<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________________ to ____________________
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.
________________________________________________________________________________
0-7862 AMERCO 88-0106815
(A Nevada Corporation)
1325 Airmotive Way, Ste. 100
Reno, Nevada 89502-3239
Telephone (702) 688-6300
2-38498 U-Haul International, Inc. 86-0663060
(A Nevada Corporation)
2727 N. Central Avenue
Phoenix, Arizona 85004
Telephone (602) 263-6645
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 [X] No [ ].
38,664,063 shares of AMERCO Common Stock, $0.25 par value, were outstanding at
February 10, 1994.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were
outstanding at February 10, 1994.
<PAGE> 2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
a) Consolidated Balance Sheets as of December 31, 1993,
March 31, 1993 and December 31, 1992...................... 4
b) Consolidated Statements of Earnings for the Nine Months
ended December 31, 1993 and 1992.......................... 6
c) Consolidated Statements of Changes in Stockholders'
Equity for the Nine Months ended December 31, 1993
and 1992.................................................. 7
d) Consolidated Statements of Earnings for the Quarters
ended December 31, 1993 and 1992.......................... 8
e) Consolidated Statements of Cash Flows for the Nine Months
ended December 31, 1993 and 1992.......................... 9
f) Notes to Consolidated Financial Statements - December 31,
1993, March 31, 1993 and December 31, 1992................ 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................. 19
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INTENTIONALLY BLANK
<PAGE> 4
PART I. FINANCIAL INFORMATION
<TABLE>
ITEM 1. FINANCIAL STATEMENTS.
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
December 31, March 31, December 31,
ASSETS 1993 1993 1992
------ ---------------------------------------
(unaudited) (audited) (unaudited)
(in thousands)
<S> <C> <C> <C>
Cash $ 81,850 21,291 29,172
Receivables 98,722 79,672 72,997
Inventories 50,057 51,437 49,622
Prepaid expenses 25,971 26,985 30,093
Investments, fixed maturities 681,142 647,505 615,868
Investments, other 98,244 129,535 165,451
Deferred policy acquisition costs 50,100 49,748 50,348
Other assets 23,940 28,247 30,883
--------- --------- ---------
Property, plant and equipment, at cost:
Land 184,584 180,171 180,379
Buildings and improvements 654,978 614,343 608,991
Furniture and equipment 161,539 158,366 156,882
Rental trailers and other rental
equipment 208,028 203,024 190,215
Rental trucks 756,836 609,306 588,356
General rental items 59,107 61,699 61,276
--------- --------- ---------
2,025,072 1,826,909 1,786,099
Less accumulated depreciation 911,582 837,306 818,837
--------- --------- ---------
Total property, plant and
equipment 1,113,490 989,603 967,262
--------- --------- ---------
$ 2,223,516 2,024,023 2,011,696
========= ========= =========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
December 31, March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1993 1992
------------------------------------ ---------------------------------------
(unaudited) (audited) (unaudited)
(in thousands)
<S> <C> <C> <C>
Liabilities:
Accounts payable and accrued
liabilities $ 133,682 113,653 97,066
Notes and loans 666,063 697,121 686,181
Policy liabilities and accruals 348,004 336,838 336,554
Liabilities from premium deposits 316,067 320,961 319,189
Cash overdraft 21,125 24,851 23,652
Other policyholders' funds and
liabilities 13,413 9,200 10,049
Deferred income 4,778 6,328 7,206
Deferred income taxes 54,173 35,113 39,034
--------- --------- ---------
Stockholders' equity:
Serial preferred stock, with or
without par value, 50,000,000 shares
authorized; 6,100,000 issued without
par value and outstanding as of
December 31, 1993 and none issued or
outstanding as of March 31, 1993 and
December 31, 1992 - - -
Serial common stock, with or without
par value, 150,000,000 shares
authorized; none issued or
outstanding - - -
Common stock of $.25 par value.
Authorized 150,000,000 shares;
issued 40,000,000 shares as of
December 31, 1993, March 31, 1993
and December 31, 1992 10,000 10,000 10,000
Additional paid-in capital 165,789 19,331 19,331
Foreign currency translation (9,003) (6,122) (6,321)
Retained earnings 527,337 482,163 495,129
---------- ---------- ----------
694,123 505,372 518,139
Less:
Cost of common shares in treasury
(1,335,937 shares as of December 31,
1993 and March 31, 1993 and
December 31, 1992) 10,461 10,461 10,461
Loan to leveraged employee stock
ownership plan 17,451 14,953 14,913
---------- ---------- ----------
Total stockholders' equity 666,211 479,958 492,765
Contingent liabilities and commitments
---------- --------- ----------
$ 2,223,516 2,024,023 2,011,696
========== ========== ==========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 6
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Nine Months ended December 31,
(Unaudited)
<CAPTION>
1993 1992
-------------------------
(in thousands except
per share data)
<S> <C> <C>
Revenues
Rental and other revenue $ 639,277 597,555
Net sales 123,567 116,712
Premiums 91,922 76,012
Net investment income 28,998 31,257
------------- ----------
Total revenues 883,764 821,536
Costs and expenses
Operating expense 479,288 452,340
Cost of sales 74,065 74,366
Benefits and losses 94,654 84,898
Amortization of deferred acquisition costs 6,508 7,249
Depreciation 96,580 82,382
Interest expense 52,530 51,139
------------- ----------
Total costs and expenses 803,625 752,374
Pretax earnings from operations 80,139 69,162
Income tax expense (25,211) (24,287)
-------------- -----------
Earnings from operations before extraordinary
loss on early extinguishment of debt
and cumulative effect of change in
accounting principle 54,928 44,875
Extraordinary loss on early extinguishment
of debt (1,897) -
Cumulative effect of change in
accounting principle (3,272) -
-------------- -----------
Net earnings $ 49,759 44,875
============== ===========
Earnings per common share:
Earnings from operations before extraordinary
loss on early extinguishment of debt
and cumulative effect of change in
accounting principle $ 1.42 1.16
Extraordinary loss on early extinguishment
of debt (.05) -
Cumulative effect of change in
accounting principle (.08) -
-------------- ----------
Net earnings $ 1.29 1.16
============== ==========
Weighted average common shares outstanding 38,664,063 38,664,063
============== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 7
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Nine Months ended December 31,
(Unaudited)
<CAPTION>
1993 1992
---------------------
(in thousands)
<S> <C> <C>
Common stock of $.25 par value:
Authorized 150,000,000 shares in 1993 and 1992.
Beginning and end of period;
40,000,000 issued in 1993 and 1992 $ 10,000 10,000
---------- --------
Additional paid-in capital:
Beginning of period 19,331 19,331
Issuance of preferred stock 146,458 -
---------- --------
Ending of period 165,789 19,331
---------- --------
Foreign currency translation:
Beginning of period (6,122) (3,551)
Change during period (2,881) (2,770)
---------- --------
End of period (9,003) (6,321)
---------- --------
Retained earnings:
Beginning of period 482,163 452,202
Net earnings 49,759 44,875
Dividends paid to stockholders
Preferred stock: ($.25 per share for 1993) (1,512) -
Common stock: ($.08, $.0516 per share for
1993 and 1992, respectively) (3,147) (1,994)
Tax benefits related to ESOP dividends 74 46
---------- --------
End of period 527,337 495,129
---------- --------
Treasury stock:
Beginning and end of period 10,461 10,461
---------- --------
Loan to leveraged employee stock ownership plan:
Beginning of period 14,953 15,633
Increase in loan 4,335 1,080
Proceeds from loan (1,837) (1,800)
---------- --------
End of period 17,451 14,913
---------- --------
Total stockholders' equity $ 666,211 492,765
========== ========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 8
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Quarters ended December 31,
(Unaudited)
<CAPTION>
1993 1992
--------------------------
(in thousands except
per share data)
<S> <C> <C>
Revenues
Rental and other revenue $ 192,051 179,159
Net sales 30,788 29,034
Premiums 35,261 24,437
Net investment income 9,348 10,291
-------------- -----------
Total revenues 267,448 242,921
Costs and expenses
Operating expense 155,422 152,740
Cost of sales 18,967 20,756
Benefits and losses 34,744 32,615
Amortization of deferred acquisition costs 2,176 3,501
Depreciation 34,314 27,285
Interest expense 17,262 16,572
-------------- -----------
Total costs and expenses 262,885 253,469
Pretax earnings (loss) from operations 4,563 (10,548)
Income tax benefit (expense) (867) 3,705
-------------- -----------
Earnings (loss) from operations before
extraordinary loss on early extinguishment
of debt and cumulative effect of change in
accounting principle 3,696 (6,843)
Extraordinary loss on early extinguishment
of debt (1,897) -
Cumulative effect of change in
accounting principle - -
-------------- -----------
Net earnings (loss) $ 1,799 (6,843)
============== ===========
Earnings per common share:
Earnings (loss) from operations before
extraordinary loss on early extinguishment
of debt and cumulative effect of change in
accounting principle $ .10 (.18)
Extraordinary loss on early extinguishment
of debt (.05) -
Cumulative effect of change in
accounting principle - -
-------------- -----------
Net earnings (loss) $ .05 (.18)
============== ===========
Weighted average common shares outstanding 38,664,063 38,664,063
============== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 9
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months ended December 31,
(Unaudited)
<CAPTION>
1993 1992
-----------------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 49,759 44,875
Depreciation and amortization 106,525 97,750
Provision for losses on accounts receivable 1,009 1,660
Net gain on sale of real and personal property (3,650) (528)
Gain on sale of investments (2,970) (5,512)
Cumulative effect of change in
accounting principle 3,272 -
Changes in policy liabilities and accruals 10,748 22,401
Additions to deferred policy acquisition costs (6,859) (7,232)
Net change in other operating assets and
liabilities 39,664 (15,517)
----------- ---------
Net cash provided by operating activities 197,498 137,897
----------- ---------
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment (395,247) (74,551)
Fixed maturities (184,368) (204,334)
Real estate (176) (404)
Mortgage loans (41,920) (16,759)
Proceeds from sale of investments:
Property, plant and equipment 180,228 12,530
Fixed maturities 152,401 211,047
Real estate 1,386 1,157
Mortgage loans 58,873 4,094
Changes in other investments (5,842) (30,970)
----------- ---------
Net cash used by investing activities (234,665) (98,190)
----------- ---------
Cash flows from financing activities:
Net change in short term borrowings (126,000) (15,025)
Proceeds from notes 186,000 35,000
Loan to leveraged employee stock ownership plan (4,335) (1,080)
Proceeds from leveraged employee stock
ownership plan 1,837 1,800
Principal payments on notes (91,058) (67,116)
Issuance of preferred stock 146,458 -
Extraordinary loss on early extinguishment
of debt (1,897) -
Dividends paid (4,659) (1,994)
Net change in cash overdraft (3,726) 4,108
Investment contract deposits 24,552 41,719
Investment contract withdrawals (29,446) (20,333)
----------- ---------
Net cash provided (used) by financing activities 97,726 (22,921)
----------- ---------
Increase in cash 60,559 16,786
Cash at beginning of period 21,291 12,386
----------- ---------
Cash at end of period $ 81,850 29,172
=========== =========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE> 10
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1993, March 31, 1993 and December 31, 1992
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the parent
corporation, AMERCO, and its subsidiaries, all of which are wholly-owned. All
material intercompany accounts and transactions of AMERCO and its subsidiaries
(herein called the "Company" or the "consolidated group") have been eliminated.
The consolidated balance sheets as of December 31, 1993 and 1992, and the
related consolidated statements of earnings, changes in stockholders' equity and
cash flows for the periods ended December 31, 1993 and 1992 are unaudited; in
the opinion of management, all adjustments necessary for a fair presentation of
such financial statements have been included. Such adjustments consisted only
of normal recurring items. Interim results are not necessarily indicative of
results for a full year.
The financial statements and notes are presented as permitted by Form 10-Q and
do not contain information included in the Company's annual financial statements
and notes.
Certain reclassifications have been made to the financial statements for the
period ended December 31, 1992 to conform with the current year's presentation.
2. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF PONDEROSA HOLDINGS, INC.
AND ITS SUBSIDIARIES
A summary consolidated balance sheet (unaudited) for Ponderosa Holdings, Inc.
and its subsidiaries is presented below:
<TABLE>
<CAPTION>
September 30,
1993 1992
---------------------
(in thousands)
<S> <C> <C>
Investments - fixed maturities $ 681,142 615,868
Other investments 98,244 165,451
Receivables 47,960 35,258
Deferred policy acquisition costs 50,100 50,348
Due from affiliate 10,072 5,476
Deferred federal income taxes 7,216 7,216
Other assets 25,023 18,245
--------- -------
Total assets $ 919,757 897,862
========= =======
Policy liabilities and accruals $ 307,410 306,434
Unearned premiums 40,594 30,538
Premium deposits 316,067 319,189
Other policyholders' funds and liabilities 13,514 11,199
--------- -------
Total liabilities 677,585 667,360
Stockholder's equity 242,172 230,502
--------- -------
Total liabilities and
stockholder's equity $ 919,757 897,862
========= =======
</TABLE>
<PAGE> 11
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Financial Statements, Continued
(Unaudited)
2. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF PONDEROSA HOLDINGS, INC.
AND ITS SUBSIDIARIES, continued
A summarized consolidated income statement (unaudited) for Ponderosa Holdings,
Inc. and its subsidiaries is presented below:
<TABLE>
<CAPTION>
Nine Months ended September 30,
1993 1992
---------------------
(in thousands)
<S> <C> <C>
Premiums $ 107,306 91,994
Net investment income 30,165 31,390
Other income 6,075 8,487
---------- --------
Total revenue 143,546 131,871
Benefits and losses 94,654 84,898
Amortization of deferred policy
acquisition costs 6,508 7,249
Other expenses 19,239 17,538
---------- --------
Income from operations 23,145 22,186
Federal income tax expense (6,084) (5,726)
---------- --------
Earnings from operations before
change in accounting principle 17,061 16,460
Cumulative effect of a change in
accounting principle (101) -
---------- --------
Net income $ 16,960 16,460
========== ========
</TABLE>
3. CONTINGENT LIABILITIES AND COMMITMENTS
During the quarter ended December 31, 1993, U-Haul Leasing & Sales Co., a
whollyowned subsidiary of U-Haul International, Inc., entered into seven
transactions, whereby they sold rental trucks and subsequently leased them back.
AMERCO has guaranteed $4,084,000 of residual values at December 31, 1993 on
these assets at the end of the lease terms. Following is the lease commitment
for these leases which have a term of more than one year (in thousands):
<TABLE>
<CAPTION>
Year ended Lease
March 31, Commitments
------------------------------
<S> <C> <C>
1994 $ 2,004
1995 6,766
1996 6,766
1997 6,766
1998 6,766
Thereafter 18,297
--------
$ 47,365
=========
</TABLE>
AMERCO and/or its subsidiaries are defendants in a number of suits and claims
incident to the type of business conducted. It is the opinion of management
that none of the suits or claims involving AMERCO and/or its subsidiaries is
expected to result in any material loss and, accordingly, no provision has been
made in the accompanying financial statements.
<PAGE> 12
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Financial Statements, Continued
(Unaudited)
4. SUPPLEMENTAL CASH FLOWS INFORMATION
The (increase) decrease in receivables, inventories and accounts payable and
accrued liabilities net of other operating and investing activities follows:
<TABLE>
<CAPTION>
Nine Months ended December 31,
1993 1992
------------------------
(in thousands)
<S> <C> <C>
Receivables $ (664) 226
=========== ========
Inventories $ 1,380 (2,849)
=========== ========
Accounts payable and
accrued liabilities $ 18,931 (19,344)
=========== =========
</TABLE>
Cash paid for income taxes amounted to $2,161,000 and $40,000 for 1993 and 1992,
respectively.
Interest paid in cash amounted to $62,403,000 and $70,531,000 for 1993 and 1992,
respectively.
5. PREFERRED STOCK
In October 1993, the Company issued 6,100,000 shares of 8.5% cumulative, no par,
non-voting preferred stock. The preferred stock is not convertible into, or
exchangeable for, shares of any other class or classes of stock of the Company.
The net proceeds to the Company from the sale were $146.5 million which have
been used to prepay working capital lines of credit, pay current debt maturities
and provide funds for general corporate purposes.
6. SUBSEQUENT EVENT
On February 8, 1994, the Company declared a cash dividend of $3,241,000 ($.531
per preferred share) to preferred stockholders of record as of February 18,
1994.
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
For financial statement preparation, the Company's insurance subsidiaries report
on a calendar year basis, while the Company reports on a fiscal year basis
ending March 31. Accordingly, with respect to the Company's insurance
subsidiaries, any reference to the years 1993 and 1992 corresponds to the
Company's fiscal years 1994 and 1993.
RESULTS OF OPERATIONS (unaudited):
The following table shows industry segment data from the Company's three
industry segments, rental operations, life insurance, and property and casualty
insurance, for the nine months ended December 31, 1993 and 1992. Rental
operations is composed of the operations of U-Haul and AMERCO Real Estate
Company. Life insurance is composed of the operations of Oxford Life Insurance
Company (Oxford). Property and casualty insurance is composed of the operations
of Republic Western Insurance Company (RWIC).
<TABLE>
<CAPTION>
Property/ Adjustments
Rental Life Casualty and Consolidated
Operations Insurance Insurance Eliminations
------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C>
1993
Revenues:
Outside $ 757,221 23,987 102,556 - 883,764
Intersegment (357) 1,638 15,403 (16,684) -
---------- -------- ---------- ---------- --------
Total revenue 756,864 25,625 117,959 (16,684) 883,764
========== ======== ========== ========== ========
Operating profit 110,222 8,532 14,613 (698) 132,669
========== ======== ========== ==========
Interest expense 52,530
--------
Pretax earnings
from operations 80,139
========
1992
Revenues:
Outside $ 706,294 27,648 87,594 - 821,536
Intersegment - 1,644 15,798 (17,442) -
--------- -------- ---------- ---------- --------
Total revenue 706,294 29,292 103,392 (17,442) 821,536
========= ======== ========== ========== ========
Operating profit 98,115 11,048 11,138 - 120,301
========= ======== ========== ==========
Interest expense 51,139
--------
Pretax earnings
from operations 69,162
========
</TABLE>
U-Haul Operations
U-Haul revenues consist of (i) total rental and other revenue and (ii) net
sales. Total rental and other revenue increased by $43.7 million, approximately
7.4%, to $633.3 million in the first nine months of fiscal 1994. The increase in
the first nine months of fiscal 1994 is primarily attributable to a $35.4
million increase in net revenues from the rental of moving related equipment,
which rose to $580.9 million, as compared to $545.5 million in the first nine
months of fiscal 1993. Moving related revenues benefitted from transactional
<PAGE> 14
growth within the truck and trailer fleets. Revenues from the rental of self-
storage facilities increased by $4.4 million to $52.2 million in the first nine
months of fiscal 1994, an increase of approximately 9.3%. Storage revenues were
positively impacted by additional rentable square footage, higher average
occupancy levels, and higher average rental rates.
Net sales revenues were $123.6 million in the first nine months of fiscal 1994,
which represented an increase of approximately 5.9% from the first nine months
of fiscal 1993 net sales of $116.7 million. Revenue growth from the sale of
hitches, moving support items (i.e. boxes, etc.), and propane resulted in a $6.7
million increase during the nine month period, which was offset by a $.6 million
decrease in revenue associated with the sale of recreational vehicles, such
vehicle inventory being completely liquidated during the first and second
quarters of fiscal 1993.
Cost of sales was $74.1 million in the first nine months of fiscal 1994, which
represented a decrease of approximately .4% from $74.4 million for the same
period in fiscal 1993. The decrease in cost of sales reflects a reduction in
labor costs and the absence of recreational vehicle sales which offset increased
material costs corresponding to the increase in retail sales.
Operating expenses increased to $476.0 million in the first nine months of
fiscal 1994 from $451.0 million in the first nine months of fiscal 1993, an
increase of approximately 5.4%. The change from the prior year primarily
reflects a $22.4 million increase in rental equipment maintenance costs.
Increased emphasis on maximizing rental equipment available to rent by reducing
downtime and a marginal increase in the age of the truck fleet are primarily
responsible for the increase. Equipment lease expense declined by $22.8 million
to $65.7 million reflecting lease terminations, lease restructuring, and lower
finance costs on new leases originated during the current fiscal year.
Management anticipates that lease expense will continue to decline further in
the last quarter of fiscal 1994 when the full impact of these programs is
realized. All other operating expense categories increased in aggregate by
$25.0 million, approximately 9.9%, to $278.9 million.
Depreciation expense for the nine month period was $96.6 million, as compared to
$82.4 million in the same period of the prior year, reflecting the addition of
new trucks and the acquisition of trucks that were previously leased.
Oxford Life Insurance Company
Premiums from Oxford's reinsurance lines before intercompany eliminations were
$11.9 million for the nine months ended September 30, 1993, an increase of $.2
million, approximately 1.7% from September 30, 1992 and accounted for 88.7% of
Oxford's premiums in the current year. The types of business reinsured include
term life insurance, single and flexible premium deferred annuities, excess loss
medical coverage, and short-term travel accident coverage.
Premiums from Oxford's direct lines before intercompany eliminations were $1.5
million for the nine months ended September 30, 1993, a decrease of $.1 million
(5.9%) from the prior year. Oxford's direct lines are principally related to
the underwriting of group life and disability income. Insurance on the lives of
the employees of AMERCO and its subsidiaries accounted for approximately 3.5% of
Oxford's premiums during this period ended September 30, 1993. Other direct
lines include individual life insurance acquired from other insurers and a small
volume of individual deferred annuities written through independent agents,
which together accounted for approximately .2% of Oxford's premiums during the
nine months ended September 30, 1993.
<PAGE> 15
Net investment income before intercompany eliminations was $9.4 million and $9.6
million for the nine months ended September 30, 1993 and 1992, respectively.
Oxford's gain on the sale of investments was $1.5 million and $4.8 million, and
Oxford had $1.4 million and $1.6 million of other income, for each of the
respective periods.
Benefits and expenses incurred were $17.1 million for the nine months ended
September 30, 1993, a decrease of 6.0% from September 30, 1992. Comparable
benefits and expenses incurred for September 30, 1992 were $18.2 million. This
decrease is primarily due to a decrease in death benefits incurred. Benefits
and expenses incurred were $5.2 million for the quarter ended September 30,
1993, a decrease of 28.8% over the same period in 1992. Comparable benefits and
expenses incurred in the quarter ended September 30, 1992 were $7.3 million.
Operating profit decreased by $2.5 million, approximately 22.8%, for the nine
months ended September 30, 1993 to $8.5 million, primarily due to a decrease in
gain on sale of investments.
Republic Western Insurance Company - Property and Casualty
RWIC gross premium writings continued to grow in the first nine months of 1993,
to $131.5 million as compared to $114.6 million in the first half of 1992. This
represents an increase of $16.9 million, or 14.7%. The rental industry market
accounts for a significant share of these premiums, approximately 40.1% and
42.6% in 1993 and 1992, respectively. These writings include U-Haul customers,
fleetowners, and U-Haul, as well as other rental industry insureds with similar
characteristics. Growth is occurring in selected general agency lines,
principally excess workers' compensation. These premiums accounted for
approximately 14.0% of gross written premiums for the first nine months of 1993,
compared to 12.9% in the first nine months of 1992. RWIC continues underwriting
professional reinsurance via broker markets, and premiums in this area increased
in the first nine months of 1993 to $44.6 million, or 33.9% of total premium,
from the comparable 1992 period of $28.6 million, or 25.0% of total premium.
Net earned premiums increased $14.5 million, or 18.3%, to $93.9 million for the
nine months ended September 30, 1993, compared with premiums of $79.4 million
for the nine months ended September 30, 1992. The premium increase was primarily
due to increased writings in the reinsurance area, along with growth in the
excess workers' compensation lines of RWIC's general agency business.
Net investment income was $20.7 million during the first nine months of 1993, a
decrease of 5.0% from 1992 net investment income of $21.8 million. The decrease
is attributable to lower rates available in the fixed income market.
Underwriting expenses incurred were $103.3 million for the nine months ended
September 30, 1993, an increase of $11.0 million, or 11.9% over 1992. Comparable
underwriting expenses incurred for 1992 were $92.3 million. The increase in
underwriting expenses is due to the larger premium volume being written in 1993,
which increased acquisition costs and commensurate reserves.
RWIC completed the first nine months of 1993 with net after tax income of $11.4
million as compared to $8.9 million for the comparable period ended September
1992. This represents an increase of $2.5 million, or 28.1% from 1992. This
increase was due to a combination of slightly better underwriting results and
unexpected realized gains on bond calls.
<PAGE> 16
Interest Expense
Interest expense increased by $1.4 million to $52.5 million for the nine months
ended December 31, 1993, as compared to $51.1 million for the nine months ended
December 31, 1992. This increase reflects higher average levels of debt
outstanding which was largely offset by lower average cost funds.
Consolidated Group
As a result of the foregoing, pretax earnings of $80.1 million were realized in
the nine months ended December 31, 1993, as compared to $69.2 million for the
same period in 1992. During the three months ended December 31, 1993, pretax
earnings were $15.1 million higher than during the same period in 1992. After
providing for income taxes, extraordinary loss pertaining to the early
extinguishment of debts and the cumulative effect of change in accounting
principle, net earnings for the nine months ended December 31, 1993 were $49.8
million as compared to $44.9 million for the same period of the prior year. The
consolidated results reflect a cumulative effect adjustment resulting from the
adoption of Statement of Financial Accounting Standards No. 106 "Accounting for
Post-Retirement Benefits Other Than Pensions."
LIQUIDITY AND CAPITAL RESOURCES:
U-Haul Operations
To meet the needs of its customers, U-Haul must maintain a large inventory of
fixed asset rental items. At December 31, 1993, net property, plant and
equipment represented approximately 71.2% of total U-Haul assets and
approximately 50.1% of consolidated assets. In the first nine months of fiscal
1994, capital expenditures for property, plant and equipment increased to $395.2
million, as compared to $74.6 million in the first nine months of fiscal 1993,
due to expansion of the rental truck fleet, purchase of trucks previously
leased, and increases in the available square footage in the self-storage
segment. The capital needs required to fund these acquisitions were funded with
internally generated funds from operations, debt and lease financings.
Cash flow from operations was $171.2 million in the first nine months of fiscal
1994, as compared to $120.0 million in the first nine months of fiscal 1993.
The principal components of the net increase in cash flow from operations when
compared to last fiscal year are increases in accounts payable and accrued
liabilities, depreciation and amortization and receivables.
At December 31, 1993, total notes and loans payable outstanding was $666.1
million as compared to $697.1 million at March 31, 1993 and $686.2 million at
December 31, 1992. This decrease reflects the issuance of preferred stock by
the Company in October 1993 which offset the impact of higher levels of capital
additions and premature lease terminations initiated by the Company.
During each of the fiscal years ending March 31, 1994, 1995 and 1996, U-Haul
estimates gross capital expenditures will average approximately $390 million as
a result of the expansion of the rental truck fleet. This level of capital
expenditures, combined with an average of approximately $100 million in annual
longterm debt maturities during this same period, are expected to create annual
average funding needs of aproximately $490 million. Management estimates that U-
Haul will fund approximately 50% of these requirements with internally generated
funds, including proceeds from the disposition of older trucks and other asset
<PAGE> 17
sales. The remainder of the required capital expenditures are expected to be
financed through existing credit facilities, new debt placements, lease
fundings, and equity offerings. During the first nine months of fiscal 1994,
the Company arranged approximately $637 million in debt, lease and equity
financing which has significantly increased liquidity available to the Company
in the form of short-term investments, and unutilized committed and uncommitted
facilities. In October 1993, the Company placed $152.5 million in perpetual
preferred stock through a public offering.
Oxford Life Insurance Company
Oxford's primary sources of cash are premiums, receipts from interest-sensitive
products and investment income. The primary uses of cash are operating costs
and benefit payments to policyholders. Matching the investment portfolio to the
cash flow demands of the types of insurance being written is an important
consideration. Benefit and claim statistics are continually monitored to provide
projections of future cash requirements.
Cash provided by operations and financing activities amounted to $6.3 million
and $3.9 million for the three months ended September 30, 1993 and 1992,
respectively, and amounted to $13.8 million and $26.4 million for the nine
months ended September 30, 1993 and 1992, respectively. In addition to cash
flow from operations and financing activities, a substantial amount of liquid
funds is available through Oxford's short-term portfolio. At September 30, 1993
and 1992, short-term investments amounted to $22.8 million and $63.5 million,
respectively. Management believes that the overall sources of liquidity will
continue to meet foreseeable cash needs.
Stockholder's equity of Oxford, excluding investment in RWIC, decreased to $86.3
million at September 30, 1993 from $90.6 million at September 30, 1992. During
1993, Oxford paid dividends of $10.0 million to Ponderosa.
Applicable laws and regulations of the State of Arizona require the Company's
insurance subsidiaries to maintain minimum capital determined in accordance with
statutory accounting practices in the amount of $600,000. In addition, the
amount of dividends that can be paid to shareholders by insurance companies
domiciled in the State of Arizona is limited. Any dividend in excess of the
limit requires prior approval of the Insurance Commissioner. Statutory surplus
that can be distributed as dividends is $17,076,000 at September 30, 1993.
These restrictions are not expected to have a material adverse effect on the
ability of the Company to meet its cash obligations.
Republic Western Insurance Company - Property and Casualty
The short-term investment portfolio was $6.3 million at September 30, 1993.
This level of liquid assets, combined with budgeted cash flow, is adequate to
meet periodic needs. This balance also reflects funds in transition from
maturity proceeds to long-term investments. The structure of the long-term
portfolio is designed to match future cash needs. Capital and operating budgets
allow RWIC to schedule cash needs in accordance with investment and underwriting
proceeds. RWIC does not have plans for any near term large capital outlays.
RWIC maintains a diversified investment portfolio, primarily in bonds at varying
maturity levels. Approximately 99.1% of the portfolio consists of investment
grade securities. The maturity distribution is designed to provide sufficient
liquidity to meet future cash needs. Current liquidity remains strong, with
RWIC having 26% more invested assets than total liabilities.
<PAGE> 18
A liability for unpaid losses is recognized based on the estimated ultimate cost
of settling claims reported prior to the end of the accounting period, estimates
received from ceding reinsurers and estimates for unreported losses based on the
historical experience of RWIC, supplemented by insurance industry historical
experience. Unpaid loss adjustment expenses are based on historical ratios of
loss adjustment expenses paid to losses paid. Unpaid loss and loss expenses are
not discounted.
Shareholder equity increased 6.7% from $150.9 million at December 31, 1992 to
$161.0 million at September 30, 1993. RWIC considers current shareholders'
equity to be adequate to support future growth and absorb unforseen risk events.
RWIC does not use debt or equity issues to increase capital and therefore has no
exposure to capital market conditions. During the first six months of 1993,
RWIC paid no shareholder dividends.
Credit Agreements
The Company's operations are funded by various credit and financing
arrangements, including unsecured long-term borrowings, unsecured medium-term
notes, and revolving lines of credit with domestic and foreign banks.
Principally to finance its fleet of trucks and trailers, the Company routinely
enters into sale and leaseback transactions. As of December 31, 1993, the
Company had $666.1 million in total notes and loans payable outstanding and
unutilized committed lines of credit of approximately $303.0 million.
Certain of the Company's credit agreements contain restrictive financial and
other covenants, including, among others, covenants with respect to incurring
additional indebtedness, maintaining certain financial ratios, and placing
certain additional liens on its properties and assets. At December 31, 1993,
the Company was in compliance with these covenants. In addition, these credit
agreements contain provisions that could result in a required prepayment upon a
"change in control" of the Company.
Under certain of the Company's credit agreements, a "change in control" is
deemed to occur if (a) any transfer of any shares of any class of capital stock
results in the Company's ESOP and members of the Shoen family owning in the
aggregate less than the amount of capital stock as may be necessary to enable
them to cast in excess of 50% of the votes for the election of directors of the
Company or (b) during any period of two consecutive years, persons who at the
beginning of such period constituted the Board of Directors of the Company
(including any director approved by a vote of not less than 66 2/3% of such
board) cease for any reason to constitute greater than 50% of the then acting
Board.
The Company is further restricted in the type and amount of dividends and
distributions that it may issue or pay, and in the issuance of certain types of
preferred stock. The Company is prohibited from issuing shares of preferred
stock that provide for any mandatory redemption, sinking fund payment, or
mandatory prepayment, or that allow the holders thereof to require the Company
or any subsidiary of the Company to repurchase such preferred stock at the
option of such holders or upon the occurrence of any event or events without the
consent of its lenders.
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits Page No.
3.1 Restated By-Laws of AMERCO 21
b. Reports on Form 8-K.
No reports on Form 8-K were filed for the nine months ended December
31, 1993.
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
U-Haul International, Inc.
___________________________________
(Registrant)
Dated: February 10, 1994 By: /S/ DONALD W. MURNEY
___________________________________
Donald W. Murney, Treasurer
(Principal Financial Officer)
<PAGE> 21
RESTATED
BY-LAWS OF
AMERCO
A NEVADA CORPORATION
Date: As of November 2, 1993
ARTICLE I
SECTION 1. Offices:
-------
The principal office and registered office of the corporation shall be located
in the State of Nevada at such locations as the Board of Directors may from time
to time authorize by resolutions. The corporation may have such other offices
either within or without the State of Nevada as the Board of Directors may
designate or as the business of the corporation may require from time to time.
SECTION 2. References:
----------
Any reference herein made to law will be deemed to refer to the law of the State
of Nevada, including any applicable provisions of Chapter 78 of Title 7, Nevada
Revised Statutes (or its successor), as at any given time in effect. Any
reference herein made to the Articles will be deemed to refer to the applicable
provision or provisions of the Articles of Incorporation of the corporation, and
all amendments thereto, as at any given time on file with the office of the
clerk of Washoe County, Nevada.
SECTION 3. Shareholders of Record:
----------------------
The word "shareholder" as used herein shall mean one who is a holder of record
of shares in the corporation.
<PAGE> 22
ARTICLE II
SHAREHOLDERS
SECTION 1. Annual Meeting:
--------------
An annual meeting of the shareholders for the election of directors to succeed
those whose terms expire and for the transaction of such other business as may
properly come before the meeting shall be held on the last Saturday of September
of each year at a time of day and place as determined by the Board of Directors,
or on such other date as may be determined by the Board of Directors.
SECTION 2. Special Meetings:
----------------
a. Special meetings of the shareholders may be held whenever
and wherever called by the Chairman of the Board, a majority of the Board of
Directors, or upon the delivery of proper written request of the holders of not
less than fifty percent (50%) of all the shares outstanding and entitled to vote
at such meeting. The business which may be conducted at any such special
meeting will be confined to the purpose stated in the notice thereof, and to
such additional matters as the Chairman of such meeting may rule to be germane
to such purposes.
b. For purposes of this Section, proper written request for the
call of a special meeting shall be made by a written request specifying the
purposes for any special meeting requested and providing the information
required by Section 5 hereof. Such written request must be delivered either in
person or by registered or certified mail, return receipt requested, to the
Chairman of the Board, or such other person as may be specifically authorized by
law to receive such request. Within thirty (30) days after receipt of proper
written request, a special meeting shall be called and notice given in the
manner required by these By-Laws and the meeting shall be held at a time and
place selected by the Board of Directors, but not later than ninety (90) days
after receipt of such proper written request. The shareholder(s) who request a
special meeting of shareholders must pay the corporation the corporation's
reasonably estimated cost of preparing and mailing a notice of a meeting of
shareholders before such notice is prepared and mailed.
SECTION 3. Notice:
------
Notice of any meeting of the shareholders will be given by the corporation as
provided by law to each shareholder entitled to vote at such meeting. Any such
notice may be waived as provided by law.
<PAGE> 23
SECTION 4. Right to Vote:
-------------
For each meeting of the shareholders, the Board of Directors will fix in advance
a record date as contemplated by law, and the shares of stock and the
shareholders "entitled to vote" (as that or any similar term is herein used) at
any meeting of the shareholders will be determined as of the applicable record
date. The Secretary (or in his or her absence an Assistant Secretary) will see
to the making and production of any record of shareholders entitled to vote that
is required by law. Any such entitlement may be exercised through proxy, or in
such other manner as is specifically provided by law. No proxy shall be valid
after eleven (11) months from the date of its execution unless otherwise
provided by the proxy. In the event of contest, the burden of proving the
validity of any undated, irrevocable, or otherwise contested proxy will rest
with the person seeking to exercise the same. A telegram, cablegram, or
facsimile appearing to have been transmitted by a shareholder (or by his duly
authorized attorney-in-fact) may, in the discretion of the tellers, if any, be
accepted as a sufficiently written and executed proxy.
SECTION 5. Manner of Bringing Business Before the Meeting:
----------------------------------------------
At any annual or special meeting of shareholders only such business (including
nomination as a director) shall be conducted as shall have been properly brought
before the meeting. In order to be properly brought before the meeting, such
business must be a proper subject for stockholder action under Nevada law and
must have either been (A) specified in the written notice of the meeting (or any
supplement thereto) given to shareholders on the record date for such meeting by
or at the direction of the Board of Directors, (B) brought before the meeting at
the direction of the Board of Directors or the Chairman of the meeting, selected
as provided in Section 9 of this Article II, or (C) specified in a written
notice given by or on behalf of a shareholder on the record date for such
meeting entitled to vote thereat or a duly authorized proxy for such
shareholder, in accordance with the following requirements. A notice referred
to in clause (C) hereof must be delivered personally to, or mailed to and
received at, the principal executive office of the corporation, addressed to the
attention of the Secretary, not more than ten (10) days after the date of the
initial notice referred to in clause (A) hereof, in the case of business to be
brought before a special meeting of shareholders, and not less than one hundred
and twenty (120) days prior to the anniversary date of the initial notice
referred to in clause (A) hereof with respect to the previous year's annual
meeting, in the case of business to be brought before an annual meeting of
shareholders. Such notice referred to in clause (C) hereof shall set forth (i)
a full description of each such item of business proposed to be brought before
the meeting and the reasons for conducting such business at such meeting, (ii)
the name and address of the person proposing to bring such business before the
<PAGE> 24
meeting, (iii) the class and number of shares held of record, held beneficially,
and represented by proxy by such person as of the record date for the meeting,
if such date has been made publicly available, or as of a date not later than
thirty (30) days prior to the delivery of the initial notice referred to in
clause (A) hereof, if the record date has not been made publicly available, (iv)
if any item of such business involves a nomination for director, all information
regarding each such nominee that would be required to be set forth in a
definitive proxy statement filed with the Securities and Exchange Commission
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, or
any successor thereto, and the written consent of each such nominee to serve if
elected, (v) any material interest of such shareholder in the specified
business, (vi) whether or not such shareholder is a member of any partnership,
limited partnership, syndicate, or other group pursuant to any agreement,
arrangement, relationship, understanding, or otherwise, whether or not in
writing, organized in whole or in part for the purpose of acquiring, owning, or
voting shares of the corporation, and (vii) all other information that would be
required to be filed with the Securities and Exchange Commission if, with
respect to the business proposed to be brought before the meeting, the person
proposing such business was a participant in a solicitation subject to Section
14 of the Securities Exchange Act of 1934, as amended, or any successor thereto.
No business shall be brought before any meeting of the shareholders of the
corporation otherwise than as provided in this Section.
Notwithstanding compliance with the foregoing provisions, the Board of Directors
shall not be obligated to include information as to any shareholder nominee for
director or any other shareholder proposal in any proxy statements or other
communication sent to shareholders.
The Chairman of the meeting may, if the facts warrant, determine that any
proposed item of business or nomination as director was not brought before the
meeting in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the improper item of business
or nomination shall be disregarded.
SECTION 6. Right to Attend:
---------------
Except only to the extent of persons designated by the Board of Directors or the
Chairman of the meeting to assist in the conduct of the meeting, and except as
otherwise permitted by the Board or such Chairman, the persons entitled to
attend any meeting of shareholders may be confined to (i) shareholders entitled
to vote thereat and (ii) the persons upon whom proxies valid for purposes of the
meeting have been conferred or their duly appointed substitutes (if the
<PAGE> 25
related proxies confer a power of substitution); provided, however, that
the Board of Directors or the Chairman of the meeting may establish rules
limiting the number of persons referred to in clause (ii) as being entitled to
attend on behalf of any shareholder so as to preclude such an excessively large
representation of such shareholder at the meeting as, in the judgment of the
Board or such Chairman, would be unfair to other shareholders represented at the
meeting or be unduly disruptive to the orderly conduct of business at such
meeting (whether such representation would result from fragmentation of the
aggregate number of shares held by such shareholder for the purpose of
conferring proxies, from the naming of an excessively large proxy delegation by
such shareholder, or from employment of any other device). A person otherwise
entitled to attend any such meeting will cease to be so entitled if, in the
judgment of the Chairman of the meeting, such person engages thereat in
disorderly conduct impeding the proper conduct of the meeting in the interests
of all shareholders as a group.
SECTION 7. Quorum Requirements:
-------------------
One-third of the outstanding shares of the corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of the
shareholders. If less than one-third of the outstanding shares are represented
at a meeting, the majority of the shares so represented may adjourn the meeting
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting originally called.
SECTION 8. Tellers:
-------
The Board of Directors, in advance of any shareholders meeting may appoint one
or more tellers to act at such meeting (and any adjournment thereof), and may
appoint one or more alternate tellers to serve (in the order designated) in the
absence of any teller or tellers so appointed. If any person appointed as a
teller or alternate teller fails to appear or to act, a substitute may be
appointed by the Chairman of the meeting. The tellers (acting through a
majority of them on any disputed matter) will determine the number of shares
outstanding, the authenticity, validity and effect of proxies, the credentials
of persons purporting to be shareholders or persons named or referred to in
proxies, and the number of shares represented at the meeting in person and by
proxy; they will receive and count votes, ballots, and consents and announce the
results thereof; they will hear and determine all challenges and questions
pertaining to proxies and voting; and, in general, they will perform such acts
as may be proper to conduct elections and voting with complete fairness to all
shareholders. No such teller need be a shareholder of the corporation. Unless
<PAGE> 26
otherwise provided in the Articles of Incorporation or other governing
instrument, each shareholder shall be entitled to one vote for each share of
stock held by him or her, and, in the event a shareholder holds a fraction of a
share or a full share plus a fraction, any such fractional share shall be
entitled to a proportionate fraction of one vote or such other votes, if any, as
is provided in the Articles of Incorporation or other governing instrument.
SECTION 9. Organization and Conduct of Business:
------------------------------------
Each shareholders meeting will be called to order and thereafter chaired by the
Chairman of the Board if there then is one; or, if not, or if the Chairman of
the Board is absent or so requests, then by the President; or if both the
Chairman of the Board and the President are unavailable, then by such other
officer of the corporation or such shareholder as may be appointed by the Board
of Directors. The Secretary (or in his or her absence an Assistant Secretary)
of the corporation will act as secretary of each shareholders meeting; if
neither the Secretary nor an Assistant Secretary is in attendance, the Chairman
of the meeting may appoint any person (whether a shareholder or not) to act as
secretary thereat. After calling a meeting to order, the
Chairman thereof may require the registration of all shareholders intending to
vote in person, and the filing of all proxies, with the teller or tellers, if
one or more have been appointed (or, if not, with the secretary of the meeting).
After the announced time for such filing of proxies has ended, no further
proxies or changes, substitutions, or revocations of proxies will be accepted.
The Chairman of a meeting will, among other things, have absolute authority to
determine the order of business to be conducted at such meeting and to establish
rules for, and appoint personnel to assist in, preserving the orderly conduct of
the business of the meeting (including any informal, or question and answer,
portions thereof). Any informational or other informal session of shareholders
conducted under the auspices of the corporation after the conclusion of or
otherwise in conjunction with any formal business meeting of the shareholders
will be chaired by the same person who chairs the formal meeting, and the
foregoing authority on his or her part will extend to the conduct of such
informal session.
SECTION 10. Voting:
------
The number of shares voted on any matter submitted to the shareholders which is
required to constitute their action thereon or approval thereof will be
determined in accordance with applicable law, the Articles, and these By-Laws,
if applicable. Voting will be by ballot on any matter as to which a ballot vote
is demanded, prior to the time the voting begins, by any person entitled to vote
<PAGE> 27
on such matter; otherwise, a voice vote will suffice. No ballot or change of
vote will be accepted after the polls have been declared closed following the
ending of the announced time for voting.
SECTION 11. Shareholder Approval or Ratification:
------------------------------------
The Board of Directors may submit any contract or act for approval or
ratification at any duly constituted meeting of the shareholders, the notice of
which either includes mention of the proposed submittal or is waived as provided
by law. If any contract or act so submitted is approved or ratified by a
majority of the votes cast thereon at such meeting, the same will be valid and
as binding upon the corporation and all of its shareholders as it would be if
approved and ratified by each and every shareholder of the corporation.
SECTION 12. Informalities and Irregularities:
--------------------------------
All informalities or irregularities in any call or notice of a meeting, or in
the areas of credentials, proxies, quorums, voting, and similar matters, will be
deemed waived if no objection is made at the meeting.
SECTION 13. Action Without a Meeting:
------------------------
Shareholder action by written consent is prohibited.
SECTION 14. Application of Nevada Revised Statutes Sections 78.378
------------------------------------------------------
to 78.3793, inclusive:
---------------------
The provisions of Sections 78.378 to 78.3793, inclusive, of the Nevada Revised
Statutes shall not apply to the exchange of shares of the corporation's Series A
Common Stock, 0.25 par value, for shares of the corporation's common stock,
$0.25 par value, held by Mark V. Shoen and James P. Shoen.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. Number and Term of Directors:
----------------------------
The Board of Directors shall consist of not less than 4 nor more than 8
directors, the exact number of directors to be determined from time to time
solely by a resolution adopted by an affirmative vote of a majority of the
entire Board of Directors. The directors shall be divided into four classes,
designated Class I, Class II, Class III and Class IV. Subject to applicable
<PAGE> 28
law, each class shall consist, as nearly as may be possible, of one-fourth of
the total number of directors constituting the entire Board of Directors. At
the 1990 Annual Meeting of Shareholders, Class I directors shall be elected for
a one-year term, Class II directors for a two-year term, Class III directors for
a three-year term, and Class IV directors for a four-year term. At each
succeeding annual meeting of shareholders, commencing in 1991, successors to the
class of directors whose term expires at the annual meeting shall be elected or
reelected for a four-year term.
If the number of directors is changed, any increase or decrease shall be
apportioned among the classes of directors so as to maintain the number of
directors in each class as nearly equal as possible, but in no case will a
decrease in the number of directors shorten the term of any incumbent director.
When the number of directors is increased by the Board of Directors and any
newly created directorships are filled by the Board, there shall be no
classification of the additional directors until the next annual meeting of
shareholders.
A director shall hold office until the meeting for the year in which his or her
term expires and until his or her successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
SECTION 2. Vacancies:
---------
Newly created directorships resulting from an increase in the number of the
directors and any vacancy on the Board of Directors shall be filled by an
affirmative vote of a majority of the Board of Directors then in office. A
director elected by the Board of Directors to fill a vacancy shall hold office
until the next meeting of shareholders called for the election of directors and
until his or her successor shall be elected and shall qualify; provided,
however, that if a vacancy on the Board of Directors occurs or is filled after
the date by which a shareholder, acting in accordance with Article II, Section
5(C) of these By-Laws, may present a director nomination before the next meeting
of shareholders called for the election of directors, the director elected by
the Board of Directors to fill such vacancy shall hold office until the next
meeting of shareholders called for the election of directors at which a
shareholder, acting in accordance with Article II, Section 5(C) of these By-
Laws, may present a director nomination. This Section shall not apply to any
vacancies in the office of any "Preferred Stock Director," as defined in section
(e)(ii) of the Certificate of Designation, Preference, and Rights of Series A
Preferred Stock of AMERCO dated October 14, 1993, such vacancies shall be filled
pursuant to the terms of said section (e)(ii).
<PAGE> 29
SECTION 3. Regular Meetings:
----------------
After the adjournment of the annual meeting of the shareholders of the
corporation, the newly elected Directors shall meet for the purpose of
organization, the election of officers, and the transaction of such other
business as may come before said meeting. No notice shall be required for such
meeting. The meeting may be held within or without the State of Nevada.
Regular meetings, other than the annual ones, may be held at regular intervals
at such times and places as the Board of Directors may provide.
SECTION 4. Special Meetings:
----------------
Special meetings of the Board of Directors may be called at any time by the
President or by any one member of the Board giving written notice thereof to the
President of said corporation, or said special meeting may be called without
notice by unanimous consent of all the members by the presence of all the
members of said board at any such meeting. The special meetings of the Board of
Directors may be held within or without the State of Nevada.
SECTION 5. Notice:
------
No notice need be given of regular meetings of the Board of Directors. Notice
of the time and place (but not necessarily the purpose or all of the purposes)
of any special meeting will be given to each director in person or by telephone,
or via mail or telegram addressed in the manner then appearing on the
corporation's records. Notice to any director of any such special meeting will
be deemed given sufficiently in advance when (i), if given by mail, the same is
deposited in the United States mail at least four days before the meeting date,
with postage thereon prepaid, (ii) if given by telegram, the same is delivered
to the telegraph office for fast transmittal at least 48 hours prior to the
convening of the meeting, (iii) if given by facsimile transmission, the same is
received by the director or an adult member of his or her office staff or
household, at least 24 hours prior to the convening of the meeting, or (iv) if
personally delivered or given by telephone, the same is handed, or the substance
thereof is communicated over the telephone, to the director or to an adult
member of his or her office staff or household, at least 24 hours prior to the
convening of the meeting. Any such notice may be waived as provided by law. No
call or notice of a meeting of directors will be necessary if each of them
waives the same in writing or by attendance. Any meeting, once properly called
and noticed (or as to which call and notice have been waived as aforesaid) and
at which a quorum is formed, may be adjourned to another time and place by a
majority of those in attendance.
<PAGE> 30
SECTION 6. Quorum:
------
A majority of the Board of Directors shall constitute a quorum for the
transaction of business, except where otherwise provided by law or by these
By-Laws, but if at any meeting of the Board less than a quorum is present, a
majority of those present may adjourn the meeting from time to time until a
quorum is obtained.
SECTION 7. Action by Telephone or Consent:
------------------------------
Any meeting of the Board or any committee thereof may be held by conference
telephone or similar communications equipment as permitted by law in which case
any required notice of such meeting may generally describe the arrangements
(rather than the place) for the holding thereof, and all other provisions herein
contained or referred to will apply to such meeting as though it were physically
held at a single place. Action may also be taken by the Board or any committee
thereof without a meeting if the members thereof consent in writing thereto as
contemplated by law.
SECTION 8. Order of Business:
-----------------
The Board of Directors may, from time to time, determine the order of business
at their meeting. The usual order of business at such meetings shall be as
follows:
1st Roll Call; a quorum being present.
2nd. Reading of minutes of the preceding meeting and action
thereon.
3rd. Consideration of communications of the Board of Directors.
4th. Reports of officials and committees.
5th. Unfinished business.
6th. Miscellaneous business.
7th. New business.
8th. Adjournment.
<PAGE> 31
SECTION 9. Voting:
------
Any matter submitted to a vote of the directors will be resolved by a majority
of the votes cast thereon. If during the course of any annual, regular or
special meeting of the Board of Directors, at which all the members of said
board are present and vote, there is a vote taken and the vote is evenly divided
between equal numbers of directors, then, and only then, the Chairman of the
Board of Directors shall break the deadlock by casting a second and deciding
vote. This power may be exercised by the Chairman of the Board as to any and
every issue that properly comes to the board for a vote, including, but not
limited to the election of officers.
ARTICLE IV
POWER OF DIRECTORS
SECTION 1. Generally:
---------
The Government in control of the corporation shall be vested in the Board of
Directors.
SECTION 2. Special Powers:
--------------
The Board of Directors shall have, in addition to its other powers, the express
right to exercise the following powers:
1. To purchase, lease, and acquire, in any lawful manner any
and all real or personal property including franchises, stocks,
bonds and debentures of other companies, business and goodwill,
patents, trademarks in contracts, and interests thereunder, and
other rights and properties which in their judgment may
beneficial for the purpose of this corporation, and to issue
shares of stock of this corporation in payment of such property,
and in payment for services rendered to this corporation when
they deem it advisable.
2. To fix and determine and to vary, from time to time, the
amount or amounts to be set aside or retained as reserve funds or
as working capital of this corporation.
3. To issue notes and other obligations or evidence of the debt
of this corporation, and to secure the same, if deemed advisable,
and endorse and guarantee the notes, bonds, stocks, and other
obligations of other corporations with or without compensation
for so doing, and from time to time to sell, assign, transfer or
otherwise dispose of any of the property of this corporation,
subject, however, to the laws of the State of Nevada, governing
<PAGE> 32
the disposition of the entire assets and business of the
corporation as a going concern.
4. To declare and pay dividends, both in the form of money and
stock, but only from the surplus or from the net profit arising
from the business of this corporation, after deducting therefrom
the amounts, at the time when any dividend is declared which
shall have been set aside by the Directors as a reserve fund or
as a working fund.
5. To adopt, modify and amend the By-Laws of this corporation.
6. To periodically determine by Resolution of the Board the
amount of compensation to be paid to members of the Board of
Directors in accordance with Article 6, Section B, Sub-section
viii of the Articles of Incorporation.
ARTICLE V
SECTION 1. Committees:
----------
From time to time the Board of Directors, by affirmative vote of a majority of
the whole Board may appoint any committee or committees for any purpose or
purposes, and such committee or committees shall have and may exercise such
powers as shall be conferred or authorized by the resolution of appointment.
Provided, however, that such committee or committees shall at no time have more
power than that authorized by law.
ARTICLE VI
OFFICERS
SECTION 1. Officers:
--------
The officers of the corporation shall consist of the Chairman of the Board, a
President, one or more Vice-Presidents, Secretary, Assistant Secretaries,
Treasurer, Assistant Treasurer, a resident agent and such other officers as
shall from time to time be provided for by the Board of Directors. Such
officers shall be elected by ballot or unanimous acclamation at the meeting of
the Board of Directors after the annual election of Directors. In order to hold
any election there must be quorum present, and any officer receiving a majority
vote shall be declared elected and shall hold office for one year and until his
or her respective successor shall have been duly elected and qualified;
provided, however, that all officers, agents and employees of the corporation
shall be subject to removal from office pre-emptorily by vote of the Board of
Directors at any meeting.
<PAGE> 33
SECTION 2. Powers and Duties of Chairman of the Board:
------------------------------------------
The Chairman of the Board of Directors will serve as a general executive
officer, but not necessarily as a full-time employee, of the corporation. He or
she shall preside at all meetings of the shareholders and of the Board of
Directors, shall have the powers and duties set forth in these By-Laws, and
shall do and perform such other duties as from time to time may be assigned by
the Board of Directors.
SECTION 3. Powers and Duties of President:
------------------------------
The President shall at all times be subject to the control of the Board of
Directors. He shall have general charge of the affairs of the corporation. He
shall supervise over and direct all officers and employees of the corporation
and see that their duties are properly performed. The President, in conjunction
with the Secretary, shall sign and execute all contracts, notes, mortgages, and
all other obligations in the name of the corporation, and with the Secretary or
Assistant Secretary shall sign all certificates of the shares of the capital
stock of the corporation.
The President shall each year present an annual report of the preceding year's
business to the Board of Directors at a meeting to be held immediately preceding
the annual meeting of the shareholders, which report shall be read at the annual
meeting of the shareholders. The President shall do and perform such other
duties as from time to time may be assigned by the Board of Directors to him.
Notwithstanding any provision to the contrary contained in the By-Laws of the
corporation, the Board may at any time and from time to time direct the manner
in which any person or persons by whom any particular contract, document, note
or instrument in writing of the corporation may or shall be signed by and may
authorize any officer or officers of the corporation to sign such contracts,
documents, notes or instruments.
SECTION 4. Powers and Duties of Vice-President:
-----------------------------------
The Vice-President shall have such powers and perform such duties as may be
assigned to him by the Board of Directors of the corporation and in the absence
or inability of the President, the Vice-President shall perform the duties of
the President.
<PAGE> 34
SECTION 5. Powers and Duties of the Secretary and Assistant
------------------------------------------------
Secretary:
---------
The Secretary of said corporation shall keep the minutes of all meetings of the
Board of Directors and the minutes of all meetings of the shareholders, and also
when requested by a committee, the minutes of such committee, in books provided
for the purpose. He shall attend to the giving and serving of notice of the
corporation. It shall be the duty of the Secretary to sign with the President,
in the name of the corporation, all contracts, notes, mortgages, and other
instruments and other obligations authorized by the Board of Directors, and when
so ordered by the Board of Directors, he shall affix the Seal of corporation
thereto. The Secretary shall have charge of all books, documents, and papers
properly belonging to his office, and of such other books and papers as the
Board of Directors may direct. In the absence or inability of the Secretary,
the Assistant Secretary shall perform the duties of the Secretary.
Execution of Instruments:
- ------------------------
In addition to the provisions of any previous By-Laws respecting the execution
of instruments of the corporation, the Board of Directors may from time to time
direct the manner in which any officer or officers or by whom any particular
deed, transfer, assignment, contract, obligation, certificate, promissory note,
guarantee and other instrument or instruments may be signed on behalf of the
corporation and any acts of the Board of Directors subsequent to the 1st day of
December, 1978 in accordance with the provision of this By-Law are hereby
adopted, ratified and confirmed as actions binding upon and enforceable against
the corporation.
SECTION 6. Powers and Duties of Treasurer and Assistant Treasurer:
------------------------------------------------------
The Treasurer shall have the care and custody of all funds and securities of the
corporation, and deposit the same in the name of the corporation in such bank or
banks or other depository as the Directors may select. He shall sign checks,
drafts, notices, and orders for the payment of money, and he shall pay out and
dispose of the same under the direction of the Board of Directors, but checks
may be signed as directed by the Board by resolution. The Treasurer shall
generally perform the duties of and act as the financial agent for the
corporation for the receipts and disbursements of its funds. He shall give such
bond for the faithful performance of his duties as the Board of Directors may
determine. The office of the Treasurer of said corporation may be held by the
same person holding the President, Vice-President or Secretary's office,
provided the Board of Directors indicates the combination of these offices. In
the absence or inability of the Treasurer, the Assistant Treasurer shall perform
the duties of the Treasurer.
<PAGE> 35
SECTION 7. Indemnification:
---------------
The corporation shall indemnify, to the fullest extent authorized or permitted
by law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the corporation
to provide broader indemnification rights than such law permitted the
corporation to provide prior to such amendment), any person made, or threatened
to be made, a defendant or witness to any threatened, pending or completed
action, suit, or proceeding (whether civil, criminal, administrative,
investigative or otherwise) by reason of the fact that he or she, or his or her
testator or intestate, is or was a director or officer of the corporation or by
reason of the fact that such director or officer, at the request of the
corporation, is or was serving any other corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. Nothing contained
herein shall diminish any rights to indemnification to which employees or agents
other than directors or officers may be entitled by law, and the corporation may
indemnify such employees and agents to the fullest extent and in the manner
permitted by law. The rights to indemnification set forth in this Article VI,
Section 7 shall not be exclusive of any other rights to which any person may be
entitled under any statute, provision of the Articles of Incorporation, bylaw,
agreement, contract, vote of shareholders or disinterested directors, or
otherwise.
In furtherance and not in limitation of the powers conferred by statute:
1. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is serving in any capacity, at
the request of the corporation, any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability or expense incurred by him or
her in any such capacity, or arising out of his or her status as
such, whether or not the corporation would have the power to
indemnify him or her against such liability or expense under the
provisions of law; and
2. The corporation may create a trust fund, grant a security
interest or lien on any assets of the corporation and/or use
other means (including, without limitation, letters of credit,
guaranties, surety bonds and/or other similar arrangements), and
enter into contracts providing indemnification to the full extent
authorized or permitted by law and including as part thereof
provisions with respect to any or all of the foregoing to ensure
<PAGE> 36
the payment of such amounts as may become necessary to effect
indemnification as provided therein, or elsewhere.
ARTICLE VII
STOCK AND CERTIFICATES AND TRANSFERS
SECTION 1. Stock and Certificates and Transfers:
------------------------------------
All certificates for the shares of the capital stock of the corporation shall be
signed by the President or Vice-President, and Secretary or Assistant Secretary.
All certificates shall be consecutively numbered in progression beginning with
number one. Each certificate shall show upon its face that the corporation is
organized under the laws of Nevada, the number and par value, if any, of each
share represented by it, the name of the person owning the shares represented
thereby, with the number of each share and the date of issue, and that the stock
thereby represented is transferable only upon the books of the corporation. A
stock transfer book, known as the stock register shall be kept, in which shall
be entered the number of each certificate issued and the name of the person
owning the shares thereby represented, with the number of such shares and the
date of issue. The transfer of any share or shares of stock in the corporation
may be made by surrender of the certificate issued therefor, and the written
assignment thereof by the owner or his duly authorized Attorney in Fact. Upon
such surrender and assignment, a new certificate shall be issued to the Assignee
as he may be entitled, but without such surrender and assignment no transfer of
stock shall be recognized by the corporation. The Board of Directors shall have
the power concerning the issue, transfer and registration of certificates for
agents and registrars of transfer, and may require all stock certificates to
bear signatures of either or both. The stock transfer books shall be closed ten
days before each meeting of the shareholders and during such period no stock
shall be transferred.
SECTION 2. Right of First Refusal on Its Common Stock, $0.25 par value:
-----------------------------------------------------------
a. In case any holder of shares of the corporation's common
stock, $0.25 par value, and Series A Common Stock, $0.25 par
value (collectively, the "Common Stock") shall wish to make any
sale, transfer or other disposition of all or any part of the
Common Stock held by him, he shall first notify the Secretary of
the corporation in writing designating the number of shares of
Common Stock which he desires to dispose of, the name(s) of the
person(s) to whom such shares are to be disposed of, and the bona
fide cash price at which such shares are to be disposed of.
<PAGE> 37
b. The corporation shall have a period of 30 calendar days
following the date of its receipt of such notice to determine
whether it wishes to purchase such shares at the price stated
therein. Such determination shall be made by the corporation by
its delivery to such holder of a written acceptance of such offer
within such 30-day period. Such written acceptance shall specify
the date (to be not later than the tenth calendar day following
the date on which such 30-day period expired), time and place at
which such holder shall deliver to the corporation the
certificate(s) for the shares of Common Stock to be so sold
against the delivery by the corporation of a certified or bank
cashier's check in the amount of the purchase price therefor.
c. If the corporation shall not so accept such offer within
such 30-day period, then such holder shall be entitled, for a
period of 90 days commencing on the first day after the date on
which such 30-day period expires, to dispose of all or any part
of the shares of Common Stock designated in such notice to the
corporation at the price set forth therein to the prospective
named transferee(s) and such transferee(s) shall be entitled to
have such shares transferred upon the books of the corporation
upon its acquisition thereof at such price. If such holder shall
not dispose of all or any part of such shares within such 90-day
period (or, in the event of a sale of part thereof, the shares
remaining untransferred), such shares shall continue to be
subject in all respects to the provision of this Article VII,
Sec. 2.
d. All certificates for shares of Common Stock shall, so long
as the provisions of this Article VII, Sec. 2 shall be in effect,
bear the following legend:
"The transfer of the shares represented by this certificate
is subject to a right of first refusal by the corporation as
provided in its By-Laws, and no transfer of this certificate
or the shares represented hereby shall be valid or effective
unless and until such provision of the By-Laws shall have
been met. A copy of the By-Laws of the corporation is
available for inspection at the principal office of the
corporation."
e. The provisions of this Article VII, Sec. 2 may be terminated
or modified at any time by the affirmative vote of not less than
a majority of the then number of directors of the corporation.
<PAGE> 38
Each holder of shares of Common Stock shall be notified of any
such termination and shall have the right to exchange his
outstanding certificate for such shares for a certificate without
the aforesaid legend.
f. The provisions of this Article VII, Sec. 2 may be extended
to other classes or series of the corporation's stock prior to
the issuance thereof upon the affirmative vote of not less than a
majority of the then number of directors of the corporation.
SECTION 3. Lost Certificates:
-----------------
In the event of the loss, theft or destruction of any certificate representing
shares of stock of this corporation, the corporation may issue (or, in the case
of any such stock as to which a transfer agent and/or registrar have been
appointed, may direct such transfer agent and/or register to countersign,
register and issue) a replacement certificate in lieu of that alleged to be
lost, stolen or destroyed, and cause the same to be delivered to the owner of
the stock represented thereby, provided that the owner shall have submitted such
evidence showing the circumstances of the alleged loss, theft or destruction,
and his or her ownership of the certificate as the corporation considers
satisfactory, together with any other facts which the corporation considers
pertinent, and further provided that an indemnity agreement and/or indemnity
bond shall have been provided in form and amount satisfactory to the corporation
and to its transfer agents and/or registrars, if applicable.
ARTICLE VIII
FISCAL YEAR
SECTION 1. Fiscal Year:
-----------
The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.
ARTICLE IX
AMENDMENT OF BY-LAWS
SECTION 1. Amendment of By-Laws by the Board of Directors:
----------------------------------------------
<PAGE> 39
The By-Laws may be amended by a majority vote of the Board of Directors of this
corporation at any meeting of the Board of Directors.
SECTION 2. Shareholder Amendment of By-Laws:
--------------------------------
The By-Laws may be amended by an affirmative vote of shares possessing two-
thirds or more of the votes that are generally (not just as the result of the
occurrence of a contingency) entitled to vote for the election of the members of
the Board of Directors of this corporation. Such vote must be by ballot at a
duly constituted meeting of the shareholders, the notice of which meeting must
include the proposed amendment.
<PAGE> 40
CERTIFICATE
I, Gary V. Klinefelter, Secretary of AMERCO, a Nevada
corporation, do hereby certify that the foregoing is a true and correct copy of
the corporation's Restated By-Laws, and that such Restated By-Laws are in full
force and effect as of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
seal of the corporation this 2nd day of November, 1993.
/S/ GARY V. KLINEFELTER
------------------------------
Gary V. Klinefelter, Secretary
