U-Haul pany(UHAL) - 2021 Q4 - Annual Report

Debt and Financial Obligations - As of March 31, 2021, the company had total debt outstanding of $4,698.6 million and operating lease liabilities of$92.5 million[77]. - Economic conditions, including credit market fluctuations, may adversely affect the company's ability to refinance existing debt or find additional financing on favorable terms[83]. - As of March 31, 2021, the company had $1,152.9 million in variable rate debt obligations, with a potential increase in interest expense of$9.2 million annually if LIBOR rises by 100 basis points[223]. - The potential phase-out of LIBOR by June 2023 may adversely affect the company's cost of capital and net investment income[80]. Competition and Market Conditions - The truck rental industry is highly competitive, with significant national, regional, and local competitors, which may adversely impact the company's financial results due to aggressive pricing strategies[76]. - The company’s ability to generate sufficient cash flow from operations to service its debt and meet other cash needs is subject to prevailing economic and competitive conditions[79]. Regulatory and Environmental Factors - The introduction of regulations favoring electric and autonomous vehicles may require infrastructure improvements that could inhibit the company's current business model[101]. - The company is subject to numerous environmental regulations, and future liabilities could have a material adverse effect on its business and financial condition[90]. Operational Risks - The company relies on a limited number of manufacturers for its rental trucks, which could negatively impact its fleet if these suppliers face issues[86]. - The company faces liability risks associated with its rental fleet and operations, which could negatively impact financial results despite risk management efforts[106]. - The company is highly dependent on automated systems and the Internet for business management, exposing it to risks from cyber-attacks and system disruptions[108]. Strategic Initiatives - U-Haul has made significant progress on initiatives such as TruckShare 24/7 and a North American propane alternative fuel network[105]. Insurance and Reinsurance - A.M. Best affirmed the financial strength rating for Oxford and Christian Fidelity Life Insurance Company at A- with a positive outlook, which is crucial for the life insurance business[111]. - Repwest reported $0.3 million of reinsurance recoverables and$64.9 million of reserves and liabilities ceded to reinsurers as of December 31, 2020[113]. Financial Instruments and Hedging - The company utilizes interest rate swap agreements to mitigate exposure to changes in interest rates, with three agreements totaling a notional amount of $235 million[223]. - The company uses derivatives to hedge equity market exposure related to indexed annuity products, with a net market value of$6.6 million as of December 31, 2020[225]. Currency Impact - Approximately 4.6% of the company's revenue was generated in Canada in fiscal 2021, 2020, and 2019, with no material impact expected from a 10% change in the U.S. dollar relative to the Canadian dollar[227]. Tax Legislation Impact - The Tax Cuts and Jobs Act and the CARES Act have introduced complexities in accounting treatment that could adversely affect future operating cash flows[113].