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Borrowings | 3 Months Ended
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Jun. 30, 2020
Debt Disclosure [Abstract] |
4. Borrowings | Long Term Debt Long term debt was as follows: June 30, March 31, 2021 Rates (a) Maturities 2020 2020 (Unaudited) (In thousands) Real estate loan (amortizing term) 1.68 % 2023 $ 90,413 $ 92,913 Senior mortgages 3.11 % - 6.62 % 2021 - 2038 2,015,495 2,029,878 Real estate loans (revolving credit) 1.58 % - 3.25 % 2022 - 2025 535,000 519,000 Fleet loans (amortizing term) 2.04 % - 4.66 % 2020 - 2027 200,983 224,089 Fleet loans (revolving credit) 1.32 % 2022 - 2024 570,000 567,000 Finance/capital leases (rental equipment) 1.92 % - 5.04 % 2020 - 2026 666,316 734,870 Finance liability (rental equipment) 1.63 % - 4.22 % 2020 2028 447,416 398,834 Other obligations 2.50 % - 8.00 % 2020 - 2049 282,524 84,484 Notes, loans and finance/capital leases payable 4,808,147 4,651,068 Less: Debt issuance costs (30,184) (29,777) Total notes, loans and finance/capital leases payable, net $ 4,777,963 $ 4,621,291 (a) Interest rates as of June 30, 2020, including the effect of applicable hedging instruments. Real Estate Backed Loans Real Estate Loan Real Estate and certain of its subsidiaries and U-Haul Company of Florida are borrowers under a real estate loan (the “Real Estate Loan”). 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, per the provisions of the amended loan agreement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. As of June 30, 2020, the applicable LIBOR was 0.18 % and the applicable margin was 1.50 %, the sum of which was 1.68 %. The default provisions of the Real Estate Loan 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. Senior Mortgages Various subsidiaries of Real Estate and U-Haul are borrowers under certain senior mortgages. The senior mortgages require monthly principal and interest payments. The senior mortgages are secured by certain properties owned by the borrowers. The fixed interest rates, per the provisions of the senior mortgages, range between 3.11 % and 6.62 %. Certain senior mortgages have an anticipated repayment date and a maturity date. If these senior mortgages are not repaid by the anticipated repayment date, the interest rate on these mortgages would increase from the current fixed rate. We are using the anticipated repayment date for our maturity schedule. Real Estate and U-Haul have provided limited guarantees of the senior 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. 10 amerco and consolidated subsidiaries notes to condensed consolidated financial statements - (continued) Real Estate Loans (Revolving Credit) Various subsidiaries of Real Estate are borrowers under asset-backed real estate loans with an aggregate borrowing capacity of $ 385.0 million. As of June 30, 2020, the outstanding balance of these loans in the aggregate was $ 385.0 million. These loans are secured by certain properties owned by the borrowers. The loan agreements provide for term loans, subject to the terms of the loan agreements. The final maturity of the loans is between June 2022 and March 2025 . The loans require monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The interest rate, per the provision of the loan agreements, is the applicable LIBOR plus the applicable margin. As of June 30, 2020, the applicable LIBOR was between 0.17 % and 0.18 % and the margin was between 1.25 % and 1.50 %, the sum of which was between 1.42 % and 1.67 %. Certain loans have interest rate swaps fixing the rate between 3.03 % and 3.14 % based on current margins. AMERCO is the guarantor of these loans. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. AMERCO is a borrower under a real estate loan. The current maximum credit commitment is $ 200.0 million, which can be increased to $ 300.0 million by bringing in other lenders. As of June 30, 2020, the outstanding balance was $ 150.0 million. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. The final maturity of this loan is April 2023. This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. As of June 30, 2020, the applicable LIBOR was 1.00 % and the margin was 2.25 %, the sum of which was 3.25 %. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. There is a 0.30 % fee charged for unused capacity. Fleet Loans Rental Truck Amortizing Loans 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 carried at fixed rates ranging between 2.04 % and 4.66 %. AMERCO, and in some cases U-Haul, is guarantor 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 Revolvers Various subsidiaries of U-Haul entered into three revolving fleet loans with an aggregate borrowing capacity of $ 590.0 million. The interest rates, per the provision of the loan agreements, are the applicable LIBOR plus the applicable margin. As of June 30, 2020, the applicable LIBOR was 0.17 % and the margin was 1.15 %, the sum of which was 1.32 %. Only interest is paid on the loans until the last nine months of the respective loan terms when principal becomes due monthly. Finance/Capital Leases The Finance/Capital Lease balance represents our sale-leaseback transactions of rental equipment that were entered into and classified as capital leases prior to the adoption of ASC 842. The historical capital lease balance was reclassified to Right of use (“ROU”) assets-finance, net. The agreements are generally seven (7) year terms with interest rates ranging from 1.92 % to 5.04 %. All of our finance leases and are collateralized by our rental fleet. There were no new financing leases, as assessed under the new leasing guidance, entered into during the quarter ended June 30, 2020. 11 amerco and consolidated subsidiaries notes to condensed consolidated financial statements - (continued) Finance Liabilities Finance Liabilities represent our rental equipment financing transactions that have historically been accounted for as capital leases prior to the adoption of ASC 842, which substantially changed the accounting for sale-leasebacks going forward. In accordance with the new leasing guidance, we assess if sale-leaseback transactions qualify as a sale at initiation by determining if a transfer of ownership occurs. We have determined that our equipment sale-leasebacks do not qualify as a sale, as the buyer-lessors do not obtain control of the assets in our ongoing sale-leaseback arrangements. As a result, we expect future sale-leasebacks to be accounted for as a financial liability and the leased assets will be capitalized at cost. Our finance liabilities have an average term of seven (7) years and interest rates ranging from 1.63 % to 4.22 %. These finance liabilities are collateralized by our rental fleet. Other Obligations In May 2020, AMERCO, entered into a $ 200.0 million secured credit facility with PNC Bank, as agent and lead arranger of a syndicate of lenders. The interest rate, per the provision of the loan agreement, is the applicable LIBOR plus the applicable margin. As of June 30, 2020, the applicable LIBOR was 0.50 % and the margin was 2.00 %, the sum of which was 2.50 %. The LIBOR has a floor of 0.50 %. As of June 30, 2020 the balance of this note was $ 200.0 million. The final maturity of this loan is May 2021 and will be paid down as the Company receives federal income tax refunds. In February 2011, AMERCO and U.S. Bank, NA (the “Trustee”) entered into the U-Haul Investors Club ® Indenture. AMERCO and the Trustee entered into this indenture to provide for the issuance of notes by us directly to investors over our proprietary website, uhaulinvestorsclub.com (“U-Notes ® ”). The U-Notes ® are secured by various types of collateral, including, but not limited to, 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 secured by the associated collateral; they are not guaranteed by any of the Company's affiliates or subsidiaries. As of June 30, 2020, the aggregate outstanding principal balance of the U-Notes ® issued was $ 85.2 million, of which $ 2.7 million was held by our insurance subsidiaries and eliminated in consolidation. Interest rates range between 2.50 % and 8.00 % and maturity dates range between 2020 and 2049 . Oxford is a member of the Federal Home Loan Bank (“FHLB”) and, as such, the FHLB has made deposits with Oxford. As of March 31, 2020, the deposits had an aggregate balance of $ 60.0 million, for which Oxford pays fixed interest rates between 0.69 % and 2.95 % with maturities between September 28, 2020 and March 29, 2025. As of March 31, 2020, available-for-sale investments held with the FHLB totaled $ 191.4 million, of which $ 69.5 million were pledged as collateral to secure the outstanding deposits. The balances of these deposits are included within Liabilities from investment contracts on the condensed consolidated balance sheets. Annual Maturities of Notes, Loans and Finance/Capital Leases Payable The annual maturities of our notes, loans and finance/capital leases payable, as of June 30, 2020 for the next five years and thereafter are as follows: Year Ended June 30, 2021 2022 2023 2024 2025 Thereafter (Unaudited) (In thousands) Notes, loans and finance/capital leases payable, secured $ 683,816 $ 770,912 $ 778,383 $ 793,838 $ 290,267 $ 1,490,931 12 amerco and consolidated subsidiaries notes to condensed consolidated financial statements - (continued) Interest on Borrowings Interest Expense Components of interest expense include the following: Quarter Ended June 30, 2020 2019 (Unaudited) (In thousands) Interest expense $ 41,911 $ 43,331 Capitalized interest (4,434) (5,499) Amortization of transaction costs 1,297 1,053 Interest expense resulting from cash flow hedges 747 3 Total interest expense $ 39,521 $ 38,888 Interest paid in cash, including payments related to derivative contracts, amounted to $ 39.4 million and $ 40.5 million for the first quarter of fiscal 2021 and 2020, respectively. Interest Rates Interest rates and Company borrowings were as follows: Revolving Credit Activity Quarter Ended June 30, 2020 2019 (Unaudited) (In thousands, except interest rates) Weighted average interest rate during the quarter 2.02 % 3.73 % Interest rate at the end of the quarter 1.67 % 3.69 % Maximum amount outstanding during the quarter $ 1,175,000 $ 990,000 Average amount outstanding during the quarter $ 1,161,385 $ 967,358 Facility fees $ 4 $ 62 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 (future interest payments) attributable to changes in LIBOR swap rates with 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 interest 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. These fair 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 in the fair value hierarchy. The derivative fair values reflected in prepaid expense and accounts payable and accrued expenses in the balance sheet were as follows: Derivatives Fair Values as of June 30, 2020 March 31, 2020 (Unaudited) (In thousands) Interest rate contracts designated as hedging instruments: Assets $ - $ - Liabilities $ 8,170 $ 8,214 Notional amount $ 235,000 $ 235,000 13

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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