U-Haul 2009 Annual Report Download - page 78

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AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company manages exposure to changes in market interest rates. The Company’s use of derivative instruments is
limited to highly effective interest rate swaps to hedge the risk of changes in cash flows (future interest payments)
attributable to changes in LIBOR swap rates, the designated benchmark interest rate being hedged on certain of our
LIBOR-indexed variable-rate debt. The interest rate swaps effectively fix the Company’s interest payments on certain
LIBOR-indexed variable-rate debt. The Company monitors its positions and the credit ratings of its counterparties and does
not currently anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for
trading purposes.
Agreement Date Effective Date Expiration Date
Designated cash
flow hedge date
100.0$ (a), (c ) 6/8/2005 6/8/2005 6/8/2008 7/1/2005
100.0 (a), (c ) 6/8/2005 6/8/2005 6/8/2010 7/1/2005
142.3 (a), (b) 11/15/2005 5/10/2006 4/10/2012 5/31/2006
50.0 (a) 6/21/2006 7/10/2006 7/10/2013 6/9/2006
144.9 (a), (b) 6/29/2006 10/10/2006 10/10/2012 6/9/2006
300.0 (a) 8/18/2006 8/18/2006 8/10/2018 8/4/2006
30.0 (a) 2/9/2007 2/12/2007 2/12/2014 2/9/2007
20.0 (a) 3/8/2007 3/10/2007 3/10/2014 3/8/2007
20.0 (a) 3/8/2007 3/10/2007 3/10/2014 3/8/2007
19.3 (a), (b) 4/8/2008 8/15/2008 6/15/2015 3/31/2008
19.0 (a) 8/27/2008 8/29/2008 7/10/2015 4/10/2008
30.0 (a) 9/24/2008 9/30/2008 9/10/2015 9/24/2008
15.0 (a), (b) 3/26/2009 3/30/2009 3/30/2016 3/25/2009
(a) interest rate swap agreement
(b) forward swap
(c ) terminated swap on August 18, 2006
Variable rate debt amount
(In millions)
As of August 18, 2006, a net gain of approximately $6.0 million related to the two cancelled swaps was included in
other comprehensive income (loss). As the variable-rate debt is replaced, it is probable that the original forecasted
transaction (future interest payments) will continue to occur. Therefore, the net derivative gain related to the two cancelled
swaps shall continue to be reported in other comprehensive income (loss) and be reclassified into earnings when the
original forecasted transaction affects earnings consistent with the term of the original designated hedging relationship. For
the year ended March 31, 2009, the Company reclassified $1.3 million of the net derivative gain to interest income. The
Company estimates that $1.0 million of the existing net gains will be reclassified into earnings within the next twelve
months.
As of March 31, 2009, the total notional amount of the Company’s variable interest rate swaps was $580.6 million.
The location and amounts of derivative fair values in the balance sheet as of March 31, 2009 were as follows:
Balance Sheet Location Fair Value
Interest rate contracts designated as hedging instruments under Statement 133 Accounts payable and accrued expenses $ 79,118
Liability Derivatives
As of March 31, 2009
(In thousands)
F-23