AMERCO /NV/ (Form: 10-Q, Received: 11/06/2013 16:14:40)

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 September 30, 2013

[ ] 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.



1-11255	AMERCO	88-0106815
	(A Nevada Corporation)
	1325 Airmotive Way, Ste. 100
	Reno, Nevada 89502-3239
	Telephone (775) 688-6300

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 requiremen ts 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 Regulat ion 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 ac celerated 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.

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 November 1, 2013

TABLE OF CONTENTS

		Page
	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	a) Condensed Consolidated Balance Sheets as of September 30, 2013 (unaudited) and March 31, 2013	1
	b) Condensed Consolidated Statements of Operations for the Quarters ended September 30, 2013 and 2012 (unaudited)	2
	c) Condensed Consol i dated Statement of Operations for the Six Months ended September 30, 2013 and 2012 (unaudited)	3
	d ) Condensed Consolidated Statements of Comprehensive In come for the Quarters and Six Months ended September 30, 2013 and 2012 (unaudited)	4
	e ) Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2013 and 2012 (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 7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4.	Controls and Procedures	60

	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	61
Item 1A.	Risk Factors	61
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine and Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	61

Part i Financial information

ITEM 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED balance sheets

		September 30,		March 31,
		2013		2013
		(Unaudited)
		(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	679,576	$	463,744
Reinsurance recoverables and trade receivables, net		237,235		261,789
Inventories, net		61,430		56,396
Prepaid expenses		55,129		57,451
Investments, fixed maturities and marketable equities		1,114,340		1,095,338
Investments, other		212,707		241,765
Deferred policy acquisition costs, net		109,303		93,043
Other assets		104,591		99,986
Related party assets		168,830		182,035
		2,743,141		2,551,547
Property, plant and equipment, at cost:
Land		363,142		333,228
Buildings and improvements		1,313,963		1,197,875
Furniture and equipment		311,765		311,142
Rental trailers and other rental equipment		350,101		317,476
Rental trucks		2,330,298		2,154,688
		4,669,269		4,314,409
Less: Accumulated depreciation		(1,636,065)		(1,559,355)
Total property, plant and equipment		3,033,204		2,755,054
Total assets	$	5,776,345	$	5,306,601
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	362,493	$	358,491
Notes, loans and leases payable		1,775,119		1,661,845
Policy benefits and losses, claims and loss expenses payable		1,115,025		1,115,048
Liabilities from investment contracts		570,321		510,789
Other policyholders' funds and liabilities		7,788		7,294
Deferred income		32,388		30,217
Deferred income taxes		451,392		393,658
Total liabilities		4,314,526		4,077,342

Commitments and contingencies (notes 4, 7, 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 September 30 and March 31, 2013		–		–
Series B preferred stock, with no par value, 100,000 shares authorized; none
issued and outstanding as of September 30 and March 31, 2013		–		–
Series common stock, with or without par value, 150,000,000 shares authorized:
Series A common stock of $0.25 par value, 10,000,000 shares authorized;
none issued and outstanding as of September 30 and March 31, 2013		–		–
Common stock of $0.25 par value, 150,000,000 shares authorized; 41,985,700
issued and 19,607,788 outstanding as of September 30 and March 31, 2013		10,497		10,497
Additional paid-in capital		440,938		438,168
Accumulated other comprehensive loss		(44,109)		(22,680)
Retained earnings		1,733,589		1,482,630
Cost of common shares in treasury, net (22,377,912 shares as of September 30 and March 31, 2013)		(525,653)		(525,653)
Cost of preferred shares in treasury, net (6,100,000 shares as of September 30 and March 31, 2013)		(151,997)		(151,997)
Unearned employee stock ownership plan shares		(1,446)		(1,706)
Total stockholders' equity		1,461,819		1,229,259
Total liabilities and stockholders' equity	$	5,776,345	$	5,306,601

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

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED Statements of operations

		Quarter Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands, except share and per share amounts)
Revenues:
Self-moving equipment rentals	$	598,931	$	538,361
Self-storage revenues		45,572		37,978
Self-moving and self-storage products and service sales		65,379		61,730
Property management fees		5,292		4,902
Life insurance premiums		39,448		47,667
Property and casualty insurance premiums		10,867		8,947
Net investment and interest income		19,960		15,853
Other revenue		51,042		28,679
Total revenues		836,491		744,117

Costs and expenses:
Operating expenses		350,540		310,214
Commission expenses		78,378		68,564
Cost of sales		34,532		30,912
Benefits and losses		37,992		48,472
Amortization of deferred policy acquisition costs		6,057		3,088
Lease expense		25,818		29,591
Depreciation, net of (gains) on disposals of (($9,311) and ($5,532), respectively)		63,208		58,954
Total costs and expenses		596,525		549,795

Earnings from operations		239,966		194,322
Interest expense		(23,118)		(22,113)
Pretax earnings		216,848		172,209
Income tax expense		(78,857)		(62,789)
Earnings available to common stockholders	$	137,991	$	109,420
Basic and diluted earnings per common share	$	7.06	$	5.61
Weighted average common shares outstanding: Basic and diluted		19,554,633		19,512,550

Related party revenues for the second quarter of fiscal 201 4 and 201 3 , net of eliminations, were $8.4 million and $ 8.2 million , respectively.

Related party costs and expenses for the second quarter of fiscal 201 4 and 201 3 , net of eliminations, were $ 15.9 million and $ 13.9 million , respectively.

Please see note 9, Related Party Transactions of the Notes to Condensed Consolidated Financial Statements for more information on the related party revenues and costs and e xpenses.

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

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED Statements of operations

		Six Months Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands, except share and per share amounts)
Revenues:
Self-moving equipment rentals	$	1,120,580	$	1,005,355
Self-storage revenues		87,671		72,714
Self-moving and self-storage products and service sales		136,070		128,908
Property management fees		10,453		9,762
Life insurance premiums		80,510		94,093
Property and casualty insurance premiums		18,833		16,190
Net investment and interest income		38,949		30,370
Other revenue		90,256		54,401
Total revenues		1,583,322		1,411,793

Costs and expenses:
Operating expenses		660,041		593,607
Commission expenses		147,005		129,671
Cost of sales		70,102		63,139
Benefits and losses		80,625		96,810
Amortization of deferred policy acquisition costs		9,740		5,899
Lease expense		52,825		62,387
Depreciation, net of (gains) on disposals of (($20,876) and ($13,048), respectively)		120,642		115,079
Total costs and expenses		1,140,980		1,066,592

Earnings from operations		442,342		345,201
Interest expense		(46,446)		(45,604)
Pretax earnings		395,896		299,597
Income tax expense		(144,937)		(109,608)
Earnings available to common shareholders	$	250,959	$	189,989
Basic and diluted earnings per common share	$	12.84	$	9.74
Weighted average common shares outstanding: Basic and diluted		19,550,128		19,507,456

Related party revenues for the first six months of fiscal 201 4 and 201 3 , net of eliminations, were $ 16.8 million and $ 16.9 million , respectively.

Related party costs and expenses for the first six months of fiscal 201 4 and 201 3 , net of eliminations, were $29.9 million and $ 26.2 million , respectively.

Please see note 9, Related Party Transactions of the Notes to Condensed Consolidated Financial State ments 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 September 30, 2013		Pre-tax		Tax		Net
		(Unaudited)
		(In thousands)
Comprehensive income:
Net earnings	$	216,848	$	(78,857)	$	137,991
Other comprehensive income (loss):
Foreign currency translation		1,557		–		1,557
Unrealized net loss on investments		(41,095)		14,322		(26,773)
Change in fair value of cash flow hedges		1,946		(740)		1,206
Total comprehensive income	$	179,256	$	(65,275)	$	113,981



Quarter Ended September 30, 2012		Pre-tax		Tax		Net
		(Unaudited)
		(In thousands)
Comprehensive income:
Net earnings	$	172,209	$	(62,789)	$	109,420
Other comprehensive income (loss):
Foreign currency translation		3,459		–		3,459
Unrealized net gain on investments		10,673		(3,769)		6,904
Change in fair value of cash flow hedges		768		(292)		476
Total comprehensive income	$	187,109	$	(66,850)	$	120,259


Six Months Ended September 30, 2013		Pre-tax		Tax		Net
		(Unaudited)
		(In thousands)
Comprehensive income:
Net earnings	$	395,896	$	(144,937)	$	250,959
Other comprehensive income (loss):
Foreign currency translation		(2,205)		–		(2,205)
Unrealized net loss on investments		(41,006)		14,254		(26,752)
Change in fair value of cash flow hedges		12,142		(4,614)		7,528
Total comprehensive income	$	364,827	$	(135,297)	$	229,530



Six Months Ended September 30, 2012		Pre-tax		Tax		Net
		(Unaudited)
		(In thousands)
Comprehensive income:
Net earnings	$	299,597	$	(109,608)	$	189,989
Other comprehensive income (loss):
Foreign currency translation		1,530		–		1,530
Unrealized net gain on investments		12,546		(4,349)		8,197
Change in fair value of cash flow hedges		253		(96)		157
Total comprehensive income	$	313,926	$	(114,053)	$	199,873

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

AMERCO AND CONSOLIDATED ENTITIES

Condensed consolidatED statements of cash flows

		Six Months Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
Cash flow from operating activities:
Net earnings	$	250,959	$	189,989
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation		141,518		128,127
Amortization of deferred policy acquisition costs		9,740		5,899
Change in allowance for losses on trade receivables		(6)		(3)
Change in allowance for inventory reserves		716		1,705
Net gain on sale of real and personal property		(20,876)		(13,048)
Net gain on sale of investments		(4,060)		238
Deferred income taxes		63,947		24,926
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		24,561		33,416
Inventories		(5,750)		(1,629)
Prepaid expenses		2,323		422
Capitalization of deferred policy acquisition costs		(16,289)		(24,489)
Other assets		(4,370)		19,770
Related party assets		8,650		142,239
Accounts payable and accrued expenses		24,866		45,412
Policy benefits and losses, claims and loss expenses payable		309		(17,413)
Other policyholders' funds and liabilities		494		4,130
Deferred income		2,191		(671)
Related party liabilities		4,475		415
Net cash provided by operating activities		483,398		539,435

Cash flows from investing activities:
Purchases of:
Property, plant and equipment		(457,671)		(280,986)
Short term investments		(154,703)		(150,987)
Fixed maturities investments		(174,593)		(179,941)
Equity securities		(388)		(26)
Preferred stock		(635)		(1,200)
Real estate		(252)		(792)
Mortgage loans		(14,260)		(50,828)
Proceeds from sales and paydowns of:
Property, plant and equipment		176,453		132,597
Short term investments		162,580		154,577
Fixed maturities investments		93,050		52,586
Equity securities		6,803		–
Preferred stock		6,004		1,453
Real estate		–		590
Mortgage loans		36,415		12,700
Net cash used by investing activities		(321,197)		(310,257)

Cash flows from financing activities:
Borrowings from credit facilities		138,041		88,847
Principal repayments on credit facilities		(122,945)		(171,496)
Debt issuance costs		(233)		(1,010)
Capital lease payments		(21,425)		(9,883)
Leveraged Employee Stock Ownership Plan - repayments from loan		260		316
Securitization deposits		–		(1,729)
Investment contract deposits		74,253		169,933
Investment contract withdrawals		(14,721)		(15,275)
Net cash provided (used) by financing activities		53,230		59,703

Effects of exchange rate on cash		401		(240)

Increase in cash and cash equivalents		215,832		288,641
Cash and cash equivalents at the beginning of period		463,744		357,180
Cash and cash equivalents at the end of period	$	679,576	$	645,821
The accompanying notes are an integral part of these consolidated financial statements

AMERCO and consolidated entities

notes to condensed consolidatED financial statements

1. Basis of Presentation

AMERCO, a Nevada corporation (“AMERCO”), has a second fiscal quarter that ends on the 30 th of September for each year that is referenced. Our insurance company subsidiaries have a second quarter that ends on the 3 0 th of June for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the financial position or results of operations. The Company discloses any material events occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 201 3 and 20 12 correspond to fiscal 201 4 and 201 3 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 September 30 , 201 3 and the related condensed consolidated statements of operations , comprehensive income for the second quarter and first six months and cash flows for the first six months of fiscal 201 4 and 201 3 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 necessaril y 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 state ments and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 201 3 .

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 “Company,” “we,” “us” or “our” refers to AMERCO and all of it s 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 include s 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 mobile self-storage spaces to the “d o-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 includes Rep w est and its wholly-owned subsidiaries and ARCOA risk retention group (“ARCOA”). The Property and Casualty Insurance operating segment provides loss adjusting and claims handling for U-Haul through regional offices across North America. The Property and Casualty Insurance operating segment also underwrites components of the Safemove, Safetow, Safemove Plus, Safestor and Safestor Mobile protection packages to U-Haul customers. The business plan for the Property and Casualty Insurance operating segment 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 includes Oxford and its wholly-owned subsidiaries. The Life Insurance operating segment provides life and health in surance 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 availab le 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 share s committed to be released , were 48 ,649 and 90,159 as of September 30 , 201 3 and 201 2 , respectively.

3. Investments

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without cal l 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 $ 16.4 million at September 30 , 201 3 .

Available-for-Sale Investments

Available-for-sale investments at September 30 , 201 3 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	$	28,048	$	1,932	$	(3)	$	(293)	$	29,684
U.S. government agency mortgage-backed securities		44,735		2,772		(4)		(1,009)		46,494
Obligations of states and political subdivisions		162,678		9,304		(132)		(1,916)		169,934
Corporate securities		800,834		28,872		(1,336)		(22,474)		805,896
Mortgage-backed securities		5,613		177		(35)		–		5,755
Redeemable preferred stocks		18,440		385		(64)		(312)		18,449
Common stocks		37,356		2,171		(1,291)		(108)		38,128
	$	1,097,704	$	45,613	$	(2,865)	$	(26,112)	$	1,114,340

The table above includes 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 $103.3 million during the first six months of fiscal 2014. The gross realized gains on these sales totaled $3.2 million. The gross rea lized losses on these sales totaled $0.9 million .

The unrealized losses of more than twelve months in the available-for-sale table are considered temporary declines. We track each investment with an unrealized loss and evaluate them 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 recognized these write-downs through earnings. There were no write downs in the second quarter or for the first six months of fiscal 2014 and 2013.

The investment portfolio primarily consists of corporate securities and U.S. governme nt 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 tim e 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 matu rity 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 mort gage backed securities credit losses include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of asset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

Credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in other comprehensive income were as follows:

		Credit Loss
		(Unaudited)
		(In thousands)
Balance at March 31, 2013	$	552
Additions:
Other-than-temporary impairment not previously recognized		–
Balance at September 30, 2013	$	552

The adjusted cost and estimated market value of available-for-sale investments at September 30 , 201 3 , by contractual maturity, were as follows:

		Amortized Cost		Estimated Market Value
		(Unaudited)
		(In thousands)
Due in one year or less	$	25,259	$	25,520
Due after one year through five years		186,894		195,909
Due after five years through ten years		316,233		320,354
Due after ten years		507,909		510,225
		1,036,295		1,052,008

Mortgage backed securities		5,613		5,755
Redeemable preferred stocks		18,440		18,449
Common stocks		37,356		38,128
	$	1,097,704	$	1,114,340

4. Borrowings

Long-Term Debt

Long-term debt was as follows:

				September 30,		March 31,
	2014 Rate (a)	Maturities		2013		2013
				(Unaudited)
				(In thousands)
Real estate loan (amortizing term)	6.93%	2023	$	255,000	$	235,000
Real estate loan (amortizing term)	2.08%	2016		24,182		24,630
Real estate loan (revolving credit)	–	2014		–		–
Senior mortgages	4.90% - 5.75%	2015 - 2038		546,957		556,522
Working capital loan (revolving credit)	–	2015		–		–
Fleet loans (amortizing term)	1.95% - 6.14%	2014 - 2020		373,324		361,079
Fleet loans (securitization)	4.90% - 5.56%	2014 - 2017		170,531		190,801
Capital leases (rental equipment)	2.23% - 7.80%	2015 - 2020		371,754		273,458
Other obligations	3.00% - 8.00%	2013 - 2043		33,371		20,355
Total notes, loans and leases payable			$	1,775,119	$	1,661,845

(a) Interest rate as of September 30, 2013, 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. During the first quarter of fiscal 2014 this loan was amended . As part of the amendment the revolver component of the agreement was terminated and certain col lateral was released. The final maturity date of the term loan was extended to April 20 23 . As of September 30 , 201 3 , the outstanding balance on the Real Estate Loan was $255.0 million . U-Haul International, Inc. is a guarantor of this loan. The Real Estat e 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 l oan a greement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. At September 30 , 201 3 , the applicable LIBOR was 0. 19 % and the applicable margin was 1.50%, the sum of which was 1. 69 %. The rate on the term fac ility portion of the Real Estate Loan is hedged with an interest rate swap fixing the rate at 6.93% based on current margin. 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.

Amerco Real Estate Company and a subsidiary of U-Haul International, Inc. entered into a revolving credit construction loan effective June 29, 2006. This loan was modifie d and extended on June 2 7 , 201 1 . The loan is now comprised of a term loan facility with an initial availability of $ 26.1 million and a final maturity of June 201 6 . As of September 30 , 201 3 , the outstanding balance was $24.2 million .

This Real Estate Loan r equires monthly principal and interest payments , with the unpaid loan balance and any accrued and unpaid interest due at maturity. The interes t rate, per the provision of this loan a greement, is the applicable LIBOR plus a margin of 1.90%. At September 30, 201 3 , the applicable LIBOR was 0.1 8 % and the margin was 1.90%, the sum of which was 2.0 8 %. U-Haul International , Inc. and AMERCO are guarantors of this loan. The default provisions of the loan include non-payment of principal or interest and other sta ndard reporting and change-in-control covenants.

On April 29, 2011, Amerco Real Estate Company and U-Haul Company of Florida entered into a revolving credit agreement for $100.0 million. This agreement was amended in February 2013 and the maturity extended to April 2014 with an option for a one year extension and the revolver commitment was reduced to $50.0 million. As of September 30, 2013, we had the full $50.0 million available to be drawn. The interest rate is the applicable LIBOR plus a margin of 1.25% . AMERCO and U-Haul International, Inc. are guarantors of this facility. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants.

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 September 30 , 201 3 were in the aggregate amount of $5 47.0 million and mature between 2015 and 2038 . The s enior m ortgages require average monthly principal and 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 interest rates, per the prov isions of the senior mortgages, range between 4.90 % and 5. 75 %. 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 princip al 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 max imum amount that can be drawn at any one time is $25.0 million. At September 30, 2013, we had the full $25.0 million available to be drawn. This loan is secured by certain properties owned by th e borrower. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. This agreement was amended in February 2013 and the maturity extended to April 2015. This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. U-Ha ul International, Inc. and AMERCO are the guarantors 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. The interest rate, per the provision of th is lo an a greement, is the applicable LIBOR plus a margin of 1. 25 %.

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 September 30 , 201 3 was $25 8.3 million with the final maturities between February 2014 and July 2020 .

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 a margin between 0.90% and 2.63%. At September 30, 2013, the applicable LIBOR was between 0.1 8 % and 0. 19 % and applicable margins were between 0.90% and 2.63%. The interest rates are hedged with interest rate swaps fixing the r ates between 2.82% and 6. 14 % based on current margins. Additionally, $ 77.4 million of these loans are carried at fixed rates ranging between 1.95% and 3.94%.

AMERCO and U-Haul International, Inc. are guarantors of these loans. The default provisions of the se loans include non-payment of principal or interest and other standard reporting and change-in-control covenants.

On December 31, 2009 , a subsidiary of U-Haul International, Inc. entered into an $85.0 million term note that was used to fund cargo van and pickup acquisitions for the pas t t wo years. This term note was amended on August 26, 2011. The amount of the term note was increased to $95.0 million. On December 22, 2011, we entered into another term loan for $20.0 million. The final maturity date of th ese notes is August 2016 . The agreement s contain options to extend the maturity through May 2017 . The se note s are secured by the purchased equipment and the corresponding operating cash flows associated with their operation. These notes have fixed intere st rates between 3.52% and 3.53% . At September 30, 2013, the outstanding balance was $115.0 million .

AMERCO and 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

U-Haul S Fleet and its subsidiaries (collectively, “USF”) issued a $217.0 million asset-backed note (“2007 Box Truck Note”) on June 1, 2007. 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 throughout fiscal 2008. U.S. Bank, NA acts as the trustee for this securitization.

The 2007 Box Truck Note has a fixed interest rate of 5.56% with an expected final maturity of February 2014. At September 30 , 201 3 , the outstanding balance was $7 3 . 1 million. The note is secured by the box trucks that were purchased and the corresponding operating cas h flows associated with their operation.

The 2007 Box Truck Note has the benefit of a financial guaranty insurance policy which guarantees the timely payment of interest on and the ultimate payment of the principal of this note.

2010 U-Haul S Fleet and its subsidiaries (collectively, “2010 USF”) issued a $155.0 million asset-backed note (“2010 Box Truck Note”) on October 28, 2010. 2010 USF is a bankruptcy-remote special purpose entity wholly-owned by U-Haul International, Inc. The net proceeds from the secu ritized 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 September 30 , 201 3 , the outstanding balance was $ 97.5 million. The note is secur ed by the box trucks being purchased and the corresponding operating cash flows associated with their operation.

The 2007 Box Truck Note and 2010 Box Truck Note are subject to certain covenant s with respect to liens, additional indebtedness of the special purpose entities, the disposition of assets and other customary covenants of bankruptcy-remote special purpose entities. The default provisions of these notes include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Capital Leases

We entered into capital leases for new equipment between April 2008 and September 2013 , with terms of the leases between 3 and 7 years. At September 30, 2013, the bala nce of these leases was $ 371.8 million .

Other Obligations

In February 2011 , the Company and US Bank, N ational A ssociation (the “Trustee”) entered into the U-Haul Investors Club Indenture. The Company and the Trustee entered into this indenture to provide for the issuance of notes by us directly to investors over our proprietary website, uhaulinvestorsclub.com (“U-Notes”). The U-Notes are secured by various types of collateral including rental equipment and real estate. U-Notes are issued in smaller serie s 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 September 30 , 201 3, the aggreg ate outstanding principal balance of the U-N otes issued was $ 39.8 million of which $6. 4 million is with our insurance subsidiaries with interest rates between 3.00% and 8.00% and maturity dates between 2013 and 204 3 .

Annual Maturities of Notes, Loans and Leases Payable

The annual maturities of long-term debt as of September 30 , 201 3 for the next five years and thereafter are as follows:

		Year Ending September 30,
		2014		2015		2016		2017		2018		Thereafter
		(Unaudited)
		(In thousands)
Notes, loans and leases payable, secured	$	241,914	$	565,402	$	283,133	$	116,779	$	168,456	$	399,435

Interest on Borrowings

Interest Expense

Components of interest expense include the following:

		Quarter Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
Interest expense	$	18,055	$	16,529
Capitalized interest		(128)		(94)
Amortization of transaction costs		843		1,050
Interest expense resulting from derivatives		4,348		4,628
Total interest expense	$	23,118	$	22,113



		Six Months Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
Interest expense	$	35,869	$	32,175
Capitalized interest		(270)		(171)
Amortization of transaction costs		1,694		2,135
Interest expense resulting from derivatives		9,153		11,465
Total interest expense	$	46,446	$	45,604

Interest paid in cash , including payments related to derivative contracts, amounted to $22.9 million and $ 21.3 million for the second quarter of fiscal 201 4 and 201 3, respectively and $44.9 million and $42.5 million for the first six months of fiscal 2014 and 2013, respectively.

Interest Rates

Interest rates and Company borrowings were as follows:

		Revolving Credit Activity
		Quarter Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands, except interest rates)
Weighted average interest rate during the quarter		1.52%		1.69%
Interest rate at the end of the quarter		1.52%		0.00%
Maximum amount outstanding during the quarter	$	25,000	$	48,920
Average amount outstanding during the quarter	$	25,000	$	26,374
Facility fees	$	64	$	106



		Revolving Credit Activity
		Six Months Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands, except interest rates)
Weighted average interest rate during the first six months		1.50%		1.71%
Interest rate at the end of the first six months		1.52%		0.00%
Maximum amount outstanding during the first six months	$	25,000	$	48,920
Average amount outstanding during the first six months	$	24,590	$	25,154
Facility fees	$	156	$	284

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 cert ain 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 counterpartie s 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)

$	300.0		8/16/2006	8/18/2006	8/10/2018	8/4/2006
	30.0		2/9/2007	2/12/2007	2/10/2014	2/9/2007
	20.0		3/8/2007	3/12/2007	3/10/2014	3/8/2007
	20.0		3/8/2007	3/12/2007	3/10/2014	3/8/2007
	19.3	(a)	4/8/2008	8/15/2008	6/15/2015	3/31/2008
	19.0		8/27/2008	8/29/2008	7/10/2015	4/10/2008
	30.0		9/24/2008	9/30/2008	9/10/2015	9/24/2008
	15.0	(a)	3/24/2009	3/30/2009	3/30/2016	3/25/2009
	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	7/1/2011
	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 September 30, 2013 , the total notional amount of our variable interest rate swaps on debt and an operating lease was $4 11.4 million and $13. 0 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
		September 30, 2013		March 31, 2013
		(Unaudited)
		(In thousands)
Interest rate contracts designated as hedging instruments	$	39,875	$	51,550


		The Effect of Interest Rate Contracts on the Statements of Operations For the Six Months Ended

		September 30, 2013		September 30, 2012
		(Unaudited)
		(In thousands)
Loss recognized in income on interest rate contracts	$	9,153	$	11,465
Gain recognized in AOCI on interest rate contracts (effective portion)	$	(12,142)	$	(253)
Loss reclassified from AOCI into income (effective portion)	$	8,685	$	10,225
Loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing)	$	468	$	1,240

Gains or losses recognized in income on derivatives are recorded as interest expense in the statements of operations. At September 30, 2013, we expect to reclassify $ 15.1 million of net losses on interest rate contracts from accumulated other comprehensive income to earnings as interest expense over the next twelve months. During the first six months of fiscal 2014, we reclassified $ 8.7 million of net losses on interes t rate contracts from accumulated other comprehensive income to interest expense.

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 (Loss) on Investments		Fair Market Value of Cash Flow Hedges		Postretirement Benefit Obligation Gain		Accumulated Other Comprehensive Income (Loss)
		(Unaudited)
		(In thousands)
Balance at March 31, 2013	$	(30,153)	$	39,645	$	(32,298)	$	126	$	(22,680)
Foreign currency translation		(2,205)		–		–		–		(2,205)
Unrealized net loss on investments		–		(26,752)		–		–		(26,752)
Change in fair value of cash flow hedges		–		–		(1,157)		–		(1,157)
Amounts reclassified from AOCI		–		–		8,685		–		8,685
Other comprehensive income (loss)		(2,205)		(26,752)		7,528		–		(21,429)
Balance at September 30, 2013	$	(32,358)	$	12,893	$	(24,770)	$	126	$	(44,109)

7 . 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 201 9 . As of September 30, 2013 , we have guaranteed $ 110.1 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.

Lease commitments for leases having terms of more than one year were as follows:


		Property, Plant and Equipment		Rental Equipment		Total
		(Unaudited)
				(In thousands)
Year-ended September 30:
2014	$	10,500	$	72,044	$	82,544
2015		2,055		48,873		50,928
2016		1,945		18,927		20,872
2017		1,825		12,204		14,029
2018		1,091		10,473		11,564
Thereafter		4,767		5,409		10,176
Total	$	22,183	$	167,930	$	190,113

8 . 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 mat erials 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 cur rently 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.

9 . Related Party Transactions

As set forth in the 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 Securities and Ex change Commission (“SEC”) rules and regulations. Accordingly, all such related party transactions are submitted to the Audit Committee for ongoing review and oversight. Our internal processes ensure that our legal and finance departments identify and monit or potential related party transactions which 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 c onsolidated 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 third party, arm’s-length transactions.

SAC Holding Co rporation 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. Between 1994 and 2002 , we sold rea l estate and various self-storage properties to SAC Holdings, resulting in significant cash flows to the Company.

Management believes that the se sales to SAC Holdings provided a unique structure for the Company to earn additional moving equipment rental re venues and property management fee revenues from the SAC Holdings self-storage properties that the Company manages.

Related Party Revenue

		Quarter Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
U-Haul interest income revenue from SAC Holdings	$	1,733	$	1,981
U-Haul interest income revenue from Private Mini		1,349		1,358
U-Haul management fee revenue from SAC Holdings		4,189		3,857
U-Haul management fee revenue from Private Mini		604		573
U-Haul management fee revenue from Mercury		500		472
	$	8,375	$	8,241


		Six Months Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
U-Haul interest income revenue from SAC Holdings	$	3,652	$	4,457
U-Haul interest income revenue from Private Mini		2,686		2,703
U-Haul management fee revenue from SAC Holdings		8,263		7,686
U-Haul management fee revenue from Private Mini		1,198		1,140
U-Haul management fee revenue from Mercury		993		936
	$	16,792	$	16,922

During the first six months of fiscal 201 4 , subsidiaries of the Company held various junior unsecured notes of SAC Holdings. Substantially all of the equity interest of SAC Holdings is controlled by Blackwater Investments, Inc. (“Blackwater”). Blackwater is wholly-owned by Mark V. Shoen, a signifi cant stock holder of AMERCO. We do not have an equity ownership interest in SAC Holdings. We received cash interest payments of $ 13.9 million and $ 8.9 million from SAC Holdings during the first six months of fiscal 201 4 and 201 3 , respectively. The largest a ggregate amount of notes receivable outstanding during the first six months of fiscal 201 4 was $72.4 million and the aggregate notes receivable balance at September 30 , 201 3 was $72. 0 million. In accordance with the terms of these notes, SAC Holdings may p repay the notes without penalty or premium at any time. The scheduled maturities of these notes are between 201 7 and 20 19 .

During the first six months of fiscal 201 4 , AMERCO and U-Haul held various junior notes issued by Private Mini Storage Realty, L.P. (“Private Mini”). The equity interests of Private Mini are ultimately controlled by Blackwater. We received cash interest payments of $2.7 million from Private Mini during the first six months of both fiscal 201 4 and 201 3 . The largest aggregate amount outs tanding during the first six months of fiscal 201 4 was $65.9 million and t he aggregate notes receivable balance at September 30 , 201 3 was $65.7 million.

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 b etween 4% and 10% of the gross receipts plus reimbursement for certain expenses. We received management fees, exclusive of reimbursed expenses, of $ 15.7 million and $14.4 million from the above mentioned entities during the first six months of fiscal 201 4 and 201 3, respectively . This management fee is consistent with the fee received for other properties the Company previously managed for third parties. SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini are substantially controlled by Blackwater. Mercury i s substantially controlled by Mark V. Shoen. James P. Shoen, a significant stock holder and director of AMERCO and an estate planning trust benefitting Shoen children have an interest in Mercury.

Related Party Costs and Expenses

		Quarter Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
U-Haul lease expenses to SAC Holdings	$	655	$	655
U-Haul commission expenses to SAC Holdings		14,407		12,455
U-Haul commission expenses to Private Mini		893		812
	$	15,955	$	13,922

		Six Months Ended September 30,
		2013		2012
		(Unaudited)
		(In thousands)
U-Haul lease expenses to SAC Holdings	$	1,310	$	1,316
U-Haul commission expenses to SAC Holdings		26,927		23,389
U-Haul commission expenses to Private Mini		1,688		1,507
	$	29,925	$	26,212

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 September 30 , 201 3 , 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 su bsidiaries are substantially identical to the terms of those with our other independent dealers whereby commissions are paid by the Company based upon equipment rental revenues .

These agreements and notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $15.8 million, expenses of $ 1.3 million and cash flows of $ 29.3 million during the first six months of fi scal 201 4 . Revenues and commission expenses related to the Dealer Agreements were $ 131.1 million and $ 28.6 million, respectively during the first six months of fiscal 201 4 .

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

Management determined that they do not have a variable interest in the holding entities Mercury, SAC Holding II Cor poration, 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 entities SAC Holding Corporation and Private Mini which represents a variable interest in each individual entity. Though we have certain protective rights within these debt agreements, we have no present influence or control over these holding entities unl ess their 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 these entities.

We do not have the power to direct the activities that most signi ficantly 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 holdin g 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 in dividual 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 during the first six months ended September 30, 2013 t o 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:

Related Party Assets

		September 30,		March 31,
		2013		2013
		(Unaudited)
		(In thousands)
U-Haul notes, receivables and interest from Private Mini	$	68,772	$	68,593
U-Haul notes receivable from SAC Holding		71,960		72,397
U-Haul interest receivable from SAC Holdings		4,192		14,483
U-Haul receivable from SAC Holdings		17,320		22,336
U-Haul receivable from Mercury		2,452		3,640
Other (a)		4,134		586
	$	168,830	$	182,035


(a) Timing difference for intercompany balances with insurance subsidiaries.

1 0 . 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.

M anagement 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 subsidiari es.

Investments in subsidiaries are accounted for by the parent using the equity method of accounting.

1 0 . Financial Information by Consolidating Industry Segment:

Consolidating balance sheets by industry segment as of September 30, 2013 are as follows:

		Moving & Storage											AMERCO Legal Group
		AMERCO		U-Haul		Real Estate		Eliminations			Moivng & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(Unaudited)
		(In thousands)
Assets:
Cash and cash equivalents	$	477,559	$	158,650	$	1,499	$	–		$	637,708	$	5,450	$	36,418	$	–		$	679,576
Reinsurance recoverables and trade receivables, net		–		26,977		177		–			27,154		181,521		28,560		–			237,235
Inventories, net		–		61,430		–		–			61,430		–		–		–			61,430
Prepaid expenses		11,297		43,034		798		–			55,129		–		–		–			55,129
Investments, fixed maturities and marketable equities		18,104		–		–		–			18,104		180,270		915,966		–			1,114,340
Investments, other		–		–		28,648		–			28,648		52,128		131,931		–			212,707
Deferred policy acquisition costs, net		–		–		–		–			–		–		109,303		–			109,303
Other assets		113		70,229		33,115		–			103,457		902		232		–			104,591
Related party assets		992,780		113,254		9		(935,949)	(c)		170,094		14,417		489		(16,170)	(c)		168,830
		1,499,853		473,574		64,246		(935,949)			1,101,724		434,688		1,222,899		(16,170)			2,743,141

Investment in subsidiaries		441,044		–		–		(75,586)	(b)		365,458		–		–		(365,458)	(b)		–

Property, plant and equipment, at cost:
Land		–		54,059		309,083		–			363,142		–		–		–			363,142
Buildings and improvements		–		195,531		1,118,432		–			1,313,963		–		–		–			1,313,963
Furniture and equipment		70		297,161		14,534		–			311,765		–		–		–			311,765
Rental trailers and other rental equipment		–		350,101		–		–			350,101		–		–		–			350,101
Rental trucks		–		2,330,298		–		–			2,330,298		–		–		–			2,330,298
		70		3,227,150		1,442,049		–			4,669,269		–		–		–			4,669,269
Less: Accumulated depreciation		(53)		(1,258,087)		(377,925)		–			(1,636,065)		–		–		–			(1,636,065)
Total property, plant and equipment		17		1,969,063		1,064,124		–			3,033,204		–		–		–			3,033,204
Total assets	$	1,940,914	$	2,442,637	$	1,128,370	$	(1,011,535)		$	4,500,386	$	434,688	$	1,222,899	$	(381,628)		$	5,776,345

(a) Balances as of June 30, 2013
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables

Consolidating balance sheets by industry segment as of September 30, 2013 are as follows:

		Moving & Storage											AMERCO Legal Group
		AMERCO		U-Haul		Real Estate		Eliminations			Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(Unaudited)
		(In thousands)
Liabilities:
Accounts payable and accrued expenses	$	1,040	$	352,916	$	4,288	$	–		$	358,244	$	–	$	4,249	$	–		$	362,493
Notes, loans and leases payable		–		985,384		789,735		–			1,775,119		–		–		–			1,775,119
Policy benefits and losses, claims and loss expenses payable		–		381,979		–		–			381,979		323,175		409,871		–			1,115,025
Liabilities from investment contracts		–		–		–		–			–		–		570,321		–			570,321
Other policyholders' funds and liabilities		–		–		–		–			–		3,233		4,555		–			7,788
Deferred income		–		32,388		–		–			32,388		–		–		–			32,388
Deferred income taxes		476,609		–		–		–			476,609		(34,629)		9,412		–			451,392
Related party liabilities		–		478,524		471,653		(935,949)	(c)		14,228		1,774		168		(16,170)	(c)		–
Total lia bilities		477,649		2,231,191		1,265,676		(935,949)			3,038,567		293,553		998,576		(16,170)			4,314,526

Stockholders' equity:
Series preferred stock:
Series A preferred stock		–		–		–		–			–		–		–		–			–
Series B preferred stock		–		–		–		–			–		–		–		–			–
Series A common stock		–		–		–		–			–		–		–		–			–
Common stock		10,497		1		1		(2)	(b)		10,497		3,301		2,500		(5,801)	(b)		10,497
Additional paid-in capital		441,148		121,230		147,941		(269,171)	(b)		441,148		91,120		26,271		(117,601)	(b)		440,938
Accumulated other comprehensive income (loss)		(44,109)		(57,002)		–		57,002	(b)		(44,109)		1,771		11,598		(13,369)	(b)		(44,109)
Retained earnings (deficit)		1,733,379		148,663		(285,248)		136,585	(b)		1,733,379		44,943		183,954		(228,687)	(b)		1,733,589
Cost of common shares in treasury, net		(525,653)		–		–		–			(525,653)		–		–		–			(525,653)
Cost of preferred shares in treasury, net		(151,997)		–		–		–			(151,997)		–		–		–			(151,997)
Unearned employee stock ownership plan shares		–		(1,446)		–		–			(1,446)		–		–		–			(1,446)
Total stockholders' equity (deficit)		1,463,265		211,446		(137,306)		(75,586)			1,461,819		141,135		224,323		(365,458)			1,461,819
Tot al liabilities and stockholders' equity	$	1,940,914	$	2,442,637	$	1,128,370	$	(1,011,535)