U-Haul 2007 Annual Report Download - page 45

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Net cash used in investing activities increased $258.8 million in fiscal 2007, compared with fiscal 2006 due
primarily to higher capital expenditures in the Moving and Storage segment. Capital expenditures increased in fiscal
2007 due to planned manufacturing of rental vehicles to replace our older r
39
ental fleet; additionally, the Company
co
mezzanine loan. Additionally, the Company used $49.1 million for the repurchase of
ources and Requirements of Our Operating Segments
M
nt in the
re
onths. U-Haul's growth plan in self-storage also includes eMove, which does not require significant
ca
06, respectively. During fiscal 2007
th
hese funds in our existing operations or pursue external opportunities in the self-moving and storage market
P
s a result, RepWest’ s assets are generally not available to satisfy the claims of AMERCO or its legal
su
pital and therefore has no exposure to capital market conditions other than through its
io.
L
s a result, Oxford’ s funds are generally not available to satisfy the claims of AMERCO or its legal
subsidiaries.
ntinued to buyout trucks and trailers at the expiration of their TRAC lease.
Cash provided by financing activities decreased $0.3 million in fiscal 2007, as compared to fiscal 2006. Cash
provided by borrowings for new rental equipment were offset by funds used for the repayment of the aged truck
revolver and the real estate
common stock.
Liquidity and Capital Res
oving and Self-Storage
To meet the needs of our customers, U-Haul maintains a large fleet of rental equipment. Capital expenditures
have primarily reflected new rental equipment acquisitions and the buyouts of existing fleet from TRAC leases. The
capital to fund these expenditures has historically been obtained internally from operations and the sale of used
equipment, and externally from debt and lease financing. In the future we anticipate that our internally generated
funds will be used to service the existing debt and support operations. U-Haul estimates that during each of the next
three fiscal years the Company will reinvest in its truck and trailer rental fleet at least $400.0 million, net of
equipment sales. This investment will be funded through external lease financing, debt financing and internally from
operations. Management considers several factors including cost and tax consequences when selecting a method to
fund capital expenditures. Because the Company has utilized all of its Federal net operating loss carry forwards,
there will be more of a focus on financing the fleet through asset-backed debt. The amount of reinvestme
ntal fleet could change based upon several factors including availability of capital and market conditions.
Real Estate has traditionally financed the acquisition of self-storage properties to support U-Haul's growth through
debt financing and funds from operations and sales. The Company is developing several existing locations for use
as storage centers. The Company is funding these development projects through construction loans and internally
generated funds and expects to invest approximately $80.0 million in new storage development over the next twelve
to eighteen m
pital.
Net capital expenditures (purchases of property, plant and equipment less proceeds from the sale of property, plant
and equipment) were $557.5 million and $322.2 million for fiscal 2007 and 20
e Company entered into $120.6 million of new equipment operating leases.
Moving and Storage continues to hold significant cash and has access to additional liquidity. Management may
invest t
place.
roperty and Casualty Insurance
State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance
companies. A
bsidiaries.
Stockholder’ s equity was $142.4 million, $137.4 million, and $154.8 million at December 31, 2006, 2005, and
2004 respectively. RepWest paid $27.0 million in dividends to its parent during 2005; payment was effected by a
reduction in intercompany accounts. The decrease was offset by increases from earnings and gains from the sale of
real estate to affiliated entities recorded directly to additional paid in capital. RepWest does not use debt or equity
issues to increase ca
investment portfol
ife Insurance
Oxford manages its financial assets to meet policyholder and other obligations including investment contract
withdrawals. Oxford’ s net investment contract withdrawals for the year ending December 31, 2006 were $62.5
million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance
companies. A