U HAUL INTERNATIONAL INC - 10-Q Quarterly Report

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

Insurance Reserves

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

Investments

For investments accounted for under SFAS No. 115, in determining if and when a decline in market value below amortized cost is other than temporary, quoted market prices, dealer quotes or discounted cash flows are reviewed. Other-than-temporary declines in value are recognized in the current period operating results to the extent of the decline.

Key Accounting Policies

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.


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Business Segment Strategy

Moving and Self-Storage

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

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

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

We continue to focus on expanding our dealer network, which provides added convenience for our customers, and expanding the selection and availability of rental equipment to satisfy the growing demands of our customers.

With respect to our retail sales of product, U-Haul has developed a number of specialty packing boxes, "Mover's Wrap" and Smart Move tape. Mover’s Wrap is a sticks-to-itself plastic stretch wrap used to bind, bundle, and fasten items when moving or storing. Additionally, U-Haul has added a full line of Smart Move tape products. The Smart Move tape is a color coded packing tape that has the room printed right on it allowing you to tape and label your belongings in one quick step.

eMove.com connects consumers to independent customer rated moving and storage service providers who provide packing, loading, unloading, self-storage, cleaning, driving help and more. With over 23,000 unedited reviews of service providers, the marketplace has facilitated over 40,000 moving and storage transactions. Another eMove service is the Storage Affiliate program. It targets independently owned self-storage facilities to connect into the eMove network to provide more customers with storage services. Over 2,200 self-storage facilities are now registered on the eMove network. We believe that acting as an intermediary, with little added investment, serves the customer in a cost effective manner. Within two years of its inception, eMove has established itself as the only online destination in the "do-it-yourself" mo ving and storage industry that connects consumers to service providers in all across North America. Our goal is to further utilize our web-based technology platform to further penetrate this market.

Republic Western Insurance Company

Republic Western Insurance Company (RepWest) provides loss adjusting and claims handling for U-Haul through regional offices across North America. RepWest also provides components of the Safemove, Safetow and Safestor protection packages to U-Haul customers. We continue to focus on increasing the penetration of these products. The business plan for RepWest includes offering property and casualty products in other U-Haul related programs. During the past year RepWest has commuted numerous assumed reinsurance treaties to eliminate the risk of further development on these treaties.

For additional information about the "DOI Supervision" reference is made to the section on "Risk Factors" under the title "RepWest has consented to an Order of Supervision issued by the Arizona Department of Insurance".

Oxford Life Insurance Company

Oxford originates and reinsures annuities, credit life and disability, single premium whole life, group life and disability coverage, and Medicare supplement insurance. Oxford also administers the self-insured employee health and dental plans for AMERCO. Reinsurance arrangements are entered into with unaffiliated reinsurers.

At June 30, 2004, the Company’s non-seasonal work force consisted of 137 full and part-time employees.


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Oxford’s business strategy is long-term capital growth through direct writing and reinsuring of annuity, credit life and disability, and Medicare supplement products. Oxford is pursing this growth strategy of increased direct writing via acquisitions of insurance companies, expanded distribution channels and product development. The acquisitions of North American Insurance Company and Safe Mate Life Insurance Company in 1997 and Christian Fidelity Life Insurance Company in 2000 represent a significant movement toward this long-term goal. Oxford has significantly expanded product offerings, distribution channels and administrative capabilities through these acquisitions.

Results of Operations

	Quarter Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
AMERCO and Consolidated Entities	(In thousands)
Rental revenue	$	469,320		$	482,972		$	(13,652	)		-3	%
Net sales		57,817			65,627			(7,810	)		-12	%
Premiums		39,072			67,480			(28,408	)		-42	%
Net investment and interest income		12,339			11,378			961			8	%
Total revenues		578,548			627,457			(48,909	)		-8	%

Operating expenses		288,447			305,324			(16,877	)		-6	%
Restructuring expenses		-			2,124			(2,124	)		-100	%
Commission expenses		51,908			44,802			7,106			16	%
Cost of sales		28,516			30,896			(2,380	)		-8	%
Benefits and losses		31,454			65,446			(33,992	)		-52	%
Amortization of deferred policy acquisition costs		7,778			8,759			(981	)		-11	%
Lease expense		36,348			34,191			2,157			6	%
Depreciation, net (a)		29,904			36,925			(7,021	)		-19	%
Total costs and expenses		474,355			528,467			(54,112	)		-10	%
Earnings from operations		104,193			98,990			5,203			5	%
Interest expense		18,060			30,773			(12,713	)		-41	%
Pretax earnings		86,133			68,217			17,916			26	%
Income tax expense		(33,074	)		(24,192	)		(8,882	)		37	%
Net earnings		53,059			44,025			9,034			21	%
Less: Preferred stock dividends		(3,241	)		(3,241	)		-			0	%
Earnings available to common shareholders	$	49,818		$	40,784		$	9,034			22	%

(a) Depreciation is shown net of (gain)/losses on the disposal of fixed assets:

	Quarter Ended September 30,
	2004		2003
	(Unaudited)
	(In thousands)
Depreciation expense	$	28,073	$	33,100
Loss on disposals		1,831		3,825
Depreciation, net	$	29,904	$	36,925


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	Six Months Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
AMERCO and Consolidated Entities	(In thousands)
Rental revenue	$	895,952		$	918,014		$	(22,062	)		-2	%
Net sales		119,063			134,836			(15,773	)		-12	%
Premiums		82,134			131,936			(49,802	)		-38	%
Net investment and interest income		32,110			22,787			9,323			41	%
Total revenues		1,129,259			1,207,573			(78,314	)		-6	%

Operating expenses		560,659			600,317			(39,658	)		-7	%
Restructuring expenses		-			4,414			(4,414	)		-100	%
Commission expenses		98,821			84,996			13,825			16	%
Cost of sales		56,256			63,115			(6,859	)		-11	%
Benefits and losses		65,591			118,845			(53,254	)		-45	%
Amortization of deferred policy acquisition costs		17,736			17,859			(123	)		-1	%
Lease expense		76,883			68,514			8,369			12	%
Depreciation, net (a)		57,932			74,963			(17,031	)		-23	%
Total costs and expenses		933,878			1,033,023			(99,145	)		-10	%
Earnings from operations		195,381			174,550			20,831			12	%
Interest expense		37,064			61,671			(24,607	)		-40	%
Pretax earnings		158,317			112,879			45,438			40	%
Income tax expense		(60,839	)		(41,118	)		(19,721	)		48	%
Net earnings		97,478			71,761			25,717			36	%
Less: Preferred stock dividends		(6,482	)		(6,482	)		-			0	%
Earnings available to common shareholders	$	90,996		$	65,279		$	25,717			39	%

(a) Depreciation is shown net of (gains)/losses on the disposal of fixed assets:

	Six Months Ended September 30,
	2004		2003
	(Unaudited)
	(In thousands)
Depreciation expense	$	56,455	$	69,674
Loss on disposals		1,477		5,289
Depreciation, net	$	57,932	$	74,963


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Quarters Ended - September 30, 2004 versus September 30, 2003

AMERCO and its consolidated entities reported revenues of $578.5 million for the second quarter of fiscal year 2005. This compares with revenues of $627.5 million for the second quarter of fiscal year 2004. During the first quarter of this year, we sold 78 self-storage properties to U.H. Storage DE, a W.P. Carey affiliate (See Footnote 9 for a more detailed discussion of the W.P. Carey Transaction). This reduced storage revenues approximately $7.9 million in the second quarter of fiscal year 2005, compared with the second quarter of last year. Moving equipment rentals and storage revenues at U-Haul, adjusted for the effect of the W.P. Carey Transaction, increased approximately 3% in the second quarter of fiscal year 2005, compared with the same period a year ago. Also, we deconsolidated 281 SAC Holding Corporation sto rage properties during the fourth quarter of last year, and they are excluded from our fiscal year 2005 results. Included in the second quarter of last year were $24.4 million of revenues for these deconsolidated properties. Revenues at RepWest were $25.0 million lower in the second quarter of this year compared with the same period a year ago. This decline reflects the impact of our strategy to exit unprofitable non U-Haul lines of business. At Oxford, revenue decreased in the second quarter by 13%, primarily as a result of the lingering effects of its rating downgrade by A. M. Best in 2003.

Earnings from operations were $104.2 million in the second quarter of fiscal year 2005 compared with $99.0 million for the same period last year. Earnings from operations, at U-Haul were $93.1 million in the second quarter of fiscal year 2005. This reflects a decrease of $5.3 million, or 5% compared with the second quarter of fiscal year 2004, and is attributable to a change in the timing of recognizing current year insurance expense to better match revenues with expenses and lost equipment rentals resulting from the hurricanes that affected the southeastern part of the U.S. during August and September. Earnings from operations at Oxford were $2.5 million in the second quarter of this year, compared with $1.8 million in the second quarter of last year. The increase from 2003 is due primarily to improved loss experienc e in the credit insurance segment. At RepWest, the run-off of our non-U-Haul insurance business is progressing as planned. As a result, earnings from operations were $0.1 million in the second quarter of this year, compared with a loss from operations of $14.2 million for the same period last year

Interest expense for the second quarter of fiscal year 2005 was $18.1 million. This compares with $30.8 million in the second quarter of fiscal year 2004. The reduction in interest expense is due to the deconsolidation of SAC Holding Corporation, lower borrowings and lower borrowing costs. Income tax expense was $33.1 million in the second quarter of fiscal year 2005 compared with $24.2 million in the second quarter of fiscal year 2004, and reflects higher earnings before taxes. Preferred stock dividends were unchanged, at $3.2 million for both periods. As a result of the above mentioned items, net income available to common shareholders was $49.8 million in the second quarter of fiscal year 2005, compared with $40.8 million for the same period last year. Earnings per share were $2.39 in the second quarter of fiscal y ear 2005, compared with $1.97 for the same period last year. This reflects an improvement of 21%, or $.42 per share.

Six Months Ended - September 30, 2004 versus September 30, 2003

AMERCO and its consolidated entities reported revenues of $1,129.3 million for the first six months of fiscal year 2005. This compares with revenues of $1,207.6 million for the first six months of fiscal year 2004. As previously mentioned, we deconsolidated 281 SAC Holding Corporation storage properties during the fourth quarter of last year, and they are excluded from our fiscal year 2005 results. Included in the first six months of last year were $51.6 million of revenues for these deconsolidated properties. Moving equipment rentals and storage revenues at U-Haul, adjusted for the effect of the W. P. Carey Transaction, increased 5% in the first six months of fiscal year 2005, compared with the same period a year ago. The W.P. Carey transaction had the effect of reducing storage revenues approximately $15.5 million i n the first six months of fiscal year 2005. Revenues at RepWest were $45.1 million lower for the first six months of 2004, compared with the same period a year ago. This decline reflects the impact of its strategy to exit unprofitable non U-Haul lines of business. At Oxford, revenue decreased 11% for the first six months of 2004, primarily as a result of the lingering effects of its rating downgrade by A. M. Best in 2003.


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Earnings from operations were $195.4 million for the first six months of fiscal year 2005, compared with $174.6 million for the same period last year. Earnings from operations, at U-Haul, were $169.1 million for the first six months of fiscal year 2005. This reflects an improvement of $4.9 million, or 3% compared with the same period last year and reflects the above mentioned change in the timing of recognizing current year insurance expense and lost equipment rentals resulting from the hurricanes in the southeastern U.S. Through six months strong truck and storage rentals, along with increased fleet productivity were major contributors to the increase in operating profitability at U-Haul. Earnings from operations at Oxford were $6.2 million for the first six months of 2004, compared with $3.4 million for the same per iod last year. The increase from 2003 is due primarily to improved investment income, and positive loss experience in the Medicare supplement and Credit insurance segments. At RepWest, the run-off of our non-U-Haul insurance business is progressing as planned. As a result, earnings from operations were $0.5 million in the first six months of 2004, compared with a loss from operations of $14.4 million for the same period last year.

Interest expense for the first six months of fiscal year 2005 was $37.1 million. This compares with $61.7 million in the same period last year. The reduction in interest expense is due to the deconsolidation of SAC Holding Corporation, lower borrowings and lower borrowing costs. Income tax expense was $60.8 million for the first six months of fiscal year 2005, compared with $41.1 million in the same period last year, and reflects higher earnings before taxes. Preferred stock dividends were unchanged, at $6.5 million for both periods. As a result of the above mentioned items, net income available to common shareholders was $91.0 million for the first six months of fiscal year 2005, compared with $65.3 million for the same period last year. Earnings per share were $4.38 for the first six months of fiscal year 2005, comp ared with $3.15 for the same period last year. This reflects an improvement of 39%, or $1.23 per share.

Moving and Self-Storage

The following tables set forth net revenue and certain consolidated statements of income data for the periods indicated:

	Quarter Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
U-Haul International	(In thousands)
Rental revenue	$	465,836		$	456,186		$	9,650			2	%
Net sales		53,546			51,444			2,102			4	%
Net investment and interest income		5,339			7,804			(2,465	)		-32	%
Total revenues		524,721			515,434			9,287			2	%

Operating expenses		285,963			271,097			14,866			5	%
Commission expenses		54,625			53,789			836			2	%
Cost of sales		27,227			24,788			2,439			10	%
Lease expense		36,428			37,014			(586	)		-2	%
Depreciation, net (a)		27,386			30,314			(2,928	)		-10	%
Total costs and expense		431,629			417,002			14,627			4	%
Earnings from operations		93,092			98,432			(5,340	)		-5	%
Interest expense, net		(8,030	)		(4,081	)		(3,949	)		97	%
Pretax earnings		101,122			102,513			(1,391	)		-1	%
Income tax expense		(38,366	)		(37,698	)		(668	)		2	%
Net earnings	$	62,756		$	64,815		$	(2,059	)		-3	%

(a) Depreciation is shown net of (gains)/losses on the disposal of fixed assets:


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	Quarter Ended September 30,
	2004		2003
	(Unaudited)
	(In thousands)
Depreciation expense	$	25,401	$	26,344
Loss on disposals		1,985		3,970
Depreciation, net	$	27,386	$	30,314

	Six Months Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
U-Haul International	(In thousands)
Rental revenue	$	891,216		$	863,233		$	27,983			3	%
Net sales		110,440			105,720			4,720			4	%
Net investment and interest income		11,299			15,832			(4,533	)		-29	%
Total revenues		1,012,955			984,785			28,170			3	%

Operating expenses		555,691			533,832			21,859			4	%
Commission expenses		103,947			100,942			3,005			3	%
Cost of sales		53,235			50,415			2,820			6	%
Lease expense		77,167			74,534			2,633			4	%
Depreciation, net (a)		53,851			60,894			(7,043	)		-12	%
Total costs and expense		843,891			820,617			23,274			3	%
Earnings from operations		169,064			164,168			4,896			3	%
Interest expense, net		(6,904	)		(5,150	)		(1,754	)		34	%
Pretax earnings		175,968			169,318			6,650			4	%
Income tax expense		(66,889	)		(61,422	)		(5,467	)		9	%
Net earnings	$	109,079		$	107,896		$	1,183			1	%

(a) Depreciation is shown net of (gains)/losses on the disposal of fixed assets:

	Six Months Ended September 30,
	2004		2003
	(Unaudited)
	(In thousands)
Depreciation expense	$	51,149	$	55,480
Loss on disposals		2,702		5,414
Depreciation, net	$	53,851	$	60,894


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	Quarter Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
SAC Holdings *	(In thousands)
Rental revenue	$	7,505		$	41,858		$	(34,353	)		-82	%
Net sales		4,271			14,161			(9,890	)		-70	%
Total revenues		11,776			56,019			(44,243	)		-79	%

Operating expenses		5,446			28,493			(23,047	)		-81	%
Cost of sales		1,289			6,098			(4,809	)		-79	%
Depreciation, net		642			5,094			(4,452	)		-87	%
Total costs and expenses		7,377			39,685			(32,308	)		-81	%
Earnings from operations		4,399			16,334			(11,935	)		-73	%
Interest expense		3,968			20,414			(16,446	)		-81	%
Pretax income(loss)		431			(4,080	)		(4,511	)		-111	%
Income tax (expense)benefit		(231	)		1,585			(1,816	)		-115	%
Net earnings (loss)	$	200		$	(2,495	)	$	(2,695	)		-108	%

* SAC Holdings II for quarter ended September 2004 and SAC Holdings I & II for 2003

	Six Months Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
SAC Holdings *	(In thousands)
Rental revenue	$	14,514		$	84,158		$	(69,644	)		-83	%
Net sales		8,608			29,079			(20,471	)		-70	%
Total revenues		23,122			113,237			(90,115	)		-80	%

Operating expenses		11,389			56,615			(45,226	)		-80	%
Cost of sales		3,013			12,684			(9,671	)		-76	%
Depreciation, net		1,260			10,860			(9,600	)		-88	%
Total costs and expenses		15,662			80,159			(64,497	)		-80	%
Earnings from operations		7,460			33,078			(25,618	)		-77	%
Interest expense		7,231			41,221			(33,990	)		-82	%
Pretax loss		229			(8,143	)		(8,372	)		-103	%
Income tax (expense) benefit		(152	)		2,116			(2,268	)		-107	%
Net earnings (loss)	$	77		$	(6,027	)	$	(6,104	)		-101	%

* SAC Holdings II for six months ended September 2004 and SAC Holdings I & II for 2003


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	Quarter Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
Amerco Real Estate	(In thousands)
Rental revenue	$	14,556		$	15,312		$	(756	)		-5	%
Net sales		-			22			(22	)		-100	%
Net investment and interest income		27			2,003			(1,976	)		-99	%
Total revenues		14,583			17,337			(2,754	)		-16	%

Operating expenses		1,617			1,870			(253	)		-14	%
Cost of sales		-			10			(10	)		-100	%
Lease expense		4			138			(134	)		-97	%
Depreciation, net (a)		2,006			1,995			11			1	%
Total costs and expenses		3,627			4,013			(386	)		-10	%
Earnings from operations		10,956			13,324			(2,368	)		-18	%
Interest expense		4,977			9,041			(4,064	)		-45	%
Pretax earnings		5,979			4,283			1,696			40	%
Income tax expense		(2,410	)		(1,793	)		(617	)		34	%
Net earnings	$	3,569		$	2,490		$	1,079			43	%

(a) Depreciation is shown net of (gains)/losses on the disposal of fixed assets:

	Quarter Ended September 30,
	2004			2003
	(Unaudited)
	(In thousands)
Depreciation expense	$	2,160			2,140
Gain on disposals		(154	)		(145	)
Depreciation, net	$	2,006			1,995


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	Six Months Ended September 30,						Changes			Changes
	2004			2003			Dollar			Percentage
Amerco Real Estate	(In thousands)
Rental revenue	$	29,363		$	30,140		$	(777	)		-3	%
Net sales		15			37			(22	)		-59	%
Net investment and interest income		54			3,995			(3,941	)		-99	%
Total revenues		29,432			34,172			(4,740	)		-14	%

Operating expenses		3,647			3,643			4			0	%
Cost of sales		8			16			(8	)		-50	%
Lease expense		27			275			(248	)		-90	%
Depreciation, net (a)		3,084			4,166			(1,082	)		-26	%
Total costs and expenses		6,766			8,100			(1,334	)		-16	%
Earnings from operations		22,666			26,072			(3,406	)		-13	%
Interest expense		6,624			15,838			(9,214	)		-58	%
Pretax earnings		16,042			10,234			5,808			57	%
Income tax expense		(6,380	)		(4,224	)		(2,156	)		51	%
Net earnings	$	9,662		$	6,010		$	3,652			61	%

(a) Depreciation is shown net of (gains)/losses on the disposal of fixed assets:

	Six Months Ended September 30,
	2004			2003
	(Unaudited)
	(In thousands)
Depreciation expense	$	4,309			4,291
Gain on disposals		(1,225	)		(125	)
Depreciation, net	$	3,084			4,166

Quarters Ended - September 30, 2004 versus September 30, 2003

Rental revenues at U-Haul, before consolidating entries, were $465.8 million for the second quarter of fiscal year 2005 compared with $456.2 million for the same period last year. This represents an increase of $9.7 million, or 2%, and was driven by a combination of factors, including increased equipment rentals, better price realization and product mix, net of lower storage revenues resulting from the sale of property pursuant to the W.P. Carey Transaction, and lost equipment rentals resulting from the hurricanes that affected the southeastern U.S. during August and September. Rental revenues at the SAC entities, before consolidating entries, were $7.5 million for the second quarter of fiscal year 2005, compared with $41.9 million for the same period last year. This represents a reduction of $34.4 million, and reflects the deconsolidation of SAC Holding Corporation. Rental revenues at Real Estate, before consolidating entries, were $14.6 million for the second quarter of fiscal year 2005 and $15.3 million for the same period last year.

Net sales of moving and self-storage related products and services at U-Haul were $53.5 million for the second quarter of fiscal year 2005, compared with $51.4 million for the same period last year. This represents an increase of $2.1 million, or 4%, and was driven by increased rental activity and improved pricing. Net sales of moving and self-storage related products and services at the SAC entities were $4.3 million for the second quarter of fiscal year 2005, compared with $14.2 million for the same period last year. This represents a reduction of $9.9 million, and reflects the deconsolidation of SAC Holding Corporation.


	45

Net investment and interest income at U-Haul, before consolidating entries, was $5.3 million for the second quarter of fiscal year 2005, compared with $7.8 million for the same period last year. The reduction in interest income is directly related to lower average investment balances in SAC Holdings notes. Net investment and interest income at Real Estate, before consolidating entries, decreased $2.0 million in the second quarter of fiscal year 2005, compared with the same period last year. The reduction in interest income is directly related to lower investments in mortgage notes, which decreased as a result of lower investment balances in SAC Holdings notes.

Operating expenses at U-Haul, before consolidating entries, were $286.0 million for the second quarter of fiscal year 2005, compared with $271.1 million for the same period last year. This represents an increase of $14.9 million, or 5%, and was the result of increases in payroll, equipment maintenance and timing changes in the recognition of insurance costs. Increased payroll and maintenance were driven by increases in volume and inflation, partially offset by lower other operating expenses. Operating expenses at the SAC entities, before consolidating entries, were $5.4 million for the second quarter of fiscal year 2005, compared with $28.5 million for the same period last year. This represents a reduction of $23.0 million, and reflects the deconsolidation of SAC Holding Corporation. Operating expenses at Real Estate, before consolidating entries, were $1.6 million for the second quarter of fiscal year 2005, compared with $1.9 million for the same period last year.

Dealer commissions at U-Haul were $54.6 million for the second quarter of fiscal year 2005, compared with $53.8 million for the same period last year. This represents an increase of $0.8 million, or 2%, and was driven by increased equipment rentals at our independent dealers.

Lease expense at U-Haul, before consolidating entries, was $36.4 million for the second quarter of fiscal year 2005, compared with $37.0 million for the same period last year. This represents a decrease of $0.6 million, or 2%, and reflects a decrease in the amount of rental equipment we leased.

Depreciation expense at U-Haul, before consolidating entries, was $27.4 million for the second quarter of fiscal year 2005, compared with $30.3 million for the same period last year. Depreciation expense at SAC Holdings, before consolidating entries, was $0.6 million during the second quarter of fiscal year 2005, compared with $5.1 million for the same period last year. This represents a reduction of $4.5 million and reflects the deconsolidation of SAC Holding Corporation. Depreciation expense at Real Estate, before consolidating entries, was $2.0 million during the second quarter of fiscal year 2005, which is consistent with the same period last year.

Earnings from operations at U-Haul, before consolidating entries, were $93.1 million during the second quarter of fiscal year 2005, compared with $98.4 million for the same period last year. This represents an decrease of $5.3 million, or 5%, and is attributable to the change in the timing of recognizing current year insurance expense and lost equipment rentals resulting from the hurricanes that affected the southeastern U.S. during August and September. Earnings from operations at SAC Holdings, before consolidating entries, were $4.4 million in the second quarter of fiscal year 2005, compared with $16.3 million for the same period last year. This represents a reduction of $11.9 million, and reflects the deconsolidation of SAC Holding Corporation. Earnings from operations at Real Estate, before consolidating entries, were $11.0 million during the second quarter of fiscal year 2005, compared with $13.3 million for the same period last year. This represents a reduction of $2.3 million, and reflects lower interest income from investments in mortgage notes, partially offset by gains on real estate sales.

Six Months Ended - September 30, 2004 versus September 30, 2003

Rental revenues at U-Haul, before consolidating entries, were $891.2 million for the first six months of fiscal year 2005, compared with $863.2 million for the same period last year. This represents an increase of $28.0 million, or 3% and was driven by a combination of factors, including increased equipment rentals, better price realization and product mix, net of lower storage revenues resulting from the sale of property pursuant to the W.P. Carey Transaction and lost equipment rentals resulting from the hurricanes that affected the southeastern U.S. during August and September. Rental revenues at the SAC entities, before consolidating entries, were $14.5 million for the first six months of fiscal year 2005, compared with $84.2 million for the same period last year. This represents a reduction of $69.6 million, and r eflects the deconsolidation of SAC Holding Corporation. Rental revenues at Real Estate, before consolidating entries, were $29.4 million for the first six months of fiscal year 2005, and $30.1 million for the same period last year.


	46

Net sales of moving and self-storage related products and services at U-Haul were $110.4 million for the first six months of fiscal year 2005, compared with $105.7 million for the same period last year. This represents an increase of $4.7 million, or 4%, and was driven by increased rental activity and improved pricing. Net sales of moving and self-storage related products and services at the SAC entities were $8.6 million for the first six months of fiscal year 2005, compared with $29.1 million for the same period last year. This represents a reduction of $20.5 million, and reflects the deconsolidation of SAC Holding Corporation.

Net investment and interest income at U-Haul, before consolidating entries, was $11.3 million for the first six months of fiscal year 2005 compared with $15.8 million for the same period last year. The reduction in interest income is directly related to lower average investment balances in SAC Holdings notes. Net investment and interest income at Real Estate, before consolidating entries, was $3.9 million lower for the first six months of fiscal year 2005, compared with the same period last year. The reduction in interest income is directly related to lower investments in mortgage notes, which decreased as a result of lower investment balances in SAC Holdings notes.

Operating expenses at U-Haul, before consolidating entries, were $555.7 million for the first six months of fiscal year 2005, compared with $533.8 million for the same period last year. This represents an increase of $21.9 million, or 4%, and was the result of increases in payroll, equipment maintenance and changes in the timing recognition of insurance costs. Increases in payroll and maintenance were driven by increases in volume and inflation, partially offset by lower other operating expenses. Operating expenses at the SAC entities, before consolidating entries, were $11.4 million for the first six months of fiscal year 2005, compared with $56.6 million for the same period last year. This represents a reduction of $45.2 million, and reflects the deconsolidation of SAC Holding Corporation. Operating expenses at Real Estate, before consolidating entries, were $3.6 million for the first six months of fiscal year 2005, which is consistent with the same period last year.

Dealer commissions at U-Haul were $103.9 million for the first six months of fiscal year 2005, compared with $100.9 million for the same period last year. This represents an increase of $3.0 million, or 3%, and was driven by increased equipment rentals at our independent dealers.

Lease expense at U-Haul, before consolidating entries, was $77.2 million for the first six months of fiscal year 2005, compared with $74.5 million for the same period last year. This represents an increase of $2.6 million, or 4%, and reflects an increase in the amount of rental equipment we leased.

Depreciation expense at U-Haul, before consolidating entries, was $53.9 million for the first six months of fiscal year 2005, compared with $60.9 million for the same period last year. Depreciation expense at SAC Holdings, before consolidating entries, was $1.3 million during the first six months of fiscal year 2005, compared with $10.9 million for the same period last year. This represents a reduction of $9.6 million and reflects the deconsolidation of SAC Holding Corporation. Depreciation expense, net at Real Estate, before consolidating entries, was $3.1 million during the first six months of fiscal year 2005, compared with $4.2 million for the same period last year, and includes a gain of $1.2 million from asset disposals this year.

Earnings from operations at U-Haul, before consolidating entries, were $169.1 million during the first six months of fiscal year 2005, compared with $164.2 for the same period million last year. This represents an increase of $4.9 million, or 3%, and reflects the abovementioned change in the timing of recognizing current year insurance expense and lost equipment rentals resulting from the hurricanes in the southeastern U.S. Also, we experienced strong truck and storage rentals during the first six months of fiscal 2005, which along with increased fleet productivity, were major contributors to the increase in operating profitability at U-Haul. Earnings from operations at SAC Holdings, before consolidating entries, were $7.5 million in the first six months of fiscal year 2005, compared with $33.1 million for the same pe riod last year. This represents a reduction of $25.6 million, and reflects the deconsolidation of SAC Holding Corporation. Earnings from operations at Real Estate, before consolidating entries, were $22.7 million during the first six months of fiscal year 2005, compared with $26.1 million for the same period last year. This represents a reduction of $3.4 million, and reflects lower interest income from investments in mortgage notes, partially offset by gains on real estate sales.


	47

Oxford Life Insurance Company

The following table sets forth net revenue and certain consolidated statements of income data for the periods indicated:

	Quarter Ended June 30,					Changes			Changes
	2004			2003		Dollar			Percentage
Oxford Life Insurance	(In thousands)
Premiums	$	32,405		$	38,341	$	(5,936	)		-15	%
Net investment income		5,480			5,324		156			3	%
Total revenue		37,885			43,665		(5,780	)		-13	%
Benefits and losses		23,585			28,031		(4,446	)		-16	%
Amortization of deferred policy acquisition costs		5,995			5,303		692			13	%
Operating expenses		5,808			8,503		(2,695	)		-32	%
Total expenses		35,388			41,837		(6,449	)		-15	%
Earnings from operations		2,497			1,828		669			37	%
Income tax expense (benefit)		(849	)		56		(905	)		-1616	%
Net earnings	$	1,648		$	1,884	$	(236	)		-13	%

Net premiums were $32.4 million and $38.3 million for the quarters ended June 30, 2004 and 2003, respectively. Medicare supplement premiums decreased by $2.3 million due to lapses on closed lines being greater than new business written on active lines. Credit insurance premiums decreased $1.5 million for the quarter due to fewer accounts. Life and annuity premiums decreased $2.1 million due to fewer sales and annuitizations.

Net investment income before inter-company eliminations was $5.5 million and $5.3 million for the quarters ended June 30, 2004 and 2003, respectively.

Benefits incurred were $23.6 million and $28.0 million for the quarters ended June 30, 2004, and 2003, respectively. Medicare supplement incurred claims decreased $1.3 million due to reduced exposure and improved experience. Credit insurance benefits decreased $1.3 million due to reduced exposure and improved disability experience. Life insurance incurred claims declined $1.8 million due to declining sales and improved mortality experience.

Amortization of deferred acquisition costs (DAC) and the value of business acquired (VOBA) was $6.0 million and $5.3 million for the quarters ended June 30, 2004 and 2003, respectively. These costs are amortized for life and health policies as the premium is earned over the term of the policy; and for deferred annuities, amortized in relation to interest spreads. Amortization associated with annuity policies increased $1.0 million from the comparable 2003 quarter primarily due to increased surrender activity. Other segments had decreases of $0.3 from 2003 due to decreased new business volume.

Operating expenses were $5.8 million and $8.5 million for the quarters ended June 30, 2004, and 2003. Non-deferrable commissions decreased $1.9 million from 2003 primarily due to decreased sales of Medicare supplement and life products. Fee income from surrendered annuity policies netted into this category increased $0.8 million from the comparable 2003 quarter.

Operating profit before tax and inter-company eliminations was $2.5 million and $1.8 for the quarters ending June 30, 2004, and 2003, respectively. The increase from 2003 is due primarily to improved loss experience in the credit insurance segment.


	48

	Six Months Ended June 30,						Changes			Changes
	2004			2003			Dollar			Percentage
Oxford Life Insurance	(In thousands)
Premiums	$	66,037		$	76,425		$	(10,388	)		-14	%
Net investment income		11,661			10,677			984			9	%
Total revenue		77,698			87,102			(9,404	)		-11	%
Benefits and losses		47,694			55,848			(8,154	)		-15	%
Amortization of deferred policy acquisition costs		12,583			10,693			1,890			18	%
Operating expenses		11,251			17,153			(5,902	)		-34	%
Total expenses		71,528			83,694			(12,166	)		-15	%
Earnings from operations		6,170			3,408			2,762			81	%
Income tax expense		(2,152	)		(818	)		(1,334	)		163	%
Net earnings	$	4,018		$	2,590		$	1,428			55	%

Net premiums were $66.0 million and $76.4 million for the six months ended June 30, 2004 and 2003, respectively. Medicare supplement premiums decreased by $4.4 million due to lapses on closed lines being greater than new business written on active lines. Credit insurance premiums decreased $3.1 million due to fewer accounts. Life and annuity premiums decreased $2.9 million from fewer sales and annuitizations.

Net investment income before inter-company eliminations was $11.7 million and $10.7 million for the six months ended June 30, 2004 and 2003, respectively. This was primarily due to interest received from the maturity of inter-company investments.

Benefits incurred were $47.7 million and $55.8 million for the six months ended June 30, 2004, and 2003, respectively. Medicare supplement incurred claims decreased $4.3 million due primarily to reduced exposure. Credit insurance benefits decreased $1.7 million due to reduced exposure and improved disability experience. All other lines had decreases of $2.1 million.

Amortization of deferred acquisition costs (DAC) and the value of business acquired (VOBA) was $12.6 million and $10.7 million for the six months ended June 30, 2004 and 2003, respectively. These costs are amortized for life and health policies as the premium is earned over the term of the policy; and for deferred annuities, amortized in relation to interest spreads. Amortization associated with annuity policies increased $2.7 million from 2003 primarily due to increased surrender activity. Other segments had decreases of $0.8 from the comparable 2003 period due to decreased new business volume.

Operating expenses were $11.3 million and $17.2 million for the six months ended June 30, 2004, and 2003. Non-deferrable commissions have decreased $3.3 million from 2003 primarily due to decreased sales of Medicare supplement and life products. Fee income from surrendered annuity policies netted into this category increased $2.0 million from the comparable 2003 period. General and administrative expenses net of fees collected decreased $0.4 million.

Operating profit before tax and inter-company eliminations was $6.2 million, and $3.4 for the six months ending June 30, 2004, and 2003, respectively. The increase from 2003 is due primarily to improved investment income, and positive loss experience in the Medicare supplement and Credit insurance segments.


	49

Republic Western Insurance Company

The following table sets forth net revenue and certain consolidated statements of income data for the periods indicated:

	Quarter Ended June 30,						Changes			Changes
	2004			2003			Dollar			Percentage
Property and Casualty Insurance	(In thousands)
Premiums	$	7,038		$	29,574		$	(22,536	)		-76	%
Net investment income		3,699			6,118			(2,419	)		-40	%
Total revenues		10,737			35,692			(24,955	)		-70	%
Benefits and losses		7,869			37,415			(29,546	)		-79	%
Amortization of deferred policy acquisition costs		1,783			3,456			(1,673	)		-48	%
Operating expenses		982			9,023			(8,041	)		-89	%
Total expenses		10,634			49,894			(39,260	)		-79	%
Earnings/(loss) from operations		103			(14,202	)		14,305			101	%
Income tax benefit (expense)		(29	)		4,983			(5,012	)		-101	%
Net earnings (loss)	$	74		$	(9,219	)	$	9,293			101	%

Premiums, before inter-company eliminations, were $7.0 million and $29.6 million for the quarters ended June 30, 2004 and 2003, respectively. Premiums from terminated programs were $1.6 million and $23.2 million for the quarters ended June 30, 2004 and 2003, respectively. The decrease in 2004 is the result of the RepWest shifting its operating focus away from non-affiliated and unprofitable lines of business. Rental industry revenues were $5.4 million and $6.4 million for the quarters ended June 30, 2004 and 2003, respectively. The 2004 decrease is the result of decreased premiums in the non-U-Haul self storage program.

Net investment income was $3.7 million and $6.1 million for the quarters ended June 30, 2004 and 2003, respectively. The decrease in 2004 is attributable to RepWest exiting non U-Haul lines which resulted in an overall decrease in invested assets. This reduction will continue until reserves associated from these exited lines are run-off.

Benefits and losses incurred were $7.9 million and $37.4 million for the quarters ended June 30, 2004 and 2003, respectively. The decrease in 2004 is due to RepWest terminating its non U-Haul related programs and reserve strengthening that was done during the prior year.

Net operating expenses, which are offset by claims handling fees, were $1.0 million and $9.0 million for the quarters ended June 30, 2004 and 2003 respectively. Included in net operating expenses are commissions that were $1.3 million and $8.6 million for the quarters ended June 30, 2004 and 2003, respectively. The decrease in 2004 is due to decreased premium writings.

Pretax gain/(loss) from operations was $0.1 million and ($14.2) million for the quarters ended June 30, 2004 and 2003. The improvement during fiscal 2005 is the result of the elimination of unprofitable programs and the reserve strengthening that was done during the comparable period in the prior year.


	50

	Six Months Ended June 30,						Changes			Changes
	2004			2003			Dollar			Percentage
Property and Casualty Insurance	(In thousands)
Premiums	$	16,840		$	58,141		$	(41,301	)		-71	%
Net investment income		8,236			11,922			(3,686	)		-31	%
Total revenues		25,076			70,063			(44,987	)		-64	%
Benefits and losses		17,897			62,997			(45,100	)		-72	%
Amortization of deferred policy acquisition costs		5,153			7,166			(2,013	)		-28	%
Operating expenses		1,557			14,301			(12,744	)		-89	%
Total expenses		24,607			84,464			(59,857	)		-71	%
Earnings/(loss) from operations		469			(14,401	)		14,870			103	%
Income tax benefit (expense)		(157	)		5,046			(5,203	)		-103	%
Net earnings (loss)	$	312		$	(9,355	)	$	9,667			103	%

Premiums, before inter-company eliminations, were $16.8 million and $58.1 million for the six months ended June 30, 2004 and 2003, respectively. Premiums from terminated programs were $6.5 million and $45.4 million for the six months ended June 30, 2004 and 2003, respectively. The decrease in 2004 is the result of the RepWest shifting its operating focus away from non-affiliated and unprofitable lines of business. Rental industry revenues were $10.3 million and $12.7 million for the six months ended June 30, 2004 and 2003, respectively. The 2004 decrease is the result of decreased premiums in the RepWest’s non-U-Haul self storage program.

Net investment income was $8.2 million and $11.9 million for the six months ended June 30, 2004 and 2003, respectively. The decrease in 2004 is attributable to RepWest exiting non U-Haul lines which resulted in an overall decrease in invested assets. This reduction will continue until reserves associated from these exited lines are run-off.

Benefits and losses incurred were $17.9 million and $63.0 million for the six months ended June 30, 2004 and 2003, respectively. The decrease in 2004 is due to RepWest terminating its non U-Haul related programs and reserve strengthening that was done during the prior year.

Operating expenses, which are offset by claims handling fees, were $1.6 million and $14.3 million for the six months ended June 30, 2004 and 2003 respectively. Included in net operating expenses are commissions that were $3.5 million and $16.2 million for the six months ended June 30, 2004 and 2003, respectively. The decrease in 2004 is due to decreased premium writings.

Pretax gain/(loss) from operations was $0.5 million and ($14.4) million for the six months ended June 30, 2004 and 2003. The improvement during fiscal 2005 is the result of the elimination of unprofitable programs and the reserve strengthening that was done during the prior year

Liquidity and Capital Resources

We believe our current capital structure will allow us to achieve our operational plans and goals, and provide us with sufficient liquidity for the next 3 to 5 years. The majority of the obligations currently in place mature at the end of fiscal year 2009. The senior subordinated notes mature at the end of fiscal year 2011. As a result, we believe that our liquidity is strong. This will allow us to focus on our operations and business to further improve our liquidity in the long term. We believe these improvements will enhance our access to capital markets. However, there is no assurance that future cash flows will be sufficient to meet our outstanding obligations or our future capital needs. The terms of our secured indebtedness place financial and operational covenants on AMERCO and its subsidiaries, and restrict ou r ability to incur additional indebtedness and other obligations.

At September 30, 2004, cash and cash equivalents totaled $45.8 million, compared with $81.6 million on March 31, 2004. In addition, as of September 30, 2004, AMERCO has availability under its revolving credit facility of $200.0 million.

At September 30, 2004, notes and loans payable were $696.9 million, and represented 1.2 times stockholders’ equity. At March 31, 2004, notes and loans payable were $862.7 million, and represented 1.7 times stockholders’ equity.


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On April 30, 2004, AMERCO completed its transaction with W.P. Carey (UH Storage DE), effectively terminating its amended and restated leases (the synthetic leases) with the Bank of Montreal and Citibank. This transaction resulted in AMERCO eliminating its capital lease obligations of approximately $99.6 million during the first quarter of fiscal year 2005.

For the first six months of fiscal year 2005, cash provided by operating activities was $168.1 million, compared with $130.6 million in the first six months of fiscal year 2004. This improvement of $37.5 million was primarily driven by stronger earnings.

Investing activities provided $119.5 million in net cash during the first six months of fiscal year 2005, compared to a use of $36.5 million in the first six months of fiscal year 2004. The majority of the increase in the first six months of fiscal year 2005 compared with the first six months of fiscal year 2004 was related to the W. P. Carey Transaction. Gross capital expenditures were $161.7 million and $102.3 million through September 30, 2004 and September 30, 2003, respectively. Capital dispositions were $220.8 million and $19.1 million through September 30, 2004 and September 30, 2003, respectively.

Financing activities used $323.4 million during the first six months of fiscal year 2005. This primarily reflects the pay down of $180.3 million on our revolving line of credit and the termination of the synthetic lease obligations, and the net change in contract deposits and withdrawals by Oxford during the first six months of fiscal year 2005. This compares with usage of $9.3 million from financing activities during the first six months of fiscal year 2004.

Liquidity and Capital Resources and Requirements of Our Operating Segments

Moving and Self-Storage

To meet the needs of our customers, U-Haul maintains a large fleet of rental equipment. Historically, capital requirements have primarily reflected new rental equipment acquisitions. The capital to fund these requirements has historically been obtained through internally generated funds from operations, lease financing and sales of used equipment. Going forward, we anticipate that a substantial portion of our internally generated funds will be used to enhance liquidity by paying down existing indebtedness. During each of the fiscal years ended March 31, 2005, 2006 and 2007, U-Haul estimates that net capital expenditures will average approximately $150 million to maintain its fleet at current levels. Financial covenants contained in our loan agreements limit the amount of capital expenditures we can make in fiscal year s 2005, 2006, and 2007, net of dispositions, to $185 million, $245 million and $195 million, respectively. Management estimates that U-Haul will fund its fleet expansion requirements from leasing and from the proceeds from the sale of trucks. We intend to focus our growth on expanding our independent dealer network, which does not require a substantial amount of capital resources. Net capital proceeds were $60.1 million for the first six months of fiscal year 2005. Excluding the effect of W.P. Carey, the capital outlays were $100 million. Rental truck net capital expenditures primarily reflect lease residual buyouts.

Real Estate has traditionally financed the acquisition of self-storage properties to support U-Haul’s growth through lease and debt financing. U-Haul’s growth plan in self-storage is focused on eMove, which does not require acquisition or construction of self-storage properties by the Company. Therefore, Real Estate will not require substantial capital for its future plans.

SAC Holdings operations are funded by various mortgage loans, secured and unsecured notes. SAC Holdings does not utilize revolving lines of credit to finance its operations or acquisitions. Certain of SAC Holdings’ loan agreements contain restrictive covenants and restrictions on incurring additional subsidiary indebtedness.

Oxford Life Insurance Company

As of June 30, 2004, Oxford had no notes and loans payable in less than one year and its accounts payable and accrued expenses total approximately $2.0 million. Oxford’s financial assets (cash, receivables, short-term investments, other investments, and fixed maturities) at June 30, 2004 were approximately $784.6 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, Oxford’s funds are generally not available to satisfy the claims of the creditors of AMERCO or its legal subsidiaries.

Oxford's primary sources of cash are premiums, receipts from interest-sensitive products, and investment income. The primary uses of cash are operating costs and benefit payments to policyholders. Matching the investment portfolio to the cash flow demands of the types of insurance being written is an important consideration. Benefit and claim statistics are continually monitored to provide projections of future cash requirements.


	52

Cash provided by operating activities was $4.4 million, and $2.5 million for the six months ended June 30, 2004, and 2003 respectively. Cash used by financing activities was $47.8 million, and $4.9 million for the six months ended June 30, 2004, and 2003, respectively. Cash flows from deferred annuity sales are a component of financing activities. Investment contract deposits increase cash flows while surrenders of these policies are a use of funds. The decrease in investment contract deposits over 2003 is due to a reduction in new contract sales and an increase in contract surrenders; both due to Oxford’s decreased ratings.

In addition to cash flows from operating and financing activities, a substantial amount of liquid funds is available through Oxford's short-term portfolio. At June 30, 2004 and 2003, short-term investments amounted to $97.6 million, and $144.5 million, respectively. Management believes that the overall sources of liquidity will continue to meet foreseeable cash needs.

Oxford’s stockholder's equity was $116.4 million, and $169.0 million as of June 30, 2004, and December 31, 2003, respectively. Increases from earnings were offset by decreases in unrealized gains resulting from the change in interest rates.

Applicable laws and regulations of the State of Arizona require the Company's insurance subsidiaries to maintain minimum capital and surplus determined in accordance with statutory accounting practices. With respect to Oxford, the amount is $0.4 million. In addition, the amount of dividends that can be paid to shareholders by insurance companies domiciled in the State of Arizona is limited. Any dividend in excess of the limit requires prior regulatory approval. At June 30, 2004, Oxford cannot distribute any of its statutory surplus as dividends without regulatory approval.

Property and Casualty Insurance

As of June 30, 2004, RepWest had no notes or loans due in less than one year and its accounts payable, accrued expenses, and other payables were approximately $17.6 million. RepWest’s financial assets (cash, receivables, inventories and short-term investments) at June 30, 2004 were approximately $371.3 million.

State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies. As a result, RepWest’s funds are generally not available to satisfy the claims of the creditors of AMERCO or its legal subsidiaries. Conversely, AMERCO’s loan agreements prohibit any loans, capital contributions or other advances to RepWest by AMERCO.

The primary sources of cash for RepWest include invested assets, premiums and investment income. The primary uses of cash are operating costs and benefit payments to policyholders. Matching the investment portfolio to the cash flow demands of the types of insurance written is an important consideration. Benefit and claim statistics are continually monitored to provide projections of future cash requirements.

RepWest’s cash and cash equivalents and short-term investment portfolio were $67.3 million and $62.1 million at June 30, 2004 and December 31, 2003 respectively. This balance reflects funds in transition from maturity proceeds to long term investments. This level of liquid assets, combined with budgeted cash flow, is adequate to meet periodic needs.


	53

Cash Provided from Operating Activities by Operating Segments

Moving and Self-Storage

Cash provided by operating activities from U-Haul was $9.0 million and $94.9 million for the first six months of fiscal years 2005 and 2004, respectively. Cash provided by operating activities for Real Estate was $1.1 million and $0.6 million for the first six months of fiscal years 2005 and 2004, respectively. Cash provided from operating activities for SAC Holdings was $0.5 million and $6.3 million for the first six months of fiscal years 2005 and 2004, respectively. The cash provided by U-Haul International operations for the first six months ended September 30, 2004 was approximately $189 million and approximately $145 million for the same period last year. Of this amount for the first six months of September 30, 2004, U-Haul transferred approximately $180 million to its parent, AMERCO, to extinguish out standing debt, and approximately $50 million for the same period last year.

Life Insurance

Cash provided by operating activities was $4.4 million, and $2.5 million for the first six months ended June 30, 2004, and 2003 respectively

Property and Casualty Insurance

Cash flows used by operating activities were $22.6 million and $52.5 million for the six months ended June 30, 2004 and 2003, respectively. The cash used by operating activities is the result of RepWest exiting the assumed reinsurance and non U-Haul related lines. As RepWest adjudicates the claims in these lines there will be a continued use of its portfolio and a corresponding decrease in insurance reserves.

Summary

We believe we have the financial resources needed to meet our business requirements including capital expenditures for the expansion and modernization of our rental fleet, rental equipment and rental storage space and working capital requirements.

For a more detailed discussion of our long-term debt and borrowing capacity, please see footnote 5 "Borrowings" to the "Notes to the Condensed Consolidated Financial Statements."

Disclosures about Contractual Obligations and Commercial Commitments

AMERCO uses certain equipment and occupies certain facilities under operating lease commitments with terms expiring through 2034, with the exception of one land lease expiring in 2079. In the event of a shortfall in proceeds from the sale of the underlying assets, AMERCO has guaranteed approximately $178.5 million of residual values at September 30, 2004 for these assets at the end of the respective lease terms. AMERCO has been leasing equipment since 1987. Thus far, we have experienced no residual value shortfalls. (See details related to operating lease commitments in footnote 9 "Contingent Liabilities and Commitments" to the "Notes to the Condensed Consolidated Financial Statements.")

Business Outlook

As we look ahead to the remainder of fiscal year 2005, we believe the momentum in our moving and self-storage segments will continue, adjusted for the deconsolidation of SAC Holding Corporation and the W.P. Carey Transaction. During fiscal year 2004, we reported approximately $101.9 million of revenues, $26.5 million of earnings from operations, $37.8 million of interest expense, and a net loss of $8.6 million related to the 281 SAC Holdings properties which were deconsolidated March 31, 2004. We reported approximately $29.2 million of storage revenues during fiscal year 2004 at the 78 self-storage properties that were recently sold to W.P. Carey (UH Storage DE).

U-Haul is expected to continue to benefit from the initiatives mentioned earlier, including positive sales increases and maintenance and repair cost improvements associated with our fleet replacement program.


	54

Oxford is in the process of rebuilding its distribution that was impacted by the AMERCO restructuring. Prior to the restructuring, Oxford was rated B++ by A.M. Best. The rating was reduced to C+ during the restructuring. In March 2004 the rating was upgraded to B-. In October 2004 the rating was upgraded to B with a continued positive outlook. Continued improvement in the rating will be a key factor in the success of Oxford’s marketing programs including annuities, life insurance, Medicare supplement, and credit life and disability. Oxford’s statutory capital measurements continue to strengthen and existing business is expected to continue to perform profitably.

RepWest expects to realize the benefits of its changed business plan. During fiscal 2004, we successfully discontinued the majority of the unprofitable direct and assumed reinsurance lines and significantly strengthened our reserves associated with those lines. U-Haul related lines have historically been profitable and we expect to see the results of the new business plan during fiscal year 2005. We believe that RepWest’s statutory capital measurements will continue to strengthen as the reserves of the discontinued lines are being run off. We are working with the Arizona Department of Insurance regarding the supervision order and expect it to be resolved in the future.

Risk Factors

We operate in a highly competitive industry.

The truck rental industry is highly competitive and includes a number of significant national and hundreds of regional and local competitors. Competition is generally based on price, product quality, convenience, availability, brand name recognition and service. In our truck rental business, we face competition from Budget Car and Truck Rental Company and Penske Truck Leasing. Some of our competitors may have greater financial resources than we have. We cannot assure you that we will not be forced to reduce our rental prices or delay price increases.

We compete with national and regional self-storage operators as well as local operators. Competition in the market areas in which we operate is significant and affects the occupancy levels, rental rates and operating expenses of our facilities. Competition might cause us to experience a decrease in occupancy levels, limit our ability to increase rental rates and compel us to offer discounted rental rates which could have a material adverse effect on our operating results.

Entry into the self-storage business through acquisition of existing facilities is possible for persons or institutions with the required initial capital. Development of new self-storage facilities is more difficult, however, due to zoning, environmental and other regulatory requirements. The self-storage industry has in the past experienced overbuilding in response to perceived increases in demand. We cannot assure you that we will be able to successfully compete in existing markets or expand into new markets.

Control of AMERCO remains in the hands of a small contingent.

As of September 30, 2004, Edward J. Shoen, Chairman of the Board of Directors and President of AMERCO, James P. Shoen, a director of AMERCO, and Mark V. Shoen, an executive officer of AMERCO, collectively own 8,789,973 shares (approximately 41.3%) of the outstanding common shares of AMERCO. Accordingly, Edward J. Shoen, Mark V. Shoen and James P. Shoen will be in a position to continue to influence the election of the members of the Board of Directors and approval of significant transactions. In addition, 2,230,061 shares (approximately 10.5%) of the outstanding common shares of AMERCO, including shares allocated to employees and unallocated shares are held by our Employee Savings and Employee Stock Ownership Trust.

Our operations subject us to numerous environmental regulations and the possibility that environmental liability in the future could adversely affect our operations.

Compliance with environmental requirements of federal, state and local governments significantly affects our business. Among other things, these requirements regulate the discharge of materials into the water, air and land and govern the use and disposal of hazardous substances. Under environmental laws, we can be held strictly liable for hazardous substances that are found on real property we have owned or operated. We are aware of issues regarding hazardous substances on some of our real estate and we have put in place a remedial plan at each site where we believe such a plan is necessary. We regularly make capital and operating expenditures to stay in compliance with environmental laws. In particular, we have managed a testing and removal program since 1988 for our underground storage tanks. Under this program, we spent $43.7 million between April 1988 and September 30, 2004. Despite these compliance efforts, risk of environmental liability is part of the nature of our business.


	55

Environmental laws and regulations are complex, change frequently and could become more stringent in the future. We cannot assure you that future compliance with these regulations or future environmental liabilities will not have a material adverse effect on our business.

Our business is seasonal.

Our business is seasonal and our results of operations and cash flows fluctuate significantly from quarter to quarter. Historically, revenues have been stronger in our first and second fiscal quarters due to the overall increase in moving activity during the spring and summer months. Our fourth fiscal quarter is generally weakest, when there is a greater potential for adverse weather conditions.

We obtain our rental trucks from a limited number of manufacturers.

In the past ten years, we purchased most of our rental trucks from Ford and General Motors. Although we believe that we have alternative sources of supply for our rental trucks, termination of one or both of our relationships with these suppliers could have a material adverse effect on our business, financial condition or results of operations.

Our property and casualty insurance business has suffered extensive losses.

Since January 2000, our property and casualty insurance business, RepWest, reported losses totaling approximately $149 million. These losses are primarily attributable to business lines that were unprofitable as underwritten. To restore profitability in RepWest, we have exited all non-U-Haul related lines and have strengthened the reserves on the lines being eliminated. Although we believe the terminated lines are adequately reserved, we cannot assure you that there will not be future adverse loss development.

Our life insurance business was downgraded by A.M. Best during restructuring

A.M. Best downgraded Oxford and its subsidiaries during the restructuring to C+. Upon emergence from bankruptcy in March 2004, Oxford and its subsidiaries were upgraded to B-. The ratings were again upgraded in October 2004 to B. A.M. Best has indicated the rating outlook for our life insurance business is positive. Prior to AMERCO’s restructuring Oxford was rated B++. Financial strength ratings are important external factors that can affect the success of Oxford’s business plans. Accordingly, if Oxford’s ratings, relative to its competitors, do not continue to improve, Oxford may not be able to retain and attract business as currently planned.

Notes receivable from SAC Holdings are a significant portion of AMERCO’S total assets.

At September 30, 2004, we held approximately $203.8 million of notes due from SAC Holdings. Although these assets have been eliminated in the consolidating financial statements, we have significant economic exposure to SAC Holdings. SAC Holdings is highly leveraged with significant indebtedness to others. We hold various junior unsecured notes of SAC Holdings. If SAC Holdings is unable to meet its obligations to its senior lenders, it could trigger a default on its obligations to us. In such an event of default, we could suffer a significant loss. We cannot assure you that SAC Holdings will not default on its loans to their senior lenders or that the value of SAC Holdings’ assets upon liquidation would be sufficient to repay us in full.

We face risks related to an SEC investigation and securities litigation.

The SEC has issued a formal order of investigation to determine whether we have violated the federal securities laws. Although we have cooperated with the SEC in this matter and intend to continue to cooperate, the SEC may determine that we have violated federal securities laws. We cannot predict when this investigation will be completed or its outcome. If the SEC makes a determination that we have violated federal securities laws, we may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief.

In addition, the Company has been named a defendant in a number of class action and related lawsuits. The findings and outcome of the SEC investigation may affect the class-action lawsuits that are pending. We are generally obliged, to the extent permitted by law, to indemnify our directors and officers who are named defendants in some of these lawsuits. We are unable to estimate what our liability in these matters may be, and we may be required to pay judgments or settlements and incur expenses in aggregate amounts that could have a material adverse effect on our financial condition or results of operations.


	56

RepWest has consented to an Order of Supervision issued by the Arizona Department of Insurance.

On May 20, 2003, RepWest consented to an Order for Supervision issued by the Arizona Department of Insurance ("DOI"). The DOI determined that RepWest’s level of risk based capital (RBC) allowed for regulatory control. Pursuant to this order and Arizona law, during the period of supervision, RepWest may not engage in any of the following activities without the prior approval of the DOI:

a. dispose of, convey or encumber any of its assets or its business in force;

b. withdraw any of its bank accounts;

c. lend any of its funds;

d. invest any of its funds;

e. transfer any of its property;

f. incur any debt, obligation or liability including the issuance of all new and renewal business;

g. merge or consolidate with another company;

h. enter into any new reinsurance contract or treaty; or

i. enter into any affiliate transactions.

In order to abate the DOI’s order, RepWest must establish that it possesses surplus in compliance with Arizona law and as the Director of Insurance may require based on type, volume or nature of its business pursuant to Arizona law and establish that certain credit risks associated with the exposures to AMERCO and its affiliates have been eliminated.

If RepWest fails to satisfy the DOI’s concerns, the DOI may take further action, including, but not limited to, commencing a conservatorship.

Subsequent Event RWIC experienced insurances losses associated with the recent hurricanes in the southeastern United States.

These losses will be reflected in RWIC’s third and fourth quarter financial statements. The estimated losses approximate $5 to $7 million dollars after taxes.

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. Interest rate cap contracts represent non-linear derivative instruments which protect the holder from rises in short-term interest rates by making a payment to the holder when an underlying interest rate (the index or reference interest rate) exceeds a specified strike rate (the cap rate). During the second quarter of fiscal year 2005, the Company entered into separate interest rate cap contracts for $200.0 million of its variable rate debt obligations for a two year term and for $50.0 million of its variable rate debt obligations for a three year term. At September 30, 2004, the Company had approximately $348.3 million of variable rate debt obligations. A fluctuation in interest rates of 100 basis points would change interest expense for the Company by approximately $3.5 million annually to the extent that the three month LIBOR is below 3.0% and by $1.0 million to the extent that the three month LIBOR exceeds 3.0%.


	57

Foreign Currency Exchange Rate Risk

The exposure to market risk for changes in foreign currency exchange rates relates primarily to our Canadian business. Approximately 2% of our revenue is generated in Canada. The result of a 10% change in the value of the U.S. dollar relative to the Canadian dollar would not be material. We typically do not hedge any foreign currency risk since the exposure is not considered material.

Item 4. Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our "disclosure controls and procedures" (Disclosure Controls) as of the end of the period covered by this Quarterly Report. The controls evaluation was done under the supervision and with the participation of management, including the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO).

Definition of Disclosure Controls

Disclosure Controls are controls and procedures designed to assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure Controls include controls and procedures designed to ensure that such information is accumulated and communicated to our management, including the CEO and the CFO, as appropriate to allow timely decisions regarding required disclosure. Our Disclosure Controls include components of our internal control over financial reporting, which consists of control processes designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of fin ancial statements in accordance with generally accepted accounting principles in the U.S. To the extent that components of our internal control over financial reporting are included within Disclosure Controls, they are included in the scope of our quarterly controls evaluation.

Limitations on the Effectiveness of Controls

The management of the Company, including the CEO and the CFO, does not expect that our Disclosure Controls or our internal control over financial reporting will prevent all error or fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. Further, 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance 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 b e 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 certain future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation

The evaluation of our Disclosure Controls included a review of the objectives and design of the controls, the implementation of the controls by the Company and the effect of the controls on the information generated for use in this Quarterly Report. In the course of the controls evaluation, we sought to identify data errors, control problems or acts of fraud and confirm that appropriate corrective action, including process improvements, were being undertaken. This type of evaluation is performed on a quarterly basis so that the conclusions of management, including the CEO and the CFO, concerning the effectiveness of the controls can be reported in our Quarterly Reports on Form 10-Q and to supplement our disclosures made in our Annual Report on Form 10-K. Many of the components of our Disclosure Controls are evaluated on an on-going basis by personnel in our finance department, as well as our independent auditors who evaluate them in connection with determining their auditing procedures related to their report on our annual financial statements. The overall goals of these various evaluation activities are to monitor our Disclosure Controls, and to modify them as necessary. Our intent is to maintain the Disclosure Controls as dynamic systems that change as conditions warrant.


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Among other matters, we also considered whether our evaluation identified any "significant deficiencies" or "material weaknesses" in our internal control over financial reporting, and whether the Company had identified any acts of fraud involving personnel with a significant role in our internal control over financial reporting. This information was important both for the controls evaluation generally, and because item 5 of the certifications of the CEO and the CFO requires that the CEO and the CFO disclose that information to the Audit Committee of our Board and the independent auditors. In the professional auditing literature, "significant deficiencies" are referred to as "reportable conditions," which are deficiencies in the design or operation of controls that could adversely affect our ability to record, process, summarize and report financial data in the financial statements. Auditing literature defines "material weakness" as a particularly serious reportable condition in which the internal control does not reduce to a relatively low level the risk that misstatements caused by error or fraud may occur in amounts that would be material in relation to the financial statements and the risk that such misstatements would not be detected within a timely period by employees in the normal course of performing their assigned functions. We also sought to address other controls matters in the controls evaluation, and in each case if a problem was identified, we considered what revision, improvement and/or correction to make in accordance with our on-going procedures.

Conclusions

Based upon the controls evaluation, our CEO and CFO have concluded that, subject to the limitations noted above, as of the end of the period covered by this Quarterly Report, our Disclosure Controls were effective to provide assurance that material information relating to AMERCO and its consolidated subsidiaries is made known to management, including the CEO and the CFO, particularly during the period when our periodic reports are being prepared.

Changes in Internal Control over Financial Reporting

During the fiscal quarter covered by this report we made no change in our internal control over financial reporting which materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Kocher

On July 20, 2000, Charles Kocher (Kocher) filed suit in Wetzel County, West Virginia, Civil Action No. 00-C-51-K, entitled Charles Kocher v. Oxford Life Insurance Co. (Oxford) seeking compensatory and punitive damages for breach of contract, bad faith and unfair claims settlement practices arising from an alleged failure of Oxford to properly and timely pay a claim under a disability and dismemberment policy. On March 22, 2002, the jury returned a verdict of $5 million in compensatory damages and $34 million in punitive damages. On November 5, 2002, the trial court entered an Order (Order) affirming the $39 million jury verdict and denying Oxford’s motion for New Trial Or, in The Alternative, Remittitur. On January 27, 2004, the matter was argued before the West Virginia Supreme Court and taken under advisement. On September 17, 2004 the West Virginia Supreme Court reversed and vacated the punitive damages award and remanded the case for a new trial on punitive damages. The trial judge has set an April 28, 2005 trial date. The Company has accrued $725,000, which represents management’s best estimate of the costs associated with legal fees to appeal and re-try the case. The Company has notified its E & O carrier of the West Virginia Supreme Court’s ruling. The E&O carrier is disputing coverage in a declaratory judgment action against Oxford.

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

On August 20, 2004, an exchange occurred between the Company and James P. Shoen. Mr. Shoen, transferred 1,946,314 shares of AMERCO Series A Common Stock, $0.25 par value, in exchange for 1,946,314 shares of AMERCO Common Stock, $0.25 par value. Mr. Shoen is a director, employee and significant shareholder of AMERCO. No gain or loss was recognized as a result of this transaction. This exchange was completed as an offering exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.

The following table provides information about purchases of our equity securities during the quarter ended September 30, 2004.

Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 through July 31, 2004	-	-	-
August 1 through August 31, 2004	1,946,314 (a)	(b)	-
September 1 through September 30, 2004	-	-	-

	1,946,314 (a)	(b)	-	-

(a) Series A Common Stock, par value $0.25 per share.

(b) Consideration paid by AMERCO was 1,946,314 shares of its Common Stock, par value $0.25.

Item 3. Defaults upon Senior Securities

Not applicable.


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Item 4. Submission of Matters to a Vote of Security Holders

The 2004 Annual Meeting of Stockholders was held on September 24, 2004. At the 2004 Annual Meeting of Stockholders, Edward J. Shoen and M. Frank Lyons were elected to serve as directors until the 2008 Annual Meeting of Stockholders. John M. Dodds and James P. Shoen continue as directors with terms that expire at the 2005 Annual Meeting of Stockholders; William E. Carty and Charles J. Bayer continue as directors with terms that expire at the 2006 Annual Meetings of Stockholders; and John P. Brogan and James J. Grogan continue as directors with terms that expire at the 2007 Annual Meeting of Stockholders. In addition, our Stockholders rejected a shareholder proposal that "independent directors" constitute two-thirds of the Board of Directors and to define the meaning of "independent director" for this purpose. The follo wing table sets forth the votes cast for, against or withheld, as well as the number of abstentions and broker non-votes with respect to each matter voted on at the 2004 Annual Meeting of Stockholders.

	Votes Cast For	Votes Cast Against	Withheld	Abstentions	Non-Votes

Election of Directors
Edward J. Shoen	10,326,119	-	932,676	-	-

M. Frank Lyons	9,783,768	-	1,475,027	-	-

Shareholder Proposal
Regarding Independent Directors	1,095,820	9,303,506	-	614,519	-

Item 5. Other Information

For inclusion in the proxy statement and form of proxy relating to the 2005 Annual Meeting of Stockholders, a proposal intended for presentation at that meeting must be submitted in accordance with the applicable rules of the Securities and Exchange Commission and received by the Secretary of AMERCO, c/o U-Haul International, Inc., 2721 North Central Avenue, Phoenix, Arizona 85004, on or before March 25, 2005. Proposals to be presented at the 2005 Annual Meeting of Stockholders that are not intended for inclusion in the proxy statement and form of proxy must be submitted by that date and in a accordance with the applicable provisions of the Company’s By-Laws, a copy of which is available upon written request, delivered to the Secretary of AMERCO at the address in the preceding sentence. The Company suggests that proponents submit their proposals to the Secretary of AMERCO by Certified Mail-Return Receipt Requested.


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Item 6. Exhibits

The following documents are filed as part of this report:

Exhibit Number	Description	Page or Method of Filing
2.1	Joint Plan of Reorganization of AMERCO and Amerco Real Estate Company	Incorporated by reference to AMERCO’s Current Report on Form 8-K filed October 20, 2003, file no. 1-11255
2.2	Disclosure Statement Concerning the Debtors’ Joint Plan of Reorganization	Incorporated by reference to AMERCO’s Current Report on Form 8-K filed October 20, 2003, file no. 1-11255
2.3	Amended Joint Plan of Reorganization of AMERCO and Amerco Real Estate Company	Incorporated by reference to AMERCO’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003, file No. 1-11255
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 number 1-11255
3.2	Restated By-Laws of AMERCO	Incorporated by reference to AMERCO’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, file No. 1-11255
3.3	Restated Articles of Incorporation of U-Haul International, Inc.	Incorporated by reference to AMERCO’s Annual Report on Form 10-K for the year ended March 31, 2003, file no. 1-11255
3.4	Bylaws of U-Haul International, Inc.	Incorporated by reference to AMERCO’s Annual Report on Form 10-K for the year ended March 31, 2003, file no. 1-11255
31.1	Rule 13a-14(a)/15d-14(a) Certificate of Edward J. Shoen, President and Chairman of the Board of AMERCO and U-Haul International, Inc.	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certificate of Jack A. Peterson, Chief Financial Officer of AMERCO	Filed herewith
31.3	Rule 13a-14(a)/15d-14(a) Certification of Robert T. Peterson, Chief Financial Officer of U-Haul International, Inc.	Filed herewith
32.1	Certificate of Edward J. Shoen, President and Chairman of the Board of AMERCO and U-Haul International, Inc. pursuant to Section 906 of the Sabanes-Oxley Act of 2002	Filed herewith
32.2	Certificate of Jack A. Peterson, Chief Financial Officer of AMERCO pursuant to Section 906 of the Sabanes-Oxley Act of 2002	Filed herewith
32.3	Certificate of Robert T. Peterson, Chief Financial Officer of U-Haul International, Inc. pursuant to Section 906 of the Sabanes-Oxley Act of 2002	Filed herewith


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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 9, 2004 /s/ Edward J. Shoen

Edward J. Shoen

President and Chairman of the Board

(Duly Authorized Officer)

Date: November 9, 2004 /s/ Jack A. Peterson

Jack A. Peterson

Chief Financial Officer

(Principal Financial Officer)

U-HAUL INTERNATIONAL, INC.

Date: November 9, 2004 /s/ Edward J. Shoen

Edward J. Shoen

President and Chairman of the Board

(Duly Authorized Officer)

Date: November 9, 2004 /s/ Robert T. Peterson

Robert T. Peterson

Chief Financial Officer

(Principal Financial Officer)


Commission File Number	Registrant, State of Incorporation, Address and Telephone Number	I.R.S. Employer Identification No.
1-11255	AMERCO	88-0106815
	(A Nevada Corporation)
	1325 Airmotive Way, Ste. 100
	Reno, Nevada 89502-3239
	Telephone (775) 688-6300

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

	September 30,			March 31,
	2004			2004
	(Unaudited)
	(In thousands)
ASSETS
Cash and cash equivalents	$	45,759		$	81,557
Trade receivables, net		251,043			268,386
Notes and mortgage receivables, net		5,352			4,537
Inventories, net		55,876			52,802
Prepaid expenses		16,803			13,172
Investments, fixed maturities		678,834			709,353
Investments, other		328,314			347,537
Deferred policy acquisition costs, net		69,219			76,939
Other assets		84,980			65,071
Related party assets		310,205			304,446
	$	1,846,385		$	1,923,800
Property, plant and equipment, at cost:
Land		151,012			158,594
Buildings and improvements		681,162			874,985
Furniture and equipment		296,046			293,115
Rental trailers and other rental equipment		186,079			159,586
Rental trucks		1,279,915			1,219,002
SAC Holdings II - property, plant and equipment		78,533			78,363
		2,672,747			2,783,645
Less: Accumulated depreciation		(1,344,908	)		(1,331,840	)
Property, plant and equipment, net		1,327,839			1,451,805
Total assets	$	3,174,224		$	3,375,605
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	253,195		$	244,570
Capital leases		-			99,609
AMERCO's notes and loans payable		696,896			862,697
SAC Holdings' notes and loans payable, non-recourse to AMERCO		78,101			78,637
Policy benefits and losses, claims and loss expenses payable		788,641			813,738
Liabilities from investment contracts		528,169			574,745
Other policyholders' funds and liabilities		18,173			28,732
Deferred income		51,119			51,383
Deferred income taxes		106,223			63,800
Related party liabilities		70,175			53,848
Total liabilities	$	2,590,692		$	2,871,759
Commitments and contingent liabilities (Notes 5 and 9)
Stockholders' equity:
Series preferred stock, with or without par value:
Series A preferred stock, with no par value	$	-		$	-
Series B preferred stock, with no par value		-			-
Series common stock, with or without par value:
Series A common stock of $0.25 par value		929			1,416
Common stock of $0.25 par value		9,568			9,081
Additional paid in-capital		349,732			349,732
Accumulated other comprehensive loss		(33,184	)		(21,446	)
Retained earnings		686,177			595,181
Cost of common shares in treasury, net		(418,092	)		(418,092	)
Unearned employee stockownership plan shares		(11,598	)		(12,026	)
Total stockholders' equity		583,532			503,846
Total liabilities and stockholders' equity	$	3,174,224		$	3,375,605

	Quarter Ended September 30,
	2004			2003
	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	53,059		$	44,025
Changes in other comprehensive income, net of taxes:
Foreign currency translation		2,010			(4,377	)
Unrealized gain/(loss) on investments		(12,796	)		15,774
Fair market value of interest rate hedge		(1,668	)		-

Total comprehensive income	$	40,605		$	55,422

	Six Months Ended September 30,
	2004			2003
	(Unaudited)
	(In thousands)
Comprehensive income:
Net earnings	$	97,478		$	71,761
Changes in other comprehensive income, net of taxes:
Foreign currency translation		(217	)		1,374
Unrealized gain/(loss) on investments		(9,853	)		25,861
Fair market value of interest rate hedge		(1,668	)		-

Total comprehensive income	$	85,740		$	98,996

	Six Months Ended September 30,
	2004			2003
	(Unaudited)
	(In thousands)
Cash flow from operating activities:
Earnings available to common shareholders	$	90,996		$	65,279
Depreciation		56,455			69,674
Amortization of deferred policy acquisition costs		19,293			16,737
Provision for losses on accounts receivable		102			686
Net loss on sale of real and personal property		1,477			5,289
(Gain) on sale of investments		(198	)		(2,317	)
Reductions in policy liabilities and accruals		(13,170	)		(18,194	)
Capitalizations of deferred policy acquisition costs		(6,732	)		(11,765	)
Net reduction in other operating assets and liabilities		19,841			5,194
Net cash provided by operating activities	$	168,064		$	130,583
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment		(161,693	)		(102,295	)
Fixed maturities		(60,023	)		(24,144	)
Common Stock		(6,766	)		-
Proceeds from sale(purchase) of investments:
Property, plant and equipment		220,848			19,091
Fixed maturities		74,929			128,499
Preferred stock		2,708			11,380
Real estate		1,722			(22,860	)
Mortgage loans		1,913			10,114
Changes in other investments		45,862			(56,321	)
Net cash provided by (used in) investing activities	$	119,500		$	(36,536	)
Cash flows from financing activities:
Borrowings from Credit Facilities	$	14,385		$	50,000
Leveraged Employee Stock Ownership Plan:
Purchase of shares		428			375
Principal Repayments on Credit Facilities		(181,076	)		(54,681	)
Pay off of capital leases		(99,609	)		-
Dividends paid		(9,723	)		-
Investment contract deposits		13,427			34,422
Investment contract withdrawals		(61,194	)		(39,375	)
Net cash used in financing activities	$	(323,362	)	$	(9,259	)
Increase (decrease) in cash equivalents	$	(35,798	)	$	84,788
Cash and cash equivalents at the beginning of period		81,557			66,834
Cash and cash equivalents at the end of period	$	45,759		$	151,622

		Page No.
	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	a)Condensed Consolidated Balance Sheets as of September 30, 2004 (unaudited) and March 31, 2004	1
	b)Condensed Consolidated Statement of Operations for the Quarters and Six Months ended September 30, 2004 and 2003 (unaudited)	2
	c) Condensed Consolidated Statements of Comprehensive Income for the Quarters and Six Months ended September 30, 2004 and 2003 (unaudited)	3
	d) Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2004 and 2003 (unaudited)	4
	e)Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	58

	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Submission of Matters to a Vote of Security Holders	61
Item 5.	Other Information	61
Item 6.	Exhibits	62

	Quarter Ended September 30,						Six Months Ended - September 30,
	2004			2003			2004			2003
	(Unaudited)
	(In thousands except per share amounts)
Revenues:
Rental revenue	$	469,320		$	482,972		$	895,952		$	918,014
Net sales		57,817			65,627			119,063			134,836
Premiums		39,072			67,480			82,134			131,936
Net investment and interest income		12,339			11,378			32,110			22,787
Total revenues		578,548			627,457			1,129,259			1,207,573

Costs and expenses:
Operating expenses		288,447			305,324			560,659			600,317
Restructuring expenses		-			2,124			-			4,414
Commission expenses		51,908			44,802			98,821			84,996
Cost of sales		28,516			30,896			56,256			63,115
Benefits and losses		31,454			65,446			65,591			118,845
Amortization of deferred policy acquisition costs		7,778			8,759			17,736			17,859
Lease expense		36,348			34,191			76,883			68,514
Depreciation, net		29,904			36,925			57,932			74,963
Total costs and expenses		474,355			528,467			933,878			1,033,023

Earnings from operations		104,193			98,990			195,381			174,550
Interest expense		18,060			30,773			37,064			61,671
Pretax earnings		86,133			68,217			158,317			112,879
Income tax expense		(33,074	)		(24,192	)		(60,839	)		(41,118	)
Net earnings	$	53,059		$	44,025		$	97,478		$	71,761
Less: Preferred stock dividends		(3,241	)		(3,241	)		(6,482	)		(6,482	)
Earnings available to common shareholders	$	49,818		$	40,784		$	90,996		$	65,279

Basic and diluted earnings per common share	$	2.39		$	1.97		$	4.38		$	3.15
Weighted average common shares outstanding		20,801,525			20,744,692			20,794,766			20,738,389

	Fiscal Years Ending
	(In thousands)
	2005		2006		2007		2008		2009		Thereafter
Notes payable, secured	$	3,500		3,500		3,500		3,500		534,250		148,646

	September 30, 2004		March 31, 2004
	(Unaudited)
	(In thousands)
Notes payable, secured, bearing interest rates ranging from 7.87% to 9.00%, due 2027	$	78,101	$	78,637

	Revolving Credit Activity
	September 30, 2004			March 31, 2004
AMERCO	(In thousands, except interest rates)
Weighted average interest rate during the first six months/year		5.50	%		6.75	%
Interest rate at the end of the second fiscal quarter/year		5.84	%		5.50	%
Maximum amount outstanding during the quarter/year	$	33,039		$	205,000

Average amount outstanding during the quarter/year	$	14,340		$	174,267
Facility fees	$	-		$	1,333

	Foreign Currency Translation			Unrealized Gain/(Loss) on Investments			Fair Market Value of Interest Rate Hedge			Accumulated Other Comprehensive Income/(Loss)
Balance at March 31, 2004	$	(34,914	)	$	13,468		$	-		$	(21,446	)
Foreign currency translation		(217	)		-			-			(217	)
Unrealized gain/(loss) on investments		-			(9,853	)		-			(9,853	)
Fair market value of interest rate hedge		-			-			(1,668	)		(1,668	)

Balance at September 30, 2004	$	(35,131	)	$	3,615		$	(1,668	)	$	(33,184	)

	Direct Amount (a)		Ceded to Other Companies		Assumed from Other Companies		Net Amount (a)		Percentage of Amount Assumed to Net
	(Unaudited)
	(In thousands)
June 30, 2004 Life insurance in force	$	1,427,735		249,175		1,944,703		3,123,263		62	%

Premiums earned:
Life	$	5,909		3,792		6,232		8,349		75	%
Accident and health		49,810		3,790		8,243		54,263		15	%
Annuity		1,255				1,427		2,682		53	%
Property and casualty		17,008		3,576		3,408		16,840		20	%
Total	$	73,982		11,158		19,310		82,134		24	%

	RepWest		Oxford
	(Unaudited)
	(In thousands)
Six months ended June 30, 2004	$	-	$	743
Six months ended June 30, 2003	$	1,272	$	1,358

		Property Plant and Equipment		Rental Fleet		Total
	(In thousands)
Year-ending:
2005		$	11,093	$	109,626	$	120,719
2006			10,919		88,482		99,401
2007			10,689		56,664		67,353
2008			10,519		18,587		29,106
2009			10,212		8,627		18,839
Thereafter			48,354		4,125		52,479
Total		$	101,786	$	286,111	$	387,897

	Obligated Group																	AMERCO Legal Group									AMERCO as Consolidated
	AMERCO			U-Haul			Real Estate			Eliminations					Obligated Group Consolidated			Property and Casualty Insurance(a)		Life Insurance(a)		Eliminations					AMERCO Consolidated			SAC Moving and Storage Operations			Eliminations					Total Consolidated
	(Unaudited)
Assets:	(Inthousands)
Cash and cash equivalents	$	16		$	34,478		$	983		$	-				$	35,477		$	4,998	$	4,590	$	-				$	45,065		$	694		$	-				$	45,759
Trade receivables, net		-			16,712			16,339			-					33,051			203,056		14,936		-					251,043			-			-					251,043
Notes and mortgage receivables, net		-			3,824			1,528			-					5,352			-		-		-					5,352			-			-					5,352
Inventories, net		-			54,774			-			-					54,774			-		-		-					54,774			1,102			-					55,876
Prepaid expenses		2,694			13,774			-			-					16,468			-		-		-					16,468			335			-					16,803
Investments, fixed maturities		-			-			-			-					-			121,041		557,793		-					678,834			-			-					678,834
Investments, other		-			1,387			11,167			-					12,554			140,995		174,765		-					328,314			-			-					328,314
Deferred policy acquisition costs, net		-			-			-			-					-			2,146		67,073		-					69,219			-			-					69,219
Other assets		21,775			53,132			1,776			-					76,683			2,516		876		-					80,075			4,905			-					84,980
Related party assets		547,124			615,920			12,626			(776,223	)	(d	)		399,447			100,942		32,515		(136,233	)	(d	)		396,671			-			(86,466	)	(d	)		310,205
		571,609			794,001			44,419			(776,223	)				633,806			575,694		852,548		(136,233	)				1,925,815			7,036			(86,466	)				1,846,385
Investment in Subsidiaries		1,249,773			-			-			(966,068	)	(c	)		283,705			-		-		(283,705	)	(c	)		-			-			-					-
Investment in SAC		(12,350	)		-			-			-					(12,350	)		-		-		-					(12,350	)		-			12,350		(c	)		-
Total investment in subsidiaries		1,237,423			-			-			(966,068	)				271,355			-		-		(283,705	)				(12,350	)		-			12,350					-
Property, plant and equipment, at cost:
Land		-			20,845			130,167			-					151,012			-		-		-					151,012			-			-					151,012
Buildings and improvements		-			82,225			598,937			-					681,162			-		-		-					681,162			-			-					681,162
Furniture and equipment		413			277,761			17,872			-					296,046			-		-		-					296,046			-			-					296,046
Rental trailers and other rental equipment		-			186,079			-			-					186,079			-		-		-					186,079			-			-					186,079
Rental trucks		-			1,279,915			-			-					1,279,915			-		-		-					1,279,915			-			-					1,279,915
SAC Holdings - property, plant and equipment (b)		-			-			-			-					-			-		-		-					-			152,745			(74,212	)	(e	)		78,533
		413			1,846,825			746,976			-					2,594,214			-		-		-					2,594,214			152,745			(74,212	)				2,672,747
Less: Accumulated depreciation		(364	)		(1,080,804	)		(266,226	)		-					(1,347,394	)		-		-		-					(1,347,394	)		(6,338	)		8,824		(e	)		(1,344,908	)
Total property, plant and equipment		49			766,021			480,750			-					1,246,820			-		-		-					1,246,820			146,407			(65,388	)				1,327,839
Total assets	$	1,809,081		$	1,560,022		$	525,169		$	(1,742,291	)			$	2,151,981		$	575,694	$	852,548	$	(419,938	)			$	3,160,285		$	153,443		$	(139,504	)			$	3,174,224

	United States		Canada			Consolidated
	Quarter Ended
	(Unaudited)
	(All amounts are in thousands U.S. $'s)
As of and for the period ended, September 30, 2004
Total revenues	$	562,489	$	16,059		$	578,548
Depreciation / amortization, net		36,490		1,192			37,682
Interest expense / (income)		18,070		(10	)		18,060
Pretax earnings		83,190		2,943			86,133
Income tax expense		33,074		-			33,074
Identifiable assets		3,104,125		70,099			3,174,224