U-Haul - 10-K annual report

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ         No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes þ         No o

     The aggregate market value of AMERCO common stock held by non-affiliates (i.e., stock held by person other than officers, directors and 5% shareholders of AMERCO) on September 30, 2004 was $338,968,245. The aggregate market value was computed using the closing price for the common stock trading on NASDAQ on such date.

     Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes þ         No o

     21,284,604 shares of AMERCO Common Stock, $0.25 par value were outstanding at June 1, 2005.

     5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were outstanding at June 1, 2005. None of these shares were held by non-affiliates.

     Documents incorporated by reference: Portions of AMERCO’s definitive Proxy Statement for the 2005 Annual Meeting of Stockholders are incorporated by reference into Part III of this report.

      We are North America’s largest “do-it-yourself” moving and storage operator through our subsidiary U-Haul International, Inc. U-Haul is synonymous with “do-it-yourself” moving and storage and is a leader in supplying products and services to help people move and store their household and commercial goods. Our primary service objective is to provide the best product and service to the most people at the lowest cost.

      We rent our distinctive orange U-Haul trucks and trailers as well as offer self-storage rooms through a network of over 1,350 company operated retail moving centers and 14,071 independent U-Haul dealers. In addition, we have an independent storage facility network with 1,717 active affiliates. We also sell U-Haul brand boxes, tape and other moving and self storage products and services to “do-it-yourself” moving and storage customers at all of our distribution outlets and through our eMove web site.

      U-Haul is the most convenient supplier of products and services meeting the needs of North America’s “do-it-yourself” moving and storage market. Our broad geographic coverage throughout the United States and Canada and our extensive selection of U-Haul brand moving equipment rentals, self storage rooms and related moving and storage products and services provide our customers with convenient “one-stop” shopping.

      Through Republic Western Insurance Company (“RepWest”), our property and casualty insurance subsidiary, we manage the property, liability and related insurance claims processing for U-Haul. Oxford, our life insurance subsidiary, sells life insurance, provides annuities and other related products to non U-Haul customers and manages the employee medical plans for U-Haul’s 18,300 employees.

      We were founded in 1945 under the name “U-Haul Trailer Rental Company.” Since 1945, we have rented trailers. Starting in 1959, we rented trucks on a one-way and in-town basis exclusively through independent U-Haul dealers. Since 1974, we have developed a network of U-Haul managed retail centers, through which we rent our trucks and trailers and sell moving and self-storage related supplies and services to complement our independent dealer network.

      AMERCO and U-Haul are each incorporated in Nevada. U-Haul’s Internet address is uhaul.com. On AMERCO’s investor relations web site, amerco.com, we post the following filings as soon as is reasonably practical after they are electronically filed with or furnished to the Securities and Exchange Commission: our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statement related to our annual meeting of stockholders, and any amendments to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. All such filings on our web site are available free of charge.

      Our customers are primarily “do-it-yourself” household movers. U-Haul moving equipment is specifically designed, engineered and manufactured for the “do-it-yourself” household mover. These “do-it-yourself” movers include individuals and families moving their belongings from one home to another, college students moving their belongings, vacationers and sports enthusiasts needing extra space or having special towing needs, people trying to save on home furniture and home appliance delivery costs, and “do-it-yourself” home remodeling and gardening enthusiasts who need to transport materials.

      As of March 31, 2005, our rental fleet consisted of approximately 93,000 trucks, 78,750 trailers and 36,100 tow devices. This equipment and our U-Haul brand of self-moving products and services are available through our network of managed retail moving centers and independent U-Haul dealers. Independent U-Haul dealers receive rental equipment from the company, act as a rental agent and are paid a commission based on gross revenues generated from their U-Haul rentals.

      Our rental truck chassis are manufactured by domestic and foreign truck manufacturers. These chassis are joined with the U-Haul designed and manufactured van boxes at U-Haul operated manufacturing and

      Our distinctive orange trailers are also manufactured at these same U-Haul operated manufacturing and assembly facilities. These trailers are well suited to the low profile of many of today’s newly manufactured automobiles. Our engineering staff is committed to making our trailers easy to tow, aerodynamic and fuel efficient.

      To provide our self-move customers with added value, our rental trucks and trailers are designed for fuel efficiency. To help make our rental equipment more trouble free, we perform extensive preventive maintenance and repairs.

      We also provide customers with equipment to transport their auto. We provide three towing options, including; auto transport, in which all four wheels are off the ground, tow dolly, in which the front wheels of the towed vehicle are off the ground, and tow bar, where all four wheels are on the ground.

      To help our customers load their boxes and larger household appliances and furniture, we offer several accessory rental items. Our utility dolly has a lightweight design and is easy to maneuver. Another rental accessory is our four wheel dolly, which provides a large, flat surface for moving dressers, wall units, pianos and other large household items. U-Haul appliance dollies provide the leverage needed to move refrigerators, freezers, washers and dryers easily and safely. These utility, furniture and appliance dollies, along with the low decks and the wide loading ramps on all U-Haul trucks and trailers, are designed for easy loading and unloading of our customers’ belongings.

      The total package U-Haul offers the “do-it-yourself” household mover doesn’t end with trucks, trailers and accessory rental items. Our moving supplies include a wide array of affordably priced U-Haul brand boxes, tape and packing materials. We also provide specialty boxes for dishes, computers and sensitive electronic equipment, carton sealing tape, security locks, and packing supplies, like wrapping paper and cushioning foam. U-Haul brand boxes are specifically sized to make stacking and tiering easier.

      Also, U-Haul is North America’s largest seller and installer of hitches and towing systems. These hitching and towing systems can tow jet skis, motorcycles, boats, campers and horse trailers. Our hitches, ball mounts, and balls undergo stringent testing requirements.

      U-Haul is also North America’s largest retail propane distributor, with more than 980 retail centers offering propane. We employ trained, certified personnel to refill all propane cylinders, and our network of propane dispensing locations is the largest automobile alternative refueling network in North America.

      Self-storage is a natural outgrowth 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 15 square feet to over 400 square feet. We operate nearly 1,000 self-storage locations in North America, with more than 340,000 rentable rooms comprising approximately 29 million square feet of rentable storage space. Our self-storage centers feature a wide array of security measures, ranging from electronic property access control gates to individually alarmed storage units. At many centers, we offer climate controlled storage rooms to protect temperature sensitive goods such as video tapes, albums, photographs and precious wood furniture.

      Our eMove web site, emove.com, is the largest network of customers and businesses in the self-moving and self-storage industry. The eMove network consists of channels where customers, businesses and service providers transact business. The eMove Moving Help marketplace connects “do-it-yourself” movers with

      Through the eMove Storage Affiliate Program, independent storage businesses can join the world’s largest storage reservation system. Self-storage customers making a reservation through eMove can access all of the U-Haul self-storage centers and all of our independent storage affiliate partners for even greater convenience to meet their self-storage needs.

      Additionally, we offer moving and storage protection packages such as Safemove and Safetow, protecting moving and towing customers with a damage waiver, cargo protection and medical and life coverage, and Safestor, protecting storage customers from loss on their goods in storage.

      AMERCO has five operating segments and four reportable segments. Our reportable segments are Moving and Storage Operations, Property and Casualty Insurance, Life Insurance and SAC Holdings (see Note 2 to the Notes to Consolidated Financial Statements, Principles of Consolidation).

      Our “do-it-yourself” moving business consists of U-Haul truck and trailer rentals and U-Haul moving supply and service sales. Our storage business consists of U-Haul self-storage room rentals, self-storage related product and service sales and management of non-owned self-storage facilities.

      Net revenues from our Moving and Storage operating segment were approximately 89% of consolidated net revenue in fiscal 2005.

      Within our truck and trailer rental operation we are focused on expanding our independent dealer network to provide added convenience for our customers. A U-Haul dealer is an independent commissioned agent, generally renting U-Haul products in conjunction with another primary business. A U-Haul dealer is most often an owner-operator. U-Haul strives to continually improve the dealer program to make it attractive for the dealer.

      At our owned and operated retail centers we have implemented several customer service initiatives. These initiatives include improving management of our rental equipment to provide our retail centers with the right type of rental equipment, at the right time and at the most convenient location for our customers, effective marketing of our broad line of self-moving related products and services, maintaining longer hours of operation to provide more convenience to our customers, and increasing staff by attracting and retaining “moonlighters” (part-time U-Haul employees with full-time jobs elsewhere) during our peak hours of operation.

      We believe our reservation and scheduling system enables us to provide more of the right equipment, at the right time and at the right location to meet seasonal demand fluctuations. We plan to further enhance this system and manage our capital expansion plans to leverage this capability and generate increased rentals on our moving equipment.

      Effective marketing of our self moving related products and services, such as boxes, pads and insurance, helps our customers have a better moving experience and helps them protect their belongings from potential damage during the moving process. We are committed to providing a complete line of products selected with the “do-it-yourself” moving and storage customer in mind. Examples of products recently added or expanded include a number of specialty packing boxes, “Mover’s Wrap” and Smart Move tapes. Mover’s Wrap is a sticks-to-itself plastic stretch wrap used to bind, bundle, and fasten items when moving or storing. Smart Move tape is a color coded packing tape that has the room printed right on it allowing customers to tape and label their belongings in one quick step.

      These actions are leveraged by over 1,350 company operated retail centers and enable the Company to provide better customer service, which we believe has led to increased sales and increased productivity.

      Our self-storage business consists of U-Haul self-storage room rentals, self-storage related product and service sales and management of self-storage facilities not owned by the Company.

      U-Haul is one of the largest North American operators of self-storage and has been a leader in the self-storage industry since 1974. U-Haul operates over 340,000 storage rooms, approximately 29 million square feet of storage space with locations in 49 states and 10 Canadian provinces. U-Haul’s self-storage facility locations range in size up to 156,000 square feet of storage space, with individual storage units in sizes ranging from 15 square feet to over 400 square feet.

      The primary market for storage rooms is the storage of household goods. We believe that our self-storage services provide a competitive advantage through such things as Maximum Security (“MAX”), an electronic system that monitors the storage facility 24 hours a day; climate control; individually alarmed rooms; extended hour access; and an internet — based customer reservation and account management system.

      eMove is an online marketplace that connects consumers to over 5,000 independent customer rated Moving Help and Self-Storage service providers who provide pack and load help, self-storage and more all over North America. A phone access system to Moving Help was launched in September 2004 and has already serviced over 10,000 customers in less than six months.

      eMove also offers a Storage Affiliate program that enables independent self-storage facilities to connect into the eMove network. Affiliates expand their reach by connecting into a moving and storage reservation system and for a fee receive an array of services including web-based management software, savings on insurance, credit card processing, and more. Over 2,700 facilities are now registered on the eMove network.

      With over 33,000 unedited reviews of service providers, the marketplace has facilitated over 60,000 moving and storage transactions all over North America. We believe that acting as an intermediary, with little added investment, serves the customer in a cost effective manner. Our goal is to further utilize our web-based technology platform to increase service to consumers and businesses in the moving and storage market.

      Republic Western Insurance Company (“RepWest”) provides loss adjusting and claims handling for U-Haul through regional offices across North America. RepWest also provides components of the Safemove, Safetow and Safestor protection packages to U-Haul customers. The business plan for RepWest includes offering property and casualty products for other U-Haul related programs and completing its exit from non-U-Haul related lines of business.

      Oxford Life Insurance Company (“Oxford”) originates and reinsures annuities; credit life and disability; single premium whole life; group life and disability coverage; and Medicare supplement insurance. Oxford also administers the self-insured employee health and dental plans for AMERCO.

      SAC Holding Corporation and 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. AMERCO, through its subsidiaries, has contractual interests in certain of SAC Holdings’ properties entitling AMERCO to potential future income based on the financial performance of these properties. With respect to SAC Holding II Corporation, AMERCO is considered the primary beneficiary of these contractual interests. Consequently, we include the results of SAC Holdings II Corporation in the consolidated financial statements of AMERCO, as required by FIN 46(R).

      As of March 31, 2005, we employed approximately 18,300 people throughout North America and 90% of these employees work within our Moving and Storage operating segment.

      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 site.

      The moving truck and trailer rental industry is large and highly competitive.

      There are 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 price.

      Our major competitors in the moving equipment rental market are Budget Car and Truck Rental Company 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, Shurgard, Storage USA and thousands of independent owner-operators.

      The highly competitive insurance industry includes a large number of life insurance companies and property and casualty insurance companies. In addition, the marketplace now includes financial services firms offering both insurance and financial products. Some of the insurance companies are owned by stockholders and others are owned by policyholders. Many competitors have been in business for a longer period of time or possess substantially greater financial resources and broader product portfolios than our insurance companies. We compete in the insurance business based upon price, product design, and services rendered to agents and policyholders.

      Corporate governance is typically defined as the system that allocates duties and authority among a company’s stockholders, board of directors and management. The stockholders elect the board and vote on extraordinary matters; the board is the Company’s governing body; and management runs the day-to-day operations of the Company.

      Our current Board members are William E. Carty, John M. Dodds, Charles J. Bayer, John P. Brogan, Daniel R. Mullen, M. Frank Lyons, James P. Shoen and Edward J. Shoen.

      The primary responsibilities of the Board of Directors are oversight, counseling and providing direction to the management of the Company in the long-term interests of the Company and its stockholders.

      The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as needed. The Board has delegated various responsibilities and authority to different Board committees as generally described below. Committees regularly report on their activities and actions to the full Board.

      The Board currently has Audit, Executive Finance, Compensation, and Independent Governance Committees, as well as an Advisory Board.

     Audit Committee. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities as to financial reporting and audit functions and risk management. The Audit Committee monitors the financial information that is provided to stockholders and others, the independence and performance of the Company’s independent auditors and internal audit department and the systems of internal control established by management and the Board.

      The members of the Audit Committee of the Board, Charles J. Bayer, John M. Dodds and John P. Brogan, each qualify as “independent” under special standards developed by the Securities and Exchange Commission (SEC) and NASDAQ for members of audit committees, and the Audit Committee includes at least one member who is determined by the Board to meet the qualifications of an “audit committee financial expert.” Mr. John P. Brogan is the independent director who has been determined to be an audit committee financial expert. Stockholders should understand that this designation is a disclosure requirement of the SEC related to Mr. Brogan’s experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on Mr. Brogan any duties, obligations or liability that are greater than are generally imposed on him as a member of the Audit Committee and the Board of Directors, and his designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

     Executive Finance Committee. The Executive Finance Committee is authorized to act on behalf of the Board of Directors in approving any transaction involving the finances of the Company. It has the authority to give final approval for the borrowing of funds on behalf of the Company without further action or approval of the Board of Directors. The Executive Finance Committee is composed of Edward J. Shoen, John P. Brogan and Charles J. Bayer.

     Compensation Committee. The Compensation Committee reviews the Company’s executive compensation plans and policies, including benefits and incentives, to ensure that they are consistent with the goals and objectives of the Company. It reviews and makes recommendations to the Board of Directors regarding management recommendations for changes in executive compensation. The Compensation Committee also monitors management plans and programs for the retention, motivation and development of senior management. The Compensation Committee is composed of John P. Brogan and John M. Dodds, independent directors of the Company.

     Independent Governance Committee. The Independent Governance Committee is chaired by John P. Brogan, an independent member of the board. Thomas W. Hayes, the former State Treasurer of California, and Paul A. Bible, a partner in the Reno-based law firm of Bible, Hoy & Trachok, are also members of this committee. Neither Mr. Hayes nor Mr. Bible are members of the Company’s Board of Directors. The Independent Governance Committee evaluates specific corporate governance principles and standards and proposes to the Board any modifications deemed appropriate. In addition, this committee may review potential candidates for Board membership. The committee may review other matters as referred to it by the Board. The committee has the authority to and a budget from which to retain professionals. The committee membership term is one year and each member is determined by the Board to be free of any relationship that would interfere with his exercise of independent judgment as member of this committee.

     Advisory Board Members. In addition to the four committees described above, the Board of Directors authorized up to two (2) Advisory Board Members. On June 4, 2003, the Board of Directors appointed Michael L. Gallagher as a member of the Advisory Board. Mr. Gallagher is a senior partner in the law firm

      On May 4, 2005, the Board of Directors of AMERCO declared a regular quarterly cash dividend of $0.53125 per share on the Company’s Series A 8¹/2% Preferred Stock. The dividend was paid on June 1, 2005 to holders of record on May 15, 2005.

      On May 9 and May 12, 2005 the Company entered into agreements to refinance its capital structure and gave notices to its current lenders of its plans for early redemption of the Company’s existing notes and loans.

      The structure consists of three asset-backed facilities including a $240 million senior mortgage funded by Merrill Lynch, a $240 million senior mortgage funded by Morgan Stanley and a $465 million real estate loan funded by Merrill Lynch. The new financing was funded on June 8, 2005.

      The Company will incur a one-time pre-tax charge of approximately $34 million in the first quarter of fiscal 2006 associated with the early payment of its existing loans.

      On May 20, 2003, the State of Arizona Department of Insurance issued an Order for Supervision against RepWest. The Order required that RepWest eliminate its credit exposure with AMERCO and its affiliates and possess sufficient surplus to comply with Arizona law. These requirements have been met and the Order was abated on June 9, 2005.

      The Company through its owned subsidiaries owns property, plant and equipment that is 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 1,350 U-Haul retail centers, and operates 10 manufacturing and assembly facilities. We also operate over 200 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 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 managed by us.

      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, officer, 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

      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.

      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 transactions properly. The action has been transferred to the United States District Court, District of Arizona. Defendants have filed motions to dismiss and will defend the case vigorously.

      The Securities and Exchange Commission (“SEC”) has issued a formal order of investigation to determine whether the Company has violated the federal securities laws. The Company has produced and delivered all requested documents and provided testimony from all requested witnesses to the SEC. The Company is cooperating with the SEC and is facilitating the expeditious review of its financial statements and any other issues that may arise. We cannot predict the outcome of the investigation.

      The Company is named as a defendant in various litigation and claims arising out of the normal course of business. In managements opinion none of these matters will have a material effect on the Company’s financial position and results of operations.

      No matter was submitted to a vote of the security holders of AMERCO or U-Haul during the fourth quarter of the fiscal year covered by this report, through the solicitation of proxies or otherwise.

      As of April 30, 2005 there were approximately 3,000 holders of record of the common stock. AMERCO’s common stock is listed on NASDAQ under the trading symbol “UHAL.”

      The following table sets forth the high and the low sales price of the common stock of AMERCO for the periods indicated:

      The common stock of U-Haul is wholly owned by AMERCO. As a result, no active trading market exists for the purchase and sale of such common stock.

      AMERCO does not have a formal dividend policy. The Board of Directors of AMERCO periodically considers the advisability of declaring and paying dividends in light of existing circumstances. The Company’s credit facility and its senior note indentures limit the Company’s ability to pay dividends and accordingly, the Company does not anticipate declaring and paying dividends on its common stock in the foreseeable future.

      U-Haul has not declared cash dividends to AMERCO during the three most recent fiscal years.

      See Note 20 of Notes to Consolidated Financial Statements for a discussion of certain statutory restrictions on the ability of the insurance subsidiaries to pay dividends to AMERCO.

      See Note 11 of Notes to Consolidated Financial Statements for a discussion of AMERCO’s preferred stock.

      During the fourth quarter of fiscal 2005, we did not repurchase any shares of our equity securities.

      Listed below is selected financial data for AMERCO and consolidated entities for five years ended March 31:

      Listed below is selected financial data for U-Haul International, Inc., for five years ended March 31:

      We begin Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) with a discussion of the overall strategy of AMERCO, followed by a description of our operating segments, and then a discussion of the strategy of our business segments to give the reader an overview of the goals of our business and the direction in which our business and products are moving. This is followed by a discussion of the Critical Accounting Estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. In the next section, we discuss our Results of Operations for fiscal 2005 compared with fiscal 2004, and for fiscal 2004 compared with fiscal 2003 beginning with an overview. We then provide an analysis of changes in our balance sheet and cash flows, and discuss our financial commitments in the sections entitled “Liquidity and Capital Resources” and “Disclosures about Contractual Obligations and Commercial Commitments.” We conclude this MD&A by discussing our outlook for fiscal 2006.

      This MD&A should be read in conjunction with the other sections of this Annual Report on Form 10-K, including “Item 1: Business”, “Item 6: Selected Financial Data” and “Item 8: Financial Statements and

      AMERCO has four reportable operating segments. Our segments are Moving and Storage, Property and Casualty Insurance, Life Insurance and SAC Holdings. (See Notes 1, 21 and 21A to the Consolidated Financial Statements included in this Form 10-K.)

      Our overall strategy is to maintain our leadership position in the North American “do-it-yourself” moving and storage industry. Our plan is to provide a seamless and integrated supply chain to the “do-it-yourself” moving and storage market. As part of executing this plan, we leverage the brand recognition of U-Haul with our full line of moving and self-storage related products and services and the convenience of our broad geographic presence.

      Our primary focus is to provide our customers with a wide selection of moving rental equipment, convenient self-storage 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 and expanding and taking advantage of our growing eMove capabilities.

      During fiscal 2004, RepWest decided to focus its activities on providing property and casualty insurance to U-Haul, its customers and its independent dealers and affiliates. We believe this will enable RepWest to focus its core competencies and financial resources to better support our overall strategy by exiting its non-U-Haul lines of business.

      Oxford’s business strategy is long-term capital growth through direct writing and reinsuring of annuity, credit life and disability and Medicare supplement products. Oxford is pursuing this growth strategy of increased direct writing via acquisitions of insurance companies, expanded distribution channels and product development.

      Our Moving and Self-Storage Operating Segment consists of the rental of trucks, trailers and self-storage spaces, and sales of moving supplies, trailer hitches and propane to the “do-it-yourself” mover. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

      With respect to our truck, trailer and self-storage rental business, we are focused on expanding our dealer network, which provides added convenience for our customers and expanding the selection and availability of rental equipment to satisfy the needs of our customers.

      With respect to our retail sales of product, U-Haul has developed a number of specialty packing boxes, “Mover’s Wrap” and Smart Move tape. Mover’s Wrap is a sticks-to-itself plastic stretch wrap used to bind, bundle, and fasten items when moving or storing. Additionally, U-Haul has added a full line of Smart Move tape products. Smart Move tape is a color coded packing tape that has the room printed right on it allowing customers to tape and label their belongings in one quick step.

      eMove.com is an online marketplace that connects consumers to over 5,000 independent customer rated Moving Help and Self- Storage service providers who provide pack and load help, self-storage and more all over North America. A phone access system to Moving Help was launched in September 2004 and has already serviced over 10,000 customers in less than six months.

      eMove also offers a Storage Affiliate program that enables independent self-storage facilities to connect into the eMove network. Affiliates expand their reach by connecting into a moving and storage reservation

      With over 33,000 unedited reviews of service providers, the eMove marketplace has facilitated over 60,000 moving and storage transactions all over North America. We believe that acting as an intermediary, with little added investment, serves the customer in a cost effective manner. Our goal is to further utilize our web-based technology platform to increase service to consumers and businesses in the moving and storage market.

      RepWest provides loss adjusting and claims handling for U-Haul through regional offices across North America. RepWest also provides components of the Safemove, Safetow and Safestor protection packages to U-Haul customers. We continue to focus on increasing the penetration of these products. The business plan for RepWest includes offering property and casualty products in other U-Haul related programs. During fiscal 2005 and fiscal 2004 RepWest commuted numerous assumed reinsurance treaties to eliminate the risk of further development on these treaties as it exits non-U-Haul business.

      Oxford originates and reinsures annuities, credit life and disability, single premium whole life, group life and disability coverage, and Medicare supplement insurance. Oxford also administers the self-insured employee health and dental plans for AMERCO. Reinsurance arrangements are entered into with unaffiliated reinsurers.

      The methods, estimates and judgments we use in applying our accounting policies can have a significant impact on the results we report in our financial statements, which we discuss under the heading “Results of Operations.” Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. The accounting estimates that require management’s most difficult and subjective judgments include our principles of consolidation, the recoverability of property, plant and equipment, the adequacy of insurance reserves, and the recognition and measurement of impairments for investments accounted for under SFAS No. 115. Below, we discuss these policies further, as well as the estimates and judgments involved. The estimates are based on historical experience, observance of trends in particular areas, information and valuations available from outside sources and on various other assumptions that are believed to be reasonable under the circumstances and which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts may differ from these estimates under different assumptions and conditions. Such differences may be material.

      Accounting policies are considered critical when they are significant and involve difficult, subjective or complex judgments or estimates. We also have other policies that we consider key accounting policies, such as revenue recognition; however, these policies do not meet the definition of critical accounting estimates, because they do not generally require us to make estimates or judgments that are difficult or subjective. The accounting policies that we deem most critical to us, and involve the most difficult, subjective or complex judgments include the following:

      The 2005 consolidated financial statements and the 2004 balance sheet include the accounts of AMERCO, its wholly owned subsidiaries, and SAC Holding II Corporation and its subsidiaries (“SAC Holding II”). The 2004 statements of operations, comprehensive income, and cash flows, and the consolidated financial statements for fiscal 2003 and fiscal 2002 include all of those entities plus SAC Holding Corporation and its subsidiaries.

      In fiscal 2003 and fiscal 2002, SAC Holding Corporation and SAC Holding II (together, “SAC Holdings”) were considered special purpose entities and were consolidated based on the provisions of Emerging Issues Task Force (EITF) Issue No. 90-15. For fiscal 2003, AMERCO reported consolidated revenue of $216.8 million, a net loss of $8.7 million, assets of $990 million, and liabilities and shareholder’s equity (deficit) of $1,035.1 million and ($45.1) million, respectively, for SAC Holdings and their subsidiaries.

      In fiscal 2004, the Company applied Financial Interpretation No. 46(R) to its interests in SAC Holdings. Initially, the Company concluded that the SAC entities were variable interest entities (VIE’s) and that the Company was the primary beneficiary. Accordingly, the Company continued to include SAC Holdings entities in its consolidated financial statements.

      Under the provisions of FIN 46(R), certain changes in the operations of a variable interest entity or its relationship with the primary beneficiary constitute a re-determination event and require a reassessment of the variable interest on the basis of the most current facts and circumstances to determine whether or not a company is a variable interest entity, which other company(s) have a variable interest in the variable interest entity and whether or not the reporting company’s variable interest in such variable interest entity make it the primary beneficiary. These determinations and re-determinations require that assumptions be made to estimate the value of the entity and a judgment be made as to whether or not the entity has the financial strength to fund its own operations and execute its business plan without the subordinated financial support of another company.

      In February, 2004, SAC Holding Corporation restructured the indebtedness of three subsidiaries and then distributed its interest in those subsidiaries to its sole shareholder. This triggered a requirement to reassess AMERCO’s involvement with those subsidiaries, which led to the conclusion that based on then existing current contractual and ownership interests between AMERCO and this entity, AMERCO ceased to have a variable interest in those three subsidiaries at that date.

      Separately, in March 2004, SAC Holding Corporation restructured its indebtedness, triggering a similar reassessment of SAC Holding Corporation that led to the conclusion that SAC Holding Corporation was not a VIE and that AMERCO ceased to be the primary beneficiary of SAC Holding Corporation and its remaining subsidiaries, based on 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 and ceased to be the primary beneficiary, it deconsolidated those entities. The deconsolidation was accounted for as a distribution of AMERCO’s interests to the sole shareholder of the SAC entities. Because of AMERCO’s continuing involvement with SAC Holding Corporation and its current and former subsidiaries, the distributions do not qualify as discontinued operations as defined by SFAS No. 144.

      It is possible that SAC Holding Corporation could take actions that would require us to re-determine whether SAC Holding Corporation was a VIE or whether we have become the primary beneficiary of SAC Holding Corporation. Should this occur, we could be required to re-consolidate some or all of SAC Holding Corporation with our financial statements.

      Similarly, SAC Holding II Corporation could take actions that would require us to re-determine whether it is a VIE or whether we continue to be the primary beneficiary of our variable interest in SAC Holding II Corporation. Should we cease to be the primary beneficiary, we would be required to de-consolidate some or all of our variable interest in SAC Holding II Corporation from our financial statements.

      Property, plant and equipment is stated at cost. Interest cost incurred during the initial construction of buildings and rental equipment is considered part of cost. Depreciation is computed for financial reporting purposes principally using the straight-line method over the following estimated useful lives: rental equipment 2-20 years and buildings and non-rental equipment 3-55 years. Major overhauls to rental equipment are capitalized and are amortized over the estimated period benefited. Routine maintenance costs are charged to operating expense as they are incurred. Gains and losses on dispositions of property, plant and equipment are

      We regularly perform reviews to determine whether facts and circumstances exist which indicate that the carrying amount of assets, including estimates of residual value, may not be recoverable or that the useful life of assets is shorter or longer than originally estimated. Reductions in residual values (i.e., the price at which we ultimately expect to dispose of revenue earning equipment) or useful lives will result in an increase in depreciation expense over the life of the equipment. Reviews are performed based on vehicle class, generally subcategories of trucks and trailers. We assess the recoverability of the cost of our assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining lives against their respective carrying amounts. We consider factors such as current and expected future market price trends on used vehicles and the expected life of vehicles included in the fleet. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If the remaining cost of assets is determined to be recoverable, but the useful lives are shorter or longer than originally estimated, the net book value of the assets is depreciated over the newly determined remaining useful lives.

      During the fourth quarter of fiscal year 2005, based on an economic market analysis, the Company decreased the estimated residual value of certain rental trucks. The effect of the change decreased pre-tax income for fiscal 2005 by $2.1 million. The in-house analysis of sales of trucks compared the truck model, size, age and average residual value of units sold. Based on the analysis, the estimated residual values are decreased to approximately 20% of historic cost. The adjustment reflects management’s best estimate, based on information available, of the estimated residual value of these rental trucks.

      Liabilities for life insurance and certain annuity policies are established to meet the estimated future obligations of policies in force, and are based on mortality and withdrawal assumptions from recognized actuarial tables which contain margins for adverse deviation. Liabilities for annuity contracts consist of contract account balances that accrue to the benefit of the policyholders, excluding surrender values. Liabilities for health, disability and other policies represents estimates of payments to be made on insurance claims for reported losses and estimates of losses incurred, but not yet reported. Insurance reserves for RepWest and U-Haul International, Inc. take into account losses incurred based upon actuarial estimates in which third party actuaries perform a separate analysis of our reserves on an annual basis for reasonableness. These estimates are based on past claims experience and current claim trends as well as social and economic conditions such as changes in legal theories and inflation. Due to the nature of underlying risks and the high degree of uncertainty associated with the determination of the liability for future policy benefits and claims, the amounts to be ultimately paid to settle liabilities cannot be precisely determined and may vary significantly from the estimated liability.

      A consequence of the long tail nature of the assumed reinsurance and the excess workers compensation lines of insurance that were written by Republic Western is that it takes a number of years for claims to be fully reported and finally settled. Also, the severity of the commercial transportation and the commercial multiple peril programs can fluctuate unexpectedly. During 2004 and 2003 these lines experienced an increase in claim severity that was materially different than the previous year’s actuarial estimations.

      For investments accounted for under SFAS No. 115, in determining if and when a decline in market value below amortized cost is other than temporary, quoted market prices, dealer quotes or discounted cash flows are reviewed. Other-than-temporary declines in value are recognized in the current period operating results to the extent of the decline.

      On June 1, 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections (“SFAS No. 154”), a replacement of APB Opinion No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements.” SFAS No. 154 applies to all voluntary changes in accounting principle and changes the requirements for accounting for and reporting a change in accounting principle. SFAS No. 154 requires the retrospective application to prior periods’ financial statements of the direct effect of a voluntary change in accounting principle unless it is impracticable. APB No. 20 required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. Unless early adoption is elected, SFAS No. 154 is effective for fiscal years beginning after December 15, 2005. Early adoption is permitted for fiscal years beginning after June 1, 2005. SFAS No. 154 does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of this statement. We do not believe that the adoption of SFAS No. 154 will have a material effect on our results of operations or financial position.

      On December 16, 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”). SFAS No. 123R is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. SFAS No. 123R requires companies to measure and recognize compensation expense for all stock-based payments at fair value. Stock-based payments include stock option grants. SFAS No. 123R is effective for public companies for annual periods beginning after June 15, 2005. Early adoption is encouraged and retroactive application of the provisions of SFAS No. 123R to the beginning of the fiscal year that includes the effective date is permitted, but not required. We do not believe that the adoption of SFAS No. 123R will have a material effect on our results of operations or financial position.

      On November 24, 2004, the FASB issued Statement of Financial Accounting Standards No. 151 “Inventory Costs — an amendment of ARB No. 43, Chapter 4” (“SFAS No. 151”) effective for fiscal years beginning after June 15, 2005. This Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS No. 151 requires that those items be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. We do not believe that the adoption of SFAS No. 151 will have a material effect on our results of operations or financial position.

      Listed below on a consolidated basis are revenues for our major product lines for fiscal 2005 and fiscal 2004:

      During fiscal 2005, we built our moving equipment rentals through steady transaction volume, modest price increases and improved mix. Reported storage revenues were reduced $109.2 million as a result of the deconsolidation of SAC Holding Corporation in fiscal 2004 and were reduced $29.7 million as a result of the W.P. Carey Transactions (see footnote 9 for a more detailed discussion of the W.P. Carey Transactions). Self-storage revenues from remaining properties grew as a result of an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Sales of moving and self storage related products and services followed our growth in self-moving equipment rentals, net of the reduction of approximately $36 million resulting from the deconsolidation of SAC Holding Corporation. Property management fees increased $10.1 million as a result of the deconsolidation of SAC Holding Corporation and increased $1.4 million as a result of the W.P. Carey Transactions.

      RepWest continued to exit non U-Haul related lines of business and as a result, its premium revenues declined approximately $67.0 million. Oxford’s premium revenues declined approximately $18.8 million primarily as a result of the lingering effects of its rating downgrade by A. M. Best in 2003.

      Net investment and interest income increased primarily as a result of the deconsolidation of SAC Holding Corporation and decreased primarily as a result of reduced loans with SAC Holdings.

      As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $2,008.1 million for fiscal 2005, compared with $2,176.0 million for fiscal 2004.

      Total costs and expenses fell by $208.0 million as a result of productivity initiatives at U-Haul, the effect of the W. P. Carey Transactions and the deconsolidation of SAC Holding Corporation. The decrease in total costs and expenses was partially offset by payroll and benefit inflation, $4.4 million of self-moving equipment impairment charges related to a lease buy-out, $2.1 million of additional depreciation expense related to lower residual value assumptions, and litigation settlement costs of $10.6 million at Oxford, net of insurance recoveries. Benefits and losses fell as a result of lower premium revenues at RepWest and Oxford. Benefits and losses included approximately $9.5 million as a result of hurricane related losses at RepWest. The absence of restructuring costs in fiscal 2005 contributed to lower costs and expenses compared with fiscal 2004.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations improved 31.6% to $167.0 million in fiscal 2005 compared with $126.9 million for fiscal 2004.

      Listed below are revenues and earnings from operations at each of our four operating segments for fiscal 2005 and fiscal 2004:

      Interest expense for fiscal 2005 was $73.2 million, compared with $121.7 million in fiscal 2004. Lower interest expense in fiscal 2005 reflects the deconsolidation of SAC Holding Corporation, lower borrowings and a lower cost of borrowing.

      Litigation proceeds, net of fees and costs, resulting from the settlement of litigation with our former auditors were $51.3 million in fiscal 2005.

      Income tax expense was $55.7 million in fiscal 2005 compared with $8.1 million in fiscal 2004 and reflects our higher pretax earnings for fiscal 2005, net of an increase in tax in fiscal 2004 of $4.8 million resulting from our settlement with the IRS for tax audits related to 1996 and 1997.

      Dividends accrued on our Series A preferred stock were $13.0 million in fiscal 2005, unchanged from fiscal 2004.

      As a result of the above mentioned items, net earnings available to common shareholders improved to $76.5 million in fiscal 2005, compared with a net loss of $15.8 million in fiscal 2004. Fiscal 2005 results included non-recurring litigation proceeds of $51.3 million pretax, while last year’s results included non-recurring restructuring charges of $44.1 million pretax.

      The weighted average number of basic and diluted shares outstanding were 20,804,773 in fiscal 2005 and were 20,749,998 in fiscal 2004.

      Basic and diluted earnings per share in fiscal 2005 were $3.68 per share, compared with a net loss per share of $0.76 for the same period last year.

      Listed below on a consolidated basis are revenues for our major product lines for fiscal 2004 and fiscal 2003:

      During fiscal 2004 we built our self-moving equipment rentals through steady transaction volume, price increases and improved mix. Self-storage revenues were driven by an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Sales of moving and self storage related products and services followed our growth in self-moving equipment rentals.

      RepWest began to exit non U-Haul related lines of business and as a result, its premium revenues declined approximately $57.2 million. Oxford’s premium revenues declined approximately $13.6 million, primarily as a result of the effects of its rating downgrade by A.M. Best in 2003.

      As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $2,176.0 million for fiscal 2004, compared with $2,141.3 million for fiscal 2003.

      Total costs and expenses rose $16.9 million in fiscal 2004, compared with fiscal 2003.

      Increases in expenses were primarily driven by payroll and benefit inflation and $37.5 million of additional restructuring costs. Benefits and losses fell as a result of fewer outstanding policies at RepWest and Oxford, and increased as a result of adverse development and reserve strengthening at RepWest. Expenses fell as a result of productivity initiatives at U-Haul and downsizing activities at RepWest and Oxford.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations improved 16.2% to $126.9 million in fiscal 2004, compared with $109.2 million for fiscal 2003.

      Listed below are earnings from operations at each of our four operating segments for fiscal 2004 and fiscal 2003:

      Interest expense for fiscal 2004 was $121.7 million, compared with $148.1 million in fiscal 2003. Higher interest expense in fiscal 2003 included payments of $26.5 million for the early termination of BBAT’s.

      Income tax expense was $8.1 million in fiscal 2004 compared with a benefit of $13.9 million in fiscal 2003 and reflects our stronger pretax earnings for fiscal 2004 and an additional $4.8 million resulting from our settlement with the IRS for tax audits related to 1996 and 1997.

      Dividends accrued on our Series A preferred stock were $13.0 million in fiscal 2004, unchanged from fiscal 2003.

      As a result of the above mentioned items, net earnings available to common shareholders were a net loss of $15.8 million in fiscal 2004, including non-recurring restructuring costs of $44.1 million, pre-tax, compared with a net loss of $37.9 million in fiscal 2003.

      The weighted average number of basic and diluted shares outstanding were 20,749,998 in fiscal 2004 and were 20,824,618 in fiscal 2003.

      Basic and diluted earnings per share in fiscal 2004 were a net loss per share of $0.76, compared with a net loss per share of $1.82 for fiscal 2003.

      Listed below are revenues for the major product lines at our Moving and Storage operating segment for fiscal 2005 and fiscal 2004:

      During fiscal 2005 we built our self-moving equipment rentals through steady transaction volume, modest price increases and improved mix. Reported self-storage revenues were reduced $29.7 million as a result of the W.P. Carey Transactions (see footnote 9 for a more detailed discussion of the W.P. Carey Transactions). Self-storage revenues from remaining properties grew as a result of an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Sales of moving and self storage related products and services followed our growth in self-moving equipment rentals, net of the reduction of approximately $36.0 million resulting from the deconsolidation of SAC Holding Corporation. Property management fees increased $1.4 million as a result of the W.P. Carey Transactions.

      We continued to exercise tight controls over expenses, with total costs and expenses decreasing $32.1 million, or 2.0% in fiscal 2005 compared with fiscal 2004. Expenses fell as a result of the absence of restructuring charges, productivity initiatives throughout U-Haul and the effect of the W. P. Carey Transaction. Expenses increased as a result of payroll and benefit inflation, rising repair and maintenance costs, $4.4 million of self-moving equipment impairment charges related to a lease buy-out and $2.1 million of additional depreciation expense related to lower residual value assumptions.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations increased 77.4% to $166.0 million in fiscal 2005 compared with $93.6 million for fiscal 2004.

      Listed below are revenues for our major product lines at our Moving and Storage operating segment for fiscal 2004 and fiscal 2003:

      During fiscal 2004 we built our self-moving equipment rentals through steady transaction volume, price increases and improved mix. Self-storage revenues were driven by an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Sales of moving and self storage related products and services followed our growth in moving equipment rental revenues.

      Although we continued to exercise tight controls over spending, total costs and expenses increased $81.2 million, or 5.2% in fiscal 2004 compared with fiscal 2003. Operating expenses increased $37.5 million as a result of higher restructuring costs. Also, payroll and benefit inflation and rising repair and maintenance costs contributed to higher costs.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations improved 35.8% to $93.6 million in fiscal 2004 compared with $68.9 million for fiscal 2003.

      Listed below are revenues for the major product lines at U-Haul International, Inc. for fiscal 2005 and fiscal 2004:

      During fiscal 2005 we built our self-moving equipment rentals through steady transaction volume, modest price increases and improved mix. Reported self-storage revenues were reduced $29.7 million as a result of the W.P. Carey Transactions. Self-storage revenues grew as a result of an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Property management fees increased $1.4 million as a result of the W.P. Carey Transactions. Sales of moving and self storage related products and services followed our growth in moving equipment rental revenues.

      Although we continued to exercise tight controls over spending, total costs and expenses increased $35.7 million, or 2.2% in fiscal 2005, compared with fiscal 2004. Operating expenses fell as a result of productivity initiatives throughout U-Haul and the affect of the W. P. Carey Transactions. Operating expenses increased as a result of payroll and benefit inflation, rising repair and maintenance costs, $4.4 million of self-moving equipment impairment charges related to a lease buy-out and $2.1 million of additional depreciation expense related to lower residual value assumptions.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations remained constant at $140.5 million in fiscal 2005 and 2004.

      Listed below are revenues for the major product lines at U-Haul International, Inc. for fiscal 2004 and fiscal 2003:

      During fiscal 2004 we built our self-moving equipment rentals through steady transaction volume, price increases and improved mix. Self-storage revenues were driven by an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Sales of moving and self storage related products and services followed our growth in moving equipment rentals.

      Although we continued to exercise tight controls over spending, total costs and expenses increased $43.6 million, or 2.8% in fiscal 2004 compared with fiscal 2003. Operating expenses increased as a result of payroll and benefit inflation and rising repair and maintenance costs. Operating expenses fell as a result of productivity initiatives throughout U-Haul.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations improved 97.9% to $140.5 million in fiscal 2004 compared with $71.0 million for fiscal 2003.

      Premium revenues were $25.0 million and $93.2 million for the years ended December 31, 2004 and 2003, respectively. The overall decrease is due to the Company’s exiting lines not associated with the Self-Storage or Self-Moving industries. Self-Storage and Self-Moving industry premiums were $18.9 million and $23.6 million for 2004 and 2003, respectively. The decrease is a result of the company being under supervision and its “C”, rating which resulted in lower writings on non-U-Haul self storage business. Other lines of business were $6.1 million and $69.6 million for 2004 and 2003, respectively.

      Net investment income was $16.4 million and $21.7 million for 2004 and 2003, respectively. The reduction was due to a decrease in the Company’s invested asset base.

      Benefits and losses incurred were $39.7 million and $109.4 million for 2004 and 2003, respectively. The decreases resulted from reduced earned premiums resulting from RepWest’s decision to exit its non-U-Haul lines, which was offset by the losses from the Florida hurricanes and additional reserves added to the long-tailed programs.

      Amortization of deferred acquisition costs was $4.7 million and $14.1 million for 2004 and 2003, respectively. The decrease is due to decreased premium writings.

      Operating expenses were $11.8 million and $27.4 million for 2004 and 2003, respectively. The decrease was due to decreased commissions, as well as, a reduction of general administrative expenses due to the exit of the non-U-Haul lines.

      Pretax losses from operations were $14.8 million and $36.0 million for 2004 and 2003, respectively. The loss in 2004 was the result of approximately $9.5 million in incurred losses and related expenses resulting from

      Premium revenues were $93.2 million and $152.6 million for the years ended December 31, 2003 and 2002, respectively. The overall decrease is due to the Company’s exiting all lines not associated with the Self-Storage or Self-Moving industries. Self-Storage and Self-Moving industry premiums were $23.6 million and $32.1 million for 2003 and 2002, respectively. The decrease is a result of a change in the structure of the U-Haul business to deductible/self-insured arrangements. Other lines of business were $69.6 million and $120.5 million for 2003 and 2002, respectively.

      Net investment income was $21.7 million and $22.3 million for 2003 and 2002 respectively.

      Benefits and losses incurred were $109.4 million and $128.7 million for 2003 and 2002, respectively. The decrease resulted from reduced earned premiums resulting from RepWest’s decision to exit its non Self-Storage and Self-Moving lines, which was offset by the additional reserves added to the non Self-Storage and Self-moving lines that were exited.

      Amortization of deferred acquisition costs was $14.1 million and $17.1 million for 2003 and 2002, respectively. The decrease was due to decreased premium writings.

      Operating expenses were $27.4 million and $37.1 million for 2003 and 2002, respectively. The decrease was due to decreased commissions, as well as, a reduction of general administrative expenses due to the exit of the non Self-Storage and non Self-Moving lines.

      Pretax losses from operations were $36.0 million and $8.0 million for the year ended December 31, 2003 and 2002, respectively. The increase in losses in 2003 was due to the additional reserves that were recorded for business lines that were terminated.

      The provision for unpaid losses and loss adjustment expenses (net of reinsurance recoveries of $107.4 million) for insured events in prior years increased by $53.1 million in calendar 2003. The adjustment related to prior years is primarily associated with two developments in 2003. The first is associated with the long tail nature of the assumed reinsurance and excess workers compensation lines, two lines that were previously written by Republic Western. Claims associated with these lines take numerous years to be fully reported and finally settled. During 2003, these programs were evaluated and additional reserves were recorded to account for unanticipated and previously unknown increases in medical and other costs that are likely to occur prior to the ultimate settlement. The second development was the unexpected severity in Republic Western’s commercial transportation and commercial multiple peril programs. Both of these lines experienced increased claim severity during 2003 that had a negative effect on the 2003 actuarial estimations. The increased claim severity was not known in prior years and thus was not reflected in previous actuarial calculations.

      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 to that reserve. The third section, reading down, represents revised estimates of the original recorded reserve as of the end of successive years. The last section compares the latest revised estimated reserve amount to the reserve amount as originally established. This last section is cumulative and should not be summed.

      Activity in the liability for unpaid losses and loss adjustment expenses for RepWest is summarized as follows:

      The liability for incurred losses and loss adjustment expenses (net of reinsurance recoverable of $189.5 million) increased by $21.8 million in fiscal 2004. The increase is a result of additional reserves being added for RepWest’s liabilities that are long term in nature.

      Net premiums were $127.7 million, $147.8 million for the years ended December 31, 2004 and 2003, respectively. Medicare supplement premiums decreased by $8.2 million from 2003 due to lapses on closed lines being greater than new business written on active lines. Credit insurance premiums decreased $6.9 million from 2003 due to fewer accounts resulting from the rating downgrade by A.M. Best. Life, other health, and annuity premiums decreased $5.0 million from 2003 primarily from reduced life insurance sales and fewer annuitizations.

      Net investment income was $23.5 million and $19.0 million for 2004 and 2003, respectively.

      Benefits incurred were $91.5 million and $103.5 million for 2004 and 2003, respectively. Medicare supplement benefits decreased $5.8 million from 2003 due primarily to reduced exposure. Credit insurance benefits decreased $2.8 million from 2003 due to reduced exposure and improved disability experience. Life insurance benefits decreased $3.6 million from 2003 as new business declined and existing exposure decreased. All other lines had increases of $0.2 million from 2003.

      Amortization of deferred acquisition costs (DAC) and the value of business acquired (VOBA) was $23.8 million and $25.0 million for 2004 and 2003, respectively. These costs are amortized for life and health policies as the premium is earned over the term of the policy; and for deferred annuities in relation to interest spreads. Annuity amortization increased $0.8 million from 2003 primarily due to increased surrender activity. Other segments, primarily credit, had decreases of $2.0 million from 2003 due to decreased new business volume.

      Operating expenses were $42.2 million and $38.1 million for 2004 and 2003, respectively. The $10.6 million accrual related to the Kocher settlement, net of insurance recoveries, accounted for the majority

      Earnings from operations were $2.1 million and $11.3 million for 2004 and 2003, respectively. The decrease in 2004 from 2003 is due primarily to the $10.6 million accrual for the Kocher settlement offset by improved investment income, and positive loss experience in the Medicare supplement and Credit insurance segments.

      Net premiums were $147.8 million and $161.4 million for 2003 and 2002, respectively. Medicare supplement premiums decreased by $3.5 million from 2002. Life Insurance premiums decreased $4.1 million from 2002. Credit life and disability premiums decreased $4.8 million from 2002 due to account cancellations and decreased penetration. Other health and annuity premiums decreased $1.3 million from 2002 primarily from reduced life insurance sales.

      Net investment income was $19.0 million and $13.9 million for 2003 and 2002, respectively. The increase from 2002 is due to fewer capital losses and fewer limited partnership losses offset by a lower invested asset base and reduced reinvestment rates.

      Benefits incurred were $103.5 million and $115.6 million for 2003 and 2002, respectively. Medicare supplement benefits decreased $6.5 million from 2002 primarily due to decreased exposure and improved experience. Credit insurance benefits decreased $2.3 million from 2002 due to reduced exposure. Benefits from other health lines increased $0.3 million from 2002 due to increased morbidity. Annuity and life benefits decreased $3.6 million from 2002 due to decreases in life insurance exposure.

      Amortization of deferred acquisition costs (DAC) and the value of business acquired (VOBA) was $25.0 million and $20.5 million for 2003 and 2002, respectively. These costs are amortized for life and health policies as the premium is earned over the term of the policy; and for deferred annuities in relation to interest spreads. Amortization associated with annuity policies increased $6.4 million from 2002 primarily due to increased surrender activity. Other segments decreased $1.9 million from 2002 due to decreased new business volume.

      Operating expenses were $38.1 million and $48.5 million for 2003 and 2002, respectively. Commissions decreased $4.1 million from 2002 primarily due to decreases in new business. General and administrative expenses decreased $6.3 million from 2002.

      Earnings/(losses) from operations were $11.3 million and ($1.4) million for 2003 and 2002, respectively. The increase from 2002 is due primarily from fewer other than temporary declines in the investment portfolio and improved loss ratios in the Medicare supplement segment.

      Listed below are revenues for our major product lines at SAC Holdings for fiscal 2005 and fiscal 2004:

      During March 2004, SAC Holding Corporation ceased to be a variable interest entity and AMERCO ceased being the primary beneficiary of SAC Holding Corporation. As a result of this, AMERCO deconsolidated its interests in SAC Holding Corporation at that time. AMERCO remains the primary beneficiary of its contractual variable interests in SAC Holding II Corporation for fiscal 2005 and 2004.

      Revenues for fiscal 2005 fell $175.8 million, primarily as a result of the above mentioned deconsolidation.

      Total costs and expenses were $32.7 million in fiscal 2005, compared with $154.3 million in fiscal 2004. Total costs and expenses fell $121.6 million, primarily as a result of the above mentioned deconsolidation.

      Earnings from operations were $10.5 million in fiscal 2005 compared with $64.7 million in fiscal 2004. Earnings from operations fell $54.2 million in fiscal 2005 compared with fiscal 2004, primarily as a result of the above mentioned deconsolidation.

      Listed below are revenues for our major product lines at SAC Holdings for fiscal 2004 and fiscal 2003:

      During fiscal 2004 we built our moving equipment rentals through steady transaction volume, price increases and improved mix. Storage revenues were driven by an increase in the number of rooms available for rent, higher occupancy rates and modest price increases. Sales of moving and self-storage related products and services followed our growth in moving equipment rentals.

      Total costs and expenses increased as a result of wage and benefit inflation and higher property taxes, cost of sales, utilities and insurance costs.

      As a result of the above mentioned changes in revenues and expenses, earnings from operations were $64.7 million in fiscal 2004, compared with $68.8 million in fiscal 2003.

      Our financial condition remains strong. At March 31, 2005, cash and short-term investments totaled $56.0 million, compared with $81.6 million at March 31, 2004. Total short-term and long-term debt, plus capital lease obligations were $780.0 million at March 31, 2005, compared with $962.3 million at March 31, 2004, and represented 1.4 times stockholders’ equity at March 31, 2005, compared with 1.9 times stockholders’ equity at March 31, 2004.

      A summary of our cash flows for fiscal 2005, fiscal 2004 and fiscal 2003 is shown in the table below:

      Cash from operating activities in fiscal 2005 was provided by net income of $89.4 million plus non-cash related items of $209.8 million. Cash from operating activities in fiscal 2005 was used in the reduction of insurance policy liabilities and deferred insurance policy acquisition costs and to fund increases in working capital. This compares with fiscal 2004 when cash from operating activities was used by a net loss of $2.9 million plus the reduction of insurance policy liabilities and deferred insurance policy acquisition costs and to fund increases in working capital. Cash from operating activities was provided by non-cash related items of $281.4 million. This compares with fiscal 2003 when cash from operating activities was used by a net loss of $25.0 million plus the reduction of insurance policy liabilities and deferred insurance policy acquisition costs and to fund increases in working capital. Cash from operating activities was provided by non-cash related items of $149.2 million.

      We provided $36.2 million of net cash from investing activities in fiscal 2005 primarily as a result of the W.P. Carey Transactions, net of investments in property, plant and equipment. We provided $60.2 million in fiscal 2004, primarily as a result of real estate and property and equipment sales, net of other investments in property, plant and equipment. We used $81.1 million of net cash from investing activities in fiscal 2003, primarily as a result of investments in property, plant and equipment. Investments in property, plant and equipment were $285.0 million in fiscal 2005, $198.4 million in fiscal 2004 and $243.2 million in fiscal 2003, as we continue to invest in rental equipment.

      We borrowed $129.4 million in fiscal 2005, compared with $997.0 million in fiscal 2004, and $371.7 million in fiscal 2003. We paid down financing by $313.0 million (including $99.6 million for the W.P. Carey Transactions) in fiscal 2005, compared with $888.2 million in fiscal 2004 and $442.1 million in fiscal 2003. Additional financing uses of cash included payment of dividends. In November 2004, our Board of Directors approved the payment of all dividend arrearages on our Series A 8¹/2% Preferred Stock. Regular quarterly cash dividends have been paid on a current basis since February 2004. As a result, our dividend payments were $25.9 million higher in fiscal 2005 compared with fiscal 2004. There were dividend payments of $6.5 million during fiscal 2003. Financing sources of cash were primarily borrowings under our revolving credit agreements ($129.4 million in fiscal 2005, compared with $164.1 million in fiscal 2004 and $205.0 million in fiscal 2003).

      The capital structure in place at March 31, 2005 allowed us to achieve our near-term operational plans and goals and support our preferred stock dividend program. We believe the new capital structure that is in place as of June 8, 2005 will allow us to achieve our longer-term operational plans and goals and provide us with sufficient liquidity for the next three to five years. We believe this will allow us to focus on our operations and business to further improve our liquidity in the long-term. We believe these improvements will enhance our access to capital markets. However, there can be no assurance that future cash flows will be sufficient to meet our outstanding obligations or our future capital needs.

      To meet the needs of its customers, U-Haul maintains a large fleet of rental equipment. Historically, capital expenditures have primarily reflected rental equipment acquisitions. The capital required to fund these expenditures has historically been obtained through internally generated funds from operations, lease financing and sales of used equipment. Going forward, we anticipate that a substantial portion of our internally generated funds will be used to enhance liquidity by paying down existing indebtedness. During each of the fiscal years ended March 31, 2006, 2007 and 2008, U-Haul estimates that net capital expenditures will average approximately $150 million to maintain its fleet at current levels. Financial covenants contained in our loan agreements at March 31, 2005 limit the amount of capital expenditures we can make in 2006, 2007 and 2008, net of dispositions, to $245 million, $195 million and $195 million, respectively. We intend to focus our growth on expanding our independent dealer network, which does not require a substantial amount of capital resources.

      In the past our real estate requirements were for the acquisition of self-storage properties to support U-Haul’s growth, and were primarily financed through lease and debt financing. Going forward, U-Haul’s growth plan in self-storage is focused on eMove, which does not require the acquisition or construction of self-

      At December 31, 2004, RepWest had no notes and loans due in less than one year and its accounts payable and accrued expenses and other policyholders’ funds and liabilities were $8.7 million. RepWest financial assets (cash, receivables, inventories, and short-term investments) at December 31, 2004, were $401.1 million.

      Stockholder’s equity was $154.8 million, $169.0 million, and $199.1 million at December 31, 2004, 2003, and 2002 respectively. Republic does not use debt or equity issues to increase capital and therefore has no exposure to capital market conditions. RepWest did not pay dividends to its parent during 2004, 2003 or 2002.

      As of December 31, 2004, Oxford had no notes and loans payable in less than one year and its accounts payable and accrued expenses and other policyholders’ funds and liabilities were $21.3 million. Oxford’s financial assets (cash, receivables, short-term investments, other investments and fixed maturities) at December 31, 2004 were approximately $777.4 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, Oxford’s funds are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

      Oxford’s stockholder’s equity was $115.0 million, $121.0 million, and $111.1 million in at December 31, 2004, 2003 and 2002, respectively. Increases from earnings were offset by decreases in unrealized gains resulting from the change in interest rates.

      SAC Holdings operations are funded by various mortgage loans and unsecured notes. SAC Holdings does not utilize revolving lines of credit to finance its operations or acquisitions. Certain of SAC Holdings loan agreements contain restrictive covenants and restrictions on incurring additional subsidiary indebtedness.

      Cash provided by operating activities was $226.5 million, $60.7 million and $201.1 million in fiscal 2005, 2004 and 2003, respectively. Fiscal 2005 results were primarily the result of net earnings plus non-cash items. Fiscal 2004 was primarily the result of non-cash items, partially offset by increases in working capital and net losses. Fiscal 2003 results were primarily the result of non-cash items plus reductions in working capital, partially offset by net losses.

      Cash used by operating activities were $31.6 million, $86.1 million, and $75.1 million for 2004, 2003, and 2002, respectively. The cash used by operating activities was the result of RepWest’s exiting its non Self-Storage and Self-Moving lines and the associated reduction of reserves in the lines exited.

      RepWest’s cash and cash equivalents and short-term investment portfolio were $90.3 million, $62.1 million, and $35.1 million at December 31, 2004, 2003, and 2002, respectively. This balance includes funds in transition from maturity proceeds until reinvested in long term investments. We believe that this level of liquid assets, combined with budgeted cash flow, is adequate to meet periodic needs for the foreseeable future. Capital and operating budgets allow RepWest to schedule cash needs in accordance with investment and underwriting proceeds.

      Cash provided (used) by operating activities from Oxford was $24.8 million, $20.9 million and ($18.0) million for 2004, 2003 and 2002, respectively.

      In addition to cash flows from operating activities, a substantial amount of liquid funds is available through Oxford’s short-term portfolio. At December 31, 2004, 2003 and 2002, short-term investments amounted to $113.8 million, $124.7 million and $80.4 million, respectively. Management believes that the overall sources of liquidity will continue to meet foreseeable cash needs.

      Cash provided (used) by operating activities at SAC Holdings was $1.1 million and ($8.2) million for fiscal 2005 and fiscal 2004, respectively. Cash of $13.5 million was provided by operating activities in fiscal 2003. The primary source of cash in fiscal 2005 was a decrease in accounts payable and accrued liabilities. The primary use of cash in fiscal 2004 was the deconsolidation of SAC Holding Corporation. The primary source of cash in fiscal 2003 was an increase in accounts payable and accrued liabilities.

      We believe we have the financial resources needed to meet our business requirements including capital expenditures for the investment and expansion of our rental fleet, rental equipment and rental storage space, working capital requirements and our preferred stock dividend program.

      For a more detailed discussion of our long-term debt and borrowing capacity, please see footnote 9 “Borrowings” to the “Notes to the Consolidated Financial Statements.”

      The following table provides contractual commitments and contingencies as of March 31, 2005:

As presented above, contractual obligations on debt and guarantees represent principal payments while contractual obligations for capital and operating leases represent the notional payments under the lease arrangements, including anticipated future cash payments for interest on capital leases.

      AMERCO used certain equipment and occupies certain facilities under operating lease commitments with terms expiring substantially through 2034 with the exception of one land lease expiring in 2079. In the event of a shortfall in proceeds from the sale of the underlying assets, AMERCO has guaranteed approximately $143.9 million of residual values at March 31, 2005 for these assets at the end of the respective lease terms. AMERCO has been leasing equipment since 1987 and, thus far, we have experienced no residual value shortfalls. See details related to operating lease commitments in Note 16 to the consolidated financial statements on page F-31.

      The Company uses off-balance sheet arrangements where the economics and sound business principles warrant their use. The Company’s principal use of off-balance sheet arrangements occurred in connection with

      Certain subsidiaries of SAC Holdings and its affiliates act as U-Haul dealers. The financial and other terms of the dealership contracts with subsidiaries of SAC Holdings and its affiliates are substantially identical to the terms of those with our 14,071 independent dealers. During fiscal 2005, we paid subsidiaries of SAC Holdings $33.1 million in commissions pursuant to such dealership contracts.

      The Company leased space for certain of its marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings and its affiliates. Total lease payments pursuant to such leases were $2.7 million during fiscal 2005.

      These agreements provided revenues of $35.0 million, expenses of $35.8 million, cash receipts of $60.5 million and cash disbursements of $71.6 million during fiscal 2005. These amounts exclude rental revenues received by the Company for which SAC Holdings and its affiliates were paid a commission.

      During fiscal 2005, a subsidiary of the Company held various senior and junior unsecured notes of SAC Holdings. The Company recorded interest income of $22.0 million and received cash interest payments of $11.7 million during fiscal 2005.

      We have many exciting developments which we believe should positively affect performance in fiscal 2006. We believe the momentum in our Moving and Storage Operations will continue. We are investing strongly in our truck rental fleet to further strengthen U-Haul’s “do-it-yourself” moving business. We placed purchase orders last fall for 6,750 of our largest rental trucks and expect to have them in service by mid-August. This investment is expected to increase the number of rentable truck days available to meet our customer’s demand and should reduce future spending on repair costs and equipment down-time.

      At RepWest, our plans to exit non-U-Haul lines of business are progressing well.

      At Oxford, the recent Kocher litigation settlement should produce improved ratings, which in turn should support the expansion of its distribution capabilities.

      Also, we completed the refinancing of the Company’s debt on June 8, 2005. This action increased our borrowing capacity by more than $45.0 million and is expected to lower our annual interest expense approximately $25.0 million before taxes (based on current borrowing levels). The early extinguishment of our existing debt will result in a one time pre-tax charge of approximately $34.0 million during the first quarter of fiscal 2006.

      Our objectives for fiscal 2006 are to position our rental fleet to achieve revenue and transaction growth and continue to drive down operating costs.

      This Annual Report on Form 10-K contains forward-looking statements. We may make additional written or oral forward-looking statements from time to time in filings with the Securities and Exchange Commission or otherwise. We believe such forward-looking statements are within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, projections of revenues, income or loss; estimates of capital expenditures, plans for future operations, products or services; financing needs and plans; our perceptions of our legal positions and anticipated outcomes of pending litigation against us; our liquidity and financial resources; goals and strategies; plans for new business; assumptions about pricing, costs, and access to capital and leasing markets

      The quarterly results shown below are derived from unaudited financial statements for the eight quarters beginning April 1, 2003 and ending March 31, 2005. The Company believes that all necessary adjustments have been included in the amounts stated below to 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 fiscal year (April through September). The operating results for the periods presented are not necessarily indicative of results for any future period.

(a) The third quarter fiscal 2005 results included non-recurring litigation proceeds of $51.3 million.

(b) Quarterly amounts include certain reclassifications to conform with current period presentation.