U-Haul 2007 Annual Report Download - page 51

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45
It
instruments, among other strategies. We do not use
nstruments for speculative purposes.
In
ap agreements, interest rate cap agreements and forward swaps to reduce our exposure
to
em 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to financial market risks, including changes in interest rates and currency exchange rates. To
mitigate these risks, we may utilize derivative financial
derivative financial i
terest Rate Risk
The exposure to market risk for changes in interest rates relates primarily to our variable rate debt obligations.
We have used interest rate sw
changes in interest rates.
Notional Amount Effective Date Expiration Date Fixed Rate Floating Rate
$ 118,218,369 (a), (c ) 5/10/2006 4/10/2012 5.06% 1 Month LIBOR
132,498,584 (a), (c ) 10/10/2006 10/10/2012 5.57% 1 Month LIBOR
43,312,431 (a) 7/10/2006 7/10/2013 5.67% 1 Month LIBOR
294,166,667 (a) 8/18/2006 8/10/2018 5.43% 1 Month LIBOR
29,500,000 (a) 2/12/2007 2/10/2014 5.24% 1 Month LIBOR
20,000,000 (a) 3/12/2007 3/10/2014 4.99% 1 Month LIBOR
20,000,000 (a) 3/12/2007 3/10/2014 4.99% 1 Month LIBOR
50,000,000 (b) 5/17/2004 5/17/2007 3.00% 3 Month LIBOR
(a) interest rate swap agreement
(b) interest rate cap agreement
(c) forward swap
sh flows by approximately $0.8 million annually (after consideration of the effect of the above
d
allocation strategy for future
mitigate the overall effect of interest rates.
F
be material. We typically do not hedge any foreign currency risk since the exposure is not considered
It
to such statements and the related schedules are set forth on
3 t
It
es in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
As of March 31, 2007, the Company had approximately $659.8 million of variable rate debt obligations. If
LIBOR were to increase 100 basis points, the increase in interest expense on the variable rate debt would increase
future earnings and ca
erivative contracts).
Additionally, our insurance subsidiaries’ fixed income investment portfolios expose the Company to interest rate
risk. This interest rate risk is the price sensitivity of a fixed income security to change in interest rates. As part of
our insurance companies’ asset and liability management, actuaries estimate the cash flow patterns of our existing
liabilities to determine their duration. These outcomes are compared to the characteristics of the assets that are
currently supporting these liabilities assisting management in determining an asset
investments that management believes will
oreign Currency Exchange Rate Risk
The exposure to market risk for changes in foreign currency exchange rates relates primarily to our Canadian
business. Approximately 4.4%, 4.0% and 3.6% of our revenue in fiscal 2007, 2006 and 2005, respectively was
generated in Canada. The result of a 10.0% change in the value of the U.S. dollar relative to the Canadian dollar
would not
material.
em 8.
Financial Statements and Supplementary Data
The Report of Independent Registered Public Accounting and Consolidated Financial Statements of AMERCO
and its consolidated subsidiaries including the notes
pages F- hrough F-66 and are incorporated herein.
em 9.
Chang