U-Haul 2009 Annual Report Download - page 15

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11
We are highly dependent upon our automated systems and the Internet for managing our business.
Our information systems are largely internet-based, including our point-of-sale reservation system and telephone
system. While our reliance on this technology lowers our cost of providing service and expands our abilities to
serve, it exposes the Company to various risks including natural disasters and man-made disasters. We have put into
place backup systems and alternative procedures to mitigate this risk. However, disruptions or breaches in any
portion of these systems could adversely affect our results of operations and financial condition.
A.M. Best financial strength ratings are crucial to our life insurance business.
In March 2009, A.M. Best affirmed the financial strength rating for Oxford, Christian Fidelity Life Insurance
Company (“CFLIC”) and Dallas General Life Insurance Company (“DGLIC”) of B++ with a stable outlook.
Financial strength ratings are important external factors that can affect the success of Oxford’s business plans.
Accordingly, if Oxford’s ratings, relative to its competitors, are not maintained or do not continue to improve,
Oxford may not be able to retain and attract business as currently planned, which could adversely affect our results
of operations and financial condition.
Item 1B.
Unresolved Staff Comments
We have no unresolved staff comments at March 31, 2009.
Item 2.
Properties
The Company, through its legal subsidiaries, owns property, plant and equipment that are utilized in the
manufacture, repair and rental of U-Haul equipment and storage space, as well as providing office space for the
Company. Such facilities exist throughout the United States and Canada. The Company also manages storage
facilities owned by others. The Company operates over 1,400 U-Haul retail centers of which 487 are managed for
other owners, and operates 12 manufacturing and assembly facilities. We also operate over 200 fixed-site repair
facilities located throughout the United States and Canada. These facilities are used primarily for the benefit of our
Moving and Storage segment.
SAC Holdings owns property, plant and equipment that are utilized in the sale of moving supplies, rental of self-
storage rooms and U-Haul equipment. Such facilities exist throughout the United States and Canada. We manage the
storage facilities under property management agreements whereby the management fees are consistent with
management fees received by U-Haul for other properties owned by unrelated parties and previously managed by us.
Item 3.
Legal Proceedings
Shoen
In September 2002, Paul F. Shoen filed a shareholder derivative lawsuit in the Second Judicial District Court of
the State of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et al., CV 02-05602,
seeking damages and equitable relief on behalf of AMERCO from SAC Holdings and certain current and former
members of the Board, including Edward J. Shoen, Mark V. Shoen and James P. Shoen as Defendants. AMERCO is
named as a nominal Defendant in the case. The complaint alleges breach of fiduciary duty, self-dealing, usurpation
of corporate opportunities, wrongful interference with prospective economic advantage and unjust enrichment and
seeks the unwinding of sales of self-storage properties by subsidiaries of AMERCO to SAC Holdings prior to the
filing of the complaint. The complaint seeks a declaration that such transfers are void as well as unspecified
damages. In October 2002, the Defendants filed motions to dismiss the complaint. Also in October 2002, Ron Belec
filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Ron
Belec vs. William E. Carty, et al., CV 02-06331 and in January 2003, M.S. Management Company, Inc. filed a
derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned M.S.
Management Company, Inc. vs. William E. Carty, et al., CV 03-00386. Two additional derivative suits were also
filed against these parties. Each of these suits is substantially similar to the Paul F. Shoen case. The Court
consolidated the five cases and thereafter dismissed these actions in May 2003, concluding that the Board had the
requisite level of independence required in order to have these claims resolved by the Board. Plaintiffs appealed this
decision and, in July 2006, the Nevada Supreme Court reversed the ruling of the trial court and remanded the case to
the trial court for proceedings consistent with its ruling, allowing the Plaintiffs to file an amended complaint and
plead in addition to substantive claims, demand futility.