U-Haul 2005 Annual Report Download - page 19

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18 I AMERCO ANNUAL REPORT
Business Description
Life฀Insurance฀Operating฀Segment
Oxford฀ Life฀ Insurance฀ Company฀ (“Oxford”)฀ originates฀
and฀reinsures฀annuities;฀credit฀life฀and฀disability;฀single฀
premium฀whole฀life;฀ group฀life฀and฀disability฀ coverage;฀
and฀ Medicare฀ supplement฀ insurance.฀ Oxford฀ also฀
administers฀the฀self-insured฀employee฀health฀and฀dental฀
plans฀for฀AMERCO.
SAC฀Holdings฀Operating฀Segment
SAC฀Holding฀Corporation฀and฀its฀subsidiaries,฀and฀SAC฀
Holding฀II฀Corporation฀and฀its฀subsidiaries,฀collectively฀
referred฀to฀as฀“SAC฀Holdings”,฀own฀self-storage฀properties฀
that฀are฀managed฀by฀U-Haul฀under฀property฀management฀
agreements.฀ AMERCO,฀ through฀ its฀ subsidiaries,฀ has฀
contractual฀ interests฀ in฀ certain฀ of฀ SAC฀ Holdings’฀
properties฀entitling฀AMERCO฀to฀potential฀future฀income฀
based฀ on฀ the฀ financial฀ performance฀of฀these฀ properties.฀
With฀respect฀to฀SAC฀Holding฀II฀Corporation,฀AMERCO฀
is฀considered฀the฀primary฀beneficiary฀of฀these฀contractual฀
interests.฀ Consequently,฀ we฀ include฀ the฀ results฀ of฀ SAC฀
Holdings฀ II฀ Corporation฀ in฀ the฀ consolidated฀ financial฀
statements฀of฀AMERCO,฀as฀required฀by฀FIN฀46(R).
Employees
As฀ of฀ March฀ 31,฀ 2005,฀ we฀ employed฀ approximately฀
18,300฀ people฀ throughout฀ North฀ America฀ and฀ 90%฀ of฀
these฀ employees฀ work฀ within฀ our฀ Moving฀ and฀ Storage฀
operating฀segment.
Sales฀and฀Marketing
We฀ promote฀ U-Haul฀ brand฀ awareness฀ through฀ direct฀
and฀ co-marketing฀ arrangements.฀ Our฀ direct฀ marketing฀
activities฀ consist฀ of฀ yellow฀ pages,฀ print฀ and฀ web฀ based฀
advertising฀ as฀ well฀ as฀ trade฀ events,฀ movie฀ cameos฀ of฀
our฀ rental฀ fleet฀ and฀ boxes,฀ and฀ industry฀ and฀ consumer฀
communications.฀Our฀rental฀equipment฀is฀our฀best฀form฀
of฀ advertisement.฀ We฀ support฀ our฀ independent฀ U-Haul฀
dealers฀ through฀ advertising฀ of฀ U-Haul฀ moving฀ and฀฀
self-storage฀rentals,฀products฀and฀services.
Our฀marketing฀plan฀includes฀maintaining฀our฀leadership฀
position฀ with฀ U-Haul฀ being฀ synonymous฀ with฀฀
“do-it-yourself”฀moving฀and฀storage.฀We฀accomplish฀this฀
by฀continually฀improving฀the฀ease฀of฀use฀and฀efficiency฀
of฀our฀rental฀equipment,฀by฀providing฀added฀convenience฀
to฀ our฀ retail฀ centers฀ through฀ independent฀ U-Haul฀
dealers,฀and฀by฀expanding฀the฀capabilities฀of฀our฀eMove฀฀
web฀site.
Competition
Moving and Storage Operating Segment
The฀moving฀truck฀and฀trailer฀rental฀industry฀is฀large฀and฀
highly฀competitive.
There฀are฀two฀distinct฀users฀of฀rental฀trucks:฀commercial฀
and฀“do-it-yourself”฀residential฀users.฀We฀focus฀primarily฀
on฀ the฀ “do-it-yourself”฀ residential฀ user.฀ Within฀ this฀
segment,฀we฀believe฀the฀principal฀competitive฀factors฀are฀
convenience฀ of฀ rental฀ locations,฀ availability฀ of฀ quality฀
rental฀ moving฀ equipment,฀ breadth฀ of฀ essential฀ products฀
and฀services,฀and฀price.
Our฀ major฀ competitors฀ in฀ the฀ moving฀ equipment฀ rental฀
market฀are฀Budget฀Car฀and฀Truck฀Rental฀Company฀and฀
Penske฀Truck฀Leasing.
The฀self-storage฀market฀is฀large฀and฀highly฀fragmented.
We฀ believe฀ the฀ principal฀ competitive฀ factors฀ in฀ this฀
industry฀ are฀ convenience฀ of฀ storage฀ rental฀ locations,฀
cleanliness,฀security฀and฀price.
Our฀ primary฀ competitors฀ in฀ the฀ self-storage฀ market฀ are฀
Public฀Storage,฀Shurgard,฀Storage฀USA฀and฀thousands฀of฀
independent฀owner-operators.
Insurance Operating Segments
The฀ highly฀ competitive฀ insurance฀ industry฀ includes฀ a฀
large฀ number฀ of฀ life฀ insurance฀ companies฀ and฀ property฀
and฀ casualty฀ insurance฀ companies.฀ In฀ addition,฀ the฀
marketplace฀ now฀ includes฀ financial฀ services฀ firms฀
offering฀both฀insurance฀and฀financial฀products.฀Some฀of฀
the฀insurance฀companies฀are฀owned฀by฀stockholders฀and฀
others฀ are฀ owned฀ by฀ policyholders.฀ Many฀ competitors฀
have฀ been฀ in฀ business฀ for฀ a฀ longer฀ period฀ of฀ time฀ or฀
possess฀ substantially฀ greater฀ financial฀ resources฀ and฀
broader฀product฀portfolios฀than฀our฀insurance฀companies.฀
We฀ compete฀ in฀ the฀ insurance฀ business฀ based฀ upon฀
price,฀ product฀ design,฀ and฀ services฀ rendered฀ to฀ agents฀฀
and฀policyholders.
Corporate Governance
Corporate฀governance฀is฀typically฀defined฀as฀the฀system฀
that฀ allocates฀ duties฀ and฀ authority฀ among฀ a฀ company’s฀
stockholders,฀ board฀ of฀ directors฀ and฀ management.฀ The฀
stockholders฀ elect฀ the฀ board฀ and฀ vote฀ on฀ extraordinary฀
matters;฀ the฀ board฀ is฀ the฀ Company’s฀ governing฀ body;฀
and฀ management฀ runs฀ the฀ day-to-day฀ operations฀ of฀฀
the฀Company.
Our฀ current฀ Board฀ members฀ are฀ William฀ E.฀ Carty,฀
John฀ M.฀ Dodds,฀ Charles฀ J.฀ Bayer,฀ John฀ P.฀ Brogan,฀฀
Daniel฀R.฀Mullen,฀M.฀Frank฀Lyons,฀James฀P.฀Shoen฀and฀
Edward฀J.฀Shoen.
Board Responsibilities and Structure
The฀ primary฀ responsibilities฀ of฀ the฀ Board฀ of฀ Directors฀
are฀oversight,฀counseling฀and฀providing฀direction฀to฀the฀
management฀of฀the฀Company฀in฀the฀long-term฀interests฀of฀
the฀Company฀and฀its฀stockholders.