Related Party Transactions

12 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Note 21: Related Party Transactions

Note 21.  Related Party Transactions

As set forth in the Audit Committee Charter and consistent with NASDAQ Listing Rules, the Company's Audit Committee (the "Audit Committee") reviews and maintains oversight over related party transactions which are required to be disclosed under the Securities and Exchange Commission ("SEC") rules and regulations. Accordingly, all such related party transactions are submitted to the Audit Committee for ongoing review and oversight. Our internal processes ensure that our legal and finance departments identify and monitor potential related party transactions which may require disclosure and Audit Committee oversight.

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

SAC Holdings was established in order to acquire self-storage properties. These properties are being managed by us pursuant to management agreements. In the past, we sold various self-storage properties to SAC Holdings, and such sales provided significant cash flows to us.

Management believes that the sales of self-storage properties to SAC Holdings has provided a unique structure for us to earn moving equipment rental revenues and property management fee revenues from the SAC Holdings self-storage properties that we manage.

Related Party Revenues

	Years Ended March 31,
	2012		2011		2010
	(In thousands)
U-Haul interest income revenue from SAC Holdings	$	19,364	$	19,163	$	18,900
U-Haul interest income revenue from Private Mini		5,431		5,451		5,333
U-Haul management fee revenue from SAC Holdings		18,306		16,873		16,321
U-Haul management fee revenue from Private Mini		2,226		2,174		2,202
U-Haul management fee revenue from Mercury		2,734		3,085		3,109
	$	48,061	$	46,746	$	45,865

During fiscal 2012, subsidiaries of the Company held various junior unsecured notes of SAC Holdings. Substantially all of the equity interest of SAC Holdings is controlled by Blackwater Investments, Inc. ("Blackwater"). Blackwater is wholly-owned by Mark V. Shoen, a significant shareholder of AMERCO. We do not have an equity ownership interest in SAC Holdings. We received cash interest payments of $17.8 million, $15.8 million and $13.9 million, from SAC Holdings during fiscal 2012, 2011 and 2010, respectively. The largest aggregate amount of notes receivable outstanding during fiscal 2012 was $196.2 million and the aggregate notes receivable balance at March 31, 2012 was $195.4 million. In accordance with the terms of these notes, SAC Holdings may prepay the notes without penalty or premium at any time. The scheduled maturities of these notes are between 2019 and 2024.Due to repayments in April 2012 and May 2012 the total notes receivable balance decreased by $113.5 million.

Interest accrues on the outstanding principal balance of junior notes of SAC Holdings that we hold at a 9.0% rate per annum. A fixed portion of that basic interest is paid on a monthly basis. Additional interest can be earned on notes totaling $122.1 million of principal depending upon the amount of remaining basic interest and the cash flow generated by the underlying property. After the April 2012 and May 2012 repayments this amount has been reduced to $8.7 million. 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 would be 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 a portion of the appreciation realized upon, among other things, the sale of such property by SAC Holdings. To date, no excess cash flows related to these arrangements have been earned or paid.

During fiscal 2012, AMERCO and U-Haul held various junior notes issued by Private Mini Storage Realty, L.P. ("Private Mini"). The equity interests of Private Mini are ultimately controlled by Blackwater. We received cash interest payments of $5.4 million, $5.5 million and $5.3 million, from Private Mini during fiscal 2012, 2011 and 2010, respectively. The largest aggregate amount outstanding during fiscal 2012 was $66.7 million. The balance of notes receivable from Private Mini at March 31, 2012 was $66.3 million.

We currently manage the self-storage properties owned or leased by SAC Holdings, Mercury Partners, L.P. ("Mercury"), Four SAC Self-Storage Corporation ("4 SAC"), Five SAC Self-Storage Corporation ("5 SAC"), Galaxy Investments, L.P. ("Galaxy") and Private Mini pursuant to a standard form of management agreement, under which we receive a management fee of between 4% and 10% of the gross receipts plus reimbursement for certain expenses. We received management fees, exclusive of reimbursed expenses, of $22.5 million, $22.0 million and $22.6 million from the above mentioned entities during fiscal 2012, 2011 and 2010, respectively. This management fee is consistent with the fee received for other properties we previously managed for third parties. SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini are substantially controlled by Blackwater. Mercury is substantially controlled by Mark V. Shoen.  James P. Shoen, a significant shareholder and director of AMERCO, has an interest in Mercury.

Related Party Costs and Expenses

	Years Ended March 31,
	2012		2011		2010
	(In thousands)
U-Haul lease expenses to SAC Holdings	$	2,430	$	2,491	$	2,446
U-Haul commission expenses to SAC Holdings		39,167		34,858		32,621
U-Haul commission expenses to Private Mini		2,523		2,399		2,116
	$	44,120	$	39,748	$	37,183

We lease space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us.

At March 31, 2012, subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini acted as U-Haul independent dealers. The financial and other terms of the dealership contracts with the aforementioned companies and their subsidiaries are substantially identical to the terms of those with our other independent dealers whereby commissions are paid by us based upon equipment rental revenue.

These agreements and notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $45.3 million, expenses of $2.4 million and cash flows of $41.8 million during fiscal 2012. Revenues and commission expenses related to the Dealer Agreements were $194.1 million and $41.7 million, respectively for fiscal 2012.

We adopted ASU 2009-17, which amends the FASB ASC for the issuance of FASB Statement 167, Amendments to FASB Interpretation 46(R), as of April 1, 2010. Management determined that the junior notes of SAC Holdings and Private Mini and the management agreements with SAC Holdings, Mercury, 4 SAC, 5 SAC, Galaxy, and Private Mini represent potential variable interests for us. Management evaluated whether it should be identified as the primary beneficiary of one or more of these VIE's using a two step approach in which management (i) identified all other parties that hold interests in the VIE's, and (ii) determined if any variable interest holder has the power to direct the activities of the VIE's that most significantly impact their economic performance.

Management determined that they do not have a variable interest in the holding entities Mercury, 4 SAC, 5 SAC, or Galaxy through management agreements which are with the individual operating entities or through the issuance of junior debt therefore we are precluded from consolidating these entities, which is consistent with the accounting treatment immediately prior to adopting ASU 2009-17.

We have junior debt with the holding entities SAC Holding Corporation, SAC Holding II Corporation, and Private Mini which represents a variable interest in each individual entity. Though we have certain protective rights within these debt agreements, we have no present influence or control over these holding entities unless their protective rights become exercisable, which management considers unlikely based on their payment history. As a result, we have no basis under ASC 810 - Consolidation ("ASC 810") to consolidate these entities, which is consistent with the accounting treatment immediately prior to adopting ASU 2009-17.

We do not have the power to direct the activities that most significantly impact the economic performance of the individual operating entities which have management agreements with U-Haul. Through control of the holding entities assets, and its ability and history of making key decisions relating to the entity and its assets, Blackwater, and its owner, are the variable interest holder with the power to direct the activities that most significantly impact each of the individual holding entities and the individual operating entities' performance.  As a result, we have no basis under ASC 810 to consolidate these entities, which is consistent with the accounting treatment immediately prior to adopting ASU 2009-17.

We have not provided financial or other support explicitly or implicitly during the fiscal year ended March 31, 2012 to any of these entities that it was not previously contractually required to provide. The carrying amount and classification of the assets and liabilities in our balance sheets that relate to our variable interests in the aforementioned entities are as follows, which approximate the maximum exposure to loss as a result of our involvement with these entities:

Related Party Assets

	March 31,
	2012			2011
	(In thousands)
U-Haul notes, receivables and interest from Private Mini	$	68,798		$	69,201
U-Haul notes receivable from SAC Holdings		195,426			196,191
U-Haul interest receivable from SAC Holdings		18,667			17,096
U-Haul receivable from SAC Holdings		30,297			16,346
U-Haul receivable from Mercury		3,195			3,534
Other (a)		(226	)		(400	)
	$	316,157		$	301,968

(a)   Timing differences for intercompany balances with insurance subsidiaries.

Between January 1, 2009 and March 31, 2011 our insurance subsidiaries purchased 308,300 shares of Series A Preferred on the open market for $7.2 million.

In April 2012, we received $52.2 million from SAC Holding Corporation as full repayment of principal and accrued interest for one of its junior notes. Also in April 2012 and May 2012, we received $46.0 million and $20.4 million, respectively from SAC Holding II Corporation as partial repayment on its junior note.