U-Haul 2008 Annual Report Download - page 11

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6
Substantially all of the equity interest of SAC Holdings is controlled by Blackwater Investments Inc.
(“Blackwater”), wholly-owned by Mark V. Shoen, a significant shareholder and executive officer of AMERCO. In
November 2007, Blackwater contributed additional capital to its wholly-owned subsidiary, SAC Holding II. This
contribution was determined by us to be material with respect to the capitalization of SAC Holding II; therefore,
triggering a requirement under FIN 46(R) for us to reassess the Company’ s involvement with those subsidiaries.
This required reassessment led to the conclusion that the Company was no longer the primary beneficiary of SAC
Holding II as of the date of Blackwater’ s contribution. Accordingly, the Company deconsolidated this entity. The
deconsolidation, effective October 31, 2007 was accounted for as a distribution of the Company’ s interests to
Blackwater, the sole shareholder of SAC Holding II. Because of the Company’ s continuing involvement with SAC
Holding II, the distributions do not qualify as discontinued operations as defined by Statement of Financial
Accounting Standards (“SFAS”) 144. It is possible that SAC Holdings could take future actions that would require
us to re-determine whether SAC Holdings has become a variable interest entity (“VIE”) or whether we have become
the primary beneficiary of SAC Holdings. Should this occur, we could be required to consolidate some or all of SAC
Holdings with our financial statements.
Net revenue from our SAC Holding II operating segment was approximately 0.8%, 1.3% and 1.3% of
consolidated net revenue in fiscal 2008, 2007 and 2006, respectively.
Employees
As of March 31, 2008, we employed approximately 18,500 people throughout North America with approximately
98% of these employees working within our Moving and Storage operating segment. Approximately 40% of these
employees work on a part-time status.
Sales and Marketing
We promote U-Haul brand awareness through direct and co-marketing arrangements. Our direct marketing
activities consist of yellow pages, print and web based advertising as well as trade events, movie cameos of our
rental fleet and boxes, and industry and consumer communications. Our rental equipment is our best form of
advertisement. We support our independent U-Haul dealers through advertising of U-Haul moving and self-storage
rentals, products and services.
Our marketing plan includes maintaining our leadership position with U-Haul being synonymous with “do-it-
yourself” moving and storage. We accomplish this by continually improving the ease of use and efficiency of our
rental equipment, by providing added convenience to our retail centers through independent U-Haul dealers, and by
expanding the capabilities of our eMove web sites.
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 prominently featured on nationwide
yellow page advertising, its websites and on the outside of its vehicles, and is a major driver of customer lead
sources. Of our customers who made reservations in advance of their U-Move rental, nearly 30% of these
reservations were completed through the Company’ s websites.
Competition
Moving and Storage Operating Segment
The moving truck and trailer rental industry is large and highly competitive. Generally speaking, we consider
there to be two distinct users of rental trucks: commercial and “do-it-yourself” residential users. We focus primarily
on the “do-it-yourself” residential user. Within this segment, we believe the principal competitive factors are
convenience of rental locations, availability of quality rental moving equipment, breadth of essential products and
services, and total cost. Our major competitors in the moving equipment rental market are Avis Budget Group, Inc.
and Penske Truck Leasing.
The self-storage market is large and highly fragmented. We believe the principal competitive factors in this
industry are convenience of storage rental locations, cleanliness, security and price. Our primary competitors in the
self-storage market are Public Storage Inc., Extra Space Storage, Inc., and Sovran Self-Storage Inc.