AMERCO /NV/ (Form: 10-Q, Received: 08/09/2004 08:31:59)

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			March 31,
	2004			2004

	(Unaudited)
	(In thousands)
ASSETS
Cash and cash equivalents	$	53,171		$	81,557
Trade receivables, net		248,893			268,386
Notes and mortgage receivables, net		4,763			4,537
Inventories, net		54,018			52,802
Prepaid expenses		21,875			13,172
Investments, fixed maturities		709,417			709,353
Investments, other		346,652			347,537
Deferred policy acquisition costs, net		69,792			76,939
Other assets		101,580			65,071
Related party assets		316,814			304,446
	$	1,926,975		$	1,923,800

Property, plant and equipment, at cost:
Land		158,618			158,594
Buildings and improvements		683,316			874,985
Furniture and equipment		294,210			293,115
Rental trailers and other rental equipment		167,526			159,586
Rental trucks		1,244,346			1,219,002
SAC Holdings - property, plant and equipment *		78,457			78,363

		2,626,473			2,783,645
Less: Accumulated depreciation		(1,324,614	)		(1,331,840	)

Property, plant and equipment, net		1,301,859			1,451,805

Total assets	$	3,228,834		$	3,375,605

The accompanying notes are an integral part of these condensed consolidating financial statements.

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payables and accrued expenses	$	323,116		$	280,596
Capital leases		-			99,609
AMERCO's notes and loans payable		779,403			880,519
SAC Holdings' notes and loans payable, non-recourse to AMERCO		78,372			78,637
Policy benefits and losses, claims and loss expenses payable		788,340			813,738
Liabilities from investment contracts		548,595			574,745
Other policyholders' funds and liabilities		23,735			28,732
Deferred income		54,479			51,383
Deferred income taxes		86,626			63,800
Total liabilities	$	2,682,666		$	2,871,759

Commitments and contingent liabilities (Notes 5 and 9)
Stockholders' equity:
Series preferred stock, with or without par value:
Series A preferred stock, with no par value	$	-		$	-
Series B preferred stock, with no par value		-			-
Series common stock, with or without par value:
Series A common stock of $0.25 par value		1,416			1,416
Common stock of $0.25 par value		9,081			9,081
Additional paid in-capital		349,732			349,732
Accumulated other comprehensive loss		(20,730	)		(21,446	)
Retained earnings		636,359			595,181
Cost of common shares in treasury, net		(418,092	)		(418,092	)
Unearned employee stockownership plan shares		(11,598	)		(12,026	)

Total stockholders' equity		546,168			503,846

Total liabilities and stockholders' equity	$	3,228,834		$	3,375,605

* SAC Holding II Corporation

The accompanying notes are an integral part of these condensed consolidating financial statements.

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	Quarter Ended June 30,
	2004		2003

	(Unaudited)
	(In thousands except per share amounts)
Revenues:
Rental revenue	$	426,632	$	435,042
Net sales		61,246		69,209
Premiums		43,062		64,456
Net investment and interest income		19,771		11,409

Total revenues		550,711		580,116

Costs and expenses:
Operating expenses		272,212		294,993
Restructuring expenses		-		2,290
Commission expenses		46,913		40,194
Cost of sales		27,740		32,219
Benefits and losses		34,137		53,399
Amortization of deferred policy acquisition costs		9,958		9,100
Lease expense		40,535		34,323
Depreciation, net		28,028		38,038

Total costs and expenses		459,523		504,556

Earnings from operations		91,188		75,560
Interest expense		19,004		30,898

Pretax earnings		72,184		44,662
Income tax expense		27,765		16,926

Net earnings	$	44,419	$	27,736
Less: Preferred stock dividends		3,241		3,241

Earnings available to common shareholders	$	41,178	$	24,495

Weighted average common share outstanding:
Basic and diluted		20,788,074		20,732,086

Basic and diluted earnings per common share	$	1.98	$	1.18

The accompanying notes are an integral part of these condensed consolidating financial statements.

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Quarter Ended June 30,
	2004			2003

	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	44,419		$	27,736
Changes in other comprehensive income, net of taxes:
Foreign currency translation		(2,227	)		5,751
Unrealized gain/(loss) on investments		2,943			10,087


Total comprehensive income	$	45,135		$	43,574

The accompanying notes are an integral part of these condensed consolidating financial statements.

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Quarter Ended June 30,
	2004			2003

	(Unaudited)
	(In thousands)
Cash flow from operating activities:
Earnings available to common shareholders	$	41,178			24,495
Depreciation		28,382			28,189
Amortization of deferred policy acquisition costs		10,686			9,945
Provision for losses on accounts receivable		44			686
Net (gain) loss on sale of real and personal property		(354	)		1,464
(Gain) on sale of investments		(218	)		(517	)
Changes in policy liabilities and accruals		(5,137	)		(7,431	)
Additions to deferred policy acquisition costs		(3,603	)		(7,535	)
Net change in other operating assets and liabilities		(10,455	)		(6,668	)

Net cash provided by operating activities	$	60,523			42,628

Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment		(65,587	)		(48,137	)
Fixed maturities		(35,655	)		(13,917	)
Other asset investments		-			(25,474	)
Proceeds from sale of investments:
Property, plant and equipment		187,537			3,157
Fixed maturities		38,764			53,150
Preferred stock		1,497			-
Real estate		1,504			6,344
Mortgage loans		1,169			203
Changes in other investments		16,003			1,114

Net cash provided by (used in) investing activities	$	145,232			(23,560	)

Cash flows from financing activities:
Proceeds from notes	$	14,280			-
Leveraged Employee Stock Ownership Plan:
Purchase of shares		428			375
Principal payments on notes, net of draws		(115,738	)		(1,595	)
Pay off of capital leases		(99,609	)		-
Dividends paid		(6,482	)		-
Investment contract deposits		6,923			20,334
Investment contract withdrawals		(33,943	)		(19,556	)

Net cash used in financing activities	$	(234,141	)		(442	)

Increase (decrease) in cash equivalents	$	(28,386	)	$	18,626
Cash and cash equivalents at the beginning of period		81,557			66,834

Cash and cash equivalents at the end of period	$	53,171		$	85,460

The accompanying notes are an integral part of these condensed consolidating financial statements.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2004, March 31, 2004, and June 30, 2003 (Unaudited)

1. Basis of Presentation

The first fiscal quarter for AMERCO ends the 30 ^th of June for each year that is referenced. Our Insurance company subsidiaries have a first quarter that ends on the 31 ^st of March for each year that is referenced. They have been consolidated on that basis. Consequently, all references to our insurance subsidiaries’ years 2004 and 2003 correspond to the Company’s fiscal years 2005 and 2004.

Accounts denominated in non-U.S. currencies have been re-measured using the U.S. dollar as the functional currency. Certain amounts reported in previous years have been reclassified to conform to the current presentation.

2. Principals of Consolidation and Organization

Principles of Consolidation

The consolidated financial statements for the first quarter of fiscal year 2005 and the balance sheet as of March 31, 2004 include the accounts of AMERCO, its wholly owned subsidiaries and SAC Holding II Corporation and its subsidiaries. The balance sheet and the statements of operations, comprehensive income, and cash flows for the first quarter of fiscal year 2004 include all of the abovementioned entities plus SAC Holding Corporation and its subsidiaries.

SAC Holding Corporation and SAC Holding II Corporation and their subsidiaries (the "SAC entities") were considered special purpose entities. During the first three quarters of fiscal year 2004, the SAC entities were consolidated based on the provisions of Emerging Issues Task Force (EITF) Issue No. 90-15. During the fourth quarter of fiscal year 2004, the Company applied FASB Interpretation No. 46 to its interest in the SAC entities and determined that SAC Holding Corporation should no longer be consolidated with the Company’s financial statements. Accordingly, during the fourth quarter of fiscal year 2004 the Company deconsolidated those entities. The deconsolidation was accounted for as a distribution of the Company’s interests to the SAC entities. Because of the Company’s continuing involvement with SAC Holding Corporation and its subsidiaries, the distributions do not qualify as discontinued operations as defined by SFAS No. 144.

The condensed consolidated balance sheet as of June 30, 2004 and the related condensed consolidated statements of operations, comprehensive income, and cash flow for the quarter ended June 30, 2004 are unaudited. In our opinion, all adjustments necessary for the fair presentation of such condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results for a full year. Inter-company accounts and transactions have been eliminated. Certain reclassifications have been made to the 2003 financial statements to conform to the 2004 presentation.

Description of Legal Entities

AMERCO, a Nevada corporation ("AMERCO"), is the holding company for:

U-Haul International, Inc. ("U-Haul"),

Amerco Real Estate Company ("Real Estate"),

Republic Western Insurance Company ("RepWest")

North American Fire & Casualty Insurance Company ("NAFCIC"),

Oxford Life Insurance Company ("Oxford")

North American Insurance Company ("NAI") and

Christian Fidelity Life Insurance Company ("CFLIC").

Unless the context otherwise requires, the term "Company" refers to AMERCO and its legal subsidiaries.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Description of Operating Segments

AMERCO has three reportable segments and five identifiable segments. The three reportable segments are Moving and Self-Storage, Property and Casualty Insurance and Life Insurance. U-Haul moving and storage, Real Estate, and SAC moving and storage, are listed under Moving and Self-Storage, since they meet the aggregation criteria of FASB 131.

U-Haul moving and self-storage operations consist of the rental of trucks, trailers and self-storage spaces and sales of moving supplies, trailer hitches and propane to the "do-it-yourself" mover. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

Real Estate owns approximately 90 percent of the Company’s real estate assets, including U-Haul Centers and Storage locations. The remaining real estate assets of the Company are owned by various corporate entities. Real Estate is responsible for overseeing major property repairs, dispositions and managing the environmental risks of the properties.

SAC moving and self-storage operations consist of the rental of self-storage spaces and sales of moving supplies, trailer hitches and propane. In addition, SAC functions as an independent moving equipment rental dealer and earns commissions from the rental of U-Haul trucks and trailers. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

Republic Western Insurance Company (RepWest) provides loss adjusting and claims handling for U-Haul through regional offices across North America. RepWest also provides components of the Safemove, Safetow and Safestor protection packages to U-Haul customers.

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

3. Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with the accounting principles generally accepted in the U.S. requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult and subjective judgments include the principals of consolidation, the recoverability of property, plant and equipment; the adequacy of insurance reserves; and the valuation of investments. The future results actually experienced by the Company may differ from management’s estimates.

Cash and Cash Equivalents

The Company considers cash equivalents to be highly liquid debt securities with insignificant interest rate risk with original maturities from the date of purchase of three months or less.

Investments

Fixed Maturities. Fixed maturity investments consist of either marketable debt or redeemable preferred stocks. As of the balance sheet date, these investments are either intended to be held to maturity or are considered available-for-sale.

Held-to-Maturity. Investments that are intended to be held-to-maturity are recorded at cost, as adjusted for the amortization of premiums or the accretion of discounts.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Available-for-Sale. Investments that are considered available-for-sale are reported at fair value, with unrealized gains or losses, net of tax, recorded in stockholders’ equity. Fair value for these investments is based on quoted market prices, dealer quotes or discounted cash flows. The cost of investments sold is based on the specific identification method. Realized gains or losses on the sale or exchange of investments and declines in value judged to be other than temporary are recorded as revenues. Investments are judged to be impaired if the fair value is less than cost continuously for six months, absent compelling evidence to the contrary.

Mortgage Loans and Notes on Real Estate. Mortgage loans and notes on real estate are reported at their unpaid balance, net of any allowance for possible losses and any unamortized premium or discount.

Recognition of Investment Income. Interest income from bonds and mortgage notes is recognized when it becomes earned. Dividends on common and preferred stocks are recognized on the ex-dividend dates. Realized gains and losses on the sale or exchange of investments are recognized at the trade date. Unrealized gains and losses are determined as of each balance sheet date.

Fair Values

Fair values of cash equivalents approximate cost due to the short period of time to maturity. Fair values of short-term investments, investments available-for-sale, long-term investments, mortgage loans and notes on real estate, swaps and forward currency contracts are based on quoted market prices, dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded value.

Limited credit risk exists on trade receivables due to the diversity of our customer base and their dispersion across broad geographic markets. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of temporary cash investments, trade receivables and notes receivable. The Company places its temporary cash investments with financial institutions and limits the amount of credit exposure to any one financial institution.

The Company has mortgage receivables, which potentially expose the Company to credit risk. The portfolio of notes is principally collateralized by mini-warehouse storage facilities and other residential and commercial properties. The Company has not experienced losses related to the notes from individual notes or groups of notes in any particular industry or geographic area. The estimated fair values were determined using the discounted cash flow method, using interest rates currently offered for similar loans to borrowers with similar credit ratings.

Other investments, including short-term investments, are substantially current or bear reasonable interest rates. As a result, the carrying values of these financial instruments approximate fair value. The carrying value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair market value due to its recent issuance.

Derivative Financial Instruments

The Company’s primary objective for holding derivative financial instruments is to manage currency and interest rate risk. The Company’s derivative instruments are recorded at fair value and are reported as other current assets, other assets, other accrued liabilities or debt.

The Company used derivative financial instruments to reduce its exposure to interest rate volatility. In the first quarter of fiscal 2005, the Company used interest rate caps to reduce exposure to interest rate changes. During May 2004, the Company entered into two (2) separate interest rate cap agreements on its $350 million amortizing term loan with notional value of $200 million for a two-year term and $50 million for a three-year term. The interest rate cap agreements require the Company to pay a floating rate of interest based on the three-month LIBOR as defined in the agreements with a cap rate of 3.0%. The Company accounted for these contracts at fair value under SFAS No. 133. At June 30, 2004, the Company had $412.9 million of variable rate debt.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Inventories, net

Inventories were as follows:

	June 30,		March 31,
	2004		2004

	(Unaudited)
	(In thousands)
Truck and trailer parts and accessories	$	38,654	$	32,788
Hitches and towing components		9,607		10,389
Moving supplies and promotional items		5,757		9,625

Total	$	54,018	$	52,802

Inventories consist primarily of truck and trailer parts and accessories used to repair rental equipment and products purchased directly for resale. Inventories are valued at the lower of cost or market. Inventory cost is primarily determined using the last-in, first-out method. Inventories valued on the LIFO basis were approximately 91% of total inventories as of June 30, 2004 and 93% of total inventories as of March 31, 2004. Inventories would have been $3.2 million higher at both June 30, 2004 and March 31 2004, if the Company valued inventories using the first-in, first-out method. Inventories are stated net of reserves for obsolescence of $2.5 million at both June 30, 2004 and March 31, 2004.

Property, Plant and Equipment

Property, plant and equipment is stated at cost. Interest cost incurred during the initial construction of buildings and rental equipment is considered part of cost. Depreciation is computed for financial reporting purposes principally using the straight-line method over the following estimated useful lives: rental equipment 2-20 years, buildings and non-rental equipment 3-55 years. Major overhauls to rental equipment are capitalized and are amortized over the estimated period benefited. Routine maintenance costs are charged to operating expense as they are incurred. Gains and losses on dispositions of property, plant and equipment are netted against depreciation expense when realized. Depreciation is recognized in amounts expected to result in the recovery of estimated residual values upon disposal, i.e., no gains or losses. During the first quarter of fiscal year 2005, the Company changed its estimates for residual values on new equipment purchases from 25% of the original cost to 20%. In determining the depreciation rate, historical disposal experience, holding periods and trends in the market for vehicles are reviewed. Due to longer holding periods on trucks and the resulting increased possibility of changes in the economic environment and market condition, these estimates are subject to a greater degree of risk.

We regularly perform reviews to determine whether facts and circumstances exist which indicate that the carrying amount of assets, including estimates of residual value, may not be recoverable or that the useful life of assets is shorter or longer than originally estimated. We assess the recoverability of the cost of our assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If the remaining cost of assets is determined to be recoverable, but the useful lives are shorter or longer than originally estimated, the net book value of the assets is depreciated over the newly determined remaining useful lives.

The carrying value of surplus real estate, which is lower than market value, at the balance sheet date was $8.7 million for June 30, 2004 and $10.1 million for March 31, 2004, respectively, and is included with investments, other.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Receivables

Accounts receivable include trade accounts from moving and self storage customers and dealers, insurance premiums and agent balances due, net of commissions payable and amounts due from ceding re-insurers, less management’s estimate of uncollectible accounts.

Notes and mortgage receivables include accrued interest and are reduced by discounts and amounts considered by management to be uncollectible.

Policy Benefits and Losses, Claims and Loss Expenses Payable

Liabilities for life insurance and certain annuity policies are established to meet the estimated future obligations of policies in force, and are based on mortality and withdrawal assumptions from recognized actuarial tables which contain margins for adverse deviation.

Liabilities for annuity contracts consist of contract account balances that accrue to the benefit of the policyholders, excluding surrender values. Liabilities for health, disability and other policies represents estimates of payments to be made on insurance claims for reported losses and estimates of losses incurred, but not yet reported.

Liabilities for reported and unreported losses are based on RepWest’s historical experience and industry averages. The liability for unpaid loss adjustment expenses is based on historical ratios of loss adjustment expenses paid to losses paid. Amounts recoverable from re-insurers on unpaid losses are estimated in a manner consistent with the claim liability associated with the reinsured policy. Adjustments to the liability for unpaid losses and loss expenses as well as amounts recoverable from re-insurers on unpaid losses are charged or credited to expense in the periods in which they are made.

Revenue Recognition

Rental revenue is recognized for the period that trucks and moving equipment are rented. Storage space revenue is recognized as rental receipts are collected. Product sales are recognized at the time that title passes and the customer accepts delivery. Insurance premiums are recognized over the policy periods. Interest and investment income are recognized as earned.

Advertising

Advertising costs are expensed as incurred. Advertising expense was $7.3 million in the first quarter of fiscal year 2005 and $8.2 million in the first quarter of fiscal year 2004.

Deferred Policy Acquisition Costs

Commissions and other costs which fluctuate with, and are primarily related to, the production of future insurance premiums, are deferred. For Oxford, these costs are amortized in relation to revenue such that costs are realized as a constant percentage of revenue. For RepWest, these costs are amortized over the related contract period which generally does not exceed one year.

Environmental Costs

Liabilities are recorded when environmental assessments and remedial efforts, if applicable, are probable and the costs can be reasonably estimated. The amount of the liability is based on management’s best estimate of undiscounted future costs. Certain recoverable environmental costs related to the removal of underground storage tanks or related contamination are capitalized and amortized over the estimated useful lives of the properties. These costs improve the safety or efficiency of the property or are incurred in preparing the property for sale.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Income Taxes

AMERCO files a consolidated tax return with all of its legal subsidiaries, except for Christian Fidelity Insurance Company, which files on a stand alone basis. SAC Holdings and its legal subsidiaries file a consolidated return, and their return is not consolidated with AMERCO. In accordance with SFAS No. 109, the provision for income taxes reflects deferred income taxes resulting primarily from changes in temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements.

Comprehensive Income/(Loss)

Comprehensive income/(loss) consists of net income, foreign currency translation adjustments, unrealized gains and losses on investments and fair market values of cash flow hedges, net of the related tax effects.

4. Earnings per Share

Net income for purposes of computing earnings per common share is net income minus preferred stock dividends. Preferred stock dividends include accrued dividends of AMERCO.

The shares used in the computation of the Company’s basic and diluted earnings per common share were as follows:

	Quarter ended June 30,

	2004		2003

Basic and diluted earnings per common share	$	1.98	$	1.18
Weighted average common shares outstanding:
Basic and diluted		20,788,074		20,732,086

The weighted average common shares outstanding listed above exclude post-1992 shares of the employee stock ownership plan that have not been committed to be released as of June 30, 2004 and June 30, 2003, respectively.

6,100,000 shares of preferred stock have been excluded from the weighted average shares outstanding calculation because they are not common stock equivalents.

5. Borrowings

Long-Term Debt

Long-term debt consisted of the following:

	June 30,		March 31,
	2004		2004

	(Unaudited)
	(In thousands)
Revolving credit facility, senior secured first lien	$	64,007	$	164,051
Senior amortizing notes, secured, first lien, due 2009		349,125		350,000
Senior notes, secured second lien, 9.0% interest rate, due 2009		200,000		200,000
Senior subordinated notes, secured, 12.0% interest rate, due 2011		148,646		148,646
Loan against cash surrender value of life insurance policies		17,625		17,822
Total AMERCO notes and loans payable	$	779,403	$	880,519

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

First Lien Senior Secured Notes

The Company has a First Lien Senior Secured credit facility, due 2009 in the amount of $550 million, with a banking syndicate led and arranged by Wells Fargo Foothill, a part of Wells Fargo & Company (the "Senior Secured Facility"). These senior notes consist of two components, a $200 million revolving credit facility (including a $50 million letter of credit sub-facility) and a $350 million amortizing term loan.

The $350 million amortizing term loan requires monthly principal payments of $291,667 and periodic interest payments, with the balance due on maturity in 2009. The interest rate per the provisions of the term loan agreement is defined as the 3-month London Inter Bank Offer Rate ("LIBOR"), plus 4.0%, the sum of which at June 30, 2004 was 5.11%. Advances under the revolving credit facility are based on a borrowing base formula which is based on a percentage of the value of our eligible real estate. On June 30, 2004, outstanding advances under the revolving credit facility totaled $64.0 million and $136.0 million was available to borrow. The interest rate per the provisions of the revolving credit facility agreement is defined as the prime rate ("Prime") plus 1.5%, the sum of which at June 30, 2004 was 5.5%. The Senior Secured Facility is secured by a first priority position in substantially all of the assets of AMERCO and its subsidiaries, except for our notes receivable from SAC Holdings, certain real estate held for sale, the capital stock of our insurance subsidiaries, real property previously mortgaged to Oxford, vehicles subject to certain lease financing arrangements, and proceeds in excess of $50 million associated with the settlement, judgment or recovery related to our litigation against PricewaterhouseCoopers (after deduction of attorneys’ fees and costs and taxes payable with respect to such proceeds).

9.0% Second Lien Senior Secured Notes

The Company issued and has outstanding $200 million aggregate principal amount of 9.0% Second Lien Senior Secured Notes due 2009. These senior notes are secured by a second priority position in the same collateral which secures our obligations under the First Lien Senior Secured Notes. No principal payments are due on the Second Lien Senior Secured Notes until maturity.

Senior Subordinated Notes

The Company issued and has outstanding $148.6 million aggregate principal amount of 12.0% senior subordinated notes due 2011 (the "Senior Subordinated Notes"). No principal payments are due on the Senior Subordinated Notes until maturity. These senior notes, which are subordinated to all of the senior indebtedness of AMERCO (including the First Lien Senior Secured Notes and the Second Lien Senior Secured Notes, both due 2009), are secured by certain assets of AMERCO, including the capital stock of our life insurance subsidiary (Oxford Life Insurance Company), certain real estate held for sale, 75% of the net proceeds in excess of $50 million associated with the settlement, judgment or recovery related to our litigation against PricewaterhouseCoopers (after deduction of attorneys’ fees and costs and taxes payable with respect to such proceeds), and payments from notes receivable from SAC Holdings having an aggregate outstanding principal balance at June 30, 2004 of $203.8 million.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Restrictive Covenants

Under the abovementioned loan agreements, we are required to comply with a number of affirmative and negative covenants. These covenants apply to the obligors, and provide that, among other things:

? On a quarterly basis, the obligors cannot allow EBITDA minus capital expenditures (as defined) to fall below specified levels.

? The obligors are restricted in the amount of capital expenditures that can be made in any fiscal year.

? The obligors’ ability to incur additional indebtedness is restricted.

? The obligors’ ability to create, incur, assume, or permit to exist any lien on or against any of the secured assets is restricted.

? The obligors’ ability to convey, sell, lease, assign, transfer or otherwise dispose of any of the secured assets is restricted.

? The obligors cannot enter into any merger, consolidation, reorganization, or recapitalization (subject to exceptions), and we cannot liquidate, wind up or dissolve any subsidiary that is a borrower under the abovementioned loan agreements, unless the assets of the dissolved entity are transferred to another subsidiary that is a borrower under the abovementioned loan agreements and certain other conditions are met.

? The obligors’ ability to guarantee the obligations of our insurance subsidiaries or any third party is restricted.

? The obligors’ ability to prepay, redeem, defease, purchase or otherwise acquire any of our indebtedness or any indebtedness of a subsidiary that is a borrower under the abovementioned loan agreements is restricted.

As of June 30, 2004 the Company was in compliance with the abovementioned covenants.

Restructuring of Synthetic Lease Agreements

On April 30, 2004, we terminated our obligations under the Synthetic Lease Agreements by selling the real property subject to the leases to a third party. Refer to note 9, "Contingent Liabilities and Commitments," for additional information about the restructuring of these leases.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Annual Maturities of AMERCO Notes and Loans Payable

The annual maturity of AMERCO’s long-term debt as of June 30, 2004 for the next five years and thereafter is as follows:

	Fiscal Years Ending

	2005		2006		2007		2008		2009		Thereafter

	(In thousands)
Notes payable, secured	$	3,500	$	3,500	$	3,500	$	3,500	$	599,132	$	166,271

SAC Holding II Corporation Notes and Loans Payable to Third Parties

SAC entities notes and loans payable consisted of the following:

	June 30,		March 31,

	2004		2004

	(Unaudited)
	(In thousands)
Notes payable, secured, bearing interest rates ranging from 7.87% to 9.00% due 2027	$	78,372	$	78,637

6. Interest on Borrowings

Interest expense was as follows:

	June 30,

	2004		2003

	(Unaudited)
	(In thousands)
Interest expense	$	16,564	$	19,183
Amortization of transaction costs		733		205
Interest expense resulting from SWAP/CAP agreements		147		-
Default interest		-		715

Total AMERCO interest expense	$	17,444	$	20,103

SAC Holding II Corporation interest expense		3,263		20,807
Less: Intercompany transactions		1,703		10,012

Total SAC Holding II Corporation interest expense	$	1,560	$	10,795

Consolidated interest expense	$	19,004	$	30,898

Interest paid in cash by AMERCO amounted to $15.4 million and $22.8 million for the first quarters of fiscal year 2005 and fiscal year 2004, respectively.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Interest Rates

Interest rates and company borrowings were as follows:

	Revolving Credit Facility
		June 30,		March 31,
		2004		2004

	(In thousands, except interest rates)
Weighted average interest rate during the quarter/year		5.37%		6.75%
Interest rate at the end of the first fiscal quarter/year		5.33%		5.50%
Maximum amount outstanding during the quarter/year	$	164,574	$	205,000

Average amount outstanding during the quarter/year	$	111,407	$	174,267
Facility fees	$	-	$	1,333

7. Comprehensive Income

The components of accumulated other comprehensive income/(loss), net of tax, were as follows:

	June 30,			March 31,

	2004			2004

	(In thousands)
Accumulated foreign currency translation (loss)	$	(37,141	)	$	(34,914	)
Accumulated unrealized gain on investments		16,411			13,468
	$	(20,730	)	$	(21,446	)

A summary of accumulated comprehensive income/ (loss) components, net of tax, were as follows:

	Foreign Currency Translation			Unrealized Gain on Investments		Accumulated Other Comprehensive Income/(Loss)

	(Unaudited)
	(In thousands)
Balance at March 31, 2004	$	(34,914	)		13,468		(21,446	)
Foreign currency translation		(2,227	)		-		(2,227	)
Unrealized gain on investments		-			2,943		2,943

Balance at June 30, 2004	$	(37,141	)		16,411		(20,730	)

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

8. Reinsurance

During their normal course of business, our insurance subsidiaries assume and cede reinsurance on both a coinsurance and a risk premium basis. They also obtain reinsurance for that portion of risks exceeding their retention limits. The maximum amount of life insurance retained on any one life is $150,000.

		Direct Amount (a)	Ceded to Other Companies	Assumed from Other Companies	Net Amount (a)	Percentage of Amount Assumed to Net

		(Unaudited)
		(In thousands)
March 31, 2004 Life insurance in force	$	1,516,683	557,698	2,048,938	3,007,923	68%

Premiums earned:
Life	$	3,076	2,112	3,286	4,250	77%
Accident and health		25,171	2,066	4,364	27,469	16%
Annuity		777	-	764	1,541	50%
Property and casualty		9,939	1,963	1,826	9,802	19%

Total	$	38,963	6,141	10,240	43,062	24%

		Direct Amount (a)	Ceded to Other Companies	Assumed from Other Companies	Net Amount (a)	Percentage of Amount Assumed to Net

		(Unaudited)
		(In thousands)
March 31, 2003 Life insurance in force	$	1,719,979	752,501	2,343,287	3,310,765	71%

Premiums earned:
Life	$	4,918	2,749	3,914	6,083	64%
Accident and health		27,927	3,063	5,559	30,423	18%
Annuity		885	-	325	1,210	27%
Property and casualty		33,660	13,593	6,981	27,048	26%

Total	$	67,390	19,405	16,779	64,764	26%

(a) Balances are reported net of inter-segment transactions. Premiums eliminated in consolidation were as follows:

	RepWest		Oxford

	(Unaudited)
	(In thousands)
First quarter ended March 31, 2004	$	-	$	372
First quarter ended March 31, 2003		1,518		677

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Oxford Life Insurance Company

Oxford assumes and cedes insurance from and to other insurers and members of various reinsurance pools and associations. Reinsurance arrangements are utilized to provide greater diversification of risk and to minimize exposure on large risks. However, the original insurer retains primary liability to the policyholder should the assuming insurer not be able to meet its obligations under the reinsurance agreements.

Oxford is subject to regulation and supervision by state insurance regulatory agencies. The regulation extends to such matters as licensing companies and agents, restricting the types, quality or quantity of investments, regulating capital and surplus and actuarial reserve maintenance, setting solvency standards, filing of annual and other reports on financial condition, and regulating trade practices. State laws also regulate transactions and dividends between an insurance company and its parent or affiliates, and generally require prior approval or notification for any change in control of the insurance subsidiary.

Oxford is in compliance with the NAIC minimum risk-based capitalization (RBC) requirements

9. Contingent Liabilities and Commitments

The Company leases a portion of its rental equipment and certain of its facilities under operating leases with terms that expire at various dates substantially through 2034. At June 30, 2004, AMERCO has guaranteed $235.3 million of residual values for these assets at the end of the respective lease terms. Certain leases contain renewal and fair market value purchase options as well as mileage and other restrictions. At the expiration of the lease, the Company has the option to renew the lease, purchase the asset for fair market value, or sell the asset to a third party on behalf of the lessor. AMERCO has been leasing equipment since 1987 and has had no material shortfall in proceeds from the sale of underlying assets.

Lease commitments for leases having terms of more than one year as of June 30, 2004, were as follows:

	Property Plant and Equipment		Rental Equipment		Total

	(In thousands)
Year-ending:
2005	$	11,208	$	114,083	$	125,291
2006		10,951		89,880		100,831
2007		10,781		71,238		82,019
2008		10,526		26,757		37,283
2009		10,310		8,918		19,228
Thereafter		50,927		5,768		56,695

Total	$	104,703	$	316,644	$	421,347

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

W. P. Carey Transaction

In 1999, AMERCO, U-Haul International, Inc. and Amerco Real Estate Company entered into financing agreements for the purchase and construction of self-storage facilities with the Bank of Montreal and Citibank (the "synthetic leases"). Title to the real property subject to these leases was held in the name of off balance sheet special purpose entities. As of March 31, 2003, we had obligations outstanding of $254 million under the synthetic leases, of which $117 million represented properties qualifying as operating leases and $137 million represented properties qualifying as capital leases.

As part of our overall Chapter 11 plan of reorganization, these leases were amended and restated on March 15, 2004. As a result, we paid down approximately $31 million of lease obligations and entered into a lease with a three year term, with four one year renewal options. After such pay down, our lease obligation under the amended and restated synthetic leases was approximately $218.5 million. The amended and restated terms of the synthetic lease caused it to become a capital lease. Consequently, we capitalized these leased properties as an asset and reported the corresponding lease obligation as a liability at March 31, 2004.

On April 30, 2004, the amended and restated leases were terminated, the properties underlying these leases were sold to UH Storage (DE) Limited Partnership, a W.P. Carey affiliate ("UH Storage") and U-Haul entered into a ten year operating lease with UH Storage for a portion of each property (the portion of the property that relates to U-Haul’s truck and trailer rental and moving supply sales businesses). The remainder of each property (the portion of the property that relates to self-storage) was leased from UH Storage to Mercury Partners, LP ("Mercury") an entity controlled by Mark V. Shoen, pursuant to a 20 year lease. These events are referred to as the "W.P. Carey Transaction." Because completion of the W.P. Carey Transaction was subject to Bankruptcy Court approval and the approval of our senior secured lenders, this transaction was not reflected on our March 31, 2004 balance sheet (although disclosure about the transaction was included in our 2004 Form 10-K).

On April 29, 2004, the Bankruptcy Court and our senior secured lenders approved the W.P. Carey Transaction and the transaction was funded as of April 30, 2004. As a result of the W.P. Carey Transaction, we no longer have a capital lease related to these properties. The terms of the W.P. Carey Transaction provide for us to be reimbursed for capital improvements we previously made to these properties, subject to conditions, which we expect will occur over approximately the next 21 months.

As part of the W.P. Carey Transaction, U-Haul entered into arrangements to manage these properties (including the properties leased by Mercury Partners). These management arrangements will allow us to continue to operate the properties as part of the U-Haul moving and self-storage system.

U-Haul’s annual lease payments under the new lease are approximately $10 million per year, with CPI inflation adjustments beginning in the sixth year of the lease. The lease term is ten years, with a renewal option for an additional ten years. Upon closing of the W.P. Carey Transaction, we made a $5 million security deposit, which will be refunded to us at the end of the lease term. We also made a deposit to UH Storage totaling approximately $23 million, which is to be refunded to us at the earlier of attainment by the properties of certain earn-out milestones, or the end of the lease term.

The property management agreement we entered into with Mercury provides that Mercury will pay U-Haul a fee equal to 4% of the gross self-storage rental revenues generated by the properties, plus a bonus of up to 6% of gross self-storage rental revenues based on specified performance levels. During the first quarter of fiscal year 2005, U-Haul received $0.2 million in management fees from Mercury.

As a result of the closing of the W.P. Carey Transaction, we received net proceeds (after deduction of transaction fees) of approximately $71 million. From this amount, we made deposits of approximately $28 million (as discussed above) plus deposits of approximately $3 million for future property taxes and insurance included in other assets on the balance sheet.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

10. Contingencies

Kocher

On July 20, 2000, Charles Kocher (Kocher) filed suit in Wetzel County, West Virginia, Civil Action No. 00-C-51-K, entitled Charles Kocher v. Oxford Life Insurance Co. (Oxford) seeking compensatory and punitive damages for breach of contract, bad faith and unfair claims settlement practices arising from an alleged failure of Oxford to properly and timely pay a claim under a disability and dismemberment policy. On March 22, 2002, the jury returned a verdict of $5 million in compensatory damages and $34 million in punitive damages. On November 5, 2002, the trial court entered an Order (Order) affirming the $39 million jury verdict and denying Oxford’s motion for New Trial Or, in The Alternative, Remittitur. Oxford perfected its appeal to the West Virginia Supreme Court. On January 27, 2004, the matter was argued before the West Virginia Supreme Court and taken under advisement. On June 17, 2004 the West Virginia Supreme Court reversed and vacated the punitive damages award and remanded the case for a new trial on punitive damages. Oxford has filed for a re-hearing of the compensatory damages portion of the verdict with the West Virginia Supreme Court. The Company has accrued $725,000, which represents management’s best estimate of the costs associated with legal fees to appeal and re-try the case. The Company has notified its E & O carrier of the West Virginia Supreme Court’s ruling. The E&O carrier is disputing coverage in a declaratory judgment action against Oxford.

Shoen

On September 24, 2002, Paul F. Shoen filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et al., CV02-05602, seeking damages and equitable relief on behalf of AMERCO from SAC Holdings and certain current and former members of the AMERCO Board of Directors, including Edward J. Shoen, Mark V. Shoen and James P. Shoen as defendants. AMERCO is named a nominal defendant for purposes of the derivative action. The complaint alleges breach of fiduciary duty, self-dealing, usurpation of corporate opportunities, wrongful interference with prospective economic advantage and unjust enrichment and seeks the unwinding of sales of self-storage properties by subsidiaries of AMERCO to SAC Holdings over the last several years. The complaint seeks a declaration that such transfers are void as well as unspecified damages. On October 28, 2002, AMERCO, the Shoen directors, the non-Shoen directors and SAC Holdings filed Motions to Dismiss the complaint. In addition, on October 28, 2002, Ron Belec filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Ron Belec vs. William E. Carty, et al., CV 02-06331 and on January 16, 2003, M.S. Management Company, Inc. filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned M.S. Management Company, Inc. vs. William E. Carty, et al., CV 03-00386. Two additional derivative suits were also filed against these parties. These additional suits are substantially similar to the Paul F. Shoen derivative action. The five suits assert virtually identical claims. In fact, three of the five plaintiffs are parties who are working closely together and chose to file the same claims multiple times. The court consolidated all five complaints before dismissing them on May 28, 2003. Plaintiffs have filed a notice of appeal. These lawsuits falsely alleged that the AMERCO Board lacked independence. In reaching its decision to dismiss these claims, the court determined that the AMERCO Board of Directors had the requisite level of independence required in order to have these claims resolved by the Board.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Article Four Trust

AMERCO is a defendant in four putative class action lawsuits. Article Four Trust v. AMERCO, et al., District of Nevada, United States District Court, Case No. CV-N-03-0050-DWH-VPC. Article Four Trust, a purported AMERCO shareholder, commenced this action on January 28, 2003 on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Article Four Trust action alleges one claim for violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. Mates v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0107. Maxine Mates, an AMERCO shareholder, commenced this putative class action on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Mates action asserts claims under section 10(b) and Rule 10b-5, and section 20(a) of the Securities Exchange Act. Klug v. AMERCO, et al., United States District Court of Nevada, Case No. CV-S-03-0380. Edward Klug, an AMERCO shareholder, commenced this putative class action on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Klug action asserts claims under section 10(b) and Rule 10b-5 and section 20(a) of the Securities Exchange Act. IG Holdings v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0199. IG Holdings, an AMERCO bondholder, commenced this putative class action on behalf of all persons and entities who purchased, acquired, or traded AMERCO bonds between February 12, 1998 and September 26, 2002, alleging claims under section 11 and section 12 of the Securities Act of 1933 and section 10(b) and Rule 10b-5, and section 20(a) of the Securities Exchange Act. Each of these four securities class actions allege that AMERCO engaged in transactions with SAC entities that falsely improved AMERCO’s financial statements and that AMERCO failed to disclose the transactions properly. The actions are at a very early stage. The Klug action has not been served. In the other three actions, AMERCO does not currently have a deadline by which it must respond to the complaints. Management intends to defend these cases vigorously.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

Securities and Exchange Commission

The Securities and Exchange Commission ("SEC") has issued a formal order of investigation to determine whether the Company has violated the Federal Securities laws. On January 7, 2003, the Company received the first of several subpoenas issued by the SEC to the Company. SAC Holdings, the Company’s current and former auditors and others have also received subpoenas relating to this matter. The Company is cooperating with the SEC and is facilitating the expeditious review of its financial statements and any other issues that may arise. The Company has produced a substantial number of documents to the SEC and continues to respond to requests for additional documents. Notwithstanding the Company’s ongoing document production, on March 5, 2004, the SEC commenced an action against the Company in the United States District Court for the District of Nevada seeking an order compelling the Company to comply with the SEC’s document requests ("Subpoena Enforcement Action"). The Company disputes whether there was any basis for the Subpoena Enforcement Action in light of the Company’s ongoing efforts to comply with the SEC’s subpoena requests. Moreover, since then, the Company has obtained an order from the Bankruptcy Court overseeing the Company’s Chapter 11 proceedings that AMERCO complied with the SEC’s subpoenas at issue. The SEC recently filed a motion for reconsideration of this order, which AMERCO will oppose.

Environmental

A subsidiary of U-Haul, INW Company ("INW") owns one property located within two different state hazardous substance sites in the State of Washington. The sites are referred to as the "Yakima Valley Spray Site" and the "Yakima Railroad Area". INW has been named as a "potentially liable party" under state law with respect to this property as it relates to both sites. As a result of the cleanup costs of approximately $5 million required by the State of Washington, INW filed for reorganization under the federal bankruptcy laws in May of 2001. The potentially liable parties, including INW, have agreed to share the cost of the environmental cleanup necessary at the Yakima site. INW’s percentage share of the cost is 17% or $879,000. Due to the bankrupt status of INW, U-Haul has agreed to be responsible for paying INW’s share, of which $706,000 has been paid through May 21, 2004.

In the normal course of business, AMERCO is a defendant in a number of suits and claims. AMERCO is also a party to several administrative proceedings arising from state and local provisions that regulate the removal and/or cleanup of underground fuel storage tanks. It is the opinion of management that none of these suits, claims or proceedings involving AMERCO, individually or in the aggregate, are expected to result in a material loss.

Compliance with environmental requirements of federal, state and local governments significantly affects Real Estate’s business operations. Among other things, these requirements regulate the discharge of materials into the water, air and land and govern the use and disposal of hazardous substances. Real Estate is aware of issues regarding hazardous substances on some of its properties. Real Estate regularly makes capital and operating expenditures to stay in compliance with environmental laws and has put in place a remedial plan at each site where it believes such a plan is necessary. Since 1988, Real Estate has managed a testing and removal program for underground storage tanks. Under this program we have spent $43.7 million.

Based upon the information currently available to Real Estate, compliance with the environmental laws and its share of the costs of investigation and cleanup of known hazardous waste sites are not expected to have a material adverse effect on AMERCO’s financial position or operating results.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - C ontinued

11. Related Party Transactions

AMERCO has engaged in related party transactions, and has continuing related party interests with certain major stockholders, directors and officers of the consolidating group as disclosed below. Management believes that the transactions described below and in the related notes were consummated on terms equivalent to those that would prevail in arm’s-length transactions.

During the first quarter of fiscal year 2005, a subsidiary of the Company held various unsecured notes of SAC Holdings. Substantially all of the equity interest of SAC Holdings is controlled by Mark V. Shoen, a significant shareholder and executive officer of AMERCO. The Company does not have an equity ownership interest in SAC Holdings, except for minority investments made by RepWest and Oxford in a SAC Holdings-controlled limited partnership which holds Canadian self-storage properties. The Company received cash interest payments of $4.4 million, from SAC Holdings during the first quarter of fiscal year 2005. The largest aggregate amount of notes receivable outstanding during the first quarter of fiscal year 2005 and the aggregate notes receivable balance at June 30, 2004 was $203.8 million. Interest accrues on the outstanding principal balance of junior notes of SAC Holdings that the Company holds at a stated rate of basic interest. A fixed portion of that basic interest is paid on a monthly basis. Additional interest is paid on the same payment date based on the amount of remaining basic interest and of the cash flow generated by the underlying property. This amount is referred to as the "cash flow-based calculation." To the extent that this cash flow-based calculation exceeds the amount of remaining basic interest, contingent interest is paid on the same monthly date as the fixed portion of basic interest. To the extent that the cash flow-based calculation is less than the amount of remaining basic interest, the additional interest payable on the applicable monthly date is limited to the amount of that cash flow-based calculation. In such a case, the excess of the remaining basic interest over the cash flow-based calculation is deferred. In addition, subject to certain contingencies, the junior notes provide that the holder of the note is entitled to receive 90% of the appreciation realized upon, among other things, the sale of such property by SAC Holdings.

The Company currently manages the self-storage properties owned by SAC Holdings, Mercury, 4 SAC and 5 SAC pursuant to a standard form of management agreement, under which the Company receives a management fee between 4% and 6% of the gross receipts. The Company received management fees of $3.7 million during the first quarter of fiscal year 2005. This management fee is consistent with the fees received for other properties the Company manages for third parties.

RepWest and Oxford currently hold a 46% limited partnership interest in Securespace Limited Partnership ("Securespace"), a Nevada limited partnership. A SAC Holdings subsidiary serves as the general partner of Securespace and owns a 1% interest. Another SAC Holdings subsidiary owns the remaining 53% limited partnership interest in Securespace. Securespace was formed by SAC Holdings to be the owner of various Canadian self-storage properties.

During the first quarter of fiscal year 2005, the Company leased space for marketing company offices, vehicle repair shops and hitch installation centers owned by subsidiaries of SAC Holdings. Total lease payments pursuant to such leases were $0.6 million during the first quarter of fiscal year 2005. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to the Company.

At June 30, 2004, subsidiaries of SAC Holdings, 4 SAC, 5 SAC and 19 SAC acted as U-Haul independent dealers. The financial and other terms of the dealership contracts with subsidiaries of SAC Holdings are substantially identical to the terms of those with the Company’s other independent dealers. During the first quarter of fiscal year 2005, the Company paid the above mentioned entities $8.9 million in commissions pursuant to such dealership contracts.

Commission File Number	Registrant, State of Incorporation Address and Telephone Number	I.R.S. Employer Identification No.

1-11255	AMERCO	88-0106815
	(A Nevada Corporation)
	1325 Airmotive Way, Ste. 100
	Reno, Nevada 89502-3239
	Telephone (775) 688-6300

2-38498	U-Haul International, Inc.	86-0663060
	(A Nevada Corporation)
	2727 N. Central Avenue
	Phoenix, Arizona 85004
	Telephone (602) 263-6645

		Page No.

	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
a)	Condensed Consolidated Balance Sheets as of June 30, 2004 (unaudited) and March 31, 2004	1
b)	Condensed Consolidated Statement of Operations for the Quarters ended June 30, 2004 and 2003 (unaudited)	2
c)	Condensed Consolidated Statements of Comprehensive Income for the Quarters ended June 30, 2004 and 2003 (unaudited)	3
d)	Condensed Consolidated Statements of Cash Flows for the Quarters ended June 30, 2004 and 2003 (unaudited)	4
e)	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48

	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Submission of Matters to a Vote of Security Holders	50
Item 5.	Other Information	50
Item 6.	Exhibits and Reports on Form 8-K	51

	Obligated Group

	AMERCO			U-Haul			Real Estate			Eliminations					Obligated Group Consolidated

	(Unaudited)
Assets:	(In thousands)
Cash and cash equivalents	$	27		$	48,904		$	1,858		$	-				$	50,789
Trade receivables, net		-			11,091			16,322			-					27,413
Notes and mortgage receivables, net		-			3,218			1,545			-					4,763
Inventories, net		-			53,578			-			-					53,578
Prepaid expenses		4,956			16,866			-			-					21,822
Investments, fixed maturities		-			-			-			-					-
Investments, other		-			-			-			-					-
Deferred policy acquisition costs, net		-			-			-			-					-
Other assets		22,335			67,791			3,070			-					93,196
Related party assets		516,739			519,864			12,626			(646,330	)	(d	)		402,899

		544,057			721,312			35,421			(646,330	)				654,460

Investment in Subsidiaries		1,193,319			-			-			(897,732	)	(c	)		295,587
Investment in SAC		(12,550	)		-			-			-					(12,550	)

Total investment in subsidiaries		1,180,769			-			-			(897,732	)				283,037

Property, plant and equipment, at cost:
Land		-			21,111			137,507			-					158,618
Buildings and improvements		-			79,816			603,500			-					683,316
Furniture and equipment		413			275,652			18,145			-					294,210
Rental trailers and other rental equipment		-			167,526			-			-					167,526
Rental trucks		-			1,244,346			-			-					1,244,346
SAC Holdings - property, plant and equipment		-			-			-			-					-

		413			1,788,451			759,152			-					2,548,016
Less: Accumulated depreciation		(355	)		(1,060,139	)		(267,066	)		-					(1,327,560	)

Total property, plant and equipment		58			728,312			492,086			-					1,220,456


Total assets	$	1,724,884		$	1,449,624		$	527,507		$	(1,544,062	)			$	2,157,953

	AMERCO Legal Group									AMERCO as Consolidated

	Property and Casualty Insurance(a)		Life Insurance(a)		Eliminations					AMERCO Consolidated			SAC Moving and Storage Operations			Eliminations					Total Consolidated

	(In thousands)
Assets:	(Unaudited)
Cash and cash equivalents	$	-	$	1,699	$	-				$	52,488		$	683		$	-				$	53,171
Trade receivables, net		204,481		16,999		-					248,893			-			-					248,893
Notes and mortgage receivables, net		-		-		-					4,763			-			-					4,763
Inventories, net		-		-		-					53,578			440			-					54,018
Prepaid expenses		-		-		-					21,822			53			-					21,875
Investments, fixed maturities		129,370		580,047		-					709,417			-			-					709,417
Investments, other		143,345		203,307		-					346,652			-			-					346,652
Deferred policy acquisition costs, net		2,557		67,235		-					69,792			-			-					69,792
Other assets		2,507		905		-					96,608			4,972			-					101,580
Related party assets		102,561		32,619		(136,217	)	(d	)		401,862			-			(85,048	)	(d	)		316,814

		584,821		902,811		(136,217	)				2,005,875			6,148			(85,048	)				1,926,975

Investment in Subsidiaries		-		-		(295,587	)	(c	)		-			-			-					-
Investment in SAC		-		-		-					(12,550	)		-			12,550		(c	)		-

Total investment in subsidiaries		-		-		(295,587	)				(12,550	)		-			12,550					-

Property, plant and equipment, at cost:
Land		-		-		-					158,618			-			-					158,618
Buildings and improvements		-		-		-					683,316			-			-					683,316
Furniture and equipment		-		-		-					294,210			-			-					294,210
Rental trailers and other rental equipment		-		-		-					167,526			-			-					167,526
Rental trucks		-		-		-					1,244,346			-			-					1,244,346
SAC Holdings - property, plant and equipment (b)		-		-		-					-			152,669			(74,212	)	(e	)		78,457

-				-		-					2,548,016			152,669			(74,212	)				2,626,473
Less: Accumulated depreciation		-		-		-					(1,327,560	)		(5,738	)		8,684		(e	)		(1,324,614	)

Total property, plant and equipment		-		-		-					1,220,456			146,931			(65,528	)				1,301,859


Total assets	$	584,821	$	902,811	$	(431,804	)			$	3,213,781		$	153,079		$	(138,026	)			$	3,228,834

	Obligated Group

	AMERCO			U-Haul			Real Estate		Eliminations					Obligated Group Consolidated

	(Unaudited)
	(In thousands)
Liabilities:
Accounts payable and accrued expenses	$	192,819		$	295,783		$	2,340	$	(116,634	)			$	374,308
Capital leases		-			-			-		-					-
AMERCO's notes and loans payable		783,216			17,677			2		-					800,895
SAC Holdings' notes and loans payable		-			-			-		-					-
Policy benefits and losses, claims and loss expenses payable		-			221,117			-		-					221,117
Liabilities from investment contracts		-			-			-		-					-
Other policyholders' funds and liabilities		-			-			-		-					-
Deferred income		-			24,382			-		-					24,382
Deferred income taxes		152,910			244,628			94,914		(339,542	)	(d	)		152,910
Other liabilities		-			-			190,154		(190,154	)	(d	)		-

Total liabilities		1,128,945			803,587			287,410		(646,330	)				1,573,612

Stockholders' equity:
Series preferred stock:
Series A preferred stock		-			-			-		-					-
Series B preferred stock		-			-			-		-					-
Series A common stock		1,416			-			-		-					1,416
Common Stock		9,081			540			-		(540	)	(c	)		9,081
Additional paid in-capital		395,803			121,230			147,481		(268,711	)	(c	)		395,803
Accumulated other comprehensive income/(loss)		(20,730	)		(37,141	)		-		37,141		(c	)		(20,730	)

Retained earnings		628,461			573,006			92,616		(665,622	)	(c	)		628,461
Cost of common shares in treasury, net		(418,092	)		-			-		-					(418,092	)
Unearned employee stock ownership plan shares		-			(11,598	)		-		-					(11,598	)

Total stockholders' equity		595,939			646,037			240,097		(897,732	)				584,341


Total liabilities and stockholders' equity	$	1,724,884		$	1,449,624		$	527,507	$	(1,544,062	)			$	2,157,953