U-Haul 2006 Annual Report Download - page 15

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AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Basis of Presentation
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.
Accounts denominated in non-U.S. currencies have been re-measured into U.S. dollars. Certain amounts reported in
previous years have been reclassified to conform to the current presentation. The opening March 31, 2003 balances for
Accumulated Other Comprehensive Income (Loss) and Retained Earnings were adjusted for the correction of an immaterial
error in the amount of $6.0 million.
Note 2: Principles of Consolidation
The fiscal 2006 and fiscal 2005 consolidated financial statements include the accounts of AMERCO, its wholly-owned
subsidiaries, and SAC Holding II Corporation and its subsidiaries (“SAC Holding II”). The fiscal 2004 statements of
operations, comprehensive income, and cash flows include all of those entities plus SAC Holding Corporation and its
subsidiaries.
In fiscal 2003 and 2002, SAC Holding Corporation and SAC Holding II Corporation (collectively referred to as “SAC
Holdings”) were considered special purpose entities and were consolidated based on the provision of Emerging Issues Task
Force (EITF) Issue No. 90-15.
In February 2004, SAC Holding Corporation restructured the indebtedness of three subsidiaries and then distributed its
interest in those subsidiaries to its sole shareholder. This triggered a requirement to reassess AMERCO’ s involvement with
those subsidiaries, which led to the conclusion that based on the current contractual and ownership interests between
AMERCO and this entity, AMERCO ceased to have a variable interest in those three subsidiaries at that date.
In March 2004, SAC Holding Corporation restructured its indebtedness, triggering a similar reassessment of SAC
Holding Corporation that led to the conclusion that SAC Holding Corporation was not a VIE and that AMERCO ceased to
be the primary beneficiary of SAC Holding Corporation and its remaining subsidiaries. This conclusion was based on SAC
Holding Corporation’ s ability to fund its own operations and execute its business plan without any future subordinated
financial support.
Accordingly, at the dates AMERCO ceased to have a variable interest in or ceased to be the primary beneficiary of SAC
Holding Corporation and its current or former subsidiaries, it deconsolidated those entities. The deconsolidation was
accounted for as a distribution of SAC Holding Corporations interests to the sole shareholder of the SAC entities. Because
of AMERCO’ s continuing involvement with SAC Holding Corporation and its current and former subsidiaries, the
distributions do not qualify as discontinued operations as defined by SFAS No. 144.
It is possible that SAC Holding Corporation could take actions that would require us to re-determine whether SAC
Holding Corporation has become a VIE or whether we have become the primary beneficiary of SAC Holding Corporation.
Should this occur, we could be required to consolidate some or all of SAC Holding Corporation with our financial
statements.
Similarly, SAC Holding II could take actions that would require us to re-determine whether it is a VIE or whether we
continue to be the primary beneficiary of our variable interest in SAC Holding II. Should we cease to be the primary
beneficiary, we would be required to deconsolidate some or all of our variable interest in SAC Holding II from our financial
statements.
Intercompany accounts and transactions have been eliminated.
F-8