UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended December 31, 2016

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________________ to __________________

 

 

 

Commission

File Number

Registrant, State of Incorporation,

Address and Telephone Number

I.R.S. Employer

Identification No.

 

 

 

 

AMERCOLOGO

 

 

 

 

1-11255

AMERCO

88-0106815

 

(A Nevada Corporation)

 

 

5555 Kietzke Lane , Ste. 100

 

 

Reno, Nevada 89511

 

 

Telephone (775) 688-6300

 

 

 

 

 

N/A

 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant : (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x]   No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule   405 of Regulation   S-T (§232.405 of this chapter) during the preceding 12   months (or for such shorter period that the registrant was required to submit and post such files) .   Yes   [x]   No   [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer , or a smaller reporting company. See the definition s of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):  

Large accelerated filer [x]   Accelerated filer [ ]  

Non-accelerated filer [ ] (Do not check if a smaller reporting company)    Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act ) . Yes [ ] No [x]

19,607,788 shares of AMERCO Common Stock, $0.25 par value, were outstanding at February 1, 201 7

 


TABLE OF CONTENTS

 

 

Page  

 

PART I FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

 

a) Condensed Consolidated Balance Sheets as of December 31, 2016 (unaudited) and March 31, 201 6

1

 

b) Condensed Consolidated Statements of Operations for the Quarters ended December 31, 2016 and 201 5 (unaudited)

2

 

c) Condensed Consolidated Statement of Operations for the Nine Months ended December 31, 2016 and 201 5 (unaudited)

3

 

d ) Condensed Consolidated Statements of Comprehensive Income (Loss) for the Quarters and Nine Months ended December 31, 2016 and 201 5 (unaudited)

4

 

e ) Condensed Consolidated Statements of Cash Flows for the Nine Months ended December 31, 2016 and 201 5 (unaudited)

5

 

f ) Notes to Condensed Consolidated Financial Statements (unaudited)

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

3 6

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

5 6

Item 4.

Controls and Procedures

5 8

 

 

 

 

PART II OTHER INFORMATION

 

Item 1.

Legal Proceedings

59

Item 1A.

Risk Factors

59

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds ........................................................................

59

Item 3.

Defaults Upon Senior Securities

59

Item 4.

Mine Safety Disclosures

59

Item 5.

Other Information

60

Item 6.

Exhibits

60

 


 


 

Part i Financial information

ITEM 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED balance sheets

 

 

December 31,

 

March 31,

 

 

2016

 

2016

 

 

(Unaudited)

 

 

 

 

(In thousands, except share data)

ASSETS

 

 

 

 

Cash and cash equivalents

$

984,185

$

600,646

Reinsurance recoverables and trade receivables, net

 

199,095

 

175,210

Inventories, net

 

79,682

 

79,756

Prepaid expenses

 

54,486

 

134,300

Investments, fixed maturities and marketable equities

 

1,700,581

 

1,510,538

Investments, other

 

376,813

 

310,072

Deferred policy acquisition costs, net

 

118,040

 

136,386

Other assets

 

78,049

 

77,210

Related party assets

 

91,705

 

85,734

 

 

3,682,636

 

3,109,852

Property, plant and equipment, at cost:

 

 

 

 

Land

 

633,725

 

587,347

Buildings and improvements

 

2,509,073

 

2,187,400

Furniture and equipment

 

477,131

 

399,943

Rental trailers and other rental equipment

 

493,214

 

462,379

Rental trucks

 

3,806,387

 

3,514,175

 

 

7,919,530

 

7,151,244

Less: Accumulated depreciation

 

(2,314,849)

 

(2,133,733)

Total property, plant and equipment

 

5,604,681

 

5,017,511

Total assets

$

9,287,317

$

8,127,363

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Accounts payable and accrued expenses

$

435,000

$

502,613

Notes, loans and leases payable

 

3,198,435

 

2,665,396

Policy benefits and losses, claims and loss expenses payable

 

1,083,627

 

1,071,412

Liabilities from investment contracts

 

1,085,775

 

951,490

Other policyholders' funds and liabilities

 

8,268

 

8,650

Deferred income

 

23,847

 

22,784

Deferred income taxes

 

791,661

 

653,612

Total liabilities

 

6,626,613

 

5,875,957

 

 

 

 

 

Commitments and contingencies (notes 4, 8 and 9)

 

 

 

 

Stockholders' equity:

 

 

 

 

Series preferred stock, with or without par value, 50,000,000 shares authorized:

 

 

 

 

Series A preferred stock, with no par value, 6,100,000 shares authorized;

 

 

 

 

6,100,000 shares issued and none outstanding as of December 31 and March 31, 2016

 

 

Series B preferred stock, with no par value, 100,000 shares authorized; none

 

 

 

 

issued and outstanding as of December 31 and March 31, 2016

 

 

Series common stock, with or without par value, 250,000,000 shares authorized:

 

 

 

 

Series A common stock of $0.25 par value, 10,000,000 shares authorized;

 

 

 

 

none issued and outstanding as of December 31 and March 31, 2016

 

 

Common stock, with $0.25 par value, 250,000,000 shares authorized:

 

 

 

 

Common stock of $0.25 par value, 250,000,000 shares authorized; 41,985,700

 

 

 

 

issued and 19,607,788 outstanding as of December 31 and March 31, 2016

 

10,497

 

10,497

Additional paid-in capital

 

452,014

 

451,629

Accumulated other comprehensive loss

 

(21,034)

 

(60,525)

Retained earnings

 

2,902,932

 

2,533,641

Cost of common shares in treasury, net (22,377,912 shares as of December 31 and March 31, 2016)

 

(525,653)

 

(525,653)

Cost of preferred shares in treasury, net (6,100,000 shares as of December 31 and March 31, 2016)

 

(151,997)

 

(151,997)

Unearned employee stock ownership plan shares

 

(6,055)

 

(6,186)

Total stockholders' equity

 

2,660,704

 

2,251,406

Total liabilities and stockholders' equity

$

9,287,317

$

8,127,363

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED Statements of operations

 

 

 

Quarter Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands, except share and per share amounts)

Revenues:

 

 

 

 

Self-moving equipment rentals

$

541,473

$

517,403

Self-storage revenues

 

72,309

 

63,164

Self-moving and self-storage products and service sales

 

51,562

 

50,038

Property management fees

 

9,734

 

8,170

Life insurance premiums

 

41,279

 

40,657

Property and casualty insurance premiums

 

14,938

 

14,105

Net investment and interest income

 

23,054

 

19,026

Other revenue

 

36,327

 

32,188

Total revenues

 

790,676

 

744,751

 

 

 

 

 

Costs and expenses:

 

 

 

 

Operating expenses

 

389,352

 

356,156

Commission expenses

 

61,052

 

58,347

Cost of sales

 

32,537

 

29,460

Benefits and losses

 

45,403

 

41,574

Amortization of deferred policy acquisition costs

 

5,200

 

5,138

Lease expense

 

8,807

 

10,461

Depreciation, net of (gains) on disposals of (($4,517) and ($8,984), respectively)

 

116,123

 

85,713

Total costs and expenses

 

658,474

 

586,849

 

 

 

 

 

Earnings from operations

 

132,202

 

157,902

Interest expense

 

(29,003)

 

(25,407)

Amortization on early extinguishment of debt

 

(499)

 

Pretax earnings

 

102,700

 

132,495

Income tax expense

 

(37,472)

 

(50,726)

Earnings available to common stockholders

$

65,228

$

81,769

Basic and diluted earnings per common share

$

3.33

$

4.17

Weighted average common shares outstanding: Basic and diluted

 

19,586,694

 

19,599,352

 

Related party revenues for the third quarter of fiscal 201 7 and 201 6 , net of eliminations, were $ 11.0 million and $ 9.4 million , respectively.

Related party costs and expenses for the third quarter of fiscal 201 7 and 201 6 , net of eliminations, were $ 13.7 million and $ 13.0 million , respectively.

Please see N ote 10 , Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements for more information on the related party revenues and costs and expenses.

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 


AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED Statements of operations

 

 

 

Nine Months Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands, except share and per share amounts)

Revenues:

 

 

 

 

Self-moving equipment rentals

$

1,899,519

$

1,844,908

Self-storage revenues

 

212,194

 

182,415

Self-moving and self-storage products and service sales

 

199,195

 

197,999

Property management fees

 

23,050

 

20,601

Life insurance premiums

 

123,064

 

121,438

Property and casualty insurance premiums

 

40,202

 

38,033

Net investment and interest income

 

76,419

 

63,149

Other revenue

 

139,353

 

123,916

Total revenues

 

2,712,996

 

2,592,459

 

 

 

 

 

Costs and expenses:

 

 

 

 

Operating expenses

 

1,172,647

 

1,125,607

Commission expenses

 

215,330

 

212,204

Cost of sales

 

116,851

 

110,596

Benefits and losses

 

139,242

 

128,393

Amortization of deferred policy acquisition costs

 

19,131

 

15,559

Lease expense

 

29,204

 

40,249

Depreciation, net of (gains) on disposals of (($32,775) and ($87,789), respectively)

 

321,408

 

199,773

Total costs and expenses

 

2,013,813

 

1,832,381

 

 

 

 

 

Earnings from operations

 

699,183

 

760,078

Interest expense

 

(83,862)

 

(71,480)

Amortization on early extinguishment of debt

 

(499)

 

Pretax earnings

 

614,822

 

688,598

Income tax expense

 

(225,946)

 

(252,165)

Earnings available to common stockholders

$

388,876

$

436,433

Basic and diluted earnings per common share

$

19.85

$

22.27

Weighted average common shares outstanding: Basic and diluted

 

19,586,389

 

19,597,735

 

Related party revenues for the first nine months of fiscal 201 7 and 201 6 , net of eliminations, were $ 26.7 million and $ 25.5 million , respectively.

Related party costs and expenses for the first nine months of fiscal 201 7 and 201 6 , net of eliminations, were $47.9 million and $ 45.6 million , respectively.

Please see N ote 10 , Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements for more information on the related party revenues and costs and expenses.

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 


AMERCO AND CONSOLIDATED ENTITIES

Condensed consolidatED statements of COMPREHENSIVE INCOME (loss)

Quarter Ended December 31, 2016

 

Pre-tax

 

Tax

 

Net

 

 

(Unaudited)

 

 

(In thousands)

Comprehensive income:

 

 

 

 

 

 

Net earnings

$

102,700

$

(37,472)

$

65,228

Other comprehensive income (loss):

 

 

 

 

 

 

Foreign currency translation

 

(5,821)

 

 

(5,821)

Unrealized net gain on investments

 

4,238

 

(1,483)

 

2,755

Change in fair value of cash flow hedges

 

2,853

 

(931)

 

1,922

Total comprehensive income

$

103,970

$

(39,886)

$

64,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31, 2015

 

Pre-tax

 

Tax

 

Net

 

 

(Unaudited)

 

 

(In thousands)

Comprehensive income:

 

 

 

 

 

 

Net earnings

$

132,495

$

(50,726)

$

81,769

Other comprehensive income (loss):

 

 

 

 

 

 

Foreign currency translation

 

(6,727)

 

 

(6,727)

Unrealized net gain on investments

 

1,025

 

(359)

 

666

Change in fair value of cash flow hedges

 

4,353

 

(1,654)

 

2,699

Total comprehensive income

$

131,146

$

(52,739)

$

78,407

 

 

Nine Months Ended December 31, 2016

 

Pre-tax

 

Tax

 

Net

 

 

(Unaudited)

 

 

(In thousands)

Comprehensive income:

 

 

 

 

 

 

Net earnings

$

614,822

$

(225,946)

$

388,876

Other comprehensive income (loss):

 

 

 

 

 

 

Foreign currency translation

 

(7,803)

 

 

(7,803)

Unrealized net gain on investments

 

64,856

 

(22,700)

 

42,156

Change in fair value of cash flow hedges

 

8,039

 

(2,901)

 

5,138

Total comprehensive income

$

679,914

$

(251,547)

$

428,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended December 31, 2015

 

Pre-tax

 

Tax

 

Net

 

 

(Unaudited)

 

 

(In thousands)

Comprehensive income:

 

 

 

 

 

 

Net earnings

$

688,598

$

(252,165)

$

436,433

Other comprehensive income (loss):

 

 

 

 

 

 

Foreign currency translation

 

(17,292)

 

 

(17,292)

Unrealized net loss on investments

 

(19,947)

 

6,982

 

(12,965)

Change in fair value of cash flow hedges

 

8,958

 

(3,404)

 

5,554

Total comprehensive income

$

660,317

$

(248,587)

$

411,730

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


AMERCO AND CONSOLIDATED ENTITIES

Condensed consolidatED statements of cash flows

 

 

Nine Months Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

Cash flow from operating activities:

 

 

 

 

Net earnings

$  

388,876

$  

436,433

Adjustments to reconcile net earnings to cash provided by operations:

 

 

 

 

Depreciation

 

354,183

 

287,562

Amortization of deferred policy acquisition costs

 

19,131

 

15,559

Amortization of debt issuance costs

 

3,125

 

2,319

Interest credited to policyholders

 

18,190

 

13,844

Change in allowance for losses on trade receivables

 

(28)

 

(182)

Change in allowance for inventory reserves

 

1,897

 

(1,939)

Net gain on sale of real and personal property

 

(32,775)

 

(87,789)

Net gain on sale of investments

 

(3,948)

 

(3,779)

Deferred income taxes

 

112,448

 

151,399

Net change in other operating assets and liabilities:

 

 

 

 

Reinsurance recoverables and trade receivables

 

(23,919)

 

8,568

Inventories

 

(1,901)

 

(3,887)

Prepaid expenses

 

79,578

 

(57,015)

Capitalization of deferred policy acquisition costs

 

(21,040)

 

(24,803)

Other assets

 

(1,431)

 

18,361

Related party assets

 

(5,469)

 

49,803

Accounts payable and accrued expenses

 

30,773

 

37,323

Policy benefits and losses, claims and loss expenses payable

 

12,843

 

12,976

Other policyholders' funds and liabilities

 

(382)

 

(560)

Deferred income

 

1,105

 

1,005

Related party liabilities

 

(711)

 

(878)

Net cash provided by operating activities

 

930,545

 

854,320

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of:

 

 

 

 

Property, plant and equipment

 

(981,316)

 

(1,051,830)

Short term investments

 

(566,371)

 

(391,683)

Fixed maturities investments

 

(261,851)

 

(318,664)

Equity securities

 

(489)

 

(1,315)

Preferred stock

 

 

(5)

Real estate

 

(15,863)

 

(23)

Mortgage loans

 

(159,309)

 

(99,549)

Proceeds from sales and paydowns of:

 

 

 

 

Property, plant and equipment

 

412,892

 

463,602

Short term investments

 

566,955

 

400,844

Fixed maturities investments

 

147,233

 

135,727

Equity securities

 

 

808

Preferred stock

 

3,351

 

Real estate

 

1,681

 

Mortgage loans

 

109,260

 

34,141

Net cash used by investing activities

 

(743,827)

 

(827,947)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Borrowings from credit facilities

 

534,008

 

508,276

Principal repayments on credit facilities

 

(244,545)

 

(280,304)

Debt issuance costs

 

(4,529)

 

(5,957)

Capital lease payments

 

(141,750)

 

(110,202)

Employee Stock Ownership Plan

 

(7,541)

 

(1,559)

Securitization deposits

 

371

 

448

Common stock dividends paid

 

(39,171)

 

(78,374)

Investment contract deposits

 

180,554

 

232,912

Investment contract withdrawals

 

(64,459)

 

(41,258)

Net cash provided by financing activities

 

212,938

 

223,982

 

 

 

 

 

Effects of exchange rate on cash

 

(16,117)

 

(17,578)

 

 

 

 

 

Increase in cash and cash equivalents

 

383,539

 

232,777

Cash and cash equivalents at the beginning of period

 

600,646

 

441,850

Cash and cash equivalents at the end of period

$  

984,185

$  

674,627

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


AMERCO and consolidated entities

notes to condensed consolidatED financial statements

1.Basis of Presentation

AMERCO, a Nevada corporation (“AMERCO”), has a third fiscal quarter that ends on the 3 1 st of December for each year that is referenced. Our insurance company subsidiaries have a third quarter that ends on the 3 0 th of September for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the presentation of financial position or results of operations. We disclose any material events , if any, occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 201 6 and 20 15 correspond to fiscal 201 7 and 201 6 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.

The condensed consolidated balance sheet as of December 31, 2016 and the related condensed consolidated statements of operations , comprehensive income (loss) for the third quarter and first nine months and cash flows for the first nine months of fiscal 201 7 and 201 6 are unaudited.

In our opinion, all adjustments necessary for the fair presentation of such condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results for a full year. The information in this Quarterly Report on Form 10-Q (“Quarterly Report”) should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 201 6 .

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”),

Rep w est Insurance Company (“Rep w est”), and

Oxford Life Insurance Company (“Oxford”).

Unless the context otherwise requires, the term s “Company,” “we,” “us” or “our” refer to AMERCO and all of its legal subsidiaries.

Description of Operating Segments

AMERCO has three reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance.

The Moving and Storage operati ng segment (“Moving and Storage”) include s AMERCO, U-Haul, 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 towin g 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.

 


AMERCO and consolidated entities

notes to condensed consolidatED financial statements (Continued)

The Property and Casualty Insurance operating segment (“Property and Casualty Insurance”) includes Rep w est and its wholly-owned subsidiaries and ARCOA R isk R etention G roup (“ARCOA”). Property and Casualty Insurance provides loss adjusting and claims handling for U-Haul through regional offices across North America. 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 the moving and storage business.

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

2. 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. The unreleased shares , net of shares committed to be released , were 20,958 and 7,587 as of December 31, 2016 and 201 5 , respectively.

3. 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 $ 17.0 million and $17.3 million at December 31, 2016 and March 31, 2016, respectively .

Available-for-Sale Investments

Available-for-sale investments at December 31, 2016 were as follows:

 

 

Amortized

Cost

 

Gross

Unrealized

Gains

 

Gross

Unrealized

Losses More than 12 Months

 

Gross

Unrealized

Losses Less than 12 Months

 

Estimated

Market

Value

 

 

(Unaudited)

 

 

(In thousands)

U.S. treasury securities and government obligations

$

87,116

$

6,872

$

$

(80)

$  

93,908

U.S. government agency mortgage-backed securities

 

28,935

 

1,940

 

(5)

 

(2)

 

30,868

Obligations of states and political subdivisions

 

159,596

 

15,829

 

(12)

 

(90)

 

175,323

Corporate securities

 

1,250,266

 

70,953

 

(4,404)

 

(1,411)

 

1,315,404

Mortgage-backed securities

 

42,665

 

1,214

 

 

(58)

 

43,821

Redeemable preferred stocks

 

14,640

 

492

 

 

(96)

 

15,036

Common stocks

 

17,970

 

8,261

 

(10)

 

 

26,221

 

$

1,601,188

$

105,561

$

(4,431)

$

(1,737)

$  

1,700,581

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Available-for-sale investments at March 31 , 201 6 were as follows:

 

 

Amortized

Cost

 

Gross

Unrealized

Gains

 

Gross

Unrealized

Losses More than 12 Months

 

Gross

Unrealized

Losses Less than 12 Months

 

Estimated

Market

Value

 

 

 

 

 

(In thousands)

U.S. treasury securities and government obligations

$

85,861

$

3,791

$

$

(193)

$  

89,459

U.S. government agency mortgage-backed securities

 

21,845

 

1,596

 

(6)

 

(39)

 

23,396

Obligations of states and political subdivisions

 

166,725

 

10,660

 

(81)

 

(414)

 

176,890

Corporate securities

 

1,143,125

 

26,861

 

(8,013)

 

(28,181)

 

1,133,792

Mortgage-backed securities

 

42,991

 

475

 

 

(62)

 

43,404

Redeemable preferred stocks

 

17,977

 

556

 

 

(105)

 

18,428

Common stocks

 

17,732

 

7,822

 

(10)

 

(375)

 

25,169

 

$

1,496,256

$

51,761

$

(8,110)

$

(29,369)

$  

1,510,538

The available-for-sale table s include gross unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

We sold available-for-sale securities with a fair value of $147.1 million during the first nine months of fiscal 201 7 . The gross realized gains on these sales totaled $3.4 million. The gross realized losses on these sales totaled $1.8 million .

The unrealized losses of more than twelve months in the available-for-sale table s are considered temporary declines. We track each investment with an unrealized loss and evaluate it on an individual basis for other-than-temporary impairments including obtaining corroborating opinions from third party sources, performing trend analysis and reviewing management’s future plans. Certain of these investments may have declines determined by management to be other-than-temporary and we recognize these write-downs , if any, through earnings . There were no write downs in the third quarter or for the first nine months of fiscal 201 7 or 201 6 .

The investment portfolio primarily consists of corporate securities and U.S. government securities. We believe we monitor our investments as appropriate. Our methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity, the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. Nothing has come to management’s attention that would lead to the belief that each issuer would not have the ability to meet the remaining contractual obligations of the security, including payment at maturity. We have the ability and intent not to sell our fixed maturity and common stock investments for a period of time sufficient to allow us to recover our costs.

The portion of other-than-temporary impairment related to a credit loss is recognized in earnings. The significant inputs utilized in the evaluation of credit losses on mortgage backed securities include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of credit losses on asset backed securities include the time frame for principal recovery and the subordination and value of the underlying collateral.

There were no credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in accumulated other comprehensive income (loss) for the third quarter or first nine months of fiscal 201 7 .

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


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

 

 

December 31, 2016

 

March 31, 2016

 

 

Amortized

Cost

 

Estimated

Market

Value

 

Amortized

Cost

 

Estimated

Market

Value

 

 

(Unaudited)

 

 

 

 

(In thousands)

Due in one year or less

$

29,111

$

29,500

$

48,679

$

49,146

Due after one year through five years

 

319,439

 

334,064

 

250,576

 

256,597

Due after five years through ten years

 

604,645

 

639,749

 

557,984

 

557,961

Due after ten years

 

572,718

 

612,190

 

560,317

 

559,833

 

 

1,525,913

 

1,615,503

 

1,417,556

 

1,423,537

 

 

 

 

 

 

 

 

 

Mortgage backed securities

 

42,665

 

43,821

 

42,991

 

43,404

Redeemable preferred stocks

 

14,640

 

15,036

 

17,977

 

18,428

Common stocks

 

17,970

 

26,221

 

17,732

 

25,169

 

$

1,601,188

$

1,700,581

$

1,496,256

$

1,510,538

4. Borrowings

Long-Term Debt

Long-term debt was as follows:

 

 

 

 

 

December 31,

 

March 31,

 

2016 Rate (a)

 

Maturities

 

2016

 

2016

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

(In thousands)

Real estate loan (amortizing term)

2.17% - 6.93%

 

2023

$

171,789

$

205,000

Senior mortgages

2.24% - 5.50%

 

2017 - 2038

 

1,256,832

 

1,121,897

Working capital loans (revolving credit)

2.24%

 

2018

 

85,000

 

Fleet loans (amortizing term)

1.95% - 4.76%

 

2017 - 2023

 

216,582

 

218,998

Fleet loans (securitization)

4.90%

 

2017

 

53,876

 

62,838

Fleet loans (revolving credit)

1.76% - 2.46%

 

2018 - 2021

 

454,000

 

347,000

Capital leases (rental equipment)

2.12% - 7.16%

 

2017 - 2024

 

917,792

 

672,825

Other obligations

3.00% - 8.00%

 

2017 - 2045

 

67,318

 

60,200

Notes, loans and leases payable

 

 

 

 

3,223,189

 

2,688,758

Less: Debt issuance costs

 

 

 

 

(24,754)

 

(23,362)

Total notes, loans and leases payable

 

 

 

$

3,198,435

$

2,665,396

 

 

 

 

 

 

 

 

(a) Interest rate as of December 31, 2016, including the effect of applicable hedging instruments.

 

 

 

 

Real Estate Backed Loans

Real Estate Loan

Amerco Real Estate Company and certain of its subsidiaries and U-Haul Company of Florida are borrowers under a Real Estate Loan. As of December 31, 2016 , the outstanding balance on the Real Estate Loan was $171.8 million . 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 final maturity of the term loan is April 20 23

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


The interest rate, per the provisions of the amended loan agreement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. At December 31, 2016 , the applicable LIBOR was 0.67 % and the applicable margin was 1.50 %, the sum of which was 2.17 % , which was applied to $40.7 million of the Real Estate Loan . The rate of the remaining balance of $131.1 million of the Real Estate Loan is hedged with an interest rate swap fixing the rate at 6.93% based on current margin. The interest rate swap expires in August 2018, after which date the remaining balance will incur interest at a rate of LIBOR plus a margin of 1.50%. 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 Amerco Real Estate Company and U-Haul International, Inc. are borrowers under certain senior mortgages. These senior mortgage loan balances as of December 31, 2016 were in the aggregate amount of $ 1,256.8 million and mature between 201 7 and 2038. The senior mortgages require monthly principal and interest payments , except for one mortgage that only requires interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. 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 3.72% and 5.50 %. 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. Additionally , $ 159.0 million of these loans have variable interest rates comprised of applicable LIBOR base rates between 0.63 % and 0.70% plus margins between 2.00 % and 2.50%, the sum s of which were between 2.63 % and 3.20 %. Amerco Real Estate Company and U-Haul International, Inc. 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.  

Working Capital Loans

Amerco Real Estate Company is a borrower under an asset backed working capital loan. The maximum amount that can be drawn at any one time is $ 50 .0 million. At December 31, 2016 the full $ 50 .0 million was available to be drawn . This loan is secured by certain properties owned by the borrower. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. The final maturity of this loan is September 2018 . This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The interest rate is the applicable LIBOR plus a margin of 1.25%. AMERCO is the guarantor of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Various subsidiaries of Amerco Real Estate Company and U-Haul International, Inc. are borrowers under an asset backed working capital loan. The maximum amount that can be drawn at any one time is $85.0 million. At December 31, 2016, the outstanding balance was $85.0 million. This loan is secured by certain properties owned by the borrower. This loan agreement provides for term loans, subject to the terms of the loan agreement. The final maturity of the loan is November 2018. This loan requires monthly interest payments with the unpaid loan balance and accrued and upaid interest due at maturity. The interest rate, per the provision of the loan agreement, is the applicable LIBOR plus the applicable margin. At December 31, 2016, the applicable LIBOR was 0.74% and the margin was 1.50%, the sum of which was 2.24%. AMERCO is the guarantor of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Fleet Loans

Rental Truck Amortizing Loans

U-Haul International, Inc. and several of its subsidiaries are borrowers under amortizing term loans. The balance of the loans as of December 31, 2016 was $ 216.6 million with the final maturities between July 201 7 and September 2023 .

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


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 the applicable LIBOR plus the applicable margin s . At December 31, 2016 , the applicable LIBOR was between 0.62 % and 0.70 % and applicable margins were between 1.72% and 2.50%. The interest rates are hedged with interest rate swaps fixing the rates between 2.82% and 4.76% based on current margins. Additionally, $ 146.9 million of these loans are carried at fixed rates ranging between 1.95% and 3.94%.

AMERCO and , in some cases, U-Haul International, Inc. are guarantors 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 Securitizations

2010 U-Haul S Fleet and its subsidiaries (collectively, “2010 USF”) issued a $155.0 million asset-backed note (“2010 Box Truck Note”). 2010 USF is a bankruptcy-remote special purpose entity wholly-owned by U-Haul International, Inc. The net proceeds from the securitized transaction were used to finance new box truck purchases. U.S. Bank, NA acts as the trustee for this securitization.

The 2010 Box Truck Note has a fixed interest rate of 4.90% with an expected final maturity of October 2017. At December 31, 2016 , the outstanding balance was $ 53.9 million . The note is secur ed by the box trucks purchased and the corresponding operating cash flows associated with their operation.

The 2010 Box Truck Note is subject to certain covenants with respect to liens, additional indebtedness of the special purpose entity , the disposition of assets and other customary covenants of bankruptcy-remote special purpose entities. The default provisions of this note include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Rental Truck Revolvers

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $ 150 million, which can be increased to a maximum of $225 million. Th is loan matures in Septem ber 2018. The interest rate, per the provision of the Loan Agreement, is the applicable LIBOR plus the applicable margin . At December 31, 2016 , the applicable LIBOR was 0.61 % and the margin was 1. 1 5%, the sum of which was 1.76 %. Only interest is paid on the loan until the last nine months when principal is due monthly . As of December 31, 2016, the outstanding balance was $ 142.0 million .

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $100 million, which can be increased to a maximum of $ 21 5 million. Th is loan matures in March 2020 . The interest rate, per the provision of the Loan Agreement, is the applicable LIBOR plus the applicable margin. At December 31, 2016, the applicable LIBOR was 0.62 % and the margin wa s 1.15%, the sum of which was 1.77 %. Only interest is paid on the loan until the last nine months when principal is due monthly . As of December 31, 2016 , the outstanding balance was $ 147.0 million .

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $ 5 0 million. The loan matures in May 2019. This agreement contains an option to extend the maturity through Jan uary 2020. The interest rate, per the provision of the Loan Agreement is the applicable LIBOR plus the applicable margin. At December 31, 2016 , the applicable LIBOR was 0.61 % and the margin was 1.85%, the sum of which was 2.46 % . Only interest is paid during the first five years of the loan with principal due upon maturity. As of December 31, 2016 , the outstanding balance was $ 40.0 million .

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $125 million. The loan matures in November 2021. In October 2016, this loan was amended and the availablity was increased to $150.0 million. The interest rate, per the provision of the Loan Agreement is the applicable LIBOR plus the applicable margin. At December 31, 2016, the applicable LIBOR was 0.62% and the margin was 1.15%, the sum of which was 1.77%. Only interest is paid on the loan until the last nine months when principal is due monthly. As of December 31, 2016, the outstanding balance was $ 125.0 million.

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Capital Leases

We regularly enter into capital leases for new equipment with the terms of the leases between five and seven years. During the first nine months of fiscal 2017, we entered into $379.4 million of new capital leases. At December 31, 2016 , the balance of our capital leases was $ 917.8 million . The net book value of the corresponding capitalized assets was $ 1,256.5 million at December 31, 2016.

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 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.

At December 31, 2016, the aggregate outstanding principal balance of the U-N otes issued was $71.9 million of which $ 4.6 million is held by our insurance subsidiaries and eliminated in consolidation. I nterest rates range between 3.00% and 8.00% and maturity dates range between 2017 and 204 5 .

Oxford is a member of the Federal Home Loan Bank (“FHLB”) and, as such, the FHLB has made a deposit with Oxford. As of September 30, 2016, the deposit balance was $30.0 million, which Oxford pays a fixed interest rate of 0.57% due on the maturity date of March 31, 2017. The balance of the deposit is included within Liabilities from investment contracts on the consolidated balance sheet.

Annual Maturities of Notes, Loans and Leases Payable

The annual maturities of long-term debt , including capital leases and excluding debt issuance costs, as of December 31, 2016 for the next five years and thereafter are as follows:

 

 

Twelve Months Ending December 31,

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

Thereafter

 

 

(Unaudited)

 

 

(In thousands)

Notes, loans and leases payable, secured

$

423,432

$

566,646

$

431,682

$

292,576

$

306,774

$

1,202,079

Interest on Borrowings

Interest Expense

Components of interest expense include the following:

 

 

Quarter Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

Interest expense

$

27,441

$

22,452

Capitalized interest

 

(1,119)

 

(958)

Amortization of transaction costs

 

863

 

807

Interest expense resulting from derivatives

 

1,818

 

3,106

Total interest expense

 

29,003

 

25,407

Amortization on early extinguishment of debt

 

499

 

Total

$

29,502

$

25,407

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


 

 

Nine Months Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

Interest expense

$

77,849

$

61,756

Capitalized interest

 

(3,417)

 

(2,380)

Amortization of transaction costs

 

2,510

 

2,298

Interest expense resulting from derivatives

 

6,920

 

9,806

Total interest expense

 

83,862

 

71,480

Amortization on early extinguishment of debt

 

499

 

Total

 

84,361

 

71,480

Interest paid in cash , including payments related to derivative contracts, amounted to $ 28.7 million and $ 25.0 million for the third quarter of fiscal 201 7 and 201 6, respectively and $84.0 million and $69.6 million for the first nine months of fiscal 2017 and 2016, respectively.

Interest Rates

Interest rates and Company borrowings were as follows:

 

 

Revolving Credit Activity

 

 

Quarter Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands, except interest rates)

Weighted average interest rate during the quarter

 

1.82%

 

1.66%

Interest rate at the end of the quarter

 

1.89%

 

1.69%

Maximum amount outstanding during the quarter

$

597,000

$

265,000

Average amount outstanding during the quarter

$

550,304

$

258,207

Facility fees

$

10

$

25

 

 

 

Revolving Credit Activity

 

 

Nine Months Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands, except interest rates)

Weighted average interest rate during the period

 

1.76%

 

1.65%

Interest rate at the end of the period

 

1.89%

 

1.69%

Maximum amount outstanding during the period

$

597,000

$

265,000

Average amount outstanding during the period

$

450,880

$

224,582

Facility fees

$

99

$

169

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


5 . 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, 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 our counterparties and do not currently anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes.

 

Original variable rate debt amount

 

Agreement Date

 

Effective Date

 

Expiration Date

 

Designated cash flow hedge date

 

(Unaudited)

 

(In millions)

 

 

 

 

 

 

 

 

 

$

300.0

 

 

8/16/2006

 

8/18/2006

 

8/10/2018

 

8/4/2006

 

14.7

(a)

 

7/6/2010

 

8/15/2010

 

7/15/2017

 

7/6/2010

 

25.0

(a)

 

4/26/2011

 

6/1/2011

 

6/1/2018

 

6/1/2011

 

50.0

(a)

 

7/29/2011

 

8/15/2011

 

8/15/2018

 

7/29/2011

 

20.0

(a)

 

8/3/2011

 

9/12/2011

 

9/10/2018

 

8/3/2011

 

15.1

(b)

 

3/27/2012

 

3/28/2012

 

3/28/2019

 

3/26/2012

 

25.0

 

 

4/13/2012

 

4/16/2012

 

4/1/2019

 

4/12/2012

 

44.3

 

 

1/11/2013

 

1/15/2013

 

12/15/2019

 

1/11/2013

 

 

 

 

 

 

 

 

 

 

 

 

(a) forward swap

 

 

 

 

 

 

 

 

 

 

(b) operating lease

 

 

 

 

 

 

 

 

 

As of December 31, 2016 , the total notional amount of our variable interest rate swaps on debt and an operating lease was $ 202.0 million and $8.2 million, respectively .

The derivative fair values located in A ccounts payable and accrued expenses in the balance sheets were as follows:

 

 

Liability Derivatives Fair Values as of

 

 

December 31, 2016

 

March 31, 2016

 

 

(Unaudited)

 

 

 

 

(In thousands)

Interest rate contracts designated as hedging instruments

$

6,785

$

14,845

 

 

 

The Effect of Interest Rate Contracts on the Statements of Operations for the Nine Months Ended

 

 

 

 

December 31, 2016

 

December 31, 2015

 

 

(Unaudited)

 

 

(In thousands)

Loss recognized in income on interest rate contracts

$

6,920

$

9,806

Gain recognized in AOCI on interest rate contracts (effective portion)

$

(8,039)

$

(8,958)

Loss reclassified from AOCI into income (effective portion)

$

6,940

$

9,736

(Gain) loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing)

$

(20)

$

70

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Gains or losses recognized in income on derivatives are recorded as interest expense in the statements of operations. During the first nine months of fiscal 201 7 , we recognized an increase in the fair value of our cash flow hedges of $5.1 million, net of taxes. Embedded in this gain was $6.9 million of losses reclassified from accumulated other comprehensive income to interest expense during the first nine months of fiscal 2017, net of taxes. At December 31, 2016, we expect to reclassify $5.8 million of net losses on interest rate contracts from accumulated other comprehensive income to earnings as interest expense over the next twelve months.

6 . Comprehensive Income (Loss)

A summary of accumulated other comprehensive income (loss) components, net of tax, were as follows:

 

 

Foreign Currency Translation

 

Unrealized Net Gain on Investments

 

Fair Market Value of Cash Flow Hedges

 

Postretirement Benefit Obligation Net Loss

 

Accumulated Other Comprehensive Income (Loss)

 

 

(Unaudited)

 

 

(In thousands)

Balance at March 31, 2016

$

(63,643)

$

14,115

$

(9,208)

$

(1,789)

$

(60,525)

Foreign currency translation

 

(7,803)

 

 

 

 

(7,803)

Unrealized net gain on investments

 

 

42,156

 

 

 

42,156

Change in fair value of cash flow hedges

 

 

 

12,078

 

 

12,078

Amounts reclassified from AOCI

 

 

 

(6,940)

 

 

(6,940)

Other comprehensive income (loss)

 

(7,803)

 

42,156

 

5,138

 

 

39,491

Balance at December 31, 2016

$

(71,446)

$

56,271

$

(4,070)

$

(1,789)

$

(21,034)

7 . Stockholders’ Equity

On March 15, 2016, we declared a cash dividend on our Common Stock of $1.00 per share to holders of record on April 5, 2016. The dividend was paid on April 21, 2016.

On October 5, 2016, we declared a cash dividend on our Common Stock of $1.00 per share to holders of record on October 20, 2016. The dividend was paid on November 3, 2016.

On June 8, 2016, the stockholder’s approved the 2016 AMERCO Stock Option Plan (Shelf Stock Option Plan). As of December 31, 2016, no awards had been issued under this plan.

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


8 . Contingent Liabilities and Commitments

We lease a portion of our rental equipment and certain of our facilities under operating leases with terms that expire at various dates substantially through 2019 . As of December 31, 2016 , we have guaranteed $ 17.6 million of residual values for these rental equipment assets at the end of the respective lease terms. Certain leases contain renewal and fair market value purchase options as well as mileage and other restrictions. At the expiration of the lease, we have the option to renew the lease, purchase the asset for fair market value, or sell the asset to a third party on behalf of the lessor. We have been leasing equipment since 1987 and ha ve experienced no material losses relating to these types of residual value guarantees.  

Operating l ease commitments for leases having terms of more than one year were as follows:

 

 

Property,

Plant and

Equipment

 

Rental

Equipment

 

Total

 

 

(Unaudited)

 

 

 

 

(In thousands)

 

 

Twelve Months Ended December 31:

 

 

 

 

 

 

2017

$

16,445

$

11,215

$

27,660

2018

 

14,592

 

9,968

 

24,560

2019

 

15,063

 

3,099

 

18,162

2020

 

15,543

 

 

15,543

2021

 

15,315

 

 

15,315

Thereafter

 

41,320

 

 

41,320

Total

$

118,278

$

24,282

$

142,560

9 . Contingencies

PODS Enterprises, Inc. v. U-Haul International, Inc.

On July 3, 2012, PODS Enterprises, Inc. (“PEI”), filed a lawsuit against U-Haul . The claims arose from U-Haul’s use of the word “pod” and “pods” as a generic term for its U-Box moving and storage product. PEI alleged that such use was an inappropriate use of its PODSmark .

On September 25, 2014, the jury in the United States District Court for the Middle District of Florida returned a unanimous verdict, finding in favor of PEI and against U-Haul on all claims and counterclaims.  The jury awarded PEI $45 million in actual damages and $15.7 million in U-Haul’s alleged profits attributable to its use of the term “pod” or “pods . A total of $60.7 million was recorded as an accrual in our financial statements.

On October 1, 2014, the Court ordered briefing on U-Haul’s oral motion for directed verdict on its genericness defense, the motion on which the Court had deferred ruling during trial.  Pursuant to the Court’s order, the parties’ briefing on that motion was completed by October 21, 2014.

On August 24, 2015, the Court entered a permanent injunction, and awarded PEI $4 .9 million in pre-judgment interest, $82,727 in costs, and post-judgment interest at the rate of 0.25%, beginning March 11, 2015, computed daily and compounded annually. This was recorded as an accrual of $5.0 million in our financial statements during fiscal 2016.

On September 1 3, 201 6 , the parties reached a settlement in principle, for $41.4 million. On October 10, 2016, the parties signed a formal written settlement agreement. U-Haul wired the settlement payment on or about October 12, 2016.

On November 4, 2016, the trial court entered an Order (i) confirming the satisfaction in full of the Judgment and the Amended Judgment and (ii) releasing the Bond and Rider in their entirety as to U-Haul.

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


On November 14, 2016, the parties jointly moved to dismiss U-Haul’s consolidated appeals with prejudice, with each side to bear its own costs. The request for dismissal encompassed all claims and all parties on appeal. Pursuant to the parties’ joint motion for voluntary dismissal, the Clerk of the Court of the United States Court of Appeals for the Eleventh Circuit entered the dismissal, effective November 16, 2016.

The parties have completed their respective performances under the terms of the settlement agreement.

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. Since 1988, Real Estate has managed a testing and removal program for underground storage tanks.

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.

10 . Related Party Transactions

As set forth in the Audit Committee Charter and consistent with N ASDAQ Listing Rules, our Audit Committee (the “Audit Committee”) reviews and maintains oversight over related party transactions which are required to be disclosed under the Securities and Exchange Commission (“SEC”) rules and regulations and in accordance with generally accepted accounting principles (“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. Management believes that the transactions described below and in the related notes were completed on terms substantially equivalent to those that would prevail in arm’s-length transactions.

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. In the past, we sold real estate and various self-storage properties to SAC Holdings, and such sales provided significant cash flows to us .

Related Party Revenue

 

 

Quarter Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

U-Haul interest income revenue from SAC Holdings

$

1,226

$

1,245

U-Haul management fee revenue from SAC Holdings

 

4,687

 

4,461

U-Haul management fee revenue from Private Mini

 

875

 

849

U-Haul management fee revenue from Mercury

 

4,172

 

2,860

 

$

10,960

$

9,415

 

 

 

 

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


 

 

 

Nine Months Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

U-Haul interest income revenue from SAC Holdings

$

3,681

$

3,733

U-Haul interest income revenue from Private Mini

 

 

1,126

U-Haul management fee revenue from SAC Holdings

 

14,995

 

14,158

U-Haul management fee revenue from Private Mini

 

2,707

 

2,473

U-Haul management fee revenue from Mercury

 

5,348

 

3,970

 

$

26,731

$

25,460

During the first nine months of fiscal 201 7 , a subsidiary of ours held a junior unsecured note from SAC Holdings. Substantially all of the equity interest of SAC Holdings is controlled by Blackwater Investments, Inc. (“Blackwater”). Blackwater is wholly-owned by Willow Grove Holdings LP, which is owned by Mark   V. Shoen ( a significant stock holder ), and various trusts associated with Edward J. Shoen (our Chairman of the Board, President and a significant shareholder) and Mark V. Shoen . We do not have an equity ownership interest in SAC Holdings. We received cash interest payments of $ 3.4 million from SAC Holdings during the first nine months of both fiscal 201 7 and 201 6 . The largest aggregate amount of notes receivable outstanding during the first nine months of fiscal 201 7 was $ 49.3 million and the aggregate notes receivable balance at December 31, 2016 was $ 48.4 million. In accordance with the terms of th is note, SAC Holdings may prepay the note without penalty or premium at any time . T he scheduled maturity of th i s note is 2017.

During fiscal 201 6 , AMERCO held a junior note issued by Private Mini Storage Realty, L.P. (“Private Mini”). In July 2015, Private Mini repaid its note and all outstanding interest due AMERCO totaling $56.8 million. The equity interests of Private Mini are ultimately controlled by Blackwater. We received cash interest payments of $1.5 million from Private Mini during fiscal 201 6 .

We currently manage the self-storage properties owned or leased by SAC Holdings, Mercury Partners, L.P. (“Mercury”), Four SAC Self-Storage Corporation (“4 SAC”), Five SAC Self-Storage Corporation (“5 SAC”), Galaxy Investments, L.P. (“Galaxy”) and Private Mini 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 cash payments for management fees, exclusive of reimbursed expenses, of $ 21.8 million and $21.4 million from the above mentioned entities during the first nine months of fiscal 201 7 and 201 6, respectively . This management fee is consistent with the fee received for other properties we previously managed for third parties. SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini are substantially controlled by Blackwater. Mark V. Shoen controls the general partner of Mercury . The limited partner interests of Mercury are indirectly owned by Mark V. Shoen , James P. Shoen ( a significant stock holder ) and a trust benefitting the children and grandchild of Edward J. Shoen .

Related Party Costs and Expenses

 

 

Quarter Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

U-Haul lease expenses to SAC Holdings

$

684

$

654

U-Haul commission expenses to SAC Holdings

 

12,135

 

11,521

U-Haul commission expenses to Private Mini

 

848

 

841

 

$

13,667

$

13,016

 

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


 

Nine Months Ended December 31,

 

 

2016

 

2015

 

 

(Unaudited)

 

 

(In thousands)

U-Haul lease expenses to SAC Holdings

$

2,056

$

1,962

U-Haul commission expenses to SAC Holdings

 

42,843

 

40,780

U-Haul commission expenses to Private Mini

 

3,021

 

2,879

 

$

47,920

$

45,621

We lease space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us .

At December 31, 2016 , subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini 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 note with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $21.4 million, expenses of $ 2.1 million and cash flows of $ 19.9 million during the first nine months of fiscal 201 7 . Revenues and commission expenses related to the Dealer Agreements were $ 212.8 million and $ 45.9 million, respectively during the first nine months of fiscal 201 7 .

Pursuant to the variable interest entity model under Accounting Standards Codification (“ ASC ”) 810 – Consolidation (“ASC 810”) , Management determined that the junior note of SAC Holdings as well as the management agreements with SAC Holdings, Mercury, 4 SAC, 5 SAC, Galaxy, and Private Mini represent s potential variable interests for us. Management evaluated whether it should be identified as the primary beneficiary of one or more of these variable interest entities (“ VIE s ) using a two - step approach in which management (i) identified all other parties that hold interests in the VIEs, and (ii) determined if any variable interest holder has the power to direct the activities of the VIEs that most significantly impact their economic performance.

Management determined that they do not have a variable interest in the holding entities SAC Holding II Corporation, Private Mini, Mercury, 4 SAC, 5 SAC, or Galaxy based upon management agreements which are with the individual operating entities or through the issuance of junior debt ; therefore , we are precluded from consolidating these entities.

We have junior debt with the holding entity SAC Holding Corporation which represents a variable interest in the entity . Though we have certain protective rights within th is debt agreement, we have no present influence or control over th i s holding entit y unless the protective rights become exercisable, which management considers unlikely based on their payment history. As a result, we have no basis under ASC 810 to consolidate th i s entit y .

We do not have the power to direct the activities that most significantly impact the economic performance of the individual operating entities which have management agreements with U-Haul. There are no fees or penalties disclosed in the management agreement for termination of the agreement. Through control of the holding entities ' assets, and its ability and history of making key decisions relating to the entity and its assets, Blackwater, and its owner, are the variable interest holder with the power to direct the activities that most significantly impact each of the individual holding entities and the individual operating entities’ performance.  As a result, we have no basis under ASC 810 to consolidate these entities.

We have not provided financial or other support explicitly or implicitly during the quarter ended December 31, 2016 to any of these entities that we were not previously contractually required to provide. In addition, we currently have no plan to provide any financial support to any of these entities in the future. The carrying amount and classification of the assets and liabilities in our balance sheet s that relate to our variable interests in the aforementioned entities are as follows, which approximate the maximum exposure to loss as a result of our involvement with these entities:

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Related Party Assets

 

 

December 31,

 

March 31,

 

 

2016

 

2016

 

 

(Unaudited)

 

 

 

 

(In thousands)

U-Haul note receivable from SAC Holdings

$

48,429

$

49,322

U-Haul interest receivable from SAC Holdings

 

5,288

 

4,970

U-Haul receivable from SAC Holdings

 

27,466

 

23,127

U-Haul receivable from Mercury

 

9,930

 

8,016

Other (a)

 

592

 

299

 

$

91,705

$

85,734

(a) Timing differences for intercompany balances with insurance subsidiaries resulting from the three month difference in reporting periods .

1 1 . 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 Rep w est 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 are shown as liabilities on the condensed 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.

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


1 1 . Financial Information by Consolidating Industry Segment:

Consolidating balance sheets by industry segment as of December 31, 2016 are as follows:

 

 

Moving & Storage

Consolidated

 

Property & Casualty Insurance (a)

 

Life

Insurance (a)

 

Eliminations

 

 

AMERCO

Consolidated

 

 

(Unaudited)

 

 

(In thousands)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

971,002

$

11,258

$

1,925

$

 

$

984,185

Reinsurance recoverables and trade receivables, net

 

58,514

 

109,590

 

30,991

 

 

 

199,095

Inventories, net

 

79,682

 

 

 

 

 

79,682

Prepaid expenses

 

54,486

 

 

 

 

 

54,486

Investments, fixed maturities and marketable equities

 

 

249,780

 

1,450,801

 

 

 

1,700,581

Investments, other

 

29,694

 

68,997

 

278,122

 

 

 

376,813

Deferred policy acquisition costs, net

 

 

 

118,040

 

 

 

118,040

Other assets

 

74,960

 

768

 

2,321

 

 

 

78,049

Related party assets

 

93,873

 

12,290

 

461

 

(14,919)

(c)

 

91,705

 

 

1,362,211

 

452,683

 

1,882,661

 

(14,919)

 

 

3,682,636

 

 

 

 

 

 

 

 

 

 

 

 

Investment in subsidiaries

 

500,358

 

 

 

(500,358)

(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, at cost:

 

 

 

 

 

 

 

 

 

 

 

Land

 

633,725

 

 

 

 

 

633,725

Buildings and improvements

 

2,509,073

 

 

 

 

 

2,509,073

Furniture and equipment

 

477,131

 

 

 

 

 

477,131

Rental trailers and other rental equipment

 

493,214

 

 

 

 

 

493,214

Rental trucks

 

3,806,387

 

 

 

 

 

3,806,387

 

 

7,919,530

 

 

 

 

 

7,919,530

Less:  Accumulated depreciation

 

(2,314,849)

 

 

 

 

 

(2,314,849)

Total property, plant and equipment

 

5,604,681

 

 

 

 

 

5,604,681

Total assets

$

7,467,250

$

452,683

$

1,882,661

$

(515,277)

 

$

9,287,317

 

 

 

 

 

 

 

 

 

 

 

 

(a) Balances as of September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

(b) Eliminate investment in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

(c) Eliminate intercompany receivables and payables

 

 

 

 

 

 

 

 

 

 

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Consolidating balance sheets by industry segment as of December 31, 2016 are as follows:

 

 

Moving & Storage

Consolidated

 

Property & Casualty Insurance (a)

 

Life

Insurance (a)

 

Eliminations

 

 

AMERCO

Consolidated

 

 

(Unaudited)

 

 

(In thousands)

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

$

424,621

$

3,899

$

6,480

$

 

$

435,000

Notes, loans and leases payable

 

3,198,435

 

 

 

 

 

3,198,435

Policy benefits and losses, claims and loss expenses payable

 

397,542

 

247,169

 

438,916

 

 

 

1,083,627

Liabilities from investment contracts

 

 

 

1,085,775

 

 

 

1,085,775

Other policyholders' funds and liabilities

 

 

4,040

 

4,228

 

 

 

8,268

Deferred income

 

23,847

 

 

 

 

 

23,847

Deferred income taxes

 

749,979

 

11,542

 

30,140

 

 

 

791,661

Related party liabilities

 

12,122

 

2,700

 

97

 

(14,919)

(c)

 

Total liabilities

 

4,806,546

 

269,350

 

1,565,636

 

(14,919)

 

 

6,626,613

 

 

 

 

 

 

 

 

 

 

 

 

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

 

452,224

 

91,120

 

26,271

 

(117,601)

(b)

 

452,014

Accumulated other comprehensive income (loss)

 

(21,034)

 

12,088

 

44,183

 

(56,271)

(b)

 

(21,034)

Retained earnings

 

2,902,722

 

76,824

 

244,071

 

(320,685)

(b)

 

2,902,932

Cost of common shares in treasury, net

 

(525,653)

 

 

 

 

 

(525,653)

Cost of preferred shares in treasury, net

 

(151,997)

 

 

 

 

 

(151,997)

Unearned employee stock ownership plan shares

 

(6,055)

 

 

 

 

 

(6,055)

Total stockholders' equity

 

2,660,704

 

183,333

 

317,025

 

(500,358)

 

 

2,660,704

Total liabilities and stockholders' equity

$

7,467,250

$

452,683

$

1,882,661

$

(515,277)

 

$

9,287,317

 

 

 

 

 

 

 

 

 

 

 

 

(a) Balances as of September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

(b) Eliminate investment in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

(c) Eliminate intercompany receivables and payables

 

 

 

 

 

 

 

 

 

 

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Consolidating balance sheets by industry segment as of March 31, 201 6 are as follows:

 

 

Moving & Storage

Consolidated

 

Property & Casualty Insurance (a)

 

Life

Insurance (a)

 

Eliminations

 

 

AMERCO

Consolidated

 

 

 

Assets:

 

(In thousands)

Cash and cash equivalents

$

585,666

$

14,049

$

931

$

 

$

600,646

Reinsurance recoverables and trade receivables, net

 

34,451

 

111,978

 

28,781

 

 

 

175,210

Inventories, net

 

79,756

 

 

 

 

 

79,756

Prepaid expenses

 

134,300

 

 

 

 

 

134,300

Investments, fixed maturities and marketable equities

 

 

238,570

 

1,271,968

 

 

 

1,510,538

Investments, other

 

21,431

 

47,374

 

241,267

 

 

 

310,072

Deferred policy acquisition costs, net

 

 

 

136,386

 

 

 

136,386

Other assets

 

71,719

 

3,088

 

2,403

 

 

 

77,210

Related party assets

 

88,022

 

12,465

 

613

 

(15,366)

(c)

 

85,734

 

 

1,015,345

 

427,524

 

1,682,349

 

(15,366)

 

 

3,109,852

 

 

 

 

 

 

 

 

 

 

 

 

Investment in subsidiaries

 

432,277

 

 

 

(432,277)

(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, at cost:

 

 

 

 

 

 

 

 

 

 

 

Land

 

587,347

 

 

 

 

 

587,347

Buildings and improvements

 

2,187,400

 

 

 

 

 

2,187,400

Furniture and equipment

 

399,943

 

 

 

 

 

399,943

Rental trailers and other rental equipment

 

462,379

 

 

 

 

 

462,379

Rental trucks

 

3,514,175

 

 

 

 

 

3,514,175

 

 

7,151,244

 

 

 

 

 

7,151,244

Less:  Accumulated depreciation

 

(2,133,733)

 

 

 

 

 

(2,133,733)

Total property, plant and equipment

 

5,017,511

 

 

 

 

 

5,017,511

Total assets

$

6,465,133

$

427,524

$

1,682,349

$

(447,643)

 

$

8,127,363

 

 

 

 

 

 

 

 

 

 

 

 

(a) Balances as of December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

(b) Eliminate investment in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

(c) Eliminate intercompany receivables and payables

 

 

 

 

 

 

 

 

 

 

 

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Consolidating balance sheets by indus try segment as of March 31, 2016 are as follows:

 

 

Moving & Storage

Consolidated

 

Property & Casualty Insurance (a)

 

Life

Insurance (a)

 

Eliminations

 

 

AMERCO

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

$

492,982

$

1,535

$

8,096

$

 

$

502,613

Notes, loans and leases payable

 

2,665,396

 

 

 

 

 

2,665,396

Policy benefits and losses, claims and loss expenses payable

 

386,366

 

252,819

 

432,227

 

 

 

1,071,412

Liabilities from investment contracts

 

 

 

951,490

 

 

 

951,490

Other policyholders' funds and liabilities

 

 

3,017

 

5,633

 

 

 

8,650

Deferred income

 

22,784

 

 

 

 

 

22,784

Deferred income taxes

 

633,061

 

7,526

 

13,025

 

 

 

653,612

Related party liabilities

 

13,138

 

2,067

 

161

 

(15,366)

(c)

 

Total liabilities

 

4,213,727

 

266,964

 

1,410,632

 

(15,366)

 

 

5,875,957

 

 

 

 

 

 

 

 

 

 

 

 

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

 

451,839

 

91,120

 

26,271

 

(117,601)

(b)

 

451,629

Accumulated other comprehensive income (loss)

 

(60,525)

 

3,611

 

10,504

 

(14,115)

(b)

 

(60,525)

Retained earnings

 

2,533,431

 

62,528

 

232,442

 

(294,760)

(b)

 

2,533,641

Cost of common shares in treasury, net

 

(525,653)

 

 

 

 

 

(525,653)

Cost of preferred shares in treasury, net

 

(151,997)