U-Haul 2006 Annual Report Download - page 123

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Life Insurance
Other than amounts payable to AMERCO, Oxford had no other notes and loans payable in less than one year. Its
accounts payable, accrued expenses were approximately $3.2 million. Oxford’ s financial assets (cash, receivables,
short-term investments, other investments and fixed maturities) at December 31, 2005 were approximately $702.0
million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance
companies. As a result, Oxford’ s funds are generally not available to satisfy the claims of AMERCO or its legal
subsidiaries.
Oxford’ s stockholder’ s equity was $127.3 million, $115.0 million, and $121.0 million at December 31, 2005,
2004 and 2003, respectively. The increase resulted from earnings of $8.9 million, $9.8 million of related party gains
from the sale of real estate recorded directly to additional paid-in capital, offset by a $6.4 million decrease in other
comprehensive income. Oxford does not use debt or equity issues to increase capital and therefore has no exposure
to capital market conditions other than through its investment portfolio.
SAC Holding II
SAC Holding II operations are funded by various mortgage loans and unsecured notes. SAC Holding II does not
utilize revolving lines of credit to finance its operations or acquisitions. Certain of SAC Holding II loan agreements
contain restrictive covenants and restrictions on incurring additional subsidiary indebtedness.
Cash Provided from Operating Activities by Operating Segments
Moving and Self-Storage
Cash provided by operating activities was $276.1 million, $226.5 million and $60.7 million in fiscal 2006, 2005
and 2004, respectively. Cash provided by operating activities increased in fiscal 2006, compared with fiscal 2005
due primarily to improved operating performance.
Property and Casualty Insurance
Cash used by operating activities was $28.9 million, $31.6 million, and $86.1 million for the years ending
December 31, 2005, 2004, and 2003, respectively. The decrease in cash used by operating activities was the result of
RepWest’ s exiting its non U-Haul lines of business and the associated reduction of reserves in the lines exited.
RepWest’ s cash and cash equivalents and short-term investment portfolio were $106.2 million, $90.3 million, and
$62.1 million at December 31, 2005, 2004, and 2003, respectively. This balance reflects funds in transition from
maturity proceeds to long term investments. This level of liquid assets, combined with budgeted cash flow, is
adequate to meet periodic needs. Capital and operating budgets allow RepWest to schedule cash needs in
accordance with investment and underwriting proceeds.
Life Insurance
Cash provided (used) by operating activities from Oxford were ($0.7) million, $24.8 million and $20.9 million for
the years ending December 31, 2005, 2004 and 2003, respectively. 2005 includes the $10.6 million settlement
payment related to the Kocher lawsuit.
In addition to cash flows from operating activities, a substantial amount of liquid funds are available through
Oxford’ s short-term portfolio. At December 31, 2005, 2004 and 2003, short-term investments amounted to $33.0
million, $113.8 million and $124.7 million, respectively. Management believes that the overall sources of liquidity
will continue to meet foreseeable cash needs.
SAC Holding II
Cash provided (used) by operating activities at SAC Holding II was $2.8 million and $1.1 million for fiscal 2006
and fiscal 2005, respectively. Cash of $8.2 million was used by operating activities in fiscal 2004 for SAC
Holdings. The primary use of cash in fiscal 2004 was the deconsolidation of SAC Holding Corporation.
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