U-Haul 2016 Annual Report Download - page 15

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9
In December 2015, each of James P. Shoen, Rosemarie Donovan as trustee, and David L. Holmes as
trustee provided written notice that they intend to withdraw their shares, constituting a total of 2,538,622
shares, from the Stockholder Agreement on June 30, 2016. James P. Shoen, Rosemarie T. Donovan and
David L. Holmes shall remain subject to the Stockholder Agreement until the effective date of such
withdrawal, which is expected to occur before our next annual meeting of stockholders. The withdrawal of
such shares from the Stockholder Agreement will result in us no longer being a “controlled company”
pursuant to the Nasdaq listing rules as of July 1, 2016. However, Willow Grove Holdings, LP, directly and
through controlled entities, owns 8,307,584 shares of AMERCO common stock, and together with Edward
J. Shoen and Mark V. Shoen, owns 8,359,502 shares (approximately 42.6%) of AMERCO common stock.
Accordingly, Edward J. Shoen and Mark V. Shoen, brothers, are in a position to significantly influence our
business and policies, including the approval of certain significant transactions, the election of the
members of our Board of Directors and other matters submitted to our stockholders. There can be no
assurance that their interests will not conflict with the interests of our other stockholders.
In addition, 1,232,753 shares (approximately 6.3%) of AMERCO common stock is owned under our
Employee Stock Ownership Plan (“ESOP”). Each ESOP participant is entitled to vote the shares
allocated to himself or herself in their discretion. In the event an ESOP participant does not vote his or
her shares, such shares shall be voted by the ESOP trustee, in the ESOP trustee’s discretion.
We bear certain risks related to our notes receivable from SAC Holding.
At March 31, 2016, we held a $49.3 million note receivable from SAC Holding, which consists of a
junior unsecured note. This entity is highly leveraged with significant indebtedness to others. If SAC
Holding is unable to meet its obligations to its senior lenders, it could trigger a default of its obligation to
us. In such an event of default, we could suffer a loss to the extent the value of the underlying collateral of
SAC Holding is inadequate to repay its senior lenders and our junior unsecured note. We cannot assure
you that SAC Holding will not default on its loans to their senior lenders or that the value of its assets
upon liquidation would be sufficient to repay us in full.
Our quarterly results of operations fluctuate due to seasonality and other factors associated with
our industry.
Our business is seasonal and our results of operations and cash flows fluctuate significantly from
quarter to quarter. Historically, revenues have been stronger in the first and second fiscal quarters due to
the overall increase in moving activity during the spring and summer months. The fourth fiscal quarter is
generally weakest, due to a greater potential for adverse weather conditions and other factors that are not
necessarily seasonal. As a result, our operating results for any given quarterly period are not necessarily
indicative of operating results for an entire year.
Our operations subject us to numerous environmental regulations and the possibility that
environmental liability in the future could adversely affect our operations.
Compliance with environmental requirements of federal, state and local governments significantly
affects our business. Among other things, these requirements regulate the discharge of materials into the
air, land and water and govern the use and disposal of hazardous substances. Under environmental laws
or common law principles, we can be held liable for hazardous substances that are found on real property
we have owned or operated. We are aware of issues regarding hazardous substances on some of our
real estate and we have put in place a remediation plan at each site where we believe such a plan is
necessary. See Note 18, Contingencies of the Notes to Consolidated Financial Statements. We regularly
make capital and operating expenditures to stay in compliance with environmental laws. In particular, we
have managed a testing and removal program since 1988 for our underground storage tanks. Despite
these compliance efforts, we believe that risk of environmental liability is part of the nature of our
business.
Environmental laws and regulations are complex, change frequently and could become more stringent
in the future. We cannot assure you that future compliance with these regulations, future environmental
liabilities, the cost of defending environmental claims, conducting any environmental remediation or
generally resolving liabilities caused by us or related third parties will not have a material adverse effect
on our business, financial condition or results of operations.