U-Haul 2016 Annual Report Download - page 84

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AMERCO AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
F-28
Future net benefit payments are expected as follows:
Future Net Benefit
Payments
(In thousands)
Year-ended:
2017
$
658
2018
773
2019
914
2020
1,073
2021
1,263
2022 through 2026
9,169
Total
$
13,850
Note 15. Fair Value Measurements
Fair values of cash equivalents approximate carrying value due to the short period of time to maturity.
Fair values of short term investments, investments available-for-sale, long term investments, mortgage
loans and notes on real estate, and interest rate swap contracts are based on quoted market prices,
dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded
value.
Our financial instruments that are exposed to concentrations of credit risk consist primarily of
temporary cash investments, trade receivables, reinsurance recoverables and notes receivable. Limited
credit risk exists on trade receivables due to the diversity of our customer base and their dispersion
across broad geographic markets. We place our temporary cash investments with financial institutions
and limit the amount of credit exposure to any one financial institution.
We have mortgage receivables, which potentially expose us to credit risk. The portfolio of notes is
principally collateralized by self-storage facilities and commercial properties. We have not experienced
any material losses related to the notes from individual or groups of notes in any particular industry or
geographic area. The estimated fair values were determined using the discounted cash flow method and
using interest rates currently offered for similar loans to borrowers with similar credit ratings.
The carrying amount of long term debt and short term borrowings are estimated to approximate fair
value as the actual interest rate is consistent with the rate estimated to be currently available for debt of
similar term and remaining maturity.
Other investments including short term investments are substantially current or bear reasonable
interest rates. As a result, the carrying values of these financial instruments approximate fair value.
Assets and liabilities are recorded at fair value on the consolidated balance sheets and are measured
and classified based upon a three tiered approach to valuation. ASC 820 - Fair Value Measurements and
Disclosures (“ASC 820”) requires that financial assets and liabilities recorded at fair value be classified
and disclosed in one of the following three categories:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for
identical, unrestricted assets or liabilities;
Level 2 – Quoted prices for identical or similar financial instruments in markets that are not considered
to be active, or similar financial instruments for which all significant inputs are observable, either directly
or indirectly, or inputs other than quoted prices that are observable, or inputs that are derived principally
from or corroborated by observable market data through correlation or other means; and
Level 3 – Prices or valuations that require inputs that are both significant to the fair value
measurement and are unobservable. These reflect management’s assumptions about the assumptions a
market participant would use in pricing the asset or liability.