U-Haul Holding Co /NV/ - Quarter Report: 2010 September (Form 10-Q)

sept10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2010

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________________ to __________________


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

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 R No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes £ No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of a “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer £ Accelerated filer R Non-accelerated filer £ Smaller reporting company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes £ No R

19,607,788 shares of AMERCO Common Stock, $0.25 par value, were outstanding at November 1, 2010.

TABLE OF CONTENTS

		Page No.
	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	a)Condensed Consolidated Balance Sheets as of September 30, 2010 (unaudited) and March 31, 2010	1
	b)Condensed Consolidated Statements of Operations for the Quarters ended September 30, 2010 and 2009 (unaudited)	2
	c)Condensed Consolidated Statements of Operations for the Six Months ended September 30, 2010 and 2009 (unaudited)	3
	d)Condensed Consolidated Statements of Comprehensive Income for the Quarters and the Six Months ended September 30, 2010 and 2009 (unaudited)	4
	e)Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2010 and 2009 (unaudited)	5
	f)Notes to Condensed Consolidated Financial Statements (unaudited)	6 – 35
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36 – 53
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53 – 54
Item 4.	Controls and Procedures	54

	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	(Removed and Reserved)	55
Item 5.	Other Information	55
Item 6.	Exhibits	55 – 56

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			March 31,
	2010			2010
	(Unaudited)
	(In thousands)
ASSETS
Cash and cash equivalents	$	329,830		$	244,118
Reinsurance recoverables and trade receivables, net		204,274			198,283
Notes and mortgage receivables, net		1,344			1,461
Inventories, net		55,659			52,837
Prepaid expenses		48,404			53,379
Investments, fixed maturities and marketable equities		643,351			549,318
Investments, other		159,795			227,486
Deferred policy acquisition costs, net		37,255			39,194
Other assets		145,304			145,864
Related party assets		294,733			302,126
		1,919,949			1,814,066
Property, plant and equipment, at cost:
Land		226,238			224,904
Buildings and improvements		1,006,101			970,937
Furniture and equipment		330,786			323,334
Rental trailers and other rental equipment		242,455			244,131
Rental trucks		1,559,732			1,529,817
		3,365,312			3,293,123
Less: Accumulated depreciation		(1,345,861	)		(1,344,735	)
Total property, plant and equipment		2,019,451			1,948,388
Total assets	$	3,939,400		$	3,762,454
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	328,761		$	296,057
Notes, loans and leases payable		1,278,555			1,347,635
Policy benefits and losses, claims and loss expenses payable		856,001			816,909
Liabilities from investment contracts		257,275			268,810
Other policyholders' funds and liabilities		6,624			8,155
Deferred income		27,596			25,207
Deferred income taxes		238,674			186,770
Total liabilities		2,993,486			2,949,543

Commitments and contingencies (notes 4, 8, 9 and 10)
Stockholders' equity:
Series preferred stock, with or without par value, 50,000,000 shares authorized:
Series A preferred stock, with no par value, 6,100,000 shares authorized;
5,796,000 and 5,992,800 shares issued and outstanding as of September 30 and March 31, 2010		-			-
Series B preferred stock, with no par value, 100,000 shares authorized; none
issued and outstanding as of September 30 and March 31, 2010		-			-
Series 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;
none issued and outstanding as of September 30 and March 31, 2010		-			-
Common stock of $0.25 par value, 150,000,000 shares authorized; 41,985,700
issued as of September 30 and March 31, 2010		10,497			10,497
Additional paid-in capital		416,326			419,811
Accumulated other comprehensive loss		(65,604	)		(56,207	)
Retained earnings		1,114,310			969,017
Cost of common shares in treasury, net (22,377,912 shares as of September 30 and March 31, 2010)		(525,653	)		(525,653	)
Unearned employee stock ownership plan shares		(3,962	)		(4,554	)
Total stockholders' equity		945,914			812,911
Total liabilities and stockholders' equity	$	3,939,400		$	3,762,454

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

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands, except share and per share amounts)
Revenues:
Self-moving equipment rentals	$	467,128		$	427,203
Self-storage revenues		30,647			27,412
Self-moving and self-storage products and service sales		56,821			55,522
Property management fees		4,580			4,478
Life insurance premiums		40,022			28,738
Property and casualty insurance premiums		8,300			7,046
Net investment and interest income		12,874			12,539
Other revenue		16,604			10,986
Total revenues		636,976			573,924

Costs and expenses:
Operating expenses		270,259			273,730
Commission expenses		57,613			51,098
Cost of sales		29,603			28,359
Benefits and losses		37,383			25,807
Amortization of deferred policy acquisition costs		1,876			2,296
Lease expense		37,964			40,026
Depreciation, net of (gains) losses on disposals		44,157			56,790
Total costs and expenses		478,855			478,106

Earnings from operations		158,121			95,818
Interest expense		(21,788	)		(23,938	)
Pretax earnings		136,333			71,880
Income tax expense		(51,114	)		(27,189	)
Net earnings		85,219			44,691
Excess (loss) of carrying amount of preferred stock over consideration paid		(140	)		48
Less: Preferred stock dividends		(3,101	)		(3,212	)
Earnings available to common shareholders	$	81,978		$	41,527
Basic and diluted earnings per common share	$	4.22		$	2.14
Weighted average common shares outstanding: Basic and diluted		19,427,595			19,382,101

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

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands, except share and per share amounts)
Revenues:
Self-moving equipment rentals	$	886,591		$	800,144
Self-storage revenues		58,874			54,416
Self-moving and self-storage products and service sales		120,111			113,344
Property management fees		9,116			8,928
Life insurance premiums		77,825			56,342
Property and casualty insurance premiums		14,479			13,261
Net investment and interest income		26,229			26,219
Other revenue		29,698			21,929
Total revenues		1,222,923			1,094,583

Costs and expenses:
Operating expenses		523,393			532,231
Commission expenses		109,782			95,509
Cost of sales		61,268			58,809
Benefits and losses		72,805			53,501
Amortization of deferred policy acquisition costs		4,069			4,213
Lease expense		76,630			79,299
Depreciation, net of (gains) losses on disposals		88,746			116,007
Total costs and expenses		936,693			939,569

Earnings from operations		286,230			155,014
Interest expense		(43,252	)		(47,159	)
Pretax earnings		242,978			107,855
Income tax expense		(91,257	)		(40,732	)
Net earnings		151,721			67,123
Excess (loss) of carrying amount of preferred stock over consideration paid		(171	)		371
Less: Preferred stock dividends		(6,257	)		(6,453	)
Earnings available to common shareholders	$	145,293		$	61,041
Basic and diluted earnings per common share	$	7.48		$	3.15
Weighted average common shares outstanding: Basic and diluted		19,421,205			19,375,846

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

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended September 30, 2010	Pre-tax			Tax			Net
	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	136,333		$	(51,114	)	$	85,219
Other comprehensive income (loss):
Foreign currency translation		2,097			-			2,097
Unrealized gain on investments		5,575			(1,927	)		3,648
Change in fair value of cash flow hedges		(7,485	)		2,844			(4,641	)
Total comprehensive income	$	136,520		$	(50,197	)	$	86,323

Quarter Ended September 30, 2009	Pre-tax			Tax			Net
	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	71,880		$	(27,189	)	$	44,691
Other comprehensive income (loss):
Foreign currency translation		5,674			-			5,674
Unrealized gain on investments		12,790			(4,471	)		8,319
Change in fair value of cash flow hedges		(5,395	)		2,050			(3,345	)
Total comprehensive income	$	84,949		$	(29,610	)	$	55,339

Six Months Ended September 30, 2010	Pre-tax			Tax			Net
	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	242,978		$	(91,257	)	$	151,721
Other comprehensive income (loss):
Foreign currency translation		(1,779	)		-			(1,779	)
Unrealized gain on investments		6,763			(2,249	)		4,514
Change in fair value of cash flow hedges		(19,568	)		7,436			(12,132	)
Total comprehensive income	$	228,394		$	(86,070	)	$	142,324

Six Months Ended September 30, 2009	Pre-tax		Tax			Net
	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	107,855	$	(40,732	)	$	67,123
Other comprehensive income (loss):
Foreign currency translation		9,903		-			9,903
Unrealized gain on investments		7,608		(2,662	)		4,946
Change in fair value of cash flow hedges		16,974		(6,450	)		10,524
Total comprehensive income	$	142,340	$	(49,844	)	$	92,496

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

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)
Cash flow from operating activities:
Net earnings	$	151,721		$	67,123
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation		106,055			117,779
Amortization of deferred policy acquisition costs		4,069			4,213
Change in allowance for losses on trade receivables		(24	)		397
Change in allowance for losses on mortgage notes		-			(6	)
Change in allowance for inventory reserves		840			1,344
Net gain on sale of real and personal property		(17,309	)		(1,772	)
Net gain on sale of investments		(1,329	)		(401	)
Deferred income taxes		57,091			40,431
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		(5,969	)		11,917
Inventories		(3,662	)		7,334
Prepaid expenses		4,975			(2,928	)
Capitalization of deferred policy acquisition costs		(7,377	)		(6,533	)
Other assets		649			6,998
Related party assets		6,710			7,481
Accounts payable and accrued expenses		20,102			(5,893	)
Policy benefits and losses, claims and loss expenses payable		39,452			11,991
Other policyholders' funds and liabilities		(1,531	)		(3,311	)
Deferred income		2,399			(1,946	)
Related party liabilities		693			(551	)
Net cash provided by operating activities		357,555			253,667

Cash flows from investing activities:
Purchases of:
Property, plant and equipment		(274,240	)		(175,827	)
Short term investments		(109,785	)		(144,306	)
Fixed maturities investments		(122,504	)		(77,106	)
Equity securities		(9,043	)		-
Preferred stock		(11,902	)		-
Real estate		(1,784	)		(466	)
Mortgage loans		(1,308	)		(525	)
Proceeds from sale of:
Property, plant and equipment		122,157			88,942
Short term investments		178,461			159,307
Fixed maturities investments		56,841			83,667
Equity securities		133			-
Preferred stock		-			2,236
Real estate		683			-
Mortgage loans		1,421			4,053
Payments from notes and mortgage receivables		117			464
Net cash used by investing activities		(170,753	)		(59,561	)

Cash flows from financing activities:
Borrowings from credit facilities		134,556			51,921
Principal repayments on credit facilities		(209,420	)		(72,695	)
Debt issuance costs		(89	)		(277	)
Capital lease payments		(8,369	)		(1,168	)
Leveraged Employee Stock Ownership Plan - repayments from loan		592			533
Preferred stock dividends paid		(6,257	)		(6,453	)
Investment contract deposits		5,875			5,564
Investment contract withdrawals		(17,409	)		(28,417	)
Net cash used by financing activities		(100,521	)		(50,992	)

Effects of exchange rate on cash		(569	)		1,250

Increase in cash and cash equivalents		85,712			144,364
Cash and cash equivalents at the beginning of period		244,118			240,587
Cash and cash equivalents at the end of period	$	329,830		$	384,951

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

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

1. Basis of Presentation

AMERCO, a Nevada corporation (“AMERCO”), has a second fiscal quarter that ends on the 30th of September for each year that is referenced. Our insurance company subsidiaries have a second quarter that ends on the 30th of June for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the financial position or results of operations. The Company discloses any material events occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 2010 and 2009 correspond to fiscal 2011 and 2010 for AMERCO.

Accounts denominated in non-U.S. currencies have been translated into U.S. dollars. Certain amounts reported in previous years have been reclassified to conform to the current presentation.

The condensed consolidated balance sheet as of September 30, 2010 and the related condensed consolidated statements of operations for the second quarter and the first six months and the cash flows for the first six months ended fiscal 2011 and 2010 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. The information in this 10-Q should be read in conjunction with Management’s Discussion and Analysis and financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

Intercompany accounts and transactions have been eliminated.

Description of Legal Entities

AMERCO is the holding company for:

U-Haul International, Inc. (“U-Haul”),

Amerco Real Estate Company (“Real Estate”),

Republic Western Insurance Company (“RepWest”), and

Oxford Life Insurance Company (“Oxford”).

Unless the context otherwise requires, the term “Company,” “we,” “us” or “our” refers to AMERCO and all of its legal subsidiaries.

Description of Operating Segments

AMERCO has three reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance.

Moving and Storage operations include AMERCO, U-Haul, and Real Estate and the wholly-owned subsidiaries of U-Haul and Real Estate. Operations consist of the rental of trucks and trailers, sales of moving supplies, sales of towing accessories, sales of propane, the rental of self-storage spaces to the “do-it-yourself” mover and management of self-storage properties owned by others. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

The Property and Casualty Insurance operating segment includes RepWest and its wholly-owned subsidiaries and ARCOA risk retention group (“ARCOA”). Property and Casualty Insurance provides loss adjusting and claims handling for U-Haul through regional offices across North America. Property and Casualty Insurance also underwrites components of the Safemove, Safetow, Super Safemove and Safestor protection packages to U-Haul customers. ARCOA is a captive insurer owned by the Company whose purpose is to provide insurance products related to the moving and storage business.

The Life Insurance operating segment includes Oxford and its wholly-owned subsidiaries. Oxford provides life and health insurance products primarily to the senior market through the direct writing or reinsuring of life insurance, Medicare supplement and annuity policies.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

2. Earnings per Share

Net earnings for purposes of computing earnings per common share are net earnings less preferred stock dividends paid, adjusted for the price paid by our insurance companies for purchasing AMERCO Preferred stock less its carrying value on our balance sheet. Preferred stock dividends include accrued dividends of AMERCO. Preferred stock dividends paid to or accrued for entities that are part of the consolidated group are excluded.

The weighted average common shares outstanding exclude post-1992 shares of the employee stock ownership plan that have not been committed to be released. The unreleased shares net of shares committed to be released were 173,803 and 219,432 as of September 30, 2010 and September 30, 2009, respectively.

5,796,000 and 6,033,900 shares of preferred stock have been excluded from the weighted average shares outstanding calculation as of September 30, 2010 and 2009, respectively because they are not common stock and they are not convertible into common stock.

From January 1, 2009 through March 31, 2010, our insurance subsidiaries purchased 166,000 shares of our Series A 8½% Preferred Stock (“Series A Preferred”) on the open market for $3.6 million. Between April 1, 2010 and September 30, 2010 they acquired an additional 138,000 shares for $3.5 million. Our insurance subsidiaries may make additional investments in shares of the Series A Preferred in the future. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260 - Earnings Per Share, for earnings per share purposes, we recognize the excess or deficit of the carrying amount of the Series A Preferred over the fair value of the consideration paid. In the first six months of fiscal 2011 this resulted in a $0.2 million charge to net earnings as the amount paid by the insurance companies exceeded the carrying value, net of a prorated portion of original issue costs of the preferred stock. In the first six months of fiscal 2010 we recognized a $0.4 million gain as the amount paid was less than our adjusted carrying value.

3. Investments

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The Company deposits bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $15.0 million at September 30, 2010.

Available-for-Sale Investments

Available-for-sale investments at September 30, 2010 were as follows:

	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses More than 12 Months			Gross Unrealized Losses Less than 12 Months			Estimated Market Value
	(Unaudited)
	(In thousands)
U.S. treasury securities and government obligations	$	66,389		$	2,947		$	(47	)	$	-		$	69,289
U.S. government agency mortgage-backed securities		79,258			6,935			(3	)		(11	)		86,179
Obligations of states and political subdivisions		27,389			580			(988	)		(942	)		26,039
Corporate securities		386,103			24,477			(924	)		(792	)		408,864
Mortgage-backed securities		8,064			280			(304	)		-			8,040
Redeemable preferred stocks		30,626			1,139			(1,924	)		(191	)		29,650
Common stocks		27,290			2,204			-			(6,634	)		22,860
Less: Preferred stock of AMERCO held by subsidiaries		(7,079	)		(491	)		-			-			(7,570	)
	$	618,040		$	38,071		$	(4,190	)	$	(8,570	)	$	643,351

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The table on the previous page includes gross unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

The Company sold available-for-sale securities with a fair value of $56.8 million during the first six months of fiscal 2011. The gross realized gains on these sales totaled $1.4 million.

The unrealized losses of more than twelve months in the available-for-sale table are considered temporary declines. The Company tracks each investment with an unrealized loss and evaluates them on an individual basis for other-than-temporary impairments including obtaining corroborating opinions from third party sources, performing trend analysis and reviewing management’s future plans. Certain of these investments had declines determined by management to be other-than-temporary and the Company recognized these write-downs through earnings in the amount $0.3 million for the second quarter of fiscal 2010 and $0.4 million for the first six months of fiscal 2010. There were no write downs in the second quarter or for the first six months of fiscal 2011.

The investment portfolio primarily consists of corporate securities and U.S. government securities. The Company believes it monitors its investments as appropriate. The Company’s methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity, the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. Nothing has come to management’s attention that would lead to the belief that each issuer would not have the ability to meet the remaining contractual obligations of the security, including payment at maturity. The Company has the ability and intent not to sell its fixed maturity and common stock investments for a period of time sufficient to allow the Company to recover its costs.

The portion of other-than-temporary impairment related to a credit loss is recognized in earnings. The significant inputs utilized in the evaluation of mortgage backed securities credit losses include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of asset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

Credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in other comprehensive income were as follows:

	Credit Loss
	(Unaudited)
	(In thousands)
Balance at March 31, 2010	$	552
Additions:
Other-than-temporary impairment not previously recognized		-
Balance at June 30, 2010	$	552
Additions:
Other-than-temporary impairment not previously recognized		-
Balance at September 30, 2010	$	552

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The adjusted cost and estimated market value of available-for-sale investments at September 30, 2010, by contractual maturity, were as follows:

	Amortized Cost			Estimated Market Value
	(Unaudited)
	(In thousands)
Due in one year or less	$	42,570		$	43,308
Due after one year through five years		177,498			185,834
Due after five years through ten years		125,538			133,933
Due after ten years		213,533			227,296
		559,139			590,371

Mortgage backed securities		8,064			8,040
Redeemable preferred stocks		30,626			29,650
Equity securities		27,290			22,860
Less: Preferred stock of AMERCO held by subsidiaries		(7,079	)		(7,570	)
	$	618,040		$	643,351

4. Borrowings

Long-Term Debt

Long-term debt was as follows:

						September 30,		March 31,
	2011 Rate (a)			Maturities		2010		2010
						(Unaudited)
						(In thousands)
Real estate loan (amortizing term)		6.93	%		2018	$	260,000	$	265,000
Real estate loan (revolving credit)		-			2018		-		86,000
Real estate loan (amortizing term)		5.00	%		2011		11,420		31,865
Senior mortgages		5.47% - 6.13	%		2015 - 2016		482,823		489,186
Working capital loan (revolving credit)		-			2011		-		15,000
Fleet loans (amortizing term)		4.78% - 7.95	%		2012 - 2017		345,810		276,222
Fleet loans (securitization)		5.56	%		2014		127,267		143,170
Other obligations		3.25% - 9.50	%		2011 - 2017		51,235		41,192
Total notes, loans and leases payable						$	1,278,555	$	1,347,635

(a) Interest rate as of September 30, 2010, including the effect of applicable hedging instruments.

Real Estate Backed Loans

Real Estate Loan

Amerco Real Estate Company and certain of its subsidiaries and U-Haul Company of Florida are borrowers under a Real Estate Loan. The loan has a final maturity date of August 2018. The loan is comprised of a term loan facility with initial availability of $300.0 million and a revolving credit facility with an availability of $200.0 million. As of September 30, 2010, the outstanding balance on the Real Estate Loan was $260.0 million and the Company had the full $200.0 million available to be drawn on the revolving credit facility. U-Haul International, Inc. is a guarantor of this loan.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The amortizing term portion of the Real Estate Loan requires monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. The revolving credit portion of the Real Estate Loan requires monthly interest payments when drawn, with the unpaid loan balance and any accrued and unpaid interest due at maturity. The Real Estate Loan is secured by various properties owned by the borrowers.

The interest rate for the amortizing term portion, per the provisions of the amended Loan Agreement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. At September 30, 2010, the applicable LIBOR was 0.26% and the applicable margin was 1.50%, the sum of which was 1.76%. The rate on the term facility portion of the loan is hedged with an interest rate swap fixing the rate at 6.93% based on current margin.

The interest rate for the revolving credit facility, per the provision of the amended Loan Agreement, is the applicable LIBOR plus the applicable margin. The margin ranges from 1.50% to 2.00%.

The default provisions of the Real Estate Loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Amerco Real Estate Company and a subsidiary of U-Haul International, Inc. entered into a revolving credit construction loan effective June 29, 2006. This loan was modified and extended on June 25, 2010. The loan is comprised of a term loan facility and a revolving credit facility with combined availability of $20 million and a final maturity of June 2011. As of September 30, 2010, the outstanding balance was $11.4 million.

This Real Estate Loan requires monthly principal and interest payments with the unpaid principal and any accrued and unpaid interest due at maturity. The interest rate, per the provision of the Loan Agreement, is the applicable LIBOR plus a margin of 3.00%. At September 30, 2010, the applicable LIBOR floor was 2.00% and the margin was 3.00%, the sum of which was 5.00%. U-Haul International, Inc. and AMERCO are guarantors of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Senior Mortgages

Various subsidiaries of Amerco Real Estate Company and U-Haul International, Inc. are borrowers under certain senior mortgages. These senior mortgage loan balances as of September 30, 2010 were in the aggregate amount of $426.8 million and are due July 2015. The Senior Mortgages require average monthly principal and interest payments of $3.0 million with the unpaid loan balance and accrued and unpaid interest due at maturity. These senior mortgages are secured by certain properties owned by the borrowers. The interest rates, per the provisions of these senior mortgages, are 5.68% and 5.52% per annum. Amerco Real Estate Company and U-Haul International, Inc. have provided limited guarantees of these senior mortgages. The default provisions of these senior mortgages include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Various subsidiaries of the Company are borrowers under the mortgage backed loans that we also classify as senior mortgages. These loans are secured by certain properties owned by the borrowers. The loan balance of these notes totals $56.0 million as of September 30, 2010. These loans mature in 2015 and 2016. Rates for these loans range from 5.47% to 6.13%. The loans require monthly principal and interest payments with the balances due upon maturity. The default provisions of the loans include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Working Capital Loans

Amerco Real Estate Company is a borrower under an asset backed working capital loan. The maximum amount that can be drawn at any one time is $25.0 million. At September 30, 2010, the Company had the full $25.0 million available to be drawn. The loan is secured by certain properties owned by the borrower. The loan agreement provides for revolving loans, subject to the terms of the loan agreement with final maturity in November 2011. The loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. U-Haul International, Inc. and AMERCO are the guarantors of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. The interest rate, per the provision of the Loan Agreement, is the applicable LIBOR plus a margin of 1.50%.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Fleet Loans

Rental Truck Amortizing Loans

U-Haul International, Inc. and several of its subsidiaries are borrowers under amortizing term loans. The balance of the loans as of September 30, 2010 was $262.9 million with the final maturities between April 2012 and July 2017.

The Amortizing Loans require monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. These loans were used to purchase new trucks. The interest rates, per the provision of the Loan Agreements, are the applicable LIBOR plus a margin between 0.90% and 2.63%. At September 30, 2010, the applicable LIBOR was 0.26% and applicable margins were between 1.13% and 2.63%. The interest rates are hedged with interest rate swaps fixing the rates between 4.78% and 7.32% based on current margins. Additionally, $20.2 million of these loans are carried at a fixed rate of 7.95%.

AMERCO and U-Haul International, Inc. are guarantors of these loans. The default provisions of these loans include non-payment of principal or interest and other standard reporting and change-in-control covenants.

On December 31, 2009 a subsidiary of U-Haul International, Inc. entered into an $85.0 million term note that will be used to fund cargo van and pickup acquisitions for the next three years. The loan has a final maturity of September 2013. The agreement contains options to extend the maturity. The note will be secured by the purchased equipment and the corresponding operating cash flows associated with their operation. At September 30, 2010, the applicable LIBOR was 0.29% and the applicable margin was 4.50%, the sum of which was 4.79%. At September 30, 2010 the Company had drawn $82.9 million on this loan.

Rental Truck Securitizations

U-Haul S Fleet and its subsidiaries (collectively, “USF”) issued a $217.0 million asset-backed note (“Box Truck Note”) on June 1, 2007. USF is a bankruptcy-remote special purpose entity wholly-owned by U-Haul International, Inc. The net proceeds from the securitized transaction were used to finance new box truck purchases throughout fiscal 2008. U.S. Bank, NA acts as the trustee for this securitization.

The Box Truck Note has a fixed interest rate of 5.56% with an estimated final maturity of February 2014. At September 30, 2010, the outstanding balance was $127.3 million. The note is secured by the box trucks that were purchased and the corresponding operating cash flows associated with their operation.

The Box Truck Note has the benefit of financial guaranty insurance policy that guarantees the timely payment of interest on and the ultimate payment of the principal of the note.

The Box Truck Note is subject to certain covenants with respect to liens, additional indebtedness of the special purpose entities, the disposition of assets and other customary covenants of bankruptcy-remote special purpose entities. The default provisions of the note include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Other Obligations

The Company entered into capital leases for new equipment between April 2008 and July 2010, with terms of the leases between 3 and 7 years. At September 30, 2010, the balance of these leases was $46.6 million.

In January 2010, the Company entered into a $0.5 million premium financing arrangement for two years expiring in December 2011 with a fixed rate of 3.37%. The Company entered into $7.5 million of premium financing arrangements for one year expiring in March and April 2011 at rates between 3.25% and 5.50%. At September 30, 2010, the outstanding balance was $4.6 million.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Annual Maturities of Notes, Loans and Leases Payable

The annual maturities of long-term debt as of September 30, 2010 for the next five years and thereafter are as follows:

	Year Ending September 30,
	2011		2012		2013		2014		2015		Thereafter
	(Unaudited)
	(In thousands)
Notes, loans and leases payable, secured	$	98,380	$	162,003	$	161,140	$	147,804	$	450,220	$	259,008

5. Interest on Borrowings

Interest Expense

Components of interest expense include the following:

	Quarter Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)
Interest expense	$	14,586		$	16,217
Capitalized interest		(122	)		(142	)
Amortization of transaction costs		1,049			1,224
Interest expense resulting from derivatives		6,275			6,639
Total interest expense	$	21,788		$	23,938

	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)
Interest expense	$	29,011		$	32,276
Capitalized interest		(269	)		(293	)
Amortization of transaction costs		2,154			2,409
Interest expense resulting from derivatives		12,356			12,767
Total interest expense	$	43,252		$	47,159

Interest paid in cash by AMERCO, including payments related to derivative contracts, amounted to $19.2 million and $21.4 million for the second quarter of fiscal 2011 and 2010, respectively and $38.8 million and $43.1 million for the first six months of fiscal 2011 and 2010, respectively.

The Company manages exposure to changes in market interest rates. The Company’s use of derivative instruments is limited to highly effective interest rate swaps to hedge the risk of changes in cash flows (future interest payments) attributable to changes in LIBOR swap rates, the designated benchmark interest rate being hedged on certain of our LIBOR indexed variable rate debt. The interest rate swaps effectively fix the Company’s interest payments on certain LIBOR indexed variable rate debt. The Company monitors its positions and the credit ratings of its counterparties and does not currently anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Original variable rate debt amount			Agreement Date	Effective Date	Expiration Date	Designated cash flow hedge date
(Unaudited)
(In millions)
$	142.3	(a), (b)	11/15/2005	5/10/2006	4/10/2012	5/31/2006
	50.0	(a)	6/21/2006	7/10/2006	7/10/2013	6/9/2006
	144.9	(a), (b)	6/9/2006	10/10/2006	10/10/2012	6/9/2006
	300.0	(a)	8/16/2006	8/18/2006	8/10/2018	8/4/2006
	30.0	(a)	2/9/2007	2/12/2007	2/10/2014	2/9/2007
	20.0	(a)	3/8/2007	3/12/2007	3/10/2014	3/8/2007
	20.0	(a)	3/8/2007	3/12/2007	3/10/2014	3/8/2007
	19.3	(a), (b)	4/8/2008	8/15/2008	6/15/2015	3/31/2008
	19.0	(a)	8/27/2008	8/29/2008	7/10/2015	4/10/2008
	30.0	(a)	9/24/2008	9/30/2008	9/10/2015	9/24/2008
	15.0	(a), (b)	3/24/2009	3/30/2009	4/15/2016	3/25/2009
	14.7	(a)	7/6/2010	8/15/2010	7/15/2017	7/6/2010

(a) interest rate swap agreement
(b) forward swap

As of September 30, 2010, the total notional amount of the Company’s variable interest rate swaps was $508.1 million.

The derivative fair values located in Accounts payable and accrued expenses in the balance sheets were as follows:

	Liability Derivatives Fair Value as of
	September 30, 2010		March 31, 2010
	(Unaudited)
	(In thousands)
Interest rate contracts designated as hedging instruments	$	73,654	$	54,239

	The Effect of Interest Rate Contracts on the Statements of Operations
	September 30, 2010			September 30, 2009
	(Unaudited)
	(In thousands)
Loss recognized in income on interest rate contracts	$	12,356		$	12,767
(Gain) loss recognized in AOCI on interest rate contracts (effective portion)	$	19,568		$	(16,973	)
Loss reclassified from AOCI into income (effective portion)	$	12,509		$	13,602
(Gain) loss recognized in income on interest rate contracts (ineffective portion and amount excluded from effectiveness testing)	$	(153	)	$	(835	)

Gains or losses recognized in income on derivatives are recorded as interest expense in the statements of operations.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Interest Rates

Interest rates and Company borrowings were as follows:

	Revolving Credit Activity
	Quarter Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands, except interest rates)
Weighted average interest rate during the quarter		1.82	%		1.78	%
Interest rate at the end of the quarter		-			1.75	%
Maximum amount outstanding during the quarter	$	75,000		$	195,000
Average amount outstanding during the quarter	$	33,804		$	186,033
Facility fees	$	57		$	238

	Revolving Credit Activity
	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands, except interest rates)
Weighted average interest rate during the first six months		1.81	%		1.84	%
Interest rate at the end of the first six months		-			1.75	%
Maximum amount outstanding during the first six months	$	111,000		$	207,280
Average amount outstanding during the first six months	$	59,585		$	195,580
Facility fees	$	113		$	480

6. Stockholders Equity

On December 3, 2008, the Board of Directors (the “Board”) authorized us, using management’s discretion, to buy back shares from former employees who were participants in our Employee Stock Ownership Plan (“ESOP”). To be eligible for consideration, the employees’ respective ESOP account balances must be valued at more than $1,000 at the then-prevailing market prices but have less than 100 shares. No such shares have been purchased.

Between January 1, 2009 and September 30, 2010, our insurance subsidiaries purchased 304,000 shares of Series A Preferred on the open market for $7.1 million. Our insurance subsidiaries may make additional investments in shares of the Series A Preferred in the future.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

7. Comprehensive Income (Loss)

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

	Foreign Currency Translation			Unrealized Gain on Investments		Fair Market Value of Cash Flow Hedges			Postretirement Benefit Obligation Gain		Accumulated Other Comprehensive Income (Loss)
	(Unaudited)
	(In thousands)
Balance at March 31, 2010	$	(29,142	)	$	5,931	$	(33,933	)	$	937	$	(56,207	)
Foreign currency translation		(1,779	)		-		-			-		(1,779	)
Unrealized gain on investments		-			4,514		-			-		4,514
Change in fair value of cash flow hedges		-			-		(12,132	)		-		(12,132	)
Balance at September 30, 2010	$	(30,921	)	$	10,445	$	(46,065	)	$	937	$	(65,604	)

8. 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 2017, with the exception of one land lease expiring in 2034. As of September 30, 2010, AMERCO has guaranteed $170.7 million of residual values for these rental equipment 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 experienced no material losses relating to these types of residual value guarantees.

Lease commitments for leases having terms of more than one year were as follows:

	Property, Plant and Equipment		Rental Equipment		Total
	(Unaudited)
			(In thousands)
Year-ended September 30:
2011	$	14,800	$	113,164	$	127,964
2012		14,066		99,791		113,857
2013		13,359		80,128		93,487
2014		8,820		60,881		69,701
2015		669		37,413		38,082
Thereafter		5,672		8,862		14,534
Total	$	57,386	$	400,239	$	457,625

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

9. Contingencies

Shoen

In September 2002, Paul F. Shoen filed a shareholder derivative lawsuit in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et al., CV 02-05602, 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 as a nominal Defendant in the case. 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 prior to the filing of the complaint. The complaint seeks a declaration that such transfers are void as well as unspecified damages. In October 2002, the Defendants filed motions to dismiss the complaint. Also in October 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 in January 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. Each of these suits is substantially similar to the Paul F. Shoen case. The Court consolidated the five cases and thereafter dismissed these actions in May 2003, concluding that the AMERCO Board of Directors had the requisite level of independence required in order to have these claims resolved by the Board. Plaintiffs appealed this decision and, in July 2006, the Nevada Supreme Court reversed the ruling of the trial court and remanded the case to the trial court for proceedings consistent with its ruling, allowing the Plaintiffs to file an amended complaint and plead in addition to substantive claims, demand futility.

In November 2006, the Plaintiffs filed an amended complaint. In December 2006, the Defendants filed motions to dismiss, based on various legal theories. In March 2007, the Court denied AMERCO’s motion to dismiss regarding the issue of demand futility, stating that “Plaintiffs have satisfied the heightened pleading requirements of demand futility by showing a majority of the members of the AMERCO Board of Directors were interested parties in the SAC transactions.” The Court heard oral argument on the remainder of the Defendants’ motions to dismiss, including the motion (“Goldwasser Motion”) based on the fact that the subject matter of the lawsuit had been settled and dismissed in earlier litigation known as Goldwasser v. Shoen, C.V.N.-94-00810-ECR (D.Nev), Washoe County, Nevada. In addition, in September and October 2007, the Defendants filed Motions for Judgment on the Pleadings or in the Alternative Summary Judgment, based on the fact that the stockholders of the Company had ratified the underlying transactions at the 2007 annual meeting of stockholders of AMERCO. In December 2007, the Court denied this motion. This ruling does not preclude a renewed motion for summary judgment after discovery and further proceedings on these issues. On April 7, 2008, the litigation was dismissed, on the basis of the Goldwasser Motion. On May 8, 2008, the Plaintiffs filed a notice of appeal of such dismissal to the Nevada Supreme Court. On May 20, 2008, AMERCO filed a cross appeal relating to the denial of its Motion to Dismiss in regard to demand futility. The Nevada Supreme Court heard the case En Banc on July 7, 2010 and we are awaiting the ruling.

Environmental

Compliance with environmental requirements of federal, state and local governments may significantly affect Real Estate’s business operations. Among other things, these requirements regulate the discharge of materials into the air, land and water 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.

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 result in a material adverse effect on AMERCO’s financial position or results of operations. Real Estate expects to spend approximately $2.6 million in total through fiscal 2011 to remediate these properties.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Other

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

10. Related Party Transactions

As set forth in the Audit Committee Charter and consistent with Nasdaq Listing Rules, 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. The Company’s internal processes ensure that the Company’s 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 consummated on terms equivalent to those that would prevail in arm’s-length transactions.

SAC Holding Corporation and SAC Holding II Corporation, (collectively “SAC Holdings”) were established in order to acquire self-storage properties. These properties are being managed by the Company pursuant to management agreements. In the past, the Company has sold various self-storage properties to SAC Holdings, and such sales provided significant cash flows to the Company.

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

During the first six months of fiscal 2011, 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 and executive officer of AMERCO. The Company does not have an equity ownership interest in SAC Holdings. The Company recorded interest income of $9.6 million and $9.4 million, and received cash interest payments of $8.8 million and $6.8 million, from SAC Holdings during the first six months of fiscal 2011 and 2010, respectively. The largest aggregate amount of notes receivable outstanding during the first six months of fiscal 2011 was $196.9 million and the aggregate notes receivable balance at September 30, 2010 was $196.6 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.

Interest accrues on the outstanding principal balance of junior notes of SAC Holdings that the Company holds 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 $122.2 million of principal depending upon the amount of remaining basic interest and 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 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 the first six months of fiscal 2011, 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. The Company recorded interest income of $2.7 million and $2.6 million and received cash interest payments of $2.8 million and $2.6 million from Private Mini during the first six months of fiscal 2011 and 2010, respectively. The largest aggregate amount outstanding during the first six months of fiscal 2011 was $67.3 million. The balance of notes receivable from Private Mini at September 30, 2010 was $66.8 million.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The Company currently manages 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 the Company receives a management fee of between 4% and 10% of the gross receipts plus reimbursement for certain expenses. The Company received management fees, exclusive of reimbursed expenses, of $13.5 million and $14.3 million from the above mentioned entities during the first six months of fiscal 2011 and 2010, respectively. This management fee is consistent with the fee received for other properties the Company 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.

The Company leases space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of SAC Holdings, 5 SAC and Galaxy. Total lease payments pursuant to such leases were $1.2 million in the first six months of fiscal 2011 and 2010. 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 September 30, 2010, 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 the Company’s other independent dealers whereby commissions are paid by the Company based upon equipment rental revenues. The Company paid the above mentioned entities $21.4 million and $19.6 million in commissions pursuant to such dealership contracts during the first six months of fiscal 2011 and 2010, respectively.

These agreements and notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $21.4 million, expenses of $1.2 million and cash flows of $24.5 million during the first six months of fiscal 2011. Revenues and commission expenses related to the Dealer Agreements were $101.4 million and $21.4 million, respectively during the first six months of fiscal 2011.

The Company adopted Accounting Standards Update (“ASU”) 2009-17, which amends the FASB ASC for the issuance of FASB Statement No. 167, Amendments to FASB Interpretation No. 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 the Company. Management evaluated whether it should be identified as the primary beneficiary of one or more of these variable interest entity’s (“VIE’s”) using a two step approach in which management a) identified all other parties that hold interests in the VIE’s, and b) 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 the Company is precluded from consolidating these entities, which is consistent with the accounting treatment immediately prior to adopting ASU 2009-17.

The Company has 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 the Company has certain protective rights within these debt agreements, the Company has 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, the Company has 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.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The Company does 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, the Company has no basis under ASC 810 to consolidate these entities, which is consistent with the accounting treatment immediately prior to adopting ASU 2009-17.

The Company has not provided financial or other support explicitly or implicitly during the first six months ended September 30, 2010 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 the Company’s balance sheet that relate to the Company’s variable interests in the aforementioned entities are as follows, which approximate the maximum exposure to loss as a result of the Company’s involvement with these entities:

Related Party Assets

	September 30,		March 31,
	2010		2010
	(Unaudited)
	(In thousands)
U-Haul notes, receivables and interest from Private Mini	$	69,407	$	69,867
U-Haul notes receivable from SAC Holdings		196,575		196,903
U-Haul interest receivable from SAC Holdings		14,559		13,775
U-Haul receivable from SAC Holdings		11,224		15,780
U-Haul receivable from Mercury		2,607		6,138
Other (a)		361		(337	)
	$	294,733	$	302,126

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

11. Consolidating Financial Information by Industry Segment

AMERCO has three reportable segments. They are Moving and Storage, Property and Casualty Insurance and Life Insurance. Management tracks revenues separately, but does not report any separate measure of the profitability for rental vehicles, rentals of self-storage spaces and sales of products that are required to be classified as a separate operating segment and accordingly does not present these as separate reportable segments. Deferred income taxes are shown as liabilities on the condensed consolidating statements.

AMERCO’s three reportable segments are:

·	Moving and Storage, comprised of AMERCO, U-Haul, and Real Estate and the subsidiaries of U-Haul and Real Estate,

·	Property and Casualty Insurance, comprised of RepWest and its subsidiaries and ARCOA, and

·	Life Insurance, comprised of Oxford and its subsidiaries.

The information includes elimination entries necessary to consolidate AMERCO, the parent, with its subsidiaries.

Investments in subsidiaries are accounted for by the parent using the equity method of accounting.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

11. Financial Information by Consolidating Industry Segment:

Consolidating balance sheets by industry segment as of September 30, 2010 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations				AMERCO Consolidated
	(Unaudited)
	(In thousands)
Assets:
Cash and cash equivalents	$	184,013		$	102,102		$	750		$	-			$	286,865		$	29,108	$	13,857	$	-			$	329,830
Reinsurance recoverables and trade receivables, net		-			20,229			-			-				20,229			171,711		12,334		-				204,274
Notes and mortgage receivables, net		-			335			1,009			-				1,344			-		-		-				1,344
Inventories, net		-			55,659			-			-				55,659			-		-		-				55,659
Prepaid expenses		-			47,787			617			-				48,404			-		-		-				48,404
Investments, fixed maturities and marketable equities		20,032			-			-			-				20,032			129,416		501,473		(7,570	)	(d)		643,351
Investments, other		-			2,016			14,637			-				16,653			71,840		71,302		-				159,795
Deferred policy acquisition costs, net		-			-			-			-				-			-		37,255		-				37,255
Other assets		37,798			79,963			26,635			-				144,396			598		310		-				145,304
Related party assets		1,149,010			239,447			43			(1,092,184	)	(c)		296,316			3,564		-		(5,147	)	(c)		294,733
		1,390,853			547,538			43,691			(1,092,184	)			889,898			406,237		636,531		(12,717	)			1,919,949

Investment in subsidiaries		(159,389	)		-			-			497,926		(b)		338,537			-		-		(338,537	)	(b)		-

Property, plant and equipment, at cost:
Land		-			44,696			181,542			-				226,238			-		-		-				226,238
Buildings and improvements		1			171,011			835,089			-				1,006,101			-		-		-				1,006,101
Furniture and equipment		245			312,351			18,190			-				330,786			-		-		-				330,786
Rental trailers and other rental equipment		-			242,455			-			-				242,455			-		-		-				242,455
Rental trucks		-			1,559,732			-			-				1,559,732			-		-		-				1,559,732
		246			2,330,245			1,034,821			-				3,365,312			-		-		-				3,365,312
Less: Accumulated depreciation		(218	)		(1,007,381	)		(338,262	)		-				(1,345,861	)		-		-		-				(1,345,861	)
Total property, plant and equipment		28			1,322,864			696,559			-				2,019,451			-		-		-				2,019,451
Total assets	$	1,231,492		$	1,870,402		$	740,250		$	(594,258	)		$	3,247,886		$	406,237	$	636,531	$	(351,254	)		$	3,939,400

(a) Balances as of June 30, 2010
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
(d) Eliminate intercompany preferred stock investment

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating balance sheets by industry segment as of September 30, 2010 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)		Eliminations					AMERCO Consolidated
	(Unaudited)
	(In thousands)
Liabilities:
Accounts payable and accrued expenses	$	8,466		$	310,965		$	4,157		$	-			$	323,588		$	-		$	5,173	$	-				$	328,761
Notes, loans and leases payable		-			563,282			715,273			-				1,278,555			-			-		-					1,278,555
Policy benefits and losses, claims and loss expenses payable		-			396,298			-			-				396,298			275,310			184,393		-					856,001
Liabilities from investment contracts		-			-			-			-				-			-			257,275		-					257,275
Other policyholders' funds and liabilities		-			-			-			-				-			4,656			1,968		-					6,624
Deferred income		-			27,596			-			-				27,596			-			-		-					27,596
Deferred income taxes		265,752			-			-			-				265,752			(31,227	)		4,321		(172	)	(d)			238,674
Related party liabilities		-			917,793			177,176			(1,092,184	)	(c)		2,785			2,256			106		(5,147	)	(c)			-
Total liabilities		274,218			2,215,934			896,606			(1,092,184	)			2,294,574			250,995			453,236		(5,319	)				2,993,486

Stockholders' equity:
Series preferred stock:
Series A preferred stock		-			-			-			-				-			-			-		-					-
Series B preferred stock		-			-			-			-				-			-			-		-					-
Series A common stock		-			-			-			-				-			-			-		-					-
Common stock		10,497			540			1			(541	)	(b)		10,497			3,301			2,500		(5,801	)	(b)			10,497
Additional paid-in capital		423,622			121,230			147,941			(269,171	)	(b)		423,622			89,620			26,271		(123,187	)	(b,d	)		416,326
Accumulated other comprehensive income (loss)		(65,285	)		(76,049	)		-			76,049		(b)		(65,285	)		1,594			11,315		(13,228	)	(b,d	)		(65,604	)
Retained earnings (deficit)		1,114,093			(387,291	)		(304,298	)		691,589		(b)		1,114,093			60,727			143,209		(203,719	)	(b,d	)		1,114,310
Cost of common shares in treasury, net		(525,653	)		-			-			-				(525,653	)		-			-		-					(525,653	)
Unearned employee stock ownership plan shares		-			(3,962	)		-			-				(3,962	)		-			-		-					(3,962	)
Total stockholders' equity (deficit)		957,274			(345,532	)		(156,356	)		497,926				953,312			155,242			183,295		(345,935	)				945,914
Total liabilities and stockholders' equity	$	1,231,492		$	1,870,402		$	740,250		$	(594,258	)		$	3,247,886		$	406,237		$	636,531	$	(351,254	)			$	3,939,400


(a) Balances as of June 30, 2010
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
(d) Eliminate intercompany preferred stock investment

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating balance sheets by industry segment as of March 31, 2010 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)		Life Insurance (a)		Eliminations				AMERCO Consolidated

	(In thousands)
Assets:
Cash and cash equivalents	$	100,460		$	107,241		$	4		$	-			$	207,705		$	22,126	$	14,287	$	-			$	244,118
Reinsurance recoverables and trade receivables, net		-			17,797			-			-				17,797			168,119		12,367		-				198,283
Notes and mortgage receivables, net		-			379			1,082			-				1,461			-		-		-				1,461
Inventories, net		-			52,837			-			-				52,837			-		-		-				52,837
Prepaid expenses		-			53,305			74			-				53,379			-		-		-				53,379
Investments, fixed maturities and marketable equities		18,247			-			-			-				18,247			98,623		435,015		(2,567	)	(d)		549,318
Investments, other		-			2,626			12,990			-				15,616			106,334		105,536		-				227,486
Deferred policy acquisition costs, net		-			-			-			-				-			-		39,194		-				39,194
Other assets		37,800			79,228			27,407			-				144,435			912		517		-				145,864
Related party assets		1,176,096			247,074			8			(1,118,983	)	(c)		304,195			2,446		-		(4,515	)	(c)		302,126
		1,332,603			560,487			41,565			(1,118,983	)			815,672			398,560		606,916		(7,082	)			1,814,066

Investment in subsidiaries		(279,582	)		-			-			604,478		(b)		324,896			-		-		(324,896	)	(b)		-

Property, plant and equipment, at cost:
Land		-			44,525			180,379			-				224,904			-		-		-				224,904
Buildings and improvements		-			157,073			813,864			-				970,937			-		-		-				970,937
Furniture and equipment		248			304,926			18,160			-				323,334			-		-		-				323,334
Rental trailers and other rental equipment		-			244,131			-			-				244,131			-		-		-				244,131
Rental trucks		-			1,529,817			-			-				1,529,817			-		-		-				1,529,817
		248			2,280,472			1,012,403			-				3,293,123			-		-		-				3,293,123
Less: Accumulated depreciation		(216	)		(1,012,575	)		(331,944	)		-				(1,344,735	)		-		-		-				(1,344,735	)
Total property, plant and equipment		32			1,267,897			680,459			-				1,948,388			-		-		-				1,948,388
Total assets	$	1,053,053		$	1,828,384		$	722,024		$	(514,505	)		$	3,088,956		$	398,560	$	606,916	$	(331,978	)		$	3,762,454

(a) Balances as of December 31, 2009
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
(d) Eliminate intercompany preferred stock investment

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating balance sheets by industry segment as of March 31, 2010 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Eliminations					AMERCO Consolidated

	(In thousands)
Liabilities:
Accounts payable and accrued expenses	$	12,496		$	275,150		$	4,212		$	-			$	291,858		$	-		$	4,199		$	-				$	296,057
Notes, loans and leases payable		-			508,930			838,705			-				1,347,635			-			-			-					1,347,635
Policy benefits and losses, claims and loss expenses payable		-			385,520			-			-				385,520			272,438			158,951			-					816,909
Liabilities from investment contracts		-			-			-			-				-			-			268,810			-					268,810
Other policyholders' funds and liabilities		-			-			-			-				-			5,609			2,546			-					8,155
Deferred income		-			25,207			-			-				25,207			-			-			-					25,207
Deferred income taxes		220,659			-			-			-				220,659			(32,819	)		(936	)		(134	)	(d)			186,770
Related party liabilities		-			1,081,278			40,438			(1,118,983	)	(c)		2,733			1,655			127			(4,515	)	(c)			-
Total liabilities		233,155			2,276,085			883,355			(1,118,983	)			2,273,612			246,883			433,697			(4,649	)				2,949,543

Stockholders' equity:
Series preferred stock:
Series A preferred stock		-			-			-			-				-			-			-			-					-
Series B preferred stock		-			-			-			-				-			-			-			-					-
Series A common stock		-			-			-			-				-			-			-			-					-
Common stock		10,497			540			1			(541	)	(b)		10,497			3,301			2,500			(5,801	)	(b)			10,497
Additional paid-in capital		422,384			121,230			147,941			(269,171	)	(b)		422,384			89,620			26,271			(118,464	)	(b,d	)		419,811
Accumulated other comprehensive income (loss)		(55,959	)		(62,138	)		-			62,138		(b)		(55,959	)		242			5,625			(6,115	)	(b,d	)		(56,207	)
Retained earnings (deficit)		968,629			(502,779	)		(309,273	)		812,052		(b)		968,629			58,514			138,823			(196,949	)	(b,d	)		969,017
Cost of common shares in treasury, net		(525,653	)		-			-			-				(525,653	)		-			-			-					(525,653	)
Unearned employee stock ownership plan shares		-			(4,554	)		-			-				(4,554	)		-			-			-					(4,554	)
Total stockholders' equity (deficit)		819,898			(447,701	)		(161,331	)		604,478				815,344			151,677			173,219			(327,329	)				812,911
Total liabilities and stockholders' equity	$	1,053,053		$	1,828,384		$	722,024		$	(514,505	)		$	3,088,956		$	398,560		$	606,916		$	(331,978	)			$	3,762,454

(a) Balances as of December 31, 2009
(b) Eliminate investment in subsidiaries
(c) Eliminate intercompany receivables and payables
(d) Eliminate intercompany preferred stock investment

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating statement of operations by industry segment for the quarter ended September 30, 2010 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Eliminations				AMERCO Consolidated
	(Unaudited)
	(In thousands)
Revenues:
Self-moving equipment rentals	$	-		$	467,797		$	-		$	-			$	467,797		$	-		$	-		$	(669	)	(c)	$	467,128
Self-storage revenues		-			30,282			365			-				30,647			-			-			-				30,647
Self-moving and self-storage products and service sales		-			56,821			-			-				56,821			-			-			-				56,821
Property management fees		-			4,580			-			-				4,580			-			-			-				4,580
Life insurance premiums		-			-			-			-				-			-			40,022			-				40,022
Property and casualty insurance premiums		-			-			-			-				-			8,300			-			-				8,300
Net investment and interest income		1,283			5,142			-			-				6,425			2,096			4,789			(436	)	(b,e)		12,874
Other revenue		-			17,841			19,286			(20,765	)	(b)		16,362			-			588			(346	)	(b)		16,604
Total revenues		1,283			582,463			19,651			(20,765	)			582,632			10,396			45,399			(1,451	)			636,976

Costs and expenses:
Operating expenses		1,816			276,725			2,328			(20,765	)	(b)		260,104			4,154			7,007			(1,006	)	(b,c)		270,259
Commission expenses		-			57,613			-			-				57,613			-			-			-				57,613
Cost of sales		-			29,603			-			-				29,603			-			-			-				29,603
Benefits and losses		-			-			-			-				-			4,235			33,148			-				37,383
Amortization of deferred policy acquisition costs		-			-			-			-				-			-			1,876			-				1,876
Lease expense		22			38,246			1			-				38,269			-			-			(305	)	(b)		37,964
Depreciation, net of (gains) losses on disposals		2			40,971			3,184			-				44,157			-			-			-				44,157
Total costs and expenses		1,840			443,158			5,513			(20,765	)			429,746			8,389			42,031			(1,311	)			478,855

Equity in earnings of subsidiaries		73,125			-			-			(69,567	)	(d)		3,558			-			-			(3,558	)	(d)		-

Earnings from operations		72,568			139,305			14,138			(69,567	)			156,444			2,007			3,368			(3,698	)			158,121
Interest income (expense)		20,288			(31,076	)		(11,000	)		-				(21,788	)		-			-			-				(21,788	)
Pretax earnings		92,856			108,229			3,138			(69,567	)			134,656			2,007			3,368			(3,698	)			136,333
Income tax expense		(7,497	)		(40,400	)		(1,400	)		-				(49,297	)		(702	)		(1,115	)		-				(51,114	)
Net earnings		85,359			67,829			1,738			(69,567	)			85,359			1,305			2,253			(3,698	)			85,219
Loss of carrying amount of preferred stock over consideration paid		-			-			-			-				-			-			-			(140	)			(140	)
Less: Preferred stock dividends		(3,241	)		-			-			-				(3,241	)		-			-			140		(e)		(3,101	)
Earnings available to common shareholders	$	82,118		$	67,829		$	1,738		$	(69,567	)		$	82,118		$	1,305		$	2,253		$	(3,698	)		$	81,978

(a) Balances for the quarter ended June 30, 2010
(b) Eliminate intercompany lease income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
(e) Eliminate preferred stock dividends paid to affiliates

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating statements of operations by industry for the quarter ended September 30, 2009 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Eliminations				AMERCO Consolidated
	(Unaudited)
	(In thousands)
Revenues:
Self-moving equipment rentals	$	-		$	427,637		$	-		$	-			$	427,637		$	-		$	-		$	(434	)	(c)	$	427,203
Self-storage revenues		-			27,101			311			-				27,412			-			-			-				27,412
Self-moving and self-storage products and service sales		-			55,522			-			-				55,522			-			-			-				55,522
Property management fees		-			4,478			-			-				4,478			-			-			-				4,478
Life insurance premiums		-			-			-			-				-			-			28,738			-				28,738
Property and casualty insurance premiums		-			-			-			-				-			7,046			-			-				7,046
Net investment and interest income		1,080			5,741			-			-				6,821			1,813			4,230			(325	)	(b,e)		12,539
Other revenue		-			11,977			18,439			(19,874	)	(b)		10,542			-			767			(323	)	(b)		10,986
Total revenues		1,080			532,456			18,750			(19,874	)			532,412			8,859			33,735			(1,082	)			573,924

Costs and expenses:
Operating expenses		2,024			281,515			1,956			(19,874	)	(b)		265,621			3,617			5,240			(748	)	(b,c)		273,730
Commission expenses		-			51,098			-			-				51,098			-			-			-				51,098
Cost of sales		-			28,359			-			-				28,359			-			-			-				28,359
Benefits and losses		-			-			-			-				-			3,619			22,188			-				25,807
Amortization of deferred policy acquisition costs		-			-			-			-				-			-			2,296			-				2,296
Lease expense		22			40,306			3			-				40,331			-			-			(305	)	(b)		40,026
Depreciation, net of (gains) losses on disposals		5			53,426			3,359			-				56,790			-			-			-				56,790
Total costs and expenses		2,051			454,704			5,318			(19,874	)			442,199			7,236			29,724			(1,053	)			478,106

Equity in earnings of subsidiaries		30,525			-			-			(26,849	)	(d)		3,676			-			-			(3,676	)	(d)		-

Earnings from operations		29,554			77,752			13,432			(26,849	)			93,889			1,623			4,011			(3,705	)			95,818
Interest income (expense)		24,110			(39,504	)		(8,544	)		-				(23,938	)		-			-			-				(23,938	)
Pretax earnings		53,664			38,248			4,888			(26,849	)			69,951			1,623			4,011			(3,705	)			71,880
Income tax expense		(8,944	)		(14,167	)		(2,120	)		-				(25,231	)		(568	)		(1,390	)		-				(27,189	)
Net earnings		44,720			24,081			2,768			(26,849	)			44,720			1,055			2,621			(3,705	)			44,691
Excess carrying amount of preferred stock over consideration paid		-			-			-			-				-			-			-			48				48
Less: Preferred stock dividends		(3,241	)		-			-			-				(3,241	)		-			-			29		(e)		(3,212	)
Earnings available to common shareholders	$	41,479		$	24,081		$	2,768		$	(26,849	)		$	41,479		$	1,055		$	2,621		$	(3,628	)		$	41,527

(a) Balances for the quarter ended June 30, 2009
(b) Eliminate intercompany lease income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
(e) Eliminate preferred stock dividends paid to affiliate

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating statements of operations by industry for the six months ended September 30, 2010 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Eliminations				AMERCO Consolidated
	(Unaudited)
	(In thousands)
Revenues:
Self-moving equipment rentals	$	-		$	887,677		$	-		$	-			$	887,677		$	-		$	-		$	(1,086	)	(c)	$	886,591
Self-storage revenues		-			58,197			677			-				58,874			-			-			-				58,874
Self-moving and self-storage products and service sales		-			120,111			-			-				120,111			-			-			-				120,111
Property management fees		-			9,116			-			-				9,116			-			-			-				9,116
Life insurance premiums		-			-			-			-				-			-			77,825			-				77,825
Property and casualty insurance premiums		-			-			-			-				-			14,479			-			-				14,479
Net investment and interest income		2,494			10,221			-			-				12,715			4,011			10,321			(818	)	(b,e)		26,229
Other revenue		20			32,013			38,658			(41,394	)	(b)		29,297			-			1,095			(694	)	(b)		29,698
Total revenues		2,514			1,117,335			39,335			(41,394	)			1,117,790			18,490			89,241			(2,598	)			1,222,923

Costs and expenses:
Operating expenses		3,895			537,382			4,591			(41,394	)	(b)		504,474			6,972			13,710			(1,763	)	(b,c)		523,393
Commission expenses		-			109,782			-			-				109,782			-			-			-				109,782
Cost of sales		-			61,268			-			-				61,268			-			-			-				61,268
Benefits and losses		-			-			-			-				-			8,114			64,691			-				72,805
Amortization of deferred policy acquisition costs		-			-			-			-				-			-			4,069			-				4,069
Lease expense		47			77,187			6			-				77,240			-			-			(610	)	(b)		76,630
Depreciation, net of (gains) losses on disposals		4			83,578			5,164			-				88,746			-			-			-				88,746
Total costs and expenses		3,946			869,197			9,761			(41,394	)			841,510			15,086			82,470			(2,373	)			936,693

Equity in earnings of subsidiaries		127,062			-			-			(120,463	)	(d)		6,599			-			-			(6,599	)	(d)		-

Earnings from operations		125,630			248,138			29,574			(120,463	)			282,879			3,404			6,771			(6,824	)			286,230
Interest income (expense)		41,568			(63,952	)		(20,868	)		-				(43,252	)		-			-			-				(43,252	)
Pretax earnings		167,198			184,186			8,706			(120,463	)			239,627			3,404			6,771			(6,824	)			242,978
Income tax expense		(15,252	)		(68,698	)		(3,731	)		-				(87,681	)		(1,191	)		(2,385	)		-				(91,257	)
Net earnings		151,946			115,488			4,975			(120,463	)			151,946			2,213			4,386			(6,824	)			151,721
Loss of carrying amount of preferred stock over consideration paid		-			-			-			-				-			-			-			(171	)			(171	)
Less: Preferred stock dividends		(6,482	)		-			-			-				(6,482	)		-			-			225		(e)		(6,257	)
Earnings available to common shareholders	$	145,464		$	115,488		$	4,975		$	(120,463	)		$	145,464		$	2,213		$	4,386		$	(6,770	)		$	145,293

(a) Balances for the six months ended June 30, 2010
(b) Eliminate intercompany lease income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
(e) Eliminate preferred stock dividends paid to affiliates

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating statements of operations by industry for the six months ended September 30, 2009 are as follows:

	Moving & Storage													AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Eliminations				Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Eliminations				AMERCO Consolidated
	(Unaudited)
	(In thousands)
Revenues:
Self-moving equipment rentals	$	-		$	800,892		$	-		$	-			$	800,892		$	-		$	-		$	(748	)	(c)	$	800,144
Self-storage revenues		-			53,759			657			-				54,416			-			-			-				54,416
Self-moving and self-storage products and service sales		-			113,344			-			-				113,344			-			-			-				113,344
Property management fees		-			8,928			-			-				8,928			-			-			-				8,928
Life insurance premiums		-			-			-			-				-			-			56,342			-				56,342
Property and casualty insurance premiums		-			-			-			-				-			13,261			-			-				13,261
Net investment and interest income		2,152			11,278			-			-				13,430			3,649			9,762			(622	)	(b,e)		26,219
Other revenue		-			23,900			36,741			(39,566	)	(b)		21,075			-			1,503			(649	)	(b)		21,929
Total revenues		2,152			1,012,101			37,398			(39,566	)			1,012,085			16,910			67,607			(2,019	)			1,094,583

Costs and expenses:
Operating expenses		4,710			547,106			4,197			(39,566	)	(b)		516,447			6,879			10,285			(1,380	)	(b,c)		532,231
Commission expenses		-			95,509			-			-				95,509			-			-			-				95,509
Cost of sales		-			58,809			-			-				58,809			-			-			-				58,809
Benefits and losses		-			-			-			-				-			6,981			46,520			-				53,501
Amortization of deferred policy acquisition costs		-			-			-			-				-			-			4,213			-				4,213
Lease expense		36			79,868			5			-				79,909			-			-			(610	)	(b)		79,299
Depreciation, net of (gains) losses on disposals		9			109,464			6,534			-				116,007			-			-			-				116,007
Total costs and expenses		4,755			890,756			10,736			(39,566	)			866,681			13,860			61,018			(1,990	)			939,569

Equity in earnings of subsidiaries		39,302			-			-			(33,040	)	(d)		6,262			-			-			(6,262	)	(d)		-

Earnings from operations		36,699			121,345			26,662			(33,040	)			151,666			3,050			6,589			(6,291	)			155,014
Interest income (expense)		47,521			(77,710	)		(16,970	)		-				(47,159	)		-			-			-				(47,159	)
Pretax earnings		84,220			43,635			9,692			(33,040	)			104,507			3,050			6,589			(6,291	)			107,855
Income tax expense		(17,068	)		(16,079	)		(4,208	)		-				(37,355	)		(1,068	)		(2,309	)		-				(40,732	)
Net earnings		67,152			27,556			5,484			(33,040	)			67,152			1,982			4,280			(6,291	)			67,123
Excess carrying amount of preferred stock over consideration paid		-			-			-			-				-			-			-			371				371
Less: Preferred stock dividends		(6,482	)		-			-			-				(6,482	)		-			-			29		(e)		(6,453	)
Earnings available to common shareholders	$	60,670		$	27,556		$	5,484		$	(33,040	)		$	60,670		$	1,982		$	4,280		$	(5,891	)		$	61,041

(a) Balances for the six months ended June 30, 2009
(b) Eliminate intercompany lease income
(c) Eliminate intercompany premiums
(d) Eliminate equity in earnings of subsidiaries
(e) Eliminate preferred stock dividends paid to affiliate

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating cash flow statements by industry segment for the six months ended September 30, 2010 are as follows:

	Moving & Storage												AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Elimination			Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Elimination			AMERCO Consolidated
	(Unaudited)
Cash flows from operating activities:	(In thousands)
Net earnings	$	151,946		$	115,488		$	4,975		$	(120,463	)	$	151,946		$	2,213		$	4,386		$	(6,824	)	$	151,721
Earnings from consolidated entities		(127,062	)		-			-			120,463			(6,599	)		-			-			6,599			-
Adjustments to reconcile net earnings to the cash provided by operations:
Depreciation		4			99,673			6,378			-			106,055			-			-			-			106,055
Amortization of deferred policy acquisition costs		-			-			-			-			-			-			4,069			-			4,069
Change in allowance for losses on trade receivables		-			(25	)		-			-			(25	)		-			1			-			(24	)
Change in allowance for losses on mortgage notes		-			-			-			-			-			-			-			-			-
Change in allowance for inventory reserve		-			840			-			-			840			-			-			-			840
Net gain on sale of real and personal property		-			(16,095	)		(1,214	)		-			(17,309	)		-			-			-			(17,309	)
Net gain on sale of investments		-			-			-			-			-			(36	)		(1,293	)		-			(1,329	)
Deferred income taxes		54,034			-			-			-			54,034			864			2,193			-			57,091
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		-			(2,407	)		-			-			(2,407	)		(3,592	)		30			-			(5,969	)
Inventories		-			(3,662	)		-			-			(3,662	)		-			-			-			(3,662	)
Prepaid expenses		-			5,518			(543	)		-			4,975			-			-			-			4,975
Capitalization of deferred policy acquisition costs		-			-			-			-			-			-			(7,377	)		-			(7,377	)
Other assets		2			(646	)		772			-			128			314			207			-			649
Related party assets		286			7,602			(35	)		-			7,853			(1,143	)		-			-			6,710
Accounts payable and accrued expenses		(2,792	)		21,114			(52	)		-			18,270			-			1,832			-			20,102
Policy benefits and losses, claims and loss expenses payable		-			11,139			-			-			11,139			2,872			25,441			-			39,452
Other policyholders' funds and liabilities		-			-			-			-			-			(953	)		(578	)		-			(1,531	)
Deferred income		-			2,399			-			-			2,399			-			-			-			2,399
Related party liabilities		-			53			-			-			53			626			14			-			693
Net cash provided (used) by operating activities		76,418			240,991			10,281			-			327,690			1,165			28,925			(225	)		357,555

Cash flows from investing activities:
Purchases of:
Property, plant and equipment		(1	)		(251,606	)		(22,633	)		-			(274,240	)		-			-			-			(274,240	)
Short term investments		-			-			-			-			-			(38,243	)		(71,542	)		-			(109,785	)
Fixed maturities investments		-			-			-			-			-			(24,350	)		(98,154	)		-			(122,504	)
Equity securities		(5,746	)		-			-			-			(5,746	)		(3,297	)		-			-			(9,043	)
Preferred stock		-			-			-			-			-			(9,305	)		(2,597	)		-			(11,902	)
Real estate		-			-			(1,647	)		-			(1,647	)		(56	)		(81	)		-			(1,784	)
Mortgage loans		-			-			-			-			-			(1,297	)		(11	)		-			(1,308	)
Proceeds from sales of:
Property, plant and equipment		-			120,790			1,367			-			122,157			-			-			-			122,157
Short term investments		-			-			-			-			-			73,980			104,481			-			178,461
Fixed maturities investments		-			-			-			-			-			8,142			48,699			-			56,841
Equity securities		-			-			-			-			-			133			-			-			133
Real estate		-			610			-			-			610			73			-			-			683
Mortgage loans		-			-			-			-			-			37			1,384			-			1,421
Payments from notes and mortgage receivables		-			44			73			-			117			-			-			-			117
Net cash provided (used) by investing activities		(5,747	)		(130,162	)		(22,840	)		-			(158,749	)		5,817			(17,821	)		-			(170,753	)
	(page 1 of 2)
(a) Balance for the period ended June 30, 2010

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Continuation of consolidating cash flow statements by industry segment for the six months ended September 30, 2010 are as follows:

	Moving & Storage											AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Elimination		Moving & Storage Consolidated			Property & Casualty Insurance (a)		Life Insurance (a)			Elimination			AMERCO Consolidated
	(Unaudited)
Cash flows from financing activities:	(In thousands)
Borrowings from credit facilities		-			100,422			34,134			-		134,556			-		-			-			134,556
Principal repayments on credit facilities		-			(51,853	)		(157,567	)		-		(209,420	)		-		-			-			(209,420	)
Debt issuance costs		-			(89	)		-			-		(89	)		-		-			-			(89	)
Capital lease payments		-			(8,369	)		-			-		(8,369	)		-		-			-			(8,369	)
Leveraged Employee Stock Ownership Plan - repayments from loan		-			592			-			-		592			-		-			-			592
Proceeds from (repayment of) intercompany loans		19,364			(156,102	)		136,738			-		-			-		-			-			-
Preferred stock dividends paid		(6,482	)		-			-			-		(6,482	)		-		-			225	(b)		(6,257	)
Investment contract deposits		-			-			-			-		-			-		5,875			-			5,875
Investment contract withdrawals		-			-			-			-		-			-		(17,409	)		-			(17,409	)
Net cash provided (used) by financing activities		12,882			(115,399	)		13,305			-		(89,212	)		-		(11,534	)		225			(100,521	)

Effects of exchange rate on cash		-			(569	)		-			-		(569	)		-		-			-			(569	)

Increase (decrease) in cash and cash equivalents		83,553			(5,139	)		746			-		79,160			6,982		(430	)		-			85,712
Cash and cash equivalents at beginning of period		100,460			107,241			4			-		207,705			22,126		14,287			-			244,118
Cash and cash equivalents at end of period	$	184,013		$	102,102		$	750		$	-	$	286,865		$	29,108	$	13,857		$	-		$	329,830
	(page 2 of 2)
(a) Balance for the period ended June 30, 2010
(b) Eliminate preferred stock dividends paid to affiliates

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consolidating cash flow statements by industry segment for the six months ended September 30, 2009 are as follows:

	Moving & Storage												AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Elimination			Moving & Storage Consolidated			Property & Casualty Insurance (a)			Life Insurance (a)			Elimination			AMERCO Consolidated
	(Unaudited)
Cash flows from operating activities:	(In thousands)
Net earnings	$	67,152		$	27,556		$	5,484		$	(33,040	)	$	67,152		$	1,982		$	4,280		$	(6,291	)	$	67,123
Earnings from consolidated entities		(39,302	)		-			-			33,040			(6,262	)		-			-			6,262			-
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation		9			111,273			6,497			-			117,779			-			-			-			117,779
Amortization of deferred policy acquisition costs		-			-			-			-			-			-			4,213			-			4,213
Change in allowance for losses on trade receivables		-			398			-			-			398			-			(1	)		-			397
Change in allowance for losses on mortgage notes		-			(6	)		-			-			(6	)		-			-			-			(6	)
Change in allowance for inventory reserve		-			1,344			-			-			1,344			-			-			-			1,344
Net (gain) loss on sale of real and personal property		-			(1,809	)		37			-			(1,772	)		-			-			-			(1,772	)
Net (gain) loss on sale of investments		-			-			-			-			-			27			(428	)		-			(401	)
Deferred income taxes		38,038			-			-			-			38,038			870			1,523			-			40,431
Net change in other operating assets and liabilities:
Reinsurance recoverables and trade receivables		-			1,637			-			-			1,637			11,826			(1,546	)		-			11,917
Inventories		-			7,334			-			-			7,334			-			-			-			7,334
Prepaid expenses		(660	)		(1,842	)		(426	)		-			(2,928	)		-			-			-			(2,928	)
Capitalization of deferred policy acquisition costs		-			-			-			-			-			-			(6,533	)		-			(6,533	)
Other assets		(303	)		6,439			804			-			6,940			131			(73	)		-			6,998
Related party assets		339			6,945			(17	)		-			7,267			214			-			-			7,481
Accounts payable and accrued expenses		(1,027	)		3,589			(2,688	)		-			(126	)		-			(5,767	)		-			(5,893	)
Policy benefits and losses, claims and loss expenses payable		-			20,382			-			-			20,382			(13,652	)		5,261			-			11,991
Other policyholders' funds and liabilities		-			-			-			-			-			(3,210	)		(101	)		-			(3,311	)
Deferred income		-			(1,946	)		-			-			(1,946	)		-			-			-			(1,946	)
Related party liabilities		-			(121	)		-			-			(121	)		(491	)		61			-			(551	)
Net cash provided (used) by operating activities		64,246			181,173			9,691			-			255,110			(2,303	)		889			(29	)		253,667

Cash flows from investing activities:
Purchases of:
Property, plant and equipment		(2	)		(163,134	)		(12,691	)		-			(175,827	)		-			-			-			(175,827	)
Short term investments		-			-			-			-			-			(49,589	)		(94,717	)		-			(144,306	)
Fixed maturities investments		-			-			-			-			-			(17,753	)		(59,353	)		-			(77,106	)
Real estate		-			(204	)		(308	)		-			(512	)		46			-			-			(466	)
Mortgage loans		-			(424	)		-			-			(424	)		(50	)		(51	)		-			(525	)
Proceeds from sales of:
Property, plant and equipment		-			87,862			1,080			-			88,942			-			-			-			88,942
Short term investments		-			-			-			-			-			58,457			100,850			-			159,307
Fixed maturities investments		-			-			-			-			-			15,036			68,631			-			83,667
Preferred stock		-			-			-			-			-			1,724			512			-			2,236
Mortgage loans		-			-			-			-			-			35			4,018			-			4,053
Payments from notes and mortgage receivables		-			123			341			-			464			-			-			-			464
Net cash provided (used) by investing activities		(2	)		(75,777	)		(11,578	)		-			(87,357	)		7,906			19,890			-			(59,561	)
	(page 1 of 2)
(a) Balance for the period ended June 30, 2009

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Continuation of consolidating cash flow statements by industry segment for the six months ended September 30, 2009 are as follows:

	Moving & Storage											AMERCO Legal Group
	AMERCO			U-Haul			Real Estate			Elimination		Moving & Storage Consolidated			Property & Casualty Insurance (a)		Life Insurance (a)			Elimination			AMERCO Consolidated
	(Unaudited)
Cash flows from financing activities:	(In thousands)
Borrowings from credit facilities		-			25,712			26,209			-		51,921			-		-			-			51,921
Principal repayments on credit facilities		-			(59,660	)		(13,035	)		-		(72,695	)		-		-			-			(72,695	)
Debt issuance costs		-			(100	)		(177	)		-		(277	)		-		-			-			(277	)
Capital lease payments		-			(1,168	)		-			-		(1,168	)		-		-			-			(1,168	)
Leveraged Employee Stock Ownership Plan - repayments from loan		-			533			-			-		533			-		-			-			533
Proceeds from (repayment of) intercompany loans		(57,706	)		68,816			(11,110	)		-		-			-		-			-			-
Preferred stock dividends paid		(6,482	)		-			-			-		(6,482	)		-		-			29	(b)		(6,453	)
Investment contract deposits		-			-			-			-		-			-		5,564			-			5,564
Investment contract withdrawals		-			-			-			-		-			-		(28,417	)		-			(28,417	)
Net cash provided (used) by financing activities		(64,188	)		34,133			1,887			-		(28,168	)		-		(22,853	)		29			(50,992	)

Effects of exchange rate on cash		-			1,250			-			-		1,250			-		-			-			1,250

Increase (decrease) in cash and cash equivalents		56			140,779			-			-		140,835			5,603		(2,074	)		-			144,364
Cash and cash equivalents at beginning of period		38			213,040			-			-		213,078			19,197		8,312			-			240,587
Cash and cash equivalents at end of period	$	94		$	353,819		$	-		$	-	$	353,913		$	24,800	$	6,238		$	-		$	384,951
	(page 2 of 2)
(a) Balance for the period ended June 30, 2009
(b) Eliminate preferred stock dividends paid to affiliate

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

12. Industry Segment and Geographic Area Data

	United States		Canada		Consolidated
	(Unaudited)
	(All amounts are in thousands of U.S. $'s)
Quarter ended September 30, 2010
Total revenues	$	596,037	$	40,939	$	636,976
Depreciation and amortization, net of (gains) losses on disposals		44,037		1,996		46,033
Interest expense		21,601		187		21,788
Pretax earnings		129,062		7,271		136,333
Income tax expense		48,972		2,142		51,114
Identifiable assets		3,804,861		134,539		3,939,400

Quarter ended September 30, 2009
Total revenues	$	536,621	$	37,303	$	573,924
Depreciation and amortization, net of (gains) losses on disposals		57,548		1,538		59,086
Interest expense		23,784		154		23,938
Pretax earnings		66,458		5,422		71,880
Income tax expense		25,345		1,844		27,189
Identifiable assets		3,814,477		115,427		3,929,904

	United States		Canada		Consolidated
	(Unaudited)
	(All amounts are in thousands of U.S. $'s)
Six months ended September 30, 2010
Total revenues	$	1,145,820	$	77,103	$	1,222,923
Depreciation and amortization, net of (gains) losses on disposals		89,074		3,741		92,815
Interest expense		42,911		341		43,252
Pretax earnings		228,944		14,034		242,978
Income tax expense		87,123		4,134		91,257
Identifiable assets		3,804,861		134,539		3,939,400

Six months ended September 30, 2009
Total revenues	$	1,027,508	$	67,075	$	1,094,583
Depreciation and amortization, net of (gains) losses on disposals		116,935		3,285		120,220
Interest expense		46,865		294		47,159
Pretax earnings		99,529		8,326		107,855
Income tax expense		37,900		2,832		40,732
Identifiable assets		3,814,477		115,427		3,929,904

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

13. Employee Benefit Plans

The components of the net periodic benefit costs with respect to postretirement benefits were as follows:

	Quarter Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)

Service cost for benefits earned during the period	$	115		$	105
Interest cost on accumulated postretirement benefit		142			150
Other components		(10	)		(26	)
Net periodic postretirement benefit cost	$	247		$	229

	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)

Service cost for benefits earned during the period	$	230		$	210
Interest cost on accumulated postretirement benefit		284			301
Other components		(19	)		(52	)
Net periodic postretirement benefit cost	$	495		$	459

14. Fair Value Measurements

Fair values of cash equivalents approximate carrying value 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, and interest rate swap contracts are based on quoted market prices, dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded value.

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of temporary cash investments, trade receivables, reinsurance recoverables and notes receivable. Limited credit risk exists on trade receivables due to the diversity of our customer base and their dispersion across broad geographic markets. 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 commercial properties. The Company has not experienced any material losses related to the notes from individual or groups of notes in any particular industry or geographic area. The estimated fair values were determined using the discounted cash flow method and using interest rates currently offered for similar loans to borrowers with similar credit ratings.

The carrying amount of long term debt and short term borrowings are estimated to approximate fair value as the actual interest rate is consistent with the rate estimated to be currently available for debt of similar term and remaining maturity.

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.

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Effective April 1, 2008, assets and liabilities recorded at fair value on the condensed consolidated balance sheets were measured and classified based upon a three tiered approach to valuation. ASC 820 - Fair Value Measurements and Disclosures (“ASC 820”) requires that financial assets and liabilities recorded at fair value be classified and disclosed in one of the following three categories:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices for identical or similar financial instruments in markets that are not considered to be active, or similar financial instruments for which all significant inputs are observable, either directly or indirectly, or inputs other than quoted prices that are observable, or inputs that are derived principally from or corroborated by observable market data through correlation or other means;

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and are unobservable. These reflect management’s assumptions about the assumptions a market participant would use in pricing the asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table represents the financial assets and liabilities on the condensed consolidated balance sheet at September 30, 2010, that are subject to ASC 820 and the valuation approach applied to each of these items.

	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Unaudited)
	(In thousands)
Assets
Short-term investments	$	319,017		$	319,017		$	-	$	-
Fixed maturities - available for sale		598,411			438,133			157,264		3,014
Preferred stock		29,650			29,650			-		-
Common stock		22,860			22,860			-		-
Less: Preferred stock of AMERCO held by subsidiaries		(7,570	)		(7,570	)		-		-
Total	$	962,368		$	802,090		$	157,264	$	3,014

Liabilities
Guaranteed residual values of TRAC leases	$	-	$	-	$	-	$	-
Derivatives		73,654		-		73,654		-
Total	$	73,654	$	-	$	73,654	$	-

AMERCO AND CONSOLIDATED ENTITIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The following table represents the fair value measurements at September 30, 2010 using significant unobservable inputs (Level 3).

	Fixed Maturities
	Auction Rate Securities			Asset Backed Securities			Total
	(Unaudited)
	(In thousands)
Balance at March 31, 2010	$	1,673		$	1,615		$	3,288

Transfers into Level 3 (a)		43			-			43
Fixed Maturities - Auction Rate Securities gain (unrealized)		2			-			2
Fixed Maturities - Asset Backed Securities loss (unrealized)		-			(160	)		(160	)
Securities called at par		-			(95	)		(95	)
Balance at June 30, 2010	$	1,718		$	1,360		$	3,078

Fixed Maturities - Auction Rate Securities loss (unrealized)		(24	)		-			(24	)
Fixed Maturities - Asset Backed Securities loss (unrealized)		-			(40	)		(40	)
Balance at September 30, 2010	$	1,694		$	1,320		$	3,014

(a) Reflects the transfer of auction rate securities for which no meaningful market rate bids are currently available. The valuation of these assets was based on a pricing matrix system as determined by the custodian of these securities.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

We begin Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) with the overall strategy of AMERCO, followed by a description of and strategy related to, our operating segments to give the reader an overview of the goals of our businesses and the direction in which our businesses and products are moving. We then discuss our critical accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. We then discuss our results of operations for the second quarter and first six months of fiscal 2011, compared with the second quarter and first six months of fiscal 2010, which is followed by an analysis of changes in our balance sheets and cash flows, and a discussion of our financial commitments in the sections entitled Liquidity and Capital Resources and Disclosures about Contractual Obligations and Commercial Commitments. We conclude this MD&A by discussing our outlook for the remainder of fiscal 2011.

This MD&A should be read in conjunction with the other sections of this Quarterly Report on Form 10-Q, including the Notes to Condensed Consolidated Financial Statements. The various sections of this MD&A contain a number of forward-looking statements, as discussed under the caption Cautionary Statements Regarding Forward-Looking Statements all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this filing or in our most recent Annual Report on Form 10-K for the year ended March 31, 2010. Our actual results may differ materially from these forward-looking statements.

The second fiscal quarter for AMERCO ends on the 30th of September for each year that is referenced. Our insurance company subsidiaries have a second quarter that ends on the 30th of June for each year that is referenced. They have been consolidated on that basis. Our insurance companies’ financial reporting processes conform to calendar year reporting as required by state insurance departments. Management believes that consolidating their calendar year into our fiscal year financial statements does not materially affect the financial position or results of operations. The Company discloses any material events occurring during the intervening period. Consequently, all references to our insurance subsidiaries’ years 2010 and 2009 correspond to fiscal 2011 and 2010 for AMERCO.

Overall Strategy

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

Our primary focus is to provide our customers with a wide selection of moving rental equipment, convenient self-storage rental facilities and related moving and self-storage products and services. We are able to expand our distribution and improve customer service by increasing the amount of moving equipment and storage rooms available for rent, expanding the number of independent dealers in our network and expanding and taking advantage of our growing eMove® capabilities.

Property and Casualty Insurance is focused on providing and administering property and casualty insurance to U-Haul and its customers, its independent dealers and affiliates.

Life Insurance is focused on long-term capital growth through direct writing and reinsuring of life, Medicare supplement and annuity products in the senior marketplace.

Description of Operating Segments

AMERCO’s three reportable segments are:

·	Moving and Storage, comprised of AMERCO, U-Haul, and Real Estate and the subsidiaries of U-Haul and Real Estate,

·	Property and Casualty Insurance, comprised of RepWest and its subsidiaries and ARCOA, and

·	Life Insurance, comprised of Oxford and its subsidiaries.

Moving and Storage Operating Segment

Our Moving and Storage operating segment consists of the rental of trucks, trailers, specialty rental items and self-storage spaces primarily to the household mover as well as sales of moving supplies, towing accessories and propane. Operations are conducted under the registered trade name U-Haul® throughout the United States and Canada.

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

U-Haul brand self-moving related products and services, such as boxes, pads and tape allow our customers to, among other things, protect their belongings from potential damage during the moving process. We are committed to providing a complete line of products selected with the “do-it-yourself” moving and storage customer in mind.

eMove® is an online marketplace that connects consumers to independent Moving Help™ service providers and over 5,300 independent Self-Storage Affiliates. Our network of customer rated affiliates provides pack and load help, cleaning help, self-storage and similar services, all over North America. Our goal is to further utilize our web-based technology platform to increase service to consumers and businesses in the moving and storage market.

For sixty five years, U-Haul has incorporated sustainable practices into its everyday operations. We believe that our basic business premise of equipment sharing helps reduce greenhouse gas emissions and reduces the need for total large capacity vehicles. We remain focused on reducing waste and are dedicated to manufacturing reusable components and recyclable products. We believe that our commitment to sustainability, through our products and services and everyday operations has helped us to reduce our impact on the environment.

Property and Casualty Insurance Operating Segment

Our Property and Casualty Insurance operating segment provides loss adjusting and claims handling for U-Haul through regional offices across North America. Property and Casualty Insurance also underwrites components of the Safemove, Safetow, Super Safemove and Safestor protection packages to U-Haul customers. We continue to focus on increasing the penetration of these products into the moving and storage market. The business plan for Property and Casualty Insurance includes offering property and casualty products in other U-Haul related programs.

Life Insurance Operating Segment

Our Life Insurance operating segment provides life and health insurance products primarily to the senior market through the direct writing or reinsuring of life insurance, Medicare supplement and annuity policies.

Critical Accounting Policies and Estimates

The Company’s financial statements have been prepared in accordance with the generally accepted accounting principles (“GAAP”) in the United States. The methods, estimates and judgments we use in applying our accounting policies can have a significant impact on the results we report in our financial statements. Certain accounting policies require us to make difficult and subjective judgments and assumptions, often as a result of the need to estimate matters that are inherently uncertain.

Below we have set forth, with a detailed description, the accounting policies that we deem most critical to us and that require management’s most difficult and subjective judgments. These estimates are based on historical experience, observance of trends in particular areas, information and valuations available from outside sources and on various other assumptions that are believed to be reasonable under the circumstances and which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts may differ from these estimates under different assumptions and conditions; such differences may be material.

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

Principles of Consolidation

The Company applies ASC 810 in its principles of consolidation. ASC 810 addresses arrangements where a company does not hold a majority of the voting or similar interests of a VIE. A company is required to consolidate a VIE if it has determined it is the primary beneficiary. ASC 810 also addresses the policy when a company owns a majority of the voting or similar rights and exercises effective control.

As promulgated by ASC 810, a VIE is not self-supportive due to having one or both of the following conditions: (i) it has an insufficient amount of equity for it to finance its activities without receiving additional subordinated financial support or (ii) its owners do not hold the typical risks and rights of equity owners. This determination is made upon the creation of a variable interest and is re-assessed on an on-going basis should certain changes in the operations of a VIE, or its relationship with the primary beneficiary trigger a reconsideration under the provisions of ASC 810. After a triggering event occurs the most recent facts and circumstances are utilized in determining whether or not a company is a VIE, which other company(s) have a variable interest in the entity, and whether or not the company’s interest is such that it is the primary beneficiary.

In fiscal 2003 and fiscal 2002, SAC Holdings were considered special purpose entities and were consolidated based on the provisions of Emerging Issues Task Force Issue 90-15, Impact of Nonsubstantive Lessors, Residual Value Guarantees and Other Provisions in Leasing Transactions. In fiscal 2004, the Company evaluated its interests in SAC Holdings and the Company concluded that SAC Holdings were VIE’s and that the Company was the primary beneficiary. Accordingly, the Company continued to include SAC Holdings in its consolidated financial statements.

Triggering events in February and March of 2004 and November 2007 required AMERCO to reassess its involvement in specific SAC Holdings entities. During these reassessments it was concluded that AMERCO was no longer the primary beneficiary resulting in the deconsolidation of SAC Holding Corporation in fiscal 2004 and SAC Holding II Corporation in fiscal 2008.

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

The condensed consolidated balance sheets as of September 30, 2010 and March 31, 2010 include the accounts of AMERCO and its wholly-owned subsidiaries. The September 30, 2010 and 2009 condensed consolidated statements of operations and cash flows include the accounts of AMERCO and its wholly-owned subsidiaries.

Recoverability of Property, Plant and Equipment

Property, plant and equipment are stated at cost. Interest expense incurred during the initial construction of buildings and rental equipment is considered part of cost. Depreciation is computed for financial reporting purposes using the straight-line or an accelerated method based on a declining balance formula over the following estimated useful lives: rental equipment 2-20 years and buildings and non-rental equipment 3-55 years. The Company follows the deferral method of accounting based on ASC 908 - Airlines for major overhauls in which engine overhauls are capitalized and amortized over five years and transmission overhauls are capitalized and amortized over three years. 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. Equipment depreciation is recognized in amounts expected to result in the recovery of estimated residual values upon disposal, i.e., minimize gains or losses. In determining the depreciation rate, historical disposal experience, holding periods and trends in the market for vehicles are reviewed.

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 are shorter or longer than originally estimated. Reductions in residual values (i.e., the price at which we ultimately expect to dispose of revenue earning equipment) or useful lives will result in an increase in depreciation expense over the life of the equipment. Reviews are performed based on vehicle class, generally subcategories of trucks and trailers. We assess the recoverability of our assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining lives against their respective carrying amounts. We consider factors such as current and expected future market price trends on used vehicles and the expected life of vehicles included in the fleet. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. If asset residual values are 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.

In fiscal 2006, management performed an analysis of the expected economic value of new rental trucks and determined that additions to the fleet resulting from purchase should be depreciated on an accelerated method based upon a declining formula. The salvage value and useful life assumptions of the rental truck fleet remain unchanged. Under the declining balances method (2.4 times declining balance), the book value of a rental truck is reduced approximately 16%, 13%, 11%, 9%, 8%, 7%, and 6% during years one through seven, respectively and then reduced on a straight line basis an additional 10% by the end of year fifteen. Whereas, a standard straight line approach would reduce the book value by approximately 5.3% per year over the life of the truck. For the affected equipment, the accelerated depreciation was $11.1 million and $13.2 million greater than what it would have been if calculated under a straight line approach for the second quarter of fiscal 2011 and 2010, respectively and $21.5 million and $26.0 million for the first six months of fiscal 2011 and 2010, respectively.

Although we intend to sell our used vehicles for prices approximating book value, the extent to which we realize a gain or loss on the sale of used vehicles is dependent upon various factors including the general state of the used vehicle market, the age and condition of the vehicle at the time of its disposal and the depreciation rates with respect to the vehicle. We typically sell our used vehicles at our sales centers throughout North America, on our web site at uhaul.com/trucksales or by phone at 1-866-404-0355. Additionally, we sell a large portion of our pickup and cargo van fleet at automobile dealer auctions.

Insurance Reserves

Liabilities for life insurance and certain annuity and health policies are established to meet the estimated future obligations of policies in force, and are based on mortality, morbidity and withdrawal assumptions from recognized actuarial tables which contain margins for adverse deviation. In addition, liabilities for health, disability and other policies include estimates of payments to be made on insurance claims for reported losses and estimates of losses incurred, but not yet reported. Liabilities for annuity contracts consist of contract account balances that accrue to the benefit of the policyholders.

Insurance reserves for our Property and Casualty Insurance operating segment and U-Haul take into account losses incurred based upon actuarial estimates. These estimates are based on past claims experience and current claim trends as well as social and economic conditions such as changes in legal theories and inflation. Due to the nature of the underlying risks and the high degree of uncertainty associated with the determination of the liability for future policy benefits and claims, the amounts to be ultimately paid to settle liabilities cannot be precisely determined and may vary significantly from the estimated liability.

Due to the long tailed nature of the assumed reinsurance and the excess workers compensation lines of insurance that were written by RepWest, it may take a number of years for claims to be fully reported and finally settled.

Impairment of Investments

Investments are evaluated pursuant to guidance contained in ASC 320 - Investments - Debt and Equity Securities to determine if and when a decline in market value below amortized cost is other-than-temporary. Management makes certain assumptions or judgments in its assessment including but not limited to: ability and intent to hold the security, quoted market prices, dealer quotes or discounted cash flows, industry factors, financial factors, and issuer specific information such as credit strength. Other-than-temporary impairment in value is recognized in the current period operating results. The Company’s insurance subsidiaries recognized $0.3 million in other-than-temporary impairments for the second quarter of fiscal 2010 and $0.4 million for the first six months of fiscal 2010. There were no write downs in the second quarter or for the first six months of fiscal 2011.

Income Taxes

The Company’s tax returns are periodically reviewed by various taxing authorities. The final outcome of these audits may cause changes that could materially impact our financial results.

AMERCO files a consolidated tax return with all of its legal subsidiaries, except for Dallas General Life Insurance Company, a subsidiary of Oxford, which will file on a stand alone basis until 2012.

Fair Values

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.

Subsequent Events

The Company has entered into a fleet securitized financing, as of October 31, 2010 of up to $155.0 million in a private placement transaction exempt from registration under the Securities Act of 1933, as amended. The new special-purpose entities that will issue the notes will be indirect subsidiaries of AMERCO. These new special-purpose subsidiaries will use the net proceeds from the sale of the notes to finance the acquisition of rental trucks. These special-purpose subsidiaries will be consolidated into U-Haul’s financial statements. The notes will be secured by the equipment purchased and the corresponding operating cash flows associated with their operation.

On November 1, 2010, the Board declared a regular quarterly cash dividend of $0.53125 per share on the Company’s Series A Preferred. The dividend will be payable December 1, 2010 to holders of record on November 16, 2010.

The Company’s management has evaluated subsequent events occurring after September 30, 2010, the date of our most recent balance sheet, through the date our financial statements will be issued. Other than the Securitization and the Series A Preferred dividend, we do not believe any subsequent events have occurred that would require further disclosure or adjustment to our financial statements.

Adoption of New Accounting Pronouncements

ASU 2009-16 formally incorporates into the FASB Codification amendments to Statements of Financial Accounting Standards (“SFAS”) 140 made by SFAS 166 primarily to (1) eliminate the concept of a qualifying special-purpose entity, (2) limit the circumstances under which a financial asset (or portion thereof) should be derecognized when the entire financial asset has not been transferred to a non-consolidated entity, (3) require additional information to be disclosed concerning a transferor's continuing involvement with transferred financial assets, and (4) require that all servicing assets and servicing liabilities be initially measured at fair value. The Company adopted the amendments to ASC 860-10 and ASC 860-50 in the first quarter of fiscal 2011 and they did not have a material impact on our financial statements.

ASU 2009-17 formally incorporates into the FASB Codification amendments to FIN 46(R) made by SFAS 167 to require that a comprehensive qualitative analysis be performed to determine whether a holder of variable interests in a variable interest entity also has a controlling financial interest in that entity. In addition, the amendments require that the same type of analysis be applied to entities that were previously designated as qualified special-purpose entities. The Company adopted the amendments to ASC 810-10 in the first quarter of fiscal 2011 and it did not have a material impact on our financial statements.

ASU 2010-06 formally incorporates into the FASB Codification amendments to SFAS 157. Entities will be required to provide enhanced disclosures about transfers in and out of Level 1 and 2 fair value classifications and separate disclosures about purchases, sales, issuances and settlements relating to the Level 3 fair value classification. The new guidance also clarifies existing fair value disclosures regarding the level of disaggregation of assets or liabilities and the valuation techniques and inputs used to measure fair value. The Company adopted the amendments to ASC 820-10 for Level 1 and 2 disclosures and for Level 3 disclosures in the first quarter of fiscal 2011 and they did not have a material impact on our financial statements.

Recent Accounting Pronouncements

ASU No. 2010-26 amends FASB ASC 944-30 to provide further guidance regarding the capitalization of costs relating to the acquisition or renewal of insurance contracts. Specifically, only qualifying costs associated with successful contract acquisitions are permitted to be deferred. The amended guidance is effective for fiscal years beginning after December 15, 2011 (and for interim periods within such years), with early adoption permitted as of the beginning of the entity's annual reporting period. The amended guidance should be applied prospectively, but retrospective application for all prior periods is allowed. The Company does not believe that the adoption of this statement will have a material impact on our financial statements.

From time to time, new accounting pronouncements are issued by the FASB or the SEC that are adopted by the Company as of the specified effective date. Unless otherwise discussed, these ASU’s entail technical corrections to existing guidance or affect guidance related to specialized industries or entities and therefore will have minimal, if any, impact on our financial position or results of operations upon adoption.

Results of Operations

AMERCO and Consolidated Entities

Quarter Ended September 30, 2010 compared with the Quarter Ended September 30, 2009

Listed below on a consolidated basis are revenues for our major product lines for the second quarter of fiscal 2011 and the second quarter of fiscal 2010:

	Quarter Ended September 30,
	2010		2009
	(Unaudited)
	(In thousands)
Self-moving equipment rentals	$	467,128	$	427,203
Self-storage revenues		30,647		27,412
Self-moving and self-storage products and service sales		56,821		55,522
Property management fees		4,580		4,478
Life insurance premiums		40,022		28,738
Property and casualty insurance premiums		8,300		7,046
Net investment and interest income		12,874		12,539
Other revenue		16,604		10,986
Consolidated revenue	$	636,976	$	573,924

Self-moving equipment rental revenues increased $39.9 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010. These increases were due to growth in transactions and average revenue per transaction for both In-Town and one-way moves. Factors contributing to the improvement in revenue per transaction were average miles driven, the mix of equipment rented and rental rates charged. We believe the growth in transactions was influenced by an increase in demand for our services as well as from enhancements to our customer service capabilities.

Self-storage revenues increased $3.2 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010 due primarily to an increase in the number of rooms rented. Our portfolio of rooms available to rent grew by over 590,000 square feet on average during the second quarter of fiscal 2011 as compared to the same period last year. Our average occupancy during the second quarter of fiscal 2011 increased by just over 601,000 square feet compared to the second quarter of fiscal 2010.

Sales of self-moving and self-storage products and services increased $1.3 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010. Both propane and hitches and towing accessories experienced increases during the quarter.

Life insurance premiums increased $11.3 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010 primarily as a result of continued expansion of its single premium whole life product. These premiums are recognized when received and offset by an increase in life insurance reserves. Earnings related to these premiums are recognized over the life of the policies.

Property and casualty insurance premiums increased $1.3 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010. A portion of RepWest’s premiums are from policies sold in conjunction with U-Haul rental transactions. As moving transactions have increased this year so have the related premiums.

Other revenue increased $5.6 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010 primarily from the expansion of new business initiatives including our U-BoxTM and College Box program.

As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $637.0 million for the second quarter of fiscal 2011, compared with $573.9 million for the second quarter of fiscal 2010.

Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2011 and the second quarter of fiscal 2010. The insurance companies second quarters ended June 30, 2010 and 2009.

	Quarter Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)
Moving and storage
Revenues	$	582,632		$	532,412
Earnings from operations		156,444			93,889
Property and casualty insurance
Revenues		10,396			8,859
Earnings from operations		2,007			1,623
Life insurance
Revenues		45,399			33,735
Earnings from operations		3,368			4,011
Eliminations
Revenues		(1,451	)		(1,082	)
Earnings from operations		(3,698	)		(3,705	)
Consolidated results
Revenues		636,976			573,924
Earnings from operations		158,121			95,818

Total costs and expenses increased $0.7 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010 due to increased benefit costs at the insurance companies. Operating expenses for Moving and Storage decreased $5.5 million as a result of reduced liability costs associated with the rental equipment fleet. Liability costs have improved as expected losses from prior years continue to develop positively. Depreciation expense, primarily related to the rental equipment fleet, decreased $12.6 million. Included in this decrease is a $5.8 million improvement in the gain on disposal of property, plant and equipment. Cost of sales and commission expenses are increasing in relation to the associated revenues.

Total costs and expenses for Life Insurance increased $12.3 million due to additional insurance reserves and commissions associated with the additional new single premium whole life business.

As a result of the above mentioned changes in revenues and expenses, earnings from operations increased to $158.1 million for the second quarter of fiscal 2011, compared with $95.8 million for the second quarter of fiscal 2010.

Interest expense for the second quarter of fiscal 2011 was $21.8 million, compared with $23.9 million for the second quarter of fiscal 2010.

Income tax expense was $51.1 million for the second quarter of fiscal 2011, compared with $27.2 million for the second quarter of fiscal 2010 due to higher pretax earnings for the second quarter of fiscal 2011.

Dividends accrued on our Series A Preferred were $3.1 million and $3.2 million for the second quarter of fiscal 2011 and 2010, respectively.

As a result of the above mentioned items, earnings available to common shareholders were $82.0 million for the second quarter of fiscal 2011, compared with $41.5 million for the second quarter of fiscal 2010.

Basic and diluted earnings per share for the second quarter of fiscal 2011 were $4.22, compared with $2.14 for the second quarter of fiscal 2010.

The weighted average common shares outstanding basic and diluted were 19,427,595 for the second quarter of fiscal 2011, compared with 19,382,101 for the second quarter of fiscal 2010.

Moving and Storage

Quarter Ended September 30, 2010 compared with the Quarter Ended September 30, 2009

Listed below are revenues for the major product lines at our Moving and Storage operating segment for the second quarter of fiscal 2011 and the second quarter of fiscal 2010:

	Quarter Ended September 30,
	2010		2009
	(Unaudited)
	(In thousands)
Self-moving equipment rentals	$	467,797	$	427,637
Self-storage revenues		30,647		27,412
Self-moving and self-storage products and service sales		56,821		55,522
Property management fees		4,580		4,478
Net investment and interest income		6,425		6,821
Other revenue		16,362		10,542
Moving and Storage revenue	$	582,632	$	532,412

Self-moving equipment rental revenues increased $40.2 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010. These increases were due to growth in transactions and average revenue per transaction for both In-Town and one-way moves. Factors contributing to the improvement in revenue per transaction were average miles driven, the mix of equipment rented and rental rates charged. We believe the growth in transactions was influenced by an increase in demand for our services as well as from enhancements to our customer service capabilities.

Other revenue increased $5.8 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010 primarily from the expansion of new business initiatives including our U-BoxTM and College Box program.

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. Self-storage data for our owned storage locations follows:

	Quarter Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands, except occupancy rate)
Room count as of September 30		148			141
Square footage as of September 30		12,032			11,412
Average number of rooms occupied		115			108
Average occupancy rate based on room count		77.9	%		77.2	%
Average square footage occupied		9,576			8,975

Total costs and expenses decreased $12.5 million during the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010. Operating expenses for Moving and Storage decreased $5.5 million as a result of reduced liability costs associated with the rental equipment fleet. Liability costs have improved as expected losses from prior years continue to develop positively. Depreciation expense, primarily related to the rental equipment fleet, decreased $12.6 million. Included in this decrease is a $5.8 million improvement in the gain on disposal of property, plant and equipment. Cost of sales and commission expenses are increasing in relation to the associated revenues.

Equity in the earnings of AMERCO’s insurance subsidiaries decreased $0.1 million for the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010.

As a result of the above mentioned changes in revenues and expenses, earnings from operations increased to $156.4 million for the second quarter of fiscal 2011, compared with $93.9 million for the second quarter of fiscal 2010.

Property and Casualty Insurance

Quarter Ended June 30, 2010 compared with the Quarter Ended June 30, 2009

Net premiums were $8.3 million and $7.0 million for the second quarters ended June 30, 2010 and 2009, respectively. A portion of RepWest’s premiums are from policies sold in conjunction with U-Haul rental transactions. As moving transactions have increased this year so have the related premiums.

Net investment income was $2.1 million and $1.8 million for the second quarters ended June 30, 2010 and 2009, respectively. The increase was a result of reinvesting some short term portfolios into longer term investments.

Net operating expenses were $4.2 million and $3.6 million for the second quarters ended June 30, 2010 and 2009, respectively.

Benefits and losses incurred were $4.2 million and $3.6 million for the second quarters ended June 30, 2010 and 2009, respectively. The increase was primarily due to increased losses in the additional liability program and other terminated lines.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were $2.0 million and $1.6 million for the second quarters ended June 30, 2010 and 2009, respectively.

Life Insurance

Quarter Ended June 30, 2010 compared with the Quarter Ended June 30, 2009

Net premiums were $40.0 million and $28.7 million for the second quarters ended June 30, 2010 and 2009, respectively. Life insurance premiums increased by $12.2 million primarily as a result of sales of the Company’s single premium life product. This was offset by a decrease in Medicare supplement premiums of $1.2 million due to decrements in excess of new sales and premium rate increases.

Net investment income was $4.8 million and $4.2 million for the second quarters ended June 30, 2010 and 2009, respectively. The increase was due to gains on the sale of securities.

Net operating expenses were $7.0 million and $5.2 million for the second quarters ended June 30, 2010 and 2009, respectively. The increase was a result of increased life commissions paid on expanded sales of the single premium life product. This was partially offset by a reduction of Medicare supplement commissions.

Benefits and losses incurred were $33.1 million and $22.2 million for the second quarters ended June 30, 2010 and 2009, respectively. Life insurance benefits increased $10.7 million due to the increase in reserves from expanded sales of the Company’s single premium life product and additional claims on a larger volume of inforce life insurance business.

Amortization of deferred acquisition costs (“DAC”) and the value of business acquired (“VOBA”) was $1.9 million and $2.3 million for the second quarters ended June 30, 2010 and 2009, respectively.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were $3.4 million and $4.0 million for the second quarters ended June 30, 2010 and 2009, respectively.

AMERCO and Consolidated Entities

Six Months Ended September 30, 2010 compared with the Six Months Ended September 30, 2009

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2011 and the first six months of fiscal 2010:

	Six Months Ended September 30,
	2010		2009
	(Unaudited)
	(In thousands)
Self-moving equipment rentals	$	886,591	$	800,144
Self-storage revenues		58,874		54,416
Self-moving and self-storage products and service sales		120,111		113,344
Property management fees		9,116		8,928
Life insurance premiums		77,825		56,342
Property and casualty insurance premiums		14,479		13,261
Net investment and interest income		26,229		26,219
Other revenue		29,698		21,929
Consolidated revenue	$	1,222,923	$	1,094,583

Self-moving equipment rental revenues increased $86.4 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010. The increase was due to growth in both the number of transactions and average revenue per transaction for In-Town and one-way moves. Factors contributing to the improvement in revenue per transaction were average miles driven, the mix of equipment rented and rental rates charged. We believe the growth in the number of transactions was influenced by an increase in demand for our services as well as from enhancements to our customer service capabilities.

Self-storage revenues increased $4.5 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010 due primarily to an increase in the number of rooms rented. Over the last twelve months we have added over 620,000 of net rentable square feet to the storage portfolio. Our average occupancy during the first six months of fiscal 2011 increased by 562,000 square feet compared to the first six months of fiscal 2010.

Sales of self-moving and self-storage products and services increased $6.8 million during the first months of fiscal 2011, compared with the first six months of fiscal 2010. We had increases in each of our three major product categories including propane, hitches and towing accessories and moving supplies.

Life insurance premiums increased $21.5 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010 primarily as a result of continued expansion of its single premium whole life product.

Property and casualty insurance premiums increased $1.2 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010. A portion of RepWest’s premiums are from policies sold in conjunction with U-Haul rental transactions. As moving transactions have increased this year so have the related premiums.

Other revenue increased $7.8 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010 primarily from the expansion of new business initiatives including our U-BoxTM program.

As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $1,222.9 million for the first six months of fiscal 2011, as compared with $1,094.6 million for the first six months of fiscal 2010.

Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2011 and the first six months of fiscal 2010. The insurance companies first six months ended June 30, 2010 and 2009.

	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands)
Moving and storage
Revenues	$	1,117,790		$	1,012,085
Earnings from operations		282,879			151,666
Property and casualty insurance
Revenues		18,490			16,910
Earnings from operations		3,404			3,050
Life insurance
Revenues		89,241			67,607
Earnings from operations		6,771			6,589
Eliminations
Revenues		(2,598	)		(2,019	)
Earnings from operations		(6,824	)		(6,291	)
Consolidated results
Revenues		1,222,923			1,094,583
Earnings from operations		286,230			155,014

Total costs and expenses decreased $2.9 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010. Operating expenses for Moving and Storage decreased $12.0 million as a result of improvements in maintenance and repair costs and reduced liability costs associated with the rental equipment fleet. Maintenance and repair has been positively influenced by the retirement of older equipment from the truck fleet. Liability costs have improved as expected losses from prior years continue to develop positively. Depreciation expense, primarily related to the rental equipment fleet, decreased $27.3 million. Included in this decrease is a $15.5 million improvement in the gain on disposal of property, plant and equipment. Cost of sales and commission expenses are increasing in relation to the associated revenues.

Total costs and expenses for Life Insurance increased $21.5 million due to additional insurance reserves and commissions associated with the increase in new business.

As a result of the above mentioned changes in revenues and expenses, earnings from operations increased to $286.2 million for the first six months of fiscal 2011, as compared with $155.0 million for the first six months of fiscal 2010.

Interest expense for the first six months of fiscal 2011 was $43.3 million, compared with $47.2 million for the first six months of fiscal 2010.

Income tax expense was $91.3 million for the first six months of fiscal 2011, compared with $40.7 million for first six months of fiscal 2010 due to higher pretax earnings for the first six months of fiscal 2011.

Dividends accrued on our Series A Preferred were $6.3 million and $6.5 million for the first six months of fiscal 2011 and 2010, respectively.

As a result of the above mentioned items, earnings available to common shareholders were $145.3 million for the first six months of fiscal 2011, compared with $61.0 million for the first six months of fiscal 2010.

Basic and diluted earnings per common share for the first six months of fiscal 2011 were $7.48, compared with $3.15 for the first six months of fiscal 2010.

The weighted average common shares outstanding basic and diluted were 19,421,205 for the first six months of fiscal 2011, compared with 19,375,846 for the first six months of fiscal 2010.

Moving and Storage

Six Months Ended September 30, 2010 compared with the Six Months Ended September 30, 2009

Listed below are revenues for the major product lines at our Moving and Storage operating segment for the first six months of fiscal 2011 and the first six months of fiscal 2010:

	Six Months Ended September 30,
	2010		2009
	(Unaudited)
	(In thousands)
Self-moving equipment rentals	$	887,677	$	800,892
Self-storage revenues		58,874		54,416
Self-moving and self-storage products and service sales		120,111		113,344
Property management fees		9,116		8,928
Net investment and interest income		12,715		13,430
Other revenue		29,297		21,075
Moving and Storage revenue	$	1,117,790	$	1,012,085

Self-moving equipment rental revenues increased $86.8 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010. The increase was due to growth in both the number transactions and average revenue per transaction for In-Town and one-way moves. Factors contributing to the improvement in revenue per transaction were average miles driven, the mix of equipment rented and rental rates charged. We believe the growth in the number of transactions was influenced by an increase in demand for our services as well as from enhancements to our customer service capabilities.

Other revenue increased $8.2 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010 primarily from the expansion of new business initiatives including our U-BoxTM program.

	Six Months Ended September 30,
	2010			2009
	(Unaudited)
	(In thousands, except occupancy rate)
Room count as of September 30		148			141
Square footage as of September 30		12,032			11,412
Average number of rooms occupied		112			107
Average occupancy rate based on room count		76.8	%		76.5	%
Average square footage occupied		9,398			8,836

Total costs and expenses decreased $25.2 million during the first six months of fiscal 2011, compared with the first six months of fiscal 2010. Operating expenses for Moving and Storage decreased $12.0 million as a result of improvements in maintenance and repair costs and reduced liability costs associated with the rental equipment fleet. Maintenance and repair has been positively influenced by the retirement of older equipment from the truck fleet. Liability costs have improved as expected losses from prior years continue to develop positively. Depreciation expense, primarily related to the rental equipment fleet, decreased $27.3 million due to a decline in the amount of new equipment added to the balance sheet recently. Included in this decrease is a $15.5 million improvement in the gain on disposal of property, plant and equipment. Cost of sales and commission expenses are increasing in relation to the associated revenues.

Equity in the earnings of AMERCO’s insurance subsidiaries increased $0.3 million for the first six months of fiscal 2011, compared with the first six months of fiscal 2010.

As a result of the above mentioned changes in revenues and expenses, earnings from operations increased to $282.9 million for the first six months of fiscal 2011, compared with $151.7 million for the first six months of fiscal 2010.

Property and Casualty Insurance

Six Months Ended June 30, 2010 compared with the Six Months Ended June 30, 2009

Net premiums were $14.5 million and $13.3 million for the six months ended June 30, 2010 and 2009, respectively. A portion of RepWest’s premiums are from policies sold in conjunction with U-Haul rental transactions. As moving transactions have increased this year so have the related premiums.

Net investment income was $4.0 million and $3.6 million for the six months ended June 30, 2010 and 2009, respectively. The increase was a result of reinvesting some short term portfolios into longer term investments.

Net operating expenses were $7.0 million and $6.9 million for the six months ended June 30, 2010 and 2009, respectively.

Benefits and losses incurred were $8.1 million and $7.0 million for the six months ended June 30, 2010 and 2009, respectively. The increase was a result of the increased premiums and increased loss in the additional liability program and other terminated lines.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were $3.4 million and $3.1 million for the six months ended June 30, 2010 and 2009, respectively.

Life Insurance

Six Months Ended June 30, 2010 compared with the Six Months Ended June 30, 2009

Net premiums were $77.8 million and $56.3 million for the six months ended June 30, 2010 and 2009, respectively. Life insurance premiums increased by $24.7 million primarily as a result of sales of the Company’s single premium life product. This was offset by a decrease in Medicare supplement premiums of $2.4 million due to decrements in excess of new sales and premium rate increases.

Net investment income was $10.3 million and $9.8 million for the six months ended June 30, 2010 and 2009, respectively. The increase was due to gains on the sale of securities offset by lower investment yields.

Net operating expenses were $13.7 million and $10.3 million for the six months ended June 30, 2010 and 2009, respectively. The increase was a result of increased life commissions paid on expanded sales of the single premium life product. This was partially offset by a reduction of Medicare supplement commissions.

Benefits and losses incurred were $64.7 million and $46.5 million for the six months ended June 30, 2010 and 2009, respectively. Life insurance benefits increased $21.5 million due to the increase in reserves from expanded sales of the Company’s single premium life product and additional claims on a larger volume of inforce business; offset by a decrease in Medicare supplement benefits of $3.0 million.

Amortization of DAC and VOBA was $4.1 million and $4.2 million for the six months ended June 30, 2010 and 2009, respectively.

As a result of the above mentioned changes in revenues and expenses, pretax earnings from operations were $6.8 million and $6.6 million for the six months ended June 30, 2010 and 2009, respectively.

Liquidity and Capital Resources

We believe our current capital structure is a positive factor that will enable us to pursue our operational plans and goals and provide us with sufficient liquidity for the foreseeable future. The majority of our obligations currently in place mature at the end of fiscal years 2014, 2015 or 2018. However, since there are many factors which could affect our liquidity, including some which are beyond our control, there is no assurance that future cash flows will be sufficient to meet our outstanding debt obligations and our other future capital needs.

At September 30, 2010, cash and cash equivalents totaled $329.8 million, compared with $244.1 million on March 31, 2010. The assets of our insurance subsidiaries are generally unavailable to fulfill the obligations of non-insurance operations (AMERCO, U-Haul and Real Estate). As of September 30, 2010 (or as otherwise indicated), cash and cash equivalents, other financial assets (receivables, short-term investments, other investments, fixed maturities, and related party assets) and obligations of each operating segment were:

	Moving & Storage		Property and Casualty Insurance (a)		Life Insurance (a)
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	286,865	$	29,108	$	13,857
Other financial assets		354,574		376,531		585,109
Debt obligations		1,278,555		-		-

(a) As of June 30, 2010

Our Moving and Storage segment (AMERCO, U-Haul and Real Estate) had cash available under existing credit facilities of $233.6 million and $2.1 million of a term loan to be used for new equipment purchases.

Net cash provided by operating activities increased $103.9 million in the first six months of fiscal 2011, compared with fiscal 2010 primarily due to improved profitability at the Moving and Storage segment. This improvement largely came from increased revenues. Operating cash flows from the Life Insurance segment increased $28.0 million primarily due to new life insurance premiums.

Net cash used in investing activities increased $111.2 million in the first six months of fiscal 2011, compared with fiscal 2010. Purchases of property, plant and equipment, which are reported net of cash from leases, increased $98.4 million. Cash from the sales of property, plant and equipment increased $33.2 million largely due to improving resale values for pickup and cargo vans and an increase in the number sold. Cash used for investing activities at the insurance companies increased $39.8 million primarily due to investment in their fixed maturity portfolios.

Net cash used by financing activities increased $49.5 million in the first six months of fiscal 2011, as compared with fiscal 2010. The increase in cash used is primarily due to the repayments of the revolving loans. Net annuity withdrawals at Life Insurance decreased $11.3 million.

Liquidity and Capital Resources and Requirements of Our Operating Segments

Moving and Storage

To meet the needs of our customers, U-Haul maintains a large fleet of rental equipment. Capital expenditures have primarily reflected new rental equipment acquisitions and the buyouts of existing fleet from leases. The capital to fund these expenditures has historically been obtained internally from operations and the sale of used equipment and externally from debt and lease financing. In the future, we anticipate that our internally generated funds will be used to service the existing debt and fund operations. U-Haul estimates that during fiscal 2011 the Company will reinvest in its truck and trailer rental fleet approximately $210 million, net of equipment sales excluding any lease buyouts. Through the first six months of this year we have reinvested $89 million, net of equipment sales excluding lease buy-outs. Fleet investments in fiscal 2011 and beyond will be dependent upon several factors including availability of capital, the truck rental environment and the used-truck sales market. We anticipate that the fiscal 2011 investments will be funded largely through debt financing, external lease financing and cash from operations. Management considers several factors including cost and tax consequences when selecting a method to fund capital expenditures. Our allocation between debt and lease financing can change from year to year based upon financial market conditions which may alter the cost or availability of financing options.

Real Estate has traditionally financed the acquisition of self-storage properties to support U-Haul's growth through debt financing and funds from operations and sales. The Company’s plan for the expansion of owned storage properties includes the acquisition of existing self-storage locations from third parties, the acquisition and development of bare land, and the acquisition and redevelopment of existing buildings not currently used for self-storage. The Company is funding these development projects through construction loans and internally generated funds. For the first six months of fiscal 2011, the Company invested approximately $38 million in real estate acquisitions, new construction and renovation and repair. For fiscal 2011, the timing of new projects will be dependent upon several factors including the entitlement process,

availability of capital, weather, and the identification and successful acquisition of target properties. U-Haul's growth plan in self-storage also includes the expansion of the eMove® program, which does not require significant capital.

Net capital expenditures (purchases of property, plant and equipment less proceeds from the sale of property, plant and equipment) were $152.1 million and $86.9 million for the first six months of fiscal 2011 and 2010, respectively. During the first six months of fiscal 2011 and 2010, the Company entered into $19.8 million and $39.4 million, respectively of new equipment leases.

The Moving and Storage operating segment continues to hold significant cash and has access to additional liquidity. Management may invest these funds in our existing operations, expand our product lines or pursue external opportunities in the self-moving and storage market place or reduce existing indebtedness where possible.

Property and Casualty Insurance

State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, Property and Casualty Insurance’s assets are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

Stockholder’s equity was $155.2 million and $151.7 million at June 30, 2010 and December 31, 2009, respectively. The increase resulted from earnings of $2.2 million and an increase in other comprehensive income of $1.3 million. Property and Casualty Insurance does not use debt or equity issues to increase capital and therefore has no direct exposure to capital market conditions other than through its investment portfolio.

Life Insurance

The Life Insurance operating segment manages its financial assets to meet policyholder and other obligations including investment contract withdrawals. Life Insurance’s net withdrawals for the six months ended June 30, 2010 were $11.5 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, Life Insurance’s funds are generally not available to satisfy the claims of AMERCO or its legal subsidiaries.

Life Insurance’s stockholder’s equity was $183.3 million and $173.2 million at June 30, 2010 and December 31, 2009, respectively. The increase resulted from earnings of $4.4 million and an increase in other comprehensive income of $5.7 million. Life Insurance does not use debt or equity issues to increase capital and therefore has no direct exposure to capital market conditions other than through its investment portfolio.

Cash Provided (Used) from Operating Activities by Operating Segments

Moving and Storage

Net cash provided from operating activities were $327.7 million and $255.1 million for the first six months of fiscal 2011 and 2010, respectively. The increase in self-moving equipment rental revenues and product and service sales was the principal contributor to the increase in operating cash flows.

Property and Casualty Insurance

Net cash provided (used) by operating activities were $1.2 million and ($2.3) million for the first six months ended June 30, 2010 and 2009, respectively. The increase in cash provided by operations was a result of a decrease in outstanding reinsurance recoverable balances and policy holder funds.

Property and Casualty Insurance’s cash and cash equivalents and short-term investment portfolio amounted to $77.6 million and $106.3 million at June 30, 2010 and December 31, 2009, respectively. This balance reflects funds in transition from maturity proceeds to long term investments. Management believes this level of liquid assets, combined with budgeted cash flow, is adequate to meet foreseeable cash needs. Capital and operating budgets allow Property and Casualty Insurance to schedule cash needs in accordance with investment and underwriting proceeds.

Life Insurance

Net cash provided by operating activities were $28.9 million and $0.9 million for the first six months ended June 30, 2010 and 2009, respectively. The increase was primarily due to an increase of $20.9 million in net cash received from new sales of our single premium life product in 2010 and additional tax payments of $6.3 million in 2009.

In addition to cash flows from operating activities and financing activities, a substantial amount of liquid funds are available through Life Insurance’s short-term portfolio. At June 30, 2010 and December 31, 2009, cash and cash equivalents and short-term investments amounted to $25.0 million and $57.5 million, respectively. Management believes that the overall sources of liquidity is adequate to meet foreseeable cash needs.

Liquidity and Capital Resources - Summary

We believe we have the financial resources needed to meet our business plans and to meet our business requirements including capital expenditures for the investment in our rental fleet, rental equipment and storage space, working capital requirements and our preferred stock dividend program for at least the next twelve months.

Our borrowing strategy is primarily focused on asset-backed financing and rental equipment operating leases. As part of this strategy, we seek to ladder maturities and hedge floating rate loans through the use of interest rate swaps. While each of these loans typically contain provisions governing the amount that can be borrowed in relation to specific assets, the overall structure is flexible with no limits on overall Company borrowings. Management feels it has adequate liquidity between cash and cash equivalents and unused borrowing capacity in existing facilities to meet the current and expected needs of the Company over the next several years. At September 30, 2010, we had cash availability under existing credit facilities of $233.6 million and $2.1 million of a term loan to be used for new equipment purchases. It is possible that circumstances beyond our control could alter the ability of the financial institutions to lend us the unused lines of credit. Despite the fact that financial market conditions continue to be challenging, we believe that there are additional opportunities for leverage in our existing capital structure. For a more detailed discussion of our long-term debt and borrowing capacity, please see Note 4, Borrowings of the Notes to Condensed Consolidated Financial Statements.

Fair Value of Financial Instruments

On April 1, 2008, assets and liabilities recorded at fair value on the condensed consolidated balance sheets were measured and classified based upon a three tiered approach to valuation. ASC 820 requires that financial assets and liabilities recorded at fair value be classified and disclosed in a Level 1, Level 2 or Level 3 category. For more information, please see Note 14, Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements.

The available-for-sale securities held by the Company are recorded at fair value. These values are determined primarily from actively traded markets where prices are based either on direct market quotes or observed transactions. Liquidity is a factor considered during the determination of the fair value of these securities. Market price quotes may not be readily available for certain securities or the market for them has slowed or ceased. In situations where the market is determined to be illiquid, fair value is determined based upon limited available information and other factors including expected cash flows. At September 30, 2010 we had $3.0 million of available-for-sale assets classified in Level 3.

The interest rate swaps held by the Company as hedges against interest rate risk for our variable rate debt are recorded at fair value. These values are determined using pricing valuation models which include broker quotes for which significant inputs are observable. They include adjustments for counterparty credit quality and other deal-specific factors, where appropriate and are classified as Level 2.

Disclosures about Contractual Obligations and Commercial Commitments

Our estimates as to future contractual obligations have not materially changed from the disclosure included under the subheading Contractual Obligations in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

Off-Balance Sheet Arrangements

The Company uses off-balance sheet arrangements in situations where management believes that the economics and sound business principles warrant their use.

AMERCO utilizes operating leases for certain rental equipment and facilities with terms expiring substantially through 2017, with the exception of one land lease expiring in 2034. In the event of a shortfall in proceeds from the sales of the underlying rental equipment assets, AMERCO has guaranteed approximately $170.7 million of residual values at September 30, 2010 for these assets at the end of their respective lease terms. AMERCO has been leasing rental equipment since 1987. To date, we have not experienced residual value shortfalls related to these leasing arrangements. Using the average cost of fleet related debt as the discount rate, the present value of AMERCO’s minimum lease payments and residual value guarantees were $495.2 million at September 30, 2010.

Historically, AMERCO has used off-balance sheet arrangements in connection with the expansion of our self-storage business. For more information please see Note 10, Related Party Transactions of the Notes to Condensed Consolidated Financial Statements. These arrangements were primarily used when the Company’s overall borrowing structure was more limited. The Company does not face similar limitations currently and off-balance sheet arrangements have not been utilized in our self-storage expansion in recent years. In the future, the Company will continue to identify and consider off-balance sheet opportunities to the extent such arrangements would be economically advantageous to the Company and its stockholders.

The Company currently manages the self-storage properties owned or leased by SAC Holdings, Mercury, 4 SAC, 5 SAC, Galaxy, and Private Mini pursuant to a standard form of management agreement, under which the Company receives a management fee of between 4% and 10% of the gross receipts plus reimbursement for certain expenses. The Company received management fees, exclusive of reimbursed expenses, of $13.5 million and $14.3 million from the above mentioned entities during the first six months of fiscal 2011 and 2010, respectively. This management fee is consistent with the fee received for other properties the Company 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.

At September 30, 2010, 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 the Company’s other independent dealers whereby commissions are paid by the Company based on equipment rental revenues. The Company paid the above mentioned entities $21.4 million and $19.6 million in commissions pursuant to such dealership contracts during the first six months of fiscal 2011 and 2010, respectively.

These agreements along with notes with subsidiaries of SAC Holdings, 4 SAC, 5 SAC, Galaxy and Private Mini, excluding Dealer Agreements, provided revenues of $21.4 million, expenses of $1.2 million and cash flows of $24.5 million during the first six months of fiscal 2011. Revenues and commission expenses related to the Dealer Agreements were $101.4 million and $21.4 million, respectively during the first six months of fiscal 2011.

During the first six months of fiscal 2011, 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. Blackwater is wholly-owned by Mark V. Shoen. The Company does not have an equity ownership interest in SAC Holdings. The Company recorded interest income of $9.6 million and $9.4 million, and received cash interest payments of $8.8 million and $6.8 million, from SAC Holdings during the first six months of fiscal 2011 and 2010, respectively. The largest aggregate amount of notes receivable outstanding during the first six months of fiscal 2011 was $196.9 million and the aggregate notes receivable balance at September 30, 2010 was $196.6 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.

Fiscal 2011 Outlook

We will continue to focus our attention on increasing transaction volume and improving pricing, product and utilization for self-moving equipment rentals. Maintaining an adequate level of new investment in our truck fleet is an important component of our plan to meet these goals. Revenue in the U-Move program could be adversely impacted should we fail to execute in any of these areas. Even if we execute our plans, we could see declines in revenues primarily due to the continuing adverse economic conditions that are beyond our control.

We have added new storage locations and expanded at existing locations. In fiscal 2011 we are looking to complete current projects and increase occupancy in our existing portfolio of locations. New projects and acquisitions will be considered and pursued if they fit our long-term plans and meet our financial objectives. The Company will continue to invest capital and resources in the U-BoxTM storage container program throughout fiscal 2011.

The Property and Casualty Insurance operating segment will continue to provide loss adjusting and claims handling for U-Haul and underwrite components of the Safemove, Safetow, Super Safemove and Safestor protection packages to U-Haul customers.

The Life Insurance operating segment is pursuing its goal of expanding its presence in the senior market through the sales of its Medicare supplement, life and annuity policies. This strategy includes growing its agency force, expanding its new product offerings, and pursuing business acquisition opportunities.

Cautionary Statements Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, contains “forward-looking statements” regarding future events and our future results of operations. We may make additional written or oral forward-looking statements from time to time in filings with the SEC or otherwise. We believe such forward-looking statements are within the meaning of the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements may include, but are not limited to, projections of revenues, earnings or

loss, estimates of capital expenditures, plans for future operations, products or services, financing needs and plans, our perceptions of our legal positions and anticipated outcomes of government investigations and pending litigation against us, liquidity, goals and strategies, plans for new business, storage occupancy, growth rate assumptions, pricing, costs, and access to capital and leasing markets as well as assumptions relating to the foregoing. The words “believe,” “expect,” “anticipate,” “estimate,” “project” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could significantly affect results include, without limitation, the risk factors set forth in the section entitled Item 1A. Risk Factors contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010, as well as the following: the Company’s ability to operate pursuant to the terms of its credit facilities; the Company’s ability to maintain contracts that are critical to its operations; the costs and availability of financing; the Company’s ability to execute its business plan; the Company’s ability to attract, motivate and retain key employees; general economic conditions; fluctuations in our costs to maintain and update our fleet and facilities; our ability to refinance our debt; changes in government regulations, particularly environmental regulations; our credit ratings; the availability of credit; changes in demand for our products; changes in the general domestic economy; the degree and nature of our competition; the resolution of pending litigation against the Company; changes in accounting standards and other factors described in this report or the other documents we file with the SEC. The above factors, the following disclosures, as well as other statements in this report and in the Notes to Condensed Consolidated Financial Statements, could contribute to or cause such risks or uncertainties, or could cause our stock price to fluctuate dramatically. Consequently, the forward-looking statements should not be regarded as representations or warranties by the Company that such matters will be realized. The Company assumes no obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to financial market risks, including changes in interest rates and currency exchange rates. To mitigate these risks, we may utilize derivative financial instruments, among other strategies. We do not use derivative financial instruments for speculative purposes.

Interest Rate Risk

The exposure to market risk for changes in interest rates relates primarily to our variable rate debt obligations. We have used interest rate swap agreements and forward swaps to reduce our exposure to changes in interest rates. The Company enters into these arrangements with counterparties that are significant financial institutions with whom we generally have other financial arrangements. We are exposed to credit risk should these counterparties not be able to perform on their obligations.

Notional Amount			Fair Value			Effective Date	Expiration Date	Fixed Rate			Floating Rate
(Unaudited)
(In thousands)
$	61,569	(a), (b)		(3,598	)	5/10/2006	4/10/2012		5.06	%	1 Month LIBOR
	62,653	(a), (b)		(5,281	)	10/10/2006	10/10/2012		5.57	%	1 Month LIBOR
	21,574	(a)		(2,457	)	7/10/2006	7/10/2013		5.67	%	1 Month LIBOR
	259,167	(a)		(53,835	)	8/18/2006	8/10/2018		5.43	%	1 Month LIBOR
	13,950	(a)		(1,673	)	2/12/2007	2/10/2014		5.24	%	1 Month LIBOR
	9,394	(a)		(1,085	)	3/12/2007	3/10/2014		4.99	%	1 Month LIBOR
	9,400	(a)		(1,081	)	3/12/2007	3/10/2014		4.99	%	1 Month LIBOR
	12,250	(a), (b)		(964	)	8/15/2008	6/15/2015		3.62	%	1 Month LIBOR
	13,063	(a)		(1,150	)	8/29/2008	7/10/2015		4.04	%	1 Month LIBOR
	19,487	(a)		(1,859	)	9/30/2008	9/10/2015		4.16	%	1 Month LIBOR
	11,063	(a), (b)		(340	)	3/30/2009	4/15/2016		2.24	%	1 Month LIBOR
	14,501	(a)		(331	)	8/15/2010	7/15/2017		2.15	%	1 Month LIBOR

(a) interest rate swap agreement
(b) forward swap

As of September 30, 2010, the Company had approximately $595.7 million of variable rate debt obligations. If LIBOR were to increase 100 basis points, the increase in interest expense on the variable rate debt would decrease future earnings and cash flows by approximately $0.9 million annually (after consideration of the effect of the above derivative contracts.)

Additionally, our insurance subsidiaries’ fixed income investment portfolios expose the Company to interest rate risk. This interest rate risk is the price sensitivity of a fixed income security to changes in interest rates. As part of our insurance companies’ asset and liability management, actuaries estimate the cash flow patterns of our existing liabilities to determine their duration. These outcomes are compared to the characteristics of the assets that are currently supporting these liabilities assisting management in determining an asset allocation strategy for future investments that management believes will mitigate the overall effect of interest rates.

Foreign Currency Exchange Rate Risk

The exposure to market risk for changes in foreign currency exchange rates relates primarily to our Canadian business. Approximately 6.3% and 6.1% of our revenue was generated in Canada during the first six months of fiscal 2011 and 2010, respectively. The result of a 10.0% change in the value of the U.S. dollar relative to the Canadian dollar would not be material to net income. We typically do not hedge any foreign currency risk since the exposure is not considered material.

Item 4. Controls and Procedures

Attached as exhibits to this Form 10-Q are certifications of the registrants’ Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”), which are required in accordance with Rule 13a-14 of the Exchange Act. This "Controls and Procedures" section includes information concerning the controls and procedures evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented in Evaluation of Disclosure Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the CEO and CAO, conducted an evaluation of the effectiveness of the design and operation of the Company’s "disclosure controls and procedures" (as such term is defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) (“Disclosure Controls”) as of the end of the period covered by this Form 10-Q. Our Disclosure Controls are designed to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Our Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CAO, as appropriate to allow timely decisions regarding required disclosure. Based upon the controls evaluation, our CEO and CAO have concluded that as of the end of the period covered by this Form 10-Q, our Disclosure Controls were effective related to the above stated design purposes.

Inherent Limitations on the Effectiveness of Controls

The Company's management, including the CEO and CAO, does not expect that our Disclosure Controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding our legal proceedings please see Note 9, Contingencies of the Notes to Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

We are not aware of any material updates to the risk factors described in the Company’s previously filed Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On December 3, 2008, the Board authorized us, using management’s discretion, to buy back shares from former employees who were participants in our Employee Stock Ownership Plan. To be eligible for consideration, the employees’ respective ESOP account balances must be valued at more than $1,000 at the then-prevailing market prices but have less than 100 shares. No such shares have been purchased.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. (Removed and Reserved)

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following documents are filed as part of this report:

Exhibit Number	Description	Page or Method of Filing
3.1	Restated Articles of Incorporation of AMERCO	Incorporated by reference to AMERCO’s Registration Statement on form S-4 filed March 30, 2004, file no. 1-11255
3.2	Restated By-Laws of AMERCO	Incorporated by reference to AMERCO’s Current Report on Form 8-K filed on September 10, 2010, file no. 1-11255
10.1	2010-1 BOX TRUCK BASE INDENTURE, dated as of October 1, 2010, among 2010 U-HAUL S FLEET, LLC, a special purpose limited liability company established under the laws of Nevada, 2010 TM-1, LLC, a special purpose limited liability company established under the laws of Nevada, 2010 DC-1, LLC, a special purpose limited liability company established under the laws of Nevada, and 2010 TT-1, LLC, a special purpose limited liability company established under the laws of Nevada, as co-issuers (each an “Issuer” and collectively, the “Issuers”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (in such capacity, the “Trustee”).	Filed herewith
10.2	Schedule I to 2010-1 Base Indenture – Definitions List	Filed herewith

10.3	SERIES 2010-1 SUPPLEMENT, dated as of October 1, 2010 (this “Series Supplement”), among 2010 U-HAUL S FLEET, LLC, a special purpose limited liability company established under the laws of Nevada, 2010 TM-1, LLC, a special purpose limited liability company established under the laws of Nevada, 2010 DC-1, LLC, a special purpose limited liability company established under the laws of Nevada, and 2010 TT-1, LLC, a special purpose limited liability company established under the laws of Nevada, as co-issuers (each an “Issuer” and collectively, the “Issuers”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (in such capacity, and together with its successors in trust thereunder as provided in the 2010-1 Base Indenture referred to below, the “Trustee”) and as securities intermediary, to the 2010-1 Box Truck Base Indenture, dated as of the date hereof, among the Issuers and the Trustee (as amended, modified, restated or supplemented from time to time, exclusive of Series Supplements creating a new Series of Notes, the “2010-1 Base Indenture”).	Filed herewith
31.1	Rule 13a-14(a)/15d-14(a) Certificate of Edward J. Shoen, President and Chairman of the Board of AMERCO	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certificate of Jason A. Berg, Principal Financial Officer and Chief Accounting Officer of AMERCO	Filed herewith
32.1	Certificate of Edward J. Shoen, President and Chairman of the Board of AMERCO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith
32.2	Certificate of Jason A. Berg, Principal Financial Officer and Chief Accounting Officer of AMERCO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith

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.

AMERCO

Date: November 3, 2010 /s/ Edward J. Shoen

Edward J. Shoen

President and Chairman of the Board

(Duly Authorized Officer)

Date: November 3, 2010 /s/ Jason A. Berg

Jason A. Berg

Chief Accounting Officer

(Principal Financial Officer)