U-Haul 2011 Annual Report Download - page 37

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32
property, plant and equipment increased $37.5 million largely due to improving resale values for pickup
and cargo vans. Cash used for investing activities at the insurance companies increased $77.9 million
primarily due to the investing of cash generated from operation, including cash from the two reinsurance
agreements entered into by Oxford.
Net cash used by financing activities decreased $221.8 million in fiscal 2011, as compared with fiscal
2010. Moving and Storage had a $202.9 million net increase in borrowings in fiscal 2011 as compared to
fiscal 2010 with a majority of this coming from the $155.0 million fleet securitization entered into during
October 2010 for the purchase of new equipment. Net annuity withdrawals at the Life Insurance segment
have decreased $12.4 million.
Liquidity and Capital Resources and Requirements of Our Operating Segments
Moving and 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 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 fund operations.
U-Haul estimates that during fiscal 2012 the Company will reinvest in its truck and trailer rental fleet
approximately $220 million, net of equipment sales and excluding any lease buyouts. For fiscal 2011, the
Company invested, net of sales, approximately $209 million before any lease buyouts in its truck and
trailer fleet. Fleet investments in fiscal 2012 and beyond will be dependent upon several factors including
availability of capital, the truck rental environment and the used-truck sales market. We anticipate that the
fiscal 2012 investments will be funded largely through debt financing, external lease financing and cash
from operations. Management considers several factors including cost and tax consequences when
selecting a method to fund capital expenditures. Our allocation between debt and lease financing can
change from year to year based upon financial market conditions which may alter the cost or availability
of financing options.
Real Estate has traditionally financed the acquisition of self-storage properties to support U-Haul's
growth through debt and funds from operations and sales. The Company’s plan for the expansion of
owned storage properties includes the acquisition of existing self-storage locations from third parties, the
acquisition and development of bare land, and the acquisition and redevelopment of existing buildings not
currently used for self-storage. The Company is funding these development projects through construction
loans and internally generated funds. For fiscal 2011, the Company invested nearly $64 million in real
estate acquisitions, new construction and renovation and repair. For fiscal 2012, the timing of new
projects will be dependent upon several factors including the entitlement process, availability of capital,
weather, and the identification and successful acquisition of target properties. U-Haul's growth plan in
self-storage also includes the expansion of the eMove® program, which does not require significant
capital.
Net capital expenditures (purchases of property, plant and equipment less proceeds from the sale of
property, plant and equipment) were $300.0 million, $116.6 million and $268.5 million for fiscal 2011,
2010 and 2009, respectively. The Company entered into new equipment leases of $44.9 million, $74.9
million and $298.1 million during fiscal 2011, 2010 and 2009, respectively.
The Moving and Storage operating segment continues to hold significant cash and has access to
additional liquidity. Management may invest these funds in our existing operations, expand our product
lines or pursue external opportunities in the self-moving and storage market place, or reduce existing
indebtedness where possible.
Property and Casualty Insurance
State insurance regulations restrict the amount of dividends that can be paid to stockholders of
insurance companies. As a result, Property and Casualty Insurance’s assets are generally not available
to satisfy the claims of AMERCO or its legal subsidiaries. Repwest paid a $3.3 million cash dividend to
AMERCO in December 2010.
Stockholder’s equity was $154.6 million, $151.7 million, and $147.9 million at December 31, 2010,
2009, and 2008, respectively. The increase in 2010 compared with 2009 resulted from earnings of $3.8
million, offset by a dividend paid to AMERCO of $3.3 million and an increase in other comprehensive