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64 I AMERCO ANNUAL REPORT
These฀ leases฀ were฀ amended฀ and฀ restated฀ on฀ March฀ 15,฀
2004.฀ As฀ a฀ result,฀ we฀ paid฀ down฀ approximately฀ $31฀
million฀of฀lease฀obligations฀and฀entered฀into฀leases฀with฀a฀
three฀year฀term,฀with฀four฀one฀year฀renewal฀options.฀After฀
such฀pay฀down,฀our฀lease฀obligation฀under฀the฀amended฀and฀
restated฀synthetic฀leases฀was฀approximately฀$218.5฀million.
On฀April฀30,฀2004,฀the฀amended฀and฀restated฀leases฀were฀
terminated฀and฀the฀properties฀underlying฀these฀leases฀were฀
sold฀to฀UH฀Storage฀(DE)฀Limited฀Partnership,฀an฀affiliate฀
of฀W.฀P.฀Carey.฀U-Haul฀entered฀into฀a฀ten฀year฀operating฀
lease฀with฀W.฀P.฀Carey฀(UH฀Storage฀DE)฀for฀a฀portion฀of฀
each฀property฀(the฀portion฀of฀the฀property฀that฀relates฀to฀
U-Haul’s฀truck฀and฀trailer฀rental฀and฀moving฀supply฀sales฀
businesses).฀The฀remainder฀of฀each฀property฀(the฀portion฀
of฀the฀property฀that฀relates฀to฀self-storage)฀was฀leased฀by฀
W.฀P.฀Carey฀(UH฀Storage฀DE)฀ to฀ Mercury฀Partners,฀LP฀
(“Mercury”)฀ pursuant฀ to฀ a฀ 20฀ year฀ lease.฀ These฀ events฀
are฀ referred฀ to฀ as฀ the฀ “W.฀ P.฀ Carey฀ Transactions.”฀ As฀
a฀ result฀ of฀ the฀ W.฀ P.฀ Carey฀ Transactions,฀ we฀ no฀ longer฀
have฀a฀capital฀lease฀related฀to฀these฀properties.฀The฀terms฀
of฀ the฀ W.฀ P.฀ Carey฀ Transactions฀ provide฀ for฀ us฀ to฀ be฀
reimbursed฀for฀capital฀improvements฀we฀previously฀made฀
to฀the฀properties,฀subject฀to฀conditions,฀which฀we฀expect฀
will฀ occur฀ over฀ a฀ period฀ of฀ approximately฀ 18฀ months฀
following฀the฀closing.
The฀sales฀price฀for฀these฀transactions฀was฀$298.4฀million฀
and฀ cash฀ received฀ was฀ $298.9฀ million.฀ The฀ Company฀
realized฀a฀gain฀on฀the฀transaction฀of฀$2.7฀million,฀which฀
is฀being฀amortized฀over฀the฀life฀of฀the฀lease฀term.
As฀part฀of฀the฀W.฀P.฀Carey฀Transactions,฀U-Haul฀entered฀into฀
agreements฀to฀manage฀these฀properties฀(including฀the฀portion฀
of฀ the฀ properties฀ leased฀ by฀ Mercury).฀ These฀ management฀
agreements฀allow฀us฀to฀continue฀to฀operate฀the฀properties฀as฀
part฀of฀the฀U-Haul฀moving฀and฀self-storage฀system.
U-Haul’s฀annual฀lease฀payments฀under฀the฀new฀lease฀are฀
approximately฀ $10฀ million฀ per฀ year,฀ with฀ CPI฀ inflation฀
adjustments฀ beginning฀ in฀ the฀ sixth฀ year฀ of฀ the฀ lease.฀
The฀ lease฀ term฀ is฀ ten฀ years,฀ with฀ a฀ renewal฀ option฀ for฀
an฀additional฀ten฀years.฀Upon฀closing฀of฀the฀W.฀P.฀Carey฀
Transactions,฀we฀made฀a฀$5฀million฀security฀deposit฀and฀
an฀earn-out฀deposit฀of฀$22.9฀million.฀The฀security฀deposit฀
will฀be฀refunded฀to฀us฀at฀the฀end฀of฀the฀lease฀term.฀The฀
earn-out฀ deposit฀ will฀ be฀ refunded฀ at฀ the฀ earlier฀ of฀ the฀
achievement฀of฀certain฀property฀level฀financial฀ratios฀or฀
the฀end฀of฀the฀lease฀term.
The฀ property฀ management฀ agreement฀ we฀ entered฀ into฀
with฀ Mercury฀ provides฀ that฀ Mercury฀ will฀ pay฀ U-Haul฀ a฀
management฀fee฀based฀on฀gross฀self-storage฀rental฀revenues฀
generated฀ by฀ the฀ properties.฀ During฀ fiscal฀ 2005,฀ U-Haul฀
earned฀$1.4฀million฀in฀management฀fees฀from฀Mercury.
AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Annual Maturities of AMERCO Consolidated Notes and Loans Payable
The annual maturity of AMERCO Consolidated long-term debt as of March 31, 2005 for the next five
years and thereafter is as follows:
Year Ended
2006 2007 2008 2009 2010 Thereafter
(In thousands)
Notes payable, secured ÏÏÏÏÏÏÏÏÏÏÏ $3,500 $3,500 $3,500 $620,862 $Ì $148,646
SAC Holding II Corporation Notes and Loans Payable to Third Parties
SAC Holding II Corporation notes and loans payable at fiscal year-ends were as follows:
March 31,
2005 2004
(In thousands)
Notes payable, secured, 7.87% interest rate, due 2027 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $77,474 $78,637
On March 15, 2004, the SAC entities issued $200 million aggregate principal amount of 8.5% senior
notes due 2014 (the ""new SAC Notes''). SAC Holding Corporation and SAC Holding II Corporation are
jointly and severally liable for these obligations. The proceeds from this issuance flowed exclusively to SAC
Holding Corporation. No liability for this payable is at SAC Holding II Corporation.
Annual Maturities of SAC Holding II Corporation Notes
The annual maturity of SAC Holding II Corporation long-term debt for the next five years and thereafter
is as follows:
Year Ended
2006 2007 2008 2009 2010 Thereafter
(In thousands)
Notes payable, securedÏÏÏÏÏÏÏÏÏÏÏÏ $1,331 $1,320 $1,430 $1,664 $1,800 $69,929
Secured notes payable are secured by deeds of trusts on the collateralized land and buildings. Principal
and interest payments on notes payable to third party lenders are due monthly. Certain notes payable contain
provisions whereby the loans may not be prepaid at any time prior to the maturity date without payment to the
lender of a Yield Maintenance Premium, as defined in the loan agreements.
F-22
AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Annual Maturities of AMERCO Consolidated Notes and Loans Payable
The annual maturity of AMERCO Consolidated long-term debt as of March 31, 2005 for the next five
years and thereafter is as follows:
Year Ended
2006 2007 2008 2009 2010 Thereafter
(In thousands)
Notes payable, secured ÏÏÏÏÏÏÏÏÏÏÏ $3,500 $3,500 $3,500 $620,862 $Ì $148,646
SAC Holding II Corporation Notes and Loans Payable to Third Parties
SAC Holding II Corporation notes and loans payable at fiscal year-ends were as follows:
March 31,
2005 2004
(In thousands)
Notes payable, secured, 7.87% interest rate, due 2027 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $77,474 $78,637
On March 15, 2004, the SAC entities issued $200 million aggregate principal amount of 8.5% senior
notes due 2014 (the ""new SAC Notes''). SAC Holding Corporation and SAC Holding II Corporation are
jointly and severally liable for these obligations. The proceeds from this issuance flowed exclusively to SAC
Holding Corporation. No liability for this payable is at SAC Holding II Corporation.
Annual Maturities of SAC Holding II Corporation Notes
The annual maturity of SAC Holding II Corporation long-term debt for the next five years and thereafter
is as follows:
Year Ended
2006 2007 2008 2009 2010 Thereafter
(In thousands)
Notes payable, securedÏÏÏÏÏÏÏÏÏÏÏÏ $1,331 $1,320 $1,430 $1,664 $1,800 $69,929
Secured notes payable are secured by deeds of trusts on the collateralized land and buildings. Principal
and interest payments on notes payable to third party lenders are due monthly. Certain notes payable contain
provisions whereby the loans may not be prepaid at any time prior to the maturity date without payment to the
lender of a Yield Maintenance Premium, as defined in the loan agreements.
F-22
Amerco and Consolidated Entities
Notes to Consolidated Financial Statements, continued
Annual Maturities of AMERCO Consolidated Notes and Loans Payable
The฀annual฀maturity฀of฀AMERCO฀Consolidated฀long-term฀debt฀as฀of฀March฀31,฀2005฀for฀the฀next฀five฀years฀and฀thereafter฀
is฀as฀follows:
SAC Holding II Corporation Notes and Loans Payable to Third Parties
SAC฀Holding฀II฀Corporation฀notes฀and฀loans฀payable฀at฀fiscal฀year-ends฀were฀as฀follows:
On฀March฀15,฀2004,฀the฀SAC฀entities฀issued฀$200฀million฀
aggregate฀ principal฀ amount฀ of฀ 8.5%฀ senior฀ notes฀ due฀
2014฀(the฀“new฀SAC฀Notes”).฀SAC฀Holding฀Corporation฀
and฀SAC฀Holding฀II฀Corporation฀are฀jointly฀and฀severally฀
liable฀ for฀ these฀ obligations.฀ The฀ proceeds฀ from฀ this฀
issuance฀flowed฀exclusively฀to฀SAC฀Holding฀Corporation.฀
No฀ liability฀ for฀ this฀ payable฀ is฀ at฀ SAC฀ Holding฀ II฀
Corporation.