U-Haul 2005 Annual Report Download - page 41

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40 I AMERCO ANNUAL REPORT
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Disclosures about Contractual Obligations and Commercial Commitments
The฀following฀table฀provides฀contractual฀commitments฀and฀contingencies฀as฀of฀March฀31,฀2005:
Disclosures about Contractual Obligations and Commercial Commitments
The following table provides contractual commitments and contingencies as of March 31, 2005:
Payment Due by Period (as of March 31, 2005)
Prior to 04/01/06 04/01/08 April 1, 2010
Contractual Obligations Total 03/31/06 03/31/08 03/31/10 and Thereafter
(In thousands)
Revolving credit facility, senior
secured first lien ÏÏÏÏÏÏÏÏÏÏÏ $ 84,862 $ Ì $ Ì $ 84,862 $ Ì
Interest portion on Revolving
credit facility ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,492 2,623 5,246 2,623
Senior amortizing notes,
secured, first lien, due 2009ÏÏ 346,500 3,500 7,000 336,000 Ì
Interest portion on Senior
amortizing notes ÏÏÏÏÏÏÏÏÏÏÏ 76,232 19,058 38,116 19,058
Senior notes, secured second
lien, 9%, due 2009 ÏÏÏÏÏÏÏÏÏ 200,000 Ì Ì 200,000 Ì
Interest portion on Senior notes 72,000 18,000 36,000 18,000
Senior subordinated notes,
secured, 12% due 2011ÏÏÏÏÏÏ 148,646 Ì Ì Ì 148,646
Interest portion on Senior
subordinated notes ÏÏÏÏÏÏÏÏÏ 107,028 17,838 35,676 35,676 17,838
AMERCO's operating leasesÏÏÏ 357,200 102,116 134,360 63,893 56,831
Private Mini Support
Agreement ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,888 Ì Ì Ì 2,888
Other obligationsÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,559 Ì Ì Ì 17,559
Interest portion on Other
obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,502 917 1,834 1,834 917
SAC Holding II Corporation
notes and loans* ÏÏÏÏÏÏÏÏÏÏÏ 152,562 1,331 2,751 3,464 145,016
Elimination of SAC Holding II
obligations to AMERCO ÏÏÏÏ (75,088) Ì Ì Ì (75,088)
Total contractual obligations $1,506,383 $165,383 $260,983 $765,410 $314,607
As presented above, contractual obligations on debt and guarantees represent principal payments while
contractual obligations for capital and operating leases represent the notional payments under the lease
arrangements, including anticipated future cash payments for interest on capital leases.
* These notes and loans represent obligations of SAC Holding II Corporation issued to third party lenders
and AMERCO through its subsidiaries.
Off Balance Sheet Arrangements
AMERCO used certain equipment and occupies certain facilities under operating lease commitments
with terms expiring substantially through 2034 with the exception of one land lease expiring in 2079. In the
event of a shortfall in proceeds from the sale of the underlying assets, AMERCO has guaranteed
approximately $143.9 million of residual values at March 31, 2005 for these assets at the end of the respective
lease terms. AMERCO has been leasing equipment since 1987 and, thus far, we have experienced no residual
value shortfalls. See details related to operating lease commitments in Note 16 to the consolidated financial
statements on page F-31.
The Company uses off-balance sheet arrangements where the economics and sound business principles
warrant their use. The Company's principal use of off-balance sheet arrangements occurred in connection with
33
As฀ presented฀ above,฀ contractual฀ obligations฀ on฀ debt฀ and฀
guarantees฀represent฀principal฀payments฀while฀contractual฀
obligations฀ for฀ capital฀ and฀ operating฀ leases฀ represent฀
the฀ notional฀ payments฀ under฀ the฀ lease฀ arrangements,฀
including฀ anticipated฀ future฀ cash฀ payments฀ for฀ interest฀
on฀capital฀leases.
*฀ These฀ notes฀ and฀ loans฀ represent฀ obligations฀ of฀ SAC฀
Holding฀ II฀ Corporation฀ issued฀ to฀ third฀ party฀ lenders฀
and฀AMERCO฀through฀its฀subsidiaries.
Off Balance Sheet Arrangements
AMERCO฀used฀certain฀equipment฀and฀occupies฀certain฀
facilities฀under฀operating฀lease฀commitments฀with฀terms฀
expiring฀ substantially฀ through฀ 2034฀ with฀ the฀ exception฀
of฀ one฀ land฀ lease฀ expiring฀ in฀ 2079.฀ In฀ the฀ event฀ of฀ a฀
shortfall฀ in฀ proceeds฀ from฀ the฀ sale฀ of฀ the฀ underlying฀
assets,฀AMERCO฀has฀guaranteed฀approximately฀$143.9฀
million฀ of฀ residual฀ values฀ at฀ March฀ 31,฀ 2005฀ for฀ these฀
assets฀at฀the฀end฀of฀the฀respective฀lease฀terms.฀AMERCO฀
has฀been฀leasing฀equipment฀since฀1987฀and,฀thus฀far,฀we฀
have฀experienced฀no฀residual฀value฀shortfalls.฀See฀details฀
related฀to฀operating฀lease฀commitments฀in฀Note฀16฀to฀the฀
consolidated฀financial฀statements฀on฀page฀F-31.
The฀ Company฀ uses฀ off-balance฀ sheet฀ arrangements฀
where฀ the฀ economics฀ and฀ sound฀ business฀ principles฀
warrant฀ their฀ use.฀ The฀ Company’s฀ principal฀ use฀ of฀ off-
balance฀ sheet฀ arrangements฀ occurred฀ in฀ connection฀
with฀ the฀ expansion฀ of฀ our฀ self-storage฀ business.฀ The฀
Company฀ currently฀ manages฀ the฀ self-storage฀ properties฀
owned฀by฀SAC฀Holdings฀and฀its฀affiliates,฀pursuant฀to฀a฀
standard฀form฀of฀management฀agreement฀with฀each฀SAC฀
Holdings฀subsidiary฀and฀its฀affiliates,฀pursuant฀to฀which฀
the฀ Company฀ receives฀ a฀ management฀ fee฀ based฀ on฀ the฀