U-Haul 2007 Annual Report Download - page 76

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AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Derivative Financial Instruments
The Company’ s primary objective for holding derivative financial instruments is to manage interest rate risk. The
Company’ s derivative instruments are recorded at fair value under SFAS No. 133 and are included in either prepaid
expenses or accrued expenses.
The exposure to market risk for changes in interest rates relates primarily to our variable rate debt obligations. We have
used interest rate swap and interest rate cap agreements to provide for matching the gain or loss recognition on the hedging
instrument with the recognition of the changes in the cash flows associated with the hedged asset or liability attributable to
the hedged risk or the earnings effect of the hedged forecasted transaction.
F-11