U-Haul 2005 Annual Report Download - page 74

73 I AMERCO ANNUAL REPORT
Amerco and Consolidated Entities
Notes to Consolidated Financial Statements, continued
Lease฀commitments฀for฀leases฀having฀terms฀of฀more฀than฀one฀year฀as฀of฀fiscal฀year-end฀were฀as฀follows:
AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (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 2034. At March 31, 2005, AMERCO has
guaranteed $143.9 million of residual values for these assets at the end of the respective lease terms. Certain
leases contain renewal and fair market value purchase options as well as other restrictions. At the expiration of
the lease, the Company has options to renew the lease, purchase the asset for fair market value, or sell the
asset to a third party on behalf of the lessor. AMERCO has been leasing equipment since 1987 and has
experienced no material losses relating to these types of residual value guarantees.
Lease expense during each fiscal years-end was as follows:
March 31,
2005 2004 2003
(In thousands)
Lease expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $151,354 $160,727 $166,100
Lease commitments for leases having terms of more than one year as of fiscal year-end were as follows:
Property
Plant and Rental
Equipment Equipment Total
(In thousands)
Year-ended:
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 11,854 $ 90,262 $102,116
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,067 72,287 83,354
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,935 40,071 51,006
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,621 26,649 37,270
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,215 16,408 26,623
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45,544 11,287 56,831
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $100,236 $256,964 $357,200
Note 17: Contingencies
Kocher
On March 2, 2005 Oxford settled a case pending in Wetzel County, West Virginia bearing the case
caption Charles Kocher v. Oxford Life Insurance Co., Civil Action No. 00-C-51-K (the ""Action''). In
consideration of the payment of $12.8 million, Charles A Kocher (""Kocher'') executed a General Release of
all claims against Oxford, Republic Western, and Evanston Insurance Company, together with certain
affiliates, subsidiaries, officers, directors, employees and other related parties of each of them, including but
not limited to all claims that were or could have been asserted in the Action. Pursuant to the General Release,
Kocher agreed to the dismissal with prejudice of the Action, with each party bearing its own costs and
attorneys' fees. Oxford received $2.2 million in reimbursement from its E&O carrier related to the settlement
of the Action.
Shoen
On September 24, 2002, Paul F. Shoen filed a derivative action in the Second Judicial District Court of
the State of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et al.,
CV02-05602, seeking damages and equitable relief on behalf of AMERCO from SAC Holdings and certain
current and former members of the AMERCO Board of Directors, including Edward J. Shoen, Mark V.
F-31
Note 17: Contingencies
Kocher
On฀March฀2,฀2005฀Oxford฀settled฀a฀case฀pending฀in฀Wetzel฀
County,฀West฀Virginia฀bearing฀the฀case฀caption฀Charles฀
Kocher฀ v.฀ Oxford฀ Life฀ Insurance฀ Co.,฀ Civil฀ Action฀
No.฀ 00-C-51-K฀ (the฀ “Action”).฀ In฀ consideration฀ of฀ the฀
payment฀of฀$12.8฀million,฀Charles฀A฀Kocher฀(“Kocher”)฀
executed฀a฀General฀Release฀of฀all฀claims฀against฀Oxford,฀
Republic฀ Western,฀ and฀ Evanston฀ Insurance฀ Company,฀
together฀ with฀ certain฀ affiliates,฀ subsidiaries,฀ officers,฀
directors,฀employees฀and฀other฀related฀parties฀of฀each฀of฀
them,฀including฀but฀not฀limited฀to฀all฀claims฀that฀were฀or฀
could฀have฀been฀asserted฀in฀the฀Action.฀Pursuant฀to฀the฀
General฀ Release,฀ Kocher฀ agreed฀ to฀ the฀ dismissal฀ with฀
prejudice฀of฀the฀Action,฀with฀each฀party฀bearing฀its฀own฀
costs฀ and฀ attorneys’฀ fees.฀ Oxford฀ received฀ $2.2฀ million฀
in฀ reimbursement฀ from฀ its฀ E&O฀ carrier฀ related฀ to฀ the฀
settlement฀of฀the฀Action.
Shoen
On฀September฀24,฀2002,฀Paul฀F.฀Shoen฀filed฀a฀derivative฀
action฀in฀the฀Second฀Judicial฀District฀Court฀of฀the฀State฀
of฀Nevada,฀Washoe฀County,฀captioned฀Paul฀F.฀Shoen฀vs.฀
SAC฀ Holding฀ Corporation฀ et฀ al.,฀ CV02-05602,฀ seeking฀
damages฀and฀equitable฀relief฀on฀behalf฀of฀AMERCO฀from฀
SAC฀ Holdings฀and฀certain฀current฀and฀former฀members฀
of฀the฀AMERCO฀Board฀of฀Directors,฀including฀Edward฀J.฀
Shoen,฀Mark฀V.฀Shoen฀and฀James฀P.฀Shoen฀as฀defendants.฀
AMERCO฀ is฀ named฀ a฀ nominal฀ defendant฀ for฀ purposes฀
of฀ the฀ derivative฀ action.฀ 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฀in฀prior฀years.฀
The฀complaint฀seeks฀a฀declaration฀that฀such฀transfers฀are฀
void฀ as฀ well฀ as฀ unspecified฀ damages.฀ On฀ October฀ 28,฀
2002,฀ AMERCO,฀ the฀ Shoen฀ directors,฀ the฀ non-Shoen฀
directors฀and฀SAC฀Holdings฀filed฀Motions฀to฀Dismiss฀the฀
complaint.฀In฀addition,฀on฀October฀28,฀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฀
on฀ January฀ 16,฀ 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.฀ These฀ additional฀ suits฀
are฀substantially฀similar฀to฀the฀Paul฀F.฀Shoen฀derivative฀
action.฀ The฀ five฀ suits฀ assert฀ virtually฀ identical฀ claims.฀
In฀ fact,฀ three฀ of฀ the฀ five฀ plaintiffs฀ are฀ parties฀ who฀ are฀
working฀ closely฀ together฀ and฀ chose฀ to฀ file฀ the฀ same฀
claims฀ multiple฀ times.฀ These฀ lawsuits฀ alleged฀ that฀ the฀
AMERCO฀ Board฀ lacked฀ independence.฀ In฀ reaching฀ its฀
decision฀ to฀ dismiss฀ these฀ claims,฀ the฀ court฀ determined฀
that฀the฀AMERCO฀Board฀of฀Directors฀had฀the฀requisite฀
level฀ of฀ independence฀ required฀ in฀ order฀ to฀ have฀ these฀
claims฀resolved฀by฀the฀Board.฀The฀court฀consolidated฀all฀
five฀complaints฀before฀dismissing฀them฀on฀May฀28,฀2003.฀
Plaintiffs฀filed฀a฀Notice฀of฀Appeal฀to฀the฀Nevada฀Supreme฀
Court.฀ The฀parties฀have฀fully฀briefed฀the฀issues฀and฀are฀
awaiting฀a฀ruling฀from฀the฀court.
Securities Litigation
AMERCO฀ is฀ a฀ defendant฀ in฀ a฀ consolidated฀ putative฀
class฀action฀lawsuit฀entitled฀“In฀Re฀AMERCO฀Securities฀
Litigation”,฀ United฀ States฀ District฀ Court,฀ Case฀ No.฀ CV-
N-03-0050-ECR฀ (RAM).฀ The฀ action฀ alleges฀ claims฀ for฀
violation฀of฀Section฀10(b)฀of฀the฀Securities฀Exchange฀Act฀
and฀Rule฀10b-5฀thereunder,฀section฀20(a)฀of฀the฀Securities฀
Exchange฀Act฀of฀1934฀and฀sections฀11,฀12,฀and฀15฀of฀the฀
Securities฀Act฀of฀1933.฀The฀action฀alleges,฀among฀other฀
things,฀that฀AMERCO฀engaged฀in฀transactions฀with฀the฀
SAC฀entities฀that฀falsely฀improved฀AMERCO’s฀financial฀
statements฀ and฀ that฀ AMERCO฀ failed฀ to฀ disclose฀ the฀