U-Haul 2007 Annual Report Download

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LIFE INSURANCE COMPANY
®
® ®
INTERNATIONAL
®
TM

Table of contents

  • Page 1
    ® ® ® TM INTERNATIONAL ® LIFE INSURANCE COMPANY

  • Page 2
    ... customer fuel consumption and CO2 generation when obtaining and returning rental equipment • Corporate annual meeting, proxy and analyst proceedings are Internet based, reducing fuel, time and trees consumed • Work from home telecommuters, reducing facilities commitment and transportation...

  • Page 3
    ... Our revenues and earnings in fiscal 2007 were negatively affected by softness in one-way truck pricing, utilization and fleet distribution. We are addressing these concerns and believe we can deal with them. Operating earnings at our life insurance and casualty insurance companies finished the year...

  • Page 4
    FINANCIAL HIGHLIGHTS Amounts in Millions, Except Share and Per Share Data Segment Results: Moving and Storage Revenues Earnings from operations Property & Casualty Insurance Revenues Earnings (loss) from operations Life Insurance Revenues Earnings from operations SAC Holdings II Revenues Earnings ...

  • Page 5
    ...Nevada Corporation) 2727 N. Central Avenue Phoenix, Arizona 85004 Telephone (602) 263-6645 Securities registered pursuant to Section 12(b) of the Act: 86-0663060 Registrant AMERCO AMERCO U-Haul International, Inc. Title of Class Series A 8 ½% Preferred Stock Common None Name of Each Exchange on...

  • Page 6
    ... of U-Haul International, Inc. Common Stock, $0.01 par value, were outstanding at June 1, 2007. None of these shares were held by non-affiliates. Documents incorporated by reference: Portions of AMERCO' s definitive Proxy Statement for the 2007 Annual Meeting of Stockholders, to be filed within 120...

  • Page 7
    ... Market Risk ...Financial Statements and Supplementary Data ...Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...Controls and Procedures ...Other information...PART III Directors, Executive Officers and Corporate Governance ...Executive Compensation...Security...

  • Page 8
    ...of nearly 1,450 Company operated retail moving centers and approximately 14,500 independent U-Haul dealers. In addition, we have an independent storage facility network with over 2,900 active affiliates. We also sell U-Haul brand boxes, tape and other moving and self-storage products and services to...

  • Page 9
    ...of the self-moving industry. Conveniently located U-Haul self-storage rental facilities provide clean, dry and secure space for storage of household and commercial goods, with storage units ranging in size from 6 square feet to 845 square feet. We operate nearly 1,055 self-storage locations in North...

  • Page 10
    ... of the rental of trucks, trailers, specialty rental items and self-storage spaces primarily to the household mover as well as sales of moving supplies, towing accessories and propane. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada. Net...

  • Page 11
    ...-storage facilities to expand their reach by connecting into a centralized 1-800 and internet reservation system and for a fee, receive an array of services including web-based management software, Secured Online Affiliated Rentals (S.O.A.R®), co-branded rental trucks, savings on insurance, credit...

  • Page 12
    ... eMove web site. A significant driver of U-Haul' s rental transaction volume is our utilization of an online reservation and sales system, through www.uhaul.com, www.eMove.com and our 24-hour 1-800-GO-U-HAUL telephone reservations system. The Company' s 1-800-GO-U-HAUL telephone reservation line is...

  • Page 13
    ... proceeds from the sale of the notes to, among other things, acquire box trucks, cargo vans and pickup trucks from the manufacturers as well as from other subsidiaries of AMERCO. The new special-purpose subsidiaries will generate income from truck and trailer rentals to be used to service and repay...

  • Page 14
    ... competitive and includes a number of significant national, regional and local competitors. Competition is generally based on convenience of rental locations, availability of quality rental moving equipment, breadth of essential services and price. Financial results for the Company can be adversely...

  • Page 15
    ... or results of operations for an indefinite period of time or we may not be able to obtain rental trucks under similar terms, if at all. A.M Best financial strength ratings are crucial to our life insurance business. A.M. Best downgraded Oxford and its subsidiaries during AMERCO' s restructuring to...

  • Page 16
    ... 498 are managed for other owners, and operates 13 manufacturing and assembly facilities. We also operate over 245 fixed site-repair facilities located throughout the United States and Canada. SAC Holdings owns property, plant and equipment that are utilized in the sale of moving supplies, rental of...

  • Page 17
    ...AMERCO' s financial position or operating results. Real Estate expects to spend approximately $7.6 million in total through 2011 to remediate these properties. Other The Company is named as a defendant in various other litigation and claims arising out of the normal course of business. In management...

  • Page 18
    ... stock. AMERCO' s common stock is listed on NASDAQ Global Select Market under the trading symbol "UHAL". The number of shareholders is derived using internal stock ledgers and utilizing Mellon Investor Services Stockholder listings. The following table sets forth the high and the low sales price...

  • Page 19
    ... TOTAL RETURN* Among AMERCO, The Dow Jones US Total Market Index And The Dow Jones US Transportation Average Index $600 $500 $400 $300 $200 $100 $0 3/02 3/03 3/04 3/05 3/06 3/07 AMERCO Dow Jones US Total Market Dow Jones US Transportation Average * $100 invested on 3/31/02 in stock or...

  • Page 20
    ... $50.0 million of its Common Stock. The stock may be repurchased by the Company from time to time on the open market between September 13, 2006 and October 31, 2007. On March 9, 2007, the Board authorized an increase in the Company' s common stock repurchase program to a total aggregate amount, net...

  • Page 21
    ... Report on Form 10-K. Listed below is selected financial data for AMERCO and consolidated entities for each of the last five years ended March 31: Year Ended March 31, 2007 Summary of Operations: Self-moving equipment rentals Self-storage revenues Self-moving and self-storage products and service...

  • Page 22
    Listed below is selected financial data for U-Haul International, Inc. for each of the last five years ended March 31: Year Ended March 31, 2007 Summary of Operations: Self-moving equipment rentals Self-storage revenues Self-moving and self-storage products and service sales Property management ...

  • Page 23
    ... selfstorage 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...

  • Page 24
    ... of the rental of trucks, trailers, specialty rental items and self-storage spaces primarily to the household mover as well as sales of moving supplies, towing accessories and propane. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada. With...

  • Page 25
    ...its subsidiaries, and SAC Holding II Corporation and its subsidiaries, collectively referred to as "SAC Holdings", own self-storage properties that are managed by U-Haul under property management agreements and act as independent U-Haul rental equipment dealers. AMERCO, through its subsidiaries, has...

  • Page 26
    ... market analysis, the Company decreased the estimated residual value of certain rental trucks. The effect of the change decreased pre-tax earnings for fiscal 2007 by $2.0 million. The in-house analysis of truck sales compared such factors as the truck model, size, age and average residual value...

  • Page 27
    ... to hold the security, quoted market prices, dealer quotes or discounted cash flows, industry factors, financial factors, and issuer specific information such as credit strength. Other-thantemporary impairment in value is recognized in the current period operating results. The Company' s insurance...

  • Page 28
    ... General Life Insurance Company ("DGLIC") which will file on a stand alone basis. SAC Holding Corporation and its legal subsidiaries and SAC Holding II Corporation and its legal subsidiaries file consolidated tax returns, which are in no way associated with AMERCO' s consolidated returns. Adoption...

  • Page 29
    ... have on its Consolidated Financial Statements. The cumulative effect of applying the provisions of FIN 48, if any, will be reported as an adjustment to the opening balance of the Companies retained earnings at April 1, 2007. In September 2006, the FASB issued SFAS 157, Fair Value Measurements which...

  • Page 30
    ...,597 $ 2,106,626 Self-moving equipment rentals Self-storage revenues Self-moving and self-storage product and service sales Property management fees Life insurance premiums Property and casualty insurance premiums Net investment and interest income Other revenue Consolidated revenue $ $ During...

  • Page 31
    ... lease arrangements which were used primarily during the previous ten years. While the Company generates a cash flow benefit from utilizing the depreciation deduction for income taxes as compared to what the lease expense would have been, the consolidated statement of operations reflects an increase...

  • Page 32
    ...service sales Property management fees Life insurance premiums Property and casualty insurance premiums Net investment and interest income Other revenue Consolidated revenue $ $ During fiscal 2006, self-moving equipment rentals increased $65.7 million with increases in truck, trailer, and support...

  • Page 33
    ... insurance companies years ended are December 31, 2005 and 2004: Year Ended March 31, 2006 2005 (In thousands) Moving and storage Revenues Earnings from operations Property and casualty insurance Revenues Earnings (loss) from operations Life insurance Revenues Earnings from operations SAC Holding II...

  • Page 34
    ... third quarter of fiscal 2005, the Company settled our litigation against our former auditor and received a settlement (net of attorneys' fees and costs) of $51.3 million before taxes. The settlement had the effect of increasing, on a non-recurring basis, earnings for the year ended March 31, 2005...

  • Page 35
    ... income increased $4.1 million primarily due to increases in interest on invested cash and higher interest rates. The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements for Moving and Storage represent Company-owned locations...

  • Page 36
    ... self-storage product and service sales Property management fees Net investment and interest income Other revenue Moving and Storage revenue $ $ During fiscal 2006, self-moving equipment rentals increased $65.7 million with increases in truck, trailer, and support rental items. The increases are...

  • Page 37
    ... $ 1,897,933 Self-moving equipment rentals Self-storage revenues Self-moving and self-storage product and service sales Property management fees Net investment and interest income Other revenue U-Haul International, Inc. revenue $ $ During fiscal 2007, self-moving equipment rentals decreased $27...

  • Page 38
    ...-storage product and service sales Property management fees Net investment and interest income Other revenue U-Haul International, Inc. revenue $ $ During fiscal 2006, self-moving equipment rentals increased $65.7 million with increases in truck, trailer, and support rental items. The increases...

  • Page 39
    ...31, 2006 and 2005, respectively. The increase is due to an increase in short-term rates and sale of real estate. Benefits and losses incurred were $21.9 million ... expenses due to the exit of the non U-Haul lines of business. Earnings from operations were $5.7 million and $1.1 million for years ended...

  • Page 40
    The following table illustrates the change in unpaid loss and loss adjustment expenses. The first line represents reserves as originally reported at the end of the stated year. The second section, reading down, represents cumulative amounts paid as of the end of successive years with respect ...

  • Page 41
    ... at January 1 Less: reinsurance recoverable Net balance at January 1 Incurred related to: Current year Prior years Total incurred Paid related to: Current year Prior years Total paid Net balance at December 31 Plus: reinsurance recoverable Balance at December 31 $ $ The liability for incurred...

  • Page 42
    ... written on active lines. Credit insurance premiums decreased $3.8 million. Oxford is no longer writing credit insurance. Oxford expects the majority of the existing credit policies to earn out over the next three years. Life premiums increased $1.6 million primarily due to increased sales from the...

  • Page 43
    ...major product lines at SAC Holding II for fiscal 2007 and fiscal 2006: Year Ended March 31, 2007 2006 (In thousands) 9,225 $ 9,498 19,926 18,869 16,045 16,602 1,407 1,270 46,603 $ 46,239 Self-moving equipment rentals Self-storage revenues Self-moving and self-storage product and service sales Other...

  • Page 44
    ... the obligations of non-insurance operations (AMERCO, U-Haul and Real Estate). The assets of SAC Holding II are completely unavailable to satisfy any of the Company' s obligations. As of March 31, 2007, cash and cash equivalents, other financial assets (receivables, short-term investments, other...

  • Page 45
    ... lease. Cash provided by financing activities decreased $0.3 million in fiscal 2007, as compared to fiscal 2006. Cash provided by borrowings for new rental equipment were offset by funds used for the repayment of the aged truck revolver and the real estate mezzanine loan. Additionally, the Company...

  • Page 46
    ...II does not utilize revolving lines of credit to finance its operations or acquisitions. Certain of SAC Holding II loan agreements contain covenants and restrictions on incurring additional subsidiary indebtedness. Cash Provided from Operating Activities by Operating Segments Moving and Self-Storage...

  • Page 47
    ... have the financial resources needed to meet our business requirements including capital expenditures for the investment in and expansion of our rental fleet, rental equipment and storage space, working capital requirements and our preferred stock dividend program. The Company' s borrowing strategy...

  • Page 48
    ... and director of AMERCO, has an interest in Mercury. The Company leases space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. Total lease payments pursuant to such leases were $2.7 million in fiscal 2007, 2006...

  • Page 49
    ... all sizes of our boxed trucks and adding to our pickup and cargo van fleet. Our current expectation is to continue adding new trucks to the fleet at a similar rate for fiscal 2008. This investment is expected to increase the number of rentable equipment days available to meet our customer demands...

  • Page 50
    ... present fairly, and in accordance with generally accepted accounting principles, such results. Moving and Storage operations are seasonal and proportionally more of the Company' s revenues and net earnings from its Moving and Storage operations are generated in the first and second quarters of each...

  • Page 51
    ... investment portfolios expose the Company to interest rate risk. This interest rate risk is the price sensitivity of a fixed income security to change in interest rates. As part of our insurance companies' asset and liability management, actuaries estimate the cash flow patterns of our existing...

  • Page 52
    ...and Procedures Attached as exhibits to this Form 10-K are certifications of the registrants' Chief Executive Officer (CEO), Chief Accounting Officer (CAO) and U-Haul' s Chief Financial Officer (CFO), which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended...

  • Page 53
    ... proceeds from the sale of the notes to, among other things, acquire box trucks, cargo vans and pickup trucks from the manufacturers as well as from other subsidiaries of AMERCO. The new special-purpose subsidiaries will generate income from truck and trailer rentals to be used to service and repay...

  • Page 54
    ... Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company and consolidated entities as of March 31, 2007 and 2006 and the related consolidated statements of operations, changes in stockholders' equity, other comprehensive income (loss), and cash flows...

  • Page 55
    ... to, or waiver from, a provision of this code of ethics by posting such information on the Company' s website, at the web address and location specified above, unless otherwise required to file a Form 8-K by Nasdaq rules and regulations. Item 11. Executive Compensation The information required to be...

  • Page 56
    ...of Earnings of Independent Rental Fleets 3. Financial Statement Schedules required to be filed by Item 8 and Paragraph (d) of this Item 15: Condensed Financial Information of AMERCO - Schedule 1 Valuation and Qualifying Accounts - Schedule II Supplemental Information (For Property-Casualty Insurance...

  • Page 57
    ... of March 15, 2004, among SAC Holding Corporation and SAC Holding II Corporation and Law Debenture Trust Company of New York Rights Agreement, dated as of August 7, 1998 Incorporated by reference to AMERCO' s Current Report on Form 8-K filed on March 26, 2004, file no. 1-11255 4.4 Incorporated by...

  • Page 58
    ...Self-Storage Corporation and U-Haul Management Agreement between Nineteen SAC Self-Storage Limited Partnership and U-Haul Incorporated by reference to AMERCO' s Annual Report on Form 10-K for the year ended March 31, 1999, file no. 111255 Incorporated by reference to AMERCO' s Annual Report on Form...

  • Page 59
    ... U-Haul Management Agreement between Twenty-Seven SAC Self-Storage Limited Partnership and U-Haul Promissory Note between SAC Holding Corporation and Oxford Life Insurance Company Amendment and Addendum to Promissory Note between SAC Holding Corporation and Oxford Life Insurance Company Fixed Rate...

  • Page 60
    ... to AMERCO' s Current Report on Form 8-K, filed June 14, 2005, file no. 1-11255 10.52 U-Haul Dealership Contract between U-Haul Leasing & Sales Co., and U-Haul Moving Partners, Inc. Property Management Agreement between Mercury Partners, LP, Mercury 99, LLC and UHaul Self-Storage Management (WPC...

  • Page 61
    ... Investments, LP in favor of U-Haul International, Inc. Property Management Agreements between Subsidiaries of U-Haul and subsidiaries of PM Preferred Properties, LP., dated June 25, 2005 Incorporated by reference to AMERCO' s Current Report on Form 8-K, filed June 14, 2005, file no. 1-11255 10.70...

  • Page 62
    ..., among Amerco Real Estate Company of Texas, Inc., Amerco Real Estate Company of Alabama, Inc., U-Haul Co. of Florida, Inc., UHaul International, Inc. and the Marketing Grantors named therein in favor of Merrill Lynch Incorporated by reference to AMERCO' s Current Report on Form 8-K filed August 23...

  • Page 63
    ...Security Agreement, dated June 28, 2005, among U-Haul Leasing & Sales Co., U-Haul Company of Arizona and UHaul International, Inc. in favor of Merrill Lynch Commercial Finance Corporation. 2007-1 BOX TRUCK BASE INDENTURE, dated as of June 1, 2007, among U-HAUL S FLEET, LLC, a special purpose limited...

  • Page 64
    ...Trustee"). SCHEDULE I TO CARGO VAN/PICK-UP TRUCK BASE INDENTURE, dated as of June 1, 2007. Filed herewith 10.102 Filed herewith 10.103 SERIES 2007-1 SUPPLEMENT, dated as of June 1, 2007 (this "Series Supplement"), among UHAUL S FLEET, LLC, a special purpose limited liability company established...

  • Page 65
    ..., Chief Financial Officer of U-Haul International, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Incorporated by reference to AMERCO' s Current Report on Form 8-K, filed on May 5, 2004, file no. 1-11255 Filed herewith Filed herewith Filed herewith See signature page Filed herewith...

  • Page 66
    ... REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders AMERCO Reno, Nevada We have audited the accompanying consolidated balance sheets of AMERCO and consolidated entities (the "Company") as of March 31, 2007 and 2006 and the related consolidated statements of operations, changes in...

  • Page 67
    ... balance sheets of SAC Holding II Corporation (A Wholly-Owned Subsidiary of Blackwater Investments, Inc.) as of March 31, 2007 and 2006 and the related consolidated statements of operations, stockholder' s deficit, and cash flows for the years ended March 31, 2007, 2006 and 2005. These financial...

  • Page 68
    ...: Accounts payable and accrued expenses AMERCO's notes and loans payable SAC Holding II notes and loans payable, non-recourse to AMERCO Policy benefits and losses, claims and loss expenses payable Liabilities from investment contracts Other policyholders' funds and liabilities Deferred income...

  • Page 69
    ...Self-moving equipment rentals Self-storage revenues Self-moving and self-storage products and service sales Property management fees Life insurance premiums Property and casualty insurance premiums Net investment and interest income Other revenue Total revenues Costs and expenses: Operating expenses...

  • Page 70
    ...loss on investments Fair market value of cash flow hedge Net earnings Preferred stock dividends: Series A ($2.13 per share for fiscal 2007) Exchange of shares Treasury stock Contribution from related party Net activity Balance as of March 31, 2007 Common Stock, $0.25 Par Value 9,081 $ 487 487 9,568...

  • Page 71
    ... CONSOLIDATED ENTITIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) 2007 Comprehensive income (loss): Net earnings Other comprehensive income (loss) net of tax: Foreign currency translation Unrealized gain (loss) on investments, net Fair market value of cash flow hedges Total comprehensive...

  • Page 72
    ...sales of: Property, plant and equipment Short term investments Fixed maturity investments Equity securities Cash received in excess of purchase of company acquired Preferred stock Real estate Mortgage loans Payments from notes and mortgage receivables Net cash provided (used) by investing activities...

  • Page 73
    ... 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...

  • Page 74
    ...four reportable segments. They are Moving and Storage, Property and Casualty Insurance, Life Insurance and SAC Holding II. Moving and Storage operations include AMERCO, U-Haul, and Real Estate and the wholly-owned subsidiaries of UHaul and Real Estate and consist of the rental of trucks and trailers...

  • Page 75
    ...due to the short period of time to maturity. Fair values of short-term investments, investments available-for-sale, long-term investments, mortgage loans and notes on real estate, and interest rate cap and swap contracts are based on quoted market prices, dealer quotes or discounted cash flows. Fair...

  • Page 76
    ... for holding derivative financial instruments is to manage interest rate risk. The Company' s derivative instruments are recorded at fair value under SFAS No. 133 and are included in either prepaid expenses or accrued expenses. The exposure to market risk for changes in interest rates relates...

  • Page 77
    ... held for retail sales Inventories consist primarily of truck and trailer parts and accessories used to manufacture and repair rental equipment as well as products and accessories available for retail sale. Inventory is held at Company-owned locations; our independent dealers do not hold any of the...

  • Page 78
    ... estate, which is lower than market value at the balance sheet date, was $10.8 million and $7.9 million for fiscal 2007 and 2006, respectively, and is included in Investments, other. Receivables Accounts receivable include trade accounts from moving and self-storage customers and dealers, insurance...

  • Page 79
    ... sheet. Revenue Recognition Self-moving rentals are recognized for the period that trucks and moving equipment are rented. Self-storage revenues, based upon the number of paid storage contract days, are recognized as earned during the period. Sales of self-moving and self-storage related products...

  • Page 80
    ... between the sales price to the lessor and the book value prior to the sale was deferred and amortized over the life of the equipment. Per SFAS 28 the amortization period should have been over the term of the lease. The Company quantified the error and in fiscal 2007 changed its accounting treatment...

  • Page 81
    ... have on its Consolidated Financial Statements. The cumulative effect of applying the provisions of FIN 48, if any, will be reported as an adjustment to the opening balance of the Companies retained earnings at April 1, 2007. In September 2006, the FASB issued SFAS 157, Fair Value Measurements which...

  • Page 82
    ... FINANCIAL STATEMENTS -- (CONTINUED) Note 4: Earnings Per Share Net earnings for purposes of computing earnings per common share are net earnings less preferred stock dividends. Preferred stock dividends include accrued dividends of AMERCO. The shares used in the computation of the Company...

  • Page 83
    ... years After ten years Mortgage backed securities Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The Company deposits bonds with insurance regulatory authorities to meet statutory...

  • Page 84
    ... Obligations of states and political subdivisions Corporate securities Mortgage-backed securities Redeemable preferred stocks Common stocks $ Gross Gross Unrealized Unrealized Losses Losses Gross Less than Unrealized More than 12 Months 12 Months Gains (In thousands) 975 $ 442 11 5,588 50 272...

  • Page 85
    ... ten years After ten years Mortgage backed securities Redeemable preferred stocks Equity securities Investments, other The carrying value of other investments was as follows: March 31, 2007 Short-term investments Real estate Mortgage loans, net Policy loans Other equity investments $ (In thousands...

  • Page 86
    AMERCO AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Note 8: Net Investment and Interest Income Net investment and interest income, were as follows: 2007 Fixed maturities Real estate Insurance policy loans Mortgage loans Short-term, amounts held by ceding ...

  • Page 87
    ... of the Real Estate Loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds. Senior Mortgages Various subsidiaries of Amerco Real Estate Company and U-Haul International, Inc. are...

  • Page 88
    ... of the Loan Agreement, is the applicable LIBOR plus a margin of 1.50%. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. Amerco Real Estate Company is a borrower under an asset backed facility. The lender is...

  • Page 89
    ... fixing the rate at 6.11% based on the current margin. AMERCO is a guarantor of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. Revolving Credit Agreement U-Haul International, Inc. and several...

  • Page 90
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Annual Maturities of AMERCO Consolidated Notes and Loans Payable The annual maturities of AMERCO consolidated long-term debt as of March 31, 2007 for the next five years and thereafter is as follows: 2008 Notes payable, secured $ 92,335...

  • Page 91
    ...earn-out deposit which was refunded in fiscal 2006. 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 2007 and 2006, UHaul received cash payments...

  • Page 92
    ...Holding II interest expense Total $ $ Interest paid in cash by AMERCO amounted to $72.9 million, $59.8 million and $57.6 million for fiscal 2007, 2006 and 2005, respectively. Early extinguishment fees paid in cash by AMERCO was $21.2 million in fiscal 2006. The exposure to market risk for changes...

  • Page 93
    ... $50.0 million of its Common Stock. The stock may be repurchased by the Company from time to time on the open market between September 13, 2006 and October 31, 2007. On March 9, 2007, the Board authorized an increase in the Company' s common stock repurchase program to a total aggregate amount, net...

  • Page 94
    ...Unrealized loss on investments Change in fair value of cash flow hedge Balance at March 31, 2006 Foreign currency translation - U-Haul Unrealized loss on investments Change in fair value of cash flow hedge Adjustment to initially apply FASB Statement No. 158 Balance at March 31, 2007 $ (33,344) (903...

  • Page 95
    AMERCO AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Note 13: Provision for Taxes Income before taxes and the provision for taxes consisted of the following: 2007 Pretax earnings: U.S. Non-U.S. Total pretax earnings Provision for taxes: Federal: Current Deferred...

  • Page 96
    ... CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Significant components of the Company' s deferred tax assets and liabilities were as follows: March 31, 2007 2006 (In thousands) Deferred tax assets: Net operating loss and credit carry forwards Accrued expenses Policy benefit and losses, claims and...

  • Page 97
    ... collateral and allocated to active employees, based on the proportion of debt service paid in the year. When shares are scheduled to be released from collateral, prorated over the year, the Company reports compensation expense equal to the current market price of the shares scheduled to be released...

  • Page 98
    ... have attained age sixty-five and earned at least ten years of full-time service upon retirement from the Company are entitled to group term life insurance benefits. The life insurance benefit is $2,000 plus $100 for each year of employment over ten years. The plan is not funded and claims are paid...

  • Page 99
    ... AAA rated or equivalent) fixed income investments with cash flow streams sufficient to satisfy benefit obligations under the plan when due. Fluctuations in the discount rate assumptions primarily reflect changes in U.S. interest rates. The estimated health care cost inflation rates used to measure...

  • Page 100
    AMERCO AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Note 15: Reinsurance and Policy Benefits and Losses, Claims and Loss Expenses Payable During their normal course of business, our insurance subsidiaries assume and cede reinsurance on both a coinsurance and a ...

  • Page 101
    ... certain of these agreements, RepWest holds letters of credit at years-end in the amount of $3.8 million from re-insurers and has issued letters of credit in the amount of $9.1 million in favor of certain ceding companies. Policy benefits and losses, claims and loss expenses payable for RepWest were...

  • Page 102
    ... ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Note 16: Contingent Liabilities and Commitments The Company leases a portion of its rental equipment and certain of its facilities under operating leases with terms that expire at various dates substantially through 2012, with...

  • Page 103
    ...AMERCO' s financial position or operating results. Real Estate expects to spend approximately $7.6 million in total through 2011 to remediate these properties. Other The Company is named as a defendant in various other litigation and claims arising out of the normal course of business. In management...

  • Page 104
    ... SAC Holdings' excess cash flows (after senior debt service). Management believes that its sales of self-storage properties to SAC Holdings in the past provided a unique structure for the Company to earn moving equipment rental revenues and property management fee revenues from the SAC Holdings self...

  • Page 105
    .... The Company leases space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. Total lease payments pursuant to such leases were $2.7 million for fiscal 2007, 2006 and 2005, respectively. The terms of the leases are...

  • Page 106
    ...of rental fees paid by customers. Based on the terms of various contracts, rental fees are distributed to U-Haul (for services as operators), to the fleet owners (including certain subsidiaries and related parties of U-Haul) and to rental dealers (including Company-operated U-Haul Centers). Related...

  • Page 107
    AMERCO AND CONSOLIDATED ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Note 20: Statutory Financial Information of Insurance Subsidiaries Applicable laws and regulations of the State of Arizona require RepWest and Oxford to maintain minimum capital and surplus determined in ...

  • Page 108
    ... Area Financial information by geographic area for fiscal 2007 is as follows: Year Ended March 31, 2007 Total revenues Depreciation and amortization, net of (gains) losses on disposal Interest expense Pretax earnings (loss) Income tax expense (benefit) Identifiable assets United States Canada...

  • Page 109
    ... AMERCO has four reportable segments. They are Moving and Storage, Property and Casualty Insurance, Life Insurance and SAC Holding II. Management tracks revenues separately, but does not report any separate measure of the profitability for rental vehicles, rentals of self-storage spaces and sales...

  • Page 110
    ... Moving & Storage Moving & Storage Consolidated AMERCO Legal Group Property & Casualty Insurance (a) AMERCO as Consolidated AMERCO U-Haul Real Estate Eliminations Life Insurance (a) Eliminations AMERCO Consolidated SAC Holding II Eliminations Total Consolidated (In thousands) Assets: Cash...

  • Page 111
    ... Group Property & Casualty Life Insurance (a) Insurance (a) Eliminations (In thousands) Liabilities: Accounts payable and accrued expenses AMERCO's notes and loans payable SAC Holding II Corporation notes and loans payable, non-recourse to AMERCO Policy benefits and losses, claims and loss expenses...

  • Page 112
    ... FINANCIAL STATEMENTS -- (CONTINUED) Consolidating balance sheets by industry segment as of March 31, 2006 are as follows: Moving & Storage Moving & Storage Consolidated AMERCO Legal Group Property & Casualty Insurance (a) AMERCO as Consolidated AMERCO U-Haul Real Estate Eliminations Life...

  • Page 113
    ... Group Property & Casualty Life Insurance (a) Insurance (a) Eliminations (In thousands) Liabilities: Accounts payable and accrued expenses AMERCO's notes and loans payable SAC Holding II Corporation notes and loans payable, non-recourse to AMERCO Policy benefits and losses, claims and loss expenses...

  • Page 114
    ...: Self-moving equipment rentals Self-storage revenues Self-moving & self-storage products & service sales Property management fees Life insurance premiums Property and casualty insurance premiums Net investment and interest income Other revenue Total revenues Costs and expenses: Operating expenses...

  • Page 115
    ...: Self-moving equipment rentals Self-storage revenues Self-moving & self-storage products & service sales Property management fees Life insurance premiums Property and casualty insurance premiums Net investment and interest income Other revenue Total revenues Costs and expenses: Operating expenses...

  • Page 116
    ...: Self-moving equipment rentals Self-storage revenues Self-moving & self-storage products & service sales Property management fees Life insurance premiums Property and casualty insurance premiums Net investment and interest income Other revenue Total revenues Costs and expenses: Operating expenses...

  • Page 117
    ... from sales of: Property, plant and equipment Short term investments Fixed maturity investments Cash received in excess of purchase of company acquired Preferred stock Real estate Mortgage loans Payments from notes and mortgage receivables Net cash provided (used) by investing activities (a) Balance...

  • Page 118
    ... 31, 2007, are as follows: Moving & Storage Real Estate Moving & Storage Consolidated AMERCO Legal Group Property & Casualty Insurance (a) Life Insurance (a) AMERCO Consolidated AMERCO as Consolidated Total Consolidated AMERCO Cash flows from financing activities: Borrowings from credit facilities...

  • Page 119
    ... Mortgage loans Proceeds from sales of: Property, plant and equipment Short term investments Fixed maturity investments Equity securities Preferred stock Real estate Mortgage loans Payments from notes and mortgage receivables Net cash provided (used) by investing activities (a) Balance for the year...

  • Page 120
    ..., are as follows: Moving & Storage Real Estate Moving & Storage Consolidated AMERCO Legal Group Property & Casualty Insurance (a) Life Insurance (a) AMERCO Consolidated AMERCO as Consolidated Total Consolidated AMERCO Cash flows from financing activities: Borrowings from credit facilities Principal...

  • Page 121
    ... Real estate Mortgage loans Proceeds from sales of: Property, plant and equipment Short term investments Fixed maturity investments Equity securities Preferred stock Real estate Mortgage loans Payments from notes and mortgage receivables Net cash provided (used) by investing activities (a) Balance...

  • Page 122
    ... as follows: Moving & Storage Real Estate Moving & Storage Consolidated AMERCO Legal Group Property & Casualty Insurance (a) Life Insurance (a) AMERCO Consolidated AMERCO as Consolidated Total Consolidated AMERCO Cash flows from financing activities: Borrowings from credit facilities Principal...

  • Page 123
    ... proceeds from the sale of the notes to, among other things, acquire box trucks, cargo vans and pickup trucks from the manufacturers as well as from other subsidiaries of AMERCO. The new special-purpose subsidiaries will generate income from truck and trailer rentals to be used to service and repay...

  • Page 124
    ... the last Monday of each month and received by U-Haul International, Inc. by the end of the month and U-Haul Center reports of rentals transacted through the last day of each month. Payments to fleet owners for trailers lost or retired from rental service as a result of damage by accident have not...

  • Page 125
    ... $ 18 $ 24 $ 31 $ 41 $ Public liability insurance 17 33 37 48 Repairs and maintenance 158 244 315 348 $ 193 $ 301 $ 383 $ 437 $ 2003 52 53 317 422 (D) The fleet owners and subsidiary U-Haul rental companies forego normal commissions on a portion of gross rental fees designated for transfer to the...

  • Page 126
    SCHEDULE I CONDENSED FINANCIAL INFORMATION OF AMERCO BALANCE SHEETS March 31, 2007 (In thousands) ASSETS Cash and cash equivalents Investment in subsidiaries and SAC Holding II Related party assets Other assets Total assets $ 9 $ (245,116) 1,180,929 15,146 950,968 7 (276,552) 1,219,703 4,309 947,467...

  • Page 127
    ... expenses Equity in earnings of subsidiaries and SAC Holding II Interest income (expense) Fees on early extinguishment of debt Litigation settlement income, net of costs, fees and expenses Pretax earnings Income tax benefit Net earnings Less: Preferred stock dividends Earnings available to common...

  • Page 128
    CONDENSED FINANCIAL INFORMATION OF AMERCO STATEMENTS OF CASH FLOW 2007 Cash flows from operating activities: Net earnings Change in investments in subsidiaries and SAC Holding II Depreciation Write-off of unamortized debt issuance costs Deferred income taxes Net change in other operating assets and ...

  • Page 129
    ...2007, 2006, AND 2005 1. Summary of Significant Accounting Policies AMERCO, a Nevada corporation, was incorporated in April, 1969, and is the holding Company for U-Haul International, Inc., Amerco Real Estate Company, Republic Western Insurance Company and Oxford Life Insurance Company. The financial...

  • Page 130
    SCHEDULE II AMERCO AND CONSOLIDATED SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Years Ended March 31, 2007, 2006 and 2005 Balance at Beginning of Year Year ended March 31, 2007 Allowance for doubtful accounts (deducted from trade receivable) Allowance for doubtful accounts (deducted from notes ...

  • Page 131
    SCHEDULE V AMERCO AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL INFORMATION (FOR PROPERTY-CASUALTY INSURANCE UNDERWRITERS) Years Ended December 31, 2006, 2005 AND 2004 Reserves for Unpaid Claims and Adjustment Discount if Expenses any, Deducted Claim and Claim Adjustment Expenses Incurred Related to ...

  • Page 132
    ...of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ EDWARD J. SHOEN Chairman of the Board and President (Principal Executive Officer) June 6, 2007...

  • Page 133
    Signature Title Date /s/ MICHAEL L. GALLAGHER Director June 6, 2007 Michael L. Gallagher

  • Page 134
    ...the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. U-Haul International, Inc. By: /s/ Edward J. Shoen Edward J. Shoen Chief Executive Officer and Chairman of the Board Dated: June 6, 2007 POWER...

  • Page 135
    ... of AMERCO and its consolidated entities (the "Company") of our reports dated June 6, 2007, relating to the consolidated financial statements, the effectiveness of the Company' s internal control over financial reporting, and schedules of the Company appearing in the Company' s Annual Report on Form...

  • Page 136
    ...56571) of AMERCO and consolidated entities of our report dated June 6, 2007, relating to the consolidated financial statements of SAC Holding II Corporation (A Wholly-Owned Subsidiary of Blackwater Investments, Inc.) and its subsidiaries' consolidated in the Company' s Annual Report on Form 10-K for...

  • Page 137
    ...or other employees who have a significant role in the Registrants internal control over financial reporting. (b) /s/ Edward J. Shoen Edward J. Shoen President and Chairman of the Board of AMERCO and Chief Executive Officer and Chairman of the Board of U-Haul International, Inc. Date: June 6, 2007

  • Page 138
    ... and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. (b) /s/ Jason A. Berg Jason A. Berg Chief Accounting Officer of AMERCO Date: June 6, 2007

  • Page 139
    ...; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. (b) /s/ Robert T. Peterson Robert T. Peterson Chief Financial Officer of U-Haul International, Inc. Date: June 6, 2007

  • Page 140
    ... with the Form 10-K for the year ended March 31, 2007 of AMERCO and U-Haul International, Inc. (together, the "Company"), as filed with the Securities and Exchange Commission on June 6, 2007 (the "Report"), I, Edward J. Shoen, Chairman of the Board and President of the Company, certify, pursuant...

  • Page 141
    ... Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. AMERCO, a Nevada corporation /s/ Jason A. Berg Jason A. Berg Chief Accounting Officer Date: June 6, 2007

  • Page 142
    ... 2002 In connection with the Form 10-K for the year ended March 31, 2007 of U-Haul International, Inc. (the "Company"), as filed with the Securities and Exchange Commission on June 6, 2007 (the "Report"), I, Robert T. Peterson, Chief Financial Officer of the Company, certify, pursuant to Section 906...

  • Page 143
    ... in the short-term rental of trucks, trailers and related equipment to the do-it-yourself mover. The Company also sells related moving products and services, and rents self-storage facilities and general rental items. In addition, the Company's insurance subsidiaries engage in the life and property...

  • Page 144
    ...Officer and Chairman of U-Haul 67 Director of AMERCO, Retired President of Amerco Real Estate Company 63 Director of AMERCO, Chairman of Muench-Kreuzer Candle Company 70 Director of AMERCO, U-Haul and Amerco Real Estate Company, Retired Executive Vice President Field Operations of U-Haul 63 Director...

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    UH-6000-2007(0) ©06/2007 AMERCO®