U-Haul 2006 Annual Report Download - page 101

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Item 7.
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 our operating segments and the strategy of our
operating segments to give the reader an overview of the goals of our business and the direction in which our
businesses and products are moving. This is followed by a discussion of the Critical Accounting Policies and
Estimates that we believe are important to understanding the assumptions and judgments incorporated in our
reported financial results. In the next section, we discuss our Results of Operations for fiscal 2006 compared with
fiscal 2005, and for fiscal 2005 compared with fiscal 2004 beginning with an overview. We then provide an analysis
of changes in our balance sheet and cash flows, and discuss our financial commitments in the sections entitled
“Liquidity and Capital Resources” and “Disclosures about Contractual Obligations and Commercial Commitments.”
We conclude this MD&A by discussing our outlook for fiscal 2007.
This MD&A should be read in conjunction with the other sections of this Annual Report on Form 10-K, including
“Item 1: Business”, “Item 6: Selected Financial Data” and “Item 8: Financial Statements and Supplementary Data.”
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 risk factors described throughout this filing and particularly under the
section “Item 1A. Risk Factors”. Our actual results may differ materially from these forward looking statements.
AMERCO has a fiscal year that ends on the 31st of March for each year that is referenced. Our insurance company
subsidiaries have fiscal years that end on the 31st of December for each year that is referenced. They have been
consolidated on that basis. Consequently, all references to our insurance subsidiaries’ years 2005, 2004 and 2003
correspond to fiscal 2006, 2005 and 2004 for AMERCO. The operating results and financial position of AMERCO’ s
consolidated insurance operations are determined as of December 31st of each year.
Overall Strategy
Our overall strategy is to maintain our leadership position in the North American “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 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
available for rent, expanding the number of independent dealers in our network and expanding and taking advantage
of our growing eMove capabilities.
RepWest is focused on providing and administering property and casualty insurance to U-Haul, its customers, its
independent dealers and affiliates. By exiting its non U-Haul lines of business we believe that RepWest will be able
to focus its core competencies and financial resources to better support our overall strategy.
Oxford is focused on long-term capital growth through direct writing and reinsuring of annuity, life and Medicare
supplement products primarily in the senior marketplace. Oxford is pursuing increased direct writing via
acquisitions of insurance companies, expanded distribution channels and product development. In 2005, Oxford
determined that it would no longer pursue growth in the credit life and disability market and is exploring options to
divest its current business through reinsurance. We believe this will enable Oxford to focus more on its core senior
population demographic.
Description of Operating Segments
AMERCO has four reportable segments. They are Moving and Storage Operations (AMERCO, U-Haul and Real
Estate), Property and Casualty Insurance, Life Insurance and SAC Holding II for fiscal 2006 and fiscal 2005 and
SAC Holdings for fiscal 2004. (See Notes 1, 21 and 21A to the Consolidated Financial Statements included in this
Form 10-K.)
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