10-Q 1 June2013q.htm JUNE 2013 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[x]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2013

or

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________________ to __________________

Commission File Number | Registrant, State of Incorporation, Address and Telephone Number | I.R.S. Employer Identification No.
1-11255 | AMERCO | 88-0106815
| (A Nevada Corporation) |
| 1325 Airmotive Way, Ste. 100 |
| Reno, Nevada 89502-3239 |
| Telephone (775) 688-6300 |

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requiremen ts for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulat ion S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an ac celerated filer, a non-accelerated filer, or a smaller reporting company. See the definition s of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [x]

Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

19,607,788 shares of AMERCO Common Stock, $0.25 par value, were outstanding at August 1, 201 3.

TABLE OF CONTENTS

|  | Page
| PART I FINANCIAL INFORMATION |
Item 1. | Financial Statements |
| a) Condensed Consolidated Balance Sheets as of June 30, 2013 (unaudited) and March 31, 2013 | 1
| b) Condensed Consolidated Statements of Operations for the Quarters ended June 30, 2013 and 2012 (unaudited) | 2
| c) Condensed Consolidated Statements of Comprehensive Income for the Quarters ended June 30, 2013 and 2012 (unaudited) | 3
| d) Condensed Consolidated Statements of Cash Flows for the Quarters ended June 31, 2013 and 2012 (unaudited) | 4
| e) Notes to Condensed Consolidated Financial Statements (unaudited) | 5
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 1
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 4 7
Item 4. | Controls and Procedures | 4 8
| PART II OTHER INFORMATION |
Item 1. | Legal Proceedings | 4 9
Item 1A. | Risk Factors | 4 9
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 4 9
Item 3. | Defaults Upon Senior Securities | 4 9
Item 4. | Mine and Safety Disclosures | 4 9
Item 5. | Other Information | 4 9
Item 6. | Exhibits | 4 9

Part i Financial information

ITEM 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED balance sheets

|  | June 30, |  | March 31,
|  | 2013 |  | 2013
|  | (Unaudited) |  |
|  | (In thousands, except share data)
ASSETS |  |  |  |
Cash and cash equivalents | $ | 552,587 | $ | 463,744
Reinsurance recoverables and trade receivables, net |  | 284,518 |  | 261,789
Inventories, net |  | 58,304 |  | 56,396
Prepaid expenses |  | 43,378 |  | 57,451
Investments, fixed maturities and marketable equities |  | 1,117,008 |  | 1,095,338
Investments, other |  | 231,418 |  | 241,765
Deferred policy acquisition costs, net |  | 97,823 |  | 93,043
Other assets |  | 104,744 |  | 99,986
Related party assets |  | 151,127 |  | 182,035
|  | 2,640,907 |  | 2,551,547
Property, plant and equipment, at cost: |  |  |  |
Land |  | 348,234 |  | 333,228
Buildings and improvements |  | 1,278,622 |  | 1,197,875
Furniture and equipment |  | 313,796 |  | 311,142
Rental trailers and other rental equipment |  | 331,433 |  | 317,476
Rental trucks |  | 2,263,692 |  | 2,154,688
|  | 4,535,777 |  | 4,314,409
Less: Accumulated depreciation |  | (1,597,922) |  | (1,559,355)
Total property, plant and equipment |  | 2,937,855 |  | 2,755,054
Total assets | $ | 5,578,762 | $ | 5,306,601
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |  |
Liabilities: |  |  |  |
Accounts payable and accrued expenses | $ | 366,302 | $ | 358,491
Notes, loans and leases payable |  | 1,737,277 |  | 1,661,845
Policy benefits and losses, claims and loss expenses payable |  | 1,115,821 |  | 1,115,048
Liabilities from investment contracts |  | 538,777 |  | 510,789
Other policyholders' funds and liabilities |  | 7,114 |  | 7,294
Deferred income |  | 37,752 |  | 30,217
Deferred income taxes |  | 429,428 |  | 393,658
Total liabilities |  | 4,232,471 |  | 4,077,342
Commitments and contingencies (notes 4, 7, 8 and 9) |  | – |  | –
Stockholders' equity: |  |  |  |
Series preferred stock, with or without par value, 50,000,000 shares authorized: |  |  |  |
Series A preferred stock, with no par value, 6,100,000 shares authorized; |  |  |  |
6,100,000 shares issued and none outstanding as of June 30 and March 31, 2013 |  | – |  | –
Series B preferred stock, with no par value, 100,000 shares authorized; none |  |  |  |
issued and outstanding as of June 30 and March 31, 2013 |  | – |  | –
Series common stock, with or without par value, 150,000,000 shares authorized: |  |  |  |
Series A common stock of $0.25 par value, 10,000,000 shares authorized; |  |  |  |
none issued and outstanding as of June 30 and March 31, 2013 |  | – |  | –
Common stock of $0.25 par value, 150,000,000 shares authorized; 41,985,700 |  |  |  |
issued and 19,607,788 outstanding as of June 30 and March 31, 2013 |  | 10,497 |  | 10,497
Additional paid-in capital |  | 439,524 |  | 438,168
Accumulated other comprehensive loss |  | (20,099) |  | (22,680)
Retained earnings |  | 1,595,598 |  | 1,482,630
Cost of common shares in treasury, net (22,377,912 shares as of June 30 and March 31, 2013) |  | (525,653) |  | (525,653)
Cost of preferred shares in treasury, net (6,100,000 shares as of June 30 and March 31, 2013) |  | (151,997) |  | (151,997)
Unearned employee stock ownership plan shares |  | (1,579) |  | (1,706)
Total stockholders' equity |  | 1,346,291 |  | 1,229,259
Total liabilities and stockholders' equity | $ | 5,578,762 | $ | 5,306,601

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED Statements of operations

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands, except share and per share amounts)
Revenues: |  |  |  |
Self-moving equipment rentals | $ | 521,649 | $ | 466,994
Self-storage revenues |  | 42,099 |  | 34,736
Self-moving and self-storage products and service sales |  | 70,691 |  | 67,178
Property management fees |  | 5,161 |  | 4,860
Life insurance premiums |  | 41,062 |  | 46,426
Property and casualty insurance premiums |  | 7,966 |  | 7,243
Net investment and interest income |  | 18,989 |  | 14,517
Other revenue |  | 39,214 |  | 25,722
Total revenues |  | 746,831 |  | 667,676
Costs and expenses: |  |  |  |
Operating expenses |  | 309,501 |  | 283,393
Commission expenses |  | 68,627 |  | 61,107
Cost of sales |  | 35,570 |  | 32,227
Benefits and losses |  | 42,633 |  | 48,338
Amortization of deferred policy acquisition costs |  | 3,683 |  | 2,811
Lease expense |  | 27,007 |  | 32,796
Depreciation, net of (gains) on disposals of (($11,565) and ($7,516), respectively) |  | 57,434 |  | 56,125
Total costs and expenses |  | 544,455 |  | 516,797
Earnings from operations |  | 202,376 |  | 150,879
Interest expense |  | (23,328) |  | (23,491)
Pretax earnings |  | 179,048 |  | 127,388
Income tax expense |  | (66,080) |  | (46,819)
Earnings available to common stockholders | $ | 112,968 | $ | 80,569
Basic and diluted earnings per common share | $ | 5.78 | $ | 4.13
Weighted average common shares outstanding: Basic and diluted |  | 19,545,618 |  | 19,502,369

Related party revenues for the first quarter of fiscal 201 4 and 201 3, net of eliminations, were $8.4 million and $8.7 million, respectively.

Related party costs and expenses for the first quarter of fiscal 201 4 and 201 3, net of eliminations, were $14.0 million and $12.3 million, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERCO AND CONSOLIDATED ENTITIES

Condensed consolidatED statements of COMPREHENSIVE INCOME (loss)

Quarter Ended June 30, 2013 |  | Pre-tax |  | Tax |  | Net
|  | (Unaudited)
|  | (In thousands)
Comprehensive income: |  |  |  |  |  |
Net earnings | $ | 179,048 | $ | (66,080) | $ | 112,968
Other comprehensive income (loss): |  |  |  |  |  |
Foreign currency translation |  | (3,762) |  | – |  | (3,762)
Unrealized net gain on investments |  | 89 |  | (68) |  | 21
Change in fair value of cash flow hedges |  | 10,196 |  | (3,874) |  | 6,322
Total comprehensive income | $ | 185,571 | $ | (70,022) | $ | 115,549
Quarter Ended June 30, 2012 |  | Pre-tax |  | Tax |  | Net
|  | (Unaudited)
|  | (In thousands)
Comprehensive income: |  |  |  |  |  |
Net earnings | $ | 127,388 | $ | (46,819) | $ | 80,569
Other comprehensive income (loss): |  |  |  |  |  |
Foreign currency translation |  | (1,929) |  | – |  | (1,929)
Unrealized net gain on investments |  | 1,873 |  | (580) |  | 1,293
Change in fair value of cash flow hedges |  | (515) |  | 196 |  | (319)
Total comprehensive income | $ | 126,817 | $ | (47,203) | $ | 79,614

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERCO AND CONSOLIDATED ENTITIES

Condensed consolidatED statements of cash flows

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Cash flow from operating activities: |  |  |  |
Net earnings | $ | 112,968 | $ | 80,569
Adjustments to reconcile net earnings to cash provided by operations: |  |  |  |
Depreciation |  | 68,999 |  | 63,641
Amortization of deferred policy acquisition costs |  | 3,683 |  | 2,811
Change in allowance for losses on trade receivables |  | (14) |  | (102)
Change in allowance for inventory reserves |  | (935) |  | 695
Net gain on sale of real and personal property |  | (11,565) |  | (7,516)
Net (gain)loss on sale of investments |  | (1,776) |  | 39
Deferred income taxes |  | 31,828 |  | 4,641
Net change in other operating assets and liabilities: |  |  |  |
Reinsurance recoverables and trade receivables |  | (22,715) |  | 23,486
Inventories |  | (973) |  | (5,398)
Prepaid expenses |  | 14,098 |  | 267
Capitalization of deferred policy acquisition costs |  | (7,808) |  | (5,420)
Other assets |  | (4,532) |  | 20,518
Related party assets |  | 24,878 |  | 144,890
Accounts payable and accrued expenses |  | 18,162 |  | 47,981
Policy benefits and losses, claims and loss expenses payable |  | 1,609 |  | (24,242)
Other policyholders' funds and liabilities |  | (180) |  | (1,884)
Deferred income |  | 7,584 |  | 6,457
Related party liabilities |  | 5,962 |  | 1,448
Net cash provided by operating activities |  | 239,273 |  | 352,881
Cash flows from investing activities: |  |  |  |
Purchases of: |  |  |  |
Property, plant and equipment |  | (275,156) |  | (157,786)
Short term investments |  | (64,652) |  | (60,395)
Fixed maturities investments |  | (66,855) |  | (50,553)
Equity securities |  | (388) |  | –
Preferred stock |  | (634) |  | –
Real estate |  | (131) |  | –
Mortgage loans |  | (12,904) |  | (14,452)
Proceeds from sale of: |  |  |  |
Property, plant and equipment |  | 93,239 |  | 62,426
Short term investments |  | 64,818 |  | 59,421
Fixed maturities investments |  | 41,491 |  | 23,978
Equity securities |  | 904 |  | –
Preferred stock |  | 3,295 |  | 1,003
Real estate |  | – |  | 4
Mortgage loans |  | 23,258 |  | 11,547
Net cash used by investing activities |  | (193,715) |  | (124,807)
Cash flows from financing activities: |  |  |  |
Borrowings from credit facilities |  | 88,182 |  | 26,187
Principal repayments on credit facilities |  | (61,996) |  | (61,142)
Debt issuance costs |  | (232) |  | –
Capital lease payments |  | (10,449) |  | (3,888)
Leveraged Employee Stock Ownership Plan - repayments from loan |  | 127 |  | 162
Securitization deposits |  | – |  | (908)
Investment contract deposits |  | 34,742 |  | 28,993
Investment contract withdrawals |  | (6,754) |  | (7,967)
Net cash provided (used) by financing activities |  | 43,620 |  | (18,563)
Effects of exchange rate on cash |  | (335) |  | (376)
Increase in cash and cash equivalents |  | 88,843 |  | 209,135
Cash and cash equivalents at the beginning of period |  | 463,744 |  | 357,180
Cash and cash equivalents at the end of period | $ | 552,587 | $ | 566,315

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERCO and consolidated entities

notes to condensed consolidatED financial statements

1.Basis of Presentation

AMERCO, a Nevada corporation (“AMERCO”), has a first fiscal quarter that ends on the 30 th of June for each year that is referenced. Our insurance company subsidiaries have a firs t quarter that ends on the 3 1 st of March for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Mana gement believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the financial position or results of operations. The Company discloses any material events occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 201 3 and 20 12 correspond to fiscal 201 4 and 201 3 for AMERCO.

Accounts denominated in non-U.S. currencies have been translated into U.S. dollars. Certain amounts reported in previous years ha ve been reclassified to conform to the current presentation.

The condensed consolidated balance sheet as of June 30, 201 3 and the related condensed consolidated statements of operations, comprehensive income and cash flows for the first quarter of fiscal 201 4 and 201 3 are unaudited.

In our opinion, all adjustments necessary for the fair presentation of such condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necess arily indicative of results for a full year. The information in this Quarterly Report on Form 10-Q (“Quarterly Report”) should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial s tatements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 201 3.

Intercompany accounts and transactions have been eliminated.

Description of Legal Entities

AMERCO is the holding company for:

U-Haul Internatio nal, Inc. (“U-Haul”),

Amerco Real Estate Company (“Real Estate”),

Rep w est Insurance Company (“Rep w est”), and

Oxford Life Insurance Company (“Oxford”).

Unless the context otherwise requires, the term “Company,” “we,” “us” or “our” refers to AMERCO and all o f its legal subsidiaries.

Description of Operating Segments

AMERCO has three reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance.

The Moving and Storage operati ng segment include s AMERCO, U-Haul, and Real Estate and the wholly-owned subsidiaries of U-Haul and Real Estate. Operations consist of the rental of trucks and trailers, sales of moving supplies, sales of towing accessories, sales of propane, and the rental of fixed and mobi le self-storage spaces to the “do-it-yourself” mover and management of self-storage properties owned by others. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

AMERCO and consolidated entities

notes to condensed consolidatED financial statements (Continued)

The Property and Casualty Insurance operating segment includes Rep w est and its wholly-owned subsidiaries and ARCOA risk retention group (“ARCOA”). The Property and Casualty Insurance operating segment provides loss adjusting and claims handling for U-Haul through regional offices across North America. The Property and Casualty Insurance operating segment also underwrites components of the Safemove, Safetow, Safemove Plus, Safestor and Safestor Mobile protection packages to U-Haul customers. The business plan for the Property and Casualty Insurance operating segment includes offering property and casualty products in other U-Haul related programs. ARC OA is a group captive insurer owned by us and our wholly-owned subsidiaries whose purpose is to provide insurance products related to the moving and storage business.

The Life Insurance operating segment includes Oxford and its wholly-owned subsidiaries. T he Life Insurance operating segment provides life and health insurance products primarily to the senior market through the direct writing and reinsuring of life insurance, Medicare supplement and annuity policies.

2. Earnings per Share

Our earn ings per share is calculated by dividing our earnings available to common stockholders by the weighted average common shares outstanding, basic and diluted.

The weighted average common shares outstanding exclude post-1992 shares of the employee stock ownership plan that have not been committed to be released. The unreleased shares, net of shares committed to be released, were 57,681 and 100,302 as of June 30, 201 3 and June 30, 201 2, respectively.

3. Investments

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $16.4 millio n at June 30, 201 3.

Available-for-Sale Investments

Available-for-sale investments at June 30, 201 3 were as follows:

|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses More than 12 Months |  | Gross Unrealized Losses Less than 12 Months |  | Estimated Market Value
|  | (Unaudited)
|  | (In thousands)
U.S. treasury securities and government obligations | $ | 28,083 | $ | 2,568 | $ | (3) | $ | (3) | $ | 30,645
U.S. government agency mortgage-backed securities |  | 42,332 |  | 3,627 |  | (5) |  | (34) |  | 45,920
Obligations of states and political subdivisions |  | 154,644 |  | 16,482 |  | – |  | (382) |  | 170,744
Corporate securities |  | 754,664 |  | 49,736 |  | (195) |  | (4,276) |  | 799,929
Mortgage-backed securities |  | 6,117 |  | 251 |  | (28) |  | – |  | 6,340
Redeemable preferred stocks |  | 21,163 |  | 871 |  | (28) |  | (6) |  | 22,000
Common stocks |  | 43,219 |  | 1,660 |  | (3,405) |  | (44) |  | 41,430
| $ | 1,050,222 | $ | 75,195 | $ | (3,664) | $ | (4,745) | $ | 1,117,008

The table above includes gross unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

We sold available-for-sale securities with a fair value of $44.2 million during the first quarter of fiscal 201 4. The gross realized gains on these sales totaled $1.2 million. T here were no gross realized losses on these sales.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

The unrealized losses of more than twelve months in the available-for-sale table are considered temporary declines. The majority of this unrealized loss is related to our long term investments in 1.8 milli on shares of Bank of America common stock. We track each investment with an unrealized loss and evaluate them on an individual basis for other-than-temporary impairments including obtaining corroborating opinions from third party sources, performing trend analysis and reviewing management’s future plans. Certain of these investments may have declines determined by management to be other-than-temporary and we recognized these write-downs through earnings. There were no write downs in the first quarter of fis cal 2014 and 2013.

The investment portfolio primarily consists of corporate securities and U.S. government securities. We believe we monitor our investments as appropriate. Our methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity, the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and wh ether the debtor is current on its contractually obligated interest and principal payments. Nothing has come to management’s attention that would lead to the belief that each issuer would not have the ability to meet the remaining contractual obligations o f the security, including payment at maturity. We have the ability and intent not to sell our fixed maturity and common stock investments for a period of time sufficient to allow us to recover our costs.

The portion of other-than-temporary impairment relat ed to a credit loss is recognized in earnings. The significant inputs utilized in the evaluation of mortgage backed securities credit losses include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of a sset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

Credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in other comprehensive income were as follows:

|  | Credit Loss
|  | (Unaudited)
|  | (In thousands)
Balance at March 31, 2013 | $ | 552
Additions: |  |
Other-than-temporary impairment not previously recognized |  | –
Balance at June 30, 2013 | $ | 552

The adjusted cost and estimated market value of available-for-sale investments at June 30, 201 3, by contractual maturity, were as follows:

|  | Amortized Cost |  | Estimated Market Value
|  | (Unaudited)
|  | (In thousands)
Due in one year or less | $ | 40,195 | $ | 40,825
Due after one year through five years |  | 172,665 |  | 183,996
Due after five years through ten years |  | 293,659 |  | 315,929
Due after ten years |  | 473,204 |  | 506,488
|  | 979,723 |  | 1,047,238
Mortgage backed securities |  | 6,117 |  | 6,340
Redeemable preferred stocks |  | 21,163 |  | 22,000
Common stocks |  | 43,219 |  | 41,430
| $ | 1,050,222 | $ | 1,117,008

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

4. Borrowings

Long-Term Debt

Long-term debt was as follows:

|  |  |  |  | June 30, |  | March 31,
| 2014 Rate (a) |  | Maturities |  | 2013 |  | 2013
|  |  |  |  | (Unaudited) |  |
|  |  |  |  | (In thousands)
Real estate loan (amortizing term) | 6.93% |  | 2023 | $ | 257,500 | $ | 235,000
Real estate loan (amortizing term) | 2.09% |  | 2016 |  | 24,406 |  | 24,630
Real estate loan (revolving credit) | - |  | 2014 |  | – |  | –
Senior mortgages | 4.90% - 5.75% |  | 2015 - 2038 |  | 550,926 |  | 556,522
Working capital loan (revolving credit) | - |  | 2015 |  | – |  | –
Fleet loans (amortizing term) | 1.95% - 6.92% |  | 2013 - 2020 |  | 369,761 |  | 361,079
Fleet loans (securitization) | 4.90% - 5.56% |  | 2014 - 2017 |  | 182,466 |  | 190,801
Capital leases (rental equipment) | 2.23% - 9.58% |  | 2015 - 2020 |  | 323,009 |  | 273,458
Other obligations | 3.00% - 8.00% |  | 2013 - 2043 |  | 29,209 |  | 20,355
Total notes, loans and leases payable |  |  |  | $ | 1,737,277 | $ | 1,661,845
(a) Interest rate as of June 30, 2013, including the effect of applicable hedging instruments.

Real Estate Backed Loans

Real Estate Loan

Amerco Real Estate Company and certain of its subsidiaries and U-Haul Company of Florida are borrowers under a Real Estate Loan. During the first quarter of fiscal 2014 this loan was amended. As part of the amendment the revolver component of the agreement was t erminated and certain collateral was released. The final maturity date of the term loan was extended to April 20 23. As of June 30, 201 3, the outstanding balance on the Real Estate Loan was $257.5 million. U-Haul International, Inc. is a guarantor of this l oan. The Real Estate Loan requires monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. The Real Estate Loan is secured by various properties owned by the borrowers.

The interest rate, pe r the provisions of the amended l oan a greement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. At June 30, 201 3, the applicable LIBOR was 0.20% and the applicable margin was 1.50%, the sum of which was 1.7 0%. The rate on the term facility portion of the Real Estate Loan is hedged with an interest rate swap fixing the rate at 6.93% based on current margin.The default provisions of the Real Estate Loan include non-payment of principal or interest and other standard report ing and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Amerco Real Estate Company and a subsidiary of U-Haul International, Inc. entered into a revolving credit construction loan effective June 29, 2006. This lo an was modified and extended on June 2 7, 201 1. The loan is now comprised of a term loan facility with an initial availability of $26.1 million and a final maturity of June 201 6. As of June 30, 201 3, the outstanding balance was $24.4 million.

This Real Esta te Loan requires monthly principal and interest payments, with the unpaid loan balance and any accrued and unpaid interest due at maturity. The interes t rate, per the provision of this loan a greement, is the applicable LIBOR plus a margin of 1.90%. At June 30, 201 3, the applicable LIBOR was 0.19% and the margin was 1.90%, the sum of which was 2.09%. U-Haul International, Inc. and AMERCO are guarantors of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

On April 29, 2011, Amerco Real Estate Company and U-Haul Company of Florida entered into a revolvin g credit agreement for $100.0 million. This agreement was amended in February 2013 and the maturity extended to April 2014 with an option for a one year extension and the revolver balance reduced to $50.0 million. As of June 30, 2013, we had the full $50.0 million available to be drawn. The interest rate is the applicable LIBOR plus a margin of 1.25%. AMERCO and U-Haul International, Inc. are guarantors of this facility. The default provisions of the loan include non-payment of principal or interest and oth er standard reporting and change-in-control covenants.

Senior Mortgages

Various subsidiaries of Amerco Real Estate Company and U-Haul International, Inc. are borrowers under certain senior mortgages. These senior mortgage loan balances as of June 30, 201 3 were in the aggregate amount of $550.9 million and mature between 2015 and 2038. The s enior m ortgages require average monthly principal and interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The senior mortgages are secured by certain properties owned by the borrowers. The interest rates, per the provisions of the senior mortgages, range between 4.90% and 5.75%. Amerco Real Estate Company and U-Haul International, Inc. have provided limited guarantees of the seni or mortgages. The default provisions of the senior mortgages include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Working Capital Loans

A merco Real Estate Company is a borrower under an asset backed working capital loan. The maximum amount that can be drawn at any one time is $25.0 million. At June 30, 2013, we had the full $25.0 million available to be drawn. This loan is secured by certai n properties owned by the borrower. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. This agreement was amended in February 2013 and the maturity extended to April 2015. This loan requires monthly interest payme nts with the unpaid loan balance and accrued and unpaid interest due at maturity. U-Haul International, Inc. and AMERCO are the guarantors of this loan. The default provisions of the loan include non-payment of principal or interest and other standard repo rting and change-in-control covenants. The interest rate, per the provision of th is loan a greement, is the applicable LIBOR plus a margin of 1.25%.

Fleet Loans

Rental Truck Amortizing Loans

U-Haul International, Inc. and several of its subsidiaries are bor rowers under amortizing term loans. The balance of the loans as of June 30, 201 3 was $254.8 million with the final maturities between July 2013 and May 2020.

The Amortizing Loans require monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. These loans were used to purchase new trucks. The interest rates, per the provision of the Loan Agreements, are the applicable LIBOR plus a margin between 0.90% and 2.63%. At June 30, 2013, the applicable L IBOR was between 0.19% and 0.2 0% and applicable margins were between 0.90% and 2.63%. The interest rates are hedged with interest rate swaps fixing the rates between 2.82% and 6.92% based on current margins. Additionally, $59.8 million of these loans are c arried at fixed rates ranging between 1.95% and 3.94%.

AMERCO and U-Haul International, Inc. are guarantors of these loans. The default provisions of these loans include non-payment of principal or interest and other standard reporting and change-in-control covenants.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

On December 31, 2009, a subsidiary of U-Haul International, Inc. entered into an $85.0 million term note that was used to fund cargo van and pickup acquisitions for the pas t t wo years. This term note was amended on August 26, 2011. The amount of the term note was increased to $95.0 million. On December 22, 2011, we entered into another term loan for $20.0 million. The final maturity date of these notes is August 2016. The agreement s contain options to extend the maturity throu gh May 2017. The se note s are secured by the purchased equipment and the corresponding operating cash flows associated with their operation. These notes have fixed interest rates between 3.52% and 3.53%. At June 30, 2013, the outstanding balance was $115.0 million.

AMERCO and U-Haul International, Inc. are guarantors of these loans. The default provisions of these loans include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Rental Truck Securitizations

U-H aul S Fleet and its subsidiaries (collectively, “USF”) issued a $217.0 million asset-backed note (“2007 Box Truck Note”) on June 1, 2007. USF is a bankruptcy-remote special purpose entity wholly-owned by U-Haul International, Inc. The net proceeds from the securitized transaction were used to finance new box truck purchases throughout fiscal 2008. U.S. Bank, NA acts as the trustee for this securitization.

The 2007 Box Truck Note has a fixed interest rate of 5.56% with an expected final maturity of February 2014. At June 30, 201 3, the outstanding balance was $78.6 million. The note is secured by the box trucks that were purchased and the corresponding operating cash flows associated with their operation.

The 2007 Box Truck Note has the benefit of a financial guaranty insurance policy which guarantees the timely payment of interest on and the ultimate payment of the principal of this note.

2010 U-Haul S Fleet and its subsidiaries (collectively, “2010 USF”) issued a $155.0 million asset-backed note (“2010 Box Tr uck Note”) on October 28, 2010. 2010 USF is a bankruptcy-remote special purpose entity wholly-owned by U-Haul International, Inc. The net proceeds from the securitized transaction were used to finance new box truck purchases. U.S. Bank, NA acts as the trus tee for this securitization.

The 2010 Box Truck Note has a fixed interest rate of 4.90% with an expected final maturity of October 2017. At June 30, 201 3, the outstanding balance was $103.8 million. The note is secur ed by the box trucks being purchased and the corresponding operating cash flows associated with their operation.

The 2007 Box Truck Note and 2010 Box Truck Note are subject to certain covenants with respect to liens, additional indebtedness of the special purpose entities, the disposition of a ssets and other customary covenants of bankruptcy-remote special purpose entities. The default provisions of these notes include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Capital Leases

We entered in to capital leases for new equipment between April 2008 and May 2013, with terms of the leases between 3 and 7 years. At June 30, 2013, the balance of these leases was $323.0 million.

Other Obligations

In February 2011, the Company and US Bank, N ational A ssociation (the “Trustee”) entered into the U-Haul Investors Club Indenture. The Company and the Trustee entered into this indenture to provide for the issuance of notes (“U-Notes”) by us directly to investors over our proprietary website, uhaulinvestorsc lub.com. The U-Notes are secured by various types of collateral including rental equipment and real estate. U-Notes are issued in smaller series that vary as to principal amount, interest rate and maturity. U-Notes are obligations of the Company and secu red by the associated collateral; they are not guaranteed by any of the Company’s affiliates or subsidiaries.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

At June 30, 201 3, the aggregate outstanding principal balance of the U-N otes issued was $35.7 million of which $6.4 million is with our insuranc e subsidiaries with interest rates between 3.00% and 8.00% and maturity dates between 2013 and 204 3.

Annual Maturities of Notes, Loans and Leases Payable

The annual maturities of long-term debt as of June 30, 201 3 for the next five years and thereafter are as follows:

|  | Year Ending June 30,
|  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | Thereafter
|  | (Unaudited)
|  | (In thousands)
Notes, loans and leases payable, secured | $ | 260,964 | $ | 129,895 | $ | 544,926 | $ | 259,114 | $ | 180,359 | $ | 362,019

Interest on Borrowings

Interest Expense

Components of interest expense include the following:

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Interest expense | $ | 17,814 | $ | 15,646
Capitalized interest |  | (142) |  | (77)
Amortization of transaction costs |  | 851 |  | 1,085
Interest expense resulting from derivatives |  | 4,805 |  | 6,837
Total interest expense | $ | 23,328 | $ | 23,491

Interest paid in cash, including payments related to derivative contracts, amounted to $22.0 million and $21.2 million for the first quarter of fiscal 201 4 and 201 3, respectively.

Interest Rates

Interest rates and Company borrowings were as follows:

|  | Revolving Credit Acti vity
|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands, except interest rates)
Weighted average interest rate during the quarter |  | 1.48% |  | 1.74%
Interest rate at the end of the quarter |  | - |  | 1.74%
Maximum amount outstanding during the quarter | $ | 25,000 | $ | 23,920
Average amount outstanding during the quarter | $ | 24,176 | $ | 23,920
Facility fees | $ | 92 | $ | 178

amerco and consolidated subsidiaries

notes to condens ed consolidated financial statements – (continued)

5. Derivatives

We manage exposure to changes in market interest rates. Our use of derivative instruments is limited to highly effective interest rate swaps to hedge the risk of changes in cash flows (fu ture 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 and a variable rate operating lease. The interest rate swaps effectively fix our int erest payments on certain LIBOR indexed variable rate debt. We monitor our positions and the credit ratings of our counterparties and do not currently anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes.

| Original variable rate debt amount |  | Agreement Date |  | Effective Date |  | Expiration Date |  | Designated cash flow hedge date
| (Unaudited)
| (In millions)
$ | 50.0 |  |  | 6/21/2006 |  | 7/10/2006 |  | 7/10/2013 |  | 6/9/2006
| 300.0 |  |  | 8/16/2006 |  | 8/18/2006 |  | 8/10/2018 |  | 8/4/2006
| 30.0 |  |  | 2/9/2007 |  | 2/12/2007 |  | 2/10/2014 |  | 2/9/2007
| 20.0 |  |  | 3/8/2007 |  | 3/12/2007 |  | 3/10/2014 |  | 3/8/2007
| 20.0 |  |  | 3/8/2007 |  | 3/12/2007 |  | 3/10/2014 |  | 3/8/2007
| 19.3 | (a) |  | 4/8/2008 |  | 8/15/2008 |  | 6/15/2015 |  | 3/31/2008
| 19.0 |  |  | 8/27/2008 |  | 8/29/2008 |  | 7/10/2015 |  | 4/10/2008
| 30.0 |  |  | 9/24/2008 |  | 9/30/2008 |  | 9/10/2015 |  | 9/24/2008
| 15.0 | (a) |  | 3/24/2009 |  | 3/30/2009 |  | 3/30/2016 |  | 3/25/2009
| 14.7 | (a) |  | 7/6/2010 |  | 8/15/2010 |  | 7/15/2017 |  | 7/6/2010
| 25.0 | (a) |  | 4/26/2011 |  | 6/1/2011 |  | 6/1/2018 |  | 7/1/2011
| 50.0 | (a) |  | 7/29/2011 |  | 8/15/2011 |  | 8/15/2018 |  | 7/29/2011
| 20.0 | (a) |  | 8/3/2011 |  | 9/12/2011 |  | 9/10/2018 |  | 8/3/2011
| 15.1 | (b) |  | 3/27/2012 |  | 3/28/2012 |  | 3/28/2019 |  | 3/26/2012
| 25.0 |  |  | 4/13/2012 |  | 4/16/2012 |  | 4/1/2019 |  | 4/12/2012
| 44.3 |  |  | 1/11/2013 |  | 1/15/2013 |  | 12/15/2019 |  | 1/11/2013
| (a) forward swap |  |  |  |  |  |  |  |  |
| (b) operating lease |  |  |  |  |  |  |  |  |

As of June 30, 2013, the total notional amount of our variable interest rate swaps on debt and an operating lease was $437.9 million and $13.4 million, respectively.

The derivative fair values located in A ccounts payable and accrued expenses in the balance sheets were as fol lows:

|  | Liability Derivatives Fair Values as of
|  | June 30, 2013 |  | March 31, 2013
|  | (Unaudited) |  |
|  | (In thousands)
Interest rate contracts designated as hedging instruments | $ | 41,749 | $ | 51,550

amerco and consolidated subsidiaries

notes to condens ed consolidated financial statements – (continued)

|  | The Effect of Interest Rate Contracts on the Statements of Operations
|  | June 30, 2013 |  | June 30, 2012
|  | (Unaudited)
|  | (In thousands)
Loss recognized in income on interest rate contracts | $ | 4,805 | $ | 6,837
(Gain) loss recognized in AOCI on interest rate contracts (effective portion) | $ | (10,196) | $ | 515
Loss reclassified from AOCI into income (effective portion) | $ | 4,410 | $ | 5,269
(Gain) loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing) | $ | 395 | $ | 1,568

Gains or losses recognized in income on derivatives are recorded as interest expense in the statements of operations. At June 30, 2013, we expect to reclassify $15.6 million of net losses on interest rate contracts from accumulated other comprehensive income to earnings as interest expense over the next twelve months. During the first quarter of fiscal 2014, we reclassified $4.4 million of net losses on interest rate contracts from accumulated other comprehensive income to interest expense.

6. Comprehensive Income (Loss)

A summary of accumulated other comprehensive income (loss) components, net of tax, were as follows:

|  | Foreign Currency Translation |  | Unrealized Net Gain on Investments |  | Fair Market Value of Cash Flow Hedges |  | Postretirement Benefit Obligation Gain |  | Accumulated Other Comprehensive Income (Loss)
|  | (Unaudited)
|  | (In thousands)
Balance at March 31, 2013 | $ | (30,153) | $ | 39,645 | $ | (32,298) | $ | 126 | $ | (22,680)
Foreign currency translation |  | (3,762) |  | – |  | – |  | – |  | (3,762)
Unrealized net gain on investments |  | – |  | 21 |  | – |  | – |  | 21
Change in fair value of cash flow hedges |  | – |  | – |  | 1,912 |  | – |  | 1,912
Amounts reclassified from AOCI |  | – |  | – |  | 4,410 |  | – |  | 4,410
Other comprehenive income (loss) |  | (3,762) |  | 21 |  | 6,322 |  | – |  | 2,581
Balance at June 30, 2013 | $ | (33,915) | $ | 39,666 | $ | (25,976) | $ | 126 | $ | (20,099)

7. Contingent Liabilities and Commitments

We lease a portion of our rental equipment and certain of our facilities under operating leases with terms that expire at various dates substantially through 201 9. As of June 30, 2013, we have guaranteed $111.8 million of residual values for these rental equipment assets at the end of the respective lease terms. Cer tain leases contain renewal and fair market value purchase options as well as mileage and other restrictions. At the expiration of the lease, we have the option to renew the lease, purchase the asset for fair market value, or sell the asset to a third part y on behalf of the lessor. We have been leasing equipment since 1987 and ha ve experienced no material losses relating to these types of residual value guarantees.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Lease commitments for leases having terms of more than one year were as follows:

|  | Property, Plant and Equipment |  | Rental Equipment |  | Total
|  | (Unaudited)
|  |  |  | (In thousands) |  |
Year-ended June 30: |  |  |  |  |  |
2014 | $ | 13,579 | $ | 79,078 | $ | 92,657
2015 |  | 2,017 |  | 55,621 |  | 57,638
2016 |  | 1,856 |  | 23,017 |  | 24,873
2017 |  | 1,767 |  | 13,279 |  | 15,046
2018 |  | 1,285 |  | 10,907 |  | 12,192
Thereafter |  | 4,893 |  | 7,757 |  | 12,650
Total | $ | 25,397 | $ | 189,659 | $ | 215,056

8. Contingencies

Environmental

Compliance with environmental requirements of federal, state and local governments may significantly affect Real Estate’s business operations. Among other things, these requirements regulate the discharge of materials into the a ir, land and water and govern the use and disposal of hazardous substances. Real Estate is aware of issues regarding hazardous substances on some of its properties. Real Estate regularly makes capital and operating expenditures to stay in compliance with e nvironmental laws and has put in place a remedial plan at each site where it believes such a plan is necessary. Since 1988, Real Estate has managed a testing and removal program for underground storage tanks.

Based upon the information currently available to Real Estate, compliance with the environmental laws and its share of the costs of investigation and cleanup of known hazardous waste sites are not expected to result in a material adverse effect on AMERCO’s financial position or results of operations.

O ther

We are named as a defendant in various other litigation and claims arising out of the normal course of business. In management’s opinion, none of these other matters will have a material effect on our financial position and results of operations.

9. Related Party Transactions

As set forth in the Audit Committee Charter and consistent with Nasdaq Listing Rules, our Audit Committee (the “Audit Committee”) reviews and maintains oversight over related party transactions which are required to be disclosed under the Securities and Ex change Commission (“SEC”) rules and regulations. Accordingly, all such related party transactions are submitted to the Audit Committee for ongoing review and oversight. Our internal processes ensure that our legal and finance departments identify and monit or potential related party transactions which may require disclosure and Audit Committee oversight.

AMERCO has engaged in related party transactions and has continuing related party interests with certain major stockholders, directors and officers of the c onsolidated group as disclosed below. Management believes that the transactions described below and in the related notes were completed on terms substantially equivalent to those that would prevail in arm’s-length transactions.

SAC Holding Corporation and SAC Holding II Corporation, (collectively “SAC Holdings”) were established in order to acquire self-storage properties. These properties are being managed by us pursuant to management agreements. In the past, we have sold various self-storage properties to SAC Holdings, and such sales provided significant cash flows to the Company.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Management believes that the sales of self-storage properties to SAC Holdings has provided a unique structure for the Company to earn moving equipment rental revenues and propert y management fee revenues from the SAC Holdings self-storage properties that the Company manages.

Related Party Revenue

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
U-Haul interest income revenue from SAC Holdings | $ | 1,919 | $ | 2,476
U-Haul interest income revenue from Private Mini |  | 1,337 |  | 1,345
U-Haul management fee revenue from SAC Holdings |  | 4,074 |  | 3,829
U-Haul management fee revenue from Private Mini |  | 594 |  | 567
U-Haul management fee revenue from Mercury |  | 493 |  | 464
| $ | 8,417 | $ | 8,681

During the first quarter of fiscal 201 4, subsidiaries of the Company held various junior unsecured notes of SAC Holdings. Substantially all of the equity interest of SAC Holdings is controlled by Blackwater Investments, Inc. (“Blackwater”). Blackwater is wholly-owned by Mark V. Shoen, a significant stock holder of AMERCO. We do not have an equity ownership interest in SAC Holdings. We received cash interest payments of $12.3 million an d $7.2 million from SAC Holdings during the first quarter of fiscal 201 4 and 201 3, respectively. The largest aggregate amount of notes receivable outstanding during the first quarter of fiscal 201 4 was $72.4 million and the aggregate notes receivable balan ce at June 30, 201 3 was $72.2 million. In accordance with the terms of these notes, SAC Holdings may prepay the notes without penalty or premium at any time. The scheduled maturities of these notes are between 201 7 and 20 19.

During the first quarter of fi scal 201 4, AMERCO and U-Haul held various junior notes issued by Private Mini Storage Realty, L.P. (“Private Mini”). The equity interests of Private Mini are ultimately controlled by Blackwater. We received cash interest payments of $1.4 million from Priva te Mini during the first quarters of both fiscal 201 4 and 201 3. The largest aggregate amount outstanding during the first quarter of fiscal 201 4 was $65.9 million and t he aggregate notes receivable balance at June 30, 201 3 was $65.8 million.

We currently manage the self-storage properties owned or leased by SAC Holdings, Mercury Partners, L.P. (“Mercury”), Four SAC Self-Storage Corporation (“4 SAC”), Five SAC Self-Storage Corporation (“5 SAC”), Galaxy Investments, L.P. (“Galaxy”) and Private Mini pursuant to a standard form of management agreement, under which we receive a management fee of between 4% and 10% of the gross receipts plus reimbursement for certain expenses. We received management fees, exclusive of reimbursed expenses, of $10.3 million and $9.4 million from the above mentioned entities during the first quarter of fiscal 201 4 and 201 3, respectively. This management fee is consistent with the fee received for other properties the Company previously managed for third parties. SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini are substantially controlled by Blackwater. Mercury is substantially controlled by Mark V. Shoen. James P. Shoen, a significant stock holder and director of AMERCO and an estate planning trust benefitting the Shoen children have an interest in Mercury.

Related Party Costs and Expenses

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
U-Haul lease expenses to SAC Holdings | $ | 655 | $ | 661
U-Haul commission expenses to SAC Holdings |  | 12,520 |  | 10,934
U-Haul commission expenses to Private Mini |  | 795 |  | 695
| $ | 13,970 | $ | 12,290

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

We lease space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us.

At June 30, 201 3, subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini acted as U-Haul independent dealers. The financial and other terms of the dealership contracts with the aforementioned companies and their subsidi aries are substantially identical to the terms of those with our other independent dealers whereby commissions are paid by the Company based upon equipment rental revenues

These agreements and notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $7.9 million, expenses of $0.7 million and cash flows of $21.7 million during the first quarter of fiscal 201 4. Revenues and commission expenses related to the Dealer Agreements were $60.5 million and $13.3 million, respectively during the first quarter of fiscal 201 4.

Pursuant to the variable interest entity model under ASC 810 – Consolidation (“ASC 810”), Management determined that the junior notes of SAC Holdings and Private Mini as well as the management agreements with SAC Holdings, Mercury, 4 SAC, 5 SAC, Galaxy, and Private Mini represent potential variable interests for us. Management evaluated whether it should be identified as the primary beneficiary of one or more of these variabl e interest entity’s (“VIE’s”) using a two-step approach in which management (i) identified all other parties that hold interests in the VIE’s, and (ii) determined if any variable interest holder has the power to direct the activities of the VIE’s that most significantly impact their economic performance.

Management determined that they do not have a variable interest in the holding entities Mercury, SAC Holding II Corporation, 4 SAC, 5 SAC, or Galaxy based upon management agreements which are with the indiv idual operating entities or through the issuance of junior debt therefore, we are precluded from consolidating these entities.

We have junior debt with the holding entities SAC Holding Corporation and Private Mini which represents a variable interest in e ach individual entity. Though we have certain protective rights within these debt agreements, we have no present influence or control over these holding entities unless their protective rights become exercisable, which management considers unlikely based o n their payment history. As a result, we have no basis under ASC 810 to consolidate these entities.

We do not have the power to direct the activities that most significantly impact the economic performance of the individual operating entities which have ma nagement agreements with U-Haul. There are no fees or penalties disclosed in the management agreement for termination of the agreement. Through control of the holding entities assets, and its ability and history of making key decisions relating to the enti ty and its assets, Blackwater, and its owner, are the variable interest holder with the power to direct the activities that most significantly impact each of the individual holding entities and the individual operating entities’ performance. As a result, we have no basis under ASC 810 to consolidate these entities.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

We have not provided financial or other support explicitly or implicitly during the quarter ended June 30, 2013 to any of these entities that it was not previously contractually required to provide. In addition, we currently have no plan to provide any financial support to any of these entities in the future. The carrying amount and classification of the assets and liabilities in our balance sheet s that relate to our variable interests in the aforementioned entities are as follows, which approximate the maximum exposure to loss as a result of our involvement with these entities:

Related Party Assets

|  | June 30, |  | Marc h 31,
|  | 2013 |  | 2013
|  | (Unaudited) |  |
|  | (In thousands)
U-Haul notes, receivables and interest from Private Mini | $ | 68,225 | $ | 68,593
U-Haul notes receivable from SAC Holdings |  | 72,181 |  | 72,397
U-Haul interest receivable from SAC Holdings |  | 4,111 |  | 14,483
U-Haul receivable from SAC Holdings |  | 10,651 |  | 22,336
U-Haul receivable from Mercury |  | 2,275 |  | 3,640
Other (a) |  | (6,316) |  | 586
| $ | 151,127 | $ | 182,035
(a) Timing difference for intercompany balances with insurance subsidiaries, including a mortgage loan of $4.3 million with Repwest.

1 0. Consolidating Financial Information by Industry Segment

AMERCO’s three reportable segments are:

• Moving and Storage, comprised of AMERCO, U-Haul, and Real Estate and the subsidiaries of U-Haul and Real Estate,

• Property and Casualty Insurance, comprised of Rep w est and its subsidiaries and ARCOA, and

• Life Insuran ce, comprised of Oxford and its subsidiaries.

Management tracks revenues separately, but does not report any separate measure of the profitability for rental vehicles, rentals of self-storage spaces and sales of products that are required to be classified as a separate operating segment and accordingly does not present these as separate reportable segments. Deferred income taxes are shown as liabilities on the condensed consolidating statements.

The information includes elimination entries necessary to cons olidate AMERCO, the parent, with its subsidiaries.

Investments in subsidiaries are accounted for by the parent using the equity method of accounting.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

1 0. Financial Information by Consolidating Industry Segment:

Consolidating balance sheets by industry segment as of June 30, 2013 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Eliminations |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Eliminations |  |  | AMERCO Consolidated
|  | (U naudited)
|  | (In thousands)
Assets: |  |
Cash and cash equivalents | $ | 371,619 | $ | 133,684 | $ | 1,499 | $ | – |  | $ | 506,802 | $ | 10,578 | $ | 35,207 | $ | – |  | $ | 552,587
Reinsurance recoverables and trade receivables, net |  | – |  | 64,354 |  | – |  | – |  |  | 64,354 |  | 185,490 |  | 34,674 |  | – |  |  | 284,518
Inventories, net |  | – |  | 58,304 |  | – |  | – |  |  | 58,304 |  | – |  | – |  | – |  |  | 58,304
Prepaid expenses |  | – |  | 42,679 |  | 699 |  | – |  |  | 43,378 |  | – |  | – |  | – |  |  | 43,378
Investments, fixed maturities and marketable equities |  | 21,931 |  | – |  | – |  | – |  |  | 21,931 |  | 169,730 |  | 925,347 |  | – |  |  | 1,117,008
Investments, other |  | – |  | – |  | 35,587 |  | – |  |  | 35,587 |  | 66,720 |  | 129,111 |  | – |  |  | 231,418
Deferred policy acquisition costs, net |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 97,823 |  | – |  |  | 97,823
Other assets |  | 118 |  | 71,018 |  | 32,350 |  | – |  |  | 103,486 |  | 1,017 |  | 241 |  | – |  |  | 104,744
Related party assets |  | 1,064,653 |  | 102,558 |  | 9 |  | (1,007,825) | (c) |  | 159,395 |  | 8,950 |  | 489 |  | (17,707) | (c) |  | 151,127
|  | 1,458,321 |  | 472,597 |  | 70,144 |  | (1,007,825) |  |  | 993,237 |  | 442,485 |  | 1,222,892 |  | (17,707) |  |  | 2,640,907
Investment in subsidiaries |  | 341,164 |  | – |  | – |  | 43,253 | (b) |  | 384,417 |  | – |  | – |  | (384,417) | (b) |  | –
Property, plant and equipment, at cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  | – |  | 54,144 |  | 294,090 |  | – |  |  | 348,234 |  | – |  | – |  | – |  |  | 348,234
Buildings and improvements |  | – |  | 188,694 |  | 1,089,928 |  | – |  |  | 1,278,622 |  | – |  | – |  | – |  |  | 1,278,622
Furniture and equipment |  | 135 |  | 295,830 |  | 17,831 |  | – |  |  | 313,796 |  | – |  | – |  | – |  |  | 313,796
Rental trailers and other rental equipment |  | – |  | 331,433 |  | – |  | – |  |  | 331,433 |  | – |  | – |  | – |  |  | 331,433
Rental trucks |  | – |  | 2,263,692 |  | – |  | – |  |  | 2,263,692 |  | – |  | – |  | – |  |  | 2,263,692
|  | 135 |  | 3,133,793 |  | 1,401,849 |  | – |  |  | 4,535,777 |  | – |  | – |  | – |  |  | 4,535,777
Less: Accumulated depreciation |  | (116) |  | (1,220,985) |  | (376,821) |  | – |  |  | (1,597,922) |  | – |  | – |  | – |  |  | (1,597,922)
Total property, plant and equipment |  | 19 |  | 1,912,808 |  | 1,025,028 |  | – |  |  | 2,937,855 |  | – |  | – |  | – |  |  | 2,937,855
Total assets | $ | 1,799,504 | $ | 2,385,405 | $ | 1,095,172 | $ | (964,572) |  | $ | 4,315,509 | $ | 442,485 | $ | 1,222,892 | $ | (402,124) |  | $ | 5,578,762
(a) Balances as of March 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Eliminate investment in subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(c) Eliminate intercompany receivables and payables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating balance sheets by industry segment as of June 30, 2013 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Eliminations |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Eliminations |  |  | AMERCO Consolidated
|  | (U naudited)
|  | (In thousands)
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses | $ | 7,386 | $ | 348,957 | $ | 4,253 | $ | – |  | $ | 360,596 | $ | – | $ | 5,706 | $ | – |  | $ | 366,302
Notes, loans and leases payable |  | – |  | 940,975 |  | 796,302 |  | – |  |  | 1,737,277 |  | – |  | – |  | – |  |  | 1,737,277
Policy benefits and losses, claims and loss expenses payable |  | – |  | 374,398 |  | – |  | – |  |  | 374,398 |  | 331,510 |  | 409,913 |  | – |  |  | 1,115,821
Liabilities from investment contracts |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 538,777 |  | – |  |  | 538,777
Other policyholders' funds and liabilities |  | – |  | – |  | – |  | – |  |  | – |  | 2,656 |  | 4,458 |  | – |  |  | 7,114
Deferred income |  | – |  | 37,752 |  | – |  | – |  |  | 37,752 |  | – |  | – |  | – |  |  | 37,752
Deferred income taxes |  | 444,248 |  | – |  | – |  | – |  |  | 444,248 |  | (34,805) |  | 19,985 |  | – |  |  | 429,428
Related party liabilities |  | – |  | 590,184 |  | 432,588 |  | (1,007,825) | (c) |  | 14,947 |  | 2,319 |  | 441 |  | (17,707) | (c) |  | –
Total liabilities |  | 451,634 |  | 2,292,266 |  | 1,233,143 |  | (1,007,825) |  |  | 2,969,218 |  | 301,680 |  | 979,280 |  | (17,707) |  |  | 4,232,471
Stockholders' equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Series preferred stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Series A preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Series B preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Series A common stock |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Common stock |  | 10,497 |  | 1 |  | 1 |  | (2) | (b) |  | 10,497 |  | 3,301 |  | 2,500 |  | (5,801) | (b) |  | 10,497
Additional paid-in capital |  | 439,734 |  | 121,230 |  | 147,941 |  | (269,171) | (b) |  | 439,734 |  | 91,120 |  | 26,271 |  | (117,601) | (b) |  | 439,524
Accumulated other comprehensive income (loss) |  | (20,099) |  | (59,765) |  | – |  | 59,765 | (b) |  | (20,099) |  | 5,609 |  | 35,794 |  | (41,403) | (b) |  | (20,099)
Retained earnings (deficit) |  | 1,595,388 |  | 33,252 |  | (285,913) |  | 252,661 | (b) |  | 1,595,388 |  | 40,775 |  | 179,047 |  | (219,612) | (b) |  | 1,595,598
Cost of common shares in treasury, net |  | (525,653) |  | – |  | – |  | – |  |  | (525,653) |  | – |  | – |  | – |  |  | (525,653)
Cost of preferred shares in treasury, net |  | (151,997) |  | – |  | – |  | – |  |  | (151,997) |  | – |  | – |  | – |  |  | (151,997)
Unearned employee stock ownership plan shares |  | – |  | (1,579) |  | – |  | – |  |  | (1,579) |  | – |  | – |  | – |  |  | (1,579)
Total stockholders' equity (deficit) |  | 1,347,870 |  | 93,139 |  | (137,971) |  | 43,253 |  |  | 1,346,291 |  | 140,805 |  | 243,612 |  | (384,417) |  |  | 1,346,291
Total liabilities and stockholders' equity | $ | 1,799,504 | $ | 2,385,405 | $ | 1,095,172 | $ | (964,572) |  | $ | 4,315,509 | $ | 442,485 | $ | 1,222,892 | $ | (402,124) |  | $ | 5,578,762
(a) Balances as of March 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Eliminate investment in subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(c) Eliminate intercompany receivables and payables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating balance sheets by industry segment as of March 31, 201 3 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Eliminations |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Eliminations |  |  | AMERCO Consolidated
|  | (In thousands)
Assets: |  |
Cash and cash equivalents | $ | 327,119 | $ | 98,926 | $ | 1,515 | $ | – |  | $ | 427,560 | $ | 14,120 | $ | 22,064 | $ | – |  | $ | 463,744
Reinsurance recoverables and trade receivables, net |  | – |  | 43,259 |  | – |  | – |  |  | 43,259 |  | 186,010 |  | 32,520 |  | – |  |  | 261,789
Inventories, net |  | – |  | 56,396 |  | – |  | – |  |  | 56,396 |  | – |  | – |  | – |  |  | 56,396
Prepaid expenses |  | 22,475 |  | 34,956 |  | 20 |  | – |  |  | 57,451 |  | – |  | – |  | – |  |  | 57,451
Investments, fixed maturities and marketable equities |  | 21,228 |  | – |  | – |  | – |  |  | 21,228 |  | 160,455 |  | 913,655 |  | – |  |  | 1,095,338
Investments, other |  | – |  | 100 |  | 50,553 |  | – |  |  | 50,653 |  | 65,212 |  | 125,900 |  | – |  |  | 241,765
Deferred policy acquisition costs, net |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 93,043 |  | – |  |  | 93,043
Other assets |  | 118 |  | 69,671 |  | 28,828 |  | – |  |  | 98,617 |  | 1,212 |  | 157 |  | – |  |  | 99,986
Related party assets |  | 1,032,663 |  | 127,751 |  | 9 |  | (975,683) | (c) |  | 184,740 |  | 8,846 |  | 514 |  | (12,065) | (c) |  | 182,035
|  | 1,403,603 |  | 431,059 |  | 80,925 |  | (975,683) |  |  | 939,904 |  | 435,855 |  | 1,187,853 |  | (12,065) |  |  | 2,551,547
Investment in subsidiaries |  | 239,541 |  | – |  | – |  | 140,100 | (b) |  | 379,641 |  | – |  | – |  | (379,641) | (b) |  | –
Property, plant and equipment, at cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  | – |  | 81,421 |  | 251,807 |  | – |  |  | 333,228 |  | – |  | – |  | – |  |  | 333,228
Buildings and improvements |  | – |  | 184,053 |  | 1,013,822 |  | – |  |  | 1,197,875 |  | – |  | – |  | – |  |  | 1,197,875
Furniture and equipment |  | 136 |  | 292,621 |  | 18,385 |  | – |  |  | 311,142 |  | – |  | – |  | – |  |  | 311,142
Rental trailers and other rental equipment |  | – |  | 317,476 |  | – |  | – |  |  | 317,476 |  | – |  | – |  | – |  |  | 317,476
Rental trucks |  | – |  | 2,154,688 |  | – |  | – |  |  | 2,154,688 |  | – |  | – |  | – |  |  | 2,154,688
|  | 136 |  | 3,030,259 |  | 1,284,014 |  | – |  |  | 4,314,409 |  | – |  | – |  | – |  |  | 4,314,409
Less: Accumulated depreciation |  | (116) |  | (1,185,796) |  | (373,443) |  | – |  |  | (1,559,355) |  | – |  | – |  | – |  |  | (1,559,355)
Total property, plant and equipment |  | 20 |  | 1,844,463 |  | 910,571 |  | – |  |  | 2,755,054 |  | – |  | – |  | – |  |  | 2,755,054
Total assets | $ | 1,643,164 | $ | 2,275,522 | $ | 991,496 | $ | (835,583) |  | $ | 4,074,599 | $ | 435,855 | $ | 1,187,853 | $ | (391,706) |  | $ | 5,306,601
(a) Balances as of December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Eliminate investment in subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(c) Eliminate intercompany receivables and payables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating balance sheets by indus try segment as of March 31, 2013 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Eliminations |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Eliminations |  |  | AMERCO Consolidated
|  | (In thousands)
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses | $ | 110 | $ | 345,864 | $ | 4,378 | $ | – |  | $ | 350,352 | $ | – | $ | 8,139 | $ | – |  | $ | 358,491
Notes, loans and leases payable |  | – |  | 881,766 |  | 780,079 |  | – |  |  | 1,661,845 |  | – |  | – |  | – |  |  | 1,661,845
Policy benefits and losses, claims and loss expenses payable |  | – |  | 380,824 |  | – |  | – |  |  | 380,824 |  | 330,184 |  | 404,040 |  | – |  |  | 1,115,048
Liabilities from investment contracts |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 510,789 |  | – |  |  | 510,789
Other policyholders' funds and liabilities |  | – |  | – |  | – |  | – |  |  | – |  | 3,157 |  | 4,137 |  | – |  |  | 7,294
Deferred income |  | – |  | 30,217 |  | – |  | – |  |  | 30,217 |  | – |  | – |  | – |  |  | 30,217
Deferred income taxes |  | 412,089 |  | – |  | – |  | – |  |  | 412,089 |  | (36,241) |  | 17,810 |  | – |  |  | 393,658
Related party liabilities |  | – |  | 638,448 |  | 347,248 |  | (975,683) | (c) |  | 10,013 |  | 1,844 |  | 208 |  | (12,065) | (c) |  | –
Total liabilities |  | 412,199 |  | 2,277,119 |  | 1,131,705 |  | (975,683) |  |  | 2,845,340 |  | 298,944 |  | 945,123 |  | (12,065) |  |  | 4,077,342
Stockholders' equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Series preferred stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Series A preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Series B preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Series A common stock |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Common stock |  | 10,497 |  | 1 |  | 1 |  | (2) | (b) |  | 10,497 |  | 3,301 |  | 2,500 |  | (5,801) | (b) |  | 10,497
Additional paid-in capital |  | 438,378 |  | 121,230 |  | 147,941 |  | (269,171) | (b) |  | 438,378 |  | 91,120 |  | 26,271 |  | (117,601) | (b) |  | 438,168
Accumulated other comprehensive income (loss) |  | (22,680) |  | (62,325) |  | – |  | 62,325 | (b) |  | (22,680) |  | 4,568 |  | 37,567 |  | (42,135) | (b) |  | (22,680)
Retained earnings (deficit) |  | 1,482,420 |  | (58,797) |  | (288,151) |  | 346,948 | (b) |  | 1,482,420 |  | 37,922 |  | 176,392 |  | (214,104) | (b) |  | 1,482,630
Cost of common shares in treasury, net |  | (525,653) |  | – |  | – |  | – |  |  | (525,653) |  | – |  | – |  | – |  |  | (525,653)
Cost of preferred shares in treasury, net |  | (151,997) |  | – |  | – |  | – |  |  | (151,997) |  | – |  | – |  | – |  |  | (151,997)
Unearned employee stock ownership plan shares |  | – |  | (1,706) |  | – |  | – |  |  | (1,706) |  | – |  | – |  | – |  |  | (1,706)
Total stockholders' equity (deficit) |  | 1,230,965 |  | (1,597) |  | (140,209) |  | 140,100 |  |  | 1,229,259 |  | 136,911 |  | 242,730 |  | (379,641) |  |  | 1,229,259
Total liabilities and stockholders' equity | $ | 1,643,164 | $ | 2,275,522 | $ | 991,496 | $ | (835,583) |  | $ | 4,074,599 | $ | 435,855 | $ | 1,187,853 | $ | (391,706) |  | $ | 5,306,601
(a) Balances as of December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Eliminate investment in subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(c) Eliminate intercompany receivables and payables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating statement of operations by industry segment for the quarter ended June 30, 2013 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Eliminations |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Eliminations |  |  | AMERCO Consolidated
|  | (U naudited)
|  | (In thousands)
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Self-moving equipment rentals | $ | – | $ | 522,083 | $ | – | $ | – |  | $ | 522,083 | $ | – | $ | – | $ | (434) | (c) | $ | 521,649
Self-storage revenues |  | – |  | 41,822 |  | 277 |  | – |  |  | 42,099 |  | – |  | – |  | – |  |  | 42,099
Self-moving and self-storage products and service sales |  | – |  | 70,691 |  | – |  | – |  |  | 70,691 |  | – |  | – |  | – |  |  | 70,691
Property management fees |  | – |  | 5,161 |  | – |  | – |  |  | 5,161 |  | – |  | – |  | – |  |  | 5,161
Life insurance premiums |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 41,062 |  | – |  |  | 41,062
Property and casualty insurance premiums |  | – |  | – |  | – |  | – |  |  | – |  | 7,966 |  | – |  | – |  |  | 7,966
Net investment and interest income |  | 1,238 |  | 2,170 |  | 1 |  | – |  |  | 3,409 |  | 2,477 |  | 13,222 |  | (119) | (b) |  | 18,989
Other revenue |  | – |  | 42,530 |  | 24,569 |  | (26,139) | (b) |  | 40,960 |  | – |  | 495 |  | (2,241) | (b) |  | 39,214
Total revenues |  | 1,238 |  | 684,457 |  | 24,847 |  | (26,139) |  |  | 684,403 |  | 10,443 |  | 54,779 |  | (2,794) |  |  | 746,831
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | 2,221 |  | 323,007 |  | 2,622 |  | (26,139) | (b) |  | 301,711 |  | 4,096 |  | 6,360 |  | (2,666) | (b,c) |  | 309,501
Commission expenses |  | – |  | 68,627 |  | – |  | – |  |  | 68,627 |  | – |  | – |  | – |  |  | 68,627
Cost of sales |  | – |  | 35,570 |  | – |  | – |  |  | 35,570 |  | – |  | – |  | – |  |  | 35,570
Benefits and losses |  | – |  | – |  | – |  | – |  |  | – |  | 1,957 |  | 40,676 |  | – |  |  | 42,633
Amortization of deferred policy acquisition costs |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 3,683 |  | – |  |  | 3,683
Lease expense |  | 23 |  | 26,998 |  | 32 |  | – |  |  | 27,053 |  | – |  | – |  | (46) | (b) |  | 27,007
Depreciation, net of (gains) losses on disposals |  | 1 |  | 54,166 |  | 3,267 |  | – |  |  | 57,434 |  | – |  | – |  | – |  |  | 57,434
Total costs and expenses |  | 2,245 |  | 508,368 |  | 5,921 |  | (26,139) |  |  | 490,395 |  | 6,053 |  | 50,719 |  | (2,712) |  |  | 544,455
Earnings (loss) from operations before equity in earnings of subsidiaries |  | (1,007) |  | 176,089 |  | 18,926 |  | – |  |  | 194,008 |  | 4,390 |  | 4,060 |  | (82) |  |  | 202,376
Equity in earnings of subsidiaries |  | 99,795 |  | – |  | – |  | (94,287) | (d) |  | 5,508 |  | – |  | – |  | (5,508) | (d) |  | –
Earnings from operations |  | 98,788 |  | 176,089 |  | 18,926 |  | (94,287) |  |  | 199,516 |  | 4,390 |  | 4,060 |  | (5,590) |  |  | 202,376
Interest income (expense) |  | 21,932 |  | (30,044) |  | (15,298) |  | – |  |  | (23,410) |  | – |  | – |  | 82 | (b) |  | (23,328)
Pret ax earnings |  | 120,720 |  | 146,045 |  | 3,628 |  | (94,287) |  |  | 176,106 |  | 4,390 |  | 4,060 |  | (5,508) |  |  | 179,048
Income tax expense |  | (7,752) |  | (53,996) |  | (1,390) |  | – |  |  | (63,138) |  | (1,537) |  | (1,405) |  | – |  |  | (66,080)
Earn ings available to common shareholders | $ | 112,968 | $ | 92,049 | $ | 2,238 | $ | (94,287) |  | $ | 112,968 | $ | 2,853 | $ | 2,655 | $ | (5,508) |  | $ | 112,968
(a) Balances for the quarter ended March 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Eliminate intercompany lease / interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(c) Eliminate intercompany premiums |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(d) Eliminate equity in earnings of subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating statements of operations by industry for the quarter ended June 30, 2012 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Eliminations |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Eliminations |  |  | AMERCO Consolidated
|  | (U naudited)
|  | (In thousands)
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Self-moving equipment rentals | $ | – | $ | 467,315 | $ | – | $ | – |  | $ | 467,315 | $ | – | $ | – | $ | (321) | (c) | $ | 466,994
Self-storage revenues |  | – |  | 34,452 |  | 284 |  | – |  |  | 34,736 |  | – |  | – |  | – |  |  | 34,736
Self-moving and self-storage products and service sales |  | – |  | 67,178 |  | – |  | – |  |  | 67,178 |  | – |  | – |  | – |  |  | 67,178
Property management fees |  | – |  | 4,860 |  | – |  | – |  |  | 4,860 |  | – |  | – |  | – |  |  | 4,860
Life insurance premiums |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 46,426 |  | – |  |  | 46,426
Property and casualty insurance premiums |  | – |  | – |  | – |  | – |  |  | – |  | 7,243 |  | – |  | – |  |  | 7,243
Net investment and interest income |  | 1,253 |  | 1,688 |  | 194 |  | – |  |  | 3,135 |  | 2,200 |  | 9,270 |  | (88) | (b) |  | 14,517
Other revenue |  | 81 |  | 27,167 |  | 21,085 |  | (22,708) | (b) |  | 25,625 |  | – |  | 446 |  | (349) | (b) |  | 25,722
Total revenues |  | 1,334 |  | 602,660 |  | 21,563 |  | (22,708) |  |  | 602,849 |  | 9,443 |  | 56,142 |  | (758) |  |  | 667,676
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | 3,462 |  | 290,311 |  | 2,540 |  | (22,708) | (b) |  | 273,605 |  | 3,290 |  | 7,155 |  | (657) | (b,c) |  | 283,393
Commission expenses |  | – |  | 61,107 |  | – |  | – |  |  | 61,107 |  | – |  | – |  | – |  |  | 61,107
Cost of sales |  | – |  | 32,227 |  | – |  | – |  |  | 32,227 |  | – |  | – |  | – |  |  | 32,227
Benefits and losses |  | – |  | – |  | – |  | – |  |  | – |  | 3,566 |  | 44,772 |  | – |  |  | 48,338
Amortization of deferred policy acquisition costs |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 2,811 |  | – |  |  | 2,811
Lease expense |  | 24 |  | 32,797 |  | 5 |  | – |  |  | 32,826 |  | – |  | – |  | (30) | (b) |  | 32,796
Depreciation, net of (gains) losses on disposals |  | 1 |  | 52,320 |  | 3,804 |  | – |  |  | 56,125 |  | – |  | – |  | – |  |  | 56,125
Total costs and expenses |  | 3,487 |  | 468,762 |  | 6,349 |  | (22,708) |  |  | 455,890 |  | 6,856 |  | 54,738 |  | (687) |  |  | 516,797
Earnings (loss) from operations before equity in earnings of subsidiaries |  | (2,153) |  | 133,898 |  | 15,214 |  | – |  |  | 146,959 |  | 2,587 |  | 1,404 |  | (71) |  |  | 150,879
Equity in earnings of subsidiaries |  | 66,615 |  | – |  | – |  | (64,033) | (d) |  | 2,582 |  | – |  | – |  | (2,582) | (d) |  | –
Earnings from operations |  | 64,462 |  | 133,898 |  | 15,214 |  | (64,033) |  |  | 149,541 |  | 2,587 |  | 1,404 |  | (2,653) |  |  | 150,879
Interest income (expense) |  | 24,660 |  | (34,154) |  | (14,068) |  | – |  |  | (23,562) |  | – |  | – |  | 71 | (b) |  | (23,491)
Pret ax earnings |  | 89,122 |  | 99,744 |  | 1,146 |  | (64,033) |  |  | 125,979 |  | 2,587 |  | 1,404 |  | (2,582) |  |  | 127,388
Income tax expense |  | (8,553) |  | (36,413) |  | (444) |  | – |  |  | (45,410) |  | (906) |  | (503) |  | – |  |  | (46,819)
Earn ings available to common shareholders | $ | 80,569 | $ | 63,331 | $ | 702 | $ | (64,033) |  | $ | 80,569 | $ | 1,681 | $ | 901 | $ | (2,582) |  | $ | 80,569
(a) Balances for the quarter ended March 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Eliminate intercompany lease / interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(c) Eliminate intercompany premiums |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(d) Eliminate equity in earnings of subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating cash flow statements by industry segment for the quarter ended June 30, 2013 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Elimination |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Elimination |  |  | AMERCO Consolidated
|  | (Unaudited)
Cash flows from operating activities: |  | (In thousands)
Net earnings | $ | 112,968 | $ | 92,049 | $ | 2,238 | $ | (94,287) |  | $ | 112,968 | $ | 2,853 | $ | 2,655 | $ | (5,508) |  | $ | 112,968
Earnings from consolidated entities |  | (99,795) |  | – |  | – |  | 94,287 |  |  | (5,508) |  | – |  | – |  | 5,508 |  |  | –
Adjustments to reconcile net earnings to the cash provided by operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  | 1 |  | 65,055 |  | 3,943 |  | – |  |  | 68,999 |  | – |  | – |  | – |  |  | 68,999
Amortization of deferred policy acquisition costs |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 3,683 |  | – |  |  | 3,683
Change in allowance for losses on trade receivables |  | – |  | (14) |  | – |  | – |  |  | (14) |  | – |  | – |  | – |  |  | (14)
Change in allowance for inventory reserve |  | – |  | (935) |  | – |  | – |  |  | (935) |  | – |  | – |  | – |  |  | (935)
Net gain on sale of real and personal property |  | – |  | (10,889) |  | (676) |  | – |  |  | (11,565) |  | – |  | – |  | – |  |  | (11,565)
Net gain on sale of investments |  | (6) |  | – |  | – |  | – |  |  | (6) |  | (258) |  | (1,512) |  | – |  |  | (1,776)
Deferred income taxes |  | 27,824 |  | – |  | – |  | – |  |  | 27,824 |  | 875 |  | 3,129 |  | – |  |  | 31,828
Net change in other operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance recoverables and trade receivables |  | – |  | (21,081) |  | – |  | – |  |  | (21,081) |  | 520 |  | (2,154) |  | – |  |  | (22,715)
Inventories |  | – |  | (973) |  | – |  | – |  |  | (973) |  | – |  | – |  | – |  |  | (973)
Prepaid expenses |  | 22,475 |  | (7,723) |  | (679) |  | – |  |  | 14,073 |  | – |  | 25 |  | – |  |  | 14,098
Capitalization of deferred policy acquisition costs |  | – |  | – |  | – |  | – |  |  | – |  | – |  | (7,808) |  | – |  |  | (7,808)
Other assets |  | – |  | (1,172) |  | (3,467) |  | – |  |  | (4,639) |  | 190 |  | (83) |  | – |  |  | (4,532)
Related party assets |  | 552 |  | 24,213 |  | – |  | – |  |  | 24,765 |  | (96) |  | – |  | 209 | (b) |  | 24,878
Accounts payable and accrued expenses |  | 8,633 |  | 10,400 |  | (126) |  | – |  |  | 18,907 |  | – |  | (745) |  | – |  |  | 18,162
Policy benefits and losses, claims and loss expenses payable |  | – |  | (5,590) |  | – |  | – |  |  | (5,590) |  | 1,326 |  | 5,873 |  | – |  |  | 1,609
Other policyholders' funds and liabilities |  | – |  | – |  | – |  | – |  |  | – |  | (501) |  | 321 |  | – |  |  | (180)
Deferred income |  | – |  | 7,584 |  | – |  | – |  |  | 7,584 |  | – |  | – |  | – |  |  | 7,584
Related party liabilities |  | – |  | 1,158 |  | 4,313 |  | – |  |  | 5,471 |  | 467 |  | 233 |  | (209) | (b) |  | 5,962
Net cash provided (used) by operating activities |  | 72,652 |  | 152,082 |  | 5,546 |  | – |  |  | 230,280 |  | 5,376 |  | 3,617 |  | – |  |  | 239,273
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  | – |  | (156,306) |  | (118,850) |  | – |  |  | (275,156) |  | – |  | – |  | – |  |  | (275,156)
Short term investments |  | – |  | – |  | – |  | – |  |  | – |  | (16,298) |  | (48,354) |  | – |  |  | (64,652)
Fixed maturities investments |  | – |  | – |  | – |  | – |  |  | – |  | (14,285) |  | (52,570) |  | – |  |  | (66,855)
Equity securities |  | – |  | – |  | – |  | – |  |  | – |  | (388) |  | – |  | – |  |  | (388)
Preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | (634) |  | – |  | – |  |  | (634)
Real estate |  | – |  | – |  | – |  | – |  |  | – |  | – |  | (131) |  | – |  |  | (131)
Mortgage loans |  | – |  | (1,580) |  | (6,500) |  | 2,514 | (b) |  | (5,566) |  | – |  | (5,785) |  | (1,553) | (b) |  | (12,904)
Proceeds from sales and paydown's of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  | – |  | 92,112 |  | 1,127 |  | – |  |  | 93,239 |  | – |  | – |  | – |  |  | 93,239
Short term investments |  | – |  | – |  | – |  | – |  |  | – |  | 14,570 |  | 50,248 |  | – |  |  | 64,818
Fixed maturities investments |  | – |  | – |  | – |  | – |  |  | – |  | 5,213 |  | 36,278 |  | – |  |  | 41,491
Equity securities |  | 516 |  | – |  | – |  | – |  |  | 516 |  | 388 |  | – |  | – |  |  | 904
Preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | 2,295 |  | 1,000 |  | – |  |  | 3,295
Real estate |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Mortgage loans |  | – |  | 1,680 |  | 21,466 |  | (2,514) | (b) |  | 20,632 |  | 221 |  | 852 |  | 1,553 | (b) |  | 23,258
Net cash provided (used) by investing activities |  | 516 |  | (64,094) |  | (102,757) |  | – |  |  | (166,335) |  | (8,918) |  | (18,462) |  | – |  |  | (193,715)
|  | (page 1 of 2)
(a) Balance for the period ended March 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Elimination of intercompany investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Continuation of consolidating cash flow statements by industry segment for the quarter ended June 30, 2013 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Elimination |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Elimination |  |  | AMERCO Consolidated
|  | (Unaudited)
Cash flows from financing activities: |  | (In thousands)
Borrowings from credit facilities |  | – |  | 39,258 |  | 48,924 |  | – |  |  | 88,182 |  | – |  | – |  | – |  |  | 88,182
Principal repayments on credit facilities |  | – |  | (29,295) |  | (32,701) |  | – |  |  | (61,996) |  | – |  | – |  | – |  |  | (61,996)
Debt issuance costs |  | – |  | (177) |  | (55) |  | – |  |  | (232) |  | – |  | – |  | – |  |  | (232)
Capital lease payments |  | – |  | (10,449) |  | – |  | – |  |  | (10,449) |  | – |  | – |  | – |  |  | (10,449)
Leveraged Employee Stock Ownership Plan - repayments from loan |  | – |  | 127 |  | – |  | – |  |  | 127 |  | – |  | – |  | – |  |  | 127
Proceeds from (repayment of) intercompany loans |  | (28,668) |  | (52,359) |  | 81,027 |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Securitization deposits |  | – |  | – |  | – |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Investment contract deposits |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 34,742 |  | – |  |  | 34,742
Investment contract withdrawals |  | – |  | – |  | – |  | – |  |  | – |  | – |  | (6,754) |  | – |  |  | (6,754)
Net cash provided (used) by financing activities |  | (28,668) |  | (52,895) |  | 97,195 |  | – |  |  | 15,632 |  | – |  | 27,988 |  | – |  |  | 43,620
Effects of exchange rate on cash |  | – |  | (335) |  | – |  | – |  |  | (335) |  | – |  | – |  | – |  |  | (335)
Increase (decrease) in cash and cash equivalents |  | 44,500 |  | 34,758 |  | (16) |  | – |  |  | 79,242 |  | (3,542) |  | 13,143 |  | – |  |  | 88,843
Cash and cash equivalents at beginning of period |  | 327,119 |  | 98,926 |  | 1,515 |  | – |  |  | 427,560 |  | 14,120 |  | 22,064 |  | – |  |  | 463,744
Cash and cash equivalents at end of period | $ | 371,619 | $ | 133,684 | $ | 1,499 | $ | – |  | $ | 506,802 | $ | 10,578 | $ | 35,207 | $ | – |  | $ | 552,587
|  | (page 2 of 2)
(a) Balance for the period ended March 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Consolidating cash flow statements by industry segment for the quarter ended June 30, 2012 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Elimination |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Elimination |  |  | AMERCO Consolidated
|  | (U naudited)
Cash flows from operating activities: |  | (In thousands)
Net earnings | $ | 80,569 | $ | 63,331 | $ | 702 | $ | (64,033) |  | $ | 80,569 | $ | 1,681 | $ | 901 | $ | (2,582) |  | $ | 80,569
Earnings from consolidated entities |  | (66,615) |  | – |  | – |  | 64,033 |  |  | (2,582) |  | – |  | – |  | 2,582 |  |  | –
Adjustments to reconcile net earnings to cash provided by operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  | 1 |  | 59,836 |  | 3,804 |  | – |  |  | 63,641 |  | – |  | – |  | – |  |  | 63,641
Amortization of deferred policy acquisition costs |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 2,811 |  | – |  |  | 2,811
Change in allowance for losses on trade receivables |  | – |  | (102) |  | – |  | – |  |  | (102) |  | – |  | – |  | – |  |  | (102)
Change in allowance for inventory reserve |  | – |  | 695 |  | – |  | – |  |  | 695 |  | – |  | – |  | – |  |  | 695
Net gain on sale of real and personal property |  | – |  | (7,516) |  | – |  | – |  |  | (7,516) |  | – |  | – |  | – |  |  | (7,516)
Net loss on sale of investments |  | – |  | – |  | – |  | – |  |  | – |  | 12 |  | 27 |  | – |  |  | 39
Deferred income taxes |  | 4,399 |  | – |  | – |  | – |  |  | 4,399 |  | (236) |  | 478 |  | – |  |  | 4,641
Net change in other operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance recoverables and trade receivables |  | – |  | (12,416) |  | – |  | – |  |  | (12,416) |  | 38,152 |  | (2,250) |  | – |  |  | 23,486
Inventories |  | – |  | (5,398) |  | – |  | – |  |  | (5,398) |  | – |  | – |  | – |  |  | (5,398)
Prepaid expenses |  | 9,496 |  | (9,063) |  | (166) |  | – |  |  | 267 |  | – |  | – |  | – |  |  | 267
Capitalization of deferred policy acquisition costs |  | – |  | – |  | – |  | – |  |  | – |  | – |  | (5,420) |  | – |  |  | (5,420)
Other assets |  | 3 |  | 19,649 |  | (259) |  | – |  |  | 19,393 |  | 1,164 |  | (39) |  | – |  |  | 20,518
Related party assets |  | (1,488) |  | 146,547 |  | 2 |  | – |  |  | 145,061 |  | (222) |  | (32) |  | 83 | (b) |  | 144,890
Accounts payable and accrued expenses |  | 27,709 |  | 20,736 |  | 181 |  | – |  |  | 48,626 |  | – |  | (645) |  | – |  |  | 47,981
Policy benefits and losses, claims and loss expenses payable |  | – |  | 6,777 |  | – |  | – |  |  | 6,777 |  | (42,772) |  | 11,753 |  | – |  |  | (24,242)
Other policyholders' funds and liabilities |  | – |  | – |  | – |  | – |  |  | – |  | (703) |  | (1,181) |  | – |  |  | (1,884)
Deferred income |  | – |  | 6,457 |  | – |  | – |  |  | 6,457 |  | – |  | – |  | – |  |  | 6,457
Related party liabilities |  | – |  | 1,447 |  | – |  | – |  |  | 1,447 |  | 105 |  | (21) |  | (83) | (b) |  | 1,448
Net cash provided (used) by operating activities |  | 54,074 |  | 290,980 |  | 4,264 |  | – |  |  | 349,318 |  | (2,819) |  | 6,382 |  | – |  |  | 352,881
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  | – |  | (131,874) |  | (25,912) |  | – |  |  | (157,786) |  | – |  | – |  | – |  |  | (157,786)
Short term investments |  | – |  | – |  | – |  | – |  |  | – |  | (22,430) |  | (37,965) |  | – |  |  | (60,395)
Fixed maturities investments |  | – |  | – |  | – |  | – |  |  | – |  | (9,576) |  | (40,977) |  | – |  |  | (50,553)
Mortgage loans |  | – |  | (5,048) |  | (7,583) |  | – |  |  | (12,631) |  | (1,821) |  | – |  | – |  |  | (14,452)
Proceeds from sales and paydown's of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  | – |  | 62,426 |  | – |  | – |  |  | 62,426 |  | – |  | – |  | – |  |  | 62,426
Short term investments |  | – |  | – |  | – |  | – |  |  | – |  | 12,706 |  | 46,715 |  | – |  |  | 59,421
Fixed maturities investments |  | – |  | – |  | – |  | – |  |  | – |  | 12,983 |  | 10,995 |  | – |  |  | 23,978
Preferred stock |  | – |  | – |  | – |  | – |  |  | – |  | 1,003 |  | – |  | – |  |  | 1,003
Real estate |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 4 |  | – |  |  | 4
Mortgage loans |  | – |  | 8,029 |  | 1,073 |  | – |  |  | 9,102 |  | 577 |  | 1,868 |  | – |  |  | 11,547
Net cash provided (used) by investing activities |  | – |  | (66,467) |  | (32,422) |  | – |  |  | (98,889) |  | (6,558) |  | (19,360) |  | – |  |  | (124,807)
|  | (page 1 of 2)
(a) Balance for the period ended March 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(b) Elimination of intercompany investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

Continuation of consolidating cash flow statements by industry segment for the quarter ended June 30, 2012 are as follows:

|  | Moving & Storage |  |  |  |  | AMERCO Legal Group |  |  |
|  | AMERCO |  | U-Haul |  | Real Estate |  | Elimination |  |  | Moving & Storage Consolidated |  | Property & Casualty Insurance (a) |  | Life Insurance (a) |  | Elimination |  |  | AMERCO Consolidated
|  | (U naudited)
Cash flows from financing activities: |  | (In thousands)
Borrowings from credit facilities |  | – |  | 26,187 |  | – |  | – |  |  | 26,187 |  | – |  | – |  | – |  |  | 26,187
Principal repayments on credit facilities |  | – |  | (55,254) |  | (5,888) |  | – |  |  | (61,142) |  | – |  | – |  | – |  |  | (61,142)
Capital lease payments |  | – |  | (3,888) |  | – |  | – |  |  | (3,888) |  | – |  | – |  | – |  |  | (3,888)
Leveraged Employee Stock Ownership Plan - repayments from loan |  | – |  | 162 |  | – |  | – |  |  | 162 |  | – |  | – |  | – |  |  | 162
Proceeds from (repayment of) intercompany loans |  | (55,326) |  | 21,300 |  | 34,026 |  | – |  |  | – |  | – |  | – |  | – |  |  | –
Securitization deposits |  | – |  | (908) |  | – |  | – |  |  | (908) |  | – |  | – |  | – |  |  | (908)
Investment contract deposits |  | – |  | – |  | – |  | – |  |  | – |  | – |  | 28,993 |  | – |  |  | 28,993
Investment contract withdrawals |  | – |  | – |  | – |  | – |  |  | – |  | – |  | (7,967) |  | – |  |  | (7,967)
Net cash provided (used) by financing activities |  | (55,326) |  | (12,401) |  | 28,138 |  | – |  |  | (39,589) |  | – |  | 21,026 |  | – |  |  | (18,563)
Effects of exchange rate on cash |  | – |  | (376) |  | – |  | – |  |  | (376) |  | – |  | – |  | – |  |  | (376)
Increase (decrease) in cash and cash equivalents |  | (1,252) |  | 211,736 |  | (20) |  | – |  |  | 210,464 |  | (9,377) |  | 8,048 |  | – |  |  | 209,135
Cash and cash equivalents at beginning of period |  | 201,502 |  | 106,951 |  | 775 |  | – |  |  | 309,228 |  | 22,542 |  | 25,410 |  | – |  |  | 357,180
Cash and cash equivalents at end of period | $ | 200,250 | $ | 318,687 | $ | 755 | $ | – |  | $ | 519,692 | $ | 13,165 | $ | 33,458 | $ | – |  | $ | 566,315
|  | (page 2 of 2)
(a) Balance for the period ended March 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

1 1. Industry Segment and Geographic Area Data

|  | United States |  | Canada |  | Consolidated
|  | (Unaudited)
|  | (All amounts are in thousands of U.S. $'s)
Quarter ended June 30, 2013 |  |  |  |  |  |
Total revenues | $ | 703,963 | $ | 42,868 | $ | 746,831
Depreciation and amortization, net of (gains) losses on disposals |  | 59,170 |  | 1,947 |  | 61,117
Interest expense |  | 23,186 |  | 142 |  | 23,328
Pretax earnings |  | 171,756 |  | 7,292 |  | 179,048
Income tax expense |  | 64,148 |  | 1,932 |  | 66,080
Identifiable assets |  | 5,425,667 |  | 153,095 |  | 5,578,762
Quarter ended June 30, 2012 |  |  |  |  |  |
Total revenues | $ | 626,183 | $ | 41,493 | $ | 667,676
Depreciation and amortization, net of (gains) losses on disposals |  | 56,963 |  | 1,973 |  | 58,936
Interest expense |  | 23,339 |  | 152 |  | 23,491
Pretax earnings |  | 119,384 |  | 8,004 |  | 127,388
Income tax expense |  | 44,698 |  | 2,121 |  | 46,819
Identifiable assets |  | 4,690,153 |  | 148,683 |  | 4,838,836

1 2. Employee Benefit Plans

The components of the net periodic benefit costs with respect to postretirement benefits were as follows:

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Service cost for benefits earned during the period | $ | 181 | $ | 155
Interest cost on accumulated postretirement benefit |  | 141 |  | 139
Other components |  | 5 |  | 1
Net periodic postretirement benefit cost | $ | 327 | $ | 295

1 3. 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 t emporary 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 tempor ary cash investments with financial institutions and limit the amount of credit exposure to any one financial institution.

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

We have mortgage receivables, which potentially expose us to credit risk. The portfolio of notes is principally collateralized by sel f-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 discounte d 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.

A ssets and liabilities are recorded at fair value on the condensed consolidated balance sheets and are measured and classified based upon a three tiered approach to valuation. ASC 820 - Fair Value Meas urements and Disclosure (“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 valuati ons 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.

A financial instrument’s le vel within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table represents the financial assets and liabilities on the condensed consolidated balance sheet at June 30, 201 3, that are subject to ASC 820 and the valuation approach applied to each of these items.

|  | Total |  | Level 1 |  | Level 2 |  | Level 3
|  | (Unaudited)
|  | (In thousands)
Assets |  |  |  |  |  |  |  |
Short-term investments | $ | 516,150 | $ | 516,150 | $ | – | $ | –
Fixed maturities - available for sale |  | 1,053,578 |  | 938,666 |  | 113,737 |  | 1,175
Preferred stock |  | 22,000 |  | 22,000 |  | – |  | –
Common stock |  | 41,430 |  | 41,430 |  | – |  | –
Derivatives |  | 1,212 |  | – |  | 1,212 |  | –
Total | $ | 1,634,370 | $ | 1,518,246 | $ | 114,949 | $ | 1,175
Liabilities |  |  |  |  |  |  |  |
Guaranteed residual values of TRAC leases | $ | – | $ | – | $ | – | $ | –
Derivatives |  | 41,749 |  | – |  | 41,749 |  | –
Total | $ | 41,749 | $ | – | $ | 41,749 | $ | –

amerco and consolidated subsidiaries

notes to condensed consolidated financial statements – (continued)

The following table represents the fair value measurements for our assets at June 30, 2013 using significant unobservable inputs (Level 3).

|  | Fixed Maturities - Asset Backed Securities
|  | (Unaudited)
|  | (In thousands)
Balance at March 31, 2013 | $ | 1,180
Fixed Maturities - Asset Backed Securities - redemption |  | (8)
Fixed Maturities - Asset Backed Securities - gain (realized) |  | 3
Balance at June 30, 2013 | $ | 1,175

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

We begin Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) with the overall strategy of AMERCO, followed by a description of and strategy related to, our operating segments to give the reader an overview of the goals of our businesses and the direction in which our businesses and pro ducts are moving. We then discuss our critical accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. Next, w e discuss our results of operations for the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3, which is followed by an analysis of changes in our balance sheets and cash flows, and a discussion of our financial commitments in the sections entitled Liquidity and Capital Re sources and Disclosures about Contractual Obligations and Commercial Commitments and a discussion of off-balance sheet arrangements. We conclude this MD&A by discussing our current outlook for the remainder of fiscal 201 4.

This MD&A should be read in conjunction with the other sections of this Quarterly Report, including the Notes to Condensed Consolidated Financial Statements. The various sections of this MD&A contain a number of forward-looking statements, as discussed under the caption, Cautionary S tatements Regarding Forward-Looking Statements, all of which are based on our current expectations and could be affected by the uncertainties and risk s described throughout this filing or in our most recent Annual Report on Form 10-K for the fiscal year en ded March 31, 201 3. Many of these risks and uncertainties are beyond our control and our actual results may differ materially from these forward-looking statements.

AMERCO, a Nevada corporation (“AMERCO”), has a first fiscal quarter that ends on the 30 th of June for each year that is referenced. Our insurance company subsidiaries have a first quarter that ends on the 3 1 st of March for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting proce sses conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the financial position or results of operati ons. The Company discloses any material events occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 201 3 and 20 12 correspond to fiscal 201 4 and 201 3 for AMERCO.

Overall Strategy

Our overall strategy is to maintain our leadership position in the North American “do-it-yourself” moving and storage industry. We accomplish this by providing a seamless and integrated supply chain to the “do-it-yourself” moving and storage market. As part of executing this stra tegy, we leverage the brand recognition of U-Haul with our full line of moving and self-storage related products and services and the convenience of our broad geographic presence.

Our primary focus is to provide our customers with a wide selection of movin g rental equipment, convenient self-storage rental facilities and related moving and self-storage products and services. We are able to expand our distribution and improve customer service by increasing the amount of moving equipment and storage rooms and portable storage boxes available for rent, expanding the number of independent dealers in our network and expanding and taking advantage of our growing eMove® capabilities.

Our Property and Casualty Insurance operating segment is focused on providing and a dministering property and casualty insurance to U-Haul and its customers, its independent dealers and affiliates.

Our Life Insurance operating segment is focused on long-term capital growth through direct writing and reinsuring of life, Medicare suppleme nt and annuity products in the senior marketplace.

Description of Operating Segments

AMERCO’s three reportable segments are:

• Moving and Storage, comprised of AMERCO, U-Haul, and Real Estate and the subsidiaries of U-Haul and Real Estate,

• Property and Casu alty Insurance, comprised of Rep w est and its subsidiaries and ARCOA, and

• Life Insurance, comprised of Oxford and its subsidiaries.

Moving and Storage Operating Segment

Our Moving and Storage operating segment consists of the rental of trucks, trailers, por table moving and storage boxes, specialty rental items and self-storage spaces primarily to the household mover as well as sales of moving supplies, towing accessories and propane. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

With respect to our truck, trailer, specialty rental items and self-storage rental business, we are focused on expanding our dealer network, which provides added convenience for our customers and expanding the selection and a vailability of rental equipment to satisfy the needs of our customers.

U-Haul brand self-moving related products and services, such as boxes, pads and tape allow our customers to, among other things, protect their belongings from potential damage during th e moving process. We are committed to providing a complete line of products selected with the “do-it-yourself” moving and storage customer in mind.

eMove is an online marketplace that connects consumers to independent Moving Help® service providers and tho usands of independent U-Haul Self-Storage Affiliates. Our network of customer rated affiliates and service provide r s furnish pack and load help, cleaning help, self-storage and similar services, all over North America. Our goal is to further utilize our we b-based technology platform to increase service to consumers and businesses in the moving and storage market.

Since 1945 U-Haul has incorporated sustainable practices into its everyday operations. We believe that our basic business premise of equipment sha ring helps reduce greenhouse gas emissions and reduces the need for total large capacity vehicles. We continue to look for ways to reduce waste within our business and are dedicated to manufacturing reusable components and recyclable products. We believe t hat our commitment to sustainability, through our products and services and everyday operations has helped us to reduce our impact on the environment.

Property and Casualty Insurance Operating Segment

Our Property and Casualty Insurance operating segment p rovides loss adjusting and claims handling for U-Haul through regional offices across North America. Our Property and Casualty Insurance operating segment also underwrites components of the Safemove, Safetow, Safemove Plus, Safestor and Safestor Mobile pro tection packages to U-Haul customers. We continue to focus on increasing the penetration of these products into the moving and storage market. The business plan for our Property and Casualty Insurance operating segment includes offering property and c asualty products in other U-Haul related programs.

Life Insurance Operating Segment

Our Life Insurance operating segment provides life and health insurance products primarily to the senior market through the direct writing and reinsuring of life insurance, Medicare supplement and annuity policies.

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with the generally accepted accounting principles (“GAAP”) in the United States. The methods, estimates and jud gments we use in applying our accounting policies can have a significant impact on the results we report in our financial statements. Certain accounting policies require us to make difficult and subjective judgments and assumptions, often as a result of th e need to estimate matters that are inherently uncertain.

In the following pages we have set forth, with a detailed description, the accounting policies that we deem most critical to us and that require management’s most difficult and subjective judgments. These estimates are based on historical experience, observance of trends in par ticular areas, information and valuations available from outside sources and on various other assumptions that are believed to be reasonable under the circumstances and which form the basis for making judgments about the carrying values of assets and liabi lities that are not readily apparent from other sources. Actual amounts may differ from these estimates under different assumptions and conditions; such differences may be material.

We also have other policies that we consider key accounting policies, such as revenue recognition; however, these policies do not meet the definition of critical accounting estimates, because they do not generally require us to make estimates or judgments that are difficult or subjective. The accounting policies that we deem mos t critical to us, and involve the most difficult, subjective or complex judgments include the following:

Principles of Consolidation

We apply ASC 810 in our principles of consolidation. ASC 810 addresses arrangements where a company does not hold a majorit y of the voting or similar interests of a VIE. A company is required to consolidate a VIE if it has determined it is the primary beneficiary. ASC 810 also addresses the policy when a company owns a majority of the voting or similar rights and exercises eff ective control.

As promulgated by ASC 810, a VIE is not self-supportive due to having one or both of the following conditions: (i) it has an insufficient amount of equity for it to finance its activities without receiving additional subordinated financial support or (ii) its owners do not hold the typical risks and rights of equity owners. This determination is made upon the creation of a variable interest and is re-assessed on an on-going basis should certain changes in the operations of a VIE, or its rela tionship with the primary beneficiary trigger a reconsideration under the provisions of ASC 810. After a triggering event occurs the facts and circumstances are utilized in determining whether or not a company is a VIE, which other company(s) have a variab le interest in the entity, and whether or not the company’s interest is such that it is the primary beneficiary.

We will continue to monitor our relationships with the other entities regarding who is the primary beneficiary, which could change based on fac ts and circumstances of any reconsideration events.

Recoverability of Property, Plant and Equipment

Property, plant and equipment are stated at cost. Interest expense incurred during the initial construction of buildings and rental equipment is considered part of cost. Depreciation is computed for financial reporting purposes using the straight-line or an accelerated method based on a declining balance formula over the following estimated useful lives: rental equipment 2-20 years and buildings and non-rent al equipment 3-55 years. We follow the deferral method of accounting based on ASC 908 - Airlines for major overhauls in which engine and transmission overhauls are currently capitalized and amortized over three years. Routine maintenance costs are charged to operating expense as they are incurred. Gains and losses on dispositions of property, plant and equipment are netted against depreciation expense when realized. Equipment depreciation is recognized in amounts expected to result in the recovery of estima ted residual values upon disposal, i.e., minimize gains or losses. In determining the depreciation rate, historical disposal experience, holding periods and trends in the market for vehicles are reviewed.

We regularly perform reviews to determine whether facts and circumstances exist which indicate that the carrying amount of assets, including estimates of residual value, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. Reductions in residual values (i.e., the price at which we ultimately expect to dispose of revenue earning equipment) or useful lives will result in an increase in depreciation expense over the life of the equipment. Reviews are performed based on vehicle class, generally subcategories of trucks and trailers. We assess the recoverability of our assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining lives against their respective carrying amounts. We consider factors such as current and expected future market price trends on used vehicles and the expected life of vehicles included in the fleet. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If asset residual values are determined to be recoverable, but the useful lives are shorter or longer than originally estimated, the net book value of the assets is depreciated over the newly determined remaining useful lives.

M anagement determined that addit ions to the fleet resulting from purchase s should be depreciated on an accelerated method based upon a declining formula. Under the declining balances method (2.4 times declining balance), the book value of a rental truck is reduced approximately 16%, 13%, 11%, 9%, 8%, 7%, and 6% during years one through seven, respectively and then reduced on a straight line basis to a salvage value of 2 0% by the end of year fifteen. Beginning in October 2012, rental equipment subject to this depreciation schedule is being depreciated to a salvage vale of 15%. This change had an immaterial effect on our current financial statements. Comparatively, a standard straight line approach would reduce the book value by approximately 5.7% per year over the life of the truck. For the affected equipment, the accelerated depreciation was $13.5 million and $1 4.8 million greater than what it would have been if calculated under a straight line approach for the first quarter of fiscal 201 4 and 201 3, respectively.

Although we intend to sell our used vehicles for prices approximating book value, the extent to which we realize a gain or loss on the sale of used vehicles is dependent upon various factors including but not limited to, the general state of the used vehicle market, the age and con dition of the vehicle at the time of its disposal and the depreciation rates with respect to the vehicle. We typically sell our used vehicles at our sales centers throughout North America, on our web site at uhaul.com/trucksales or by phone at 1-866-404-03 55. Additionally, we sell a large portion of our pickup and cargo van fleet at automobile dealer auctions.

Insurance Reserves

Liabilities for life insurance and certain annuity and health policies are established to meet the estimated future obligations o f policies in force, and are based on mortality, morbidity and withdrawal assumptions from recognized actuarial tables which contain margins for adverse deviation. In addition, liabilities for health, disability and other policies include estimates of paym ents to be made on insurance claims for reported losses and estimates of losses incurred, but not yet reported. Liabilities for annuity contracts consist of contract account balances that accrue to the benefit of the policyholders.

Insurance reserves for o ur Property and Casualty Insurance operating segment and U-Haul take into account losses incurred based upon actuarial estimates and are management’s best approximation of future payments. These estimates are based upon past claims experience and current claim trends as well as social and economic conditions such as changes in legal theories and inflation. These reserves consist of case reserves for reported losses and a provision for losses incurred but not reported (“IBNR”), both reduced by applicable r einsurance recoverables, resulting in a net liability.

Due to the nature of the underlying risks and high degree of uncertainty associated with the determination of the liability for future policy benefits and claims, the amounts to be ultimately paid to settle these liabilities cannot be precisely determined and may vary significantly from the estimated liability, especially for long-tailed casualty lines of business such as excess workers’ compensation. As a result of the long-tailed nature of the ex cess workers’ compensation policies written by Repwest during 1983 through 2002, and similar policies assumed by Repwest during 2001 through 2003, it may take a number of years for claims to be fully reported and finally settled.

On a regular basis insuran ce reserve adequacy is reviewed by management to determine if existing assumptions need to be updated. In determining the assumptions for calculating workers’ compensation reserves, management considers multiple factors including the following:

• Claimant lo ngevity

• Cost trends associated with claimant treatments

• Changes in ceding entity and third party administrator reporting practices

• Changes in environmental factors including legal and regulatory

• Current conditions affecting claim settlements

• Future economi c conditions including inflation

We have reserved each claim based upon the accumulation of current claim costs projected through the claimants’ life expectancy, and then adjusted for applicable reinsurance arrangements. Management reviews each claim bi-a nnually to determine if the estimated life-time claim costs have increased and then adjusts the reserve estimate accordingly at that time. We have factored in an estimate of what the potential cost increases could be in our IBNR liability. We have not as sumed settlement of the existing claims in calculating the reserve amount, unless it is in the final stages of completion.

Continued i ncreases in claim costs, including medical inflation and new treatments and medications could lead to future adverse devel opment resulting in additional reserve strengthening. Conversely, settlement of existing claims or if injured workers return to work or expire prematurely, could lead to future positive development.

Impairment of Investments

Investments are evaluated purs uant to guidance contained in ASC 320 - Investments - Debt and Equity Securities to determine if and when a decline in market value below amortized cost is other-than-temporary. Management makes certain assumptions or judgments in its assessment including but not limited to: ability and intent to hold the security, quoted market prices, dealer quotes or discounted cash flows, industry factors, financial factors, and issuer specific information such as credit strength. Other-than-temporary impairment in valu e is recognized in the current period operating results. There were no write downs in the first quarter of fiscal 2014 and 201 3.

Income Taxes

Our tax returns are periodically reviewed by various taxing authorities. The final outcome of these audits may cause changes that could materially impact our financial results.

AMERCO files a consolidated tax return with all of its legal subsidiaries.

Fair Va lues

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 t emporary 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 b y 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 o ffered 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 ava ilable 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.

Subsequent Events

Our management has evaluated subsequent events occurring after June 30, 2013, the date of our most recent balance sheet, through the date our financial statements were issued. W e do not believe any subsequent events have occurred that wou ld require further disclosure or adjustment to our financial statements.

Adoption of New Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Com prehensive Income, (“ASU 2013-02”) an amendment to FASB ASC Topic 220. The update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of th e statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its ent irety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This ASU is effective prospectively for the Company’s fiscal years, and interim periods within those years beginning after December 15, 2012. We adopted ASU 2013-02 in the first quarter of fiscal 2014 and it did not have a material impact on our financial statements.

From time to time, new accountin g pronouncements are issued by the FASB or the SEC that are adopted by the Company as of the specified effective date. Unless otherwise discussed, these ASU’s entail technical corrections to existing guidance or affect guidance related to specialized indus tries or entities and therefore will have minimal, if any, impact on our financial position or results of operations upon adoption.

Results of Operations

AMERCO and Consolidated Entities

Quarter Ended June 30, 2013 compared with the Quarter Ended June 30, 2012

Listed below on a consolidated basis are revenues for our major product lines for the first quarter of fiscal 201 4 and the first quarter of fiscal 201 3:

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Self-moving equipment rentals | $ | 521,649 | $ | 466,994
Self-storage revenues |  | 42,099 |  | 34,736
Self-moving and self-storage products and service sales |  | 70,691 |  | 67,178
Property management fees |  | 5,161 |  | 4,860
Life insurance premiums |  | 41,062 |  | 46,426
Property and casualty insurance premiums |  | 7,966 |  | 7,243
Net investment and interest income |  | 18,989 |  | 14,517
Other revenue |  | 39,214 |  | 25,722
Consolidated revenue | $ | 746,831 | $ | 667,676

Self-moving equipment rental revenues increased $54.7 million during the first quarter of fiscal 201 4, compared with t he first quarter of fiscal 2013. The improvement in revenue came primarily from growth in moving transactions across both our truck and trailer fleets. The additional transac tions were facilitated by an increase in the amount of equipment available to rent along with incremental utilization improvements.

Self-storage revenues increased $7.4 million during the first quarter of fiscal 201 4, com pared with the first quarter o f fiscal 201 3 due primarily to an increase in the number of rooms rented. The average monthly amount of occupied square feet increased by nearly 21% during the first quarter of fiscal 201 4 compared to the same period last year. The growth in revenues and square feet rented comes from a combination of improved occupancy at existing locations as well as the addition of new facilities to the portfolio. Over the last twelve months we have added approximately 2.5 million net rentable square feet to the self-st orage portfolio with over 0.8 million of that coming on during the first quarter.

Sales of self-moving and self-storage products and services increased $3.5 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3. Increases were recognized in the sales of moving supplies, propane and towing accessories and related installations.

Life insurance premiums dec reased $5.4 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 2013 du e primarily to reduced life and Medicare supplement premiums.

Property and casualty insurance premiums inc reased $0.7 million during the first quarter of fiscal 2014, compared with the first quarter of fiscal 201 3 due to an increase in Safestor and Safetow sales which were a result of increased equipment and storage rental transactions.

Net investment and interest income increased $4.5 million during the first quarter of fiscal 2014, compared with the first quarter of fiscal 2013. The Life Insurance operati ng segment recognized increased investment income due to a larger invested asset base and realized gains compared to the same period last year.

Other revenue increased $13.5 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3 primarily from the expansion of new business initiatives including our U-Box TM program.

As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $746.8 million for the first quarter of fiscal 201 4, compared with $667.7 million for the first quarter of fiscal 201 3.

Listed below are revenues and earnings from operations at each of our operating segments for the first quarter of fiscal 201 4 and the first quarter of fiscal 201 3. The insurance companies first quarters ended March 31, 201 3 and 20 12.

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Moving and storage |  |  |  |
Revenues | $ | 684,403 | $ | 602,849
Earnings from operations before equity in earnings of subsidiaries |  | 194,008 |  | 146,959
Property and casualty insurance |  |  |  |
Revenues |  | 10,443 |  | 9,443
Earnings from operations |  | 4,390 |  | 2,587
Life insurance |  |  |  |
Revenues |  | 54,779 |  | 56,142
Earnings from operations |  | 4,060 |  | 1,404
Eliminations |  |  |  |
Revenues |  | (2,794) |  | (758)
Earnings from operations before equity in earnings of subsidiaries |  | (82) |  | (71)
Consolidated results |  |  |  |
Revenues |  | 746,831 |  | 667,676
Earnings from operations |  | 202,376 |  | 150,879

Total costs and expenses in creased $27.7 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 4. Operating expenses for the Moving and Storage operating segment increased $28.1 million with a significant portion of this coming from spending on personnel and operating costs associated with the U-Box program along with an increase in rental equipment maintenance. Commission expenses increased in relation to the associated revenues. Depreciation expense increased $5.4 million and gains from the disposal property, plant and equi pment increased $4.1 million. This resulted in a $1.3 million increase in depreciation expense, net. Conversely, lease expense decreased $5.8 million as a result of the Company’s continued trend in financing new equipment on the balance sheet versus thro ugh operating leases.

As a result of the above mentioned changes in revenues and expenses, earnings from operations in creased to $202.4 million for the first quarter of fiscal 201 4, compared with $150.9 million for the first quarter of fiscal 201 3.

Interest expense for the first quarter of fiscal 201 4 was $23.3 million, compared with $23.5 million for the first quarter of fiscal 201 3.

Income tax expense was $66.1 million for the first quarter of fiscal 201 4, compared with $46.8 million for the first quarter of fiscal 201 3.

As a result of the above mentioned items, earnings available to common shareholders were $113.0 million for the first quarter of fiscal 201 4, compared with $80.6 million for the first quarter of fiscal 201 3.

Basic and diluted earn ings per share for the first quarter of fiscal 201 4 were $5.78, compared with $4.13 for the first quarter of fiscal 201 3.

The weighted average common shares outstanding basic and diluted were 19,545,618 for the first quarter of fiscal 201 4, compared with 1 9,502,369 for the first quarter of fiscal 201 3.

Moving and Storage

Quarter Ended June 30, 2013 compared with the Quarter Ended June 30, 2012

Listed below are revenues for the major product lines at our Moving and Storage operating segment for the first quarter of fiscal 201 4 and the first quarter of fiscal 201 3:

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Self-moving equipment rentals | $ | 522,083 | $ | 467,315
Self-storage revenues |  | 42,099 |  | 34,736
Self-moving and self-storage products and service sales |  | 70,691 |  | 67,178
Property management fees |  | 5,161 |  | 4,860
Net investment and interest income |  | 3,409 |  | 3,135
Other revenue |  | 40,960 |  | 25,625
Moving and Storage revenue | $ | 684,403 | $ | 602,849

Self-moving equipment rental revenues increased $54.8 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3. The improvement in revenue came primarily from growth in moving transactions across both our truck and trailer fleets. The additiona l transactions were facilitated by an increase in the amount of equipment available to rent along with incremental utilization improvements.

Self-storage revenues increased $7.4 million during the first quarter of fiscal 201 4, com pared with the first quarter of fiscal 201 3 due primarily to an increase in the number of rooms rented. The average monthly amount of occupied square feet increased by nearly 21% during the first quarter of fiscal 201 4 compared to the same period last year. The growth in re venues and occupancy comes from a combination of improved occupancy at existing locations as well as the addition of new facilities to the portfolio. Over the last twelve months we have added approximately 2.5 million net rentable square feet to the self-storage portfolio with over 0.8 million of that coming on during the first quarter.

Sales of self-moving and self-storage products and services increased $3.5 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3. Increases were recognized in the sales of moving supplies, propane and towing accessories and related installations.

Net investment and interest income increased $0.3 million during the first quarter of fiscal 2014, compared with the first quarter of fiscal 2013 primarily due to increased investment income offset by a decrease in interest income on the SAC Holdings notes compared to the same period last year. In June 2013, SAC Holdings made a payment to reduce its outstanding deferred interest payable to AMERCO by $10.4 million.

Other revenue increased $15.3 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3 primarily from the expansion of new business initiatives including our U-Box TM program.

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. Self-storage data for our owned storage locations follows:

|  | Quarter Ended June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands, except occupancy rate)
Room count as of June 30 |  | 195 |  | 170
Square footage as of June 30 |  | 16,854 |  | 14,308
Average monthly number of rooms occupied |  | 153 |  | 131
Average monthly occupancy rate based on room count |  | 80.2% |  | 78.0%
Average monthly square footage occupied |  | 13,448 |  | 11,119

Total costs and expenses in creased $34.5 million during the first quarter of fiscal 201 4, compared with the first quarter of fiscal 201 3. Operating expenses increased $28.1 million with a significant portion of this coming from spending on personnel and operating costs associated with the U-Box program along with an increase in rental equipment maintenance. Commission expenses increased in relation to the associated revenues. Depreciation e xpense increased $5.4 million and gains from the disposal property, plant and equipment increased $4.1 million. This resulted in a $1.3 million increase in depreciation expense, net. Conversely, lease expense decreased $5.8 million as a result of the Com pany’s continued trend in financing new equipment on the balance sheet versus through operating leases.

As a result of the above mentioned changes in revenues and expenses, earnings from operations for the Moving and Storage operating segment before consol idation of the equity in the earnings of the insurance subsidiaries, increased to $194.0 million for the first quarter of fiscal 2014, compared with $147.0 million for the first quarter of fiscal 2013.

Equity in the earnings of AMERCO’s insurance subsidiar ies was $5.5 million and $2.6 million for the first quarter of fiscal 201 4 and 201 3, respectively.

As a result of the above mentioned changes in revenues and expenses, earnings from operations increased to $199.5 million for the first quarter of fiscal 201 4, compared with $149.5 million for the first quarter of fiscal 201 3.

Property and Casualty Insurance

Quarter Ended March 31, 201 3 compared with the Quarter Ended March 31, 2012

Net premiums were $8.0 million and $7.2 million for the quarters ended March 31, 201 3 and 201 2, respectively. A significant portion of Repwest’s premiums are from policies sold in conjunction with U-Haul rental transactions. The premium increase corresponded with the increased moving and storag e transactions at U-Haul during the same time period.

Net investment income was $2.5 million and $2.2 million for the quarters ended March 31, 201 3 and 201 2, respectively. The increase was due to $0.3 million of gains on the sale of bonds and preferred sto ck.

Net operating expenses were $4.1 million and $3.3 million for the quarters ended March 31, 201 3 and 201 2, respectively. The increase was primarily due to an increase in commissions.

Benefits and losses incurred were $2.0 million and $3.6 million for t he quarters ended March 31, 201 3 and 201 2, respectively. The decrease was due to a $1.4 million strengthening of reserves on assumed reinsurance business in the first quarter of last year whereas no similar adjustment was necessary this year.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were $4.4 million and $2.6 million for t he quarters ended March 31, 2013 and 201 2, respectively.

Life Insurance

Quarter Ended March 31, 2013 compared with the Quarter Ended March 3 1, 20 12

Net premiums were $41.1 million and $46.4 million for the quarters ended March 31, 201 3 and 201 2, respectively. Medicare supplement premiums decreased $2.7 million while premiums from single premium whole life insurance and immediate annuities decreased by $2.6 million. In the past year n ew business activity shifted more towards deferred annuity policies with sales of these products accounted for as deposits on the balance sheet instead of premium income. Annuity deposits were $27.7 million, an increase of $1.3 million compared to the same period last year.

Net investment income was $13.2 million and $9.3 million for the quarters ended March 31, 201 3 and 201 2, respectively. The re was an increase of $3.0 mil lion of investment income due to a larger invested asset base and an increase in realized gains of $1.0 million compared to the same period last year.

Net operating expenses were $6.4 million and $7.2 million for the quarters ended March 31, 201 3 and 201 2, respectively. The variance is due to a reduction in Medicare supplement, single premium life, and immediate annuities commissions resulting from a lower Medicare supplement policy base and decreased sales of single premium life and immediate annuity pol icies.

Benefits and losses incurred were $40.7 million and $44.8 million for the quarter ended March 31, 201 3 and 201 2, respectively. Life and immediate annuity benefits decreased $2.3 million primarily due to a reduction in reserves from reduced sales. M edicare supplement incurred benefits decreased by $3.0 million from a reduction of policies in force and an improved benefit ratio. Interest credited to policyholders increased $1.5 million as a result of increased deferred annuity deposits.

Amortization o f deferred acquisition costs (“DAC”), sales inducement asset (“SIA”) and the value of business acquired was $3.7 million and $2.8 million for the quarters ended March, 201 3 and 201 2, respectively. The variance is a result of increased amortization of annuity DAC and SIA due to growth of the in force business.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were $4.1 million and $1.4 million for the quarters ended March 31, 201 3 and 201 2, respectiv ely.

Liquidity and Capital Resources

We believe our current capital structure is a positive factor that will enable us to pursue our operational plans and goals, and provide us with sufficient liquidity for th e foreseeable future. The majority of our obligations currently in place mature between fiscal years 201 6 and 201 9. However, since there are many factors which could affect our liquidity, including some which are beyond our control, there is no assurance t hat future cash flows and liquidity resources will be sufficient to meet our outstanding debt obligations and our other future capital needs.

At June 30, 2013, cash and cash equivalents totaled $552.6 million, compared with $463.7 million on March 31, 201 3. The assets of our insurance subsidiaries are generally unavailable to fulfill the obligations of non-insurance operations (AMERCO, U-Haul and Real Estate). As of June 30, 2013 (or as otherwise indicated), cash and cash equivalents, other financial assets (receivables, short-term investments, other investments, fixed maturities, and related party assets) and debt obligations of each operating segment were:

|  | Moving & Storage |  | Property and Casualty Insurance (a) |  | Life Insurance (a)
|  | (Unaudited)
|  | (In thousands)
Cash and cash equivalents | $ | 506,802 | $ | 10,578 | $ | 35,207
Other financial assets |  | 281,267 |  | 430,890 |  | 1,089,621
Debt obligations |  | 1,737,277 |  | – |  | –
(a) As of March 31, 2013 |  |  |  |  |  |

At June 30, 2013, o ur Moving and Storage operating segment had additional cash available under existing credit facilities of $75.0 million.

Net cash provided by operating activities de creased $113.6 million in the first quarter of fiscal 201 4 compared with fiscal 201 3 primarily due to repayments of $127.3 million of the notes and interest receivables with SAC Holdings in fiscal 2013 that did not recur this year.

Net cash used in investing activities in creased $68.9 million in the first quarter of fiscal 201 4, compared with fiscal 201 3. Purchases of property, plant and equipment, which are reported net of cash from leases, in creased $117.4 million. Cash from the sales of property, plant and equipment increased $30.8 million largely due to an increase in pickup and cargo van sales.

Net cash provide d by fina ncing activities in creased $62.2 million in the first quarter of fiscal 201 4, as compared with fiscal 201 3. Borrowings increased by $62.0 million and were offset by an increase in capital lease payments of $6.6 million. Additionally, net annuity d eposits at the Life i nsurance segment increased $7.0 million in the first quarter of fiscal 201 4 compared to the same period last year.

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 obtai ned 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 tha t during fiscal 201 4, we will reinvest in our truck and trailer rental fleet approximately $300 million, net of equipment sales excluding any lease buyouts. Through the first quarter of fiscal 2014, we have invested, net of sales, approximately $120 million before any lease buyouts in our truck and trailer fleet of this projected amount. Fleet investments in fiscal 201 4 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 201 4 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 acqu isition of self-storage properties to support U-Haul's growth through debt financing and funds from operations and sales. Our 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. We are funding these development projects through construction loans and internally generated funds. For the fir st quarter of fiscal 201 4, we invested approximately $99 million in real estate acquisitions, new construction and renovation and repair. For fiscal 201 4, 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 expendi tures (purchases of property, plant and equipment less proceeds from the sale of property, plant and equipment and lease proceeds) were $181.9 million and $95.4 million for the first quarter of fiscal 201 4 and 201 3, respectively. The components of our net capital expenditures are provided in the following table:

|  | Three Months Ending June 30,
|  | 2013 |  | 2012
|  | (Unaudited)
|  | (In thousands)
Purchases of Rental Equipment | $ | 213,255 | $ | 196,138
Equipment Lease Buyouts |  | 9,106 |  | 24,374
Purchases of Real Estate, Construction and Renovations |  | 99,400 |  | 36,423
Other capital expenditures |  | 13,394 |  | 9,260
Gross capital expenditures |  | 335,155 |  | 266,195
Less: Lease proceeds |  | (59,999) |  | (108,409)
Less: Sales of property, plant and equipment |  | (93,239) |  | (62,426)
Net capital expenditures | $ | 181,917 | $ | 95,360

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 co mpanies. As a result, our Property and Casualty Insurance’s operating segment assets are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

We believe that stockholders equity at the Property and Casualty operating segment remains sufficient and we do not believe that its ability to pay ordinary dividends to AMERCO will be restricted per state regulations.

Our Property and Casualty operating segment s tockholder’s equity was $140.8 million and $136.9 million at March 31, 2013 and December 31, 20 12, respectively. The increase resulted from net earnings of $2.9 m illion and a n increase in other comprehensive income of $1.0 million. Our Property and Casualty Insurance operating segment does not use debt or equity issues to increas e capital and therefore has no direct exposure to capital market conditions other than through its investment portfolio.

Life Insurance

Our Life Insurance operating segment manages its financial assets to meet policyholder and other obligations including i nvestment contract withdrawals and deposits. Our Life Insurance’s operating segment net deposits for the quarter ended March 31, 2013 were $28.0 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insur ance companies. As a result, our Life Insurance’s operating segment funds are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

Our Life Insurance’s operating segment stockholder’s equity was $243.6 million and $242.7 milli on at March 31, 2013 and December 31, 20 12, respectively. The increase resulted from net earnings of $2.7 million and a de crease in other comprehensive income of $1.8 million. Our Life Insurance operating segment does not use debt or equity issues to incre ase capital and therefore has no direct exposure to capital market conditions other than through its investment portfolio.

Cash Provided (Used) from Operating Activities by Operating Segments

Moving and Storage

Net cash provided from operating activities were $230.3 million and $349.3 million for the first quarter of fiscal 2014 and 201 3, respectively primarily due to repayments of $127.3 million of the notes and interest receivables with SAC Holdings in fiscal 2013 that did not recur this year, offset by increased revenues this year.

Property and Casualty Insurance

Net cash provided (used) by operating activities were $5.4 million and ($2.8) million for the first quarter ended March 31, 2013 and 2012, respectively. The increase in cash provided was primari ly due to a decrease in claim payments.

Our Property and Casualty Insurance’s operating segment cash and cash equivalents and short-term investment portfolio amounted to $43.4 million and $45.2 million at March 31, 2013 and December 31, 20 12, respectively. This balance reflects funds in transition from maturity proceeds to long term investments. Management believes this level of liquid assets, combined with budgeted cash flow, is adequate to meet foreseeable cash needs. Capital and operating budgets allow o ur Property and Casualty Insurance operating segment to schedule cash needs in accordance with investment and underwriting proceeds.

Life Insurance

Net cash provided by operating activities were $3.6 million and $6.4 million for the first quarter ended Mar ch 31, 2013 and 20 12, respectively. The decrease in cash provided was attributable to the decrease in collected premiums offset by an increase in net investment income.

In addition to cash flows from operating activities and financing activities, a substan tial amount of liquid funds are available through our Life Insurance’s operating segment short-term portfolio. At March 31, 2013 and December 31, 20 12, cash and cash equivalents and short-term investments amounted to $45.9 million and $34.6 million, respec tively. Management believes that the overall sources of liquidity are adequate to meet foreseeable cash needs.

Liquidity and Capital Resources - Summary

We believe we have the financial resources needed to meet our business plans including our working capi tal needs. We continue to hold significant cash and have access to existing credit facilities and additional liquidity to meet our anticipated capital expenditure requirements for investment in our rental fleet, rent al equipment and storage acquisitions and build outs.

Our borrowing strategy is primarily focused on asset-backed financing and rental equipment operating leases. As part of this strategy, we seek to ladder maturities and hedge floating rate loans through the use of interest rate swaps. While each of these loans typically contain s provisions governing the amount that can be borrowed in relation to specific assets, the overall structure is flexible with no limits on overall Company borrowings. Management feels it has adequate liquidity between c ash and cash equivalents and unused borrowing capacity in existing credit facilities to meet the current and expected needs of the Company over the next several years. At June 30, 2013, we had cash availability under existing credit facilities of $75.0 mil lion. It is possible that circumstances beyond our control could alter the ability of the financial institutions to lend us the unused lines of credit. W e believe that there are additional opportunities for leverage in our existing capital structure. For a more detailed discussion of our long-term debt and borrowing capacity, please see Note 4, Borrowings of the Notes to Condensed Consolidated Financial Statements.

Fair Value of Financial Instruments

A ssets and liabilities recorded at fair value on the cond ensed consolidated balance sheets and are measured and classified based upon a three tiered approach to valuation. ASC 820 requires that financial assets and liabilities recorded at fair value be classified and disclosed in a Level 1, Level 2 or Level 3 ca tegory. For more information, please see Note 1 3, Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements.

The available-for-sale securities held by the Company are recorded at fair value. These values are determined primarily from actively traded markets where prices are based either on direct market quotes or observed transactions. Liquidity is a factor considered during the determination of the fair value of these securities. Market price quotes may not be readily available for certain securities or the market for them has slowed or ceased. In situations where the market is determined to be illiquid, fair value is determined based upon limited available information and other factors including expected cash flows. At June 30, 2013, we had $1.2 million of available-for-sale assets classified in Level 3.

The interest rate swaps held by us as hedges against interest rate risk for our variable rate debt are recorded at fair value. These values are determined using pricing valuation models which include broker quotes for which significant inputs are observable. They include adjustments for counterparty credit quality and other deal-specific factors, where appropriate and are classified as Level 2.

Disclosures about Contractual Obliga tions and Commercial Commitments

Our estimates as to future contractual obligations have not materially changed from the disclosure included under the subheading Disclosures About Contractual Obligations and Commercial Commitments in Part II, Item 7, Manag ement’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended March 31, 201 3.

Off-Balance Sheet Arrangements

The Company uses off-balance sheet arrangements in situations where management believes that the economics and sound business principles warrant their use.

We utilize operating leases for certain rental equipment and facilities with terms expiring substantially through 201 9. In the event of a shortfall in proceeds from th e sales of the underlying rental equipment assets, we have guaranteed $111.8 million of resid ual values at June 30, 2013 for these assets at the end of their respective lease terms. We have been leasing rental equipment since 1987. To date, we have not exp erienced residual value shortfalls related to these leasing arrangements. Using the average cost of fleet related debt as the discount rate, the present value of our minimum lease payments and residual value guarantees were $276.8 million at June 30, 2013.

Historically, we have used off-balance sheet arrangements in connection with the expansion of our self-storage business. For more information please see Note 9, Related Party Transactions of the Notes to Condensed Consolidated Financial Statements. These arrangements were primarily used when the Company’s overall borrowing structure was more limited. The Company does not face similar limitations currently and off-balance sheet arrangements have not been utilized in our self-storage expansion in recent year s. In the future, we will continue to identify and consider off-balance sheet opportunities to the extent such arrangements would be economically advantageous to us and our stockholders.

We currently manage the self-storage properties owned or leased by SA C Holdings, Mercury, 4 SAC, 5 SAC, Galaxy, and Private Mini pursuant to a standard form of management agreement, under which we receive a management fee of between 4% and 10% of the gross receipts plus reimbursement for certain expenses. We received manage ment fees, exclusive of reimbursed expenses, of $10.3 million and $9.4 million from the above mentioned entities during the first quarter of fiscal 201 4 and 201 3, respectively. This management fee is consistent with the fee received for other properties we previously managed for third parties. SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini are substantially controlled by Blackwater. Blackwater is wholly-owned by Mark V. Shoen, a significant stockholder of AMERCO. Mercury is substantially controlled by Mark V. Shoen. James P. Shoen, a significant shareholder and director of AMERCO and an estate planning trust benefitting the Shoen children ha ve an interest in Mercury.

We lease space for marketing company offices, vehicle repair shops and hitch installati on centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. Total lease payments pursuant to such leases were $0.7 million in the first quarters of both fiscal 201 4 and 201 3, respectively. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us.

At June 30, 2013, subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini acted as U-Haul independent dealers. The financial and other terms of the dealership contracts with the aforementioned companies and their subsidiaries are substantially identical to the terms of those with our other independent dealers whereby commissions are paid by us based on equipment rental revenues. We paid the above mentioned entities $13.3 million and $11.6 million in commissions pursuant to such dealership contracts during the first quarter of fiscal 201 4 and 201 3, respectively.

During the first quarter of fiscal 201 4, subsidiaries of ours held various junior unsecured notes of SAC Holdings. Substantially all of the equity interest of SAC Holdings is controlled by Blackwater. We do not have an equity ownership interest in SAC Holdings. We recorded interest income of $1.9 million and $2.5 million, and received cash interest payments of $12.3 million and $7.2 million, from SAC Holdings during the first quarter of fiscal 201 4 and 201 3, respectively. The largest aggregate amount of notes receivable outstanding during the first quarter of fisc al 201 4 was $72.4 million and the aggregate notes receivable balance at June 30, 2013 was $72.2 million. In accordance with the terms of these notes, SAC Holdings may prepay the notes without penalty or premium at any time. The scheduled maturities of thes e notes are between 201 7 and 20 19

These agreements along with notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $7.9 million, expenses of $0.7 million and cash flows of $21.7 m illion during the first quarter of fiscal 201 3. Revenues and commission expenses related to the Dealer Agreements were $60.5 million and $13.3 million, respectively during the first quarter of fiscal 201 4.

Fiscal 201 4 Outlook

We will continue to focus our attention on increasing transaction volume and improving pricing, product and utilization for self-moving equipment rentals. Maintaining an adequate level of new investment in our truck fleet is an important component of our plan to meet our operational go als. Revenue in the U-Move program could be adversely impacted should we fail to execute in any of these areas. Even if we execute our plans, we could see declines in revenues due to unforeseen events including the continuation of adverse economic conditio ns that are beyond our control.

W ith respect to our storage business, w e have added new locations and expanded at existing locations. In fiscal 201 4, we are looking to continue to acquire new locations, complete current projects and increase occupancy in our existing portfolio of locations. New projects and acquisitions will be considered and pursued if they fit our long-term plans and meet our financial objectives. In the current environment, we have focused fewer resources on new construction than in rec ent history. We will continue to invest capital and resources in the U-Box storage container program throughout fiscal 201 4.

Our Property and Casualty Insurance operating segment will continue to provide loss adjusting and claims handling for U-Haul and un derwrite components of the Safemove, Safetow, Safemove Plus, Safestor and Safestor Mobile protection packages to U-Haul customers.

Our Life Insurance operating segment is pursuing its goal of expanding its presence in the senior market through the sales of its Medicare supplement, life and annuity policies. This strategy includes growing its agency force, expanding its new product offerings, and pursuing business acquisition opportunities.

Cautionary Statements Regarding Forward-Looking Statements

This Quar terly Report contains “forward-looking statements” regarding future events and our future results of operations. We may make additional written or oral forward-looking statements from time to time in filings with the SEC or otherwise. We believe such forwa rd-looking statements are within the meaning of the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements may include, but a re not limited to, projections of revenues, earnings or loss, estimates of capital expenditures, plans for future operations, products or services, financing needs and plans, our perceptions of our legal positions and anticipated outcomes of government inv estigations and pending litigation against us, liquidity, goals and strategies, plans for new business, storage occupancy, growth rate assumptions, pricing, costs, and access to capital and leasing markets as well as assumptions relating to the foregoing. The words “believe,” “expect,” “anticipate,” “estimate,” “project” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made.

Forward-looking statements are inherently subject to risks and uncertai nties, some of which cannot be predicted or quantified. Factors that could significantly affect results include, without limitation, the risk factors set forth in the section entitled Item 1A. Risk Factors contained in our Annual Report on Form 10-K for th e fiscal year ended March 31, 201 3, as well as the following: our ability to operate pursuant to the terms of its credit facilities; our ability to maintain contracts that are critical to our operations; the costs and availability of financing; our ability to execute our business plan; our ability to attract, motivate and retain key employees; general economic conditions; fluctuations in our costs to maintain and update our fleet and facilities; our ability to refinance our debt; changes in governme nt regulations, particularly environmental regulations; our credit ratings; the availability of credit; changes in demand for our products; changes in the general domestic economy; the degree and nature of our competition; the resolution of pending litigat ion against us; changes in accounting standards and other factors described in this Quarterly R eport or the other documents we file with the SEC. The above factors, the following disclosures, as well as other statements in this Quarterly R eport and in the Notes to Condensed Consolidated Financial Statements, could contribute to or cause such risks or uncertainties, or could cause our stock price to fluctuate dramatically. Consequently, the forward-looking statements should not be regarded as representations or warranties by us that such matters will be realized. We assume no obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.

Item 3. 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 fina ncial instruments, among other strategies. We do not use derivative financial instruments for speculative purposes.

Interest Rate Risk

The exposure to market risk for changes in interest rates relates primarily to our variable rate debt obligations and one variable rate operating lease. We have used interest rate swap agreements and forward swaps to reduce our exposure to changes in interest rates. We enter into these arrangements with counterparties that are significant financial institutions with whom we generally have other financial arrangements. We are exposed to credit risk should these counterparties not be able to perform on their obligations.

| Notional Amount |  |  | Fair Value |  | Effective Date |  | Expiration Date |  | Fixed Rate |  | Floating Rate
| (Unaudited) |  |  |  |  |  |  |  |
| (In thousands) |  |  |  |  |  |  |  |
$ | 15,157 |  | $ | (28) |  | 7/10/2006 |  | 7/10/2013 |  | 5.67% |  | 1 Month LIBOR
| 231,666 |  |  | (37,843) |  | 8/18/2006 |  | 8/10/2018 |  | 5.43% |  | 1 Month LIBOR
| 10,000 |  |  | (297) |  | 2/12/2007 |  | 2/10/2014 |  | 5.24% |  | 1 Month LIBOR
| 6,595 |  |  | (212) |  | 3/12/2007 |  | 3/10/2014 |  | 4.99% |  | 1 Month LIBOR
| 6,600 |  |  | (217) |  | 3/12/2007 |  | 3/10/2014 |  | 4.99% |  | 1 Month LIBOR
| 7,800 | (a) |  | (448) |  | 8/15/2008 |  | 6/15/2015 |  | 3.62% |  | 1 Month LIBOR
| 7,760 |  |  | (487) |  | 8/29/2008 |  | 7/10/2015 |  | 4.04% |  | 1 Month LIBOR
| 12,067 |  |  | (866) |  | 9/30/2008 |  | 9/10/2015 |  | 4.16% |  | 1 Month LIBOR
| 6,476 | (a) |  | (250) |  | 3/30/2009 |  | 4/15/2016 |  | 2.24% |  | 1 Month LIBOR
| 7,688 | (a) |  | (279) |  | 8/15/2010 |  | 7/15/2017 |  | 2.15% |  | 1 Month LIBOR
| 17,500 | (a) |  | (654) |  | 6/1/2011 |  | 6/1/2018 |  | 2.38% |  | 1 Month LIBOR
| 33,750 | (a) |  | (638) |  | 8/15/2011 |  | 8/15/2018 |  | 1.86% |  | 1 Month LIBOR
| 13,750 | (a) |  | (216) |  | 9/12/2011 |  | 9/10/2018 |  | 1.75% |  | 1 Month LIBOR
| 13,374 | (b) |  | (28) |  | 3/28/2012 |  | 3/28/2019 |  | 1.42% |  | 1 Month LIBOR
| 20,625 |  |  | 53 |  | 4/16/2012 |  | 4/1/2019 |  | 1.28% |  | 1 Month LIBOR
| 40,500 |  |  | 661 |  | 1/15/2013 |  | 12/15/2019 |  | 1.07% |  | 1 Month LIBOR
| (a) forward swap |  |  |  |  |  |
| (b) operating lease |  |  |  |  |  |

As of June 30, 2013, we had $476.9 million of variable rate debt obligations and $13.7 million of a variable rate operating lease. If LIBOR were to increase 100 basis points, the increase in interest expense on the variable rate debt would decrease future earnings and cash flows by $0.4 million annually (after consideration of the effect of the above derivative contracts.)

Additionally, our insurance subsidiaries’ fixed income investment portfolios expose us to interest rate risk. This interest rate risk is the price sensitivity of a fixed income security to changes in interest rat es. 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 s upporting these liabilities assisting management in determining an asset allocation strategy for future investments that management believes will mitigate the overall effect of interest rates.

Foreign Currency Exchange Rate Risk

The exposure to market risk for changes in foreign currency exchange rates relates primarily to our Canadian busi ness. Approximately 5.7% and 6.2% of our revenue was generated in Canada during the first quarter of fiscal 201 4 and 201 3, respectively. The result of a 10.0% change in t he value of the U.S. dollar relative to the Canadian dollar would not be material to net income. We typically do not hedge any foreign currency risk since the exposure is not considered material.

Item 4. Controls and Procedures

Attached as exhibits to this Quarterly Report are certifications of our Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”), which are required in accordance with Rule 13a-14 of the Exchange Act. This "Controls and Procedures" section includes information concerning the controls and procedures evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented in the secti on, Evaluation of Disclosure Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the CEO and CAO, conducted an evaluation of the effectiveness of the design and operation of the Comp any’s "disclosure controls and procedures" (as such term is defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) (“Disclosure Controls”) as of the most recently completed fiscal quarter covered by this Quarterly Report. Our Disclosure Controls are de signed to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Our Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including our CEO and CAO, as appropriate to allow timely decisions regarding required disclosure. Based upon the cont rols evaluation, our CEO and CAO have concluded that as of the end of the period covered by this Quarterly Report, our Disclosure Controls were effective related to the above stated design purposes.

Inherent Limitations on the Effectiveness of Controls

The Company's management, including our CEO and CAO, does not expect that our Disclosure Controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their c osts. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within th e Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of som e persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or dete rioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) during the most recent ly completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II Other information

Item 1. Legal Proceedings

For information regarding our legal proceedings please see Note 8, Contingencies of the Notes to Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

We are not aware of any material updates to the risk factors described in the Company’s previously filed Annual Report on Form 10-K for the fiscal year ended March 31, 201 3.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior S ecurities

Not applicable.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following documents are filed as part of this report:

Exhibit Number | Description | Page or Method of Filing
--- | --- | ---
3.1 | Restated Articles of Incorporation of AMERCO | Incorporated by reference to AMERCO’s Definitive Proxy filed July 17, 2013 on F orm DEF 14A, file no. 1-11255
3.2 | Restated By l aws of AMERCO | Incorporated by reference to AMERCO’s Current Report on Form 8-K ,file d on Sept ember 10, 20 10, file no. 1-11255
10.1 | Amendment No. 2 to the Amended and Restated Credit Agreement and Security Agreement, dated as of May 28,2013, to Amendment No. 1 to the Amended and Restated Credit Agreement and Security Agreement, dated as of August 18, 2006, to the Amended and Restated Credit Agreement, dated as of June 8, 2005, among Amerco Real Estate Company of Texas, Inc., Amerco Real Estate Company of Alabama, Inc., U-Haul Co. of Florida, Inc., U-Haul International, Inc. and Bank o f America, NA as lender | Filed herewith
31.1 | Rule 13a-14(a)/15d-14(a) Certificate of Edward J. Shoen, President and Chairman of the Board of AMERCO | Filed herewith
31.2 | Rule 13a-14(a)/15d-14(a) Certificate of Jason A. Berg, Principal Financial Officer and Chief Accounting Officer of AMERCO | Filed herewith

32.1 | Certificate of Edward J. Shoen, President and Chairman of the Board of AMERCO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith
32.2 | Certificate of Jason A. Berg, Principal Financial Officer and Chief Accounting Officer of AMERCO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith
101.INS | XBRL Instance Document | Filed herewith
101.SCH | XBRL Taxonomy Extension Schema | Filed herewith
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed herewith
101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed herewith
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed herewith
101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| AMERCO
Date: August 7, 201 3 | /s/ Edward J. Shoen |
| Edward J. Shoen President and Chairman of the Board (Duly Authorized Officer)

Date: August 7, 201 3 | /s/ Jason A. Berg |
| Jason A. Berg Chief Accounting Officer (Principal Financial Officer)