
–
–
229
0
0
0
9000
0
0
0
229000
5600000
23000000.0
23000000.0
4000000.0
Years Ended March 31,
2022
2021
(In thousands)
Allocated shares
890
951
Unreleased shares - leveraged
–
–
Fair value of unreleased shares - leveraged
$
–
$
–
Unreleased shares - non-leveraged
–
–
Fair value of unreleased shares - non-leveraged$
–
$
–
890
951
0
0
0
0
0
0
0
0
20000
3000
100
Years Ended March 31,
2022
2021
2020
(In thousands)
Service cost for benefits earned during the period
$
1,401
$
1,267
$
1,055
Other components of net periodic benefit costs:
Interest cost on accumulated postretirement benefit
908
919
964
Other components
212
68
90
Total other components of net periodic benefit costs
1,120
987
1,054
Net periodic postretirement benefit cost$
2,521
$
2,254
$
2,109
1401000
1267000
1055000
908000
919000
964000
212000
68000
90000
1120000
987000
1054000
2521000
2254000
2109000
Years Ended March 31,
2022
2021
(In thousands)
Beginning of year
$
30,755
$
27,503
Service cost for benefits earned during the period
1,401
1,267
Interest cost on accumulated post retirement benefit
908
919
Net benefit payments and expense
(1,021)
(841)
Actuarial (gain) loss
(1,837)
1,907
Accumulated postretirement benefit obligation
30,206
30,755
Current liabilities
1,449
1,334
Non-current liabilities
28,757
29,421
Total post retirement benefit liability recognized in statement of financial position
30,206
30,755
Components included in accumulated other comprehensive income (loss):
Unrecognized net loss
(3,237)
(5,286)
Cumulative net periodic benefit cost (in excess of employer contribution)$
26,969
$
25,469
30755000
27503000
1401000
1267000
908000
919000
1021000
841000
-1837000
1907000
30206000
30755000
1449000
1334000
28757000
29421000
30206000
30755000
-3237000
-5286000
26969000
25469000
Years Ended March 31,
2022
2021
2020
(In percentages)
Accumulated postretirement benefit obligation
3.76
%
2.93
%
3.37
%
0.0376
0.0293
0.0337
0.049
0.040
0.050
0.040
Future Net Benefit Payments
(In thousands)
Year-ended:
2023
$
1,369
2024
1,536
2025
1,733
2026
1,950
2027
2,170
2028 Through 2032
12,112
Total$
20,870
1369000
1536000
1733000
1950000
2170000
12112000
20870000
Note 15.
Fair Value Measurements
Certain assets and liabilities are recorded at fair value on the consolidated balance sheets and are measured and classified based upon a three-tiered approach to valuation. Financial assets and liabilities recorded at fair value and are classified and disclosed in one of the following three categories:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices for identical or similar financial instruments in markets that are not considered to be active, or similar financial instruments for which all significant inputs are observable, either directly or indirectly, or inputs other than quoted prices that are observable, or inputs that are derived principally from or corroborated by observable market data through correlation or other means; and
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and are unobservable. These reflect management’s assumptions about the assumptions a market participant would use in pricing the asset or liability.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Fair values of cash equivalents approximate carrying value due to the short period of time to maturity. Fair values of short-term investments, investments available-for-sale, long-term investments, mortgage loans and notes on real estate, and interest rate swap contracts are based on quoted market prices, dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded value.
Our financial instruments that are exposed to concentrations of credit risk consist primarily of temporary cash investments, trade receivables, reinsurance recoverables and notes receivable. Limited credit risk exists on trade receivables due to the diversity of our customer base and their dispersion across broad geographic markets. We place our temporary cash investments with financial institutions and limit the amount of credit exposure to any one financial institution.
We have mortgage receivables, which potentially expose us to credit risk. The portfolio of notes is principally collateralized by self-storage facilities and commercial properties. We have not experienced any material losses related to the notes from individual or groups of notes in any particular industry or geographic area. The estimated fair values were determined using the discounted cash flow method and using interest rates currently offered for similar loans to borrowers with similar credit ratings.
Other investments including short-term investments are substantially current or bear reasonable interest rates. As a result, the carrying values of these financial instruments approximate fair value.
The carrying values and estimated fair values for the financial instruments stated above and their placement in the fair value hierarchy are as follows:
Fair Value Hierarchy
As of March 31, 2022
Carrying Value
Level 1
Level 2
Level 3
Total Estimated Fair Value
(In thousands)
Assets
Reinsurance recoverables and trade receivables, net
$
229,343
$
–
$
–
$
229,343
$
229,343
Mortgage loans, net
423,163
–
–
423,163
450,347
Other investments
120,592
–
–
120,592
120,592
Total
$
773,098
$
–
$
–
$
773,098
$
800,282
Liabilities
Notes, loans and finance leases payable
$
6,059,713
$
–
$
6,059,713
$
–
$
5,875,781
Total
$
6,059,713
$
–
$
6,059,713
$
–
$
5,875,781
.
Fair Value Hierarchy
As of March 31, 2021
Carrying Value
Level 1
Level 2
Level 3
Total Estimated Fair Value
(In thousands)
Assets
Reinsurance recoverables and trade receivables, net
$
224,426
$
–
$
–
$
224,426
$
224,426
Mortgage loans, net
391,230
–
–
391,230
391,230
Other investments
98,529
–
–
98,529
98,529
Total
$
714,185
$
–
$
–
$
714,185
$
714,185
Liabilities
Notes, loans and finance leases payable
$
4,698,615
–
$
4,698,615
$
–
$
4,449,691
Total
$
4,698,615
$
–
$
4,698,615
$
–
$
4,449,691
The following tables represent the financial assets and liabilities on the consolidated balance sheets as of March 31, 2022 and 2021, that are measured at fair value on a recurring basis and the level within the fair value hierarchy.
As of March 31, 2022
Total
Level 1
Level 2
Level 3
(In thousands)
Assets
Short-term investments
$
2,482,154
$
2,482,154
$
–
$
–
Fixed maturities - available for sale
2,821,092
26,914
2,794,086
92
Preferred stock
26,095
26,095
–
–
Common stock
46,212
46,212
–
–
Derivatives
7,474
7,474
–
–
Total
$
5,383,027
$
2,588,849
$
2,794,086
$
92
Liabilities
Derivatives
$
587
$
–
$
587
$
–
Total
$
587
$
–
$
587
$
–
As of March 31, 2021
Total
Level 1
Level 2
Level 3
(In thousands)
Assets
Short-term investments
$
839,250
$
839,250
$
–
$
–
Fixed maturities - available for sale
2,653,539
6,967
2,646,415
157
Preferred stock
21,677
21,677
–
–
Common stock
20,440
20,440
–
–
Derivatives
6,601
6,601
–
–
Total
$
3,541,507
$
894,935
$
2,646,415
$
157
Liabilities
Derivatives
$
5,141
$
–
$
5,141
$
–
Total
$
5,141
$
–
$
5,141
$
–
The fair value measurement of our assets using significant unobservable inputs (Level 3) were $
0.1
million and $
0.2
million for March 31, 2022 and 2021, respectively.
Fair Value Hierarchy
As of March 31, 2022
Carrying Value
Level 1
Level 2
Level 3
Total Estimated Fair Value
(In thousands)
Assets
Reinsurance recoverables and trade receivables, net
$
229,343
$
–
$
–
$
229,343
$
229,343
Mortgage loans, net
423,163
–
–
423,163
450,347
Other investments
120,592
–
–
120,592
120,592
Total
$
773,098
$
–
$
–
$
773,098
$
800,282
Liabilities
Notes, loans and finance leases payable
$
6,059,713
$
–
$
6,059,713
$
–
$
5,875,781
Total$
6,059,713
$
–
$
6,059,713
$
–
$
5,875,781
229343000
0
0
229343000
229343000
423163000
0
0
423163000
450347000
120592000
0
0
120592000
120592000
773098000
0
0
773098000
800282000
6059713000
0
6059713000
0
5875781000
6059713000
0
6059713000
0
5875781000
.
Fair Value Hierarchy
As of March 31, 2021
Carrying Value
Level 1
Level 2
Level 3
Total Estimated Fair Value
(In thousands)
Assets
Reinsurance recoverables and trade receivables, net
$
224,426
$
–
$
–
$
224,426
$
224,426
Mortgage loans, net
391,230
–
–
391,230
391,230
Other investments
98,529
–
–
98,529
98,529
Total
$
714,185
$
–
$
–
$
714,185
$
714,185
Liabilities
Notes, loans and finance leases payable
$
4,698,615
–
$
4,698,615
$
–
$
4,449,691
Total$
4,698,615
$
–
$
4,698,615
$
–
$
4,449,691
224426000
0
0
224426000
224426000
391230000
0
0
391230000
391230000
98529000
0
0
98529000
98529000
714185000
0
0
714185000
714185000
4698615000
0
4698615000
0
4449691000
4698615000
0
4698615000
0
4449691000
As of March 31, 2022
Total
Level 1
Level 2
Level 3
(In thousands)
Assets
Short-term investments
$
2,482,154
$
2,482,154
$
–
$
–
Fixed maturities - available for sale
2,821,092
26,914
2,794,086
92
Preferred stock
26,095
26,095
–
–
Common stock
46,212
46,212
–
–
Derivatives
7,474
7,474
–
–
Total
$
5,383,027
$
2,588,849
$
2,794,086
$
92
Liabilities
Derivatives
$
587
$
–
$
587
$
–
Total$
587
$
–
$
587
$
–
2482154000
2482154000
0
0
2821092000
26914000
2794086000
92000
26095000
26095000
0
0
46212000
46212000
0
0
7474000
7474000
0
0
5383027000
2588849000
2794086000
92000
587000
0
587000
0
587000
0
587000
0
As of March 31, 2021
Total
Level 1
Level 2
Level 3
(In thousands)
Assets
Short-term investments
$
839,250
$
839,250
$
–
$
–
Fixed maturities - available for sale
2,653,539
6,967
2,646,415
157
Preferred stock
21,677
21,677
–
–
Common stock
20,440
20,440
–
–
Derivatives
6,601
6,601
–
–
Total
$
3,541,507
$
894,935
$
2,646,415
$
157
Liabilities
Derivatives
$
5,141
$
–
$
5,141
$
–
Total$
5,141
$
–
$
5,141
$
–
839250000
839250000
0
0
2653539000
6967000
2646415000
157000
21677000
21677000
0
0
20440000
20440000
0
0
6601000
6601000
0
0
3541507000
894935000
2646415000
157000
5141000
0
5141000
0
5141000
0
5141000
0
100000
200000
Note 16.
Reinsurance and Policy Benefits and Losses, Claims and Loss Expenses Payable
During their normal course of business, our insurance subsidiaries assume and cede reinsurance on both a coinsurance and a risk premium basis. They also obtain reinsurance for that portion of risks exceeding their retention limits. The maximum amount of life insurance retained on any one life is $
150,000
.
Amount (a)
Direct
Other
Companies
Ceded to
from Other
Companies
Assumed
Amount (a)
Net
Amount
Assumed to Net
Percentage of
(In thousands)
Year ended December 31, 2021
Life insurance in force
$
1,029,537
$
72
$
328,030
$
1,357,495
24
%
Premiums earned:
Life
$
56,353
$
2
$
4,514
$
60,865
7
%
Accident and health
48,385
160
1,166
49,391
2
%
Annuity
444
–
327
771
42
%
Property and casualty
89,667
–
–
89,667
–
%
Total
$
194,849
$
162
$
6,007
$
200,694
Year ended December 31, 2020
Life insurance in force
$
1,031,634
$
73
$
356,266
$
1,387,827
26
%
Premiums earned:
Life
$
58,048
$
1
$
5,049
$
63,096
8
%
Accident and health
57,081
211
1,388
58,258
2
%
Annuity
221
–
34
255
13
%
Property and casualty
70,285
–
–
70,285
–
%
Total
$
185,635
$
212
$
6,471
$
191,894
Year ended December 31, 2019
Life insurance in force
$
957,280
$
7
$
441,563
$
1,398,836
32
%
Premiums earned:
Life
$
53,289
$
1
$
5,629
$
58,917
10
%
Accident and health
66,863
226
1,563
68,200
2
%
Annuity
65
–
794
859
92
%
Property and casualty
69,126
–
15
69,141
–
%
Total
$
189,343
$
227
$
8,001
$
197,117
(a)
Balances are reported net of inter-segment transactions.
Reserves for recognizing a premium deficiency included in future policy benefits are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be materially insufficient to provide for expected future policy benefits and expenses. Additionally, in certain instances the policyholder liability for a particular line of business may not be deficient in the aggregate to trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier years followed by losses in later years. In these situations, accounting standards require that an additional liability be recognized by an amount necessary to sufficiently offset the losses that would be recognized in later years. The Company has not recognized any reserves related to premium deficiencies in the years ended December 31, 2021 and December 31, 2020.
To the extent that a reinsurer is unable to meet its obligation under the related reinsurance agreements, Repwest would remain liable for the unpaid losses and loss expenses. Pursuant to certain of these agreements, Repwest holds letters of credit as of December 31, 2021 in the amount of $0.1 million from re-insurers.
Policy benefits and losses, claims and loss expenses payable for Property and Casualty Insurance were as follows:
December 31,
2021
2020
(In thousands)
Unpaid losses and loss adjustment expense
$
159,162
$
177,963
Reinsurance losses payable
1,217
979
Total
$
160,379
$
178,942
Activity in the liability for unpaid losses and loss adjustment expenses for Property and Casualty Insurance is summarized as follows:
December 31,
2021
2020
2019
(In thousands)
Balance at January 1
$
177,963
$
209,127
$
228,970
Less: reinsurance recoverable
64,873
87,083
94,920
Net balance at January 1
113,090
122,044
134,050
Incurred related to:
Current year
28,980
20,670
22,137
Prior years
(6,290)
(3,865)
(9,535)
Total incurred
22,690
16,805
12,602
Paid related to:
Current year
11,040
7,664
7,366
Prior years
12,972
18,095
17,242
Total paid
24,012
25,759
24,608
Net balance at December 31
111,768
113,090
122,044
Plus: reinsurance recoverable
47,394
64,873
87,083
Balance at December 31
$
159,162
$
177,963
$
209,127
Prior year incurred losses were impacted by favorable development on numerous Excess Workers Compensation claims. The liability for incurred losses and loss adjustment expenses (net of reinsurance recoverable of $47.4 million) decreased by $18.8 million as of December 31, 2021.
The information about property and casualty incurred and paid loss and loss adjustment expense development for the years end December 31, 2015 through 2021, and the average annual percentage payout of incurred claims by age as of December 31, 2021, is presented as supplementary information. Claims data for December 31, 2015 through 2020 is unaudited. Claims data for December 31, 2021 is audited.
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
As of
December 31, 2021
Total of
Incurred-but-
Not-Reported
Liabilities Plus
Expected
Cumulative
Development
Number of
Accident
on Reported
Reported
Year
2015
2016
2017
2018
2019
2020
2021
Claims
Claims
(In thousands, except claim counts)
2015
$
12,214
$
12,459
$
12,460
$
12,464
$
11,087
$
11,092
$
11,093
$
–
11,104
2016
13,297
13,011
13,056
11,790
11,764
11,764
–
11,469
2017
15,748
16,109
17,078
15,538
15,273
–
12,102
2018
19,580
18,386
18,027
17,157
251
11,983
2019
22,138
26,316
27,316
2,283
11,746
2020
20,671
17,485
3,455
11,274
2021
28,982
12,709
13,729
Total
18,698
The following table presents paid claims development as of December 31, 2021, net of reinsurance. Claims data for 2015 through 2020 is unaudited. Claims data for 2021 is audited.
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2015
$
7,509
$
9,601
$
9,730
$
10,343
$
11,087
$
11,092
$
11,093
2016
7,777
10,665
11,643
11,746
11,764
11,764
2017
8,970
11,638
14,825
15,012
15,263
2018
8,838
12,689
15,150
16,766
2019
7,366
14,737
19,215
2020
7,665
11,114
2021
11,040
Total
Total
96,255
All outstanding liabilities before 2015, net of reinsurance
78,955
Liabilities for claims and claim adjustment expenses, net of reinsurance
111,768
The reconciliation of the net incurred and paid claims development tables for the liability for claims and claims adjustment expenses is as follows:
December 31, 2021
(In thousands)
Liabilities for unpaid Property and Casualty claims
and claim adjustment expenses, net of reinsurance
$
111,768
Total reinsurance recoverable on unpaid
Property and Casualty claims
$
47,394
Total gross liability for unpaid Property and Casualty
claims and claim adjustment expense
$
159,162
The following is supplementary information about average historical claims duration as of December 31, 2021.
Average Annual Percentage Payout of Incurred Claims by Age, net of Reinsurance
(In percentages)
Years
1
2
3
4
5
6
7
Property and Casualty Insurance
50.4
%
21.7
%
12.2
%
4.3
%
2.8
%
–
%
–
%
150000
Direct
Ceded to
Assumed
Net
Percentage of
(In thousands)
Year ended December 31, 2021
Life insurance in force
$
1,029,537
$
72
$
328,030
$
1,357,495
24
%
Premiums earned:
Life
$
56,353
$
2
$
4,514
$
60,865
7
%
Accident and health
48,385
160
1,166
49,391
2
%
Annuity
444
–
327
771
42
%
Property and casualty
89,667
–
–
89,667
–
%
Total
$
194,849
$
162
$
6,007
$
200,694
Year ended December 31, 2020
Life insurance in force
$
1,031,634
$
73
$
356,266
$
1,387,827
26
%
Premiums earned:
Life
$
58,048
$
1
$
5,049
$
63,096
8
%
Accident and health
57,081
211
1,388
58,258
2
%
Annuity
221
–
34
255
13
%
Property and casualty
70,285
–
–
70,285
–
%
Total
$
185,635
$
212
$
6,471
$
191,894
Year ended December 31, 2019
Life insurance in force
$
957,280
$
7
$
441,563
$
1,398,836
32
%
Premiums earned:
Life
$
53,289
$
1
$
5,629
$
58,917
10
%
Accident and health
66,863
226
1,563
68,200
2
%
Annuity
65
–
794
859
92
%
Property and casualty
69,126
–
15
69,141
–
%
Total$
189,343
$
227
$
8,001
$
197,117
1029537000
72000
328030000
1357495000
0.24
56353000
2000
4514000
60865000
0.07
48385000
160000
1166000
49391000
0.02
444000
0
327000
771000
0.42
89667000
0
0
89667000
0
194849000
162000
6007000
200694000
1031634000
73000
356266000
1387827000
0.26
58048000
1000
5049000
63096000
0.08
57081000
211000
1388000
58258000
0.02
221000
0
34000
255000
0.13
70285000
0
0
70285000
0
185635000
212000
6471000
191894000
957280000
7000
441563000
1398836000
0.32
53289000
1000
5629000
58917000
0.10
66863000
226000
1563000
68200000
0.02
65000
0
794000
859000
0.92
69126000
0
15000
69141000
0
189343000
227000
8001000
197117000
100000
December 31,
2021
2020
(In thousands)
Unpaid losses and loss adjustment expense
$
159,162
$
177,963
Reinsurance losses payable
1,217
979
Total $
160,379
$
178,942
159162000
177963000
1217000
979000
160379000
178942000
December 31,
2021
2020
2019
(In thousands)
Balance at January 1
$
177,963
$
209,127
$
228,970
Less: reinsurance recoverable
64,873
87,083
94,920
Net balance at January 1
113,090
122,044
134,050
Incurred related to:
Current year
28,980
20,670
22,137
Prior years
(6,290)
(3,865)
(9,535)
Total incurred
22,690
16,805
12,602
Paid related to:
Current year
11,040
7,664
7,366
Prior years
12,972
18,095
17,242
Total paid
24,012
25,759
24,608
Net balance at December 31
111,768
113,090
122,044
Plus: reinsurance recoverable
47,394
64,873
87,083
Balance at December 31$
159,162
$
177,963
$
209,127
177963000
209127000
228970000
64873000
87083000
94920000
113090000
122044000
134050000
28980000
20670000
22137000
6290000
3865000
9535000
22690000
16805000
12602000
11040000
7664000
7366000
12972000
18095000
17242000
24012000
25759000
24608000
111768000
113090000
122044000
47394000
64873000
87083000
159162000
177963000
209127000
47400000
18800000
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
As of
December 31, 2021
Total of
Incurred-but-
Not-Reported
Liabilities Plus
Expected
Cumulative
Development
Number of
Accident
on Reported
Reported
Year
2015
2016
2017
2018
2019
2020
2021
Claims
Claims
(In thousands, except claim counts)
2015
$
12,214
$
12,459
$
12,460
$
12,464
$
11,087
$
11,092
$
11,093
$
–
11,104
2016
13,297
13,011
13,056
11,790
11,764
11,764
–
11,469
2017
15,748
16,109
17,078
15,538
15,273
–
12,102
2018
19,580
18,386
18,027
17,157
251
11,983
2019
22,138
26,316
27,316
2,283
11,746
2020
20,671
17,485
3,455
11,274
2021
28,982
12,709
13,729
Total
18,698
12214000
12459000
12460000
12464000
11087000
11092000
11093000
0
11104
13297000
13011000
13056000
11790000
11764000
11764000
0
11469
15748000
16109000
17078000
15538000
15273000
0
12102
19580000
18386000
18027000
17157000
251000
11983
22138000
26316000
27316000
2283000
11746
20671000
17485000
3455000
11274
28982000
13729
18698000
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2015
$
7,509
$
9,601
$
9,730
$
10,343
$
11,087
$
11,092
$
11,093
2016
7,777
10,665
11,643
11,746
11,764
11,764
2017
8,970
11,638
14,825
15,012
15,263
2018
8,838
12,689
15,150
16,766
2019
7,366
14,737
19,215
2020
7,665
11,114
2021
11,040
Total
Total
96,255
All outstanding liabilities before 2015, net of reinsurance
78,955
Liabilities for claims and claim adjustment expenses, net of reinsurance
111,768
7509000
9601000
9730000
10343000
11087000
11092000
11093000
7777000
10665000
11643000
11746000
11764000
11764000
8970000
11638000
14825000
15012000
15263000
8838000
12689000
15150000
16766000
7366000
14737000
19215000
7665000
11114000
11040000
96255000
78955000
111768000
December 31, 2021
(In thousands)
Liabilities for unpaid Property and Casualty claims
and claim adjustment expenses, net of reinsurance
$
111,768
Total reinsurance recoverable on unpaid
Property and Casualty claims
$
47,394
Total gross liability for unpaid Property and Casualty
claims and claim adjustment expense$
159,162
111768000
47394000
159162000
Average Annual Percentage Payout of Incurred Claims by Age, net of Reinsurance
(In percentages)
Years
1
2
3
4
5
6
7
Property and Casualty Insurance
50.4
%
21.7
%
12.2
%
4.3
%
2.8
%
–
%
–
%
0.504
0.217
0.122
0.043
0.028
0
0
Note 17. Leases
Lessor
We have determined that revenues derived by providing self-moving equipment rentals, self-storage rentals and certain other revenues, including U-Box rentals, are within the scope of the accounting guidance contained in Topic 842.
We combined all lease and non-lease components of lease contracts for which the timing and pattern of transfer are the same and the lease component meets the classification of an operating lease, and account for them in accordance with Topic 842. The revenue streams accounted for in accordance with Topic 842 are recognized evenly over the period of rental. Please see Note 22, Revenue Recognition, of the Notes to Consolidated Financial Statements.
Lessee
We determine if an arrangement is a lease at inception. Operating leases, which are comprised primarily of storage rental locations, are included in ROU assets - operating, net and operating lease liabilities in our consolidated balance sheets. Finance leases, which are comprised primarily of rental equipment leases, are included in ROU assets - financing, net, and notes, loans and finance leases payable, net in our consolidated balance sheets.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected remaining lease term. We use our incremental borrowing rate based on information available at commencement date, including the rate for a fully collateralized loan that can either be fully amortized or financed with a residual at the end of the lease term, for a borrower with similar credit quality in order to determine the present value of lease payments. Our lease terms may include options to extend or terminate the lease, which are included in the calculation of ROU assets when it is reasonably certain that we will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
We have lease agreements with lease and non-lease components, which are generally not accounted for separately. Additionally, for certain leases, we apply a portfolio approach to account for the operating lease ROU assets and liabilities as the leases are similar in nature and have nearly identical contract provisions.
Our equipment sale/leaseback transactions do not qualify as a sale.
New sale leaseback transactions that fail to qualify as a sale are accounted for as a financial liability.
Please see Note 8, Borrowings, of the Notes to Consolidated Financial Statements for additional information.
The following table shows the components of our ROU assets, net:
As of March 31, 2022
Finance
Operating
Total
(In thousands)
Buildings and improvements
$
–
$
136,444
$
136,444
Furniture and equipment
14,731
–
14,731
Rental trailers and other rental equipment
169,514
–
169,514
Rental trucks
1,114,248
–
1,114,248
Right-of-use assets, gross
1,298,493
136,444
1,434,937
Less: Accumulated depreciation
(677,669)
(62,062)
(739,731)
Right-of-use assets, net
$
620,824
$
74,382
$
695,206
As of March 31, 2021
Finance
Operating
Total
(In thousands)
Buildings and improvements
$
–
$
132,901
$
132,901
Furniture and equipment
22,316
–
22,316
Rental trailers and other rental equipment
203,594
–
203,594
Rental trucks
1,494,098
–
1,494,098
Right-of-use assets, gross
1,720,008
132,901
1,852,909
Less: Accumulated depreciation
(842,970)
(40,396)
(883,366)
Right-of-use assets, net
$
877,038
$
92,505
$
969,543
As of March 31, 2022 and 2021, we had finance leases for the ROU assets, net of $
347.4
million and $
513.6
million, respectively and operating leases of $
74.2
million and $
92.5
million, respectively.
Financing leases
March 31,
2022
2021
Weighted average remaining lease term (years)
3
3
Weighted average discount rate
3.7
%
3.6
%
Operating leases
March 31,
2022
2021
Weighted average remaining lease term (years)
16.5
14.7
Weighted average discount rate
4.6
%
4.6
%
For fiscal years 2022, 2021 and 2020, cash paid for leases included in our operating cash flow activities were $
30.2
million, $
29.3
million and $
25.9
million, respectively and our financing cash flow activities were $
166.3
million, $
221.2
million and $
307.8
million, respectively.
Non-cash activities of ROU assets in exchange for lease liabilities were $
3.7
million, $
6.8
million and $
15.4
million for fiscal years 2022, 2021 and 2020, respectively.
The components of lease costs, including leases of less than 12 months, were as follows:
Twelve Months Ended March 31,
2022
2021
(In thousands)
Operating lease costs
$
30,239
$
30,551
Finance lease cost:
Amortization of right-of-use assets
$
115,199
$
150,994
Interest on lease liabilities
15,289
22,405
Total finance lease cost
$
130,488
$
173,399
The short-term lease costs for fiscal years 2022 and 2021 were not material.
Maturities of lease liabilities were as follows:
Finance leases
Operating leases
Year ending March 31,
(In thousands)
2023
$
133,577
$
23,311
2024
111,781
21,903
2025
78,280
10,630
2026
47,064
4,162
2027
–
3,061
Thereafter
–
59,348
Total lease payments
370,702
122,415
Less: imputed interest
(23,309)
(48,218)
Present value of lease liabilities
$
347,393
$
74,197
As of March 31, 2022
Finance
Operating
Total
(In thousands)
Buildings and improvements
$
–
$
136,444
$
136,444
Furniture and equipment
14,731
–
14,731
Rental trailers and other rental equipment
169,514
–
169,514
Rental trucks
1,114,248
–
1,114,248
Right-of-use assets, gross
1,298,493
136,444
1,434,937
Less: Accumulated depreciation
(677,669)
(62,062)
(739,731)
Right-of-use assets, net$
620,824
$
74,382
$
695,206
0
136444000
136444000
14731000
0
14731000
169514000
0
169514000
1114248000
0
1114248000
1298493000
136444000
1434937000
677669000
62062000
739731000
620824000
74382000
695206000
As of March 31, 2021
Finance
Operating
Total
(In thousands)
Buildings and improvements
$
–
$
132,901
$
132,901
Furniture and equipment
22,316
–
22,316
Rental trailers and other rental equipment
203,594
–
203,594
Rental trucks
1,494,098
–
1,494,098
Right-of-use assets, gross
1,720,008
132,901
1,852,909
Less: Accumulated depreciation
(842,970)
(40,396)
(883,366)
Right-of-use assets, net$
877,038
$
92,505
$
969,543
0
132901000
132901000
22316000
0
22316000
203594000
0
203594000
1494098000
0
1494098000
1720008000
132901000
1852909000
842970000
40396000
883366000
877038000
92505000
969543000
347400000
513600000
74200000
92500000
Financing leases
March 31,
2022
2021
Weighted average remaining lease term (years)
3
3
Weighted average discount rate
3.7
%
3.6
%
3
3
0.037
0.036
Operating leases
March 31,
2022
2021
Weighted average remaining lease term (years)
16.5
14.7
Weighted average discount rate
4.6
%
4.6
%
16.5
14.7
0.046
0.046
30200000
29300000
25900000
166300000
221200000
307800000
3700000
6800000
15400000
Twelve Months Ended March 31,
2022
2021
(In thousands)
Operating lease costs
$
30,239
$
30,551
Finance lease cost:
Amortization of right-of-use assets
$
115,199
$
150,994
Interest on lease liabilities
15,289
22,405
Total finance lease cost$
130,488
$
173,399
30239000
30551000
115199000
150994000
15289000
22405000
130488000
173399000
Finance leases
Operating leases
Year ending March 31,
(In thousands)
2023
$
133,577
$
23,311
2024
111,781
21,903
2025
78,280
10,630
2026
47,064
4,162
2027
–
3,061
Thereafter
–
59,348
Total lease payments
370,702
122,415
Less: imputed interest
(23,309)
(48,218)
Present value of lease liabilities$
347,393
$
74,197
133577000
23311000
111781000
21903000
78280000
10630000
47064000
4162000
0
3061000
0
59348000
370702000
122415000
23309000
48218000
347393000
74197000
Note 18.
Contingencies
Environmental
Compliance with environmental requirements of federal, state and local governments may significantly affect Real Estate’s business operations. Among other things, these requirements regulate the discharge of materials into the air, land and water and govern the use and disposal of hazardous substances. Real Estate is aware of issues regarding hazardous substances on some of its properties. Real Estate regularly makes capital and operating expenditures to stay in compliance with environmental laws and has put in place a remedial plan at each site where it believes such a plan is necessary.
Based upon the information currently available to Real Estate, compliance with the environmental laws and its share of the costs of investigation and cleanup of known hazardous waste sites are not expected to result in a material adverse effect on AMERCO’s financial position or results of operations.
Other
We are named as a defendant in various other litigation and claims arising out of the normal course of business. In management’s opinion, none of these other matters will have a material effect on our financial position and results of operations.
Note 19.
Related Party Transactions
As set forth in the Company’s Audit Committee Charter and consistent with NASDAQ Listing Rules, our Audit Committee (the “Audit Committee”) reviews and maintains oversight over related party transactions, which are required to be disclosed under the SEC rules and regulations and in accordance with GAAP. Accordingly, all such related party transactions are submitted to the Audit Committee for ongoing review and oversight. Our internal processes are designed to ensure that our legal and finance departments identify and monitor potential related party transactions that may require disclosure and Audit Committee oversight.
AMERCO has engaged in related party transactions and has continuing related party interests with certain major stockholders, directors and officers of the consolidated group as disclosed below.
SAC Holding Corporation and SAC Holding II Corporation (collectively “SAC Holdings”) were established in order to acquire and develop self-storage properties. These properties are being managed by us pursuant to management agreements.
SAC Holdings, Four SAC Self-Storage Corporation, Five SAC Self-Storage Corporation, Galaxy Investments, L.P. and 2015 SAC Self-Storage, LLC are substantially controlled by Blackwater Investments, Inc. (“Blackwater”). Blackwater is wholly owned by Willow Grove Holdings LP, which is owned by Mark V. Shoen (a significant stockholder), and various trusts associated with Edward J. Shoen (our Chairman of the Board, President and a significant stockholder) and Mark V. Shoen.
Related Party Revenues
Years Ended March 31,
2022
2021
2020
(In thousands)
U-Haul management fee revenue from Blackwater
$
28,546
$
25,512
$
24,014
U-Haul management fee revenue from Mercury
6,648
6,091
6,392
$
35,194
$
31,603
$
30,406
We currently manage the self-storage properties owned or leased by Blackwater and Mercury Partners, L.P. (“Mercury”), pursuant to a standard form of management agreement, under which we receive a management fee of between
4
% and
10
% of the gross receipts plus reimbursement for certain expenses. We received management fees, exclusive of reimbursed expenses, of $
38.5
million, $
31.2
million and $
29.0
million from the above-mentioned entities during fiscal 2022, 2021 and 2020, respectively. This management fee is consistent with the fee received for other properties we previously managed for third parties. Mark V. Shoen controls the general partner of Mercury. The limited partner interests of Mercury are owned indirectly by James P. Shoen and various trusts benefitting Edward J. Shoen and James P. Shoen or their descendants.
Mercury holds the option to purchase a portfolio of properties currently leased by Mercury and a U-Haul subsidiary, which option is exercisable in 2024.
Related Party Costs and Expenses
Years Ended March 31,
2022
2021
2020
(In thousands)
U-Haul lease expenses to Blackwater
$
2,445
$
2,612
$
2,631
U-Haul commission expenses to Blackwater
88,288
69,212
62,066
$
90,733
$
71,824
$
64,697
We lease space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of Blackwater. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us.
As of March 31, 2022, subsidiaries of Blackwater acted as U-Haul independent dealers. The financial and other terms of the dealership contracts with the aforementioned companies and their subsidiaries are substantially identical to the terms of those with our other independent dealers whereby commissions are paid by us based upon equipment rental revenues.
These agreements and notes with subsidiaries of Blackwater, excluding Dealer Agreements, provided revenues of $
28.5
million, expenses of $
2.4
million and cash flows of $
25.9
million during fiscal 2022. Revenues and commission expenses related to the Dealer Agreements were $
417.9
million and $
88.3
million, respectively for fiscal 2022.
Management determined that we do not have a variable interest pursuant to the VIE model under ASC 810 in the holding entities of Blackwater.
Related Party Assets
March 31,
2022
2021
(In thousands)
U-Haul receivable from Blackwater
$
41,364
$
27,116
U-Haul receivable from Mercury
5,708
9,632
Other (a)
779
(1,353)
$
47,851
$
35,395
(a) Timing differences for intercompany balances with insurance subsidiaries resulting from the three month difference in reporting periods.
Years Ended March 31,
2022
2021
2020
(In thousands)
U-Haul management fee revenue from Blackwater
$
28,546
$
25,512
$
24,014
U-Haul management fee revenue from Mercury
6,648
6,091
6,392
$
35,194
$
31,603
$
30,406
28546000
25512000
24014000
6648000
6091000
6392000
35194000
31603000
30406000
0.04
0.10
38500000
31200000
29000000.0
Years Ended March 31,
2022
2021
2020
(In thousands)
U-Haul lease expenses to Blackwater
$
2,445
$
2,612
$
2,631
U-Haul commission expenses to Blackwater
88,288
69,212
62,066
$
90,733
$
71,824
$
64,697
2445000
2612000
2631000
88288000
69212000
62066000
90733000
71824000
64697000
28500000
2400000
25900000
417900000
88300000
March 31,
2022
2021
(In thousands)
U-Haul receivable from Blackwater
$
41,364
$
27,116
U-Haul receivable from Mercury
5,708
9,632
Other (a)
779
(1,353)
$
47,851
$
35,395
41364000
27116000
5708000
9632000
779000
-1353000
47851000
35395000
Note 20.
Statutory Financial Information of Insurance Subsidiaries
Applicable laws and regulations of the States of Arizona and Nevada require Property and Casualty Insurance and Life Insurance to maintain minimum capital and surplus determined in accordance with statutory accounting principles. Audited statutory net income and statutory capital and surplus for the years ended are listed below:
Years Ended December 31,
2021
2020
2019
(In thousands)
Repwest:
Audited statutory net income
$
33,314
$
22,898
$
28,614
Audited statutory capital and surplus
266,875
227,380
226,999
ARCOA:
Audited statutory net income (loss)
(752)
2,438
2,906
Audited statutory capital and surplus
14,697
15,928
12,851
Oxford:
Audited statutory net income
23,217
6,296
18,599
Audited statutory capital and surplus
230,202
218,301
223,264
CFLIC:
Audited statutory net income
6,019
8,082
8,043
Audited statutory capital and surplus
17,098
25,980
26,305
NAI:
Audited statutory net income
1,874
2,127
1,942
Audited statutory capital and surplus
7,961
13,980
13,371
The amount of dividends that can be paid to shareholders by insurance companies domiciled in the State of Arizona is limited. There are restrictions on the ability of our insurance subsidiaries to transfer funds to us in the form of cash dividends, loans or advances. Their ordinary dividends are limited to the lower of 10% of prior year statutory surplus or prior year net income. Any extraordinary dividend, loans or advances to us from the insurance subsidiaries must be approved by the domiciliary insurance commissioner. Any dividend in excess of the limit requires prior regulatory approval. The statutory surplus for Repwest at December 31, 2021 that could be distributed as ordinary dividends was $26.7 million. The statutory surplus for Oxford at December 31, 2021 that could be distributed as ordinary dividends was $23.0 million. Repwest paid a dividend of $ $22.6 million and $21.6 million to AMERCO during fiscal 2021 and 2020, respectively. Repwest did not pay a dividend to AMERCO in fiscal 2022. Oxford paid a dividend of $18.6 million to AMERCO during fiscal 2021. Oxford did not pay a dividend to AMERCO in
fiscal 2022 or 2020. Restricted net assets for our insurance subsidiaries were $
91.7
million and $
105.4
million as of December 31, 2021 and 2020, respectively.
For our insurance subsidiaries, statutory accounting principles (“SAP”) differ from GAAP primarily in that: (i) premiums from deferred annuities are recognized as revenue under SAP, while they are accounted for as liabilities from investment contracts under GAAP; (ii) policy acquisition costs are expensed as incurred under SAP, while they are deferred and amortized over the effective period of the related life insurance policies or the present value of actual and expected gross profits from annuity deposits; (iii) policy benefits and losses are established using different actuarial assumptions; and (iv) investments are valued on a different basis and valuation allowances attributable to investments are different. In addition, certain assets are not admitted under SAP and are charged directly to surplus.
Years Ended December 31,
2021
2020
2019
(In thousands)
Repwest:
Audited statutory net income
$
33,314
$
22,898
$
28,614
Audited statutory capital and surplus
266,875
227,380
226,999
ARCOA:
Audited statutory net income (loss)
(752)
2,438
2,906
Audited statutory capital and surplus
14,697
15,928
12,851
Oxford:
Audited statutory net income
23,217
6,296
18,599
Audited statutory capital and surplus
230,202
218,301
223,264
CFLIC:
Audited statutory net income
6,019
8,082
8,043
Audited statutory capital and surplus
17,098
25,980
26,305
NAI:
Audited statutory net income
1,874
2,127
1,942
Audited statutory capital and surplus
7,961
13,980
13,371
33314000
22898000
28614000
266875000
227380000
226999000
-752000
2438000
2906000
14697000
15928000
12851000
23217000
6296000
18599000
230202000
218301000
223264000
6019000
8082000
8043000
17098000
25980000
26305000
1874000
2127000
1942000
7961000
13980000
13371000
26700000
23000000.0
22600000
21600000
18600000
91700000
105400000
Note 21.
Financial Information by Geographic Area
United States
Canada
Consolidated
(All amounts are in thousands U.S. $'s)
Fiscal Year Ended March 31, 2022
Total revenues
$
5,452,027
$
287,720
$
5,739,747
Depreciation and amortization, net of gains on disposal
509,517
2,969
512,486
Interest expense
163,586
3,838
167,424
Pretax earnings
1,431,155
44,342
1,475,497
Income tax expense
342,213
9,998
352,211
Identifiable assets
16,776,070
523,511
17,299,581
United States
Canada
Consolidated
(All amounts are in thousands U.S. $'s)
Fiscal Year Ended March 31, 2021
Total revenues
$
4,334,083
$
207,902
$
4,541,985
Depreciation and amortization, net of gains on disposal
631,344
10,160
641,504
Interest expense
160,429
3,073
163,502
Pretax earnings
773,030
23,628
796,658
Income tax expense
180,845
4,957
185,802
Identifiable assets
14,212,978
438,628
14,651,606
United States
Canada
Consolidated
(All amounts are in thousands U.S. $'s)
Fiscal Year Ended March 31, 2020
Total revenues
$
3,797,849
$
181,019
$
3,978,868
Depreciation and amortization, net of gains on disposal
652,110
15,414
667,524
Interest expense
157,595
3,355
160,950
Pretax earnings
372,687
5,437
378,124
Income tax expense (benefit)
(65,842)
1,918
(63,924)
Identifiable assets
13,016,942
421,082
13,438,024
United States
Canada
Consolidated
(All amounts are in thousands U.S. $'s)
Fiscal Year Ended March 31, 2022
Total revenues
$
5,452,027
$
287,720
$
5,739,747
Depreciation and amortization, net of gains on disposal
509,517
2,969
512,486
Interest expense
163,586
3,838
167,424
Pretax earnings
1,431,155
44,342
1,475,497
Income tax expense
342,213
9,998
352,211
Identifiable assets
16,776,070
523,511
17,299,581
5452027000
287720000
5739747000
509517000
2969000
512486000
163586000
3838000
167424000
1431155000
44342000
1475497000
342213000
9998000
352211000
16776070000
523511000
17299581000
United States
Canada
Consolidated
(All amounts are in thousands U.S. $'s)
Fiscal Year Ended March 31, 2021
Total revenues
$
4,334,083
$
207,902
$
4,541,985
Depreciation and amortization, net of gains on disposal
631,344
10,160
641,504
Interest expense
160,429
3,073
163,502
Pretax earnings
773,030
23,628
796,658
Income tax expense
180,845
4,957
185,802
Identifiable assets
14,212,978
438,628
14,651,606
4334083000
207902000
4541985000
631344000
10160000
641504000
160429000
3073000
163502000
773030000
23628000
796658000
180845000
4957000
185802000
14212978000
438628000
14651606000
United States
Canada
Consolidated
(All amounts are in thousands U.S. $'s)
Fiscal Year Ended March 31, 2020
Total revenues
$
3,797,849
$
181,019
$
3,978,868
Depreciation and amortization, net of gains on disposal
652,110
15,414
667,524
Interest expense
157,595
3,355
160,950
Pretax earnings
372,687
5,437
378,124
Income tax expense (benefit)
(65,842)
1,918
(63,924)
Identifiable assets
13,016,942
421,082
13,438,024
3797849000
181019000
3978868000
652110000
15414000
667524000
157595000
3355000
160950000
372687000
5437000
378124000
-65842000
1918000
-63924000
13016942000
421082000
13438024000
Note 21A.
Consolidating Financial Information by Industry Segment
AMERCO’s three reportable segments are:
Moving and Storage, comprised of AMERCO, U-Haul, and Real Estate and the subsidiaries of
U-Haul and Real Estate;
Property and Casualty Insurance, comprised of Repwest and its subsidiaries and ARCOA; and
Life Insurance, comprised of Oxford and its subsidiaries.
Management tracks revenues separately, but does not report any separate measure of the profitability for rental vehicles, rentals of self-storage spaces and sales of products that are required to be classified as a separate operating segment and accordingly does not present these as separate reportable segments. Deferred income taxes, net are shown as liabilities on the consolidating statements.
The information includes elimination entries necessary to consolidate AMERCO, the parent, with its subsidiaries.
Investments in subsidiaries are accounted for by the parent using the equity method of accounting.
Consolidating balance sheets by industry segment as of March
31, 2022 are as follows:
Moving & Storage
Consolidated
Property & Casualty Insurance (a)
Life
Insurance (a)
Eliminations
AMERCO
Consolidated
(In thousands)
Assets:
Cash and cash equivalents
$
2,643,213
$
10,800
$
50,124
$
–
$
2,704,137
Reinsurance recoverables and trade receivables, net
142,895
50,235
36,213
–
229,343
Inventories and parts, net
158,888
–
–
–
158,888
Prepaid expenses
236,915
–
–
–
236,915
Investments, fixed maturities and marketable equities
–
297,488
2,595,911
–
2,893,399
Investments, other
20,653
114,269
408,833
–
543,755
Deferred policy acquisition costs, net
–
–
103,828
–
103,828
Other assets
57,305
371
2,733
–
60,409
Right of use assets - financing, net
620,824
–
–
–
620,824
Right of use assets - operating, net
74,190
93
99
–
74,382
Related party assets
64,611
6,713
16,911
(40,384)
(c)
47,851
4,019,494
479,969
3,214,652
(40,384)
7,673,731
Investment in subsidiaries
737,073
–
–
(737,073)
(b)
–
Property, plant and equipment, at cost:
Land
1,283,142
–
–
–
1,283,142
Buildings and improvements
5,974,639
–
–
–
5,974,639
Furniture and equipment
846,132
–
–
–
846,132
Rental trailers and other rental equipment
615,679
–
–
–
615,679
Rental trucks
4,638,814
–
–
–
4,638,814
13,358,406
–
–
–
13,358,406
Less:
Accumulated depreciation
(3,732,556)
–
–
–
(3,732,556)
Total property, plant and equipment, net
9,625,850
–
–
–
9,625,850
Total assets
$
14,382,417
$
479,969
$
3,214,652
$
(777,457)
$
17,299,581
(a)
Balances as of December 31, 2021
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
Consolidating balance sheets by industry segment as of March
31, 2022 are as follows:
Moving & Storage
Property & Casualty Insurance (a)
Life
Eliminations
AMERCO
(In thousands)
Liabilities:
Accounts payable and accrued expenses
$
663,482
$
3,849
$
10,454
$
–
$
677,785
Notes, loans and finance leases payable, net
6,022,497
–
–
–
6,022,497
Operating lease liability
73,998
93
106
–
74,197
Policy benefits and losses, claims and loss expenses payable
418,890
160,379
398,985
–
978,254
Liabilities from investment contracts
–
–
2,336,238
–
2,336,238
Other policyholders' funds and liabilities
–
3,521
7,291
–
10,812
Deferred income
49,157
–
–
–
49,157
Deferred income taxes, net
1,244,639
12,803
7,916
–
1,265,358
Related party liabilities
25,668
3,196
12,717
(41,581)
(c)
–
Total liabilities
8,498,331
183,841
2,773,707
(41,581)
11,414,298
Stockholders' equity :
Series preferred stock:
Series A preferred stock
–
–
–
–
–
Series B preferred stock
–
–
–
–
–
Series A common stock
–
–
–
–
–
Common stock
10,497
3,301
2,500
(5,801)
(b)
10,497
Additional paid-in capital
454,029
91,120
26,271
(117,601)
(b)
453,819
Accumulated other comprehensive income (loss)
45,187
16,630
87,200
(102,633)
(b)
46,384
Retained earnings
6,052,023
185,077
324,974
(509,841)
(b)
6,052,233
Cost of common shares in treasury, net
(525,653)
–
–
–
(525,653)
Cost of preferred shares in treasury, net
(151,997)
–
–
–
(151,997)
Total stockholders' equity
5,884,086
296,128
440,945
(735,876)
5,885,283
Total liabilities and stockholders' equity
$
14,382,417
$
479,969
$
3,214,652
$
(777,457)
$
17,299,581
(a)
Balances as of December 31, 2021
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
2643213000
10800000
50124000
0
2704137000
142895000
50235000
36213000
0
229343000
158888000
0
0
0
158888000
236915000
0
0
0
236915000
0
297488000
2595911000
0
2893399000
20653000
114269000
408833000
0
543755000
0
0
103828000
0
103828000
57305000
371000
2733000
0
60409000
620824000
0
0
0
620824000
74190000
93000
99000
0
74382000
64611000
6713000
16911000
-40384000
47851000
4019494000
479969000
3214652000
-40384000
7673731000
737073000
0
0
-737073000
0
1283142000
0
0
0
1283142000
5974639000
0
0
0
5974639000
846132000
0
0
0
846132000
615679000
0
0
0
615679000
4638814000
0
0
0
4638814000
13358406000
0
0
0
13358406000
3732556000
0
0
0
3732556000
9625850000
0
0
0
9625850000
14382417000
479969000
3214652000
-777457000
17299581000
663482000
3849000
10454000
0
677785000
6022497000
0
0
0
6022497000
73998000
93000
106000
0
74197000
418890000
160379000
398985000
0
978254000
0
0
2336238000
0
2336238000
0
3521000
7291000
0
10812000
49157000
0
0
0
49157000
1244639000
12803000
7916000
0
1265358000
25668000
3196000
12717000
-41581000
0
8498331000
183841000
2773707000
-41581000
11414298000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10497000
3301000
2500000
-5801000
10497000
454029000
91120000
26271000
-117601000
453819000
45187000
16630000
87200000
-102633000
46384000
6052023000
185077000
324974000
-509841000
6052233000
525653000
0
0
0
525653000
151997000
0
0
0
151997000
5884086000
296128000
440945000
-735876000
5885283000
14382417000
479969000
3214652000
-777457000
17299581000
Consolidating balance sheets by industry segment as of March 31, 2021 are as follows:
Moving & Storage
Consolidated
Property & Casualty Insurance (a)
Life
Insurance (a)
Eliminations
AMERCO
Consolidated
(In thousands)
Assets:
Cash and cash equivalents
$
1,010,275
$
5,658
$
178,079
$
–
$
1,194,012
Reinsurance recoverables and trade receivables, net
118,741
67,069
38,616
–
224,426
Inventories and parts, net
105,577
–
–
–
105,577
Prepaid expenses
469,144
–
–
–
469,144
Investments, fixed maturities and marketable equities
–
295,753
2,399,903
–
2,695,656
Investments, other
20,733
90,412
378,614
–
489,759
Deferred policy acquisition costs, net
–
–
89,749
–
89,749
Other assets
44,763
436
2,531
–
47,730
Right of use assets - financing, net
877,038
–
–
–
877,038
Right of use assets - operating, net
92,245
92
168
–
92,505
Related party assets
54,042
6,854
13,850
(39,351)
(c)
35,395
2,792,558
466,274
3,101,510
(39,351)
6,320,991
Investment in subsidiaries
741,860
–
–
(741,860)
(b)
–
Property, plant and equipment, at cost:
Land
1,075,813
–
–
–
1,075,813
Buildings and improvements
5,163,705
–
–
–
5,163,705
Furniture and equipment
786,505
–
–
–
786,505
Rental trailers and other rental equipment
477,921
–
–
–
477,921
Rental trucks
3,909,724
–
–
–
3,909,724
11,413,668
–
–
–
11,413,668
Less:
Accumulated depreciation
(3,083,053)
–
–
–
(3,083,053)
Total property, plant and equipment, net
8,330,615
–
–
–
8,330,615
Total assets
$
11,865,033
$
466,274
$
3,101,510
$
(781,211)
$
14,651,606
(a)
Balances as of December 31, 2020
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
Consolidating balance sheets by industry segment as of March 31, 2021 are as follows:
Moving & Storage
Property & Casualty Insurance (a)
Life
Eliminations
AMERCO
(In thousands)
Liabilities:
Accounts payable and accrued expenses
$
636,257
$
2,029
$
7,289
$
–
$
645,575
Notes, loans and leases payable, net
4,657,720
–
11,187
–
4,668,907
Operating lease liability
92,236
96
178
–
92,510
Policy benefits and losses, claims and loss expenses payable
427,073
178,942
391,686
–
997,701
Liabilities from investment contracts
–
–
2,161,530
–
2,161,530
Other policyholders' funds and liabilities
–
3,698
8,722
–
12,420
Deferred income
42,592
–
–
–
42,592
Deferred income taxes, net
1,136,149
13,046
29,294
–
1,178,489
Related party liabilities
25,413
5,821
12,406
(43,640)
(c)
–
Total liabilities
7,017,440
203,632
2,622,292
(43,640)
9,799,724
Stockholders' equity :
Series preferred stock:
Series A preferred stock
–
–
–
–
–
Series B preferred stock
–
–
–
–
–
Series A common stock
–
–
–
–
–
Common stock
10,497
3,301
2,500
(5,801)
(b)
10,497
Additional paid-in capital
454,029
91,120
26,271
(117,601)
(b)
453,819
Accumulated other comprehensive income (loss)
102,568
22,546
140,817
(159,074)
(b)
106,857
Retained earnings
4,958,149
145,675
309,630
(455,095)
(b)
4,958,359
Cost of common shares in treasury, net
(525,653)
–
–
–
(525,653)
Cost of preferred shares in treasury, net
(151,997)
–
–
–
(151,997)
Total stockholders' equity
$
4,847,593
262,642
479,218
(737,571)
4,851,882
Total liabilities and stockholders' equity
11,865,033
$
466,274
$
3,101,510
$
(781,211)
$
14,651,606
(a)
Balances as of December 31, 2020
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
1010275000
5658000
178079000
0
1194012000
118741000
67069000
38616000
0
224426000
105577000
0
0
0
105577000
469144000
0
0
0
469144000
0
295753000
2399903000
0
2695656000
20733000
90412000
378614000
0
489759000
0
0
89749000
0
89749000
44763000
436000
2531000
0
47730000
877038000
0
0
0
877038000
92245000
92000
168000
0
92505000
54042000
6854000
13850000
-39351000
35395000
2792558000
466274000
3101510000
-39351000
6320991000
741860000
0
0
-741860000
0
1075813000
0
0
0
1075813000
5163705000
0
0
0
5163705000
786505000
0
0
0
786505000
477921000
0
0
0
477921000
3909724000
0
0
0
3909724000
11413668000
0
0
0
11413668000
3083053000
0
0
0
3083053000
8330615000
0
0
0
8330615000
11865033000
466274000
3101510000
-781211000
14651606000
636257000
2029000
7289000
0
645575000
4657720000
0
11187000
0
4668907000
92236000
96000
178000
0
92510000
427073000
178942000
391686000
0
997701000
0
0
2161530000
0
2161530000
0
3698000
8722000
0
12420000
42592000
0
0
0
42592000
1136149000
13046000
29294000
0
1178489000
25413000
5821000
12406000
-43640000
0
7017440000
203632000
2622292000
-43640000
9799724000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10497000
3301000
2500000
-5801000
10497000
454029000
91120000
26271000
-117601000
453819000
102568000
22546000
140817000
-159074000
106857000
4958149000
145675000
309630000
-455095000
4958359000
525653000
0
0
0
525653000
151997000
0
0
0
151997000
4847593000
262642000
479218000
-737571000
4851882000
11865033000
466274000
3101510000
-781211000
14651606000
Consolidating statements of operations by industry segment for period ending March 31, 2022 are as follows:
Moving & Storage
Property & Casualty Insurance (a)
Life
Eliminations
AMERCO
(In thousands)
Revenues:
Self-moving equipment rentals
$
3,963,535
$
–
$
–
$
(4,728)
(c)
$
3,958,807
Self-storage revenues
617,120
–
–
–
617,120
Self-moving & self-storage products & service sales
351,447
–
–
–
351,447
Property management fees
35,194
–
–
–
35,194
Life insurance premiums
–
–
111,027
–
111,027
Property and casualty insurance premiums
–
89,667
–
(3,149)
(c)
86,518
Net investment and interest income
3,135
25,376
123,809
(4,059)
(b)
148,261
Other revenue
427,836
–
3,976
(439)
(b)
431,373
Total revenues
5,398,267
115,043
238,812
(12,375)
5,739,747
Costs and expenses:
Operating expenses
2,621,270
42,456
21,112
(8,297)
(b,c)
2,676,541
Commission expenses
429,581
–
–
–
429,581
Cost of sales
259,585
–
–
–
259,585
Benefits and losses
–
22,448
164,199
–
186,647
Amortization of deferred policy acquisition costs
–
–
33,854
–
33,854
Lease expense
31,973
359
109
(2,531)
(b)
29,910
Depreciation, net gains on disposals
482,752
–
–
–
482,752
Net gains on disposal of real estate
(4,120)
–
–
–
(4,120)
Total costs and expenses
3,821,041
65,263
219,274
(10,828)
4,094,750
Earnings from operations before equity in earnings of subsidiaries
1,577,226
49,780
19,538
(1,547)
1,644,997
Equity in earnings of subsidiaries
54,746
–
–
(54,746)
(d)
–
Earnings from operations
1,631,972
49,780
19,538
(56,293)
1,644,997
Other components of net periodic benefit costs
(1,120)
–
–
–
(1,120)
Interest expense
(168,491)
–
(480)
1,547
(b)
(167,424)
Fees on early extinguishment of debt
(956)
–
–
–
(956)
Pretax earnings
1,461,405
49,780
19,058
(54,746)
1,475,497
Income tax expense
(338,119)
(10,378)
(3,714)
–
(352,211)
Earnings available to common shareholders
$
1,123,286
$
39,402
$
15,344
$
(54,746)
$
1,123,286
(a)
Balances for the year ended December 31, 2021
(b) Eliminate intercompany lease / interest income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
3963535000
0
0
-4728000
3958807000
617120000
0
0
0
617120000
351447000
0
0
0
351447000
35194000
0
0
0
35194000
0
0
111027000
0
111027000
0
89667000
0
-3149000
86518000
3135000
25376000
123809000
-4059000
148261000
427836000
0
3976000
-439000
431373000
5398267000
115043000
238812000
-12375000
5739747000
2621270000
42456000
21112000
-8297000
2676541000
429581000
0
0
0
429581000
259585000
0
0
0
259585000
0
22448000
164199000
0
186647000
0
0
33854000
0
33854000
31973000
359000
109000
-2531000
29910000
482752000
0
0
0
482752000
4120000
0
0
0
4120000
3821041000
65263000
219274000
-10828000
4094750000
1577226000
49780000
19538000
-1547000
1644997000
54746000
0
0
-54746000
0
1631972000
49780000
19538000
-56293000
1644997000
1120000
0
0
0
1120000
168491000
0
480000
-1547000
167424000
956000
0
0
0
956000
1461405000
49780000
19058000
-54746000
1475497000
338119000
10378000
3714000
0
352211000
1123286000
39402000
15344000
-54746000
1123286000
Consolidating statements of operations by industry segment for period ending March 31, 2021 are as follows:
Moving & Storage
Property & Casualty Insurance (a)
Life
Eliminations
AMERCO
(In thousands)
Revenues:
Self-moving equipment rentals
$
3,086,824
$
–
$
–
$
(3,507)
(c)
$
3,083,317
Self-storage revenues
477,262
–
–
–
477,262
Self-moving & self-storage products & service sales
344,929
–
–
–
344,929
Property management fees
31,603
–
–
–
31,603
Life insurance premiums
–
–
121,609
–
121,609
Property and casualty insurance premiums
–
70,285
–
(1,506)
(c)
68,779
Net investment and interest income
2,259
16,452
107,745
(3,518)
(b)
122,938
Other revenue
288,797
–
3,280
(529)
(b)
291,548
Total revenues
4,231,674
86,737
232,634
(9,060)
4,541,985
Costs and expenses:
Operating expenses
2,137,381
35,450
20,376
(5,523)
(b,c)
2,187,684
Commission expenses
329,609
–
–
–
329,609
Cost of sales
214,059
–
–
–
214,059
Benefits and losses
–
18,558
160,954
–
179,512
Amortization of deferred policy acquisition costs
–
–
28,293
–
28,293
Lease expense
30,551
231
135
(2,447)
(b)
28,470
Depreciation, net gains on disposals
609,930
–
–
–
609,930
Net losses on disposal of real estate
3,281
–
–
–
3,281
Total costs and expenses
3,324,811
54,239
209,758
(7,970)
3,580,838
Earnings from operations before equity in earnings of subsidiaries
906,863
32,498
22,876
(1,090)
961,147
Equity in earnings of subsidiaries
44,441
–
–
(44,441)
(d)
–
Earnings from operations
951,304
32,498
22,876
(45,531)
961,147
Other components of net periodic benefit costs
(987)
–
–
–
(987)
Interest expense
(164,592)
–
–
1,090
(b)
(163,502)
Pretax earnings
785,725
32,498
22,876
(44,441)
796,658
Income tax expense
(174,869)
(6,778)
(4,155)
–
(185,802)
Earnings available to common shareholders
$
610,856
$
25,720
$
18,721
$
(44,441)
$
610,856
(a)
Balances for the year ended December 31, 2020
(b) Eliminate intercompany lease/interest income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
3086824000
0
0
-3507000
3083317000
477262000
0
0
0
477262000
344929000
0
0
0
344929000
31603000
0
0
0
31603000
0
0
121609000
0
121609000
0
70285000
0
-1506000
68779000
2259000
16452000
107745000
-3518000
122938000
288797000
0
3280000
-529000
291548000
4231674000
86737000
232634000
-9060000
4541985000
2137381000
35450000
20376000
-5523000
2187684000
329609000
0
0
0
329609000
214059000
0
0
0
214059000
0
18558000
160954000
0
179512000
0
0
28293000
0
28293000
30551000
231000
135000
-2447000
28470000
609930000
0
0
0
609930000
-3281000
0
0
0
-3281000
3324811000
54239000
209758000
-7970000
3580838000
906863000
32498000
22876000
-1090000
961147000
44441000
0
0
-44441000
0
951304000
32498000
22876000
-45531000
961147000
987000
0
0
0
987000
164592000
0
0
-1090000
163502000
785725000
32498000
22876000
-44441000
796658000
174869000
6778000
4155000
0
185802000
610856000
25720000
18721000
-44441000
610856000
Consolidating statements of operations by industry segment for period ending March 31, 2020 are as follows:
Moving & Storage
Property & Casualty Insurance (a)
Life
Eliminations
AMERCO
(In thousands)
Revenues:
Self-moving equipment rentals
$
2,696,516
$
–
$
–
$
(4,103)
(c)
$
2,692,413
Self-storage revenues
418,741
–
–
–
418,741
Self-moving & self-storage products & service sales
265,091
–
–
–
265,091
Property management fees
30,406
–
–
–
30,406
Life insurance premiums
–
–
127,976
–
127,976
Property and casualty insurance premiums
–
69,141
–
(3,088)
(c)
66,053
Net investment and interest income
10,593
19,923
109,018
(1,705)
(b)
137,829
Other revenue
236,419
–
4,470
(530)
(b)
240,359
Total revenues
3,657,766
89,064
241,464
(9,426)
3,978,868
Costs and expenses:
Operating expenses
2,069,655
33,770
21,425
(7,702)
(b,c)
2,117,148
Commission expenses
288,332
–
–
–
288,332
Cost of sales
164,018
–
–
–
164,018
Benefits and losses
–
12,410
162,426
–
174,836
Amortization of deferred policy acquisition costs
–
–
31,219
–
31,219
Lease expense
27,494
–
–
(612)
(b)
26,882
Depreciation, net gains on disposals
637,063
–
–
–
637,063
Net gains on disposal of real estate
(758)
–
–
–
(758)
Total costs and expenses
3,185,804
46,180
215,070
(8,314)
3,438,740
Earnings from operations before equity in earnings of subsidiaries
471,962
42,884
26,394
(1,112)
540,128
Equity in earnings of subsidiaries
55,789
–
–
(55,789)
(d)
–
Earnings from operations
527,751
42,884
26,394
(56,901)
540,128
Other components of net periodic benefit costs
(1,054)
–
–
–
(1,054)
Interest expense
(162,062)
–
–
1,112
(b)
(160,950)
Pretax earnings
364,635
42,884
26,394
(55,789)
378,124
Income tax benefit (expense)
77,413
(8,956)
(4,533)
–
63,924
Earnings available to common shareholders
$
442,048
$
33,928
$
21,861
$
(55,789)
$
442,048
(a)
Balances for the year ended December 31, 2019
(b) Eliminate intercompany lease/interest income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
2696516000
0
0
-4103000
2692413000
418741000
0
0
0
418741000
265091000
0
0
0
265091000
30406000
0
0
0
30406000
0
0
127976000
0
127976000
0
69141000
0
-3088000
66053000
10593000
19923000
109018000
-1705000
137829000
236419000
0
4470000
-530000
240359000
3657766000
89064000
241464000
-9426000
3978868000
2069655000
33770000
21425000
-7702000
2117148000
288332000
0
0
0
288332000
164018000
0
0
0
164018000
0
12410000
162426000
0
174836000
0
0
31219000
0
31219000
27494000
0
0
-612000
26882000
637063000
0
0
0
637063000
758000
0
0
0
758000
3185804000
46180000
215070000
-8314000
3438740000
471962000
42884000
26394000
-1112000
540128000
55789000
0
0
-55789000
0
527751000
42884000
26394000
-56901000
540128000
1054000
0
0
0
1054000
162062000
0
0
-1112000
160950000
364635000
42884000
26394000
-55789000
378124000
-77413000
8956000
4533000
0
-63924000
442048000
33928000
21861000
-55789000
442048000
Consolidating cash flow statements by industry segment for the year ended March 31, 2022, are as follows:
Moving & Storage Consolidated
Property & Casualty
Insurance (a)
Life
Insurance (a)
Elimination
AMERCO
Consolidated
(In thousands)
Cash flows from operating activities:
Net earnings
$
1,123,286
$
39,402
$
15,344
$
(54,746)
$
1,123,286
Earnings from consolidated subsidiaries
(54,746)
–
–
54,746
–
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation
696,955
–
–
–
696,955
Amortization of deferred policy acquisition costs
–
–
33,854
–
33,854
Amortization of premiums and accretion of discounts related to investments, net
–
1,638
18,111
–
19,749
Amortization of debt issuance costs
5,659
–
–
–
5,659
Interest credited to policyholders
–
–
64,692
–
64,692
Change in allowance for losses on trade receivables
4,689
(456)
(6)
–
4,227
Change in allowance for inventories and parts reserve
15,235
–
–
–
15,235
Net gains on disposal of personal property
(214,203)
–
–
–
(214,203)
Net gains on disposal of real estate
(4,120)
–
–
–
(4,120)
Net gains on sales of investments
–
(991)
(10,881)
–
(11,872)
Net gains on equity securities
–
(7,837)
–
–
(7,837)
Deferred income taxes
106,869
1,347
(7,125)
–
101,091
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables
(28,776)
17,180
2,409
–
(9,187)
Inventories and parts
(68,536)
–
–
–
(68,536)
Prepaid expenses
232,342
–
–
–
232,342
Capitalization of deferred policy acquisition costs
–
–
(32,626)
–
(32,626)
Other assets
(2,919)
346
(133)
–
(2,706)
Related party assets
(10,517)
160
–
–
(10,357)
Accounts payable and accrued expenses
23,839
1,821
3,092
–
28,752
Policy benefits and losses, claims and loss expenses payable
(8,428)
(18,563)
7,299
–
(19,692)
Other policyholders' funds and liabilities
–
(177)
(1,431)
–
(1,608)
Deferred income
6,368
–
(1,152)
–
5,216
Related party liabilities
255
(2,644)
310
–
(2,079)
Net cash provided by operating activities
1,823,252
31,226
91,757
–
1,946,235
Cash flows from investing activities:
Escrow deposits
(9,328)
–
–
–
(9,328)
Purchases of:
Property, plant and equipment
(2,136,537)
–
–
–
(2,136,537)
Short term investments
–
(74,418)
–
–
(74,418)
Fixed maturities investments
–
(10,248)
(617,078)
–
(627,326)
Equity securities
–
(17,919)
(1,380)
–
(19,299)
Preferred stock
–
–
(8,000)
–
(8,000)
Real estate
(33)
(59)
(169)
–
(261)
Mortgage loans
–
(24,032)
(134,115)
–
(158,147)
Proceeds from sales and paydowns of:
Property, plant and equipment
623,235
–
–
–
623,235
Short term investments
–
50,737
854
–
51,591
Fixed maturities investments
–
24,201
336,736
–
360,937
Equity securities
–
20
2,026
–
2,046
Preferred stock
–
2,000
–
–
2,000
Real estate
113
–
–
–
113
Mortgage loans
–
23,634
102,584
–
126,218
Net cash used by investing activities
(1,522,550)
(26,084)
(318,542)
–
(1,867,176)
(page 1 of 2)
(a) Balance for the period ended December 31, 2021
Continuation of consolidating cash flow statements by industry segment for the year ended March 31, 2022, are as follows:
Moving & Storage Consolidated
Property & Casualty
Life
Elimination
AMERCO
(In thousands)
Cash flows from financing activities:
Borrowings from credit facilities
1,969,474
–
–
–
1,969,474
Principal repayments on credit facilities
(426,319)
–
(11,187)
–
(437,506)
Payment of debt issuance costs
(13,156)
–
–
–
(13,156)
Finance lease payments
(166,262)
–
–
–
(166,262)
Common stock dividends paid
(29,412)
–
–
–
(29,412)
Investment contract deposits
–
–
347,520
–
347,520
Investment contract withdrawals
–
–
(237,503)
–
(237,503)
Net cash provided by financing activities
1,334,325
–
98,830
–
1,433,155
Effects of exchange rate on cash
(2,089)
–
–
–
(2,089)
Increase (decrease) in cash and cash equivalents
1,632,938
5,142
(127,955)
–
1,510,125
Cash and cash equivalents at beginning of period
1,010,275
5,658
178,079
–
1,194,012
Cash and cash equivalents at end of period
$
2,643,213
$
10,800
$
50,124
$
–
$
2,704,137
(page 2 of 2)
(a) Balance for the period ended December 31, 2021
1123286000
39402000
15344000
-54746000
1123286000
54746000
0
0
-54746000
0
696955000
0
0
0
696955000
0
0
33854000
0
33854000
0
1638000
18111000
0
19749000
5659000
0
0
0
5659000
0
0
64692000
0
64692000
4689000
-456000
-6000
0
4227000
15235000
0
0
0
15235000
214203000
0
0
0
214203000
4120000
0
0
0
4120000
0
991000
10881000
0
11872000
0
7837000
0
0
7837000
106869000
1347000
-7125000
0
101091000
28776000
-17180000
-2409000
0
9187000
68536000
0
0
0
68536000
-232342000
0
0
0
-232342000
0
0
32626000
0
32626000
2919000
-346000
133000
0
2706000
10517000
-160000
0
0
10357000
23839000
1821000
3092000
0
28752000
-8428000
-18563000
7299000
0
-19692000
0
-177000
-1431000
0
-1608000
6368000
0
-1152000
0
5216000
255000
-2644000
310000
0
-2079000
1823252000
31226000
91757000
0
1946235000
9328000
0
0
0
9328000
2136537000
0
0
0
2136537000
0
74418000
0
0
74418000
0
10248000
617078000
0
627326000
0
17919000
1380000
0
19299000
0
0
8000000
0
8000000
33000
59000
169000
0
261000
0
24032000
134115000
0
158147000
623235000
0
0
0
623235000
0
50737000
854000
0
51591000
0
24201000
336736000
0
360937000
0
20000
2026000
0
2046000
0
2000000
0
0
2000000
113000
0
0
0
113000
0
23634000
102584000
0
126218000
-1522550000
-26084000
-318542000
0
-1867176000
1969474000
0
0
0
1969474000
426319000
0
11187000
0
437506000
13156000
0
0
0
13156000
166262000
0
0
0
166262000
29412000
0
0
0
29412000
0
0
347520000
0
347520000
0
0
237503000
0
237503000
1334325000
0
98830000
0
1433155000
-2089000
0
0
0
-2089000
1632938000
5142000
-127955000
0
1510125000
1010275000
5658000
178079000
0
1194012000
2643213000
10800000
50124000
0
2704137000
Consolidating cash flow statements by industry segment for the year ended March 31, 2021, are as follows:
Moving & Storage Consolidated
Property & Casualty
Insurance (a)
Life
Insurance (a)
Elimination
AMERCO
Consolidated
(In thousands)
Cash flows from operating activities:
Net earnings
$
610,856
$
25,720
$
18,721
$
(44,441)
$
610,856
Earnings from consolidated subsidiaries
(44,441)
–
–
44,441
–
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation
664,001
–
–
–
664,001
Amortization of deferred policy acquisition costs
–
–
28,293
–
28,293
Amortization of premiums and accretion of discounts related to investments, net
–
1,578
12,651
–
14,229
Amortization of debt issuance costs
5,948
–
–
–
5,948
Interest credited to policyholders
–
–
55,321
–
55,321
Change in allowance for losses on trade receivables
1,424
(217)
(1)
–
1,206
Change in allowance for inventories and parts reserve
1,298
–
–
–
1,298
Net gains on disposal of personal property
(54,071)
–
–
–
(54,071)
Net losses on disposal of real estate
3,281
–
–
–
3,281
Net gains on sales of investments
–
(158)
(9,900)
–
(10,058)
Net gains on equity securities
–
(394)
–
–
(394)
Deferred income taxes
72,407
459
(4,455)
–
68,411
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables
(60,806)
27,302
(6,012)
–
(39,516)
Inventories and parts
(5,775)
–
–
–
(5,775)
Prepaid expenses
94,359
–
–
–
94,359
Capitalization of deferred policy acquisition costs
–
–
(36,162)
–
(36,162)
Other assets
29,879
537
(551)
–
29,865
Related party assets
(12,790)
303
–
12,000
(b)
(487)
Accounts payable and accrued expenses
96,309
(3,497)
113
–
92,925
Policy benefits and losses, claims and loss expenses payable
14,919
(31,398)
14,487
–
(1,992)
Other policyholders' funds and liabilities
–
(2,053)
4,283
–
2,230
Deferred income
10,959
–
608
–
11,567
Related party liabilities
1,136
1,187
9,737
(12,000)
(b)
60
Net cash provided by operating activities
1,428,893
19,369
87,133
–
1,535,395
Cash flows from investing activities:
Escrow deposits
(5,221)
–
–
–
(5,221)
Purchases of:
Property, plant and equipment
(1,441,475)
–
–
–
(1,441,475)
Short term investments
–
(69,929)
–
–
(69,929)
Fixed maturities investments
–
(18,823)
(587,410)
–
(606,233)
Equity securities
–
–
(962)
–
(962)
Preferred stock
–
–
(16,144)
–
(16,144)
Real estate
–
–
(622)
–
(622)
Mortgage loans
–
(18,035)
(140,036)
–
(158,071)
Proceeds from sales and paydowns of:
Property, plant and equipment
537,484
–
–
–
537,484
Short term investments
–
69,669
49
–
69,718
Fixed maturities investments
–
20,854
508,385
–
529,239
Equity securities
–
–
207
–
207
Preferred stock
–
2,700
–
–
2,700
Real estate
255
–
–
–
255
Mortgage loans
–
17,659
11,866
–
29,525
Net cash (used) provided by investing activities
(908,957)
4,095
(224,667)
–
(1,129,529)
(page 1 of 2)
(a) Balance for the period ended December 31, 2020
Continuation of consolidating cash flow statements by industry segment for the year ended March 31, 2021, are as follows:
Moving & Storage Consolidated
Property & Casualty
Life
Elimination
AMERCO
(In thousands)
Cash flows from financing activities:
Borrowings from credit facilities
912,408
–
9,600
–
922,008
Principal repayments on credit facilities
(652,728)
–
(9,860)
–
(662,588)
Payment of debt issuance costs
(5,793)
–
–
–
(5,793)
Finance lease payments
(221,247)
–
–
–
(221,247)
Common stock dividends paid
(49,019)
–
–
–
(49,019)
Net contribution from (to) related party
41,199
(22,600)
(18,599)
–
–
Investment contract deposits
–
–
517,856
–
517,856
Investment contract withdrawals
–
–
(213,864)
–
(213,864)
Net cash provided (used) by financing activities
24,820
(22,600)
285,133
–
287,353
Effects of exchange rate on cash
6,441
–
–
–
6,441
Increase in cash and cash equivalents
551,197
864
147,599
–
699,660
Cash and cash equivalents at beginning of period
459,078
4,794
30,480
–
494,352
Cash and cash equivalents at end of period
$
1,010,275
$
5,658
$
178,079
$
–
$
1,194,012
(page 2 of 2)
(a) Balance for the period ended December 31, 2020
610856000
25720000
18721000
-44441000
610856000
44441000
0
0
-44441000
0
664001000
0
0
0
664001000
0
0
28293000
0
28293000
0
1578000
12651000
0
14229000
5948000
0
0
0
5948000
0
0
55321000
0
55321000
1424000
-217000
-1000
0
1206000
1298000
0
0
0
1298000
54071000
0
0
0
54071000
-3281000
0
0
0
-3281000
0
158000
9900000
0
10058000
0
394000
0
0
394000
72407000
459000
-4455000
0
68411000
60806000
-27302000
6012000
0
39516000
5775000
0
0
0
5775000
-94359000
0
0
0
-94359000
0
0
36162000
0
36162000
-29879000
-537000
551000
0
-29865000
12790000
-303000
0
-12000000
487000
96309000
-3497000
113000
0
92925000
14919000
-31398000
14487000
0
-1992000
0
-2053000
4283000
0
2230000
10959000
0
608000
0
11567000
1136000
1187000
9737000
-12000000
60000
1428893000
19369000
87133000
0
1535395000
5221000
0
0
0
5221000
1441475000
0
0
0
1441475000
0
69929000
0
0
69929000
0
18823000
587410000
0
606233000
0
0
962000
0
962000
0
0
16144000
0
16144000
0
0
622000
0
622000
0
18035000
140036000
0
158071000
537484000
0
0
0
537484000
0
69669000
49000
0
69718000
0
20854000
508385000
0
529239000
0
0
207000
0
207000
0
2700000
0
0
2700000
255000
0
0
0
255000
0
17659000
11866000
0
29525000
-908957000
4095000
-224667000
0
-1129529000
912408000
0
9600000
0
922008000
652728000
0
9860000
0
662588000
5793000
0
0
0
5793000
221247000
0
0
0
221247000
49019000
0
0
0
49019000
41199000
-22600000
-18599000
0
0
0
0
517856000
0
517856000
0
0
213864000
0
213864000
24820000
-22600000
285133000
0
287353000
6441000
0
0
0
6441000
551197000
864000
147599000
0
699660000
459078000
4794000
30480000
0
494352000
1010275000
5658000
178079000
0
1194012000
Consolidating cash flow statements by industry segment for the year ended March 31, 2020 are as follows:
Moving & Storage
Consolidated
Property & Casualty
Insurance (a)
Life
Insurance (a)
Elimination
AMERCO
Consolidated
(In thousands)
Cash flows from operating activities:
Net earnings
$
442,048
$
33,928
$
21,861
$
(55,789)
$
442,048
Earnings from consolidated subsidiaries
(55,789)
–
–
55,789
–
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation
664,120
–
–
–
664,120
Amortization of deferred policy acquisition costs
–
–
31,219
–
31,219
Amortization of premiums and accretion of discounts related to investments, net
–
1,469
11,848
–
13,317
Amortization of debt issuance costs
4,426
–
–
–
4,426
Interest credited to policyholders
–
–
51,857
–
51,857
Change in allowance for losses on trade receivables
(14)
–
–
–
(14)
Change in allowance for inventories and parts reserve
640
–
–
–
640
Net gains on disposal of personal property
(27,057)
–
–
–
(27,057)
Net gains on disposal of real estate
(758)
–
–
–
(758)
Net gains on sales of investments
–
(355)
(13,241)
–
(13,596)
Net gains on equity securities
–
(3,783)
–
–
(3,783)
Deferred income taxes
323,980
(2,847)
(3,240)
–
317,893
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables
30,771
8,127
(769)
–
38,129
Inventories and parts
1,776
–
–
–
1,776
Prepaid expenses
(391,120)
–
–
–
(391,120)
Capitalization of deferred policy acquisition costs
–
–
(24,447)
–
(24,447)
Other assets
(3,099)
2,098
(294)
–
(1,295)
Related party assets
(5,106)
(539)
–
–
(5,645)
Accounts payable and accrued expenses
(4,428)
2,688
(2,790)
–
(4,530)
Policy benefits and losses, claims and loss expenses payable
3,092
(19,618)
3,908
–
(12,618)
Other policyholders' funds and liabilities
–
491
(5,348)
–
(4,857)
Deferred income
(1,818)
–
–
–
(1,818)
Related party liabilities
(1,170)
819
1,977
–
1,626
Net cash provided by operating activities
980,494
22,478
72,541
–
1,075,513
Cash flows from investing activities:
Escrow deposits
6,617
–
–
–
6,617
Purchases of:
Property, plant and equipment
(2,309,406)
–
–
–
(2,309,406)
Short term investments
–
(60,590)
(636)
–
(61,226)
Fixed maturities investments
–
(13,001)
(366,348)
–
(379,349)
Equity securities
–
–
(83)
–
(83)
Real estate
–
(328)
(3,958)
–
(4,286)
Mortgage loans
–
(18,050)
(43,966)
–
(62,016)
Proceeds from sales and paydowns of:
Property, plant and equipment
687,375
–
–
–
687,375
Short term investments
–
59,056
–
–
59,056
Fixed maturities investments
–
25,386
243,250
–
268,636
Equity securities
–
185
–
–
185
Preferred stock
–
1,375
1,000
–
2,375
Real estate
311
–
–
–
311
Mortgage loans
–
4,126
21,036
–
25,162
Net cash used by investing activities
(1,615,103)
(1,841)
(149,705)
–
(1,766,649)
(page 1 of 2)
(a) Balance for the period ended December 31, 2019
Continuation of consolidating cash flow statements by industry segment for the year ended March 31, 2020 are as follows:
Moving & Storage
Property & Casualty
Life
Elimination
AMERCO
(In thousands)
Cash flows from financing activities:
Borrowings from credit facilities
1,118,912
–
2,500
–
1,121,412
Principal repayments on credit facilities
(347,486)
–
(2,500)
–
(349,986)
Payment of debt issuance costs
(5,332)
–
–
–
(5,332)
Finance lease payments
(307,782)
–
–
–
(307,782)
Employee stock ownership plan shares
(206)
–
–
–
(206)
Common stock dividends paid
(29,404)
–
–
–
(29,404)
Net contribution from (to) related party
21,600
(21,600)
–
–
–
Investment contract deposits
–
–
234,640
–
234,640
Investment contract withdrawals
–
–
(151,022)
–
(151,022)
Net cash provided (used) by financing activities
450,302
(21,600)
83,618
–
512,320
Effects of exchange rate on cash
(533)
–
–
–
(533)
Increase (decrease) in cash and cash equivalents
(184,840)
(963)
6,454
–
(179,349)
Cash and cash equivalents at beginning of period
643,918
5,757
24,026
–
673,701
Cash and cash equivalents at end of period
$
459,078
$
4,794
$
30,480
$
–
$
494,352
(page 2 of 2)
(a) Balance for the period ended December 31, 2019
442048000
33928000
21861000
-55789000
442048000
55789000
0
0
-55789000
0
664120000
0
0
0
664120000
0
0
31219000
0
31219000
0
1469000
11848000
0
13317000
4426000
0
0
0
4426000
0
0
51857000
0
51857000
-14000
0
0
0
-14000
640000
0
0
0
640000
27057000
0
0
0
27057000
758000
0
0
0
758000
0
355000
13241000
0
13596000
0
3783000
0
0
3783000
323980000
-2847000
-3240000
0
317893000
-30771000
-8127000
769000
0
-38129000
-1776000
0
0
0
-1776000
391120000
0
0
0
391120000
0
0
24447000
0
24447000
3099000
-2098000
294000
0
1295000
5106000
539000
0
0
5645000
-4428000
2688000
-2790000
0
-4530000
3092000
-19618000
3908000
0
-12618000
0
491000
-5348000
0
-4857000
-1818000
0
0
0
-1818000
-1170000
819000
1977000
0
1626000
980494000
22478000
72541000
0
1075513000
-6617000
0
0
0
-6617000
2309406000
0
0
0
2309406000
0
60590000
636000
0
61226000
0
13001000
366348000
0
379349000
0
0
83000
0
83000
0
328000
3958000
0
4286000
0
18050000
43966000
0
62016000
687375000
0
0
0
687375000
0
59056000
0
0
59056000
0
25386000
243250000
0
268636000
0
185000
0
0
185000
0
1375000
1000000
0
2375000
311000
0
0
0
311000
0
4126000
21036000
0
25162000
-1615103000
-1841000
-149705000
0
-1766649000
1118912000
0
2500000
0
1121412000
347486000
0
2500000
0
349986000
5332000
0
0
0
5332000
307782000
0
0
0
307782000
-206000
0
0
0
-206000
29404000
0
0
0
29404000
21600000
-21600000
0
0
0
0
0
234640000
0
234640000
0
0
151022000
0
151022000
450302000
-21600000
83618000
0
512320000
-533000
0
0
0
-533000
-184840000
-963000
6454000
0
-179349000
643918000
5757000
24026000
0
673701000
459078000
4794000
30480000
0
494352000
Note 22.
Revenue Recognition
Revenue Recognized in Accordance with ASC Topic 606
ASC Topic 606,
Revenue from Contracts with Customers (Topic 606)
, outlines a five-step model for entities to use in accounting for revenue arising from contracts with customers. The standard applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. The standard also requires disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments.
We enter into contracts that may include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of amounts collected from customers for taxes, such as sales tax, and remitted to the applicable taxing authorities. We account for a contract under Topic 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For contracts scoped into this standard, revenue is recognized when (or as) the performance obligations are satisfied by means of transferring goods or services to the customer as applicable to each revenue stream as discussed below. There were no material contract assets or liabilities for fiscal 2022.
Sales of self-moving and self-storage related products are recognized at the time that title passes and the customer accepts delivery. The performance obligations identified for this portfolio of contracts include moving and storage product sales, installation services and/or propane sales. Each of these performance obligations has an observable stand-alone selling price. We concluded that the performance obligations identified are satisfied at a point in time. The basis for this conclusion is that the customer does not receive the product/propane or benefit from the installation services until the related performance obligation is satisfied. These products/services being provided have an alternative use as they are not customized and can be sold/provided to any customer. In addition, we only have the right to receive payment once the products have been transferred to the customer or the installation services have been completed. Although product sales have a right of return policy, our estimated obligation for future product returns is not material to the financial statements at this time.
Property management fees are recognized over the period that agreed-upon services are provided. The performance obligation for this portfolio of contracts is property management services, which represents a series of distinct days of service, each of which is comprised of activities that may vary from day to day. However, those tasks are activities to fulfill the property management services and are not separate promises in the contract. We determined that each increment of the promised service is distinct. This is because the customer can benefit from each increment of service on its own and each increment of service is separately identifiable because no day of service significantly modifies or customizes another and no day of service significantly affects either the entity’s ability to fulfill another day of service or the benefit to the customer of another day of service. As such, we concluded that the performance obligation is satisfied over time. Additionally, in certain contracts the Company has the ability to earn an incentive fee based on operational results. We measure and recognize the progress toward completion of the performance obligation on a quarterly basis using the most likely amount method to determine an accrual for the incentive fee portion of the compensation received in exchange for the property management service. The variable consideration recognized is subject to constraints due to a range of possible consideration amounts based on actual operational results.
Other revenue consists of numerous services or rentals, of which U-Box contracts and service fees from Moving Help are the main components. The performance obligations identified for U-Box contracts are fees for rental, storage and shipping of U-Box containers to a specified location, each of which are distinct. A contract may be partially within the scope of Topic 606 and partially within the scope of other topics. The rental and storage obligations in U-Box contracts meet the definition of a lease in Topic 842, while the shipping obligation represents a contract with a customer accounted for under Topic 606. Therefore, we allocate the total transaction price between the performance obligations of storage fees and rental fees and the shipping fees on a standalone selling price basis. U-Box shipping fees are collected once the shipment is in transit. Shipping fees in U-Box contracts are set at the initiation of the contract based on the shipping origin and destination, and the performance obligation is satisfied over
time. U-Box shipping contracts span over a relatively short period of time, and the majority of these contracts begin and end within the same fiscal year. Moving Help services fees are recognized in accordance with Topic 606. Moving Help services are generated as we provide a neutral venue for the connection between the service provider and the customer for agreed upon services. We do not control the specified services provided by the service provider before that service is transferred to the customer.
Revenue Recognized in Accordance with Topic 842
The Company’s self-moving rental revenues meet the definition of a lease pursuant to the guidance in Topic 842 because those substitution rights do not provide an economic benefit to the Company that would exceed the cost of exercising the right.
Please see Note 17, Leases, of the Notes to Consolidated Financial Statements.
Self-moving rentals are recognized over the contract period that trucks and moving equipment are rented. We offer two types of self-moving rental contracts, one-way rentals and in-town rentals, which have varying payment terms. Customer payment is received at the initiation of the contract for one-way rentals which covers an allowable limit for equipment usage. An estimated fee in the form of a deposit is received at the initiation of the contract for in-town rentals, and final payment is received upon the return of the equipment based on actual fees incurred. The contract price is estimated at the initiation of the contract, as there is variable consideration associated with ratable fees incurred based on the number of days the equipment is rented and the number of miles driven. Variable consideration is estimated using the most likely amount method which is based on the intended use of the rental equipment by the customer at the initiation of the contract. Historically, the variability in estimated transaction pricing compared to actual is not significant due to the relatively short duration of rental contracts. Each performance obligation has an observable stand-alone selling price. The input method of passage of time is appropriate as there is a direct relationship between our inputs and the transfer of benefit to the customer over the life of the contract. Self-moving rental contracts span a relatively short period of time, and the majority of these contracts began and ended within the same fiscal year.
Self-storage revenues are recognized as earned over the contract period based upon the number of paid storage contract days.
We lease portions of our operating properties to tenants under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers.
The following table summarizes the minimum lease payments due from our customers and operating property tenants on leases for the next five years and thereafter:
Year Ended March 31,
2023
2024
2025
2026
2027
Thereafter
(In thousands)
Self-moving equipment rentals
$
5,537
$
–
$
–
$
–
$
–
$
–
Property lease revenues
16,544
11,063
8,180
6,381
5,254
43,931
Total
$
22,081
$
11,063
$
8,180
$
6,381
$
5,254
$
43,931
The amounts above do not reflect future rental revenue from the renewal or replacement of existing leases.
Revenue Recognized in Accordance with Other Topics
Traditional life and Medicare supplement insurance premiums are recognized as revenue over the premium-paying periods of the contracts when due from the policyholders. For products where premiums are due over a significantly shorter duration than the period over which benefits are provided, such as our single premium whole life product, premiums are recognized when received and excess profits are deferred and recognized in relation to the insurance in force.
Property and casualty insurance premiums are recognized as revenue over the policy periods. Interest and investment income are recognized as earned.
Net investment and interest income has multiple components. Interest income from bonds and mortgage notes are recognized when earned. Dividends on common and preferred stocks are recognized on the ex-dividend dates. Realized gains and losses on the sale or exchange of investments are recognized at the trade date.
In the following tables, the revenue is disaggregated by timing of revenue recognition:
Years Ended March 31,
2022
2021
2020
(In thousands)
Revenues recognized over time
$
284,401
$
182,278
$
147,565
Revenues recognized at a point in time
414,985
396,600
309,804
Total revenues recognized under ASC 606
699,386
578,878
457,369
Revenues recognized under ASC 842
4,690,434
3,644,798
3,182,902
Revenues recognized under ASC 944
201,666
195,371
200,768
Revenues recognized under ASC 320
148,261
122,938
137,829
Total revenues
$
5,739,747
$
4,541,985
$
3,978,868
In the above tables, the revenues recognized over time include property management fees, the shipping fees associated with U-Box rentals and a portion of other revenues. Revenues recognized at a point in time include self-moving equipment rentals, self-moving and self-storage products and service sales and a portion of other revenues.
We recognized liabilities resulting from contracts with customers for self-moving equipment rentals, self-storage revenues, U-Box revenues and tenant revenue, in which the length of the contract goes beyond the reported period end, although rental periods of the equipment, storage and U-Box contract are generally short-term in nature. The timing of revenue recognition results in liabilities that are reflected in deferred income on the balance sheet.
Year Ended March 31,
2023
2024
2025
2026
2027
Thereafter
(In thousands)
Self-moving equipment rentals
$
5,537
$
–
$
–
$
–
$
–
$
–
Property lease revenues
16,544
11,063
8,180
6,381
5,254
43,931
Total$
22,081
$
11,063
$
8,180
$
6,381
$
5,254
$
43,931
5537000
0
0
0
0
0
16544000
11063000
8180000
6381000
5254000
43931000
22081000
11063000
8180000
6381000
5254000
43931000
Years Ended March 31,
2022
2021
2020
(In thousands)
Revenues recognized over time
$
284,401
$
182,278
$
147,565
Revenues recognized at a point in time
414,985
396,600
309,804
Total revenues recognized under ASC 606
699,386
578,878
457,369
Revenues recognized under ASC 842
4,690,434
3,644,798
3,182,902
Revenues recognized under ASC 944
201,666
195,371
200,768
Revenues recognized under ASC 320
148,261
122,938
137,829
Total revenues$
5,739,747
$
4,541,985
$
3,978,868
284401000
182278000
147565000
414985000
396600000
309804000
699386000
578878000
457369000
4690434000
3644798000
3182902000
201666000
195371000
200768000
148261000
122938000
137829000
5739747000
4541985000
3978868000
Note 23
.
Allowance for Credit Losses
Mortgage loans, net
Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at amortized cost.
Modeling for the Company’s mortgage loans is based on inputs most highly correlated to defaults, including loan-to-value, occupancy, and payment history.
Historical credit loss experience provides additional support for the estimation of expected credit losses. In assessing the credit losses, the portfolio is reviewed on a collective basis, using loan-specific cash flows to determine the fair value of the collateral in the event of default.
Adjustments to this analysis are made to assess loans with a loan-to-value of 65% or greater. These loan are evaluated on an individual basis and loan specific risk characteristics such as occupancy levels, expense, income growth and other relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts.
When management determines that credit losses are expected to occur, an allowance for expected credit losses based on the fair value of the collateral is recorded.
Reinsurance recoverables
Reinsurance recoverable on paid and unpaid benefits was less than
1
% of the total assets as of January 1, 2021 which is immaterial based on historical loss experience and high credit rating of the reinsurers.
Premium receivables
Premiums receivables
were $
1.7
million as of December 31, 2021, in which the credit loss allowance is immaterial based on our ability to cancel the policy if the policyholder doesn‘t pay premiums.
The following details the changes in the Company’s reserve allowance for credit losses for trade receivables, fixed maturities and investments, other:
Allowance for Credit Losses
Trade Receivables
Investments, Fixed Maturities
Investments, other
Total
(In thousands)
Balance as of March 31, 2020
$
3,215
$
503
$
501
$
4,219
Transition adjustment current expected credit losses
1,206
817
–
2,023
Write-offs against allowance
–
–
–
–
Recoveries
–
–
–
–
Balance as of March 31, 2021
$
4,421
$
1,320
$
501
$
6,242
Provision for (reversal of) credit losses
4,228
(1,260)
–
2,968
Write-offs against allowance
–
–
–
–
Recoveries
–
–
–
–
Balance as of March 31, 2022
$
8,649
$
60
$
501
$
9,210
0.01
1700000
Allowance for Credit Losses
Trade Receivables
Investments, Fixed Maturities
Investments, other
Total
(In thousands)
Balance as of March 31, 2020
$
3,215
$
503
$
501
$
4,219
Transition adjustment current expected credit losses
1,206
817
–
2,023
Write-offs against allowance
–
–
–
–
Recoveries
–
–
–
–
Balance as of March 31, 2021
$
4,421
$
1,320
$
501
$
6,242
Provision for (reversal of) credit losses
4,228
(1,260)
–
2,968
Write-offs against allowance
–
–
–
–
Recoveries
–
–
–
–
Balance as of March 31, 2022$
8,649
$
60
$
501
$
9,210
3215000
503000
501000
4219000
1206000
817000
0
2023000
0
0
0
0
0
0
0
0
4421000
1320000
501000
6242000
4228000
-1260000
0
2968000
0
0
0
0
0
0
0
0
8649000
60000
501000
9210000
Note 24.
Subsequent Events
Our management has evaluated subsequent events occurring after March 31, 2022. We do not believe any subsequent events have occurred that would require further disclosure or adjustment to our financial statements.
SCHEDULE
I
CONDENSED FINANCIAL INFORMATION OF AMERCO
BALANCE SHEETS
March 31,
2022
2021
(In thousands)
ASSETS
Cash and cash equivalents
$
2,085,447
$
751,053
Investment in subsidiaries
4,240,811
3,284,760
Related party assets
1,821,654
1,535,355
Other assets
178,691
413,167
Total assets
$
8,326,603
$
5,984,335
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Other liabilities
$
2,442,517
$
1,136,742
2,442,517
1,136,742
Stockholders' equity:
Preferred stock
–
–
Common stock
10,497
10,497
Additional paid-in capital
454,029
454,029
Accumulated other comprehensive income (loss)
45,187
102,568
Retained earnings:
Beginning of period
4,958,149
4,399,192
Adjustment for adoption of Topic 326
–
(2,880)
Net earnings
1,123,286
610,856
Dividends
(29,412)
(49,019)
End of period
6,052,023
4,958,149
Cost of common shares in treasury
(525,653)
(525,653)
Cost of preferred shares in treasury
(151,997)
(151,997)
Total stockholders' equity
5,884,086
4,847,593
Total liabilities and stockholders' equity
$
8,326,603
$
5,984,335
The accompanying notes are an integral part of these condensed financial statements.
CONDENSED FINANCIAL INFORMATION OF AMERCO
STATEMENTS OF OPERATIONS
Years Ended March 31,
2022
2021
2020
(In thousands, except share and per share data)
Revenues:
Net interest income and other revenues
$
1,516
$
720
$
6,586
Expenses:
Operating expenses
5,517
6,753
10,622
Other expenses
115
115
96
Total expenses
5,632
6,868
10,718
Equity in earnings of subsidiaries
1,011,841
508,632
205,940
Interest income
131,400
135,673
130,670
Pretax earnings
1,139,125
638,157
332,478
Income tax benfefit (expense)
(15,839)
(27,301)
109,570
Earnings available to common shareholders
$
1,123,286
$
610,856
$
442,048
Basic and diluted earnings per common share
$
57.29
$
31.15
$
22.55
Weighted average common shares outstanding: Basic and diluted
19,607,788
19,607,788
19,603,708
The accompanying notes are an integral part of these condensed financial statements.
CONDENSED FINANCIAL INFORMATION OF AMERCO
STATEMENTS OF comprehensive income
Years Ended March 31,
2022
2021
2020
(In thousands)
Net earnings
$
1,123,286
$
610,856
$
442,048
Other comprehensive income (loss)
(60,473)
72,205
101,350
Total comprehensive income
$
1,062,813
$
683,061
$
543,398
The accompanying notes are an integral part of these condensed financial statements.
CONDENSED FINANCIAL INFORMATION OF AMERCO
STATEMENTS OF CASH FLOW
Years Ended March 31,
2022
2021
2020
(In thousands)
Cash flows from operating activities:
Net earnings
$
1,123,286
$
610,856
$
442,048
Change in investments in subsidiaries
(1,011,841)
(508,632)
(205,940)
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation
1
1
1
Amortization of debt issuance costs
292
924
–
Deferred income taxes
106,869
72,407
323,980
Net change in other operating assets and liabilities:
Prepaid expenses
234,490
88,898
(381,190)
Other assets
(4)
–
22
Related party assets
(240)
(12,000)
–
Accounts payable and accrued expenses
5,461
(4,019)
1,935
Net cash provided by operating activities
458,314
248,435
180,856
Cash flows from investing activities:
Purchases of property, plant and equipment
(11)
(3)
–
Proceeds of property, plant and equipment
–
–
–
Net cash used by investing activities
(11)
(3)
–
Cash flows from financing activities:
Borrowings from credit facilities
1,200,000
200,000
–
Principal repayments on credit facilities
–
(200,000)
–
Debt issuance costs
(8,468)
(924)
–
Proceeds from (repayments) of intercompany loans
(284,438)
211,064
(311,534)
Common stock dividends paid
(29,412)
(49,019)
(29,404)
Net contribution from related party
–
41,199
21,600
Net cash provided (used) by financing activities
877,682
202,320
(319,338)
Effects of exchange rate on cash
(1,591)
5,773
4,060
Increase (decrease) in cash and cash equivalents
1,334,394
456,525
(134,422)
Cash and cash equivalents at beginning of period
751,053
294,528
428,950
Cash and cash equivalents at end of period
$
2,085,447
$
751,053
$
294,528
Income taxes paid (received), net of income taxes refunds received, amounted to ($4.5) million, $29.0 million and $6.9 million for fiscal 2022, 2021 and 2020, respectively.
The accompanying notes are an integral part of these condensed financial statements.
2085447000
751053000
4240811000
3284760000
1821654000
1535355000
178691000
413167000
8326603000
5984335000
2442517000
1136742000
0
0
10497000
10497000
454029000
454029000
45187000
102568000
4958149000
4399192000
0
2880000
1123286000
610856000
29412000
49019000
6052023000
4958149000
525653000
525653000
151997000
151997000
5884086000
4847593000
8326603000
5984335000
1516000
720000
6586000
5517000
6753000
10622000
115000
115000
96000
5632000
6868000
10718000
1011841000
508632000
205940000
131400000
135673000
130670000
1139125000
638157000
332478000
15839000
27301000
-109570000
1123286000
610856000
442048000
57.29
31.15
22.55
19607788
19607788
19603708
1123286000
610856000
442048000
-60473000
72205000
101350000
1062813000
683061000
543398000
1123286000
610856000
442048000
1011841000
508632000
205940000
1000
1000
1000
-292000
-924000
0
106869000
72407000
323980000
-234490000
-88898000
381190000
4000
0
-22000
240000
12000000
0
5461000
-4019000
1935000
458314000
248435000
180856000
11000
3000
0
0
0
0
-11000
-3000
0
1200000000
200000000
0
0
200000000
0
8468000
924000
0
-284438000
211064000
-311534000
29412000
49019000
29404000
0
41199000
21600000
877682000
202320000
-319338000
-1591000
5773000
4060000
1334394000
456525000
-134422000
751053000
294528000
428950000
2085447000
751053000
294528000
1.
Summary of Significant Accounting Policies
AMERCO, a Nevada corporation, was incorporated in April, 1969, and is the holding Company for U-Haul International, Inc., Amerco Real Estate Company, Repwest Insurance Company and Oxford Life Insurance Company. The financial statements of the Registrant should be read in conjunction with the Consolidated Financial Statements and notes thereto included in this Annual Report.
AMERCO is included in a consolidated Federal income tax return with all of its U.S. subsidiaries. Accordingly, the provision for income taxes has been calculated for Federal income taxes of AMERCO and subsidiaries included in the consolidated return of AMERCO. State taxes for all subsidiaries are allocated to the respective subsidiaries.
The financial statements include only the accounts of AMERCO, which include certain of the corporate operations of AMERCO. The interest in AMERCO’s majority owned subsidiaries is accounted for on the equity method. The intercompany interest income and expenses are eliminated in the Consolidated Financial Statements.
2.
Guarantees
AMERCO has guaranteed performance of certain long-term leases and other obligations. See Note 17, Leases, and Note 19, Related Party Transactions, of the Notes to Consolidated Financial Statements.
SCHEDULE II
AMERCO AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Balance at Beginning of Year
Additions Charged to Costs and Expenses
Additions Charged to Other Accounts
Deductions
Balance at Year End
Year ended March 31, 2022
(In thousands)
Allowance for credit losses
(deducted from trade receivable)
$
4,421
$
5,283
$
1,679
$
(2,734)
$
8,649
Allowance for obsolescence
(deducted from inventory)
$
1,416
$
–
$
–
$
(336)
$
1,080
Allowance for LIFO
(deducted from inventory)
$
21,832
$
15,568
$
–
$
–
$
37,400
Allowance for probable losses
(deducted from mortgage loans)
$
448
$
–
$
–
$
–
$
448
Year ended March 31, 2021
Allowance for credit losses
(deducted from trade receivable)
$
535
$
2,179
$
2,680
$
(973)
$
4,421
Allowance for obsolescence
(deducted from inventory)
$
3,063
$
–
$
–
$
(1,647)
$
1,416
Allowance for LIFO
(deducted from inventory)
$
18,886
$
2,946
$
–
$
–
$
21,832
Allowance for probable losses
(deducted from mortgage loans)
$
493
$
–
$
–
$
(45)
$
448
Year ended March 31, 2020
Allowance for doubtful accounts
(deducted from trade receivable)
$
549
$
731
$
–
$
(745)
$
535
Allowance for obsolescence
(deducted from inventory)
$
2,322
$
741
$
–
$
–
$
3,063
Allowance for LIFO
(deducted from inventory)
$
18,987
$
–
$
–
$
(101)
$
18,886
Allowance for probable losses
(deducted from mortgage loans)$
493
$
–
$
–
$
–
$
493
4421000
5283000
1679000
2734000
8649000
1416000
0
0
336000
1080000
21832000
15568000
0
0
37400000
448000
0
0
0
448000
535000
2179000
2680000
973000
4421000
3063000
0
0
1647000
1416000
18886000
2946000
0
0
21832000
493000
0
0
45000
448000
549000
731000
0
745000
535000
2322000
741000
0
0
3063000
18987000
0
0
101000
18886000
493000
0
0
0
493000
SCHEDULE V
AMERCO AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL INFORMATION (FOR PROPERTY-CASUALTY INSURANCE Operations)
Years Ended December 31, 2021, 2020, AND 2019
Fiscal Year
Affiliation with Registrant
Deferred Policy Acquisition Cost
Reserves for Unpaid Claims and Adjustment Expenses
Discount if any, Deducted
Unearned Premiums
Net Earned Premiums (1)
Net Investment Income (2)
Claim and Claim Adjustment Expenses Incurred Related to Current Year
Claim and Claim Adjustment Expenses Incurred Related to Prior Year
Amortization of Deferred Policy Acquisition Costs
Paid Claims and Claim Adjustment Expense
Net Premiums Written (1)
(In thousands)
2022
Consolidated property
casualty entity
$
–
$
159,162
$
–
334
$
89,667
$
24,385
$
28,980
$
(6,290)
$
–
$
24,012
$
90,002
2021
Consolidated property
casualty entity
–
177,963
–
(294)
70,285
16,335
20,670
(3,865)
–
25,759
69,989
2020
Consolidated property
casualty entity
–
209,127
–
233
69,141
19,926
22,137
(9,535)
–
24,608
66,277
(1)The earned and written premiums are reported net of intersegment transactions. There were $
3.1
million, $
1.5
million and $
3.1
million in written premiums and $
2.8
million, $
1.8
million and $
2.8
million in earned premiums eliminated for the years ended December 31, 2021, 2020 and 2019, respectively.
(2) Net Investment Income excludes net realized (gains) losses on investments of ($1.0) million, ($0.1) million and ($0.4) million for the years ended December 31, 2021, 2020 and 2019, respectively.
0
159162000
0
334000
89667000
24385000
28980000
6290000
0
24012000
90002000
0
177963000
0
-294000
70285000
16335000
20670000
3865000
0
25759000
69989000
0
209127000
0
233000
69141000
19926000
22137000
9535000
0
24608000
66277000
3100000
1500000
3100000
2800000
1800000
2800000
1000000.0
100000
400000