U-Haul 2006 Annual Report Download - page 44

AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
During 1997, Private Mini secured a $225.0 million line of credit with a financing institution, which was subsequently
reduced in accordance with its terms to $125.0 million in December 2001. Under the terms of this credit facility, AMERCO
entered into a support party agreement with Private Mini whereby upon default or noncompliance with certain debt
covenants by Private Mini, AMERCO assumes responsibility in fulfilling all obligations related to this credit facility. In
2003, the support party obligation was bifurcated into two separate support party obligations; one consisting of a $55.0
million support party obligation and one consisting of a $70.0 million support party obligation. At March 31, 2003, $55.0
million of AMERCO’ s support party obligation had been triggered. AMERCO satisfied the $55.0 million obligation by
issuing notes to the Private Mini creditor, and we correspondingly increased our receivable from Private Mini by $55.0
million. Interest from Private Mini on this receivable is being recorded by AMERCO on a regular basis. The Company
expects to fully recover this amount. Under the terms of FIN 45, the remaining $70.0 million support party obligation was
recognized by the Company as a liability at March 31, 2004 and March 31, 2003. This resulted in AMERCO increasing
Other Liabilities by $70.0 million and increasing our receivable from Private Mini by an additional $70.0 million. At
March 31, 2005, the Company revalued the FIN 45 liability to $2.9 million. Effective July 15, 2005 the $70.0 million
support party obligation was terminated and AMERCO is no longer obligated on behalf of Private Mini. The $2.9 million
liability recorded in the Company’ s books was eliminated at the time the support party obligation was terminated. Private
Mini is now a wholly-owned subsidiary of 4 SAC and 5 SAC.
In prior years, U-Haul sold various properties to SAC Holding Corporation at prices in excess of U-Haul’ s carrying
values resulting in gains which U-Haul deferred and treated as additional paid-in capital. The transferred properties have
historically been stated at the original cost basis as the gains were eliminated in consolidation. In March 2004, these
deferred gains were recognized and treated as contributions from a related party in the amount of $111.0 million as a result
of the deconsolidation of SAC Holding Corporation.
In August 2005, RepWest completed the sale of three storage properties to 5 SAC and the sale of nineteen storage
properties to Real Estate, for approximately $50.5 million. The gains realized by RepWest were recorded directly to
additional paid-in capital. The purchase price was based upon existing re-purchase agreements management believes were
consummated on terms equivalent to those that prevail in arm’ s-length transactions.
In October 2005, Oxford completed the sale of three storage properties to 5 SAC, one storage property to Real Estate
and was fully repaid by U-Haul on a mortgage note secured by twenty-five storage properties. These transactions totaled
approximately $38.0 million. The gains realized by Oxford were recorded directly to additional paid-in capital. The
purchase price was based upon existing re-purchase agreements management believes were consummated on terms
equivalent to those that prevail in arm’ s-length transactions.
Related Party Assets
2006 2005
Private Mini notes, receivables and interest $ 74,427 $ 70,887
Oxford note receivable from SAC Holding Corporation 5,040 5,040
U-Haul notes receivable from SAC Holding Corporation 123,578 123,578
U-Haul interest receivable from SAC Holding Corporation 42,189 35,960
U-Haul receivable from SAC Holding Corporation 5,688 1,028
SAC Holding II receivable from parent 2,900 2,202
U-Haul receivable from Mercury 2,342 2,185
Oxford and RepWest investment in Securespace 11,585 11,225
Other 2,719 561
$ 270,468 $ 252,666
March 31,
(In thousands)
F-37