<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, 1997
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 [ ].
22,614,087 shares of AMERCO Common Stock, $0.25 par value, were
outstanding at February 12, 1998.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par
value, were outstanding at February 12, 1998. U-Haul International,
Inc. meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this form with the reduced
disclosure format.
<PAGE 2>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
a) Consolidated Balance Sheets as of December 31, 1997,
March 31, 1997 and December 31, 1996................... 4
b) Consolidated Statements of Earnings for the Nine
months ended December 31, 1997 and 1996................ 6
c) Consolidated Statements of Changes in Stockholders'
Equity for the Nine months ended December 31, 1997
and 1996............................................... 7
d) Consolidated Statements of Earnings for the
Quarters ended December 31, 1997 and 1996.............. 8
e) Consolidated Statements of Cash Flows for the Nine
months ended December 31, 1997 and 1996................ 9
f) Notes to Consolidated Financial Statements -
December 31, 1997, March 31, 1997 and
December 31, 1996...................................... 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................... 26
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INTENTIONALLY BLANK
<PAGE 4>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
December 31, March 31, December 31,
ASSETS 1997 1997 1996
------------------------------------
(unaudited) (audited) (unaudited)
(in thousands)
Cash and cash equivalents $ 31,822 41,752 20,873
Receivables 251,064 238,523 237,866
Inventories 78,242 65,794 54,857
Prepaid expenses 30,379 17,264 16,922
Investments, fixed maturities 864,321 859,694 885,865
Investments, other 147,545 127,306 117,684
Deferred policy acquisition costs 41,257 48,598 52,919
Other assets 73,355 72,997 68,240
------------------------------------
Property, plant and equipment, at
cost:
Land 208,334 209,803 215,566
Buildings and improvements 830,747 814,744 811,008
Furniture and equipment 208,374 199,126 196,248
Rental trailers and other rental
equipment 179,733 170,407 171,143
Rental trucks 1,041,591 947,911 940,701
------------------------------------
2,468,779 2,341,991 2,334,666
Less accumulated depreciation 1,128,819 1,094,925 1,088,618
------------------------------------
Total property, plant and
equipment 1,339,960 1,247,066 1,246,048
------------------------------------
$ 2,857,945 2,718,994 2,701,274
====================================
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE 5>
December 31, March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1997 1996
------------------------------------
(unaudited) (audited) (unaudited)
(in thousands)
Liabilities:
Accounts payable and accrued
liabilities $ 94,284 131,099 106,518
Notes and loans 1,074,409 983,550 933,410
Policy benefits and losses, claims
and loss expenses payable 493,003 469,134 484,254
Liabilities from premium deposits 423,777 433,397 435,838
Cash overdraft 24,978 23,606 24,620
Other policyholders' funds and
liabilities 26,695 30,966 31,663
Deferred income 42,803 35,247 33,991
Deferred income taxes 39,944 9,675 18,009
------------------------------------
Stockholders' equity:
Serial preferred stock, with or
without par value, 50,000,000
shares authorized -
Series A preferred stock, with no
par value, 6,100,000 shares issued
and outstanding as of December 31, 1997,
March 31, 1997 and December 31, 1996 - - -
Series B preferred stock, with no
par value, 100,000 shares issued
and outstanding as of December 31, 1997,
March 31, 1997 and December 31, 1996 - - -
Serial common stock, with or
without par value, 150,000,000
shares authorized -
Series A common stock of $0.25 par
value, 10,000,000 shares authorized,
5,762,495 shares issued as of
December 31, 1997, March 31, 1997,
and December 31, 1996 1,441 1,441 1,441
Common stock of $0.25 par value,
150,000,000 shares authorized,
36,487,505 shares issued as of
December 31, 1997, March 31, 1997
and December 31, 1996 9,122 9,122 9,122
Additional paid-in capital 337,444 337,933 338,528
Foreign currency translation adjustment (16,992) (14,133) (13,282)
Unrealized gain on investments 7,749 4,411 1,614
Retained earnings 677,078 644,009 665,210
------------------------------------
1,015,842 982,783 1,002,633
Less:
Cost of common shares in treasury,
(19,635,913 shares as of December 31,
1997, March 31, 1997,
and December 31, 1996) 359,723 359,723 348,923
Unearned employee stock
ownership plan shares 18,067 20,740 20,739
------------------------------------
Total stockholders' equity 638,052 602,320 632,971
Contingent liabilities and commitments
$ 2,857,945 2,718,994 2,701,274
====================================
<PAGE 6>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Nine months ended December 31,
(Unaudited)
1997 1996
----------------------
(in thousands except
per share data)
Revenues
Rental revenue $ 811,191 781,193
Net sales 143,866 141,728
Premiums 119,890 116,671
Net investment income 36,388 36,802
----------------------
Total revenues 1,111,335 1,076,394
Costs and expenses
Operating expense 683,240 673,728
Cost of sales 82,312 84,305
Benefits and losses 130,914 109,156
Amortization of deferred acquisition
costs 10,679 12,404
Depreciation, net 59,880 51,186
----------------------
Total costs and expenses 967,025 930,779
Earnings from operations 144,310 145,615
Interest expense, net of interest
income of $10,307 and $21,402 in
1997 and 1996, respectively 49,301 35,060
----------------------
Pretax earnings from operations 95,009 110,555
Income tax expense (32,169) (40,347)
----------------------
Earnings from operations before
extraordinary loss on early
extinguishment of debt 62,840 70,208
Extraordinary loss on early
extinguishment of debt, net (13,984) (2,319)
----------------------
Net earnings $ 48,856 67,889
======================
Earnings per common share:
Earnings from operations before
extraordinary loss on early
extinguishment of debt $ 2.15 2.17
Extraordinary loss on early
extinguishment of debt, net (.64) (.09)
----------------------
Net earnings $ 1.51 2.08
======================
Weighted average common shares outstanding 21,890,250 26,683,455
======================
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE 7>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Nine months ended December 31,
(Unaudited)
1997 1996
-------------------
(in thousands)
Series A common stock of $0.25 par value:
10,000,000 shares authorized, 5,762,495
shares issued as of December 31, 1997,
March 31, 1997 and December 31, 1996
Beginning and end of period $ 1,441 1,441
------------------
Common stock of $0.25 par value:
150,000,000 shares authorized, 36,487,505
shares issued as of December 31, 1997,
March 31, 1997 and December 31, 1996
Beginning of period 9,122 8,559
Issuance of common stock - 563
------------------
End of period 9,122 9,122
------------------
Additional paid-in capital:
Beginning of period 337,933 165,756
Issuance of common stock under ESOP 511 485
Issuance of common stock - 73,665
Issuance of preferred stock (1,000) 98,622
------------------
End of period 337,444 338,528
------------------
Foreign currency translation:
Beginning of period (14,133) (11,877)
Change during period (2,859) (1,405)
------------------
End of period (16,992) (13,282)
------------------
Unrealized gain (loss) on investments:
Beginning of period 4,411 11,097
Change during period 3,338 (9,483)
------------------
End of period 7,749 1,614
------------------
Retained earnings:
Beginning of period 644,009 609,019
Net earnings 48,856 67,889
Dividends paid to stockholders:
Preferred stock Series A ($1.59 per share) (9,723) (9,723)
Preferred stock Series B($60.64 per share
for 1997 and $19.75 per share for 1996) (6,064) (1,975)
------------------
End of period 677,078 665,210
------------------
Less Treasury stock:
Beginning of period 359,723 111,118
Net increase (12,426,836 shares in 1996) - 237,805
------------------
End of period 359,723 348,923
------------------
Less Unearned employee stock ownership
plan shares:
Beginning of period 20,740 23,329
Increase in loan 4 1
Proceeds from loan (2,677) (2,591)
------------------
End of period 18,067 20,739
------------------
Total stockholders' equity $ 638,052 632,971
==================
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE 8>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Quarters ended December 31,
(Unaudited)
1997 1996
-------------------------
(in thousands except
per share data)
Revenues
Rental revenue $ 234,345 226,772
Net sales 35,401 34,536
Premiums 40,045 43,922
Net investment income 12,752 11,662
------------------------
Total revenues 322,543 316,892
Costs and expenses
Operating expense 221,410 227,670
Cost of sales 20,658 21,666
Benefits and losses 48,881 42,440
Amortization of deferred acquisition
costs 3,556 4,347
Depreciation, net 20,607 19,447
------------------------
Total costs and expenses 315,112 315,570
Earnings from operations 7,431 1,322
Interest expense, net of interest
income of $3,243 and $2,765 in
1997 and 1996, respectively 15,657 17,346
------------------------
Pretax loss from operations (8,226) (16,024)
Income tax expense 2,836 6,486
------------------------
Loss from operations before
extraordinary loss on early
extinguishment of debt (5,390) (9,538)
Extraordinary loss on early
extinguishment of debt, net (9,846) (315)
------------------------
Net loss $ (15,236) (9,853)
========================
Loss per common share:
Loss from operations before
extraordinary loss on early
extinguishment of debt $ (.49) (.72)
Extraordinary loss on early
extinguishment of debt, net (.45) (.02)
------------------------
Net loss $ (.94) (.74)
========================
Weighted average common shares outstanding 21,901,521 20,359,869
========================
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE 9>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months ended December 31,
(Unaudited)
1997 1996
---------------------
(in thousands)
Cash flows from operating activities:
Net earnings $ 48,856 67,889
Depreciation and amortization 92,184 71,813
Provision for losses on accounts
receivable 3,496 2,791
Net (gain) loss on sale of real and
personal property (667) (6,461)
Gain on sale of investments (315) (173)
Changes in policy liabilities and
accruals 37,431 24,146
Additions to deferred policy
acquisition costs (4,890) (11,873)
Net change in other operating assets
and liabilities (48,252) (56,759)
--------------------
Net cash provided by operating activities 127,843 91,373
--------------------
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment (317,189) (159,744)
Fixed maturities (94,451) (132,855)
Equity investments (24,500) -
Mortgage loans (13,380) (18,939)
Real estate - (767)
Proceeds from sale of investments:
Property, plant and equipment 163,503 214,411
Fixed maturities 95,562 106,564
Real estate 685 599
Mortgage loans 15,222 35,525
Changes in other investments 1,793 (931)
--------------------
Net cash provided (used) by investing
activities (172,755) 43,863
--------------------
Cash flows from financing activities:
Net change in short-term borrowings 171,500 (328,000)
Proceeds from notes 300,000 487,800
Debt issuance costs (1,936) (4,724)
Loan to leveraged Employee Stock
Ownership Plan (4) (1)
Proceeds from leveraged Employee Stock
Ownership Plan 2,677 2,591
Extraordinary loss on early
extinguishment of debt, net (13,984) (2,319)
Principal payments on notes (380,641) (224,610)
Issuance of common stock - 74,228
Issuance of preferred stock (1,000) 98,622
Net change in cash overdraft 1,372 (7,539)
Dividends paid (15,787) (11,698)
Treasury stock acquisitions - (237,805)
Investment contract deposits 17,990 51,162
Investment contract withdrawals (45,205) (43,238)
--------------------
Net cash provided (used) by
financing activities 34,982 (145,531)
--------------------
Increase (decrease) in cash and
cash equivalents (9,930) (10,295)
Cash and cash equivalents at
beginning of period 41,752 31,168
--------------------
Cash and cash equivalents at
end of period $ 31,822 20,873
====================
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE 10>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997, March 31, 1997 and December 31, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
AMERCO, a Nevada corporation (the Company), is the holding
company for U-Haul International, Inc. (U-Haul), Amerco Real Estate
Company (AREC), Republic Western Insurance Company (RWIC) and
Oxford Life Insurance Company (Oxford).
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
the parent corporation, AMERCO, and its subsidiaries, substantially all
of which are wholly-owned. All material intercompany accounts and
transactions of AMERCO and its subsidiaries have been eliminated.
The consolidated balance sheets as of December 31, 1997 and
1996, and the related consolidated statements of earnings, changes
in stockholders' equity and cash flows for the quarters ended
December 31, 1997 and 1996 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 operating results and financial position of AMERCO's
consolidated insurance operations are determined on a one quarter
lag. There were no effects related to intervening events which
would significantly affect consolidated financial position or
results of operations for the financial statements presented
herein.
The financial statements and notes are presented as permitted
by Form 10-Q and do not contain certain information included in the
Company's annual financial statements and notes.
Property, plant and equipment are carried at cost and are
depreciated on the straight-line and accelerated methods over the
estimated useful lives of the assets. Maintenance is charged to
operating expenses as incurred, while renewals and betterments are
capitalized. Major overhaul costs are amortized over the estimated
period benefited. Gains and losses on dispositions are netted
against depreciation expense when realized.
Basic earnings per share are computed by dividing net earnings after
deduction of preferred stock dividends by the weighted average
number of common shares outstanding, excluding shares of the
employee stock ownership plan that have not been committed to be
released. Preferred dividends include undeclared or unpaid
dividends of the Company. The Company does not have any potential common
stock that was not included in the calculation of diluted earnings per
share because it is antidilutive in the current period.
Certain reclassifications have been made to the financial
statements for the nine months ended December 31, 1996 to conform
with the current year's presentation.
<PAGE 11>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
2. INVESTMENTS
A comparison of amortized cost to market for fixed maturities
is as follows:
September 30, 1997
- ------------------ Par Value Gross Gross Estimated
Consolidated or number Amortized unrealized unrealized market
Held-to-Maturity of shares cost gains losses value
------------------------------------------------------
(in thousands)
U.S. treasury
securities
and government
obligations $ 16,663 $ 16,499 1,154 (9) 17,644
U.S. government
agency mortgage-
backed securities $ 46,128 45,886 495 (1,174) 45,207
Obligations of
states and
political
subdivisions $ 28,170 27,995 1,311 (2) 29,304
Corporate
securities $ 162,740 166,435 4,136 (591) 169,980
Mortgage-backed
securities $ 107,256 105,844 1,767 (757) 106,854
Redeemable preferred
stocks 1,343 38,426 832 (75) 39,183
----------------------------------------
401,085 9,695 (2,608) 408,172
----------------------------------------
September 30, 1997
- ------------------ Par Value Gross Gross Estimated
Consolidated or number Amortized unrealized unrealized market
Available-for-Sale of shares cost gains losses value
------------------------------------------------------
U.S. treasury
securities and
government
obligations $ 11,685 11,757 900 - 12,657
U.S. government
agency mortgage-
backed securities $ 29,359 28,776 900 (4) 29,672
States,
municipalities
and political
subdivisions $ 15,880 16,271 629 (54) 16,846
Corporate
securities $ 299,952 302,766 9,910 (1,071) 311,605
Mortgage-backed
securities $ 75,157 74,685 2,384 (128) 76,941
Redeemable preferred
stocks 571 14,869 646 - 15,515
----------------------------------------
449,124 15,369 (1,257) 463,236
----------------------------------------
Total $ 850,209 25,064 (3,865) 871,408
========================================
In February 1997, the Company, through its insurance
subsidiaries, invested in the equity of a limited partnership in a
Texas-based self-storage corporation. RWIC invested $13,500,000 in
exchange for a 27.3% limited partnership and Oxford invested
$11,000,000 in exchange for a 22.2% limited partnership. U-Haul is
a 50% owner of a corporation which is a general partner in the
Texas-based self-storage corporation. The Company has a
$10,000,000 note receivable from the corporation.
<PAGE 12>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF INSURANCE
SUBSIDIARIES
A summary consolidated balance sheet for RWIC is presented
below:
September 30,
---------------------
1997 1996
---------------------
(in thousands)
Investments - fixed maturities $ 413,196 395,365
Other investments 22,571 11,535
Receivables 119,367 130,285
Deferred policy acquisition costs 5,663 10,342
Due from affiliate 33,020 52,747
Deferred federal income taxes 17,531 17,573
Other assets 18,917 7,939
-------------------
Total assets $ 630,265 625,786
===================
Policy liabilities and accruals $ 361,146 339,542
Unearned premiums 50,586 66,433
Other policyholders' funds and liabilities 23,028 24,544
-------------------
Total liabilities 434,760 430,519
Stockholder's equity 195,505 195,267
-------------------
Total liabilities and
stockholder's equity $ 630,265 625,786
===================
A summarized consolidated income statement for RWIC is
presented below:
Nine months ended September 30,
-------------------------------
1997 1996
-------------------------------
(in thousands)
Premiums $ 118,753 108,432
Net investment income 23,222 22,742
-----------------------
Total revenue 141,975 131,174
Benefits and losses 113,749 92,330
Amortization of deferred policy
acquisition costs 6,466 7,393
Other expenses 19,902 18,587
-----------------------
Income from operations 1,858 12,864
Federal income tax expense (35) (3,830)
-----------------------
Net income $ 1,823 9,034
=======================
<PAGE 13>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF INSURANCE
SUBSIDIARIES, continued
A summary consolidated balance sheet for Oxford is presented
below:
September 30,
---------------------
1997 1996
---------------------
(in thousands)
Investments - fixed maturities $ 451,125 490,500
Other investments 102,467 84,839
Receivables 12,357 14,906
Deferred policy acquisition costs 35,594 42,577
Due from affiliate 260 112
Other assets 1,667 2,318
-------------------
Total assets $ 603,470 635,252
===================
Policy liabilities and accruals $ 81,271 78,478
Premium deposits 423,777 435,838
Other policyholders' funds and liabilities 5,524 10,758
Deferred taxes 10,457 9,751
-------------------
Total liabilities 521,029 534,825
Stockholder's equity 82,441 100,427
-------------------
Total liabilities and
stockholder's equity $ 603,470 635,252
===================
A summarized consolidated income statement for Oxford is
presented below:
Nine months ended September 30,
-------------------------------
1997 1996
-------------------------------
(in thousands)
Premiums $ 19,259 21,276
Net investment income 13,400 13,949
-----------------------
Total revenue 32,659 35,225
Benefits and losses 17,165 16,826
Amortization of deferred policy
acquisition costs 4,213 5,011
Other expenses 4,063 4,618
-----------------------
Income from operations 7,218 8,770
Federal income tax expense (2,036) (3,094)
-----------------------
Net income $ 5,182 5,676
=======================
On November 18, 1997, Oxford purchased all of the issued and
outstanding shares of Encore Financial, Inc. and its subsidiaries
(Encore) for $11,569,000. Encore's primary subsidiary is North American
Insurance Company (NAI). NAI is an insurance company domiciled in the state
of Wisconsin whose premium volume is primarily derived from the
sale of credit life and disability products. On November 24, 1997
Oxford purchased all of the issued and outstanding shares of Safe
Mate Life Insurance Company for $2,243,000, domiciled in the state of Texas,
whose premium volume is derived from the sale of credit life and
disability products. These purchases greatly increase Oxford's
distribution channels and enhance administrative capabilities in
these markets.
<PAGE 14>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
4. NOTES AND LOANS
During the second quarter of fiscal 1998, the Company
extinguished $76.0 million of 10.27% interest-bearing notes
originally due in fiscal 1999 through fiscal 2002. This resulted
in an extraordinary loss of $4.1 million, net of tax of $2.3
million ($0.19 per share).
In October 1997, the Company issued $300.0 million of Bond
Back Asset Trust Certificates (BATs). The net proceeds were used
to initially prepay floating rate indebtedness of the Company under
revolving credit agreements. Subsequent to the funding of the BATs,
the Company extinguished $256.0 million of 6.61% to 8.13% interest-bearing
notes originally due in fiscal 1999 through fiscal 2010. This
resulted in an extraordinary loss of $9.8 million, net of tax of
$5.4 million ($0.45 per share).
During the second quarter of fiscal 1997, the Company
extinguished $76.3 million of debt and $86.2 million of long-term
notes originally due in fiscal 1997 through fiscal 1999. This
resulted in an extraordinary loss of $2.3 million, net of tax of
$1.4 million ($0.09 per share).
5. CONTINGENT LIABILITIES AND COMMITMENTS
During the nine months ended December 31, 1997, a subsidiary
of U-Haul entered into eighteen transactions, whereby the Company
sold rental trucks and subsequently leased back. The Company has
guaranteed $25,884,000 of residual values for these assets at the
end of the respective lease terms. U-Haul also entered into two
transactions, whereby the Company sold and subsequently leased back
computer equipment. Following are the lease commitments for the
leases executed during the nine months ended December 31, 1997,
which have a term of more than one year (in thousands):
Year ended Lease
March 31, Commitments
------------------------------
1998 $ (5,330)
1999 (5,735)
2000 (5,735)
2001 4,262
2002 11,766
Thereafter 39,007
--------
$ 38,235
========
During the nine months ended December 31, 1997, the Company
has reduced future lease commitments by $83,713,000 through early
termination of certain leases. Residual value guarantees were also
reduced by $14,301,000 in connection with the terminations.
In the normal course of business, the Company is a defendant
in a number of suits and claims. The Company is also a party to
several administrative proceedings arising from state and local
provisions that regulate the removal and/or clean-up of underground
fuel storage tanks. It is the opinion of management that none of
such suits, claims or proceedings involving the Company,
individually or in the aggregate, are expected to result in a
material loss.
<PAGE 15>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
6. SUPPLEMENTAL CASH FLOWS INFORMATION
The (increase) decrease in receivables, inventories and
accounts payable and accrued liabilities net of other operating and
investing activities follows:
Nine months ended December 31,
1997 1996
---------------------
(in thousands)
Receivables $ (12,262) 86,194
=====================
Inventories $ (12,448) (8,966)
=====================
Accounts payable and
accrued liabilities $ (38,065) (82,175)
=====================
Income taxes paid in cash amounted to $1,367,000 and
$4,780,000 for the nine months ended December 31, 1997 and 1996,
respectively.
Interest paid in cash amounted to $59,009,000 and $55,631,000
for the nine months ended December 31, 1997 and 1996, respectively.
7. EARNINGS PER SHARE
Basic earnings per share are computed based on the weighted average
number of shares outstanding for the year and quarterly periods,
excluding shares of the employee stock ownership plan that have not
been committed to be released. Preferred dividends include
undeclared or unpaid dividends of the Company. Net income is
reduced for preferred dividends for purposes of the calculation. The Company
does not have any potential common stock that was not included in the
calculation of diluted earnings per share because it is antidilutive in
the current period.
The following table reflects the calculation of the earnings
per share (in thousands except per share data):
Nine months ended Quarters ended
December 31, December 31,
1997 1996 1997 1996
---------------------- ----------------------
Earnings from operations
before extraordinary
loss on early extinguishment
of debt $ 62,840 70,208 (5,390) (9,538)
Less dividends
on preferred shares 15,863 12,321 5,292 5,203
---------------------- ----------------------
46,977 57,887 (10,682) (14,741)
Extraordinary loss on early
extinguishment of debt (13,984) (2,319) (9,846) (315)
---------------------- ----------------------
Net earnings for per
share calculation $ 32,993 55,568 (20,528) (15,056)
====================== ======================
Net earnings for per share:
Earnings from operations
before extraordinary loss
on early extinguishment
of debt $ 2.15 2.17 (.49) (.72)
Extraordinary loss on early
extinguishment of debt, net (.64) (.09) (.45) (.02)
---------------------- ----------------------
Net earnings $ 1.51 2.08 (.94) (.74)
====================== ======================
Weighted average common
shares outstanding 21,890,250 26,683,455 21,901,521 20,359,869
====================== ======================
<PAGE 16>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
8. RELATED PARTIES
During the nine months ended December 31, 1997, a subsidiary
held various senior and junior notes with SAC Holding Corporation
and its subsidiaries (SAC Holdings). The voting common stock of
SAC Holdings is held by Mark V. Shoen, a major stockholder of the
Company.
The Company's subsidiary received principal payments of
$3,725,000 and interest payments of $5,014,000 from SAC Holdings
during the period.
The Company currently manages the properties owned by SAC
Holdings pursuant to a management agreement, under which the
Company receives a management fee equal to 6% of the gross receipts
from the properties. The Company received management fees of
$1,387,000 during the nine months ended December 31, 1997. The
management fee percentage is consistent with the fees received by
the Company for other properties managed by the Company.
9. NEW ACCOUNTING STANDARDS
On April 1, 1995, the Company implemented Statement of
Position 93-7, "Reporting on Advertising Costs", issued by the
Accounting Standards Executive Committee in December 1993. This
statement of position provides guidance on financial reporting on
advertising costs in annual financial statements. The
Company is currently reviewing its implementation procedures.
Other pronouncements issued by the Financial Standards Board
with future effective dates are either not applicable or not
material to the consolidated financial statements of the Company.
10. SUBSEQUENT EVENTS
In January 1998, the Company redeemed 25,000 shares of its
Series B Preferred Stock for $25,000,000. The shares were convertible
under certain circumstances into 1,000,000 shares, subject to the
Company's prior right to redeem the Series B Preferred Stock, of
AMERCO's Common Stock.
On February 3, 1998, the Company declared a cash dividend of
$3,241,000 ($0.53125 per preferred share) to preferred stockholders
of record as of February 13, 1998.
<PAGE 17>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The following table shows industry segment data from the Company's
three primary industry segments: Moving and Storage Operations,
Property and Casualty Insurance and Life Insurance. Moving and Storage
Operations is composed of the operations of U-Haul, which consists of
the rental of trucks, automobile-type trailers and self-storage space
and sales of related products and services and AREC. Property and
Casualty Insurance is composed of the operations of RWIC, which
operates in various property and casualty lines. Life Insurance is
composed of the operations of Oxford, which operates in various life,
accident and health and annuity lines. The Company's U-Haul Moving and
Storage Operations are seasonal and proportionately more of the
Company's revenues and net earnings are generated in the first and
second quarters of each fiscal year (April through September).
Moving and Property and Adjustments
Storage Casualty Life and
Operations Insurance Insurance Eliminations Consolidated
-----------------------------------------------------------
(in thousands)
Nine months ended
December 31, 1997
Revenues:
Outside $ 954,823 124,771 31,741 - 1,111,335
Intersegment - 17,204 918 (18,122) -
----------------------------------------------------------
Total revenues 954,823 141,975 32,659 (18,122) 1,111,335
==========================================================
Operating profit $ 135,234 1,858 7,218 - 144,310
============================================
Interest expense 49,301
--------
Pretax earnings
from operations $ 95,009
========
Identifiable assets $1,952,967 630,265 603,470 (328,757) 2,857,945
==========================================================
Moving and Property and Adjustments
Storage Casualty Life and
Operations Insurance Insurance Eliminations Consolidated
-----------------------------------------------------------
(in thousands)
Nine months ended
December 31, 1996
Revenues:
Outside $ 923,032 118,883 34,479 - 1,076,394
Intersegment - 12,291 746 (13,037) -
----------------------------------------------------------
Total revenues 923,032 131,174 35,225 (13,037) 1,076,394
==========================================================
Operating profit $ 123,981 12,864 8,770 - 145,615
============================================
Interest expense 35,060
--------
Pretax earnings
from operations $ 110,555
========
Identifiable assets $1,769,568 625,786 635,252 (329,332) 2,701,274
==========================================================
<PAGE 18>
NINE MONTHS ENDED DECEMBER 31, 1997 VERSUS NINE MONTHS ENDED
DECEMBER 31, 1996
Moving and Storage Operations
Revenues consist of rental revenues and net sales.
Rental revenues increased by $30.0 million, approximately
3.8%, to $811.2 million in the first nine months of fiscal 1998.
This increase primarily reflects the growth in truck rental
revenues which benefited from transactional growth and higher
average revenue per transaction.
Net sales revenues were $143.9 million in the first nine
months of fiscal 1998, which represents an increase of
approximately 1.6% from the first nine months of fiscal 1997 net
sales of $141.7 million. Revenue growth from the sale of moving
support items (i.e. boxes, etc.) and propane resulted in a $4.8
million increase during the first nine months of fiscal 1998, which
was partially offset by a net decrease in revenue from other sales
categories.
Cost of sales was $82.3 million in the first nine months of
fiscal 1998, which represents a decrease of approximately 2.4% from
$84.3 million for the same period in fiscal 1997. Lower material
costs associated with the sale of gasoline which corresponds to a
$1.2 million decline in gasoline sales was primarily responsible
for the decline.
Operating expenses increased to $677.4 million in the first
nine months of fiscal 1998 from $663.6 million in the first nine
months of fiscal 1997, an increase of approximately 2.1%. The
change from the prior year primarily reflects a $7.9 million
increase in insurance costs due to increased cost of risk and
higher rental activity and a $4.7 million increase in lease expense
due to new leasing activity within the rental fleet and with
storage facilities. Collectively, all other operating expense
categories increased by $1.2 million, approximately 0.2%, to $540.5
million.
Net depreciation expense for the first nine months of fiscal
1998 was $59.9 million, as compared to $51.2 million in the same
period of the prior year.
Property and Casualty
RWIC's gross premium writings for the nine months ended
September 30, 1997 were $129.8 million, as compared to $133.0
million in the nine months ended September 30, 1996. This
represents a decrease of $3.2 million, or 2.4%. As in prior
periods, the rental industry market accounts for a significant
share of total premiums, approximately 53.9% and 47.9% in the nine
months ended September 30, 1997 and 1996, respectively. These
writings include U-Haul customers, fleetowners and U-Haul as well
as other rental industry insureds with similar characteristics.
RWIC continues underwriting professional reinsurance via broker
markets. Premiums in this area decreased during the nine months
ended 1997 to 27.6% of total gross premiums, from comparable 1996
figures of 27.9%, due to the timing of premium recognition. RWIC
continues its direct multiple peril coverage of various commercial
properties and businesses in 1997. These premiums accounted for
13.2% of the total gross premiums for the nine months ended
September 30, 1997 as compared to 9.5% for the same period in 1996.
The increase is the result of planned business expansion. Premium
writings in selected general agency lines were 5.3% of total gross
premium writings for the period ended September 30, 1997 as
compared to 14.7% in the same period of 1996. This decrease
resulted from the cancellation of a general agency agreement in
November 1996.
Net earned premiums increased $10.4 million, or 9.6%, to
$118.8 million for the nine months ended September 30, 1997,
compared with premiums of $108.4 million for the period ended
September 30, 1996. The increase was primarily due to planned
business expansion in the rental industry and direct multiple peril
markets, offset by a decrease of $4.8 million in general agency and
assumed treaty reinsurance segments. The rental industry markets
increased to $69.6 million or 58.6% over comparable 1996 figures of
$57.0 million or 52.6% of total net earned premiums. The expansion
of the direct multiple peril line resulted in an increase of $2.5
million over 1996's net earned premiums of $9.9 million for the
period. The 1997 decrease of $3.0 million in the general agency
lines resulted from the cancellation of an agency agreement in
November 1996.
Net investment income was $23.2 million for the period ended
September 30, 1997, an increase of 2.2% over 1996 net investment
income of $22.7 million. The marginal increase resulted from an
increase in the amount of preferred stock in RWIC's portfolio.
<PAGE 19>
Underwriting expenses incurred were $140.1 million for the
nine months ended September 30, 1997, an increase of $21.8 million,
or 18.4% over 1996. Comparable underwriting expenses incurred for
the first nine months of 1996 were $118.3 million. The increase is
attributed to increased commission expense and losses incurred.
Increased commission expense on the rental industry and direct
multiple peril markets resulted from the planned increase in
premium writings and represents $1.8 million of the increase.
Losses incurred increased $19.8 million in the rental industry,
general agency lines, and assumed treaty reinsurance segments,
offset by a decrease in the direct multiple peril markets.
Approximately $18.2 million of the increase in losses incurred is
attributable to all programs and result from an increase in
liabilities for unpaid claims due to estimated future losses on
current and prior business, a component of losses incurred.
Increased net paid losses in the general agency, assumed treaty
reinsurance and rental industry lines, were offset by a decrease in
the direct multiple peril segment. All other underwriting expenses
increased in the aggregate by $2.0 million.
RWIC completed the nine months ended September 30, 1997 with
income before tax expense of $1.9 million as compared to $12.9
million for the same period ended September 30, 1996. This
represents a decrease of $11.0 million, or 85.3% over 1996.
Increased premium earnings and marginal investment income were
offset by increased underwriting expenses as discussed above.
Life Insurance
Premiums from Oxford's reinsurance lines before intercompany
eliminations were $13.1 million for the nine months ended September
30, 1997, a decrease of $2.5 million, or approximately 16.0% over
1996, and accounted for 68.0% of Oxford's premiums for the nine
months ended September 30, 1997. These premiums are primarily from
term life insurance and deferred annuity reinsurance agreements.
Decreases in premiums are primarily from the aging of these
reinsurance agreements.
Premiums from Oxford's direct lines before intercompany
eliminations were $6.2 million premiums for the nine months ended
September 30, 1997, an increase of $0.5 million or 8.8% from the
same period of 1996. This increase in direct premium is primarily
attributable to the Company's disability and group life business.
Oxford's direct business related to group life and disability
coverage issued to employees of the Company for the nine months
ended September 30, 1997 accounted for approximately 9.8% of
premiums. Other direct lines, including credit life and health
business, accounted for approximately 22.2% of Oxford's premiums
for the nine months ended September 30, 1997.
Net investment income before intercompany eliminations was
$13.4 million and $13.9 million for the nine months ended September
30, 1997 and 1996, respectively. This decrease is due to a lower
asset base resulting from a dividend paid to Oxford's parent.
Benefits and expenses incurred were $25.4 million for the nine
months ended September 30, 1997 and $26.5 million for the nine
months ended September 30, 1996.
Operating profit before tax and before intercompany
elimination decreased by $1.6 million, or approximately 18.2%, in
1997 to $7.2 million, primarily due to the decrease in premium
income and lower asset base attributable to the dividend paid to
Oxford's parent.
Interest Expense, net
Interest expense net of interest income increased by $14.2
million to $49.3 million for the nine months ended December 31,
1997, as compared to $35.1 million for the nine months ended
December 31, 1996. The increase is attributed to lower levels of
interest income in the current fiscal year.
Extraordinary Loss on Extinguishment of Debt
During the second quarter of fiscal 1998, the Company
extinguished $76.0 million of 10.27% interest-bearing notes
originally due in fiscal 1999 through fiscal 2002. This resulted
in an extraordinary loss of $4.1 million, net of tax of $2.3
million ($0.19 per share).
During the third quarter of fiscal 1998, the Company
extinguished $256.0 million of 6.61% to 8.13% interest-bearing
notes originally due in fiscal 1999 through fiscal 2010. This
resulted in an extraordinary loss of $9.8 million, net of tax of
$5.4 million ($0.45 per share).
During the second quarter of fiscal 1997, the Company
extinguished $76.3 million of debt and $86.2 million of long-term
notes originally due in fiscal 1997 through fiscal 1999. This
resulted in an extraordinary loss of $2.3 million, net of tax of
$1.4 million ($0.09 per share).
<PAGE 20>
Consolidated Group
As a result of the foregoing, pretax earnings of $95.0 million
were realized in the nine months ended December 31, 1997, as
compared to $110.6 million for the same period in 1996. After
providing for income taxes, earnings from operations were $62.8
million as compared to $70.2 million. Following deductions for an
extraordinary loss from the early extinguishment of debt, net
earnings for the nine months ended December 31, 1997 were $48.9
million, as compared to $67.9 million for the same period of the
prior year.
QUARTERLY RESULTS
The following table presents unaudited quarterly results for
the eleven quarters in the period beginning April 1, 1995 and
ending December 31, 1997. 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, the selected quarterly information when read
in conjunction with the consolidated financial statements of the
Company. The Company's U-Haul rental operations are seasonal and
proportionally more of the Company's revenues and net earnings from
its U-Haul rental 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 (in thousands except
for per share data).
Quarter Ended
------------------------------------
Jun 30 Sep 30 Dec 31
1997 1997 1997
------------------------------------
Total revenues $ 372,021 416,771 322,543
Earnings from operations
before extraordinary loss
on early extinguishment
of debt (4)(5) 29,198 39,032 (5,390)
Net earnings (loss) 29,198 34,894 (15,236)
Weighted average common
shares outstanding 21,879,156 21,890,072 21,901,521
Earnings from operations
before extraordinary loss
on early extinguishment
of debt per common share 1.09 1.54 (.49)
Net earnings (loss) per
common share (1)(4)(5) 1.09 1.35 (.94)
Quarter Ended
---------------------------------------------
Jun 30 Sep 30 Dec 31 Mar 31
1996 1996 1996 1997
---------------------------------------------
Total revenues $ 361,053 398,449 316,892 308,105
Earnings from operations
before extraordinary loss
on early extinguishment
of debt (3) 40,005 39,741 (9,538) (16,024)
Net earnings (loss) 40,005 37,737 (9,853) (16,024)
Weighted average common
shares outstanding (2) 32,015,301 27,675,192 20,359,869 21,868,241
Earnings from operations
before extraordinary loss
on early extinguishment
of debt per common share (3) 1.15 1.29 (0.72) (0.97)
Net earnings (loss) per
common share (1) (2) (3) 1.15 1.22 (0.74) (0.97)
Quarter Ended
---------------------------------------------
Jun 30 Sep 30 Dec 31 Mar 31
1995 1995 1995 1996
---------------------------------------------
Total revenues $ 340,331 381,746 305,105 298,656
Net earnings (loss) 15,177 35,332 7,701 2,184
Weighted average common
shares outstanding (2) 37,958,426 37,931,825 36,796,961 32,554,458
Net earnings (loss) per
common share (1) (2) 0.31 0.85 0.13 (0.04)
<PAGE 21>
________________
(1)Net earnings (loss) per common share amounts were computed
after giving effect to the dividends on the Company's Preferred
Stock.
(2)Reflects the acquisition of treasury shares acquired pursuant
to the Shoen Litigation as discussed in Note 14 of Notes to
Consolidated Financial Statements in Item 8 of the Company's
Form 10-K for the year ended March 31, 1997.
(3)During the second quarter of fiscal 1997, the Company
extinguished $76.3 million of debt and $86.2 million of long-
term notes originally due in fiscal 1997 through fiscal 1999.
This resulted in an extraordinary loss of $2.3 million, net of
tax of $1.4 million ($0.09 per share).
(4)During the second quarter of fiscal 1998, the Company
extinguished $76.0 million of 10.27% interest-bearing notes
originally due in fiscal 1999 through fiscal 2002. This
resulted in an extraordinary loss of $4.1 million, net of tax
of $2.3 million ($0.19 per share).
(5)During the third quarter of fiscal 1998, the Company
extinguished $256.0 million of 6.61% to 8.13% interest-bearing
notes originally due in fiscal 1999 through fiscal 2010. This
resulted in an extraordinary loss of $9.8 million, net of tax
of $5.4 million ($0.45 per share).
<PAGE 22>
QUARTER ENDED DECEMBER 31, 1997 VERSUS QUARTER ENDED DECEMBER 31,
1996
Moving and Storage Operations
Revenues consist of rental revenues and net sales.
Rental revenues increased by $7.6 million, approximately 3.3%,
to $234.3 million in the third quarter of fiscal 1998. This
increase reflects an $8.2 million increase in revenues from the
rental of moving related equipment reflecting higher In-Townr
transaction levels and an increase in the average revenue per
transaction.
Net sales revenues were $35.4 million in the third quarter of
fiscal 1998, which represented an increase of approximately 2.6%
from the third quarter of fiscal 1997 net sales of $34.5 million.
Revenue growth from the sale of moving support items (i.e. boxes,
etc.) and propane resulted in a $1.3 million increase during the
quarter, which was offset by a $0.2 million net decrease in
gasoline sales and other sales.
Cost of sales was $20.7 million in the third quarter of fiscal
1998, which represents an decrease of 4.6% from $21.7 million for
the same period in fiscal 1997. Lower material cost associated
with the reduction of gasoline sales and a reduction in propane
costs attributed to the decrease.
Operating expenses decreased to $213.3 million in the third
quarter of fiscal 1998 from $227.7 million in the third quarter of
fiscal 1997, a decrease of approximately 6.3%. The decrease from
the prior year resulted from management's increased focus on cost
containment during off-peak rental periods.
Net depreciation expense for the third quarter of fiscal 1998
was $20.8 million, as compared to $18.9 million in the same period
of the prior year.
Property and Casualty
RWIC's gross premium writing for the quarter ended September
30, 1997 were $41.9 million as compared to $43.6 million in the
third quarter of 1996. The rental industry market accounts for a
significant share of total premiums, approximately 60.2% and 52.5%
in the third quarters of 1997 and 1996, respectively. These
writings include U-Haul, U-Haul customers and fleetowners as well
as other rental industry insureds with similar characteristics.
RWIC continues underwriting professional reinsurance via broker
markets. Premiums in this area decreased during the third quarter
of 1997 to 12.8% of total gross premiums, from comparable 1996
figures of 18.9%, due to the timing of premium recognition. RWIC
continues its direct multiple peril coverage of various commercial
properties and businesses in 1997. These premiums accounted for
15.6% of total gross premiums during third quarter 1997, as
compared to 12.1% in 1996. This increase is the result of planned
business expansion. Premiums in selected general agency lines
accounted for an 11.4% share of written premiums in 1997 as
compared to 16.5% share in 1996. This decrease resulted from the
cancellation of a general agency agreement in November 1996.
Net earned premiums decreased to $39.8 million for the quarter
ended September 30, 1997, compared with $43.7 million for the
quarter ended September 30, 1996. The premium decrease resulted
from decreases in general agency, assumed treaty reinsurance and
rental industry segments, partially offset by an increase in the
direct multiple peril market. The cancellation of a general agency
agreement in November 1996 resulted in a $1.7 million decrease from
$2.4 million for the same period in 1996. The elimination of the
premium accrual on the reinsurance program contributed $0.9 million
to the decrease from 1996. Net earned premiums in the rental
industry markets decreased $2.6 million from $27.1 million for the
quarter ended September 1996. Partially offsetting this decrease
was an increase of $1.3 million in net earned premiums on the
direct multiple peril line due to planned business expansion.
Net investment income was $7.9 million for the quarter ended
September 30, 1997, an increase of 3.9% over 1996 net investment
income of $7.6 million. The increase over 1996 resulted from
increased cash flow from operations.
Underwriting expenses incurred were $51.7 million for the
quarter ended September 30, 1997, an increase of $3.6 million, or
7.5% over 1996. This change is attributable to increased losses
incurred for the rental industry and direct multiple peril markets,
offset by a decrease in commission expense on the assumed treaty
reinsurance segment. Paid losses, a component of losses incurred,
represented $4.2 million of the increase over 1996. The remaining
losses incurred increase, $2.5 million, resulted from an increase
in liabilities for unpaid claims due to estimated future losses for
current and prior policies. The increases were partially offset by
a $1.9 million decrease in commission expense resulting primarily
from the elimination of the accrual for premiums and corresponding
<PAGE 23>
commissions on the assumed treaty reinsurance segment, as mentioned
earlier. All other underwriting expenses decreased in the aggregate
by $1.2 million.
RWIC completed the third quarter of 1997 with income before
tax expense of $(4.0) million as compared to $3.2 million for the
comparable period ended September 30, 1996. This represents a
decrease of $7.1 million, or 225.4% under 1996. Decreased earned
premiums for the quarter and increased underwriting expenses were
the primary cause.
Life Insurance
Premiums from Oxford's reinsurance lines before intercompany
eliminations were $4.4 million for the quarter ended September 30,
1997, a decrease of $0.6 million or approximately 12.0% over 1996
and accounted for 66.7% of Oxford's premiums in 1997. These
premiums are primarily from term life insurance and deferred
annuity reinsurance agreements. Decreases in premiums are
primarily from the aging of these reinsurance agreements.
Premiums from Oxford's direct lines before intercompany
eliminations were $2.2 million for the quarter ended September 30,
1997, an increase of $0.2 million or 10.0% from the prior year.
This increase in direct premium is primarily attributable to group
life and disability coverage issued to employees of the Company,
which accounted for approximately 10.6% of premiums. Other direct
lines, including credit life and health business, accounted for
approximately 22.7% of Oxford's premiums for the quarter ended
September 30, 1997.
Net investment income before intercompany eliminations was
$4.6 million and $4.5 million for the quarters ended September 30,
1997 and 1996, respectively.
Benefits and expenses incurred were $7.7 million for the
quarter ended September 30, 1997, a decrease of 10.5% under 1996.
Comparable benefits and expenses incurred for the quarter ended
September 30, 1996 were $8.6 million. This decrease is primarily
due to decreases in death benefits, reserves and deferred
acquisition cost amortization partially offset by increases in
commissions and annuity benefits.
Operating profit before tax and intercompany eliminations
increased by $0.3 million or approximately 9.4% for the quarter
ended September 30, 1997 to $3.5 million, primarily due to an
increase in premium income and a decrease in death benefits.
Interest Expense, net
Interest expense, net of interest income, was $15.7 million
for the quarter ended December 31, 1997 versus $17.3 million in the
prior year's third quarter. This decrease was derived from a
reduction in the average cost of borrowings due to the Company's
debt restructuring program.
Extraordinary Loss on Extinguishment of Debt
During the third quarter of fiscal 1998, the Company
extinguished $256.0 million of 6.61% to 8.13% interest-bearing
notes originally due in fiscal 1999 through fiscal 2010. This
resulted in an extraordinary loss of $9.8 million, net of tax of
$5.4 million ($0.45 per share).
Consolidated Group
As a result of the foregoing, a pretax loss of $8.2 million
was incurred for the quarter ended December 31, 1997, as compared
to a pretax loss of $16.0 million for the same period in 1996.
After providing for income taxes, a loss of $5.4 million was
incurred during the third quarter of fiscal 1998 as compared to a
loss of $9.6 million in the prior year. After providing for
extraordinary losses from the early extinguishment of debt, a net
loss of $15.2 million was incurred for the current quarter, as
compared to a net loss of $9.9 million for the same period of the
prior year.
<PAGE 24>
LIQUIDITY AND CAPITAL RESOURCES
Moving and Storage Operations
To meet the needs of its customers, U-Haul must maintain a
large inventory of fixed asset rental items. At December 31, 1997,
net property, plant, and equipment represented approximately 68.6%
of total U-Haul assets and approximately 46.9% of consolidated
assets. In the first nine months of fiscal 1998, gross capital
expenditures for property, plant and equipment were $317.2 million,
as compared to $159.7 million in the first nine months of fiscal
1997. These expenditures primarily reflect expansion of the
rental truck fleet, purchase of trucks previously leased and real
property acquisitions. The capital needs required to fund these
acquisitions were funded with internally generated funds from
operations, debt and lease financings.
Cash flows from operating activities were $95.9 million during
the nine months ended December 31, 1997, as compared to $76.1
million during the nine months ended December 31, 1996. The
increase results from increased revenues offset by a slight
increase in operating expenses.
At December 31, 1997, total notes and loans outstanding were
$1,074.4 million as compared to $983.6 million at March 31, 1997
and $933.4 million at December 31, 1996.
Property and Casualty
Cash flows from operating activities were $7.9 million and
$(19.0) million for the nine months ended September 30, 1997 and
September 30, 1996, respectively. The change resulted from
decreased due from affiliates and paid losses recoverable, offset
by increases in accounts receivable and other assets and decreases
in other liabilities and federal income tax payable. Also
contributing are increased loss and expense reserves and a smaller
unearned premium decrease than for the quarter ended September 30,
1996.
The short-term investment portfolio was $1.5 million at
September 30, 1997. This balance reflects funds in transition from
maturity proceeds to long-term investments. The structure of the
long-term portfolio is designed to match future liability cash
needs. Capital and operating budgets allow RWIC to schedule cash
needs in accordance with investment and underwriting proceeds.
RWIC maintains a diversified securities investment portfolio,
primarily in bonds at varying maturity levels. Approximately 95.0%
of the portfolio is comprised 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 0.2% more invested assets than total liabilities.
Stockholder's equity increased $3.2 million from $192.3 million
at December 31, 1996 to $195.5 at September 30, 1997. RWIC
considers current shareholder's equity to be adequate to support
future growth and absorb unforeseen risk events. RWIC does not use
debt or equity issues to increase capital and, therefore, has no
exposure to capital market conditions.
Life Insurance
Oxford's primary sources of cash are premiums, deferred
annuity sales 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 flows from operating activities were $6.4 million and
$13.7 million for the nine months ended September 30, 1997 and
1996, respectively. In 1997, cash flows provided(used) by
financing activities were approximately $(9.5) million compared to
$22.2 million for the nine months ended September 30, 1996. Cash
flows from deferred annuity sales are a component of financing
activities and result in the purchase of fixed maturities, which
are a component of investing activities. In addition to cash flows
from operating and financing activities, a substantial amount of
liquid funds is available through Oxford's short-term portfolio.
At September 30, 1997 and 1996, short-term investments amounted to
$6.1 million and $12.5 million, respectively. Management believes
that the overall sources of liquidity will continue to meet
foreseeable cash needs.
Stockholder's equity of Oxford decreased to $82.4 million in
1997 from $100.4 million in 1996 as the result of cash dividends of
$33.9 million paid to its parent on December 31, 1996.
<PAGE 25>
On November 18, 1997, Oxford purchased all of the issued and
outstanding shares of Encore Financial, Inc. and its subsidiaries
(Encore). Encore's primary subsidiary is North American Insurance
Company (NAI). NAI is an insurance company domiciled in the state
of Wisconsin whose premium volume is primarily derived from the
sale of credit life and disability products. On November 24, 1997
Oxford purchased all of the issued and outstanding shares of Safe
Mate Life Insurance Company, domiciled in the state of Texas, whose
premium volume is derived from the sale of credit life and
disability products. These purchases greatly increase Oxford's
distribution channels and enhance administrative capabilities in
these markets.
Applicable laws and regulations of the State of Arizona
require the Company's insurance subsidiaries to maintain minimum
capital and surplus 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 regulatory approval.
Statutory surplus which can be distributed as dividends without
regulatory approval is zero at September 30, 1997. These
restrictions are not expected to have a material adverse effect on
the ability of the Company to meet its cash obligations.
Consolidated Group
During each of the fiscal years ending March 31, 1998, 1999
and 2000, U-Haul estimates gross capital expenditures will average
approximately $250-$300 million as a result of the expansion of the
rental truck fleet and self-storage locations. This level of
capital expenditures, combined with an average of approximately $75
million in annual long-term debt maturities during this same
period, are expected to create annual average funding needs of
approximately $325-$375 million. Management estimates that U-Haul
will fund between 75% and 88% of these requirements with internally
generated funds, including proceeds from the disposition of older
trucks and other asset sales. The remainder of the anticipated
capital expenditures are expected to be financed through existing
credit facilities, new debt placements, lease fundings and equity
offerings.
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, 1997, the Company had
$1,074.4 million in total notes and loans outstanding and
unutilized committed lines of credit of approximately $180.0
million.
In October 1997, the Company issued $300.0 million of Bond
Back Asset Trust Certificates (BATs). The net proceeds were
initially used to prepay floating rate indebtedness of the Company
under revolving credit agreements. Subsequent to the funding of
the BATs, the Company extinguished $256.0 million of 6.61% to 8.13%
in interest-bearing notes originally due in fiscal 1999 through
fiscal 2010.
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, 1997, the Company was
in compliance with these covenants.
The Company is further restricted 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 26>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
3.1 Restated Articles of Incorporation (1)
3.2 Restated By-Laws of AMERCO as of August 27, 1996
(2)
4.1 AMERCO and Citibank, N.A. Trustee Second
Supplemental Indenture Dated as of October 22, 1997
4.2 Calculation Agency Agreement
4.3 6.65%-AMERCO Series 1997 A Bond Backed Asset Trust
Certificates ("BATs") Due October 15, 1999
27 Financial Data Schedule
b. Reports on Form 8-K.
No report on Form 8-K was filed for the quarter ended
December 31, 1997.
_____________________________________
(1) Incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1992, file no. 0-7862.
(2) Incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1996, file no. 0-7862.
<PAGE 27>
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 12, 1998 By: /S/ DONALD W. MURNEY
___________________________________
Donald W. Murney, Treasurer
(Principal Financial Officer)
<PAGE>
______________________________________________________________________________
AMERCO
TO
CITIBANK, N.A., TRUSTEE
________________
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 22, 1997
TO
INDENTURE
DATED AS OF MAY 1, 1996
________________
6.65% SENIOR NOTES, SERIES 1997-A DUE 2029
6.89% SENIOR NOTES, SERIES 1997-B DUE 2010
7.135% SENIOR NOTES, SERIES 1997-C DUE 2032
______________________________________________________________________________
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of the 22nd day
of October 1997 (the "SUPPLEMENTAL INDENTURE"), between AMERCO, a
corporation duly organized and existing under the laws of the
State of Nevada (herein called the "COMPANY"), having its
principal office at 1325 Airmotive Way, Suite 100, Reno, Nevada
89502-3239, and CITIBANK, N.A., a national banking association,
existing under the laws of the United States of America, as
Trustee (herein called the "TRUSTEE") under the Indenture dated
as of May 1, 1996 (the "DEBT SECURITIES INDENTURE"), between the
Company and the Trustee.
RECITALS OF THE COMPANY
The Company has executed and delivered the Debt
Securities Indenture to the Trustee to provide for the issuance
of its unsecured debentures, notes or other evidences of
indebtedness, to be issued from time to time in one or more
series as determined by the Company in accordance with the terms
of the Debt Securities Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered
thereunder as provided in the Debt Securities Indenture.
Pursuant to the terms of the Debt Securities Indenture,
the Company desires to provide for the establishment of three new
series of notes to be known as its 6.65% Senior Notes,
Series 1997-A due October 15, 2029 (the "SERIES A NOTES"), its
6.89% Senior Notes, Series 1997-B due October 15, 2010 (the
"SERIES B NOTES") and its 7.135% Senior Notes, Series 1997-C due
October 15, 2032 (the "SERIES C NOTES" and, together with the
Series A Notes and Series B Notes, the "NOTES"), the form and
substance of such Notes and the terms, provisions and conditions
thereof to be set forth as provided in the Debt Securities
Indenture and this Supplemental Indenture.
All things necessary to make this Supplemental
Indenture a valid agreement of the Company, in accordance with
its terms, have been done.
NOW THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Notes by the Holders thereof (as defined below),
it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF SPECIAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Supplemental Indenture, except
as otherwise expressly provided or unless the context otherwise
requires:
<PAGE>
(1) terms used herein and not otherwise defined
herein shall have the respective meanings assigned thereto
in the Debt Securities Indenture, whether by cross-reference
or otherwise;
(2) the words "herein", "hereof" and "hereunder"
and other words of similar import, when used in this
Supplemental Indenture, refer to this Supplemental Indenture
as a whole and not to any particular Article, Section or
other subdivision thereof; and
(3) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular, as follows:
"ATTRIBUTABLE DEBT" means indebtedness for money borrowed
deemed to be incurred in respect of a Sale and Leaseback
Transaction and shall be, at the date of determination, the
present value (discounted at the actual rate of interest implicit
in such transaction, compounded annually), of the total
obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale and Leaseback
Transaction.
"CAPITAL STOCK" means, with respect to any person, any and
all shares or other equivalents (however designated) of corporate
stock, partnership interests, or any other participation, right,
warrant, option, or other interest in the nature of an equity
interest in such person, but excluding debt securities
convertible or exchangeable into such equity interest.
"CAPITALIZED LEASE" means any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its subsidiaries in
accordance with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of the date of
any determination thereof, the total amount of all assets of the
Company and its Consolidated Subsidiaries (less depreciation,
depletion and other properly deductible valuation reserves) after
deducting Intangibles.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary of the
Company or of any Consolidated Subsidiary which is consolidated
with the Company for financial reporting purposes in accordance
with GAAP.
"DEBT" of the Company or any Subsidiary thereof means,
collectively, (i) any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Subsidiary
(excluding any indebtedness for money borrowed by the Company
from any Affiliate thereof) or (ii) any mortgage, indenture or
instrument (including the Debt Securities Indenture) under which
there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company (excluding any
indebtedness for money borrowed by the Company from any Affiliate
thereof) or any Subsidiary (excluding any indebtedness for money
borrowed by any Subsidiary from any Affiliate thereof), whether
such indebtedness now exists or shall hereafter be created.
"DEFAULT" means an event which, with the giving of notice or
the lapse of time, or both, would constitute an Event of Default.
"DOLLARS" means the lawful currency of the United States of
America.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
<PAGE>
"GAAP" means United States generally accepted accounting
principles as in effect as of the date of determination, unless
otherwise stated.
"GOOD FAITH CONTEST" means, with respect to any tax,
assessment, Lien, obligation, claim, liability, judgment,
injunction, award, decree, order, law, regulation, statute or
similar item, any challenge or contest thereof by appropriate
proceedings timely initiated in good faith by the Person subject
thereto for which adequate reserves therefor have been taken in
accordance with GAAP.
"INDEBTEDNESS FOR MONEY BORROWED", when used with respect to
the Company or any Subsidiary, means any obligation of, or any
obligation guaranteed by, the Company or any Subsidiary for the
repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred
obligation of, or any such obligation guaranteed by, the Company
for the payment of the purchase price of property or assets.
"INTANGIBLES" means all Intellectual Properties and all
goodwill, patents, trade names, trademarks, copyrights,
franchises, experimental expense, organization expense,
unamortized debt discount and expense, deferred assets (other
than prepaid insurance, prepaid taxes, prepaid advertising,
prepaid licensing and other similar expenses prepaid in the
ordinary course of business), amounts invested in or advanced to
or equity in the Company's Subsidiaries other than Consolidated
Subsidiaries less any writedowns thereof, the excess of cost of
shares acquired over book value of related assets, any increase
in the value of a fixed asset arising from a reappraisal,
revaluation or write-up thereof, and such other assets as are
properly classified as "intangible assets" in accordance with
GAAP.
"INTELLECTUAL PROPERTIES" means all material patents, patent
applications, copyrights, copyright applications, trade secrets,
trade names and trademarks, technologies, methods, processes or
other proprietary properties or information which are used by the
Company and its Consolidated Subsidiaries in the conduct of their
business and are either owned by them or are used, employed or
practiced by them under valid and existing licenses, grants,
"shop rights", or other rights.
"ISSUE DATE" means the date of initial issuance of the Notes
under this Supplemental Indenture and the Debt Securities
Indenture.
"LIEN" means any interest in property securing an obligation
owed to, or a claim by, a person other than the owner of the
property, whether such interest is based on the common law,
statute or contract, and including but not limited to the
security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "LIEN" shall include
reservations, exceptions, encroachments, easements, rights-of-
way, covenants, conditions, restrictions, bankers' liens, setoff
and similar arrangements, leases and other title exceptions and
encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all
similar arrangements) affecting property. For the purposes
hereunder, the Company or a Consolidated Subsidiary shall be
deemed to be the owner of any property which it has acquired or
holds subject to a conditional sale agreement, Capitalized Lease
or other arrangement pursuant to which title to the property has
been retained by or vested in some other person for security
purposes and such retention or vesting shall constitute a Lien.
<PAGE>
"PRIORITY DEBT" means (i) indebtedness for money borrowed of
any Consolidated Subsidiary, except indebtedness for money
borrowed issued to and held by the Company or a Wholly-Owned
Consolidated Subsidiary, and (but without duplication) (ii)
Secured Indebtedness.
"RENTALS" means and includes, as of the date of any
determination thereof, all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
the Company or a Consolidated Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a
Consolidated Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"SALE AND LEASEBACK TRANSACTION" has the meaning specified
in Section 602 hereof.
"SECURED INDEBTEDNESS" means any indebtedness for money
borrowed, whether of the Company or any Consolidated Subsidiary,
secured by any Lien on any property of the Company or any
Consolidated Subsidiary.
"SUBSIDIARY" means a person more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company
and one or more other Subsidiaries.
"VOTING STOCK" of a person means all classes of Capital
Stock of such person then outstanding and normally entitled to
vote in the election of directors (or persons performing similar
functions) or to direct the business and affairs of the issuer of
such Capital Stock in the absence of contingencies.
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any
Consolidated Subsidiary all of the outstanding Capital Stock of
which (except for directors' qualifying shares to the extent
required by applicable law) is owned by the Company and/or its
Wholly-Owned Consolidated Subsidiaries.
SECTION 102. Debt Securities Indenture.
The Debt Securities Indenture, as supplemented by this
Supplemental Indenture, is in all respects ratified and
confirmed, and this Supplemental Indenture shall be deemed part
of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 103. Counterparts.
This Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same
instrument.
ARTICLE TWO
FORM OF THE NOTES
SECTION 201. Form of the Face of the Notes.
<PAGE>
The face of the Notes is to be substantially in the
following form:
[To be included on the face of any Note that is a Global
Security:
This Note is a Global Security within the meaning
of the Supplemental Indenture hereinafter referred to and is
registered in the name of a Depository or a nominee of a
Depository or a successor depository. This Note is not
exchangeable for Notes registered in the name of a Person
other than the Depository or its nominee except in the
limited circumstances described in the Debt Securities
Indenture hereinafter referred to, and no transfer of this
Note (other than a transfer of this Note as a whole by the
Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the
Depository) may be registered except in the limited
circumstances described in the Supplemental Indenture.]
[To be included on the face of any Note that is a Global
Security where DTC is the Depository:
Unless this Note is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company (as defined below) or
its agent for registration of transfer, exchange or payment,
and any certificate issued is registered int he name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.]
AMERCO
___% Senior Notes, Series 1997-[A][B][C] Due [2029][2010][2032]
No.__________ $__________
CUSIP No. __________
AMERCO, a corporation duly organized and existing
under the laws of Nevada (herein called the "COMPANY", which
terms includes any successor Person under the Debt
Securities Indenture hereinafter referred to), for value
received, hereby promises to pay to ________________ or
registered assigns, the principal sum of __________
_____________ on October 15, [2029][2010][2032] and to pay
interest thereon from October 22, 1997 or from the most
recent Interest Payment Date on which interest has been paid
or duly provided for, semi-annually on April 15 and October
15 of each year (each an "INTEREST PAYMENT DATE") commencing
April 15, 1998, at the rate of ___% per annum (subject to
reset, effective as of the Interest Reset Effective Date (as
defined herein), pursuant to the Calculation Agency
Agreement referred to herein, as set forth in more detail on
the reverse hereof), until the principal hereof is paid or
made available for payment, and (to the extent that the
payment of such interest shall be legally enforceable) at a
rate per annum equal to 2% plus the rate per annum at which
interest otherwise accrues hereunder on any overdue
principal (and premium, if any) and on any overdue
installment of interest.
All capitalized terms used herein shall have the
respective meanings assigned thereto in the Supplemental
Indenture dated as of October 22, 1997 (the "SUPPLEMENTAL
INDENTURE") between the Company and Citibank, N.A., as
Trustee (the "TRUSTEE", which term includes any successor
<PAGE>
trustee under the Debt Securities Indenture referred to
below), whether by cross-reference or otherwise. The
Supplemental Indenture is one of the supplemental indentures
referred to in and executed in accordance with the terms of
the Debt Securities Indenture dated as of May 1, 1996
between the Company and the Trustee. The interest so
payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Debt
Securities Indenture and the Supplemental Indenture, be paid
to the Person in whose name this Note (or one or more
Predecessor Note) is registered at the close of business on
the Regular Record Date for such interest, which shall be
April 1 or October 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of
Notes not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner, all
as more fully provided in said Debt Securities Indenture and
Supplemental Indenture.
Payment of the principal of (and premium, if any)
and any such interest on this Note will be made in the
manner set forth in the Supplemental Indenture, in
immediately available funds in such coin or currency of the
United States of America as at the time of payment is legal
tender for payment of public and private debts, provided
that the Company may at its option pay interest by check in
the case of a Note that is not a Global Security. In the
event that the Maturity or Interest Payment Date is not a
Business Day, then payment of interest payable on such
Maturity or Interest Payment Date, as the case may be, shall
be made on the next succeeding Business Day (and without any
interest or other payment in respect of any such delay), in
each case with the same force and effect as if made on such
Maturity or Interest Payment Date.
Reference is hereby made to the further provisions
of this Note set forth on the reverse hereof and of the
Supplemental Indenture and the Debt Securities Indenture,
which further provisions shall for all purposes have the
same effect as if set forth at this place. In the event of
any conflict between this Note on one hand and the
Supplemental Indenture and the Debt Securities Indenture, on
the other, the terms of the Supplemental Indenture and the
Debt Securities Indenture shall govern.
Unless the certificate of authentication hereon
has been executed by the Trustee by manual signature, this
Note shall not be entitled to any benefit under the Debt
Securities Indenture or the Supplemental Indenture or be
valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: _______________
AMERCO
By________________________
Title:
ATTEST:
By_____________________
Title:
SECTION 202. Form of the Reverse of the Notes.
The Reverse of the Notes is to be substantially in the
following form:
This Note is one of a duly authorized issue of
securities of the Company (the "NOTES") issued under the
Debt Securities Indenture and the Supplemental Indenture, to
which Debt Securities Indenture and Supplemental Indenture
reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of
the Notes and of the terms upon which the Notes are, and are
to be, authenticated and delivered. This Note is one of the
series designated on the face hereof, limited in aggregate
principal amount to $100,000,000.
In the event that a Note is purchased in part
only, a new Note or Notes of like tenor for the unpurchased
portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof, provided that each new
note issued shall be in a principal amount in denominations
of $100,000 and integral multiples thereof.
The rate of interest on the Notes is subject to
reset as provided in the Calculation Agency Agreement dated
as of October 22, 1997 (as modified and supplemented and in
effect from time to time, the "CALCULATION AGENCY
AGREEMENT"), between the Company and Citicorp Securities,
Inc., as calculation agent (in such capacity, together with
its successors in such capacity, the "CALCULATION AGENT").
As provided in Section 401 of the Supplemental Indenture,
upon receipt by the Company of notice from the Calculation
Agent of its calculation of the rate of interest (the "RESET
RATE") at which interest is to accrue in respect of the
Notes (other than in respect of overdue amounts), effective
from and including October 15, [1999] 1 [2000] 2 [2002] 3 (or, if
_______________________________
1Include in Series A Note.
2Include in Series B Note.
3Include in Series C Note.
<PAGE>
such date is not a Business Day, from and including the next
succeeding Business Day) (the "INTEREST RESET EFFECTIVE
DATE"), the Company is required, by delivery of an Officers'
Certificate to the Trustee on or prior to the Interest Reset
Effective Date, to notify the Trustee of such Reset Rate
(whereupon the Trustee is required to give notice of such
Reset Rate to each Holder of record on such Interest Reset
Effective Date). Any such change in the rate at which
interest is to accrue in respect of the Notes shall be
effective for the period from and including the Interest
Reset Effective Date to but excluding Maturity, subject to
receipt by the Company from the Calculation Agent of notice
of such Reset Rate.
The Notes shall not be subject to any sinking
fund.
If (a) the Call Options (as defined below) are not
exercised at or prior to 4:00 p.m. New York City time on
October [__], [1999] 4 [2000] 5 [2002] 6 (or, if such date is not
a Business Day, on the next preceding Business Day) (the
"CALL EXERCISE DATE"), or (b) following any such exercise,
the Callholders (as defined below) fail to make payment in
full when due for the purchase of the Notes in accordance
with the Call Options (either such event, a "PURCHASE
TRIGGER EVENT"), then any Holder of a Note may, by
irrevocable written notice to the Company (which shall
promptly notify the Trustee) given not later than two
Business Days after the Purchase Trigger Event, require that
the Company, not earlier than the Interest Reset Effective
Date and not later than the date one Business Day after the
date of such notice, purchase such Note at a purchase price
(paid through the Trustee) equal to (i) the unpaid principal
amount of such Note plus (ii) all unpaid interest on the
unpaid principal amount of such Note accrued to but
excluding the Interest Reset Effective Date plus
(iii) interest (calculated at the rate applicable to
payments of overdue principal of such Note prior to the
Interest Reset Effective Date) on the unpaid principal
amount of such Note, and on any accrued and unpaid interest,
accrued from and including the Interest Reset Effective Date
to but excluding the date of payment of such purchase price.
As used herein, (A) "CALL OPTIONS" means each of (i) the
call option, dated as of October 22, 1997, pursuant to which
Citibank, N.A. (or a successor Callholder) has the right,
but not the obligation, to purchase Notes on the Call
Exercise Date at the purchase price specified therein and
(ii) the call option, dated as October 22, 1997, pursuant to
which NationsBank, N.A. (or a successor Callholder) has the
right, but not the obligation, to purchase Notes on the Call
Exercise Date at the purchase price specified therein, in
each case, subject to and in accordance with the ISDA Master
Agreement entered into between the Callholder party thereto
and the initial Holder of the Notes; and (B) "CALLHOLDERS"
means, with respect to the first Call Option, Citibank, N.A.
and, with respect to the second Call Option, NationsBank,
N.A., in each case, together with their respective
transferees and successors.
In the event that a Holder elects to require the
Company to purchase a Note pursuant to the immediately
preceding paragraph, the Company may, in lieu of purchasing
the relevant Note, with notice to the Trustee, identify a
third party who will agree to purchase the Note on the
purchase date under the same terms and conditions as if the
Notes were purchased by the Company. The Company will not
_______________________________
4Include in Series A Note.
5Include in Series B Note.
6Include in Series C Note.
<PAGE>
be relieved of its obligations to purchase a Note on any
purchase date specified above if such third party fails to
purchase such Note.
The Notes shall be general unsecured obligations
of the Company. The Notes shall rank pari passu in right of
payment with all senior indebtedness of the Company and
senior in right of payment to any subordinated indebtedness
of the Company.
If an Event of Default with respect to the Notes
shall occur and be continuing, the principal of the Notes
may be declared due and payable in the manner and with the
effect provided in the Debt Securities Indenture and the
Supplemental Indenture.
The Debt Securities Indenture and the Supplemental
Indenture permit, with certain exceptions as therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Holders of the Notes to be effected at any time by the
Company and the Trustee with the consent of the Holders of a
majority of aggregate principal amount or at least two-
thirds of the aggregate principal amount, as applicable, of
the Notes at the time Outstanding. The Debt Securities
Indenture and the Supplemental Indenture also contain
provisions permitting the Holders of specified percentages
in principal amount of the Notes at the time Outstanding, on
behalf of the Holders of all Notes, to waive compliance by
the Company with certain provisions of the Debt Securities
Indenture and the Supplemental Indenture and certain past
defaults under the Debt Securities Indenture and the
Supplemental Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
No reference herein to the Debt Securities
Indenture and the Supplemental Indenture and no provision of
this Note or of the Debt Securities Indenture or the
Supplemental Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay
the principal of and any premium and interest on this Note
at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Debt Securities Indenture and
the Supplemental Indenture, and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this
Note for registration of transfer at the office or agency of
the Company in any place where the principal of and any
premium and interest on this Note are payable, duly endorsed
by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar
duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes
of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated
transferee or transferees.
The Debt Securities Indenture and the Supplemental
Indenture contain provisions for defeasance at any time
after the Interest Reset Effective Date of (a) the entire
amount of the Notes and (b) certain restrictive covenants
and related Events of Default, in each case, upon compliance
with certain conditions set forth therein.
<PAGE>
The Notes are issuable only in registered form
without coupons in denominations of $100,000 and any
integral multiple thereof. As provided in the Debt
Securities Indenture and the Supplemental Indenture and
subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes
of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Note for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and
neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
This Note shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered
Holder hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification Number:
__________________________________________
Please print or type name and address, including
the zip code of the assignee:
___________________________________________
the attached Note and all rights thereunder, hereby
irrevocably constituting and appointing
___________________________________________
as attorney to transfer said Note on the books of the
Company with full power and substitution in the premises.
Date:_____________________
___________________________________
NOTE: The signature to this
assignment must correspond with
the name as written upon the face
of the attached Note in every
particular, without alteration or
change whatsoever.
SECTION 203. Form of the Certificate of Authentication.
The Trustee's Certificate of Authentication to be
endorsed on the Notes is to be substantially in the following
form:
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the within-mentioned Debt
Securities Indenture.
CITIBANK, N.A.,
as Trustee
By:__________________________
Authorized Signatory
ARTICLE THREE
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 301. Designation of Securities and Amounts Thereof.
There shall be and is hereby authorized three series of
securities designated the "6.65% Senior Notes, Series 1997-A due
October 15, 2029", the "6.89% Senior Notes, Series 1997-B due
October 15, 2010" and the "7.135% Senior Notes, Series 1997-C due
October 15, 2032", each series being limited in aggregate
principal amount to $100,000,000.
SECTION 302. Payment of Principal and Interest.
The Series A Notes, the Series B Notes and the Series C
Notes shall mature and the principal thereof shall be due and
payable in Dollars to the Holders thereof (subject to Section 304
hereof), together with all accrued and unpaid interest thereon,
on October 15, 2029, October 15, 2010 and October 15, 2032,
respectively (the "MATURITY" for the purposes of the Notes under
this Supplemental Indenture).
Subject to the next succeeding paragraph, the Series A
Notes, the Series B Notes and the Series C Notes shall bear
interest at 6.65%, 6.89% and 7.135% per annum, respectively,
subject to the provisions of the following paragraph, from and
including October 22, 1997 or from the most recent Interest
Payment Date (defined below) on which interest has been paid or
provided for until the principal thereof becomes due and payable,
and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum. Interest on
the Notes shall be payable semiannually in arrears in Dollars on
April 15 and October 15 of each year, commencing on April 15,
1998 (each such date, an "INTEREST PAYMENT DATE" for the purposes
of the Notes under this Supplemental Indenture). Payments of
interest shall be made to the Person in whose name a Note (or
predecessor Note) is registered (which shall initially be the
Depository, as set forth in Section 304 hereof) at the close of
business on the April 1 or October 1, as the case may be, next
preceding such Interest Payment Date (each such date, a "REGULAR
RECORD DATE" for the purposes of the Notes under this
Supplemental Indenture).
The rate of interest on the Notes is subject to reset
as provided in the Calculation Agency Agreement dated as of
October 22, 1997 (as modified and supplemented and in effect from
<PAGE>
time to time, the "CALCULATION AGENCY AGREEMENT"), between the
Company and Citicorp Securities, Inc., as calculation agent (in
such capacity, together with its successors in such capacity, the
"CALCULATION AGENT"). Upon receipt by the Company of notice from
the Calculation Agent of its calculation of the rate of interest
(the "RESET RATE") at which interest is to accrue in respect of
each Series of Notes (other than in respect of overdue amounts),
effective from and including October 15, 1999 7, 2000 8 or 2002 9
(or, if such date is not a Business Day, from and including the
next succeeding Business Day) (the "INTEREST RESET EFFECTIVE
DATE"), the Company shall, by delivery of an Officers'
Certificate to the Trustee on or prior to the Interest Reset
Effective Date for such Series, notify the Trustee of such Reset
Rate (and the Trustee shall give notice of such Reset Rate to
each Holder of record on such Interest Reset Effective Date).
Any such change in the rate at which interest is to accrue in
respect of any Series of Notes shall be effective for the period
from and including the Interest Reset Effective Date to but
excluding Maturity, subject to receipt by the Company from the
Calculation Agent of notice of such Reset Rate.
For so long as the Notes are represented by Global
Securities, all payments of principal and interest shall be made
by the Company in immediately available funds in such coin or
currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts,
provided that the Company may at its option pay interest by check
in the case of a Note that is not a Global Security.
In the event that the Maturity or any Interest Payment
Date is not a Business Day, then payment of interest payable on
such Maturity or Interest Payment Date, as the case may be, shall
be made on the next succeeding Business Day (and without any
interest or other payment in respect of any such delay), in each
case with the same force and effect as if made on such Maturity
or Interest Payment Date.
For so long as and to the extent that the Notes are
represented by a Global Security pursuant to Section 304 hereof,
payments of principal and interest shall be made in accordance
with said Section 304. All other payments of principal and
interest shall be made to the registered Holders thereof by a
Paying Agent that the Company shall maintain, in the event that
definitive Notes shall have been issued, in The City of New York.
The Notes shall not be subject to any sinking fund.
Holders of the Notes will have the right under certain
circumstances specified in Section 401 to require that the
Company purchase the Notes.
SECTION 303. Ranking.
The Notes shall be general unsecured obligations of the
Company. The Notes shall rank pari passu in right of payment
with all senior indebtedness of the Company and senior in right
of payment to any subordinated indebtedness of the Company.
_______________________________
7Series A Note.
8Series B Note.
9Series C Note.
<PAGE>
SECTION 304. Book-Entry System
The Notes shall be represented by one or more permanent
global notes (each, a "GLOBAL SECURITY") deposited with, or on
behalf of, The Depositary Trust Company, as Depository under the
Debt Securities Indenture and this Supplemental Indenture (the
"DEPOSITORY"), and registered in the name of the Depository's
nominee. Except as set forth in the following paragraph, (1)
owners of beneficial interests in a Global Security shall not be
entitled to have Notes represented by such Global Securities
registered in their names, will not receive or be entitled to
receive physical delivery of Notes in definitive form and shall
not be considered the owners or Holders thereof under the Debt
Securities Indenture and this Supplemental Indenture and (2) each
Global Security may be transferred, in whole and not in part,
only to another nominee of the Depository or to a successor of
the Depository or its nominee. Accordingly, beneficial interests
in the Notes shall be shown on, and transfers thereof shall be
effected only through, records maintained by the Depository and
its participants.
Notwithstanding any provisions of Section 305 of the
Debt Securities Indenture, no Note that is a Global Security
shall be registered for transfer or exchange, or be authenticated
and delivered, and owners of beneficial interests in any Global
Security will not be entitled to receive Notes in definitive form
and will not be considered Holders of Notes unless (1) the
Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time
the Depository ceases to be a clearing agency registered under
the Exchange Act, (2) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so
exchangeable or (3) there shall have occurred and be continuing a
Default or an Event of Default. In such circumstances, upon
surrender by the Depository or a successor depository of any
Global Security, Notes in definitive form will be issued to each
Person that the Depository or successor depository identifies as
the beneficial owner of the related Notes. Upon such issuance,
the Trustee is required to register such Notes in the name of,
and cause such Notes to be delivered to, such Person or Persons
(or nominees thereof). Such Notes would be issued in fully
registered form without coupons, in denominations of $100,000 and
integral multiples thereof.
The Depository shall be permitted to take any action
permitted to be taken by an owner or Holder of Notes only at the
direction of one or more participants in the Depository, as it
may from time to time determine.
Principal and interest payments on Notes registered in
the name of or held by the Depository or its nominee shall be
made to the Depository or its nominee, as the case may be, as the
registered owner of the Global Security representing such Notes.
The Company and the Trustee shall treat the Persons in whose
names the Notes are registered as the Holders of such Notes for
the purpose of receiving payment of principal and interest on
such Notes and for all other purposes whatsoever. Therefore,
none of the Company, the Trustee or any Paying Agent has direct
responsibility or liability for the payment of principal and
interest on the Notes to owners of beneficial interests in any
Global Security. Payments by direct and indirect participants in
the Depository shall be the responsibility of such participants.
The Notes shall trade in the Depository's Same-Day
Funds Settlement System until Maturity (or until they are subject
to purchase pursuant to Section 401 hereof or acceleration
pursuant to Article Five of the Debt Securities Indenture), and
secondary market trading activity in the Notes may be required by
the Depository to settle in immediately available funds.
<PAGE>
ARTICLE FOUR
PURCHASE AND DEFEASANCE
SECTION 401. Purchase by the Company at the Election of the
Holders
The Company shall not be required to redeem or
otherwise purchase Notes except as set forth in this Article
Four.
If (a) the Call Options (as defined below) are not
exercised at or prior to 4:00 p.m. New York City time on
October 12, 1999 10, October 11, 2000 11 or October 9, 2002 12 (or, if
such date is not a Business Day, on the next preceding Business
Day) (the "CALL EXERCISE DATE"), or (b) following any such
exercise, the Callholders (as defined below) fail to make payment
in full when due for the purchase of the Notes in accordance with
the Call Options (either such event, a "PURCHASE TRIGGER EVENT"),
then any Holder of a Note may, by irrevocable written notice to
the Company (which shall promptly notify the Trustee) given not
later than two Business Days after the Purchase Trigger Event,
require that the Company, not earlier than the Interest Reset
Effective Date and not later than the date one Business Day after
the date of such notice, purchase such Note at a purchase price
(paid through the Trustee) equal to (i) the unpaid principal
amount of such Note plus (ii) all unpaid interest on the unpaid
principal amount of such Note accrued to but excluding the
Interest Reset Effective Date plus (iii) interest (calculated at
the rate applicable to payments of overdue principal of such Note
prior to the Interest Reset Effective Date) on the unpaid
principal amount of such Note, and on any accrued and unpaid
interest, accrued from and including the Interest Reset Effective
Date to but excluding the date of payment of such purchase price.
As used herein, (A) "CALL OPTIONS" means each of (i) the call
option, dated as of October 22, 1997, pursuant to which Citibank,
N.A. (or a successor Callholder) has the right, but not the
obligation, to purchase Notes on the Call Exercise Date at the
purchase price specified therein and (ii) the call option, dated
as October 22, 1997, pursuant to which NationsBank, N.A. (or a
successor Callholder) has the right, but not the obligation, to
purchase Notes on the Call Exercise Date at the purchase price
specified therein, in each case, subject to and in accordance
with the ISDA Master Agreement entered into between the
Callholder party thereto and the initial Holder of the Notes; and
(B) "CALLHOLDERS" means, with respect to the first Call Option,
Citibank, N.A. and, with respect to the second Call Option,
NationsBank, N.A., in each case, together with their respective
transferees and successors.
In the event that a Holder elects to require the
Company to purchase a Note pursuant to the immediately preceding
paragraph, the Company may, in lieu of purchasing the relevant
Note, with notice to the Trustee, identify a third party who will
agree to purchase the Note on the purchase date under the same
terms and conditions as if the Notes were purchased by the
Company. The Company will not be relieved of its obligations to
purchase a Note on any purchase date specified above if such
third party fails to purchase such Note.
_______________________________
10Series A Note.
11Series B Note.
12Series C Note.
<PAGE>
SECTION 402. Defeasance of the Notes
Each Series of Notes shall be subject to defeasance in
accordance with the provisions of Section 403 of the Debt
Securities Indenture, provided that no defeasance of any Series
--------
of the Notes may be effected until after the Interest Reset
Effective Date for such Series.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default
For all purposes of the Debt Securities Indenture and
this Supplemental Indenture relating to the Notes, the following
shall be Events of Default in addition to the Events of Default
enumerated in Section 501 of the Debt Securities Indenture:
(a) a default (including a default with respect
to debt Securities of any series other than the Notes) under
any Debt of the Company or any Subsidiary thereof, which
default shall have resulted (i) in a failure to pay an
aggregate principal amount exceeding $10,000,000 of such
Debt at the later of final maturity thereof or upon the
expiration of any applicable period of grace with respect to
such principal amount or (ii) in such Debt in an aggregate
principal amount exceeding $10,000,000 becoming or being
declared due and payable prior to the date on which it would
otherwise have become due and payable, without such Debt
having been discharged, or such acceleration having been
rescinded or annulled, within a period of 15 days after
there shall have been given, by registered or certified
mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Notes, a written notice specifying
such default and requiring the Company to cause such Debt to
be discharged or to cause such acceleration to be rescinded
or annulled and stating that such notice is a "NOTICE OF
DEFAULT" hereunder; provided, however, that the Trustee
shall not be deemed to have knowledge of such default unless
either (A) an officer in the Corporate Trust Department of
the Trustee shall have actual knowledge of such default or
(B) the Trustee shall have received written notice thereof
from the Company, from any Holder, from the holder of any
such Debt or from the trustee under any such mortgage,
indenture or other instrument.
ARTICLE SIX
COVENANTS
The Company covenants and agrees for the benefit of the
Holders of the Notes that it will comply with all covenants
contained in the Debt Securities Indenture and with such further
covenants that are contained in this Article Six and in any other
provisions of this Supplemental Indenture.
SECTION 601. Limitation on Liens Securing Indebtedness.
The Company may not, and may not permit any
Consolidated Subsidiary to, create or incur, or suffer to be
incurred or to exist, at any time, any Lien on its or their
property, including after-acquired property, or upon any income
or profits therefrom, to secure the payment of any indebtedness
<PAGE>
for money borrowed of the Company or of any Consolidated
Subsidiary or of any other Person, unless all obligations of the
Company on or in respect of the Notes are equally and ratably and
validly secured by such Lien by proceedings and documents
reasonably satisfactory to the Trustee, except that the
provisions of this paragraph shall not prohibit the following:
(a) Liens existing as of the Issue Date securing
indebtedness for money borrowed of the Company and its
Consolidated Subsidiaries outstanding on such date;
(b) Liens (i) incurred after the Issue Date given (on
or within 120 days of the date of acquisition, construction
or improvement) to secure the payment of the purchase price
or construction costs incurred by the Company or a
Consolidated Subsidiary in connection with the acquisition,
construction or improvement of real and personal property
useful and intended to be used in carrying on the business
of the Company or such Consolidated Subsidiary, or (ii) on
fixed assets useful and intended to be used in carrying on
the business of the Company or a Consolidated Subsidiary
existing at the time of acquisition or construction thereof
by the Company or such Consolidated Subsidiary or at the
time of acquisition by the Company or a Consolidated
Subsidiary of any business entity then owning such fixed
assets, whether or not such existing Liens were given to
secure the payment of the purchase price or construction
costs of the fixed assets to which they attach, so long as
Liens permitted by this clause (ii) were not incurred,
extended or renewed in contemplation of such acquisition or
construction, provided that any such Liens permitted by this
clause (b) shall attach solely to the property acquired,
constructed, improved or purchased;
(c) Liens for taxes, assessments or other governmental
levies or charges not yet due or which are subject to a Good
Faith Contest;
(d) Liens incidental to the conduct of the Company's
and its Subsidiaries' businesses or their ownership of
property and other assets not securing any indebtedness for
money borrowed and not otherwise incurred in connection with
the borrowing of money or obtaining of credit, and which do
not in the aggregate materially diminish the value of the
Company's or Subsidiaries' property or assets when taken as
a whole, or materially impair the use thereof in the
operation of their businesses;
(e) Liens in respect of any interest or title of a
lessor in any property subject to a Capitalized Lease
permitted under Section 602 hereof;
(f) Liens arising in respect of judgments against the
Company, except for any judgment in an amount in excess of
$1,000,000 which is not discharged or execution thereof
stayed pending appeal within 45 days after entry thereof;
(g) Liens in favor of the Company or any Consolidated
Subsidiary of the Company;
(h) Liens consisting of minor survey exceptions or
minor encumbrances, easements or reservations, or rights of
others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to use of real
property, that are necessary for the conduct of the
operations of the Company and its Subsidiaries or that
customarily exist on properties of corporations engaged in
similar businesses and are similarly situated and that do
not in any event materially impair their use in the
operations of the Company and its Subsidiaries; and
<PAGE>
(i) Liens renewing, extending or refunding any Lien
permitted by the preceding clauses of this paragraph;
provided, however, that the principal amount of indebtedness
for money borrowed secured by such Lien immediately prior
thereto is not increased and such Lien is not extended to
any other assets or property.
Notwithstanding the foregoing, the Company or any
Consolidated Subsidiary may create or assume Liens, in addition
to those otherwise permitted by the preceding clauses of this
Section 601, securing indebtedness for money borrowed of the
Company or any Consolidated Subsidiary issued or incurred after
the Issue Date, provided that at the time of such issuance or
incurrence, the aggregate amount of all Secured Indebtedness and
Attributable Debt would not exceed 15% of Consolidated Net
Tangible Assets.
In the event that any property of the Company or any
Consolidated Subsidiary is subject to a Lien not otherwise
permitted by this Section 601, the Company must make or cause to
be made a provision whereby the Notes will be secured (together
with other indebtedness for money borrowed then entitled thereto
and equal in rank to the Notes), to the full extent permitted
under applicable law, equally and ratably with all other
obligations secured thereby, and in any case the Notes shall (but
only in such event) have the benefit, to the full extent that the
holders of the Notes may be entitled thereto under applicable
law, of an equitable Lien on such property equally and ratably
securing the Notes and such other obligations.
SECTION 602. Limitation on Sale and Leaseback.
The Company may not, and may not permit any
Consolidated Subsidiary to, enter into any arrangement, directly
or indirectly, whereby the Company or such Consolidated
Subsidiary shall, in one transaction or a series of related
transactions, (i) sell, transfer or otherwise dispose of any
property owned by the Company or any Consolidated Subsidiary and
(ii) more than 120 days after the later of the date of initial
acquisition of such property or completion or occupancy thereof,
as the case may be, by the Company or such Consolidated
Subsidiary, rent or lease, as lessee, such property or
substantially identical property or any material part thereof (a
"SALE AND LEASEBACK TRANSACTION"), provided that the foregoing
restriction shall not apply to any Sale and Leaseback Transaction
if (a) immediately after the consummation of such Sale and
Leaseback Transaction and after giving effect thereto, no Default
or Event of Default shall exist and (b) any one of the following
conditions is satisfied:
(i) the lease concerned constitutes a Capitalized
Lease and at the time of entering into such Sale and
Leaseback Transaction and after giving effect thereto and to
any Liens incurred pursuant to Section 601 hereof, the
aggregate amount of all Secured Indebtedness and
Attributable Debt would not exceed 15% of Consolidated Net
Tangible Assets; or
(ii) the lease has a term which in the aggregate would
not exceed 36 months (including any extensions or renewals
thereof at the option of the lessee); or
(iii) the sale of such property is for cash
consideration which equals or exceeds the fair market value
thereof (as determined in good faith by the Company) and the
net proceeds from such sale are applied, within 30 days of
the date of the sale thereof, to the payment (other than
payments due at maturity or in satisfaction of, or applied
to, any mandatory or scheduled payment or prepayment
<PAGE>
obligation) of indebtedness for money borrowed of the
Company which ranks, in right of payment, on a parity with
or senior to the Notes.
SECTION 603. Restrictive Agreements.
The Company may not and may not permit any of its
Consolidated Subsidiaries to enter into any indenture, agreement,
instrument or other arrangement which, directly or indirectly,
prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the
ability of any Consolidated Subsidiary to make loans or advances
to the Company or to declare and pay dividends or make
distribution on shares of such Consolidated Subsidiary's capital
stock (including capital stock issued in the future); provided,
however, that any agreement to subordinate indebtedness for money
borrowed owing from any Consolidated Subsidiary to the Company or
owing between Consolidated Subsidiaries pursuant to any Priority
Debt or to any guarantee of such indebtedness for money borrowed
shall not be deemed to violate this paragraph so long as any such
agreement to subordinate does not directly or indirectly prohibit
or restrain the ability of any such Consolidated Subsidiary to
make loans or advances to the Company or to declare and pay
dividends or make distributions on shares of such Consolidated
Subsidiary's capital stock (including capital stock issued in the
future).
SECTION 604. Corporate Existence.
The Company is required to do or cause to be done all
things necessary to preserve and keep in full force and effect
its corporate existence and material rights (charter and
statutory) and material franchises of the Company, provided,
however, that the Company shall not be required to preserve any
such right or franchise if the Board of Directors shall determine
that the preservation of such rights and franchises is no longer
desirable in the conduct of the business of the Company and its
Consolidated Subsidiaries considered as a whole, and that the
loss thereof is not disadvantageous in any material respect to
the holders of the Notes.
SECTION 605. Defeasance of Certain Obligations.
The Company may omit to comply with the covenants
contained in Sections 601, 602 and 603 hereof, and violations of
such covenants shall not be deemed to be an Event of Default
hereunder, under the Debt Securities Indenture and under the
Notes, to the extent that all of the conditions set forth in
Section 1004 of the Debt Securities Indenture have been met.
SECTION 606. Rule 144A Information.
At any time when the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange
Act, upon the request of any Holder of any Notes, the Company
shall promptly furnish or cause to be furnished to such Holder or
to a prospective purchaser of a Note designated by such Holder,
as the case may be, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act ("RULE 144A
INFORMATION") in order to permit compliance by such Holder with
Rule 144A in connection with the resale of such Note by such
Holder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Second Supplemental Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and attested,
all as of the day and year first above written.
AMERCO
By:__________________________________
Gary V. Klinefelter
Secretary
Attest:
__________________________________
John A. Lorentz
Assistant Secretary
CITIBANK, N.A.,
as Trustee
By__________________________________
Name:
Title:
Attest:
__________________________________
Name:
Title:
<PAGE>
STATE OF ARIZONA )
COUNTY OF MARICOPA ) ss.:
On the 22nd day of October 1997, before me personally
came Gary V. Klinefelter, to me known, who, being by me duly
sworn, did depose and say that he is Secretary of AMERCO, one of
the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the
seal affixed to the said instrument is such corporate seal; that
it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like
authority.
___________________________
Name:
Notary Public
State of Arizona
My Commission expires on:
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss.:
On the ___ day of October 1997, before me personally came
_______________, to me known, who, being by me duly sworn, did
depose and say that he is the _______________ of Citibank, N.A.,
one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name
thereto by like authority.
___________________________
Name:
Notary Public
State of New York
My Commission expires on:
<PAGE>
CONFIDENTIAL AND PROPRIETARY
CALCULATION AGENCY AGREEMENT dated as of October 22,
1997, between:
AMERCO, a corporation organized under the laws of the
State of Nevada (the "COMPANY"); and
CITICORP SECURITIES, INC., a corporation organized
under the laws of the State of Delaware, as calculation
agent (in such capacity, together with its successors in
such capacity, the "CALCULATION AGENT").
The Company proposes to issue and sell (a) $100,000,000
aggregate principal amount of its 6.65% Senior Notes, Series 1997-
A due 2029 (the "SERIES A NOTES"), (b) $100,000,000 aggregate
principal amount of its 6.89% Senior Notes, Series 1997-B due
2010 (the "SERIES B NOTES") and (c) $100,000,000 aggregate
principal amount of its 7.135% Senior Notes, Series 1997-C due
2032 (the "SERIES C NOTES" and, collectively with the Series A
Notes and the Series B Notes, the "NOTES"; and each,
individually, a "SERIES" of Notes).
Pursuant to an Indenture dated as of May 1, 1996 (as
modified and supplemented and in effect from time to time, the
"INDENTURE"), between the Company and Citibank, N.A., as trustee
(in such capacity, together with its successors in such capacity,
the "TRUSTEE"), notes may be issued under the Indenture in series
as from time to time authorized by the Board of Directors of the
Company. Each series of notes issued under the Indenture is
required to be created by a supplemental indenture authorized by
resolutions of the Executive Finance Committee of the Board of
Directors of the Company.
The Company has duly authorized the issuance of the
Notes pursuant to resolutions adopted by the Board of Directors
of the Company adopted on October 14, 1997 (the "RESOLUTIONS").
The Notes have been created by the Supplemental Indenture dated
as of October 22, 1997 (the "SUPPLEMENTAL INDENTURE") entered
into between the Company and the Trustee.
Pursuant to the Resolutions and in accordance with the
Supplemental Indenture, the rate at which interest accrues on
each Series of Notes is to be reset effective as of the Effective
Date (as defined below) for that Series, and the Company desires
to appoint the Calculation Agent for the purpose of calculating
the rate at which interest accruing on each Series of Notes is to
be reset, all as provided in this Agreement.
Accordingly, the Company and the Calculation Agent
agree as follows:
Section 1. Definitions. As used in this Agreement:
-----------
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"BUSINESS DAY" has the meaning given to such term in
the Indenture.
<PAGE>
"CALLHOLDERS" means, with respect to each Series of
Notes, any Person that has the right, but not the obligation, to
purchase such Series of Notes under either related Call Option.
"CALL OPTIONS" means, with respect to each Series of
Notes, (a) the call option relating to such Series of Notes
purchased by Citibank, N.A., as evidenced by the Confirmation
with a Trade Date (as defined therein) of October 17, 1997 and
(b) the call option relating to such Series of Notes purchased by
NationsBank, N.A., as evidenced by the Confirmation with a Trade
Date (as defined therein) of October 17, 1997, in each case, as
modified and supplemented and in effect from time to time.
"CAUSE" means the Calculation Agent: (a) fails to
perform any of its obligations hereunder for any reason;
(b) becomes insolvent or is generally unable to pay its debts or
fails or admits in writing its inability generally to pay its
debts as they become due; (c) makes a general assignment,
arrangement or composition with or for the benefit of its
creditors; or (d) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other
similar law affecting creditors' rights, or a petition is
presented for its winding-up or liquidation, and, in the case of
any such proceeding or petition instituted or presented against
it, such proceeding or petition (i) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or
(ii) is not dismissed, discharged, stayed or restrained in each
case within 30 days of the institution or presentation thereof.
"CHANGE OF CONTROL" means (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Exchange Act and
the rules of the Securities and Exchange Commission thereunder as
in effect on the date hereof) of shares representing more than
50% of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Identified Person or
(b) if the Identified Person is not the Calculation Agent, the
failure of the Identified Person to own, directly or indirectly,
all of the issued and outstanding shares of common capital stock
of the Calculation Agent (other than directors' qualifying
shares, if any).
"CSI" means Citicorp Securities, Inc., together with
its successors and assigns.
"CONSENT" includes a consent, approval, action,
authorization, exemption, notice, filing or registration.
"COUPON RESET REFERENCE SPREAD" means, with respect to
each Series of Notes, the percentage set forth in the table in
Annex 1 hereto opposite "Coupon Reset Reference Spread" in the
column in such table for such Series.
"DEALER" has the meaning given to such term in
Section 3(a).
"EFFECTIVE DATE" means, with respect to each Series of
Notes, the date set forth in the table in Annex 1 hereto opposite
"Effective Date" in the column in such table for such Series;
provided that, if any such date would otherwise fall on a day
- --------
that is not a Business Day, the relevant Effective Date will be
the first following day that is a Business Day.
"EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
<PAGE>
"FAILED RESET" means, with respect to any Series of
Notes, no Dealer submits, at or prior to the deadline specified
in Section 3(b), a Spread Bid for such Series to the Calculation
Agent.
"FIXED RESET PRICE" means, with respect to any Series
of Notes, the sum of (a) the par value of the Notes of such
Series plus (b) the excess, if any, of (i) the present value,
----
discounted (on the basis of a year of 360 days and twelve 30-day
months) to the Effective Date for such Series at a discount rate
per annum equal to the Spot Treasury Yield for such Series
plus the Coupon Reset Reference Spread for such Series, of the
Scheduled Note Payments with respect to such Series over (ii) the
----
par value of the Notes of such Series.
"IDENTIFIED PERSON" means (a) Citicorp, a Delaware
corporation, and (b) if CSI is no longer the Calculation Agent,
(i) if the successor Calculation Agent is on the date on which it
becomes the Calculation Agent hereunder a subsidiary of a holding
company, such holding company and (ii) otherwise, the successor
Calculation Agent.
"LAW" includes any treaty, law, rule or regulation, and
"lawful" and "unlawful" will be construed accordingly.
"MATURITY DATE" means, with respect to each Series of
Notes, the date set forth in the table in Annex 1 hereto opposite
"Maturity Date" in the column in such table for such Series.
"NMSI" means NationsBanc Montgomery Securities, Inc.,
together with its successors and assigns.
"OFFERING CIRCULAR" means the Offering Circular dated
October 17, 1997 prepared by the Company relating to the offering
and issuance of the Notes.
"QUALIFIED DEALER" means a dealer registered pursuant
to Section 15 of the Exchange Act that in the aggregate owns and
invests on a discretionary basis at least $100,000,000 of
securities, the issuers of which securities are not Affiliates of
such dealer; provided that in no event may a Qualified Dealer be
--------
an Affiliate of the Company.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, governmental authority or other entity.
"RELEVANT MATURITY" means, with respect to each Series
of Notes, the period of time set forth in the table in Annex 1
hereto opposite "Relevant Maturity" in the column in such table
for such Series.
"RESET DATE" means, with respect to each Series of
Notes, the date set forth in the table in Annex 1 hereto opposite
"Reset Date" in the column in such table for such Series;
provided that, if any such date would otherwise fall on a day
- --------
that is not a Business Day, the relevant Reset Date will be the
first preceding day that is a Business Day.
<PAGE>
"RESET RATE" means, with respect to any Series of
Notes, the interest rate on Notes of such Series (computed on the
basis of a year of 360 days and twelve 30-day months and
calculated by the Calculation Agent pursuant to Section 3(d))
that would, over the period from the Effective Date for such
Series to the Maturity Date for such Series, amortize completely
the excess of (a) the Fixed Reset Price for such Series over
----
(b) the par value of the Notes of such Series at the Yield to
Maturity for such Series.
"SCHEDULED NOTE PAYMENTS" means, with respect to any
Series of Notes, each payment of principal and interest that
would be paid on such Series of Notes during the period from but
excluding the Effective Date for such Series to and including the
Maturity Date for such Series, assuming for the purposes of this
definition, that (a) the entire principal amount of such Notes is
paid on the Maturity Date for such Series and (b) the rate per
annum at which interest is stated to accrue on such Notes is
equal to the Strike Yield plus the Coupon Reset Reference Spread
for such Series.
"SPOT TREASURY YIELD" means, with respect to any Series
of Notes, the bid side yield-to-maturity of the current ("on-the-
run") U.S. Treasury Note or Bond, as applicable, having a
maturity of the Relevant Maturity that appears on Dow Jones
Markets (Telerate) Page 500 at 12:00 noon, New York City time, on
the Reset Date for such Series. If such rate does not appear on
such Page, the Spot Treasury Yield for such Series will be
determined by the Calculation Agent and will be a yield-to-
maturity based on the arithmetic mean of the secondary market bid
side prices as of approximately 12:00 noon, New York City time,
on the Reset Date for such Series of three leading primary United
States government securities dealers in the City of New York
(from five such dealers and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)) for
U.S. Treasury Notes or Bonds, as applicable, having a maturity of
the Relevant Maturity and taking a simple average of the
remaining three values.
"SPREAD" means, with respect to any Series of Notes,
the percentage that, when added to the Spot Treasury Yield for
such Series, equals the Yield to Maturity for such Series.
"SPREAD BID" means, with respect to any Series of
Notes, an irrevocable written bid by a Dealer setting forth the
Spread for such Series at which such Dealer would be willing to
purchase, as provided in Section 3(e), the entire outstanding
principal amount of the Notes of such Series on the Effective
Date for such Series at a purchase price equal to the Fixed Reset
Price for such Series.
"STRIKE YIELD" means, with respect to each Series of
Notes, the percentage set forth in the table in Annex 1 hereto
opposite "Strike Yield" in the column in such table for such
Series.
"YIELD TO MATURITY" means, with respect to any Series
of Notes, the sum of (a) the Spot Treasury Yield for such Series
plus (b) the Selected Bid (as defined in Section 3(c)) for such
Series.
Section 2. Appointment of Calculation Agent. The
--------------------------------
Company hereby appoints the Calculation Agent as its agent for
the purpose of calculating the Reset Rate for each Series of
Notes in accordance with this Agreement, and the Calculation
Agent hereby accepts such appointment.
<PAGE>
Section 3. Determination of Reset Rate.
---------------------------
(a) Identification of Dealers. The Company shall, by
notice to the Calculation Agent given not later than 3:00 p.m.
New York City time on the date five Business Days prior to the
Reset Date for each Series of Notes, identify five Qualified
Dealers (including, as to each Dealer, its address, its telephone
number, its telecopier number and a contact name) from which the
Calculation Agent is to obtain Spread Bids for such Series in
order to calculate the Reset Rate for such Series as provided
herein. Two of the Dealers so specified shall be CSI and NMSI.
If the Company fails to identify five Qualified Dealers by such
time or if any Dealer (other than CSI and NMSI) identified by the
Company does not satisfy the criteria that the Calculation Agent
applies generally at such time in deciding whether to offer or to
make an extension of credit, then the Calculation Agent may, on
behalf of the Company, identify one or more Qualified Dealers
until five Qualified Dealers have been identified by the Company
or the Calculation Agent on its behalf. Each Qualified Dealer so
identified under this Section 3(a) is herein referred to as a
"DEALER".
(b) Obtaining Spread Bids. Not later than 3:00 p.m.
---------------------
New York City time on the date four Business Days prior to the
Reset Date for each Series of Notes, the Calculation Agent shall
provide to each Dealer identified under Section 3(a) with respect
to such Series (i) a copy of the Offering Circular, (ii) a copy
of the form of Note of such Series and (iii) a written request
that such Dealer submit, not later than 10:00 a.m. New York City
time on the Reset Date for such Series, a Spread Bid to the
Calculation Agent (which written request shall include the
relevant pricing assumptions for providing a Spread Bid,
including the method specified herein for calculating the Fixed
Reset Price and the Reset Rate). The Company may, not later than
the deadline specified in the foregoing clause (iii), submit a
Spread Bid to the Calculation Agent (which, for all purposes of
this Agreement other than Section 3(a), will be deemed to have
been submitted by a Dealer).
(c) Establishment of Fixed Reset Price. On the Reset
----------------------------------
Date for each Series of Notes, the Calculation Agent shall
determine the Fixed Reset Price for such Series. Promptly
following its determination of such Fixed Reset Price, the
Calculation Agent shall give notice to the Company of (i) with
respect to each Dealer from which the Calculation Agent received
Spread Bids by the deadline specified in Section 3(b), the name
of such Dealer and the Spread Bid submitted by it, (ii) the name
of the Dealer (which may be the Company) that submitted the
lowest such Spread Bid (the "SELECTED BID" for such Series) and
(iii) the Fixed Reset Price for such Series; provided that, if
two or more Spread Bids submitted by such deadline are equal and
are the lowest of all such Spread Bids, then the Company may in
its sole discretion select any of such equivalent Spread Bids
(and the Spread Bid so selected by the Company will be the deemed
to be the Selected Bid).
(d) Calculation of Reset Rate. Promptly following its
-------------------------
determination of the Fixed Reset Price for any Series of Notes,
the Calculation Agent shall calculate the Reset Rate and give
notice to the Company and the Dealer that submitted the Selected
Bid of the Fixed Reset Price, the Yield to Maturity and the Reset
Rate, in each case, for such Series. The Company shall, by
delivery on or prior to the Effective Date for such Series of an
officer's certificate to the Trustee pursuant to and in
accordance with the Indenture, establish the Reset Rate for such
Series as the rate of interest payable on the Notes of such
Series for the period from and including the Effective Date for
such Series to but excluding the Maturity Date for such Series.
<PAGE>
(e) Sale of Notes. On the Effective Date for each
-------------
Series of Notes, if such Notes have been purchased by the related
Callholders pursuant to an exercise of the related Call Options,
such Callholders shall severally sell to the Dealer that
submitted the Selected Bid, and such Dealer shall purchase from
the Callholders, upon the tender thereof for sale, such Notes at
a purchase price equal to the Fixed Reset Price for such Notes;
provided that no such sale and purchase shall be effected in the
event of a Failed Reset. Payment for such Notes will be made by
such Dealer in Dollars and immediately available funds, by wire
transfer to an account of the Callholder entitled thereto
maintained with a commercial bank located in the United States of
America and identified by such Callholder to such Dealer not less
than one Business Day prior to the Effective Date for such
Series.
Section 4. Representations. Each party represents to
---------------
the other party that: (a) it is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization or incorporation; (b) it has the power to execute,
deliver and perform its obligations under this Agreement and has
taken all necessary action to authorize such execution, delivery
and performance; (c) this Agreement has been duly executed and
delivered by it; (d) such execution, delivery and performance do
not violate or conflict with any law applicable to it, any
provision of its constitutional documents, any order or judgment
of any court or other agency of government applicable to it or
any of its assets or any material contractual restriction binding
on or affecting it or any of its assets; (e) all governmental and
other consents that are required to have been obtained by it with
respect to this Agreement have been obtained and are in full
force and effect and all conditions of any such consents have
been complied with; (f) its obligations under this Agreement
constitute its legal, valid and binding obligations, enforceable
in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law)); and (g) there is not pending or, to its
knowledge, threatened against it any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental
body, agency or official or any arbitrator that is likely to
affect the legality, validity or enforceability against it of
this Agreement or its ability to perform its obligations under
this Agreement.
Section 5. Rights and Duties of the Calculation Agent.
------------------------------------------
(a) Limited Duties. The Calculation Agent shall not
--------------
have any duties or obligations except those expressly set forth
herein. Without limiting the generality of the foregoing, the
Calculation Agent shall have no obligation to, or any trust,
fiduciary, agency or other relationship with, the Trustee or any
of the holders of the Notes or any other securities issued under
the Indenture. The recitals contained herein and in the
Indenture and the Notes shall be taken as the statements of the
Company, and the Calculation Agent shall have no responsibility
for their correctness. The Calculation Agent makes no
representations as to, and shall have no responsibility for, the
validity or sufficiency of the Indenture or the Notes or the
performance or observance of any of the covenants, agreements or
other terms or conditions set forth in the Indenture or the
Notes. The Calculation Agent shall not be accountable for the
use or application by the Company of the Notes or the proceeds
thereof.
(b) Reliance on Written Instruments, Officer's
------------------------------------------
Certificate and Legal Counsel. The Calculation Agent may rely
- -----------------------------
and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order or other paper
<PAGE>
or document believed by it to be genuine and to have been signed
or presented by the proper party or parties. Whenever in taking
any action under this Agreement the Calculation Agent shall deem
it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the
Calculation Agent may rely upon a certificate signed by the
Chairman of the Board, the President, any Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company and delivered by the Company to the
Calculation Agent. The Calculation Agent may consult with legal
counsel (which includes counsel for the Company), and the written
advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) No Duty of Inquiry. The Calculation Agent shall
------------------
not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order or
other paper or document, but the Calculation Agent, in its
discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(d) Right to Own Notes, Etc.. Each of the Calculation
------------------------
Agent (in its individual or any other capacity) and its
Affiliates may become the owner or pledgee of Notes and other
securities issued by the Company and may otherwise deal with the
Company with the same rights it would have if it were not
Calculation Agent.
(e) Indemnity. The Company shall indemnify each of
---------
the Calculation Agent, its Affiliates and the respective
directors, officers, employees, agents and advisors of the
Calculation Agent and its Affiliates (each such Person being
called an "INDEMNITEE") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities,
whether joint or several, and related expenses, including the
fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the
consummation of the transactions contemplated hereby or (ii) any
actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto and regardless of whether an
Indemnitee has been actively or passively negligent; provided
--------
that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such
Indemnitee.
(f) Resignation or Removal of Calculation Agent.
-------------------------------------------
Subject to the appointment and acceptance of a successor
Calculation Agent as provided in this paragraph, the Calculation
Agent (i) may resign at any time by notifying the Company,
(ii) be removed for Cause at any time upon notice from the
Company to the Calculation Agent specifying in reasonable detail
the basis for such removal or (iii) be removed within 30 days
following the occurrence of a Change of Control with respect to
the Calculation Agent upon notice thereof from the Company to the
Calculation Agent. Upon any such resignation or removal, the
Company shall appoint a successor Calculation Agent; provided
--------
that, if such removal results from a Change of Control, the
retiring Calculation Agent shall appoint a successor Calculation
Agent with the consent of the Company (such consent not to be
unreasonably withheld). If no successor shall have been so
appointed by the Company and shall have accepted such appointment
within 30 days after the retiring Calculation Agent gives notice
<PAGE>
of its resignation or the Company gives notice of removal, then
the retiring Calculation Agent may, on behalf of the Company,
appoint a successor Calculation Agent which shall be a Qualified
Dealer. Upon the acceptance of its appointment as Calculation
Agent hereunder by a successor (and upon delivery to the other
party or parties thereto of its written agreement to be bound by
the obligations of the predecessor Calculation Agent under the
letter agreement dated the date hereof originally between CSI and
NMSI relating hereto, for the benefit of each, CSI, and if NMSI
is not the successor Calculation Agent, NMSI) such successor
shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Calculation Agent and the
retiring Calculation Agent shall be discharged from its duties
and obligations hereunder. After the Calculation Agent's
resignation or removal hereunder, the provisions of this Section
5 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
Calculation Agent.
(g) Successor by Merger. Any corporation into which
-------------------
the Calculation Agent may be merged or converted or with which it
may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Calculation
Agent shall be a party, or any corporation succeeding to all or
substantially all the business of the Calculation Agent, shall be
the successor of the Calculation Agent hereunder, without the
execution or filing of any paper or any further act on the part
of either party hereto.
Section 6. Fees and Expenses. Each party hereto shall
-----------------
bear its own expenses in connection with the negotiation,
preparation, execution and delivery and of this Agreement. The
Company agrees to pay, and to reimburse the Calculation Agent for
paying, all reasonable out-of-pocket costs and expenses of the
Calculation Agent (including, without limitation, the reasonable
fees and expenses of legal counsel), in connection with (a) any
amendment, modification or waiver of any of the terms of this
Agreement; and (b) the enforcement and protection of its rights
under this Agreement, including, but not limited to, costs of
collection.
Section 7. Transfer. Except as provided in Section 5
--------
with respect to the resignation, removal, merger, conversion or
consolidation of the Calculation Agent, neither this Agreement
nor any interest or obligation in or under this Agreement may be
transferred (whether by way of security or otherwise) by either
party without the prior written consent of the other party.
Section 8. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement constitutes the
----------------
entire agreement and understanding of the parties with respect to
its subject matter and supersedes all oral communication and
prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver
----------
in respect of this Agreement will be effective unless in writing
(including a writing evidenced by a facsimile transmission) and
executed by each of the parties.
(c) Survival of Obligations. The rights and benefits
-----------------------
of the Calculation Agent under Section 5, and the obligations of
the parties hereto under Sections 5(e) and 6, of this Agreement
will survive the payment in full of the Notes, whether by
repayment, redemption or otherwise.
<PAGE>
(d) Counterparts. This Agreement (and each amendment,
------------
modification and waiver in respect of it) may be executed and
delivered in counterparts (including by facsimile transmission),
each of which will be deemed an original.
(e) Benefit of Agreement. This Agreement shall be
--------------------
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted transferees. No Person
other than the parties hereto shall have any rights under or be
entitled to rely upon this Agreement.
(f) Headings. The headings used in this Agreement are
--------
for convenience of reference only and are not to affect the
construction of or to be taken into consideration in interpreting
this Agreement.
Section 9. Notices. Any notice or other communication
-------
in respect of this Agreement shall be given in any manner set
forth below to the address or number set forth beneath the
signature of such party hereto and will be deemed effective as
indicated: (i) if in writing and delivered in person or by
courier, on the date it is delivered; (ii) if sent by facsimile
transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form; or (iii)
if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail
is delivered or its delivery is attempted; unless the date of
that delivery (or attempted delivery) or that receipt, as
applicable, is not a Business Day or that communication is
delivered (or attempted) or received, as applicable, after the
close of business on a Business Day, in which case that
communication shall be deemed given and effective on the first
following day that is a Business Day. Either party may by notice
to the other change the address or facsimile number at which
notices or other communications are to be given to it.
Section 10. Governing Law; Jurisdiction; Forum.
----------------------------------
(a) Governing Law. This Agreement will be governed by
-------------
and construed in accordance with the law of the State of New York
(without reference to choice of law doctrine, but without
prejudice to Section 5-1401 of the New York General Obligations
Law).
(b) Jurisdiction and Forum. With respect to any suit,
----------------------
action or proceedings relating to this Agreement ("PROCEEDINGS"),
each party irrevocably and unconditionally: (i) submits to the
non-exclusive jurisdiction of the courts of the State of New York
and the United States District Court located in the Borough of
Manhattan in New York City; and (ii) waives any objection which
it may have at any time to the laying of venue of any Proceedings
brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party. Nothing in
this Agreement precludes either party from bringing Proceedings
in any other jurisdiction, nor will the bringing of Proceedings
in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
AMERCO
By____________________________
Title:
Address for Notices:
AMERCO
1325 Airmotive Way
Suite 100
Reno, Nevada 89502-3239
Telecopy No.: 702-345-6046
Telephone No.: 702-688-6300
Attn: Mr. Rocky Wardrip
CITICORP SECURITIES, INC.
By____________________________
Title:
Address for Notices:
Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043
Telecopy No.: 212-291-1279
Telephone No.: 212-291-0007
Attn: Mr. Gary Davis
<PAGE>
ANNEX I
==========================================================================
Series A Notes Series B Notes Series C Notes
==========================================================================
Coupon Reset 1.50% 1.25% 1.50%
Reference Spread
- ---------------------------------------------------------------------------
Reset Date October 12, 1999 October 11, 2000 October 9, 2002
- ---------------------------------------------------------------------------
Effective Date October 15, 1999 October 15, 2000 October 15, 2002
- ---------------------------------------------------------------------------
Maturity Date October 15, 2029 October 15, 2010 October 15, 2032
- ---------------------------------------------------------------------------
Relevant Maturity 30 years 10 years 30 years
- ---------------------------------------------------------------------------
Strike Yield 6.4525% 6.1700% 6.5900%
===========================================================================
<PAGE>
NUMBER $100,000,000
R-001 CUSIP NO. 023589AA2
SEE REVERSE FOR CERTAIN DEFINITIONS
THE CERTIFICATE (OR ITS PREDECESSOR) EVIDENCED HEREBY
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
BY ACQUISITION HEREOF, THE HOLDER OF THIS SECURITY
AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS ONE YEAR AFTER THE LATER OF THE DATE OF THE
ACQUISITION OF THE CERTIFICATES FROM THE COMPANY OR ANY AFFILIATE
OF THE COMPANY AND THE DATE OF ANY RESALE OF CERTIFICATES FOR THE
ACCOUNT OF EITHER THE ACQUIROR OR ANY SUBSEQUENT HOLDER OF THE
CERTIFICATES, EXCEPT (A) TO THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE CERTIFICATES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT UPON THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
THE TRUSTEE AND THE COMPANY, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT UPON THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO THE TRUSTEE AND THE
COMPANY, SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY AMERCO OR THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL
AGENCY OR ANY OTHER PERSON.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
<PAGE>
CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
AMERCO SERIES 1997-A BOND BACKED ASSET TRUST
6.65% AMERCO SERIES 1997-A BOND BACKED ASSET
TRUST CERTIFICATES, ("BATs") DUE OCTOBER 15, 1999
----
evidencing a fractional undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists
principally of $100,000,000 aggregate principal amount of 6.65%
Notes, Series 1997-A due October 15, 2032 (collectively, the
"Notes") of AMERCO (the "Company"). The Notes have been
----- -------
purchased by the Trust from the Company with the proceeds of the
sale of the Certificates and the Call Options (as defined
herein).
THIS CERTIFIES THAT CEDE & CO. is the registered owner
of a nonassessable, fully-paid, fractional undivided interest in
the AMERCO SERIES 1997-A BOND BACKED ASSET TRUST formed by the
Company equal to a Certificate Principal Balance of $100,000,000.
Under the Trust Agreement, there will be distributed on the 15th
day of each April and October, or if such day is not a Business
Day, the next succeeding Business Day, commencing April 15, 1998
through and including the Final Distribution Date (each a
"Distribution Date"), to the extent of Available Funds (as
-----------------
defined below), an amount equal to the interest collected on the
Notes. On the Final Distribution Date, there will be
distributed, to the extent of Available Funds, all distributions
received from or in respect of the Trust Assets.
The Trust was created pursuant to a Trust Agreement
dated as of October 22, 1997 (the "Trust Agreement"), between the
---------------
Company and IBJ Schroder Bank & Trust Company, not in its
individual capacity but solely as Trustee (the "Trustee"). This
-------
Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the
Trust Agreement may be obtained from the Trustee by written
request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as 6.65% AMERCO Series 1997-A Bond Backed
Asset Trust Certificates ("BATs") Due October 15, 1999 (herein
----
called the "Certificates"). Concurrently with the issuance of
------------
the Certificates, the Trustee will issue call options (the "Call
----
Options") to Citibank, N.A. and NationsBank, N.A. (the
- -------
"Callholders") pursuant to which each Callholder has the right,
-----------
but not the obligation, to purchase all, but not less than all,
the Notes from the Trust on the Final Distribution Date at a
purchase price equal to 100% of the outstanding principal amount
thereof. If (i) the Call Options are not exercised at or prior
to 4:00 p.m. New York City time on the date three Business Days
<PAGE>
prior to the Final Distribution Date, or (ii) following any such
exercise, the Callholders fail to make payment in full when due
for the purchase of the Notes, then the Trustee, on behalf of the
Certificateholders, shall, immediately thereafter, give
irrevocable written notice to the Company that it intends to
exercise the Put Option on the Final Distribution Date in
accordance with the terms of the Notes and the Indenture. Any
such notice shall be irrevocable.
This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound. The
property of the Trust consists primarily of the Notes and all
payments on or collections in respect of the Notes accrued on or
after the Closing Date (not including any interest or other
reinvestment income received with respect to the foregoing) and
any proceeds from the sale of the Notes pursuant to the Put
Option or the Call Options, as the case may be.
Subject to the terms and conditions of the Trust
Agreement and the Call Options (including the availability of
funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date to the
Person in whose name this Certificate is registered on the
applicable Record Date, in an amount equal to such
Certificateholder's fractional undivided interest in the amount
required to be distributed to the Holders of the Certificates on
such Distribution Date. If a payment with respect to the Notes
is not made to the Trustee by 11:00 a.m. (New York City time) on
the date such payment is due, or if such payment is not made on
the due date, the Trustee will upon receipt of such funds make
such distribution on the next Business Day (and no additional
amounts of interest shall accrue on the Certificates or be owed
to Certificateholders as a result of any such delay).
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer
in immediately available funds, without the presentation or
surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the Final Distribution on this
Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained
for that purpose by the Trustee in the Borough of Manhattan, the
City of New York.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the Trust has caused this
Certificate to be duly executed as of the date set forth below.
AMERCO SERIES 1997-A
BOND BACKED ASSET TRUST
by IBJ Schroder Bank & Trust Company,
not in its individual capacity but
solely as Trustee
By:__________________________
Authorized Officer
Dated: October 22, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the Trust
Agreement referred to herein.
IBJ Schroder Bank & Trust Company,
as Trustee
By:_______________________________
Authorized Signatory
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to payments under the
Notes, the Call Options and the Put Option (to the extent of its
rights therein) for distributions hereunder.
Subject to the next paragraph and to certain exceptions
provided in the Trust Agreement and the Call Options, the Trust
Agreement permits the amendment thereof and the modification of
the rights and obligations of the Company and the Trustee and the
rights of the Certificateholders under the Trust Agreement at any
time by the Company and the Trustee with the consent of the
Holders of Certificates evidencing more than 50% of the aggregate
Voting Rights of Outstanding Certificates subject to certain
provisions set forth in the Trust Agreement. Any such consent by
the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
Under the terms of the Call Options and the Trust
Agreement, Certificateholders will not be entitled to terminate
the Trust or cause the sale or other disposition of the Notes.
In addition, amendment of the Trust Agreement may require, and
amendment of the Call Options generally will require, consent of
the Callholders, all as provided in the Call Options and the
Trust Agreement.
The Certificates are issuable in fully registered form
only in minimum original principal amounts of $100,000 and
integral multiples thereof. As provided in the Trust Agreement
and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same
principal amount, class, original issue date and maturity, in
authorized denominations as requested by the Holder surrendering
the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, the City of New York,
duly endorsed by or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement, and thereupon one or more new Certificates of the same
class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or
transferees. The Certificate Registrar appointed under the Trust
Agreement is IBJ Schroder Bank & Trust Company.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
<PAGE>
The Company and the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Trustee, nor any such agent shall be
affected by any notice to the contrary.
The Trust and the obligations of the Company and the
Trustee created by the Trust Agreement with respect to the
Certificates shall terminate upon the earliest to occur of (i)
the distribution in full of all amounts due to Certificateholders
on a sale of the Notes in accordance with the Call Options or
repurchase by the Company of the Notes pursuant to the Put
Option, (ii) the distribution of all proceeds received by the
Trustee in connection with certain circumstances described in the
Trust Agreement following an Event of Default and (iii) the
expiration of 21 years from the death of the last survivor of the
descendants of the youngest Executive Officer of the Company,
measured as of the date of the Trust Agreement, living on the
date hereof.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto [PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
_________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
_________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated:_______________
_______________________________*
Signature Guaranteed;
_______________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
<PAGE>
NUMBER $100,000,000
R-001 CUSIP NO. 023589AB0
SEE REVERSE FOR CERTAIN DEFINITIONS
THE CERTIFICATE (OR ITS PREDECESSOR) EVIDENCED HEREBY
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
BY ACQUISITION HEREOF, THE HOLDER OF THIS SECURITY
AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS ONE YEAR AFTER THE LATER OF THE DATE OF THE
ACQUISITION OF THE CERTIFICATES FROM THE COMPANY OR ANY AFFILIATE
OF THE COMPANY AND THE DATE OF ANY RESALE OF CERTIFICATES FOR THE
ACCOUNT OF EITHER THE ACQUIROR OR ANY SUBSEQUENT HOLDER OF THE
CERTIFICATES, EXCEPT (A) TO THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE CERTIFICATES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT UPON THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
THE TRUSTEE AND THE COMPANY, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT UPON THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO THE TRUSTEE AND THE
COMPANY, SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY AMERCO OR THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL
AGENCY OR ANY OTHER PERSON.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
<PAGE>
CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
AMERCO SERIES 1997-B BOND BACKED ASSET TRUST
6.89% AMERCO SERIES 1997-B BOND BACKED ASSET
TRUST CERTIFICATES, ("BATs") DUE OCTOBER 15, 2000
----
evidencing a fractional undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists
principally of $100,000,000 aggregate principal amount of 6.89%
Notes, Series 1997-B due October 15, 2010 (collectively, the
"Notes") of AMERCO (the "Company"). The Notes have been
----- -------
purchased by the Trust from the Company with the proceeds of the
sale of the Certificates and the Call Options (as defined
herein).
THIS CERTIFIES THAT CEDE & CO. is the registered owner
of a nonassessable, fully-paid, fractional undivided interest in
the AMERCO SERIES 1997-B BOND BACKED ASSET TRUST formed by the
Company equal to a Certificate Principal Balance of $100,000,000.
Under the Trust Agreement, there will be distributed on the 15th
day of each April and October, or if such day is not a Business
Day, the next succeeding Business Day, commencing April 15, 1998
through and including the Final Distribution Date (each a
"Distribution Date"), to the extent of Available Funds (as
-----------------
defined below), an amount equal to the interest collected on the
Notes. On the Final Distribution Date, there will be
distributed, to the extent of Available Funds, all distributions
received from or in respect of the Trust Assets.
The Trust was created pursuant to a Trust Agreement
dated as of October 22, 1997 (the "Trust Agreement"), between the
---------------
Company and IBJ Schroder Bank & Trust Company, not in its
individual capacity but solely as Trustee (the "Trustee"). This
-------
Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the
Trust Agreement may be obtained from the Trustee by written
request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as 6.89% AMERCO Series 1997-B Bond Backed
Asset Trust Certificates ("BATs") Due October 15, 2000 (herein
----
called the "Certificates"). Concurrently with the issuance of
------------
the Certificates, the Trustee will issue call options (the "Call
----
Options") to Citibank, N.A. and NationsBank, N.A. (the
- -------
"Callholders") pursuant to which each Callholder has the right,
-----------
but not the obligation, to purchase all, but not less than all,
the Notes from the Trust on the Final Distribution Date at a
purchase price equal to 100% of the outstanding principal amount
thereof. If (i) the Call Options are not exercised at or prior
to 4:00 p.m. New York City time on the date three Business Days
<PAGE>
prior to the Final Distribution Date, or (ii) following any such
exercise, the Callholders fail to make payment in full when due
for the purchase of the Notes, then the Trustee, on behalf of the
Certificateholders, shall, immediately thereafter, give
irrevocable written notice to the Company that it intends to
exercise the Put Option on the Final Distribution Date in
accordance with the terms of the Notes and the Indenture. Any
such notice shall be irrevocable.
This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound. The
property of the Trust consists primarily of the Notes and all
payments on or collections in respect of the Notes accrued on or
after the Closing Date (not including any interest or other
reinvestment income received with respect to the foregoing) and
any proceeds from the sale of the Notes pursuant to the Put
Option or the Call Options, as the case may be.
Subject to the terms and conditions of the Trust
Agreement and the Call Options (including the availability of
funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date to the
Person in whose name this Certificate is registered on the
applicable Record Date, in an amount equal to such
Certificateholder's fractional undivided interest in the amount
required to be distributed to the Holders of the Certificates on
such Distribution Date. If a payment with respect to the Notes
is not made to the Trustee by 11:00 a.m. (New York City time) on
the date such payment is due, or if such payment is not made on
the due date, the Trustee will upon receipt of such funds make
such distribution on the next Business Day (and no additional
amounts of interest shall accrue on the Certificates or be owed
to Certificateholders as a result of any such delay).
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer
in immediately available funds, without the presentation or
surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the Final Distribution on this
Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained
for that purpose by the Trustee in the Borough of Manhattan, the
City of New York.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the Trust has caused this
Certificate to be duly executed as of the date set forth below.
AMERCO SERIES 1997-B
BOND BACKED ASSET TRUST
by IBJ Schroder Bank & Trust Company,
not in its individual capacity but
solely as Trustee
By:__________________________
Authorized Officer
Dated: October 22, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the Trust
Agreement referred to herein.
IBJ Schroder Bank & Trust Company,
as Trustee
By:_______________________________
Authorized Signatory
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to payments under the
Notes, the Call Options and the Put Option (to the extent of its
rights therein) for distributions hereunder.
Subject to the next paragraph and to certain exceptions
provided in the Trust Agreement and the Call Options, the Trust
Agreement permits the amendment thereof and the modification of
the rights and obligations of the Company and the Trustee and the
rights of the Certificateholders under the Trust Agreement at any
time by the Company and the Trustee with the consent of the
Holders of Certificates evidencing more than 50% of the aggregate
Voting Rights of Outstanding Certificates subject to certain
provisions set forth in the Trust Agreement. Any such consent by
the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
Under the terms of the Call Options and the Trust
Agreement, Certificateholders will not be entitled to terminate
the Trust or cause the sale or other disposition of the Notes.
In addition, amendment of the Trust Agreement may require, and
amendment of the Call Options generally will require, consent of
the Callholders, all as provided in the Call Options and the
Trust Agreement.
The Certificates are issuable in fully registered form
only in minimum original principal amounts of $100,000 and
integral multiples thereof. As provided in the Trust Agreement
and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same
principal amount, class, original issue date and maturity, in
authorized denominations as requested by the Holder surrendering
the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, the City of New York,
duly endorsed by or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement, and thereupon one or more new Certificates of the same
class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or
transferees. The Certificate Registrar appointed under the Trust
Agreement is IBJ Schroder Bank & Trust Company.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
<PAGE>
The Company and the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Trustee, nor any such agent shall be
affected by any notice to the contrary.
The Trust and the obligations of the Company and the
Trustee created by the Trust Agreement with respect to the
Certificates shall terminate upon the earliest to occur of (i)
the distribution in full of all amounts due to Certificateholders
on a sale of the Notes in accordance with the Call Options or
repurchase by the Company of the Notes pursuant to the Put
Option, (ii) the distribution of all proceeds received by the
Trustee in connection with certain circumstances described in the
Trust Agreement following an Event of Default and (iii) the
expiration of 21 years from the death of the last survivor of the
descendants of the youngest Executive Officer of the Company,
measured as of the date of the Trust Agreement, living on the
date hereof.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto [PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
_________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
_________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated:_______________
_______________________________*
Signature Guaranteed;
_______________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
<PAGE>
NUMBER $100,000,000
R-001 CUSIP NO. 023589AC8
SEE REVERSE FOR CERTAIN DEFINITIONS
THE CERTIFICATE (OR ITS PREDECESSOR) EVIDENCED HEREBY
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
BY ACQUISITION HEREOF, THE HOLDER OF THIS SECURITY
AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS ONE YEAR AFTER THE LATER OF THE DATE OF THE
ACQUISITION OF THE CERTIFICATES FROM THE COMPANY OR ANY AFFILIATE
OF THE COMPANY AND THE DATE OF ANY RESALE OF CERTIFICATES FOR THE
ACCOUNT OF EITHER THE ACQUIROR OR ANY SUBSEQUENT HOLDER OF THE
CERTIFICATES, EXCEPT (A) TO THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE CERTIFICATES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT UPON THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
THE TRUSTEE AND THE COMPANY, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT UPON THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO THE TRUSTEE AND THE
COMPANY, SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY AMERCO OR THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL
AGENCY OR ANY OTHER PERSON.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
<PAGE>
CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
AMERCO SERIES 1997-C BOND BACKED ASSET TRUST
7.135% AMERCO SERIES 1997-C BOND BACKED ASSET
TRUST CERTIFICATES, ("BATs") DUE OCTOBER 15, 2002
----
evidencing a fractional undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists
principally of $100,000,000 aggregate principal amount of 7.135%
Notes, Series 1997-C due October 15, 2032 (collectively, the
"Notes") of AMERCO (the "Company"). The Notes have been
----- -------
purchased by the Trust from the Company with the proceeds of the
sale of the Certificates and the Call Options (as defined
herein).
THIS CERTIFIES THAT CEDE & CO. is the registered owner
of a nonassessable, fully-paid, fractional undivided interest in
the AMERCO SERIES 1997-C BOND BACKED ASSET TRUST formed by the
Company equal to a Certificate Principal Balance of $100,000,000.
Under the Trust Agreement, there will be distributed on the 15th
day of each April and October, or if such day is not a Business
Day, the next succeeding Business Day, commencing April 15, 1998
through and including the Final Distribution Date (each a
"Distribution Date"), to the extent of Available Funds (as
-----------------
defined below), an amount equal to the interest collected on the
Notes. On the Final Distribution Date, there will be
distributed, to the extent of Available Funds, all distributions
received from or in respect of the Trust Assets.
The Trust was created pursuant to a Trust Agreement
dated as of October 22, 1997 (the "Trust Agreement"), between the
---------------
Company and IBJ Schroder Bank & Trust Company, not in its
individual capacity but solely as Trustee (the "Trustee"). This
-------
Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the
Trust Agreement may be obtained from the Trustee by written
request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as 7.135% AMERCO Series 1997-C Bond
Backed Asset Trust Certificates ("BATs") Due October 15, 2002
----
(herein called the "Certificates"). Concurrently with the
------------
issuance of the Certificates, the Trustee will issue call options
(the "Call Options") to Citibank, N.A. and NationsBank, N.A. (the
------------
"Callholders") pursuant to which each Callholder has the right,
-----------
but not the obligation, to purchase all, but not less than all,
the Notes from the Trust on the Final Distribution Date at a
purchase price equal to 100% of the outstanding principal amount
thereof. If (i) the Call Options are not exercised at or prior
to 4:00 p.m. New York City time on the date three Business Days
<PAGE>
prior to the Final Distribution Date, or (ii) following any such
exercise, the Callholders fail to make payment in full when due
for the purchase of the Notes, then the Trustee, on behalf of the
Certificateholders, shall, immediately thereafter, give
irrevocable written notice to the Company that it intends to
exercise the Put Option on the Final Distribution Date in
accordance with the terms of the Notes and the Indenture. Any
such notice shall be irrevocable.
This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound. The
property of the Trust consists primarily of the Notes and all
payments on or collections in respect of the Notes accrued on or
after the Closing Date (not including any interest or other
reinvestment income received with respect to the foregoing) and
any proceeds from the sale of the Notes pursuant to the Put
Option or the Call Options, as the case may be.
Subject to the terms and conditions of the Trust
Agreement and the Call Options (including the availability of
funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date to the
Person in whose name this Certificate is registered on the
applicable Record Date, in an amount equal to such
Certificateholder's fractional undivided interest in the amount
required to be distributed to the Holders of the Certificates on
such Distribution Date. If a payment with respect to the Notes
is not made to the Trustee by 11:00 a.m. (New York City time) on
the date such payment is due, or if such payment is not made on
the due date, the Trustee will upon receipt of such funds make
such distribution on the next Business Day (and no additional
amounts of interest shall accrue on the Certificates or be owed
to Certificateholders as a result of any such delay).
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer
in immediately available funds, without the presentation or
surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the Final Distribution on this
Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained
for that purpose by the Trustee in the Borough of Manhattan, the
City of New York.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the Trust has caused this
Certificate to be duly executed as of the date set forth below.
AMERCO SERIES 1997-C
BOND BACKED ASSET TRUST
by IBJ Schroder Bank & Trust Company,
not in its individual capacity but
solely as Trustee
By:__________________________
Authorized Officer
Dated: October 22, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the Trust
Agreement referred to herein.
IBJ Schroder Bank & Trust Company,
as Trustee
By:_______________________________
Authorized Signatory
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to payments under the
Notes, the Call Options and the Put Option (to the extent of its
rights therein) for distributions hereunder.
Subject to the next paragraph and to certain exceptions
provided in the Trust Agreement and the Call Options, the Trust
Agreement permits the amendment thereof and the modification of
the rights and obligations of the Company and the Trustee and the
rights of the Certificateholders under the Trust Agreement at any
time by the Company and the Trustee with the consent of the
Holders of Certificates evidencing more than 50% of the aggregate
Voting Rights of Outstanding Certificates subject to certain
provisions set forth in the Trust Agreement. Any such consent by
the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
Under the terms of the Call Options and the Trust
Agreement, Certificateholders will not be entitled to terminate
the Trust or cause the sale or other disposition of the Notes.
In addition, amendment of the Trust Agreement may require, and
amendment of the Call Options generally will require, consent of
the Callholders, all as provided in the Call Options and the
Trust Agreement.
The Certificates are issuable in fully registered form
only in minimum original principal amounts of $100,000 and
integral multiples thereof. As provided in the Trust Agreement
and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same
principal amount, class, original issue date and maturity, in
authorized denominations as requested by the Holder surrendering
the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, the City of New York,
duly endorsed by or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement, and thereupon one or more new Certificates of the same
class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or
transferees. The Certificate Registrar appointed under the Trust
Agreement is IBJ Schroder Bank & Trust Company.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
<PAGE>
The Company and the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Trustee, nor any such agent shall be
affected by any notice to the contrary.
The Trust and the obligations of the Company and the
Trustee created by the Trust Agreement with respect to the
Certificates shall terminate upon the earliest to occur of (i)
the distribution in full of all amounts due to Certificateholders
on a sale of the Notes in accordance with the Call Options or
repurchase by the Company of the Notes pursuant to the Put
Option, (ii) the distribution of all proceeds received by the
Trustee in connection with certain circumstances described in the
Trust Agreement following an Event of Default and (iii) the
expiration of 21 years from the death of the last survivor of the
descendants of the youngest Executive Officer of the Company,
measured as of the date of the Trust Agreement, living on the
date hereof.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto [PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
_________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
_________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_________________________________________________________________
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated:_______________
_______________________________*
Signature Guaranteed;
_______________________________*
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 31,822
<SECURITIES> 0
<RECEIVABLES> 251,064<F1>
<ALLOWANCES> 0
<INVENTORY> 78,242
<CURRENT-ASSETS> 0<F2>
<PP&E> 2,468,779
<DEPRECIATION> 1,128,819
<TOTAL-ASSETS> 2,857,945
<CURRENT-LIABILITIES> 0
<BONDS> 1,074,409
0
0
<COMMON> 10,563
<OTHER-SE> 627,489
<TOTAL-LIABILITY-AND-EQUITY> 2,857,945
<SALES> 143,866
<TOTAL-REVENUES> 1,111,335
<CGS> 82,312
<TOTAL-COSTS> 870,910
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,496
<INTEREST-EXPENSE> 59,608
<INCOME-PRETAX> 95,009
<INCOME-TAX> 32,169
<INCOME-CONTINUING> 62,840
<DISCONTINUED> 0
<EXTRAORDINARY> (13,984)
<CHANGES> 0
<NET-INCOME> 48,856
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
<FN>
<F1>THE VALUE FOR RECEIVABLES REPRESENTS THEIR AMOUNT NET OF THEIR ALLOWANCES.
<F2>AN UNCLASSIFIED BALANCE SHEET EXISTS IN THE REGISTRANT'S FINANCIAL STATEMENTS.
</FN>
</TABLE>
