If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised ~~finanical~~financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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, ~~2017.~~ 2018.

TABLE OF CONTENTS

		Page
	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	a) Condensed Consolidated Balance Sheets as of June 30, ~~2017~~2018 (unaudited) and March 31, ~~2017~~2018	1
	b) Condensed Consolidated Statements of Operations for the Quarters Ended June 30, ~~2017~~2018 and ~~2016~~2017 (unaudited)	2
	c) Condensed Consolidated Statements of Comprehensive Income (Loss) for the Quarters Ended June 30, ~~2017~~2018 and ~~2016~~2017 (unaudited)	3
	d) Condensed Consolidated Statements of Cash Flows for the Quarters Ended June 30, ~~2017~~2018 and ~~2016~~2017 (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	3234
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4850
Item 4.	Controls and Procedures	4951

	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	5153
Item 1A.	Risk Factors	5153
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5153
Item 3.	Defaults Upon Senior Securities	5153
Item 4.	Mine Safety Disclosures	5153
Item 5.	Other Information	5153
Item 6.	Exhibits	5153

Part i Financial information

~~ITEM~~Item 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED balance sheets

		June 30,		March 31,		June 30,		March 31,
		2017		2017		2018		2018
		(Unaudited)				(Unaudited)
		(In thousands, except share data)				(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	803,522	$	697,806	$	650,339	$	759,388
Reinsurance recoverables and trade receivables, net		187,037		178,081		207,987		193,538
Inventories, net		93,374		82,439
Inventories and parts, net						94,901		89,877
Prepaid expenses		80,118		124,728		183,536		166,129
Investments, fixed maturities and marketable equities		1,763,031		1,663,768		1,950,876		1,919,860
Investments, other		376,224		367,830		396,622		399,064
Deferred policy acquisition costs, net		128,878		130,213		134,133		124,767
Other assets		99,550		97,525		248,320		244,782
Related party assets		80,865		86,168		30,486		33,276
		3,612,599		3,428,558		3,897,200		3,930,681
Property, plant and equipment, at cost:
Land		661,622		648,757		849,042		827,649
Buildings and improvements		2,710,924		2,618,265		3,331,918		3,140,713
Furniture and equipment		529,374		510,415		641,730		632,803
Rental trailers and other rental equipment		515,733		492,280		547,291		545,968
Rental trucks		4,228,778		4,091,598		4,533,758		4,390,750
		8,646,431		8,361,315		9,903,739		9,537,883
Less: Accumulated depreciation		(2,457,890)		(2,384,033)		(2,799,455)		(2,721,142)
Total property, plant and equipment		6,188,541		5,977,282		7,104,284		6,816,741
Total assets	$	9,801,140	$	9,405,840	$	11,001,484	$	10,747,422
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	432,122	$	450,541	$	518,033	$	511,115
Notes, loans and leases payable, net		3,386,851		3,262,880		3,586,127		3,513,076
Policy benefits and losses, claims and loss expenses payable		1,091,550		1,086,322		1,252,810		1,248,033
Liabilities from investment contracts		1,221,381		1,112,498		1,409,705		1,364,066
Other policyholders' funds and liabilities		14,232		10,150		9,857		10,040
Deferred income		37,135		28,696		41,963		34,276
Deferred income taxes, net		854,805		835,009		686,844		658,108
Total liabilities		7,038,076		6,786,096		7,505,339		7,338,714

Commitments and contingencies (Notes 4, 8, and 9)
Commitments and contingencies (notes 4, 9 and 10)
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, 2017		–		–
6,100,000 shares issued and none outstanding as of June 30 and March 31, 2018						–		–
Series B preferred stock, with no par value, 100,000 shares authorized; none
issued and outstanding as of June 30 and March 31, 2017		–		–
issued and outstanding as of June 30 and March 31, 2018						–		–
Serial common stock, with or without par value, 250,000,000 shares authorized:
Serial common stock of $0.25 par value, 10,000,000 shares authorized;
none issued and outstanding as of June 30 and March 31, 2017		–		–
none issued and outstanding as of June 30 and March 31, 2018						–		–
Common stock, with $0.25 par value, 250,000,000 shares authorized:
Common stock of $0.25 par value, 250,000,000 shares authorized; 41,985,700
issued and 19,607,788 outstanding as of June 30 and March 31, 2017		10,497		10,497
issued and 19,607,788 outstanding as of June 30 and March 31, 2018						10,497		10,497
Additional paid-in capital		452,319		452,172		452,862		452,746
Accumulated other comprehensive loss		(35,098)		(51,236)		(45,966)		(4,623)
Retained earnings		3,019,100		2,892,893		3,763,339		3,635,561
Cost of common shares in treasury, net (22,377,912 shares as of June 30 and March 31, 2017)		(525,653)		(525,653)
Cost of preferred shares in treasury, net (6,100,000 shares as of June 30 and March 31, 2017)		(151,997)		(151,997)
Cost of common shares in treasury, net (22,377,912 shares as of June 30 and March 31, 2018)						(525,653)		(525,653)
Cost of preferred shares in treasury, net (6,100,000 shares as of June 30 and March 31, 2018)						(151,997)		(151,997)
Unearned employee stock ownership plan shares		(6,104)		(6,932)		(6,937)		(7,823)
Total stockholders' equity		2,763,064		2,619,744		3,496,145		3,408,708
Total liabilities and stockholders' equity	$	9,801,140	$	9,405,840	$	11,001,484	$	10,747,422

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,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands, except share and per share data)				(In thousands, except share and per share amounts)
Revenues:
Self-moving equipment rentals	$	669,858	$	646,336	$	716,602	$	669,858
Self-storage revenues		76,718		67,722		86,212		76,718
Self-moving and self-storage products and service sales		78,911		77,303		79,241		78,911
Property management fees		6,762		6,604		7,416		6,762
Life insurance premiums		39,091		40,892		36,888		39,091
Property and casualty insurance premiums		11,815		11,255		12,781		11,815
Net investment and interest income		27,217		27,331		24,605		27,217
Other revenue		47,553		45,748		55,832		47,553
Total revenues		957,925		923,191		1,019,577		957,925

Costs and expenses:
Operating expenses		416,924		385,082		496,554		416,692
Commission expenses		75,365		73,816		79,257		75,365
Cost of sales		47,595		43,362		49,881		47,595
Benefits and losses		47,720		47,003		48,554		47,720
Amortization of deferred policy acquisition costs		6,321		7,942		6,031		6,321
Lease expense		8,287		11,048		8,169		8,287
Depreciation, net of (gains) losses on disposals of ($4,741) and ($18,640), respectively		126,682		95,381
Depreciation, net of gains on disposal of ($16,295 and $5,088, respectively)						126,427		126,335
Net losses on disposal of real estate						–		347
Total costs and expenses		728,894		663,634		814,873		728,662

Earnings from operations		229,031		259,557		204,704		229,263
Other components of net periodic benefit costs						(253)		(232)
Interest expense		(30,345)		(26,426)		(35,254)		(30,345)
Pretax earnings		198,686		233,131		169,197		198,686
Income tax expense		(72,479)		(85,958)		(41,348)		(72,479)
Earnings available to common stockholders	$	126,207	$	147,173	$	127,849	$	126,207
Basic and diluted earnings per common share	$	6.44	$	7.51	$	6.53	$	6.44
Weighted average common shares outstanding: Basic and diluted		19,587,891		19,586,069		19,590,585		19,587,891

Related party revenues for the first quarter of fiscal ~~2018~~2019 and ~~2017,~~2018, net of eliminations, were ~~$8.0~~$7.4 million and ~~$7.8~~$8.0 million, respectively.

Related party costs and expenses for the first quarter of fiscal ~~2018~~2019 and ~~2017,~~2018, net of eliminations, were $17.2 million and $16.6 million, respectively.

Please see Note 10, Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements for more information on the related party revenues and ~~$16.4 million, respectively.~~costs and expenses.

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, 2018								Pre-tax		Tax		Net
								(Unaudited)
								(In thousands)
Comprehensive income:
Net earnings							$	169,197	$	(41,348)	$	127,849
Other comprehensive income (loss):
Foreign currency translation								(2,093)		–		(2,093)
Unrealized net loss on investments								(50,218)		10,546		(39,672)
Change in fair value of cash flow hedges								560		(138)		422
Total comprehensive income							$	117,446	$	(30,940)	$	86,506



Quarter Ended June 30, 2017		Pre-tax		Tax		Net		Pre-tax		Tax		Net
		(Unaudited)						(Unaudited)
		(In thousands)						(In thousands)
Comprehensive income:
Net earnings	$	198,686	$	(72,479)	$	126,207	$	198,686	$	(72,479)	$	126,207
Other comprehensive income:
Other comprehensive income (loss):
Foreign currency translation		8,267		–		8,267		8,267		–		8,267
Unrealized net gain on investments		10,631		(3,720)		6,911		10,631		(3,720)		6,911
Change in fair value of cash flow hedges		1,550		(590)		960		1,550		(590)		960
Total comprehensive income	$	219,134	$	(76,789)	$	142,345	$	219,134	$	(76,789)	$	142,345


Quarter Ended June 30, 2016		Pre-tax		Tax		Net
		(Unaudited)
		(In thousands)
Comprehensive income:
Net earnings	$	233,131	$	(85,958)	$	147,173
Other comprehensive income:
Foreign currency translation		(278)		–		(278)
Unrealized net gain on investments		29,828		(10,440)		19,388
Change in fair value of cash flow hedges		2,081		(791)		1,290
Total comprehensive income	$	264,762	$	(97,189)	$	167,573

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,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands)				(In thousands)
Cash flows from operating activities:
Net earnings	$	126,207	$	147,173	$	127,849	$	126,207
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation		131,423		114,021		142,722		131,423
Amortization of deferred policy acquisition costs		6,321		7,942		6,031		6,321
Amortization of debt issuance costs		932		961		984		932
Interest credited to policyholders		7,651		5,059		8,060		7,651
Change in allowance for losses on trade receivables		(26)		21		38		(26)
Change in allowance for inventory reserves		1,114		1,221
Net gain on sale of real and personal property		(4,741)		(18,640)
Net gain on sale of investments		(1,985)		(2,406)
Change in allowance for inventories and parts reserves						2,139		1,114
Net gains on disposal of personal property						(16,295)		(5,088)
Net losses on disposal of real estate						–		347
Net (gains) losses on sales of investments						506		(1,985)
Deferred income taxes		12,024		22,733		38,678		12,024
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		(8,870)		(14,138)		(14,543)		(8,870)
Inventories		(11,982)		(4,391)
Inventories and parts						(7,170)		(11,982)
Prepaid expenses		44,788		39,828		(17,999)		44,788
Capitalization of deferred policy acquisition costs		(8,228)		(7,252)		(5,808)		(8,228)
Other assets		17,812		(3,392)		(761)		(2,523)
Related party assets		7,836		4,084		2,205		7,836
Accounts payable and accrued expenses		61,704		57,099		89,348		61,704
Policy benefits and losses, claims and loss expenses payable		4,747		1,373		5,291		4,747
Other policyholders' funds and liabilities		4,083		242		(184)		4,083
Deferred income		8,393		8,727		7,732		8,393
Related party liabilities		(2,532)		781		474		(2,532)
Net cash provided by operating activities		396,671		361,046		369,297		376,336

Cash flow from investing activities:
Purchase of:
Cash flows from investing activities:
Escrow deposits						(4,559)		23,005
Purchases of:
Property, plant and equipment		(480,259)		(437,287)		(548,147)		(480,259)
Short term investments		(16,491)		(277,038)		(14,390)		(16,491)
Fixed maturity investments		(123,090)		(166,648)		(103,121)		(123,090)
Equity securities						(46)		–
Preferred stock						(81)		–
Real estate		(505)		(3,495)		(80)		(505)
Mortgage loans		(24,382)		(62,572)		(8,262)		(24,382)
Proceeds from sales and paydowns of:
Property, plant and equipment		142,343		147,196		187,546		142,343
Short term investments		24,639		279,341		20,416		24,639
Fixed maturity investments		36,559		55,946		14,946		36,559
Preferred stock		–		2,000		500		–
Real estate		2,664		831		–		2,664
Mortgage loans		6,054		94,015		9,402		6,054
Net cash used by investing activities		(432,468)		(367,711)		(445,876)		(409,463)

Cash flow from financing activities:
Cash flows from financing activities:
Borrowings from credit facilities		155,367		103,338		103,641		155,367
Principal repayments on credit facilities		(64,819)		(48,326)		(73,770)		(64,819)
Payment of debt issuance costs		(1,734)		(223)		(1,420)		(1,734)
Capital lease payments		(56,522)		(37,405)		(84,374)		(56,522)
Employee Stock Ownership Plan		3,516		(1,393)
Employee stock ownership plan shares						(57)		3,516
Securitization deposits		49		93		–		49
Common stock dividends paid		–		(19,586)		(9,795)		–
Investment contract deposits		155,437		74,157		76,343		155,437
Investment contract withdrawals		(54,205)		(14,051)		(38,763)		(54,205)
Net cash provided by financing activities		137,089		56,604
Net cash provided (used) by financing activities						(28,195)		137,089

Effects of exchange rate on cash		4,424		(4,397)		(4,275)		4,424

Increase in cash and cash equivalents		105,716		45,542
Increase (decrease) in cash and cash equivalents						(109,049)		108,386
Cash and cash equivalents at the beginning of period		697,806		600,646		759,388		697,806
Cash and cash equivalents at the end of period	$	803,522	$	646,188	$	650,339	$	806,192

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 30th of June for each year that is referenced. Our insurance company subsidiaries have a first quarter that ends on the 31st 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. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the presentation of financial position or results of operations. We disclose any material events, if any, occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years ~~2017~~2018 and ~~2016~~2017 correspond to fiscal ~~2018~~2019 and ~~2017~~2018 for AMERCO.

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

The condensed consolidated balance sheet as of June 30, ~~2017~~2018 and the related condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the first quarter of fiscal ~~2018~~2019 and ~~2017~~2018 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 necessarily 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 statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017.~~2018.

Intercompany accounts and transactions have been eliminated.

Description of Legal Entities

AMERCO is the holding company for:

U-Haul International, Inc. (“U-Haul”),

Amerco Real Estate Company (“Real Estate”),

Repwest Insurance Company (“Repwest”), and

Oxford Life Insurance Company (“Oxford”).

Unless the context otherwise requires, the terms “Company,” “we,” “us” or “our” refer to AMERCO and all of 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 operating segment (“Moving and Storage”) includes 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 portable moving and storage units 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 (“Property and Casualty Insurance”) includes Repwest and its wholly-owned subsidiaries and ARCOA Risk Retention Group (“ARCOA”). Property and Casualty Insurance provides loss adjusting and claims handling for U-Haul® through regional offices in the United States and Canada. Property and Casualty Insurance also underwrites components of the Safemove®, Safetow®, Safemove Plus®, Safestor® and Safestor Mobile® protection packages to U-Haul customers. The business plan for Property and Casualty Insurance includes offering property and casualty insurance products in other U-Haul-related programs. ARCOA is a group captive insurer owned by us and our wholly-owned subsidiaries whose purpose is to provide insurance products related to our moving and storage business.

The Life Insurance operating segment (“Life Insurance”) includes Oxford and its wholly-owned subsidiaries. Life Insurance 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 earnings 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 ~~19,553~~16,828 and ~~21,548~~19,533 as of June 30, ~~2017~~2018 and June 30, ~~2016,~~2017, 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 ~~$28.1~~$31.4 million and ~~$16.8~~$32.4 million at June 30, ~~2017~~2018 and March 31, ~~2017,~~2018, respectively.

Available-for-Sale Investments

Available-for-sale investments at June 30, ~~2017~~2018 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		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(Unaudited)										(Unaudited)
		(In thousands)										(In thousands)
U.S. treasury securities and government obligations	$	123,328	$	3,169	$	–	$	(1,605)	$	124,892	$	123,420	$	1,858	$	(1,561)	$	(911)	$	122,806
U.S. government agency mortgage-backed securities		27,330		1,005		(6)		(327)		28,002		63,031		714		(1)		(662)		63,082
Obligations of states and political subdivisions		165,559		9,917		(19)		(308)		175,149		190,454		7,481		(236)		(538)		197,161
Corporate securities		1,289,221		38,855		(5,322)		(7,744)		1,315,010		1,423,091		26,369		(5,291)		(15,275)		1,428,894
Mortgage-backed securities		81,009		550		–		(282)		81,277		101,605		1,055		–		(765)		101,895
Redeemable preferred stocks		13,789		348		–		(46)		14,091		2,118		93		–		–		2,211
Common stocks		15,732		8,890		(10)		(2)		24,610
	$	1,715,968	$	62,734	$	(5,357)	$	(10,314)	$	1,763,031	$	1,903,719	$	37,570	$	(7,089)	$	(18,151)	$	1,916,049

Available-for-sale investments at March 31, ~~2017~~2018 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
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(In thousands)										(In thousands)
U.S. treasury securities and government obligations	$	123,474	$	2,892	$	–	$	(1,675)	$	124,691	$	123,557	$	3,595	$	(1,036)	$	(203)	$	125,913
U.S. government agency mortgage-backed securities		27,908		1,070		(6)		(377)		28,595		36,416		951		(1)		(93)		37,273
Obligations of states and political subdivisions		159,417		9,466		(23)		(424)		168,436		178,702		9,938		(217)		(18)		188,405
Corporate securities		1,263,703		32,901		(5,731)		(13,837)		1,277,036		1,388,300		50,056		(3,009)		(1,826)		1,433,521
Mortgage-backed securities		26,577		515		–		(5)		27,087		94,106		2,072		–		(153)		96,025
Redeemable preferred stocks		13,789		168		–		(468)		13,489		2,118		129		–		–		2,247
Common stocks		15,732		8,728		(10)		(16)		24,434
	$	1,630,600	$	55,740	$	(5,770)	$	(16,802)	$	1,663,768	$	1,823,199	$	66,741	$	(4,263)	$	(2,293)	$	1,883,384

As of March 31, 2018, equity investments were classified as available-for-sale on our balance sheet. However, upon adoption of ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, the updated guidance eliminated the available-for-sale balance sheet classification for equity investments. As of June 30, 2018 and March 31, 2018 we had $8.0 million and $8.7 million of preferred stock and $26.9 million and $27.9 million of common stock, respectively that are included in Investments, fixed maturities and marketable equities on the balance sheet. The changes in the fair value of the equity investments are recognized through Net investment and interest income.

The available-for-sale tables include 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 ~~$35.6~~$14.0 million during the first quarter of fiscal ~~2018.~~2019. The gross realized net gains on these sales totaled ~~$1.6~~$0.2 million.

The unrealized losses of more than twelve months in the available-for-sale tables are considered temporary declines. 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 recognize these write-downs, if any, through earnings. There were no write downs in the first quarter of fiscal ~~2018~~2019 or ~~2017.~~2018.

The investment portfolio primarily consists of corporate securities and ~~U.S. government securities.~~obligations of states and political subdivisions. 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 whether 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~~any issuer would not have the ability to meet the remaining contractual obligations of 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 related 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 asset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

There were no credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in accumulated other comprehensive income (loss) for the first quarter of fiscal ~~2018.~~2019 and fiscal 2018, respectively.

The adjusted cost and estimated market value of available-for-sale investments by contractual maturity were as follows:

		June 30, 2017				March 31, 2017				June 30, 2018				March 31, 2018
		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
		(Unaudited)								(Unaudited)
		(In thousands)								(In thousands)
Due in one year or less	$	33,197	$	33,448	$	35,399	$	35,795	$	42,372	$	42,546	$	36,446	$	36,674
Due after one year through five years		355,226		365,085		324,286		333,016		469,929		472,652		441,223		450,816
Due after five years through ten years		608,698		622,859		598,232		607,184		616,785		618,194		607,895		626,174
Due after ten years		608,317		621,661		616,585		622,763		670,910		678,551		641,411		671,448
		1,605,438		1,643,053		1,574,502		1,598,758		1,799,996		1,811,943		1,726,975		1,785,112

Mortgage backed securities		81,009		81,277		26,577		27,087		101,605		101,895		94,106		96,025
Redeemable preferred stocks		13,789		14,091		13,789		13,489		2,118		2,211		2,118		2,247
Equity securities		15,732		24,610		15,732		24,434
	$	1,715,968	$	1,763,031	$	1,630,600	$	1,663,768	$	1,903,719	$	1,916,049	$	1,823,199	$	1,883,384

4. Borrowings

Long Term Debt

Long term debt was as follows:

				June 30,		March 31,				June 30,		March 31,
	2018 Rate (a)	Maturities		2017		2017	2019 Rate (a)	Maturities		2018		2018
				(Unaudited)						(Unaudited)
				(In thousands)						(In thousands)
Real estate loan (amortizing term)	2.62% - 6.93%	2023	$	166,789	$	169,289	3.55% - 6.93%	2023	$	132,787	$	135,287
Senior mortgages	3.72% - 5.50%	2022 - 2038		1,366,248		1,292,160	3.72% - 6.62%	2021 - 2038		1,519,614		1,487,645
Working capital loan (revolving credit)	2.51%	2018		85,000		85,000
Working capital loans (revolving credit)							3.36%	2021		75,000		55,000
Fleet loans (amortizing term)	1.95% - 4.76%	2017 - 2024		341,313		324,977	1.95% - 4.66%	2018 - 2025		332,236		342,971
Fleet loan (securitization)	4.90%	2017		50,055		52,112
Fleet loans (revolving credit)	2.19% - 2.20%	2018 - 2021		423,000		417,000	3.13%	2021 - 2022		450,000		460,000
Capital leases (rental equipment)	1.92% - 4.86%	2017 - 2024		909,406		876,828	1.92% - 5.04%	2018 - 2025		1,029,405		984,217
Other obligations	2.75% - 8.00%	2017 - 2047		70,216		69,867	2.75% - 8.00%	2018 - 2047		72,978		73,579
Notes, loans and leases payable				3,412,027		3,287,233				3,612,020		3,538,699
Less: Debt issuance costs				(25,176)		(24,353)				(25,893)		(25,623)
Total notes, loans and leases payable, net			$	3,386,851	$	3,262,880			$	3,586,127	$	3,513,076

(a) Interest rate as of June 30, 2017, including the effect of applicable hedging instruments.

(a) Interest rate as of June 30, 2018, including the effect of applicable hedging instruments.							(a) Interest rate as of June 30, 2018, 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. As of June 30, ~~2017,~~2018, the outstanding balance on the Real Estate Loan was ~~$166.8~~$132.8 million. 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 final maturity of the term loan is April 2023.

The interest rate, per the provisions of the amended loan agreement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. AtAs of June 30, ~~2017,~~2018, the applicable LIBOR was ~~1.12%~~2.05% and the applicable margin was 1.50%, the sum of which was ~~2.62%~~3.55%, which was applied to ~~$39.0~~$72.2 million of the Real Estate Loan. The rate of the remaining balance of ~~$127.8~~$60.6 million of the Real Estate Loan is hedged with an interest rate swap fixing the rate at 6.93% based on the current margin. The interest rate swap expires in August 2018, after which date the remaining balance will incur interest at a rate of LIBOR plus a margin of 1.50%. 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 ~~Amerco~~ Real Estate ~~Company~~ and U-Haul ~~International, Inc.~~ are borrowers under certain senior mortgages. These senior mortgage loan balances as of June 30, ~~2017~~2018 were in the aggregate amount of ~~$1,366.2~~$1,519.6 million and mature between ~~2022~~2021 and 2038. 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 3.72% and ~~5.50%~~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. ~~Amerco~~ Real Estate ~~Company~~ and U-Haul ~~International, Inc.~~ 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.

Working Capital Loans

Amerco 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 $50.0 million. At June 30, 2017, the full $50.0 million was available to be drawn. This loan is secured by certain properties owned by the borrower. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. The final maturity of this loan is September 2018. This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The interest rate is the applicable LIBOR plus a margin of 1.25%. AMERCO is the guarantor 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.

Various subsidiaries of ~~Amerco~~ Real Estate ~~Company~~ and U-Haul ~~International, Inc.~~ are borrowers under an asset backed working capital loan. This loan was amended in June 2018, to extend the maturity date and reduce the applicable margin. The maximum amount that can be drawn at any one time is $85.0 million. AtAs of June 30, ~~2017,~~2018, the outstanding balance was ~~$85.0~~$75.0 million. This loan is secured by certain properties owned by the borrowers. This loan agreement provides for term loans, subject to the terms of the loan agreement. The final maturity of the loan is ~~November 2018.~~June 2021. This loan requires 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 agreement, is the applicable LIBOR plus the applicable margin. AtAs of June 30, ~~2017,~~2018, the applicable LIBOR was ~~1.01%~~1.98% and the margin was ~~1.50%~~1.38%, the sum of which was ~~2.51%~~3.36%. AMERCO is the guarantor 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 is a borrower under a working capital loan. The current maximum credit commitment is $150.0 million, which can be increased to $300.0 million by bringing in other lenders. As of June 30, 2018, the full $150.0 million was available to be drawn. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. The final maturity of this loan is September 2020. This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The interest rate is the applicable LIBOR plus a margin between 1.38% and 1.50% depending on the amount outstanding. 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

U-Haul ~~International, Inc.~~ and several of its subsidiaries are borrowers under amortizing term loans. The aggregate balance of the loans as of June 30, ~~2017~~2018 was ~~$341.3~~$332.2 million with the final maturities between ~~July 2017~~September 2018 and June ~~2024.~~2025.

The ~~Amortizing Loans~~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,~~loan agreements, are the applicable LIBOR plus the applicable margins. AtAs of June 30, ~~2017,~~2018, the applicable LIBOR was between ~~1.05%~~1.98% and ~~1.16%~~2.07% and applicable margins were between 1.72% and ~~2.50%~~2.25%. The interest rates are hedged with interest rate swaps fixing the rates between 2.82% and ~~4.76%~~4.11% based on current margins. Additionally, ~~$276.0~~$286.6 million of these loans are carried at fixed rates ranging between 1.95% and ~~3.94%~~4.66%.

AMERCO and, in some cases, 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~~

2010 U-Haul S Fleet and its subsidiaries (collectively, “2010 USF”) issued a $155.0 million asset-backed note (“2010 Box Truck Note”). 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 trustee 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, 2017, the outstanding balance was $50.1 million. The note is secured by the box trucks purchased and the corresponding operating cash flows associated with their operation.

The 2010 Box Truck Note is subject to certain covenants with respect to liens, additional indebtedness of the special purpose entity, the disposition of assets and other customary covenants of bankruptcy-remote special purpose entities. The default provisions of this note include non-payment of principal or interest and other standard reporting and change-in-control covenants.

~~Rental Truck~~ Revolvers

Various subsidiaries of U-Haul ~~International, Inc.~~ entered into athree revolving fleet ~~loan~~loans in aggregate for ~~$150~~$510.0 million, which can be increased to a maximum of ~~$225~~$565.0 million. ~~This loan matures in September 2018.~~These loans mature between January 2021 and July 2022. The interest rate, per the provision of the ~~Loan Agreement,~~loan agreements, is the applicable LIBOR plus the applicable margin. AtAs of June 30, ~~2017,~~2018, the applicable LIBOR was ~~1.04%~~1.98% and the margin was 1.15%, the sum of which was ~~2.19%~~3.13%. Only interest is paid on the ~~loan~~loans until the last nine months when principal is due monthly. As of June 30, ~~2017,~~2018, the aggregate outstanding balance ~~was $150.0 million.~~

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $150 million, which can be increased to a maximum of $190 million. This loan matures in March 2020. The interest rate, per the provision of the ~~Loan Agreement, is the applicable LIBOR plus the applicable margin. At June 30, 2017, the applicable LIBOR~~loans was 1.05% and the margin was 1.15%, the sum of which was 2.20%. Only interest is paid on the loan until the last nine months when principal is due monthly. As of June 30, 2017, the outstanding balance was $150.0 million.

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $150 million. The loan matures in November 2021. The interest rate, per the provision of the Loan Agreement is the applicable LIBOR plus the applicable margin. At June 30, 2017, the applicable LIBOR was 1.05% and the margin was 1.15%, the sum of which was 2.20%. Only interest is paid on the loan until the last nine months when principal is due monthly. As of June 30, 2017, the outstanding balance was $123.0$450.0 million.

Capital Leases

We regularly enter into capital leases for new equipment with the terms of the leases between five and seven years. During the first quarter of fiscal ~~2018,~~2019, we entered into ~~$87.4~~$126.9 million of new capital leases. AtAs of June 30, ~~2017~~2018 and March 31, ~~2017,~~2018, the balance of our capital leases was ~~$909.4~~$1,029.4 million and ~~$876.8~~$984.2 million, respectively. The net book value of the corresponding capitalized assets was ~~$1,259.1~~$1,479.4 million and ~~$1,233.3~~$1,407.6 million atas of June 30, ~~2017~~2018 and March 31, ~~2017,~~2018, respectively.

Annual Maturities of Notes, Loans and Leases Payable

The annual maturities of long term debt, including capital leases, as of June 30, 2018 for the next five years and thereafter are as follows:

		Year Ended June 30,
		2019		2020		2021		2022		2023		Thereafter
		(Unaudited)
		(In thousands)
Notes, loans and leases payable, secured	$	483,563	$	433,620	$	526,913	$	534,647	$	259,432	$	1,373,845

Interest on Borrowings

Interest Expense

Components of interest expense include the following:

		Quarter Ended June 30,
		2018		2017
		(Unaudited)
		(In thousands)
Interest expense	$	34,196	$	29,629
Capitalized interest		(419)		(1,765)
Amortization of transaction costs		961		932
Interest expense resulting from derivatives		516		1,549
Total interest expense		35,254		30,345

Interest paid in cash, including payments related to derivative contracts, amounted to $34.4 million and $31.0 million for the first quarter of fiscal 2019 and 2018, respectively.

Interest Rates

Interest rates and Company borrowings were as follows:

		Revolving Credit Activity				Revolving Credit Activity
		Quarter Ended June 30,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands, except interest rates)				(In thousands, except interest rates)
Weighted average interest rate during the quarter		2.24%		1.73%		3.11%		2.24%
Interest rate at quarter end		2.25%		1.72%
Interest rate at the end of the quarter						3.16%		2.25%
Maximum amount outstanding during the quarter	$	508,000	$	410,000	$	525,000	$	508,000
Average amount outstanding during the quarter	$	499,659	$	369,637	$	497,967	$	499,659
Facility fees	$	76	$	41	$	144	$	76

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, 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. ~~Following~~The following is a summary of our interest rate swap agreements atas of June 30, ~~2017:~~2018:

Original variable rate debt and lease amount

Agreement Date

Effective Date

Expiration Date

Designated cash flow hedge date

(Unaudited)

(In millions)

$
300.0

8/16/2006

8/18/2006

8/10/2018

8/4/2006

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

6/1/2011

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

	Original variable rate debt amount		Agreement Date	Effective Date	Expiration Date	Designated cash flow hedge date
	(Unaudited)
	(In millions)
$	300.0		8/16/2006	8/18/2006	8/10/2018	8/4/2006
	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, ~~2017,~~2018, the total notional amount of our variable interest rate swaps on debt and an operating lease was ~~$194.4~~$107.4 million and ~~$7.4~~$5.8 million, ~~respectively~~respectively.

The derivative fair values were as follows:

		Derivatives Fair Values as of
		June 30, 2018		March 31, 2018
		(Unaudited)
		(In thousands)
Interest rate contracts designated as hedging instruments:	$		$
Assets		422		437
Liabilities		(338)		(897)

		The Effect of Interest Rate Contracts on the Statements of Operations for the Quarters Ended

		June 30, 2018		June 30, 2017
		(Unaudited)
		(In thousands)
Loss recognized in income on interest rate contracts	$	516	$	1,549
Gain recognized in AOCI on interest rate contracts (effective portion)	$	(560)	$	(1,550)
Loss reclassified from AOCI into income (effective portion)	$	500	$	1,550
(Gain) loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing)	$	16	$	(1)

~~The derivative fair values reflected in Accounts payable and accrued expenses in the balance sheets were as follows:~~

Net Liability Derivative Fair Value as of

June 30, 2017

March 31, 2017

(Unaudited)

(In thousands)
Interest rate contracts designated as hedging instruments
$
3,353
$
4,903

The Effect of Interest Rate

Contracts on the Statements of Operations

Quarter Ended June 30,

2017

2016

(Unaudited)

(In thousands)
Loss recognized in income on interest rate contracts
$
1,549
$
2,811
Gain recognized in AOCI on interest rate contracts (effective portion)
$
(1,550)
$
(2,081)
Loss reclassified from AOCI into income (effective portion)
$
1,550
$
2,809
(Gain) loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing)
$
(1)
$
2

Gains or losses recognized in income on derivatives are recorded as interest expense in the statements of operations. During the first quarter of fiscal ~~2018,~~2019, we recognized an increase in the fair value of our cash flow hedges of ~~$1.0~~$0.4 million, net of taxes. Embedded in this change was ~~$1.6~~$0.5 million of losses reclassified from accumulated other comprehensive income (loss) to interest expense during the first quarter of fiscal ~~2018. At~~2019. As of June 30, ~~2017,~~2018, we expect to reclassify ~~$3.4 million~~$18 thousand of net ~~losses~~gains on interest rate contracts from accumulated other comprehensive income (loss) to earnings as interest expense over the next twelve months.

6. Accumulated Other 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 Net Loss		Accumulated Other Comprehensive Income (Loss)		Foreign Currency Translation		Unrealized Net Gain on Investments		Fair Market Value of Cash Flow Hedges		Postretirement Benefit Obligation Net Loss		Accumulated Other Comprehensive Income (Loss)
		(Unaudited)										(Unaudited)
		(In thousands)										(In thousands)
Balance at March 31, 2017	$	(69,505)	$	23,099	$	(3,059)	$	(1,771)	$	(51,236)
Balance at March 31, 2018											$	(54,853)	$	52,509	$	(370)	$	(1,909)	$	(4,623)
Foreign currency translation		8,267		–		–		–		8,267		(2,093)		–		–		–		(2,093)
Unrealized net gain on investments		–		6,911		–		–		6,911
Unrealized net loss on investments												–		(39,672)		–		–		(39,672)
Change in fair value of cash flow hedges		–		–		2,510		–		2,510		–		–		922		–		922
Amounts reclassified from AOCI		–		–		(1,550)		–		(1,550)		–		–		(500)		–		(500)
Other comprehensive income (loss)		8,267		6,911		960		–		16,138		(2,093)		(39,672)		422		–		(41,343)
Balance at June 30, 2017	$	(61,238)	$	30,010	$	(2,099)	$	(1,771)	$	(35,098)

Balance at June 30, 2018											$	(56,946)	$	12,837	$	52	$	(1,909)	$	(45,966)

7. Stockholders’ Equity

On ~~July 5, 2017,~~March 8, 2018, we declared a cash dividend on our Common Stock of ~~$1.00~~$0.50 per share to holders of record on ~~July 20, 2017.~~March 23, 2018. The dividend was paid on ~~August 3, 2017.~~April 6, 2018.

On June 6, 2018, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on June 21, 2018. The dividend was paid on July 5, 2018.

On June 8, 2016, the stockholder’s approved the 2016 AMERCO Stock Option Plan (Shelf Stock Option Plan). As of June 30, ~~2017,~~2018, no awards had been issued under this plan.

Operating and ground lease commitments for leases having terms of more than one year were as follows:

		Property, Plant and Equipment				Rental Equipment				Property, Plant and Equipment				Rental Equipment
		Ground		Operating		Operating		Total		Ground		Operating		Operating		Total
		(Unaudited)								(Unaudited)
		(In thousands)								(In thousands)
Year ended June 30:
2018	$	957	$	16,616	$	10,808	$	28,381
Year-ended June 30:
2019		1,008		15,235		7,315		23,558	$	1,008	$	17,032	$	7,287	$	25,327
2020		1,024		15,873		429		17,326		1,024		17,376		428		18,828
2021		1,025		15,216		–		16,241		1,025		16,213		–		17,238
2022		1,030		14,963		–		15,993		1,030		15,051		–		16,081
2023										1,030		14,561		–		15,591
Thereafter		46,653		30,640		–		77,293		49,391		16,579		–		65,970
Total	$	51,697	$	108,543	$	18,552	$	178,792	$	54,508	$	96,812	$	7,715	$	159,035

9. Contingencies

Litigation

On July 1, 2014, a 100-pound propane cylinder allegedly filled at a Philadelphia-area U-Haul Co. of Pennsylvania (“UHPA”) center exploded while in use on a food truck. The explosion killed two people and injured eleven. Following the incident, the injured parties and their estates filed a number of lawsuits against U-Haul and its subsidiary, UHPA, both of which denied the allegations. One plaintiff sued AMERCO, which also denied the allegations. All suits were filed in the Philadelphia Court of Common Pleas. The plaintiffs alleged, among other things, that UHPA should not have refilled the propane cylinder at issue because it was out-of-date and improperly fitted with an incorrect valve, which allegedly caused the explosion. The plaintiffs sought compensatory and punitive damages.

After several settlements with the less-injured plaintiffs, in April 2018, the parties reached an agreement, in principle, to settle the remaining cases. We will pay our self-insured retention and attorney’s fees. Together, these amounts are currently estimated to be $27.3 million, of which $26.8 million has already been paid. The balance of the settlement amount is accrued on our balance sheet in Policy benefits and losses, claims and loss expenses payable with offsetting insurance recoveries from our insurance carriers in Other assets.

Following the resolution of the civil claims in April 2018, the U.S. Attorney’s Office for the Eastern District of Pennsylvania advised the Company that UHPA was a target of an investigation. On June 12, 2018, UHPA was indicted by a grand jury in the U.S. District Court for the Eastern District of Pennsylvania. The six-count indictment charged UHPA with allegedly improperly filling propane cylinders that were overdue for periodic requalification, offering such cylinders for transportation, and failing to train and certify a UHPA employee dispensing propane. UHPA will vigorously defend itself against the charges.

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 air, 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 environmental 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.

Other

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.

Related Party Costs and Expenses

Quarter Ended June 30,

2017

2016

(Unaudited)

(In thousands)
U-Haul lease expenses to SAC Holdings
$
681
$
688
U-Haul commission expenses to SAC Holdings

14,926

14,701
U-Haul commission expenses to Private Mini

960

1,052

$
16,567
$
16,441

		Quarter Ended June 30,
		2018		2017
		(Unaudited)
		(In thousands)
U-Haul lease expenses to Blackwater	$	670	$	681
U-Haul commission expenses to Blackwater		16,485		15,886
	$	17,155	$	16,567

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.

AtAs of June 30, ~~2017,~~2018, subsidiaries of ~~SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini~~Blackwater 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 upon equipment rental revenues.

These agreements ~~and note~~ with subsidiaries of ~~SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini,~~Blackwater, excluding Dealer Agreements, provided revenues of ~~$7.4~~$6.2 million, expenses of $0.7 million and cash flows of ~~$6.6~~$5.4 million during the first quarter of fiscal ~~2018.~~2019. Revenues and commission expenses related to the Dealer Agreements were ~~$72.8~~$75.4 million and ~~$15.9~~$16.5 million, respectively during the first quarter of fiscal ~~2018.~~2019.

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

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

We have junior debt with the holding entity SAC Holding Corporation which represents a variable interest in the entity. Though we have certain protective rights within this debt agreement, we have no present influence or control over this holding entity unless the protective rights become exercisable, which management considers unlikely based on their payment history. As a result, we have no basis under ASC 810 to consolidate this entity.

We do not have the power to direct the activities that most significantly impact the economic performance of the individual operating entities which have management 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 entity 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.

We have not provided financial or other support explicitly or implicitly during the quarter ended June 30, ~~2017~~2018 to any of these entities that ~~it was~~we were 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 sheets 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,

March 31,

2017

2017

(Unaudited)

(In thousands)
U-Haul notes receivable from SAC Holdings

47,783

48,098
U-Haul interest receivable from SAC Holdings

5,498

5,397
U-Haul receivable from SAC Holdings

20,050

23,202
U-Haul receivable from Mercury

4,804

9,195
Other (a)

2,730

276

$
80,865
$
86,168

		June 30,		March 31,
		2018		2018
		(Unaudited)
		(In thousands)
U-Haul receivable from Blackwater		25,801		24,034
U-Haul receivable from Mercury		6,364		10,357
Other (a)		(1,679)		(1,115)
	$	30,486	$	33,276

(a) Timing differences for intercompany balances with insurance subsidiaries resulting from the three month difference in reporting periods.

11. 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 Repwest and its subsidiaries and ARCOA, and
Life Insurance, 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 consolidate AMERCO, the parent, with its subsidiaries.

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

11. Financial Information by Consolidating Industry Segment:

Consolidating balance sheets by industry segment as of June 30, ~~2017~~2018 are as follows:

		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(Unaudited)											(Unaudited)
		(In thousands)											(In thousands)
Assets:
Cash and cash equivalents	$	748,823	$	8,291	$	46,408	$	–		$	803,522	$	618,300	$	5,119	$	26,920	$	–		$	650,339
Reinsurance recoverables and trade receivables, net		52,275		103,382		31,380		–			187,037		79,460		97,351		31,176		–			207,987
Inventories, net		93,374		–		–		–			93,374
Inventories and parts, net													94,901		–		–		–			94,901
Prepaid expenses		80,118		–		–		–			80,118		183,536		–		–		–			183,536
Investments, fixed maturities and marketable equities		–		259,126		1,503,905		–			1,763,031		–		287,278		1,663,598		–			1,950,876
Investments, other		33,183		63,337		279,704		–			376,224		22,993		61,557		312,072		–			396,622
Deferred policy acquisition costs, net		–		–		128,878		–			128,878		–		–		134,133		–			134,133
Other assets		96,466		589		2,495		–			99,550		244,325		1,004		2,991		–			248,320
Related party assets		81,146		11,380		18,428		(30,089)	(c)		80,865		35,211		9,452		18,304		(32,481)	(c)		30,486
		1,185,385		446,105		2,011,198		(30,089)			3,612,599		1,278,726		461,761		2,189,194		(32,481)			3,897,200

Investment in subsidiaries		489,779		–		–		(489,779)	(b)		–		517,861		–		–		(517,861)	(b)		–

Property, plant and equipment, at cost:
Land		661,622		–		–		–			661,622		849,042		–		–		–			849,042
Buildings and improvements		2,710,924		–		–		–			2,710,924		3,331,918		–		–		–			3,331,918
Furniture and equipment		529,374		–		–		–			529,374		641,730		–		–		–			641,730
Rental trailers and other rental equipment		515,733		–		–		–			515,733		547,291		–		–		–			547,291
Rental trucks		4,228,778		–		–		–			4,228,778		4,533,758		–		–		–			4,533,758
		8,646,431		–		–		–			8,646,431		9,903,739		–		–		–			9,903,739
Less: Accumulated depreciation		(2,457,890)		–		–		–			(2,457,890)		(2,799,455)		–		–		–			(2,799,455)
Total property, plant and equipment		6,188,541		–		–		–			6,188,541		7,104,284		–		–		–			7,104,284
Total assets	$	7,863,705	$	446,105	$	2,011,198	$	(519,868)		$	9,801,140	$	8,900,871	$	461,761	$	2,189,194	$	(550,342)		$	11,001,484

(a) Balances as of March 31, 2017
(a) Balances as of March 31, 2018
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables

Consolidating balance sheets by industry segment as of June 30, ~~2017~~2018 are as follows:


		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(Unaudited)											(Unaudited)
		(In thousands)											(In thousands)
Liabilities:
Accounts payable and accrued expenses	$	415,785	$	3,178	$	13,159	$	–		$	432,122	$	509,704	$	3,417	$	4,912	$	–		$	518,033
Notes, loans and leases payable		3,386,851		–		–		–			3,386,851
Notes, loans and leases payable, net													3,586,127		–		–		–			3,586,127
Policy benefits and losses, claims and loss expenses payable		406,786		238,930		445,834		–			1,091,550		572,151		232,893		447,766		–			1,252,810
Liabilities from investment contracts		–		–		1,221,381		–			1,221,381		–		–		1,409,705		–			1,409,705
Other policyholders' funds and liabilities		–		4,284		9,948		–			14,232		–		4,800		5,057		–			9,857
Deferred income		37,135		–		–		–			37,135		41,963		–		–		–			41,963
Deferred income taxes		826,856		10,924		17,025		–			854,805
Deferred income taxes, net													667,537		7,523		11,784		–			686,844
Related party liabilities		27,228		2,421		440		(30,089)	(c)		–		27,244		4,860		377		(32,481)	(c)		–
Total liabilities		5,100,641		259,737		1,707,787		(30,089)			7,038,076		5,404,726		253,493		1,879,601		(32,481)			7,505,339

Stockholders' equity :
Stockholders' equity:
Series preferred stock:
Series A preferred stock		–		–		–		–			–		–		–		–		–			–
Series B preferred stock		–		–		–		–			–		–		–		–		–			–
Serial common stock		–		–		–		–			–
Series A common stock													–		–		–		–			–
Common stock		10,497		3,301		2,500		(5,801)	(b)		10,497		10,497		3,301		2,500		(5,801)	(b)		10,497
Additional paid-in capital		452,529		91,120		26,271		(117,601)	(b)		452,319		453,072		91,120		26,271		(117,601)	(b)		452,862
Accumulated other comprehensive income (loss)		(35,098)		8,030		21,980		(30,010)	(b)		(35,098)		(45,966)		1,653		11,185		(12,838)	(b)		(45,966)
Retained earnings		3,018,890		83,917		252,660		(336,367)	(b)		3,019,100		3,763,129		112,194		269,637		(381,621)	(b)		3,763,339
Cost of common shares in treasury, net		(525,653)		–		–		–			(525,653)		(525,653)		–		–		–			(525,653)
Cost of preferred shares in treasury, net		(151,997)		–		–		–			(151,997)		(151,997)		–		–		–			(151,997)
Unearned employee stock ownership plan shares		(6,104)		–		–		–			(6,104)		(6,937)		–		–		–			(6,937)
Total stockholders' equity		2,763,064		186,368		303,411		(489,779)			2,763,064		3,496,145		208,268		309,593		(517,861)			3,496,145
Total liabilities and stockholders' equity	$	7,863,705	$	446,105	$	2,011,198	$	(519,868)		$	9,801,140	$	8,900,871	$	461,761	$	2,189,194	$	(550,342)		$	11,001,484

(a) Balances as of March 31, 2017
(a) Balances as of March 31, 2018
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables

Consolidating balance sheets by industry segment as of March 31, ~~2017~~2018 are as follows:

		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(In thousands)
Assets:													(In thousands)
Cash and cash equivalents	$	671,665	$	12,725	$	13,416	$	–		$	697,806	$	702,036	$	6,639	$	50,713	$	–		$	759,388
Reinsurance recoverables and trade receivables, net		41,234		107,757		29,090		–			178,081		64,798		99,682		29,058		–			193,538
Inventories, net		82,439		–		–		–			82,439
Inventories and parts, net													89,877		–		–		–			89,877
Prepaid expenses		124,728		–		–		–			124,728		166,129		–		–		–			166,129
Investments, fixed maturities and marketable equities		–		248,816		1,414,952		–			1,663,768		–		285,846		1,634,014		–			1,919,860
Investments, other		35,342		63,086		269,402		–			367,830		22,992		65,553		310,519		–			399,064
Deferred policy acquisition costs, net		–		–		130,213		–			130,213		–		–		124,767		–			124,767
Other assets		93,197		1,922		2,406		–			97,525		241,493		685		2,604		–			244,782
Related party assets		88,829		11,496		18,465		(32,622)	(c)		86,168		40,003		6,959		18,334		(32,020)	(c)		33,276
		1,137,434		445,802		1,877,944		(32,622)			3,428,558		1,327,328		465,364		2,170,009		(32,020)			3,930,681

Investment in subsidiaries		477,058		–		–		(477,058)	(b)		–		544,151		–		–		(544,151)	(b)		–

Property, plant and equipment, at cost:
Land		648,757		–		–		–			648,757		827,649		–		–		–			827,649
Buildings and improvements		2,618,265		–		–		–			2,618,265		3,140,713		–		–		–			3,140,713
Furniture and equipment		510,415		–		–		–			510,415		632,803		–		–		–			632,803
Rental trailers and other rental equipment		492,280		–		–		–			492,280		545,968		–		–		–			545,968
Rental trucks		4,091,598		–		–		–			4,091,598		4,390,750		–		–		–			4,390,750
		8,361,315		–		–		–			8,361,315		9,537,883		–		–		–			9,537,883
Less: Accumulated depreciation		(2,384,033)		–		–		–			(2,384,033)		(2,721,142)		–		–		–			(2,721,142)
Total property, plant and equipment		5,977,282		–		–		–			5,977,282		6,816,741		–		–		–			6,816,741
Total assets	$	7,591,774	$	445,802	$	1,877,944	$	(509,680)		$	9,405,840	$	8,688,220	$	465,364	$	2,170,009	$	(576,171)		$	10,747,422

(a) Balances as of December 31, 2016
(a) Balances as of December 31, 2017
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables

Consolidating balance sheets by industry segment as of March 31, ~~2017~~2018 are as follows:

													Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(In thousands)											(In thousands)
Liabilities:
Accounts payable and accrued expenses	$	441,667	$	1,926	$	6,948	$	–		$	450,541	$	506,158	$	2,582	$	2,375	$	–		$	511,115
Notes, loans and leases payable		3,262,880		–		–		–			3,262,880
Notes, loans and leases payable, net													3,513,076		–		–		–			3,513,076
Policy benefits and losses, claims and loss expenses payable		399,181		244,980		442,161		–			1,086,322		568,456		234,359		445,218		–			1,248,033
Liabilities from investment contracts		–		–		1,112,498		–			1,112,498		–		–		1,364,066		–			1,364,066
Other policyholders' funds and liabilities		–		4,184		5,966		–			10,150		–		5,377		4,663		–			10,040
Deferred income		28,696		–		–		–			28,696		34,276		–		–		–			34,276
Deferred income taxes		809,566		11,243		14,200		–			835,009
Deferred income taxes, net													629,389		8,927		19,792		–			658,108
Related party liabilities		30,040		2,539		43		(32,622)	(c)		–		28,157		2,870		993		(32,020)	(c)		–
Total liabilities		4,972,030		264,872		1,581,816		(32,622)			6,786,096		5,279,512		254,115		1,837,107		(32,020)			7,338,714

Stockholders' equity :
Stockholders' equity:
Series preferred stock:		–		–		–		–			–
Series A preferred stock		–		–		–		–			–		–		–		–		–			–
Series B preferred stock		–		–		–		–			–		–		–		–		–			–
Series A common stock		–		–		–		–			–		–		–		–		–			–
Common stock		10,497		3,301		2,500		(5,801)	(b)		10,497		10,497		3,301		2,500		(5,801)	(b)		10,497
Additional paid-in capital		452,382		91,120		26,271		(117,601)	(b)		452,172		452,956		91,120		26,271		(117,601)	(b)		452,746
Accumulated other comprehensive income (loss)		(51,236)		6,166		16,933		(23,099)	(b)		(51,236)		(4,623)		16,526		35,982		(52,508)	(b)		(4,623)
Retained earnings		2,892,683		80,343		250,424		(330,557)	(b)		2,892,893		3,635,351		100,302		268,149		(368,241)	(b)		3,635,561
Cost of common shares in treasury, net		(525,653)		–		–		–			(525,653)		(525,653)		–		–		–			(525,653)
Cost of preferred shares in treasury, net		(151,997)		–		–		–			(151,997)		(151,997)		–		–		–			(151,997)
Unearned employee stock ownership plan shares		(6,932)		–		–		–			(6,932)		(7,823)		–		–		–			(7,823)
Total stockholders' equity	$	2,619,744		180,930		296,128		(477,058)			2,619,744		3,408,708		211,249		332,902		(544,151)			3,408,708
Total liabilities and stockholders' equity		7,591,774	$	445,802	$	1,877,944	$	(509,680)		$	9,405,840	$	8,688,220	$	465,364	$	2,170,009	$	(576,171)		$	10,747,422

(a) Balances as of December 31, 2016
(a) Balances as of December 31, 2017
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables

Consolidating statement of operations by industry segment for the quarter ended June 30, ~~2017~~2018 are as follows:

		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(Unaudited)											(Unaudited)
		(In thousands)											(In thousands)
Revenues:
Self-moving equipment rentals	$	670,698	$	–	$	–	$	(840)	(c)	$	669,858	$	717,542	$	–	$	–	$	(940)	(c)	$	716,602
Self-storage revenues		76,718		–		–		–			76,718		86,212		–		–		–			86,212
Self-moving and self-storage products and service sales		78,911		–		–		–			78,911		79,241		–		–		–			79,241
Property management fees		6,762		–		–		–			6,762		7,416		–		–		–			7,416
Life insurance premiums		–		–		39,091		–			39,091		–		–		36,888		–			36,888
Property and casualty insurance premiums		–		11,815		–		–			11,815		–		13,348		–		(567)	(c)		12,781
Net investment and interest income		2,657		4,291		20,655		(386)	(b)		27,217		2,563		2,541		19,917		(416)	(b)		24,605
Other revenue		46,781		–		910		(138)	(b)		47,553		54,911		–		1,058		(137)	(b)		55,832
Total revenues		882,527		16,106		60,656		(1,364)			957,925		947,885		15,889		57,863		(2,060)			1,019,577

Costs and expenses:
Operating expenses		404,043		8,232		5,617		(968)	(b,c)		416,924		483,620		8,700		5,873		(1,639)	(b,c)		496,554
Commission expenses		75,365		–		–		–			75,365		79,257		–		–		–			79,257
Cost of sales		47,595		–		–		–			47,595		49,881		–		–		–			49,881
Benefits and losses		–		2,438		45,282		–			47,720		–		4,476		44,078		–			48,554
Amortization of deferred policy acquisition costs		–		–		6,321		–			6,321		–		–		6,031		–			6,031
Lease expense		8,334		–		–		(47)	(b)		8,287		8,305		–		–		(136)	(b)		8,169
Depreciation, net of (gains) losses on disposals		126,682		–		–		–			126,682
Depreciation, net of (gains) losses on disposal													126,427		–		–		–			126,427
Net (gains) losses on disposal of real estate													–		–		–		–			–
Total costs and expenses		662,019		10,670		57,220		(1,015)			728,894		747,490		13,176		55,982		(1,775)			814,873

Earnings from operations before equity in earnings of subsidiaries		220,508		5,436		3,436		(349)			229,031		200,395		2,713		1,881		(285)			204,704

Equity in earnings of subsidiaries		5,810		–		–		(5,810)	(d)		–		3,656		–		–		(3,656)	(d)		–

Earnings from operations		226,318		5,436		3,436		(6,159)			229,031		204,051		2,713		1,881		(3,941)			204,704
Other components of net periodic benefit costs													(253)		–		–		–			(253)
Interest expense		(30,694)		–		–		349	(b)		(30,345)		(35,539)		–		–		285	(b)		(35,254)
Pretax earnings		195,624		5,436		3,436		(5,810)			198,686		168,259		2,713		1,881		(3,656)			169,197
Income tax expense		(69,417)		(1,862)		(1,200)		–			(72,479)		(40,410)		(545)		(393)		–			(41,348)
Earnings available to common shareholders	$	126,207	$	3,574	$	2,236	$	(5,810)		$	126,207	$	127,849	$	2,168	$	1,488	$	(3,656)		$	127,849

(a) Balances for the quarter ended March 31, 2017
(a) Balances for the quarter ended March 31, 2018
(b) Eliminate intercompany lease / interest income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries

Consolidating statements of operations by industry for the quarter ended June 30, ~~2016~~2017 are as follows:

		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations			AMERCO Consolidated
		(Unaudited)											(Unaudited)
		(In thousands)											(In thousands)
Revenues:
Self-moving equipment rentals	$	647,116	$	–	$	–	$	(780)	(c)	$	646,336	$	670,698	$	–	$	–	$	(840)	(c)	$	669,858
Self-storage revenues		67,722		–		–		–			67,722		76,718		–		–		–			76,718
Self-moving and self-storage products and service sales		77,303		–		–		–			77,303		78,911		–		–		–			78,911
Property management fees		6,604		–		��		–			6,604		6,762		–		–		–			6,762
Life insurance premiums		–		–		40,892		–			40,892		–		–		39,091		–			39,091
Property and casualty insurance premiums		–		11,255		–		–			11,255		–		11,815		–		–			11,815
Net investment and interest income		2,112		5,630		19,994		(405)	(b)		27,331		2,657		4,291		20,655		(386)	(b)		27,217
Other revenue		44,974		–		909		(135)	(b)		45,748		46,781		–		910		(138)	(b)		47,553
Total revenues		845,831		16,885		61,795		(1,320)			923,191		882,527		16,106		60,656		(1,364)			957,925

Costs and expenses:
Operating expenses		373,672		6,285		6,031		(906)	(b,c)		385,082		403,811		8,232		5,617		(968)	(b,c)		416,692
Commission expenses		73,816		–		–		–			73,816		75,365		–		–		–			75,365
Cost of sales		43,362		–		–		–			43,362		47,595		–		–		–			47,595
Benefits and losses		–		3,097		43,906		–			47,003		–		2,438		45,282		–			47,720
Amortization of deferred policy acquisition costs		–		–		7,942		–			7,942		–		–		6,321		–			6,321
Lease expense		11,095		–		–		(47)	(b)		11,048		8,334		–		–		(47)	(b)		8,287
Depreciation, net of (gains) losses on disposals		95,381		–		–		–			95,381
Depreciation, net of (gains) losses on disposal													126,335		–		–		–			126,335
Net (gains) losses on disposal of real estate													347		–		–		–			347
Total costs and expenses		597,326		9,382		57,879		(953)			663,634		661,787		10,670		57,220		(1,015)			728,662

Earnings from operations before equity in earnings of subsidiaries		248,505		7,503		3,916		(367)			259,557		220,740		5,436		3,436		(349)			229,263

Equity in earnings of subsidiaries		7,574		–		–		(7,574)	(d)		–		5,810		–		–		(5,810)	(d)		–

Earnings from operations		256,079		7,503		3,916		(7,941)			259,557		226,550		5,436		3,436		(6,159)			229,263
Other components of net periodic benefit costs													(232)		–		–		–			(232)
Interest expense		(26,793)		–		–		367	(b)		(26,426)		(30,694)		–		–		349	(b)		(30,345)
Pretax earnings		229,286		7,503		3,916		(7,574)			233,131		195,624		5,436		3,436		(5,810)			198,686
Income tax expense		(82,113)		(2,626)		(1,219)		–			(85,958)		(69,417)		(1,862)		(1,200)		–			(72,479)
Earnings available to common shareholders	$	147,173	$	4,877	$	2,697	$	(7,574)		$	147,173	$	126,207	$	3,574	$	2,236	$	(5,810)		$	126,207

(a) Balances for the quarter ended March 31, 2016
(b) Eliminate intercompany lease/interest income
(a) Balances for the quarter ended March 31, 2017
(b) Eliminate intercompany lease / interest income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries

Consolidating cash flow statements by industry segment for the quarter ended June 30, 2018 are as follows:

		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Elimination		AMERCO Consolidated
		(Unaudited)
Cash flows from operating activities:		(In thousands)
Net earnings	$	127,849	$	2,168	$	1,488	$	(3,656)	$	127,849
Earnings from consolidated entities		(3,656)		–		–		3,656		–
Adjustments to reconcile net earnings to the cash provided by operations:
Depreciation		142,722		–		–		–		142,722
Amortization of deferred policy acquisition costs		–		–		6,031		–		6,031
Amortization of debt issuance costs		984		–		–		–		984
Interest credited to policyholders		–		–		8,060		–		8,060
Change in allowance for losses on trade receivables		40		–		(2)		–		38
Change in allowance for inventories and parts reserve		2,139		–		–		–		2,139
Net gains on disposal of personal property		(16,295)		–		–		–		(16,295)
Net (gains) losses on sales of investments		–		(38)		544		–		506
Deferred income taxes		38,011		1,140		(473)		–		38,678
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		(14,763)		2,331		(2,111)		–		(14,543)
Inventories and parts		(7,170)		–		–		–		(7,170)
Prepaid expenses		(17,999)		–		–		–		(17,999)
Capitalization of deferred policy acquisition costs		–		–		(5,808)		–		(5,808)
Other assets		(132)		(243)		(386)		–		(761)
Related party assets		4,713		(2,508)		–		–		2,205
Accounts payable and accrued expenses		84,004		835		4,509		–		89,348
Policy benefits and losses, claims and loss expenses payable		4,208		(1,466)		2,549		–		5,291
Other policyholders' funds and liabilities		–		(577)		393		–		(184)
Deferred income		7,732		–		–		–		7,732
Related party liabilities		(913)		2,003		(616)		–		474
Net cash provided by operating activities		351,474		3,645		14,178		–		369,297

Cash flows from investing activities:
Escrow deposits		(4,559)		–		–		–		(4,559)
Purchases of:
Property, plant and equipment		(548,147)		–		–		–		(548,147)
Short term investments		–		(14,220)		(170)		–		(14,390)
Fixed maturities investments		–		(12,754)		(90,367)		–		(103,121)
Equity securities		–		–		(46)		–		(46)
Preferred stock		–		–		(81)		–		(81)
Real estate		–		(59)		(21)		–		(80)
Mortgage loans		–		(2,287)		(5,975)		–		(8,262)
Proceeds from sales and paydowns of:
Property, plant and equipment		187,546		–		–		–		187,546
Short term investments		–		20,287		129		–		20,416
Fixed maturities investments		–		3,170		11,776		–		14,946
Preferred stock		–		500		–		–		500
Mortgage loans		–		198		9,204		–		9,402
Net cash used by investing activities		(365,160)		(5,165)		(75,551)		–		(445,876)
		(page 1 of 2)
(a) Balance for the period ended March 31, 2018

Continuation of consolidating cash flow statements by industry segment for the quarter ended June 30, 2018 are as follows:

		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		103,641		–		–		–		103,641
Principal repayments on credit facilities		(73,770)		–		–		–		(73,770)
Payments of debt issuance costs		(1,420)		–		–		–		(1,420)
Capital lease payments		(84,374)		–		–		–		(84,374)
Employee stock ownership plan shares		(57)		–		–		–		(57)
Common stock dividend paid		(9,795)		–		–		–		(9,795)
Investment contract deposits		–		–		76,343		–		76,343
Investment contract withdrawals		–		–		(38,763)		–		(38,763)
Net cash provided (used) by financing activities		(65,775)		–		37,580		–		(28,195)

Effects of exchange rate on cash		(4,275)		–		–		–		(4,275)

Decrease in cash and cash equivalents		(83,736)		(1,520)		(23,793)		–		(109,049)
Cash and cash equivalents at beginning of period		702,036		6,639		50,713		–		759,388
Cash and cash equivalents at end of period	$	618,300	$	5,119	$	26,920	$	–	$	650,339
		(page 2 of 2)
(a) Balance for the period ended March 31, 2018

Consolidating cash flow statements by industry segment for the quarter ended June 30, 2017 are as follows:

		Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Elimination		AMERCO Consolidated
		(Unaudited)										Moving & Storage Consolidated		Property & Casualty Insurance (a)		Life Insurance (a)		Elimination		AMERCO Consolidated
		(In thousands)										(Unaudited)
Cash flows from operating activities:												(In thousands)
Net earnings	$	126,207	$	3,574	$	2,236	$	(5,810)	$	126,207	$	126,207	$	3,574	$	2,236	$	(5,810)	$	126,207
Earnings from consolidated subsidiaries		(5,810)		–		–		5,810		–
Adjustments to reconcile net earnings to the cash provided by operations:
Earnings from consolidated entities												(5,810)		–		–		5,810		–
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation		131,423		–		–		–		131,423		131,423		–		–		–		131,423
Amortization of deferred policy acquisition costs		–		–		6,321		–		6,321		–		–		6,321		–		6,321
Amortization of debt issuance costs		932		–		–		–		932		932		–		–		–		932
Interest credited to policyholders		–		–		7,651		–		7,651		–		–		7,651		–		7,651
Change in allowance for losses on trade receivables		(26)		–		–		–		(26)		(26)		–		–		–		(26)
Change in allowance for inventory reserve		1,114		–		–		–		1,114
Net gain on sale of real and personal property		(4,741)		–		–		–		(4,741)
Net gain on sale of investments		–		(589)		(1,396)		–		(1,985)
Change in allowance for inventories and parts reserve												1,114		–		–		–		1,114
Net gains on disposal of personal property												(5,088)		–		–		–		(5,088)
Net losses on disposal of real estate												347		–		–		–		347
Net gains on sales of investments												–		(589)		(1,396)		–		(1,985)
Deferred income taxes		16,765		(1,600)		(3,141)		–		12,024		16,765		(1,600)		(3,141)		–		12,024
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		(10,955)		4,375		(2,290)		–		(8,870)		(10,955)		4,375		(2,290)		–		(8,870)
Inventories		(11,982)		–		–		–		(11,982)
Inventories and parts												(11,982)		–		–		–		(11,982)
Prepaid expenses		44,788		–		–		–		44,788		44,788		–		–		–		44,788
Capitalization of deferred policy acquisition costs		–		–		(8,228)		–		(8,228)		–		–		(8,228)		–		(8,228)
Other assets		16,237		1,665		(90)		–		17,812		(4,098)		1,665		(90)		–		(2,523)
Related party assets		7,721		115		–		–		7,836		7,721		115		–		–		7,836
Accounts payable and accrued expenses		48,255		1,249		12,200		–		61,704		48,255		1,249		12,200		–		61,704
Policy benefits and losses, claims and loss expenses payable		7,125		(6,051)		3,673		–		4,747		7,125		(6,051)		3,673		–		4,747
Other policyholders' funds and liabilities		–		101		3,982		–		4,083		–		101		3,982		–		4,083
Deferred income		8,393		–		–		–		8,393		8,393		–		–		–		8,393
Related party liabilities		(2,812)		(117)		397		–		(2,532)		(2,812)		(117)		397		–		(2,532)
Net cash provided by operating activities		372,634		2,722		21,315		–		396,671		352,299		2,722		21,315		–		376,336

Cash flows from investing activities:
Escrow deposits												23,005		–		–		–		23,005
Purchases of:
Property, plant and equipment		(480,259)		–		–		–		(480,259)		(480,259)		–		–		–		(480,259)
Short term investments		–		(10,779)		(5,712)		–		(16,491)		–		(10,779)		(5,712)		–		(16,491)
Fixed maturities investments		–		(11,602)		(111,488)		–		(123,090)		–		(11,602)		(111,488)		–		(123,090)
Real estate		(505)		–		–		–		(505)		(505)		–		–		–		(505)
Mortgage loans		–		(6,059)		(18,323)		–		(24,382)		–		(6,059)		(18,323)		–		(24,382)
Proceeds from sales and paydowns of:
Property, plant and equipment		142,343		–		–		–		142,343		142,343		–		–		–		142,343
Short term investments		–		15,424		9,215		–		24,639		–		15,424		9,215		–		24,639
Fixed maturities investments		–		4,275		32,284		–		36,559		–		4,275		32,284		–		36,559
Real estate		2,664		–		–		–		2,664		2,664		–		–		–		2,664
Mortgage loans		–		1,585		4,469		–		6,054		–		1,585		4,469		–		6,054
Net cash used by investing activities		(335,757)		(7,156)		(89,555)		–		(432,468)		(312,752)		(7,156)		(89,555)		–		(409,463)
		(page 1 of 2)										(page 1 of 2)
(a) Balance for the period ended March 31, 2017

Continuation of consolidating cash flow statements by industry segment for the quarter ended June 30, 2017 are as follows:

Moving & Storage
Consolidated

Property &
Casualty
Insurance (a)

Life
Insurance (a)

Elimination

AMERCO
Consolidated

(Unaudited)

(In thousands)
Cash flows from financing activities:

Borrowings from credit facilities

155,367

–

–

–

155,367
Principal repayments on credit facilities

(64,819)

–

–

–

(64,819)
Payments of debt issuance costs

(1,734)

–

–

–

(1,734)
Capital lease payments

(56,522)

–

–

–

(56,522)
Employee Stock Ownership Plan

3,516

–

–

–

3,516
Securitization deposits

49

–

–

–

49
Investment contract deposits

–

–

155,437

–

155,437
Investment contract withdrawals

–

–

(54,205)

–

(54,205)
Net cash provided by financing activities

35,857

–

101,232

–

137,089

Effects of exchange rate on cash

4,424

–

–

–

4,424

Increase (decrease) in cash and cash equivalents

77,158

(4,434)

32,992

–

105,716
Cash and cash equivalents at beginning of period

671,665

12,725

13,416

–

697,806
Cash and cash equivalents at end of period
$
748,823
$
8,291
$
46,408
$
–

$
803,522

(page 2 of 2)
(a) Balance for the period ended March 31, 2017

12. Industry Segment and Geographic Area Data

United States

Canada

Consolidated

(Unaudited)

(All amounts are in thousands U.S. $'s)
Quarter Ended June 30, 2017

Total revenues
$
913,114
$
44,811
$
957,925
Depreciation and amortization, net of (gains) losses on disposal

131,499

1,504

133,003
Interest expense

29,643

702

30,345
Pretax earnings

191,973

6,713

198,686
Income tax expense

70,610

1,869

72,479
Identifiable assets

9,390,397

410,743

9,801,140

United States

Canada

Consolidated

(Unaudited)

(All amounts are in thousands U.S. $'s)
Quarter Ended June 30, 2016

Total revenues
$
880,729
$
42,462
$
923,191
Depreciation and amortization, net of (gains) losses on disposal

102,000

1,323

103,323
Interest expense

26,426

–

26,426
Pretax earnings

224,913

8,218

233,131
Income tax expense

83,745

2,213

85,958
Identifiable assets

8,269,109

274,700

8,543,809

		United States		Canada		Consolidated
		(Unaudited)
		(All amounts are in thousands of U.S. $'s)
Quarter Ended June 30, 2018
Total revenues	$	971,295	$	48,282	$	1,019,577
Depreciation and amortization, net of (gains) losses on disposal		131,379		1,079		132,458
Interest expense		34,549		705		35,254
Pretax earnings		163,262		5,935		169,197
Income tax expense		39,777		1,571		41,348
Identifiable assets		10,657,222		344,262		11,001,484

Quarter Ended June 30, 2017
Total revenues	$	913,114	$	44,811	$	957,925
Depreciation and amortization, net of (gains) losses on disposal		131,499		1,504		133,003
Interest expense		29,643		702		30,345
Pretax earnings		191,973		6,713		198,686
Income tax expense		70,610		1,869		72,479
Identifiable assets		9,390,397		410,743		9,801,140

13. Employee Benefit Plans

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

		Quarter Ended June 30,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands)				(In thousands)

Service cost for benefits earned during the period	$	268	$	256	$	277	$	268
Other components of net periodic benefit costs:
Interest cost on accumulated postretirement benefit		217		204		236		217
Other components		15		22		17		15
Total other components of net periodic benefit costs						253		232
Net periodic postretirement benefit cost	$	500	$	482	$	530	$	500

14. Fair Value Measurements

Fair values of cash equivalents approximate carrying value due to the short period of time to maturity. Fair values of short term investments, investments available-for-sale, long term investments, mortgage loans and notes on real estate, and interest rate swap contracts are based on quoted market prices, dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded value.

Our financial instruments that are exposed to concentrations of credit risk consist primarily of temporary cash investments, trade receivables, reinsurance recoverables and notes receivable. Limited credit risk exists on trade receivables due to the diversity of our customer base and their dispersion across broad geographic markets. We place our temporary cash investments with financial institutions and limit the amount of credit exposure to any one financial institution.

We have mortgage receivables, which potentially expose us to credit risk. The portfolio of notes is principally collateralized by self-storage facilities and commercial properties. We have not experienced any material losses related to the notes from individual or groups of notes in any particular industry or geographic area. The estimated fair values were determined using the discounted cash flow method and using interest rates currently offered for similar loans to borrowers with similar credit ratings.

The carrying amount of long term debt and short term borrowings are estimated to approximate fair value as the actual interest rate is consistent with the rate estimated to be currently available for debt of similar term and remaining maturity.

Other investments, including short term investments, are substantially current or bear reasonable interest rates. As a result, the carrying values of these financial instruments approximate fair value.

Certain assets 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 Measurements 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 valuations that require inputs that are both significant to the fair value measurement and are unobservable. These reflect management’s assumptions about the assumptions a market participant would use in pricing the asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following tables represent the financial assets and liabilities on the condensed consolidated balance ~~sheet~~sheets as of June 30, ~~2017~~2018 and March 31, ~~2017~~2018 that are subject to ASC 820 and the valuation approach applied to each of these items.

As of June 30, 2017		Total		Level 1		Level 2		Level 3
As of June 30, 2018										Total		Level 1		Level 2		Level 3
		(Unaudited)								(Unaudited)
		(In thousands)								(In thousands)
Assets
Short-term investments	$	546,743	$	546,542	$	201	$	–
Short term investments									$	409,787	$	409,787	$	–	$	–
Fixed maturities - available for sale		1,724,331		6,506		1,717,496		329		1,913,838		7,372		1,906,197		269
Preferred stock		14,090		14,090		–		–		10,186		10,186		–		–
Common stock		24,610		24,610		–		–		26,852		26,852		–		–
Derivatives		4,288		4,288		–		–		4,256		3,834		422		–
Total	$	2,314,062	$	596,036	$	1,717,697	$	329	$	2,364,919	$	458,031	$	1,906,619	$	269


Liabilities
Guaranteed residual values of TRAC leases	$	–	$	–	$	–	$	–

Derivatives		3,353		–		3,353		–	$	338	$	–	$	338	$	–
Total	$	3,353	$	–	$	3,353	$	–	$	338	$	–	$	338	$	–

As of March 31, 2017		Total		Level 1		Level 2		Level 3

As of March 31, 2018										Total		Level 1		Level 2		Level 3
		(In thousands)								(In thousands)
Assets
Short-term investments	$	521,911	$	521,710	$	201	$	–
Short term investments									$	475,320	$	475,320	$	–	$	–
Fixed maturities - available for sale		1,625,845		6,491		1,619,024		330		1,881,137		7,567		1,873,293		277
Preferred stock		13,489		13,489		–		–		10,861		10,861		–		–
Common stock		24,434		24,434		–		–		27,862		27,862		–		–
Derivatives		4,260		4,260		–		–		4,825		4,388		437		–
Total	$	2,189,939	$	570,384	$	1,619,225	$	330	$	2,400,005	$	525,998	$	1,873,730	$	277


Liabilities
Guaranteed residual values of TRAC leases	$	–	$	–	$	–	$	–

Derivatives		4,903		–		4,903		–	$	897	$	–	$	897	$	–
Total	$	4,903	$	–	$	4,903	$	–	$	897	$	–	$	897	$	–

The following table represents the fair value measurements for our assets atas of June 30, ~~2017~~2018 using significant unobservable inputs (Level 3).

Fixed Maturities - Asset Backed Securities

(Unaudited)

(In thousands)
Balance at March 31, 2017
$
330

Fixed Maturities - Asset Backed Securities - redeemed

(2)
Fixed Maturities - Asset Backed Securities - net loss (unrealized)

1
Balance at June 30, 2017
$
329

		Fixed Maturities - Asset Backed Securities
		(Unaudited)
		(In thousands)
Balance as of March 31, 2018	$	277

Fixed Maturities - Asset Backed Securities - redeemed		(14)
Fixed Maturities - Asset Backed Securities - net gain (unrealized)		6
Balance as of June 30, 2018	$	269

15. ~~Real Estate Agreements~~Revenue Recognition

In ~~February 2017, Real Estate entered into~~May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), an ~~agreement~~updated standard on revenue recognition. The standard outlines a five-step model for entities to use in accounting for revenue arising from contracts with customers. The standard applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. The standard also requires expanded disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 became effective for us on April 1, 2018 and was adopted on a ~~qualified intermediary~~modified retrospective basis. Due to insignificant changes in our revenue recognition pattern for applicable revenue streams as a result of the updated guidance, there was no cumulative effect recorded. Additionally, due to the relatively short duration of our equipment contracts, we elected to use the practical expedient for contracts that begin and end within the same reporting period in applying the updated guidance to our applicable revenue streams. We performed an impact assessment by analyzing certain existing material revenue transactions and arrangements that are representative of our business segments and their revenue streams. Additionally, we assessed any potential impacts on our internal controls and processes related to ~~a potential 1031 Exchange. The qualified intermediary formed an LLC to facilitate~~both the ~~reverse exchange portion~~implementation and ongoing compliance of the 1031 Exchange, which was determined to be a VIE. Real Estate was deemed to be the primary beneficiary of this VIE as it has the ability to direct the activities that most significantly impact its economic performance and has allnew guidance. The adoption of the ~~risks and rewards~~standard did not have a material effect on our Consolidated Balance Sheets, Consolidated Statements of ~~ownership. Accordingly, Real Estate consolidated this VIE. As~~Operations, or Consolidated Statements of June 30, 2017, Real Estate had loaned $60.5 million to the VIE for the purchase of the replacement properties. The sale of the relinquished property had not been completed as of this filing, and as such, the acquired properties remained in the possession of the VIE. At the earlier of the sale of the relinquished property or 180 days from the acquisition date of each replacement property, the sole membership interest in each property held within the VIE will be assigned to Real Estate in satisfaction of the outstanding loan, resulting in the property being wholly owned by Real Estate.Cash Flows.

~~16. Subsequent Events~~We enter into contracts that may include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of amounts collected from customers for taxes, such as sales tax, and remitted to the applicable taxing authorities. We account for a contract under Topic 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For contracts scoped into this standard, revenue is recognized when (or as) the performance obligations are satisfied by means of transferring goods or services to the customer as applicable to each revenue stream as discussed below. A contract may be partially within the scope of Topic 606 and partially within the scope of other topics. This is applicable to insurance premiums received in conjunction with equipment rentals, for which we allocate the transaction price relating to these distinct performance obligations covered by Topic 944 on a relative standalone selling price basis. There were no material contract assets or liabilities as of June 30, 2018 and March 31, 2018.

~~Real Estate Agreement~~Self-moving rentals are recognized over the contract period that trucks and moving equipment are rented. We offer two types of self-moving rental contracts, one-way rentals and in-town rentals, which have varying payment terms. Customer payment is received at the initiation of the contract for one-way rentals which covers an allowable limit for equipment usage. An estimated fee in the form of a deposit is received at the initiation of the contract for in-town rentals, and final payment is received upon the return of the equipment based on actual fees incurred. The contract price is estimated at the initiation of the contract, as there is variable consideration associated with ratable fees incurred based on the number of days the equipment is rented and the number of miles driven. Variable consideration is estimated using the most likely amount method which is based on the intended use of the rental equipment by the customer at the initiation of the contract. Historically, the variability in estimated transaction pricing compared to actual is not significant due to the relatively short duration of rental contracts. Each performance obligation has an observable stand-alone selling price. We concluded that the performance obligations identified are satisfied over time under Topic 606, which is consistent with the timing of our revenue recognition under legacy guidance. The input method of passage of time is appropriate as there is a direct relationship between our inputs and the transfer of benefit to the customer over the life of the contract. Self-moving rental contracts span a relatively short period of time, and the majority of these contracts begin and end within the same fiscal year.

The Company’s self-moving rental revenues do not currently meet the definition of a lease under Topic 840 due to the existence of substitution rights, and thus are accounted for under Topic 606. However, the contracts are expected to meet the definition of a lease pursuant to the guidance in ASU 2016-02, Leases (Topic 842) because those substitution rights do not provide an economic benefit to the Company that would exceed the cost of exercising the right. Therefore, upon adoption of ASU 2016-02 on April 1, 2019, self-rental contracts will be accounted for as leases. We do not expect this change to result in a change in the timing and pattern of recognition of the related revenues due to the short-term nature of the self-moving rental contracts.

Self-storage revenues are recognized as earned over the contract period based upon the number of paid storage contract days. Self-storage revenues are recognized in accordance with existing guidance in Topic 840 – Leases.

~~On July 25, 2017, Real Estate further amended~~Sales of self-moving and self-storage related products are recognized at the time that title passes and the customer accepts delivery. The performance obligations identified for this portfolio of contracts include moving and storage product sales, installation services and/or propane sales. Each of these performance obligations has an observable stand-alone selling price. We concluded that the performance obligations identified are satisfied at a point in time under Topic 606, which is consistent with the timing of our revenue recognition under legacy guidance. The basis for this conclusion is that the customer does not receive the product/propane or benefit from the installation services until the related performance obligation is satisfied. These products/services being provided have an alternative use as they are not customized and can be sold/provided to any customer. In addition, we only have the right to receive payment once the products have been transferred to the customer or the installation services have been completed. Although product sales have a right of return policy, our estimated obligation for future product returns is not material to the financial statements at this time.

Property management fees are recognized over the period that agreed-upon services are provided. The performance obligation for this portfolio of contracts is property management services, which represents a series of distinct days of service, each of which is comprised of activities that may vary from day to day. However, those tasks are activities to fulfill the property management services and are not separate promises in the contract. We determined that each increment of the promised service is distinct in accordance with paragraph 606-10-25-19. This is because the customer can benefit from each increment of service on its ~~Purchase~~own and ~~Sale Agreement~~each increment of service is separately identifiable because no day of service significantly modifies or customizes another and no day of service significantly affects either the entity’s ability to fulfill another day of service or the benefit to the customer of another day of service. As such, we concluded that the performance obligation is satisfied over time under Topic 606, which is consistent with 23rd ~~and 11~~th ~~Associate, L.L.C.,~~the timing of our revenue recognition under legacy guidance for the Management Fee component of the compensation received in exchange for the service. Additionally, in certain contracts the Company has the ability to earn an incentive fee based on operational results. Historically these fees have been recognized once fully determinable. Under Topic 606, we measure and recognize the progress toward completion of the performance obligation on a quarterly basis using the most likely amount method to determine an accrual for the Incentive Fee portion of the compensation received in exchange for the property management service. The variable consideration recognized is subject to constraints due to a range of possible consideration amounts based on actual operational results. The amount accrued in the first quarter of fiscal 2019 did not have a material effect on our financial statements.

Traditional life and Medicare supplement insurance premiums are recognized as revenue over the premium-paying periods of the contracts when due from the policyholders. For products where premiums are due over a significantly shorter duration than the period over which benefits are provided, such as our single premium whole life product, premiums are recognized when received and excess profits are deferred and recognized in relation to the insurance in force. Life insurance premiums are recognized in accordance with existing guidance in Topic 944 – Financial Services – Insurance.

Property and casualty insurance premiums are recognized as revenue over the policy periods. Interest and investment income are recognized as earned. Property and casualty premiums are recognized in accordance with existing guidance in Topic 944 – Financial Services – Insurance.

Net investment and interest income has multiple components. Interest income from bonds and mortgage notes are recognized when earned. Dividends on common and preferred stocks are recognized on the ex-dividend dates. Realized gains and losses on the sale or exchange of investments are recognized at the trade date. Net investment and interest income is recognized in accordance with existing guidance in Topic 825 – Financial Instruments.

Other revenue consists of numerous services or rentals, of which U-Box contracts and service fees from Moving Help are the main components. The performance obligations identified for U-Box contracts are fees for rental, storage and shipping of U-Box containers to a specified location, each of which are distinct. A contract may be partially within the scope of Topic 606 and partially within the scope of other topics. The rental and storage obligations in U-Box contracts meet the definition of a lease in Topic 840, while the shipping obligation represents a contract with a customer accounted for under Topic 606. Therefore, we allocate the total transaction price between the performance obligations of storage fees and rental fees and the shipping fees on a standalone selling price basis. U-Box shipping fees are collected once the shipment is in transit. Shipping fees in U-Box contracts are set at the initiation of the contract based on the shipping origin and destination, and the performance obligation is satisfied over time under Topic 606 which is consistent with the timing of our revenue recognition under legacy guidance. U-Box shipping contracts span over a relatively short period of time, and the majority of these contracts begin and end within the same fiscal year. Moving Help services fees are generated as we provide a neutral venue for the connection between the service provider and the customer for agreed upon services. We do not control the specified services provided by the service provider before that service is transferred to the customer.

In the following table, revenue is disaggregated by timing of revenue recognition:

		Quarter Ended June 30,
		2018		2017
		(Unaudited)
		(In thousands)

Revenues recognized over time:	$	757,736	$	706,072
Revenues recognized at a point in time:		90,190		89,138
Total revenues recognized under ASC 606		847,926		795,210

Revenues recognized under ASC 840		95,857		83,452
Revenues recognized under ASC 944		51,189		52,046
Revenues recognized under ASC 320		24,605		27,217
Total revenues	$	1,019,577	$	957,925

In the above table, the revenues recognized over time include self-moving equipment rentals, property management fees, the shipping fees associated with U-Box rentals and a portion of ~~Real Estate’s real property~~other revenues, whereas revenues recognized at a point in time include self-moving and ~~improvements thereon located in Manhattan, New York~~self-storage products and service sales and a portion of other revenues.

16. Income Taxes

The Tax Reform Act was enacted on December 22, 2017. The Tax Reform Act reduces the U.S. federal corporate income tax rate from 35% to ~~change~~21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and repeals the closing date to September 2017, with the ability of either party to further extend the closing date to October 2017. Real Estate will maintain ownership of one building at the Manhattan location thus allowing U-Haul to serve the equipment rental needs of our customers in the area. Real Estate’s book valuedeferral of the ~~property being sold is approximately $5 million. The Company continues to intend to reinvest~~phase three tax for life insurance companies. As of June 30, 2018, we have not completed our accounting for the ~~proceeds into its self-storage holdings via a~~ tax ~~free exchange pursuant to Section 1031~~effects of enactment of the ~~Internal Revenue Code.~~Tax Reform Act; however, we have made a reasonable estimate of the effects of all items affected by the Tax Reform Act.

17. Subsequent Events

Financial Strength Rating

In August ~~2017,~~2018, A.M. Best upgraded the financial strength rating ~~(FSR)~~(“FSR”) for Repwest Insurance Company to ~~B++~~A- from B++. The FSR outlook remains stable. In addition, A.M. Best upgraded the long-term issuer credit rating ~~(LTICR)~~(“LTICR”) to ~~bbb~~a- from ~~bbb-.~~bbb. The LTICR outlook has been revised to ~~positive~~stable from ~~stable.~~positive.

~~ITEM~~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 products 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, we discuss our results of operations for the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017,~~2018, which ~~are~~is followed by an analysis of liquidity changes in our balance sheets and cash flows, and a discussion of our financial commitments in the sections entitled Liquidity and Capital Resources - Summary 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 ~~2018.~~2019.

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 Statements Regarding Forward-Looking Statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing or in our most recent Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017.~~2018. 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, has a first fiscal quarter that ends on the 30th of June for each year that is referenced. Our insurance company subsidiaries have a first quarter that ends on the 31st 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. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the presentation of financial position or results of operations. We disclose any material events, if any, occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years ~~2017~~2018 and ~~2016~~2017 correspond to fiscal ~~2018~~2019 and ~~2017~~2018 for AMERCO.

Overall Strategy

Our overall strategy is to maintain our leadership position in the ~~North American~~United States and Canada “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 strategy, 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 moving rental equipment, convenient self-storage rental facilities, portable moving and storage units 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 moving and storage units available for rent, expanding the number of independent dealers in our network and expanding and taking advantage of our eMove® capabilities.

Property and Casualty Insurance is focused on providing and administering property and casualty insurance to U-Haul and its customers, its independent dealers and affiliates.

Life Insurance is focused on long term capital growth through direct writing and reinsuring of life insurance, Medicare supplement 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 wholly-owned subsidiaries of U-Haul and Real Estate,
Property and Casualty Insurance, comprised of Repwest and its wholly-owned subsidiaries and ARCOA, and
Life Insurance, comprised of Oxford and its wholly-owned subsidiaries.

Moving and Storage

Moving and Storage consists of the rental of trucks, trailers, portable moving and storage units, 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 availability 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 the moving process. We are committed to providing a complete line of products selected with the “do-it-yourself” moving and storage customer in mind.

uhaul.com® is an online marketplace that connects consumers to our operations as well as independent Moving Help® service providers and thousands of independent Self-Storage Affiliates. Our network of customer rated affiliates and service providers furnish pack and load help, cleaning help, self-storage and similar services ~~all over~~throughout the United States and Canada. Our goal is to further utilize our web-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 sharing helps reduce greenhouse gas emissions and reduces the inventory of 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 that 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

Property and Casualty Insurance provides loss adjusting and claims handling for U-Haul through regional offices across the United States and Canada. Property and Casualty Insurance also underwrites components of the Safemove®, Safetow®, Safemove Plus®, Safestor® and Safestor Mobile® protection 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 Property and Casualty Insurance includes offering property and casualty insurance products in other U-Haul® related programs.

Life Insurance

Life Insurance 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 GAAP in the United States. The methods, estimates and judgments 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 the need to estimate matters that are inherently uncertain.

Following is a detailed description of 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 particular 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 liabilities that are not readily apparent from other sources. Actual amounts may differ from these estimates under different assumptions and ~~conditions;~~conditions and 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 most critical to us, and involve the most difficult, subjective or complex judgments include the following:

Principles of Consolidation

We apply Accounting Standards Codification (“ASC”) 810 - Consolidation (“ASC 810”) in our principles of consolidation. ASC 810 addresses arrangements where a company does not hold a majority of the voting or similar interests of a variable interest entity (“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 effective 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 relationship 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(ies) have a variable 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 facts and circumstances of any ~~reconsideration~~triggering events.

Recoverability of Property, Plant and Equipment

Our property, plant and equipment is 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-rental equipment 3-55 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 estimated 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. As a result of the changes in IRS regulations regarding the capitalization of assets, beginning in the first quarter of fiscal 2017, the Company has changed its depreciation policy to raise the value threshold before certain assets are capitalized. This change in procedure results in the immediate recognition of reported operating costs with a lagging decrease in depreciation expense over the term that these assets would have been depreciated. Due to this change, we had additional operating expenses of ~~$6.3~~$5.1 million and ~~$4.6~~$6.3 million in the first quarter of fiscal ~~2018~~2019 and ~~2017,~~2018, respectively. This change in procedure is expected to benefit the Company through the immediate recognition of tax deductible costs.

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.

Management determined that additions to the fleet resulting from purchases 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 ~~20%~~15% by the end of year fifteen. ~~Beginning in~~Prior to October 2012, rental equipment subject to this depreciation schedule ~~will be~~was depreciated to a salvage value of ~~15%~~20%. Comparatively, a standard straight-line approach would reduce the book value by approximately 5.7% per year over the life of the truck.

~~truck.~~

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 condition 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 the United States and Canada, on our website at uhaul.com/trucksales or by phone at 1-866-404-0355. 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 of 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 payments to be made on insurance claims for reported losses and estimates of losses incurred, but not yet reported (“IBNR”). Liabilities for annuity contracts consist of contract account balances that accrue to the benefit of the policyholders.

Insurance reserves for Property and Casualty Insurance 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 IBNR losses, both reduced by applicable reinsurance 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 excess workers’ compensation policies written by Repwest during 1983 through 2001, it may take a number of years for claims to be fully reported and finally settled.

On a regular basis management reviews insurance 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:~~including:

Claimant longevity
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 economic conditions including inflation

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

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

Impairment of Investments

Investments are evaluated pursuant 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: our 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 value is recognized in the current period operating results. There were no write downs in the first quarter of fiscal ~~2018~~2019 or ~~2017.~~2018.

Income Taxes

~~AMERCO files~~We file a consolidated tax return with all of ~~its~~our legal subsidiaries.

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.

Fair Values

Fair values of cash equivalents approximate carrying value due to the short period of time to maturity. Fair values of short term investments, investments available-for-sale, long term investments, mortgage loans and notes on real estate, and interest rate swap contracts are based on quoted market prices, dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded value.

Our financial instruments that are exposed to concentrations of credit risk consist primarily of temporary cash investments, trade receivables, reinsurance recoverables and notes receivable. Limited credit risk exists on trade receivables due to the diversity of our customer base and their dispersion across broad geographic markets. We place our temporary cash investments with financial institutions and limit the amount of credit exposure to any one financial institution.

We have mortgage receivables, which potentially expose us to credit risk. The portfolio of notes is principally collateralized by self-storage facilities and commercial properties. We have not experienced any material losses related to the notes from individual or groups of notes in any particular industry or geographic area. The estimated fair values were determined using the discounted cash flow method and using interest rates currently offered for similar loans to borrowers with similar credit ratings.

The carrying amount of long term debt and short term borrowings are estimated to approximate fair value as the actual interest rate is consistent with the rate estimated to be currently available for debt of similar term and remaining maturity.

Other investments, including short term investments are substantially current or bear reasonable interest rates. As a result, the carrying values of these financial instruments approximate fair value.

Adoption of New Accounting Pronouncements

In ~~October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-17,~~ ~~Interests Held through Related Parties That Are under Common Control~~, which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under ASU 2016-17, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. As a result of ASU 2016-17, in certain cases, previous consolidation conclusions may change. We adopted this standard in the first quarter of fiscal 2018. The adoption of this standard did not have a material impact on our consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other provisions, the new guidance requires the fair value measurement of investments in certain equity securities. For investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. All changes in measurement will be recognized in net income. The guidance iswas effective for interim periods and annual period beginning after December 15, 2017. Early adoption iswas not permitted, except for certain provisions relating to financial liabilities. We ~~are currently evaluating~~adopted this standard in the ~~impact~~first quarter of fiscal 2019 and recorded an increase of approximately $9.7 million to retained earnings with a corresponding decrease to accumulated other comprehensive income (loss).

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The effective date of ASU 2016-15 was for interim and annual reporting periods beginning after December 15, 2017. Early adoption was permitted. We adopted this standard in the first quarter of fiscal 2019. The adoption of this standard did not have a material impact on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This update was effective for fiscal years beginning after December 31, 2017, and interim periods within those fiscal years with early adoption permitted. We adopted this standard in the first quarter of fiscal 2019. The adoption of this standard did not have a material impact on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash. The new guidance requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statements of cash flows include restricted cash and restricted cash equivalents. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, companies will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. Companies will also need to disclose information about the nature of the restrictions. This update became effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We adopted this standard in the first quarter of fiscal 2019. The adoption of this standard did not have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. This update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This update became effective for fiscal years beginning after December 15, 2017, including interim periods within those years. We adopted this standard in the first quarter of fiscal 2019. The adoption of this standard did not have a material impact on our consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how companies that sponsor defined benefit pension plans present the related net periodic benefit cost in the income statement. The service cost component of the net periodic benefit cost will continue to be presented in the same income statement line items, however other components of the net periodic benefit cost will be presented as a component of other income and excluded from operating profit. ASU 2017-07 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. We adopted this standard in the first quarter of fiscal 2019. We report the current service cost component of net periodic benefit cost in Operating expenses on our condensed consolidated statements of operations and report the Other components of net periodic benefit cost as a separate item outside of earnings from operations. We have applied these changes in presentation retrospectively, which resulted in a decrease in earnings from operations of $0.2 million for the quarter ended June 30, 2017. These changes in presentation did not result in any changes to earnings available to common stockholders or earnings per common share. Details of the net periodic costs are provided in Note 13, Employee Benefit Plans, of the Notes to Condensed Consolidated Financial Statements.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases – (Topic 842). This update will require lessees to recognize all leases with terms greater than 12 months on their balance sheet as lease liabilities with a corresponding right-of-use asset. This update maintains the dual model for lease accounting, requiring leases to be classified as either operating or finance, with lease classification determined in a manner similar to existing lease guidance. The basic principle is that leases of all types convey the right to direct the use and obtain substantially all the economic benefits of an identified asset, meaning they create an asset and liability for lessees. Lessees will classify leases as either finance leases (comparable to current capital leases) or operating leases (comparable to current operating leases). Costs for a finance lease will be split between amortization and interest expense, with operating leases reporting a single lease ~~expense reported for operating leases.~~expense. This update will also ~~will~~ require both qualitative and quantitative disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; however, early adoption is permitted. We have determined that the provisions of ASU 2016-02 may result in an increase in assets to recognize the present value of the lease obligations with a corresponding increase in liabilities. We are still in the process of determining the impact on our consolidated financial statements. For the last ten years, we have reported a discounted estimate of the off-balance sheet lease obligations in our MD&A.

In ~~June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments – Credit Losses (Topic 326)~~. This update will require that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. This update will become effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of this standard on our consolidated financial statements.

Results of Operations

AMERCO and Consolidated Entities

Quarter Ended June 30, ~~2017~~2018 compared with the Quarter Ended June 30, ~~2016~~2017

Listed below, on a consolidated basis, are revenues for our major product lines for the first quarter of fiscal ~~2018~~2019 and the first quarter of fiscal ~~2017:~~2018:

		Quarter Ended June 30,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands)				(In thousands)
Self-moving equipment rentals	$	669,858	$	646,336	$	716,602	$	669,858
Self-storage revenues		76,718		67,722		86,212		76,718
Self-moving and self-storage products and service sales		78,911		77,303		79,241		78,911
Property management fees		6,762		6,604		7,416		6,762
Life insurance premiums		39,091		40,892		36,888		39,091
Property and casualty insurance premiums		11,815		11,255		12,781		11,815
Net investment and interest income		27,217		27,331		24,605		27,217
Other revenue		47,553		45,748		55,832		47,553
Consolidated revenue	$	957,925	$	923,191	$	1,019,577	$	957,925

Self-moving equipment rental revenues increased ~~$23.5~~$46.7 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017. Revenue gains were the result of increases in both one-way~~2018. One-way and in-town ~~transactions.~~transactions both increased leading to the improved revenue results. Sales of our Safemove® and related protection packages contributed to the revenue growth. Compared to the same period last year, we increased the number of retail locations, independent dealers, box trucks, trailers and towing devices in the rental fleet. ~~Additionally, we continued with the expansion of our independent dealer network as well as Company-owned locations.~~

Self-storage revenues increased ~~$9.0~~$9.5 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017.~~2018. The average monthly amount of occupied square feet increased by ~~8.1%~~10.7% during the first quarter of fiscal ~~2018~~2019 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of improved rates per square foot, occupancy gains at existing locations and from the addition of new facilities to the portfolio. Over the last twelve months, we added approximately ~~3.1~~4.3 million net rentable square feet or a ~~12.4%~~15.5% increase, with approximately ~~0.7~~1.4 million of that coming on during the first quarter of fiscal ~~2018.~~2019.

Sales of self-moving and self-storage products and services increased ~~$1.6~~$0.3 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017. Increases were recognized in the sales of moving supplies and towing accessories and related installations.~~2018.

Life insurance premiums decreased ~~$1.8~~$2.2 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017~~2018 due primarily to decreased life and Medicare supplement premiums.

Property and casualty insurance premiums increased ~~$0.6~~$1.0 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017~~2018 due to an increase in Safetow® and Safestor® sales, which is a reflection of the increased equipment and storage rental transactions.

~~Other revenue increased $1.8~~Net investment and interest income decreased $2.6 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017,~~2018. Updated accounting guidance now requires changes in the market value of equity securities held for investment at our insurance subsidiaries to be recognized through income. This accounted for $1.2 million of the decrease during the quarter. The remainder of the decrease was from gains recognized during the first quarter of fiscal 2018 from mortgage loan payoffs that did not recur in the first quarter of this year.

Other revenue increased $8.3 million during the first quarter of fiscal 2019, compared with the first quarter of fiscal 2018, primarily coming from our U-Box® program.

As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $1,019.6 million for the first quarter of fiscal 2019, compared with $957.9 million for the first quarter of fiscal ~~2018, compared with $923.2 million for the first quarter of fiscal 2017.~~2018.

Listed below are revenues and earnings from operations at each of our operating segments for the first quarter of fiscal ~~2018~~2019 and the first quarter of fiscal ~~2017.~~2018. The insurance ~~companies~~companies’ first quarters ended March 31, ~~2017~~2018 and ~~2016.~~2017.

		Quarter Ended June 30,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands)				(In thousands)
Moving and storage
Revenues	$	882,527	$	845,831	$	947,885	$	882,527
Earnings from operations before equity in earnings of subsidiaries		220,508		248,505		200,395		220,740
Property and casualty insurance
Revenues		16,106		16,885		15,889		16,106
Earnings from operations		5,436		7,503		2,713		5,436
Life insurance
Revenues		60,656		61,795		57,863		60,656
Earnings from operations		3,436		3,916		1,881		3,436
Eliminations
Revenues		(1,364)		(1,320)		(2,060)		(1,364)
Earnings from operations before equity in earnings of subsidiaries		(349)		(367)		(285)		(349)
Consolidated Results
Consolidated results
Revenues		957,925		923,191		1,019,577		957,925
Earnings from operations		229,031		259,557		204,704		229,263

Total costs and expenses increased ~~$65.3~~$86.2 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017. The Moving and Storage segment accounted for $64.7 million of the increase.~~2018. Operating expenses for Moving and Storage increased ~~$30.4~~$79.8 million, largely from increased ~~personnel costs,~~ equipment maintenance, personnel, shipping costs associated with U-Box and property ~~tax. Depreciation expense increased $17.4~~taxes. Repair costs accounted for $40.8 million ~~due to~~of the ~~additional amount~~increase with the majority of ~~equipment in~~this associated with the ~~rental fleet. Gains~~portion of the fleet nearing resale. Net gains from the disposal of ~~property, plant and~~rental equipment ~~decreased $13.9~~increased $11.2 million. Compared with fiscal 2018, we have sold more used trucks and the ~~first quarter of last year, the trucks we are selling had a higher~~ average ~~cost and we are receiving lower average~~sales proceeds per ~~unit. Lease~~truck were nominally better. Depreciation expense ~~decreased $2.8~~associated with our rental fleet increased $7.2 million asto $114.0 million due to a ~~result of our shift in financing new equipment~~larger fleet. Depreciation expense on ~~the balance sheet versus through operating leases.~~all other assets, largely from buildings and improvements increased $4.1 million to $28.7 million.

As a result of the above mentioned changes in revenues and expenses, earnings from operations decreased to ~~$229.0~~$204.7 million for the first quarter of fiscal ~~2018,~~2019, compared with ~~$259.6~~$229.3 million for the first quarter of fiscal ~~2017.~~2018.

Interest expense for the first quarter of fiscal ~~2018~~2019 was ~~$30.3~~$35.3 million, compared with ~~$26.4~~$30.3 million for the first quarter of fiscal ~~2017~~2018, primarily due to increased borrowings.

Income tax expense was $41.3 million for the first quarter of fiscal 2019, compared with $72.5 million for the first quarter of fiscal ~~2018,~~2018. Our effective tax rate was 24.4% of net income before taxes for fiscal 2019, compared ~~with $86.0 million for~~to 36.5% in the ~~first quarter of fiscal 2017.~~prior-year period.

As a result of the above mentioned items, earnings available to common shareholders were $127.8 million for the first quarter of fiscal 2019, compared with $126.2 million for the first quarter of fiscal ~~2018, compared with $147.2 million for the first quarter of fiscal 2017.~~2018.

Basic and diluted earnings per share for the first quarter of fiscal ~~2018~~2019 were ~~$6.44,~~$6.53, compared with ~~$7.51~~$6.44 for the first quarter of fiscal ~~2017.~~2018.

The weighted average common shares outstanding basic and diluted were 19,590,585 for the first quarter of fiscal 2019, compared with 19,587,891 for the first quarter of fiscal ~~2018, compared with 19,586,069 for the first quarter of fiscal 2017.~~2018.

Moving and Storage

Quarter Ended June 30, ~~2017~~2018 compared with the Quarter Ended June 30, ~~2016~~2017

Listed below are revenues for our major product lines at Moving and Storage for the first quarter of fiscal ~~2018~~2019 and the first quarter of fiscal ~~2017:~~2018:

		Quarter Ended June 30,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands)				(In thousands)
Self-moving equipment rentals	$	670,698	$	647,116	$	717,542	$	670,698
Self-storage revenues		76,718		67,722		86,212		76,718
Self-moving and self-storage products and service sales		78,911		77,303		79,241		78,911
Property management fees		6,762		6,604		7,416		6,762
Net investment and interest income		2,657		2,112		2,563		2,657
Other revenue		46,781		44,974		54,911		46,781
Moving and Storage revenue	$	882,527	$	845,831	$	947,885	$	882,527

Self-moving equipment rental revenues increased ~~$23.6~~$46.8 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017. Revenue gains were the result of increases in both one-way~~2018. One-way and in-town ~~transactions.~~transactions both increased leading to the improved revenue results. Sales of our Safemove® and related protection packages contributed to the revenue growth. Compared to the same period last year, we increased the number of retail locations, independent dealers, box trucks, trailers and towing devices in the rental fleet. ~~Additionally, we continued with the expansion of our independent dealer network as well as Company-owned locations.~~

Self-storage revenues increased ~~$9.0~~$9.5 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017.~~2018. The average monthly amount of occupied square feet increased by ~~8.1%~~10.7% during the first quarter of fiscal ~~2018~~2019 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of improved rates per square foot, occupancy gains at existing locations and from the addition of new facilities to the portfolio. Over the last twelve months, we added approximately ~~3.1~~4.3 million net rentable square feet or a ~~12.4%~~15.5% increase, with approximately ~~0.7~~1.4 million of that coming on during the first quarter of fiscal ~~2018.~~2019.

Sales of self-moving and self-storage products and services increased ~~$1.6~~$0.3 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017. Increases were recognized in the sales of moving supplies and towing accessories and related installations.~~2018.

Net investment and interest income ~~increased $0.5~~decreased $0.1 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017.~~2018.

Other revenue increased ~~$1.8~~$8.1 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017~~2018 caused primarily by the U-Box® program.

We own and manage 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,		Quarter Ended June 30,
	2017	2016	2018	2017
	(Unaudited)		(Unaudited)
	(In thousands, except occupancy rate)		(In thousands, except occupancy rate)
Room count as of June 30	328	287	383	328
Square footage as of June 30	28,044	24,941	32,394	28,044
Average monthly number of rooms occupied	237	219	262	237
Average monthly occupancy rate based on room count	73.0%	77.4%	69.6%	73.0%
Average monthly square footage occupied	21,383	19,791	23,666	21,383

Total costs and expenses increased ~~$64.7~~$85.7 million during the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017.~~2018. Operating expenses increased ~~$30.4~~$79.8 million largely from increased ~~personnel costs,~~ equipment maintenance, personnel, shipping costs associated with U-Box and property ~~tax. Depreciation expense increased $17.4~~taxes. Repair costs accounted for $40.8 million ~~due to~~of the ~~additional amount~~increase with the majority of ~~equipment in~~this associated with the ~~rental fleet. Gains~~portion of the fleet nearing resale. Net gains from the disposal of ~~property, plant and~~rental equipment ~~decreased $13.9~~increased $11.2 million. Compared with fiscal 2018, we have sold more used trucks and the ~~first quarter of last year, the trucks we are selling had a higher~~ average ~~cost and we are receiving lower average~~sales proceeds per ~~unit. Lease~~truck were nominally better. Depreciation expense ~~decreased $2.8~~associated with our rental fleet increased $7.2 million asto $114.0 million due to a ~~result of our shift in financing new equipment~~larger fleet. Depreciation expense on ~~the balance sheet versus through operating leases.~~all other assets, largely from buildings and improvements increased $4.1 million to $28.7 million.

As a result of the above mentioned changes in revenues and expenses, earnings from operations for Moving and Storage before consolidation of the equity in the earnings of the insurance subsidiaries, decreased to ~~$220.5~~$200.4 million for the first quarter of fiscal ~~2018,~~2019, compared with ~~$248.5~~$220.7 million for the first quarter of fiscal ~~2017.~~2018.

Equity in the earnings of AMERCO’s insurance subsidiaries was $3.7 million for the first quarter of fiscal 2019, compared with $5.8 million for the first quarter of fiscal ~~2018, compared with $7.6 million for the first quarter of fiscal 2017.~~2018.

As a result of the above mentioned changes in revenues and expenses, earnings from operations decreased to ~~$226.3~~$204.1 million for the first quarter of fiscal ~~2018,~~2019, compared with ~~$256.1~~$226.6 million for the first quarter of fiscal ~~2017.~~2018.

Property and Casualty Insurance

Quarter Ended March 31, ~~2017~~2018 compared with the Quarter Ended March 31, ~~2016~~2017

Net premiums were ~~$11.8~~$13.3 million and ~~$11.3~~$11.8 million for the quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, 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 storage transactions at U-Haul during the same period.

Net investment and interest income was ~~$4.3~~$2.5 million and $5.6 million for quarters ended March 31, 2017 and 2016, respectively. The main driver of the decrease in net investment income was the decrease in net realized gains to $0.6 million in 2017 from $2.1 million in 2016.

~~Net operating expenses were $8.2 million and $6.3~~$4.3 million for the quarters ended March 31, 2018 and 2017, ~~and 2016,~~ respectively. Updated accounting guidance now requires changes in the market value of equity securities held for investment to be recognized through income. This accounted for $1.2 million of the decrease during the quarter.

~~Benefits and losses incurred~~Net operating expenses were ~~$2.4~~$8.7 million and ~~$3.1~~$8.2 million for the quarters ended March 31, 2018 and 2017, respectively, primarily driven by larger commission spend from top line growth.

Benefits and ~~2016,~~losses incurred were $4.5 million and $2.4 million for the quarters ended March 31, 2018 and 2017, respectively, ~~as a result~~with $1.0 million of ~~a $0.7 million improvement in loss experience~~the increase is associated with new business that was not in force for the ~~moving and storage related insurance business.~~prior year quarter.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were ~~$5.4~~$2.7 million and ~~$7.5~~$5.4 million for the ~~three months~~quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively.

Life Insurance

Quarter Ended March 31, ~~2017~~2018 compared with the Quarter Ended March 31, ~~2016~~2017

Net premiums were ~~$39.1~~$36.9 million and ~~$40.9~~$39.1 million for the quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively. Medicare Supplement premiums decreased by ~~$1.4~~$3.3 million due to ~~the reduction~~reductions in new sales and declined premiums on the ~~run off~~existing business, partially offset by rate increases on renewal premiums. ~~A remaining decrease~~All other lines of ~~$0.4~~business combined for a $1.1 million ~~was from reduced supplemental contract considerations and life insurance premiums.~~increase. Deferred annuity deposits were ~~$95.4~~$61.3 million or ~~$39.7~~$34.1 million ~~above~~below prior year and are accounted for on the balance sheet as deposits rather than premiums.

Net investment and interest income was ~~$20.7~~$19.9 million and ~~$20.0~~$20.7 million for the quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively. Realized gains from ~~our~~ fixed maturities ~~portfolio increased by $1.2 million compared with the prior year quarter while investment income decreased by $0.5 million. The prior year quarter investment income included an~~and additional ~~$4.1 million gain~~gains from our mortgage loan ~~portfolio compared with $0.4~~portfolios decreased $1.6 million, partially offset by a $0.9 million increase in investment and interest income due to a larger invested asset base.

Net operating expenses were $5.9 million and $5.6 million for the ~~current year quarter.~~quarters ended March 31, 2018 and 2017, respectively. A minor increase in general expenses was partially offset by the decrease in Medicare Supplement commissions from the reduced business in force.

~~Net operating expenses~~Benefits and losses incurred were ~~$5.6~~$44.1 million and ~~$6.0~~$45.3 million for the quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively. The decrease was primarily due to a ~~reduction in commission expense from decreased Medicare supplement premiums.~~

~~Benefits and losses incurred were $45.3~~$2.9 million and $43.9 million for the quarters ended March 31, 2017 and 2016, respectively. The increase was primarily due to a $2.6 million increase in interest credited to policyholders as a result of the increased annuity deposit base along with $0.9 million from life insurance benefits. Partially offsetting this was a $1.8 million decreasereduction in Medicare supplement benefits from ~~an improved benefit to premium ratio and~~the declined policies in force. All other lines of business accounted for a ~~$0.3~~$1.7 million ~~decrease in supplemental contract and immediate annuity payouts.~~increase.

Amortization of deferred acquisition costs (“DAC”), sales inducement asset (“SIA”) and the value of business acquired (“VOBA”) was ~~$6.3~~$6.0 million and ~~$7.9~~$6.3 million for the quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively. The decrease was primarily due to an additional ~~$2.5 million~~DAC amortization in the first quarter of ~~the~~ prior year ~~quarter~~ generated by added gains on discounted mortgage loan ~~investments.~~investments and realized gains partially offset by the increased amortization from a larger DAC asset in the current quarter.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were ~~$3.4~~$1.9 million and ~~$3.9~~$3.4 million for the quarters ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively.

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 the foreseeable future. There are many factors which could affect our liquidity, including some which are beyond our control, and there is no assurance that future cash flows and liquidity resources will be sufficient to meet our outstanding debt obligations and our other future capital needs.

AtAs of June 30, ~~2017,~~2018, cash and cash equivalents totaled ~~$803.5~~$650.1 million, compared with ~~$697.8~~$759.4 million at March 31, ~~2017.~~2018. The assets of our insurance subsidiaries are generally unavailable to fulfill the obligations of non-insurance operations (Moving and Storage). As of June 30, ~~2017~~2018 (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)		Moving & Storage		Property & Casualty Insurance (a)		Life Insurance (a)
		(Unaudited)						(Unaudited)
		(In thousands)						(In thousands)
Cash and cash equivalents	$	748,823	$	8,291	$	46,408	$	618,300	$	5,119	$	26,920
Other financial assets		166,604		437,225		1,833,417		137,664		455,638		2,025,150
Debt obligations		3,386,851		–		–		3,586,127		–		–

(a) As of March 31, 2017

(a) As of March 31, 2018

AtAs of June 30, ~~2017,~~2018, Moving and Storage had additional cash available under existing credit facilities of ~~$77.0~~$220.0 million.

Net cash provided by operating activities ~~increased $35.6~~decreased $7.0 million in the first quarter of fiscal ~~2018~~2019 compared with the first quarter of fiscal ~~2017.~~2018. The insurance subsidiaries accounted for $6.2 million of the decrease. Moving and Storage operating cash flows were negatively affected by the end of the month falling on a weekend; this pushed the receipt of credit card receipts into the following month.

Net cash used in investing activities increased ~~$64.8~~$36.4 million in the first quarter of fiscal ~~2018,~~2019, compared with the first quarter of fiscal ~~2017.~~2018. Purchases of property, plant and equipment, which are reported net of cash from sales and lease-back transactions, increased ~~$43.0~~$67.9 million. Cash from the sales of property, plant and equipment ~~decreased $4.9~~increased $45.2 million largely due to reduced fleet sales. For our insurance subsidiaries, net cash used in investing activities ~~increased $20.9~~decreased $16.0 million due to additional investment purchases.

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 consisted of new rental equipment acquisitions and the buyouts of existing fleet from leases. The capital to fund these expenditures has historically been obtained 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 that during fiscal ~~2018,~~2019, we will reinvest in our truck and trailer rental fleet approximately ~~$440~~$450 million, net of equipment sales excluding any lease buyouts. Through the first quarter of fiscal ~~2018,~~2019, we have invested, net of equipment sales, ~~$256~~$254 million before any lease buyouts in our truck and trailer fleet of this projected amount. Fleet investments in fiscal ~~2018~~2019 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 ~~2018~~2019 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 acquisition 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 first quarter of fiscal ~~2018,~~2019, we invested ~~$142.5~~$219 million in real estate acquisitions, new construction and renovation and major ~~repair.~~repairs. For fiscal ~~2018,~~2019, 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 U-Haul Storage Affiliate program, which does not require significant capital.

Net capital expenditures (purchases of property, plant and equipment less proceeds from the sale of property, plant and equipment and lease proceeds) were ~~$337.9~~$360.6 million and ~~$290.1~~$337.9 million for the first quarter of fiscal ~~2018~~2019 and ~~2017,~~2018, respectively. The components of our net capital expenditures are provided in the following table:

		Quarter Ended June 30,				Quarter Ended June 30,
		2017		2016		2018		2017
		(Unaudited)				(Unaudited)
		(In thousands)				(In thousands)
Purchases of rental equipment	$	396,068	$	418,975	$	440,350	$	396,068
Equipment lease buyouts		–		7,864		2,633		–
Purchases of real estate, construction and renovations		142,499		123,531		219,196		142,499
Other capital expenditures		29,083		30,289		12,871		29,083
Gross capital expenditures		567,650		580,659		675,050		567,650
Less: Lease proceeds		(87,391)		(143,372)		(126,903)		(87,391)
Less: Sales of property, plant and equipment		(142,343)		(147,196)		(187,546)		(142,343)
Net capital expenditures		337,916		290,091		360,601		337,916

Moving and Storage 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 companies. As a result, Property and Casualty Insurance’s assets are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

We believe that stockholder’s equity at Property and Casualty Insurance remains sufficient and we do not believe that its ability to pay ordinary dividends to AMERCO will be restricted per state regulations.

Property and Casualty Insurance’s stockholder’s equity was ~~$186.4~~$208.3 million and ~~$180.9~~$211.2 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. The increase resulted from net earnings of ~~$3.6~~$2.2 million, ~~and an increase~~a decrease in other comprehensive income of ~~$1.9 million.~~$14.8 million, and a one-time reclass of $9.7 million between other comprehensive income and beginning retained earnings due to the implementation of ASU 2016-01. Property and Casualty Insurance does not use debt or equity issues to increase capital and therefore has no direct exposure to capital market conditions other than through its investment portfolio.

Life Insurance

Life Insurance manages its financial assets to meet policyholder and other obligations including investment contract withdrawals and deposits. Life Insurance’s net deposits for the quarter ended March 31, ~~2017~~2018 were ~~$101.2~~$37.6 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, Life Insurance’s funds are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

Life Insurance’s stockholder’s equity was ~~$303.4~~$309.6 million and ~~$296.1~~$332.9 million atas of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. The ~~increase~~decrease resulted from ~~net earnings of $2.2 million and an increase~~a reduction in other comprehensive income of ~~$5.1~~$24.8 million primarily due to the effect of interest rate changes on the fixed maturity portion of the investment ~~portfolio.~~portfolio, offset by net earnings of $1.5 million. Life Insurance has not historically used debt or equity issues to increase capital and therefore has not had any significant direct exposure to capital market conditions other than through its investment portfolio. However, as of March 31, ~~2017,~~2018, Oxford had outstanding deposits of $60.0 million through ~~their~~its membership in the FHLB system. For a more detailed discussion of this deposit, please see Note 4, Borrowings, of the Notes to Condensed Consolidated Financial Statements.

Cash Provided from Operating Activities by Operating Segments

Moving and Storage

Net cash provided from operating activities were ~~$372.6~~$351.5 million and ~~$348.8~~$352.3 million for the first quarter of fiscal 2019 and 2018, respectively. Moving and ~~2017, respectively.~~Storage operating cash flows were negatively affected by the end of the month falling on a weekend; this pushed the receipt of credit card receipts into the following month.

Property and Casualty Insurance

Net cash provided by operating activities were ~~$2.7~~$3.6 million and ~~$3.2~~$2.7 million for the first quarters ended March 31, 2018 and 2017, ~~and 2016,~~ respectively. The increase was the result of increased underwriting profit.

Property and Casualty Insurance’s cash and cash equivalents and short-term investment portfolios amounted to ~~$11.6~~$9.4 million and ~~$20.7~~$11.6 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. These balances reflect 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 Property and Casualty Insurance to schedule cash needs in accordance with investment and underwriting proceeds.

Life Insurance

Net cash provided by operating activities were ~~$21.3~~$14.2 million and ~~$9.1~~$21.3 million for the first quarter ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively. The ~~increase in operating cash flows~~decrease was primarily due to the timing of settlement of payables, offset by ~~a decrease~~an increase resulting from a reduction in paid commissions and federal income ~~tax payment.~~tax.

In addition to cash flows from operating activities and financing activities, a substantial amount of liquid funds are available through Life Insurance’s short-term portfolio and its membership in the FHLB. AtAs of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, cash and cash equivalents and short-term investments amounted to ~~$50.2~~$27.1 million and ~~$20.6~~$50.7 million, respectively. 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 capital 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, rental equipment and storage acquisitions and build outs.

Our borrowing strategy is primarily focused on asset-backed financing and rental equipment leases. As part of this strategy, we seek to ladder maturities and ~~hedge floating rate loans through the use of~~fix interest ~~rate swaps.~~rates. While each of these loans typically contains 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 believes it has adequate liquidity between cash 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. AtAs of June 30, ~~2017,~~2018, we had available borrowing capacity under existing credit facilities of ~~$77.0~~$220.0 million. It is possible that circumstances beyond our control could alter the ability of the financial institutions to lend us the unused lines of credit. We 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

Certain assets 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 requires that financial assets and liabilities recorded at fair value be classified and disclosed in a Level 1, Level 2 or Level 3 category. For more information, please see Note 14, Fair Value Measurements, of the Notes to Condensed Consolidated Financial Statements.

The available-for-sale securities held by us 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. AtAs of June 30, ~~2017,~~2018, we had $0.3 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 Obligations 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, Management’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, ~~2017.~~2018.

Off-Balance Sheet Arrangements

We use 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 ~~2019.~~2024. In the event of a shortfall in proceeds from the sales of the underlying rental equipment assets, we have guaranteed ~~$16.5~~$14.2 million of residual values atas of June 30, ~~2017~~2018 for these assets at the end of their respective lease terms. We have been leasing rental equipment since 1987. To date, we have not experienced 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 ~~$33.8~~$21.5 million atas of June 30, ~~2017.~~2018.

Historically, we have used off-balance sheet arrangements in connection with the expansion of our self-storage business. For more information please see Note 10, Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements. These arrangements were primarily used when our overall borrowing structure was more limited. We do not face similar limitations currently and off-balance sheet arrangements have not been utilized in our self-storage expansion in recent years. 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. SAC Holdings, Four SAC Self-Storage Corporation (“4 SAC”), Five SAC Self-Storage Corporation (“5 SAC”), Galaxy Investments, L.P. (“Galaxy”) and Private Mini are substantially controlled by Blackwater. Blackwater is wholly-owned by WGHLP, which is owned by Mark V. Shoen (a significant shareholder) and various trusts associated with Edward J. Shoen (our Chairman of the Board, President and a significant shareholder) and Mark V. Shoen.

We currently manage the self-storage properties owned or leased by ~~SAC Holdings,~~Blackwater and 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 management fees, exclusive of reimbursed expenses, of ~~$10.0~~$10.3 million and ~~$8.7~~$10.0 million from the above mentioned entities during the first quarter of fiscal ~~2018~~2019 and ~~2017,~~2018, 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 Willow Grove Holding LP, which is owned by Mark V. Shoen (a significant shareholder), and various trusts associated with Edward J. Shoen and Mark V. Shoen. Mark V. Shoen controls the general partner of Mercury. The limited partner interests of Mercury are indirectly owned by Mark V. Shoen, James P. Shoen (a significant shareholder) and a trust benefitting the children and ~~grandchild~~grandchildren of Edward J. Shoen (our Chairman of the Board, President and a significant shareholder).

We lease space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of ~~SAC Holdings, 5 SAC and Galaxy.~~Blackwater. Total lease payments pursuant to such leases were $0.7 million in the first quarters of both fiscal ~~2018~~2019 and ~~2017, respectively.~~2018. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us.

AtAs of June 30, 2017, subsidiaries of ~~SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini~~Blackwater 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 ~~$15.9~~$16.5 million and ~~$15.8~~$15.9 million in commissions pursuant to such dealership contracts during the first quarter of fiscal 2019 and 2018, ~~and 2017,~~ respectively.

During the first quarter of fiscal 2018, a subsidiary of ours held a junior unsecured note 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 $1.2 million and $1.2 million, and received cash interest payments of $1.1 million and $1.1 million, from SAC Holdings during the first quarter of fiscal 2018 and 2017, respectively. The largest aggregate amount of the note receivable outstanding during the first quarter of fiscal 2018 was $48.1 million and the aggregate note receivable balance at June 30, 2017 was $47.8 million. In accordance with the terms of this note, SAC Holdings may prepay the note without penalty or premium at any time. We are currently negotiating to extend this note. The scheduled maturity of this note is 2017.

These agreements ~~along with a note~~ with subsidiaries of ~~SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini,~~Blackwater, excluding Dealer Agreements, provided revenues of ~~$7.4~~$6.2 million, expenses of $0.7 million and cash flows of ~~$6.6~~$5.4 million during the first quarter of fiscal ~~2018.~~2019. Revenues and commission expenses related to the Dealer Agreements were ~~$72.8~~$75.4 million and ~~$15.9~~$16.5 million, respectively during the first quarter of fiscal ~~2018.~~2019.

Fiscal ~~2018~~2019 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 goals. 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 primarily due to ~~unforseen~~unforeseen events including adverse economic conditions or heightened competition that is beyond our control.

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 financial 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. Following is a summary of our interest rate swap agreements atas of June 30, ~~2017:~~2018:

Notional Amount

Fair Value

Effective Date

Expiration Date

Fixed Rate

Floating Rate

(Unaudited)

(In thousands)

$
127,778

$
(3,389)

8/18/2006

8/10/2018

5.43%

1 Month LIBOR

4,563
(a)

(2)

8/15/2010

7/15/2017

2.15%

1 Month LIBOR

8,750
(a)

(77)

6/1/2011

6/1/2018

2.38%

1 Month LIBOR

17,833
(a)

(88)

8/15/2011

8/15/2018

1.86%

1 Month LIBOR

7,050
(a)

(29)

9/12/2011

9/10/2018

1.75%

1 Month LIBOR

7,388
(b)

5

3/28/2012

3/28/2019

1.42%

1 Month LIBOR

9,792

29

4/16/2012

4/1/2019

1.28%

1 Month LIBOR

18,675

198

1/15/2013

12/15/2019

1.07%

1 Month LIBOR

(a) forward swap

(b) operating lease

Notional Amount

Fair Value

Effective Date

Expiration Date

Fixed Rate

Floating Rate

(Unaudited)

(In thousands)

$

60,555

$

(338)

8/18/2006

8/10/2018

5.43%

1 Month LIBOR

15,417

(a)

5

8/15/2011

8/15/2018

1.86%

1 Month LIBOR

6,200

(a)

4

9/12/2011

9/10/2018

1.75%

1 Month LIBOR

5,774

(b)

35

3/28/2012

3/28/2019

1.42%

1 Month LIBOR

8,542

62

4/16/2012

4/1/2019

1.28%

1 Month LIBOR

16,650

316

1/15/2013

12/15/2019

1.07%

1 Month LIBOR

(a) forward swap

(b) operating lease

As of June 30, ~~2017,~~2018, we had ~~$740.1~~$703.4 million of variable rate debt obligations and ~~$7.4~~$5.8 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 ~~$5.5~~$6.0 million annually (after consideration of the effect of the above derivative contracts). 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.

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 rates. 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 supporting these liabilities assisting management in determining an asset allocation strategy for future investments that management believes will mitigate the overall effect of interest rates.

Cautionary Statements Regarding Forward-Looking Statements

This Quarterly 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 forward-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 are not limited to, estimates of capital expenditures, plans for future operations, products or services, financing needs, plans and ~~plans,~~strategies, our perceptions of our legal positions and anticipated outcomes of government investigations 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, the impact of our compliance with environmental laws and cleanup costs, our used vehicle disposition strategy, the sources and availability of funds for our rental equipment and self-storage expansion and replacement strategies and plans, our plan to expand our U-Haul storage affiliate program, that additional leverage can be supported by our operations and business, the availability of alternative vehicle manufacturers, our estimates of the residual values of our equipment fleet, our plans with respect to off-balance sheet arrangements, our plans to continue to invest in the U-Box® program, the impact of interest rate and foreign currency exchange rate changes on our operations, the sufficiency of our capital resources and the sufficiency of capital of our insurance subsidiaries as well as assumptions relating to the foregoing. The words “believe,” “expect,” “anticipate,” “plan,” “may,” “will,” “could,” “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 uncertainties, some of which cannot be predicted or quantified. Factors that could significantly affect results include, without limitation, the degree and nature of our competition; our leverage; general economic conditions; fluctuations in our costs to maintain and update our fleet and facilities; the limited number of manufacturers that supply our rental trucks; our ability to effectively hedge our variable interest rate debt; that we are controlled by a small contingent of stockholders; ~~risks relating to our note receivable from SAC Holdings;~~ fluctuations in quarterly results and seasonality; changes in, and our compliance with, government regulations, particularly environmental regulations and regulations relating to motor carrier operations; our reliance on our third party dealer network; liability claims relating to our rental vehicles and equipment; our ability to attract, motivate and retain key employees; reliance on our automated systems and the internet; our credit ratings; our ability to recover under reinsurance arrangements and other factors described in our Annual Report on Form 10-K in Item 1A, Risk Factors, and in this Quarterly Report or the other documents we file with the SEC. The above factors, ~~the following disclosures,~~ as well as other statements in this Quarterly Report 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.~~otherwise, except as required by law.

Item 4. Controls and Procedures

Attached as exhibits to this Quarterly Report are certifications of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), 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 section titled Evaluation of Disclosure Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the CEO and CFO, conducted an evaluation of the effectiveness of the design and operation of our "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 end of the most recently completed fiscal quarter covered by this Quarterly Report. Our Disclosure Controls are designed to ensure that information required to be disclosed in our reports filed or submitted 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 ensure that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based upon the controls evaluation, our CEO and CFO have concluded that as of the end of the period covered by this Quarterly Report, our Disclosure Controls were effective at a reasonable assurance level related to the above stated design purposes.

Inherent Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, 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 costs. 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 the 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 some 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 deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control Over Financial Reporting

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


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)
	5555 Kietzke Lane, Ste. 100
	Reno, Nevada 89511
	Telephone (775) 688-6300

	N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

		The Effect of Interest Rate
		Contracts on the Statements of Operations
		Quarter Ended June 30,
		2017		2016
		(Unaudited)
		(In thousands)
Loss recognized in income on interest rate contracts	$	1,549	$	2,811
Gain recognized in AOCI on interest rate contracts (effective portion)	$	(1,550)	$	(2,081)
Loss reclassified from AOCI into income (effective portion)	$	1,550	$	2,809
(Gain) loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing)	$	(1)	$	2


Exhibit Number	Description	Page or Method of Filing
3.1	Amended and Restated Articles of Incorporation of AMERCO	Incorporated by reference to AMERCO’s Current Report on Form 8-K, filed on June 9, 2016, file no. 1-11255
3.2	Restated Bylaws of AMERCO	Incorporated by reference to AMERCO’s Current Report on Form 8-K, filed on September 5, 2013, file no. 1-11255
~~4.1~~	~~Thirtieth Supplemental Indenture, dated June 27, 2017 by and between AMERCO and U.S. Bank National Association~~	~~Incorporated by reference to AMERCO’s Current Report on Form 8-K, filed on June 27, 2017, file no. 1-11255~~
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, Chief Financial 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, Chief Financial Officer of AMERCO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished 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

Date: August ~~9, 2017~~8, 2018		/s/ Edward J. Shoen
		Edward J. Shoen
		President and Chairman of the Board
		(Duly Authorized Officer)



Date: August ~~9, 2017~~8, 2018		/s/ Jason A. Berg
		Jason A. Berg
		Chief Financial Officer
		(Principal Financial Officer)



Date: August 8, 2018		/s/ Mary K. Thompson
		Mary K. Thompson
		Chief Accounting Officer