U-haul Holding Co-non Voting Aktie

Good morning, ladies and gentlemen, and welcome to the U-Haul Holding Company Fourth Quarter and Fiscal Year End 2026 Investor Call. [Operator Instructions]

This call is being recorded on Thursday, May 28, 2026. I would now like to turn the conference over to Sebastien Reyes. Please go ahead.

Good morning, everyone. Thank you for joining us today. Welcome to the U-Haul Holding Company Fourth Quarter Fiscal Year-End 2026 Investor Call. Before we begin, I'd like to remind everyone that certain of the statements during this call, including, without limitation, statements regarding revenue, expenses, income and general growth of our business may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-K for the year ended March 31, 2026, which is on file with the U.S. Securities and Exchange Commission.

I'll now turn the call over to Jason Berg, Chief Financial Officer of U-Haul Holding Company.

Thanks, Sebastien. Good morning. I'm speaking to you today from our offices here in Phoenix. Yesterday, we reported a fourth quarter loss of $128 million compared to a fourth quarter loss of $82 million a year before. Our full year fiscal 2026 earnings were $83 million, down from $367 million the previous year. In terms of earnings per share, the fourth quarter of this year was a loss of $0.65 per nonvoting share compared to $0.41 per nonvoting share fourth quarter of the previous year. Earnings before interest, taxes and depreciation, which we refer to as adjusted EBITDA, at our moving and storage segment increased $6 million for the quarter to $223 million. And for the full year fiscal 2026 adjusted EBITDA increased $26 million to $1.646 billion. Included in our release and the financial supplement is a reconciliation of how you get from GAAP earnings to adjusted EBITDA or vice versa.

Approximately half of the fourth quarter's decline in EPS came from depreciation on the truck fleet, which went from $181 million in the fourth quarter of last year to $221 million this year. For the full fiscal year, it was $879 million compared to $693 million the year before. We began to materially increase the depreciation rate on our cargo van fleet in the first quarter of fiscal [ 2006, ] when we began selling the higher cost 2023 and '24 model year vans into a resale market that frankly just didn't recognize that increased price. Additionally, depreciation has been increasing on box trucks. We grew the box truck fleet by over 14,000 units, if you compare March -- end of March of '25 to March '26.

A few positive signals, though. The rate of change, we'll call it, the second derivative of fleet depreciation growth has been slowing. In fact, we've seen sequential declines in the last 2 quarters. For box trucks, the upcoming year of no planned growth will lead to a natural decline in depreciation over the course of the year even if we don't shrink the fleet. On the cargo van front, April and May resale results have been steady, albeit that's in relation to units that had a much higher depreciation rate over the last 12 months. Also, the step down in what we're paying for model year '25 units and '26 units will be beneficial, but not likely enough to be the sole solution to issue.

Looking forward, utilization of the expanded box truck fleet during this summer will inform us of what actions that we should take going into next year. And on the cargo van side, it's going to be the resale market and manufacturer pricing that are going to guide us as to whether we need to extend the holding period next year for those trucks and reduce future purchases.

For the fourth quarter, our equipment rental revenue results increased $12 million compared to the same quarter of the year before. And for the full year, we finished up $86 million, which is just over 2%. Revenue growth for both our In-Town and One-Way markets for both the quarter and the full year increased. In-Town growth was more robust. Comparing the end of March of this year to the end of March last year, we had 55 new company-operated locations, and we had a net increase of 1,400 independent dealers.

Our goal of increasing the number of dealers by several thousand and then productively dispersing equipment to them has been taking shape. April and May revenue has trended in line with what we saw in the fourth quarter. Capital expenditures for new rental equipment in fiscal 2026 were $2.81 billion. That was a $218 million increase compared to the year before, while proceeds from the sale of retired rental equipment that we sold increased by $48 million to $700 million. That nets out to net equipment purchases of $1.381 billion. I estimate that close to $780 million of the total spend was growth related.

Our projections for this coming fiscal year include growth of the U-Box container fleet and our new toy hauler trailer, but do not include growth of the truck fleet. We estimate for next fiscal year a decrease in new purchases, net of sales somewhere around $560 million. Storage revenues were up $16 million. That's a 7% increase for the quarter, and our 12-month results were up 8% or a little over $74 million. Average revenue per occupied foot for both our same-store and for the nonstabilized total portfolio improved by over 6%. Our average new customer rental rates have increased by about 3% year-over-year, and rates for customers leaving are still a couple of percentage points lower than customers moving in.

Same-store occupancy was down 540 basis points to 86.1%. I continue to highlight the portion that was due to our cleanup of delinquent rooms. And for this quarter, it was about 450 basis points of that decline. If you recall, we instituted the cleanup program in the second quarter of fiscal '26. Since then, delinquency has not been a problem, but we're still dealing with the year-over-year comparisons.

Net tenant move-ins remained slower than in recent years, but we're seeing some incremental improvement. Our strategy of straightforward pricing, which includes the 1-year price lock guarantee that Joe announced earlier this year is strengthening our team's resolve and beginning to resonate with customers. During fiscal 2026, we invested $966 million in real estate acquisitions along with self-storage and U-Box warehouse development at the $541 million decrease over fiscal '25.

For the full year, we added 66 locations with storage totaling 5.3 million net rentable square feet. We have approximately 5.5 million new square feet under development right now across 99 projects and another 6.2 million square feet of potential development behind that in properties that we own, but we haven't started. To put that into context, last year at those times -- at this time, those figures were, respectively, 6.9 million and 8.1 million square feet. My projections have us continuing to see spending on self-storage growth decline.

Moving on storage operating expenses increased $17 million for the fourth quarter. Compared to the fourth quarter of last year, our adjusted EBITDA margin saw a slight improvement with our all-in operating margin worsening due to the fleet depreciation that we discussed. Personnel increased $13 million for the quarter. Fleet maintenance and repair was up $1 million. And our self-insurance liability decreased by $2 million, largely due to a rough fourth quarter last year. We've made progress on this front over the course of fiscal '26, we've increased our reserves by about $93 million. At the end of March, our cash and availability in moving in storage totaled $8.479 billion.

A couple of last items. I wanted to highlight that the U-Haul Holding Company Board of Directors authorized a $350 million share repurchase plan. The plan stands across both our UHAL and UHAL.B share classes. The planned decreases in our growth CapEx this coming year allow us to allocate capital to this program. We firmly believe that the investments that we've made in the business over the last several years, while they're having near-term downside effect on our earnings, they will mature under the productive assets and yield expected returns.

If you haven't visited yet, although I assume, I guess everyone has if you're listening to this call on the Internet, visit investors.uhaul.com. We've relaunched the site, just trying to make it a little bit easier for people to access information. We'd always appreciate any feedback that you have on that.

With that, I'd like to hand the call back to our operator, John, to begin the question-and-answer portion of the call.

[Operator Instructions] Our first question comes from the line of Steven Ramsey from Thompson Research Group.

On the U-Box revenue per transaction being down, I believe, for the second consecutive quarter, if I remember correctly. Can you talk about the trends there and how volume is playing out within just overall U-Box?

Thanks for the question, Steven. Actual activity, and I'll define activity as moves and also boxes in storage, both of those are up. I would say the boxes and storage is up on a percentage basis a little bit heavier than the actual transaction activity, but both are up. As far as the revenue per transaction issues, we're seeing a couple of things. One would be the same thing we're seeing on some of the One-Way moves, and that is shorter moves, right? Shorter moves combined with whatever we've seen on the freight side, which for most of the year has been down. And then the last item I would like to highlight would be that competitively, I think the market appears to be a little bit more competitive than, say, it was a year ago, and we're going to be competitive right along with it.

Okay. That's helpful, Jason. And then the cross usage of moving and storage at around the 50% mark, that's good to see. Do you think that's a natural peak on that front? And then when you compare U-Box moves with U-Box storage, it sounds like that cross usage is increasing. Do you think over time that it could reach that 50% level as well?

Great question. The first one, I think the 50% is more of a baseline. I think there's -- I continue to believe it's one of the things that's frustrating but also it gives you optimism for the future. And that is, I think there's so much more that we can harvest on cross-selling. And so I think the 50% is a low part. If you were to flip it and try to analyze how many truck transactions have storage, that number is significantly lower. And I think we have a lot of people within the system that believe that number can be increased.

On the U-Box side, yes, I don't see why we can't increase the storage penetration there. It's a major goal of our -- our team is on it right now. Part of that is increasing the number of moving transactions. But part of that, which is a unique opportunity for us that the other portable storage providers don't have is that we have the ability to convert self-storage customers into these containers, right? So I think there's an opportunity there for us. The folks in our system who are best at that are the ones that have run out of storage space, right? They filled their facilities. And then they find ways to serve the customers, and U-Box is a fantastic way of getting people into storage. So both of those, I would say, on the U-Box we're in the early innings of that.

That's excellent. And can you talk about the uptake of toy hauler trailers in the quarter and more recently, given that you're investing more into it this next fiscal year, it sounds like it is going well. And maybe can you elaborate on the diverse usage of the product, given it seems to be more non-moving oriented?

Yes. The first group of people that we expected to use it were the people that traditionally use our auto transports, but then with larger vehicles, weren't able to use it. Now I think what we're seeing is the usage scenarios have expanded dramatically. A few months ago, I was up in North Dakota and our location up there was using them for smaller tractors, right? And I think we're going to continue to see that grow from a CapEx perspective. I think the plan going into this next year is maybe half the spending to maybe 2/3 of the spending that we did on the initial rollout. And then we'll just see where that goes. The only planned growth that we have for next year would be adding U-Box containers and these trailers at a slower clip than we did this last year.

Okay. Great. And last quick one for me. I'm sure there could be other questions on this on the call. But the buyback authorization, can you just describe the eagerness to deploy it or is it more of a perspective that let's have this ready to go just in case the stock gets low enough.

Well, we think the stock is low enough. We're eager to deploy it. So they officially approved it last week. My team is setting up the trading account. I'm working on proposed instructions, then I'll sit down with Joe and we've got the corporate resolutions. Everything you have to do behind the scenes is going, so I don't think this is something that we're going to wait too long on, no.

Your next question comes from the line of Steven Ralston from Zacks.

To me, the big news is the announcement of the share repurchase program. So I'm going to dwell on it a little more. It not only states that the Board has determined the stock's price is cheap, but also at the present time, it implies that further expansion of the fleet is not in the company's best interest given the over-fleeting and depreciation implications. It also implies the strength of the company's balance sheet. Could you speak to these and any other nuances about the rationale of the share repurchase program?

Sure. I appreciate the question, Steve. On the first front, yes, the Board of Directors thinks that the stock is trading at a discount today and that there's an opportunity to acquire it. Our view on that really hasn't changed too much. What I'll say has changed is the availability of capital. And for those who've been around a long time as you have, you know that our first instinct and what we typically do is we want to reinvest back into the business.

I would say that the pace at which we've grown over the last several years has now afforded us the opportunity today to do this because we've added so much capacity that under normal circumstances, it would take about this much time in order to soak up that with demand. So now we can take a year off at least of some of that growth, and it frees up the capital here without -- we don't believe it's going to materially affect our leverage levels. We think that there will be a certain amount, certainly on the fleet side, a certain amount of deleveraging taking place on that front. So it gives us that opportunity.

So look, ideally, at the end of the year, we've fully utilized these assets. We go back to a little bit of growth. But I think where we're at for what we want to accomplish, we have the most storage capacity that we've ever had. So I don't view that as a weakness. I view it as a huge opportunity. And while we're waiting for us to get caught up on filling that up, we're going to go out and do other things that we think are wise allocation of capital. And so we've finally been able to hit this program, and we appreciate everyone's patience.

Now just turning to the tone of business. I noticed in the fourth fiscal quarter, the rate of year-over-year growth in the self-moving equipment rental revenue line improved somewhat over the flattish growth in the third fiscal quarter. Even though the fourth fiscal quarter is seasonally the company's weakest, what were the drivers of that fourth quarter's growth? And what do you glean about the future tone of revenues in the self-moving rental segment going forward into fiscal 2027?

Yes. In the third quarter, we saw kind of a mix of an increase in In-Town revenue, a decrease in One-Way revenue. Fourth quarter both managed to increase. And of note, in the fourth quarter, we did see an increase in One-Way transactions.

Now I think part of that, there's a little bit of a trade-off with revenue per transaction or rate. I think that there was a little bit of a hand off there. But we were able to increase the transactions. For the first 3 quarters of the year, One-Way transactions have kind of been up and down month-over-month, it was hard to get any sort of trend. So the fourth quarter was welcome on that front. But we're still seeing small declines in miles per transaction. I think I've been saying now for over a year that I expect that to bottom out. The actual mild decreases are getting much smaller, but that continues to be a little bit of a headwind, and that's probably not going to turn around until consumer confidence gets better.

What we've seen through the April and the first couple of weeks of May has been growth fairly similar to what we saw in the fourth quarter. So we would like to get back to the 4.5%, 5% growth. The initiative that Joe was pressing on expanding the dealer network, we're maybe 1/3 of the way there and trying to get the equipment out there. So I think some amount of those new dealers are going to be available to help to row the boat in the -- from Memorial Day to Labor Day here in the busy season. And if that all works out, I think there's more in store for us on this revenue line.

And just one last question, which is just something that occurred to me concerning retired rental equipment and the depreciation of -- one of the factors has been that the rate of depreciation has been underestimated. But it occurs to me that another factor could be that the realized prices from selling off the retired fleet dropped. Since these are older trucks, you held them longer than you expected to. And so the use was overextended, and the normal replacement cycle is stretched out. How much do you think the lower realized pricing account for the, I guess, pressure on profitability versus the underestimated depreciation that is mentioned more often.

The dynamic that you referenced is true. I just don't think it's applicable to this last 12 months as it has been in other years. We are back to about a 12-month replacement cycle for our cargo van fleet. So last year, we increased the amount that we spent on cargo vans without growing the fleet because we sold more. And the resale prices were fairly resilient over last year. As far as -- there wasn't a big decrease in average price per unit. I think in many cases, we may have seen increases for some models.

The bigger issue was it was not enough to cover the increased price that we paid for those units 2 to 3 years ago. And what we're seeing so far this year is pricing improving a little bit. We had a couple of good weeks in April, a little bit of a step back. So I'm not going to say that there's a trend yet. But we're selling newer units and it's looking better. But I'm not -- we're not ready to declare victory because that's still comparing it at a pretty elevated depreciation rate. So we need a couple of things to happen.

One, we need buy the units cheaper. Two, we need to sell them for more. And then three, we need to -- that will allow us to do 3, which is reduce the monthly depreciation on those so that we can get back to making some money on the actual rentals. And a couple of those things are falling into place. The prices for model year '26 have come down more than they came down in '25. But I mentioned in the prepared remarks, is that on that portion of the fleet, if we don't see -- we're going to compare the resale market this year versus what the manufacturers want to sell those for last year. And now we have built in for next year the optionality to not have to buy, right? We can sit out a year of buying vans or buying as many as we would normally buy. If we just don't feel like the resale market is there in relation to what they want to charge us for new trucks. Sorry, I went a little long there.

Your next question comes from the line of Andy Liu from Wolfe Research.

We covered good ground here. So I'll start on the storage side. So since you guys started the initiative to address the delinquencies here, seems like there's still some amount that you're working through in the quarter. So that's on the move-out side. But on the move-in side, I see kind of industry headline as well as some of the pure-play storage REITs kind of calling out that spring leasing season as it gained momentum. So I just want to get some color on what your thoughts are around how much of the evictions on the delinquency side that you have left here and when you can get back to kind of gaining occupancy from the momentum that we're seeing.

Yes. The delinquency issue now is really an idiosyncratic issue to specific locations. System-wide, we're back to the system expectation, the system standard. So we went -- we took all of our pain in 1 quarter, cleaned every one out, had a little bit of an amnesty program for folks that we're letting that go on. And then now we're on program. So if I still see individual locations that are running higher than they should, but system-wide, our percentages are in line with our expectations.

On the rent-up period, it's better year-over-year. But to give you a sense, I'm talking about a few thousand rooms. The pace has improved a few thousand rooms year-over-year. I'm not talking about $10,000 or $20,000 increase in pace. So we're still filling rooms. If you look at the locations that are rent up right now, we're probably depending upon the cohort, either year 1, year 2 or year 3 or somewhere between 5 to maybe 10 percentage occupancy points behind what we would normally expect. So we still have some ground to make up.

Got it. That's very helpful. And I think one thing that I wanted to appreciate is really, right, as you move out these delinquencies, I see it as the as a headwind of physical occupancy. That's reported, but if they weren't paying to begin with, right, I guess on a -- from an economic standpoint, you look to move someone out who wasn't paying to begin with, does it really impact as much? So I want to get a sense of how I should think about it as I look at the physical occupancy number that you report versus kind of maybe like an economic occupancy number because if you're moving out people who aren't paying and you're seeing improvement on the moving side, I guess, economically, I think it sheds a better picture than just the physical occupancy side, right?

It's for customers that want to run storage from us, it's fantastic, right? They now have a whole bunch of more rooms, I forget the exact number, but 35,000 more units available to them to rent. So yes, some of our folks were fooling themselves looking at physical occupancy versus economic occupancy. We've now made sure that everyone is on what our program was, which was economic occupancy all along. And so I think we're in a much better spot with people not trying to fool themselves with the physical occupancy.

No, for sure, for sure. And then just one last one on kind of on the U-Box. I noticed that you guys report quarterly the number of U-Box colocations you have. I think it's been going up every quarter. But I'm looking for this quarter, it seems to be down. So I'm curious if there's anything interesting of note there.

I still appreciate that you're going through our investor supplement and looking at that closely. Thank you. Yes, actually, it's a good question, and it's actually a sign of progress, and I'll explain why. So I'll break apart that number, which is our warehouse count versus what the customers see. So the U-Box availability for our customers is still near ubiquitous across all company-operated locations. They can pretty much get a U-Box at any company location, pick up and drop off.

What we've been doing is we've been consolidating warehouse space. So when we first got into this business, we were kind of finally trying to find anywhere we could to store these containers. As you look at our supplement, you can see these new warehouses that we're building, they're storing 1,000 to maybe 2,000 containers. So what's happened is from -- I'll go from March of last year to March of this year, we've added 49 warehouses that have more than a 500 box capacity. And then at the same time, we've reduced the number of warehouses that have less than 100 box capacity by, say, [ 160. ] It's not that we're not serving any markets or pulling back, it's that we're trying to become a little bit more efficient with the storing and the shipping of these containers We've increased -- over that same time frame, I mentioned the number of containers that we can store inside warehouses has increased 53,000, maybe 52,000. So that's the story behind that number.

Your next question comes from the line of Jeff Kauffman from Citizens Bank.

Just a quick question. I was looking at the supplement, and you had a terrific slide in there talking about how, geez, if we could just get the occupancy up in storage, here's what can happen to operating profits. And I think the point here is you don't really need the market so much to improve is just kind of get back to where you want to be in some of these businesses. Can you talk about kind of the core businesses? And how tough is it to get 100 basis points of occupancy back? You were talking about being 500 basis points to 1,000 basis points off.

And then on the moving and storage side, we know a lot of this issue is the depreciation and the losses on sale. It looks like you're going to anniversary the negative effect of the losses in this next quarter, that's different than generating a gain on sale. I understand that. But maybe talk about how far margins are off in that business once you get to a more normalized level in the market on depreciation levels and gain loss on sale as well.

Great questions. You're probably going to have to refresh my memory on some of this. I'm sure I'm going to forget one of them. The first one was on storage revenue I think today, just a rough rule of thumb is for every 1% increase in occupied rooms for a 12-month period, it's just under a $14 million increase in revenue. So our year-over-year increase in occupied rooms, excluding the effect of this whole delinquency issue has been I think, around 25,000 -- plus 25,000 to 27,000 rooms, I think. So at that rate, it's going to take us a while. I should have the exact number, but I don't.

What I'll say is we certainly should be capable of doubling that pace, plus 50,000 rooms. And on the margin question if nothing else were to get that much better, we would at least look better next year because from a comparable standpoint, it hasn't been a great year in fiscal '26.

So on the -- I mentioned the delinquency issue. We're going to lap that. So then the occupancy -- year-over-year occupancy numbers will look comparable and we won't have to try to explain that part. On the depreciation, we're going to -- we're on track to see the fleet depreciation decrease the second half of this year.

On the disposal on equipment, I really don't want to prognosticate on whether or not we're going to get back to a gain this year. But what I will say is everything is set up for us to do better than we did last year. And then when you combine the 2, depreciation plus the gain, which we do in the financial statements, that should be a headwind -- a tailwind going into next year.

On the repair and maintenance side of the equation, the fleet is in good shape. We we certainly are in a position where we can prune some of the oldest part of the fleet, and that would have the biggest effect on the maintenance number next year or the year that we're in now coming up. And on liability costs, we've got a lot of people here focused on trying to manage that number. From our claims units to our general counsel team, everyone is focused on making sure that not only do we seize the growth in that, but we also start to try to reduce it. And we finally got back to the point where we think we're well reserved on that front. So I would be surprised if I saw next year get much worse outside of maybe an inflation number.

So our EBITDA margin for last year for fiscal '26 was, I think, 29%. That's still probably 350 basis points off. And that -- so that's not even affected by depreciation. So we still have a ways to go and the majority of that being revenue.

Your next question comes from the line of Jamie Wilen from Wilen Company.

Jason, I want to flag the shift in the capital allocation strategy. But I hope it's not a short-term thing. I mean Joe has always said that the key measure for the truck rental business is fleet utilization. And if we can reduce that denominator, that will help that there. And also if we can slow down the very fast build-out of self-storage for a while, which starts at 0% occupancy and obviously doesn't make any money for a few years, that would help the overall number. So I hope it's not just a short-term thing and like it was COVID induced and then we'll go back to overspending for a while.

I appreciate the feedback.

Secondly, I would wonder if we could revisit the idea of selling advertising on the side panels of our trucks. We have a couple of hundred thousand vehicles. And there's a lot of other companies out there. I mean, you can see the Waymo cars going around and they have ads on their fleet, which teams put the little logo for $1 million a year on New Jersey. We have a couple of hundred thousand trucks out there. And if we could just sell the side panels, I would think we could -- for $100 a month, we could rent them to a Coca-Cola, McDonald's or Wendy's or 7-Eleven. And if you wrap those numbers around the size of our truck fleet, we're looking at incremental profits of around $0.5 billion a year. And I would hope you could relook at it. I mean any time I would see $1 billion laying in the street, I think the thing is to go down and pick it up.

Jamie, it's an interesting idea that obviously, we've thought about in the past and we tried to weigh the pros and the cons of that. Our view on that is that it would be a gain likely in the short term. Our challenge now is customer awareness of our product offerings. And we have excellent awareness of the rental equipment because people see it everywhere, and it's a clear brand imaging. What is less clear to customers is self-storage, moving supplies, U-Box and how all of those can be used together. And I would say before we introduce something that could potentially confuse customers, irritate local communities and their zoning boards, I think we're trying to find ways to use the equipment in a better way to inform our customers of every other product offering that we have.

I see that on the backs of the trucks, but on the side, it still says Cape Cod or visit wherever, and it's beautiful for the local company -- local communities, but we're spending millions of dollars a year just putting details, not promoting our product but promoting some city in this country.

Yes. We have a limited, very limited program where trucks that are transitioning into the for-sale fleet are used as advertisements, right, small businesses typically can use them out in front of their business as a billboard and storage inside, right? And that program has had limited success. But we've at least attempted to go down that path and look into it. Now that's full imaging, that's not partial imaging. I would be a little concerned about the confusion that it would cause customers and the potential issues that we'd have turning these into rolling billboards for everyone else and trying to explain that.

I like rolling billboards. I think it's a nice profit business for us, but that's your decision. Okay. Appreciate the switching capital allocation. I think it's a wonderful room for the company. Thanks, Jason.

There are no further questions at this time. I will now turn the call over to the management team. Please continue.

Well, I appreciate everyone joining us for the call. I hope you enjoy the new website and the investor supplement. And we will speak to you again on August 6 for our first quarter earnings call. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to U-Haul Holding Company Third Quarter Fiscal 2026 Investor Conference Call. [Operator Instructions]

I would now like to turn the conference call over to Sebastien Reyes. Please go ahead.

Good morning, and thank you for joining us today. Welcome to the U-Haul Holding Company Third Quarter 2026 Investor Call.

Before we begin, I'd like to remind everyone that certain of the statements during this call, including, without limitation, statements regarding revenue, expenses, income and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-Q for the quarter ended December 31, 2025, which is on file with the U.S. Securities and Exchange Commission.

I'll now turn the call over to Joe Shoen, Chairman of U-Haul Holding Company.

Good morning, everybody. As you read in the press release, we continue to have earnings pulled down due to excessive acquisition costs of vans and pickups in model years '23 and '24. This has hit earnings hard, and you can see it in increased depreciation and originally declining gains on sale and now losses on sale of vans and pickups exiting the fleet.

To a much lesser extent, the enormous post-COVID price increases on internal combustion engine vehicles is dogging our box trucks with elevated depreciation. We had been accumulating internal combustion engine fleet due to predicted declines in availability of ICE-powered units going ahead. Now we are too heavy in fleet and the rental market is not responding with significant transaction increases. We are working a plan to open more U-Haul dealership locations, which will put some of this excess fleet to work while earning in return. We will likely still be overfleeted so we will need to increase sales of older, higher-mileage trucks over the next 12 months.

As best as I can tell, we are holding our own and then some in the self-storage industry. For nearly 24 months, we have been adding units faster than we are renting them up. This results in a surplus [ automotive ] units. We're launching some initiatives intended to improve our rate of units rendered over the prior year. The proof will be in the pudding, and we'll see how that develops going into summer.

We now have a significant U-Box presence at over 700 locations in North America. With that, I mean a significant warehouse and depot operation. This increases our capacity and the absolute number, well, to the extent that U-Box's self-storage, U-Box's both moving in storage. But one component of it is storage. To the extent Box is self-storage, this increases our capacity and absolute number of self-storage customers. We have over 200,000 U-Box containers in service and over 100,000 of them in the hands of customers. We have slowed our rate of adding U-Box warehouses as we have a workable present in most markets. However, in D.C., L.A., Boston, New York City and the Bay Area, we are still underserved. In Canada, we are still light on U-Box capacity in Vancouver Island and Edmonton. We have projects in planning or in construction in all of these markets. [ We're not planning ] to carry through on these capital expenses. We continue to heavily invest in digital tools to meet what customers expect from the industry leader. Most of this investment is expensed in the current period.

With that, I'll turn it back to Jason.

Thanks, Joe. Yesterday, we reported third quarter losses of $37 million compared to earnings of $67 million for the same quarter last year. So that's a loss of $0.18 per nonvoting share this quarter compared to earnings of $0.35 per nonvoting share in the third quarter of last year. Earnings before interest, taxes and depreciation, what we're calling adjusted EBITDA, in our moving and storage segment decreased 11% to nearly $42 million for the quarter. On a percentage basis, that's about the same decrease that we saw in operating cash flows for the quarter as well.

Included in our release and financial supplement is a reconciliation of adjusted EBITDA to GAAP earnings.

Depreciation and losses from the disposal of rental units continues to be a significant earnings headwind. During the third quarter of this year, we reported a $26 million loss on the disposal of retired rental equipment compared to a $4 million gain in last year's quarter. Cargo vans that we purchased over the previous 2 model years that are now being sold came into the fleet with a higher cost the current market resale values have not been reflecting that, thus resulting in this loss. We've also increased the pace of depreciation on the remaining units to reflect that new reality.

On top of this, we have depreciation from increasing the size of the box truck fleet by nearly 11,000 units compared to December of last year. Between fleet depreciation and the loss on disposal, we experienced a $75 million cost increase for this quarter compared to the same time last year, translated into nonvoting share EPS, that's approximately $0.24 a share. Over 3/4 of this negative variance is related to our cargo van fleet. Looking towards the future, the model year 2026 cargo van purchases that will be coming on the books this year are going to be at an average cost of about 12% lower than last year's model year. And if you compare them to 2 years ago, about 20% lower.

For the third quarter, our equipment rental revenues results increased $8 million or just under 1% compared to the same time the year before, the majority coming from in-town portion of our business. Comparing the end of December 2025 to the same time in 2024, we added 65 new company-operated locations, and we had a net increase of 365 independent dealers. These new locations, as Joe mentioned, are expected to help us better distribute the larger fleet and increase transactions.

For January, our results were trending quite positive prior to the onset of the significant weather activity that hit much of the country has certainly slowed the improvement over the last 1.5 weeks or so. Capital expenditures for new rental equipment in the first 9 months of this year were $1.748 billion. It's $162 million increase compared to same 9-month period last year. Looking at the last 12 months, so that would be the calendar year of 2025, our gross fleet spend was approximately $2.025 billion. If you net out equipment sales, we got down to $1.331 billion. I'm estimating close to $670 million of that gross spend was growth related. Initial estimates for next fiscal year are showing a decrease in new truck purchases somewhere north of $500 million.

Storage revenues were up $18 million or 8% for the quarter. Average revenue per foot continued to improve across the entire portfolio by just under 7%. While the same-store revenue per occupied foot was up 5%, reflecting the cumulative effects of our rate increase activity. Our strategy of straightforward pricing with the customer and avoiding the large introductory discounts continues.

Our same-store occupancy decreased 490 basis points to just over 87%. And mentioned in our last earnings call that in July, we took on an effort system-wide to increase the number of available units at existing facilities by focusing on delinquent units. This effort did not affect revenue because we don't record storage revenue until we collect it, but it has had an effect on our reported occupancy level. So of that almost 5% decrease in same-store occupancy close to 4% of that was related to the removal of delinquent rooms.

Net tenant move-ins year-over-year, so comparing end of December of this year versus last year, [ are ] slower than in recent years has picked up compared to where we were last year adjusted for the delinquent units.

During the first 9 months of fiscal 2026, we invested $770 million in real estate acquisitions along with the development of new self-storage and U-Box warehouse space. That's a [ $444 million ] decrease over the first 9 months of fiscal 2025. During the third quarter, we added 16 new locations with storage, translates to about 1.5 million new net rentable square feet. Our development pipeline now is down to active development is down to 106 projects that should result in somewhere around 5.7 million new net rentable square feet.

Moving to storage operating expenses were up $66 million for the third quarter. As a percent of revenue, we certainly took a step back from the progress that we made last quarter. First, personnel costs were up $16 million, and fleet maintenance and repair were up $13 million. But really, the unusual increase in the largest component that we had was related to our self-insurance liability costs, and they were up $38 million, with the majority of that being in the form of reserve strengthening. We've made progress on this front, increasing our liability by nearly $79 million since March of 2025.

In December, our property and casualty insurance company paid U-Haul Holding Company [ its ] parent $100 million dividend as we're taking steps to reallocate capital amongst some of our subsidiaries. This $100 million is now available for general U-Haul corporate use.

As of December 2025, cash along with availability from existing loan facilities, at our moving and storage segment totaled $1.475 billion. I'd like to remind everyone that we have a supplemental financial information exhibit that's available on our homepage investors.uhall.com under Investor Kit.

With that, I'd like to hand the call back to Jenny as we have Joe, Sam Shoen and myself here to answer questions.

[Operator Instructions] Your first question is from Steven Ralston from Zacks.

Taking into account that seasonally, this is the second weakest quarter in your year. There seem to be some pressures in the one-way market in the self-moving equipment area and also in the U-Box program. Could you discuss that? And also, does that indicate there is some sort of -- that the U-Box market sort of track the one-way market, one-way rental market?

I'll start on that. And I mentioned this last conference call, what we've seen over decades is when consumers get anxious, they shorten the distance of a transaction. So instead of moving relocating to Denver, they go to a summer of their existing town. They still move for a variety of reasons, which is basic underlying demand, but they've moved shorter distances. And sometimes that turns a one-way transaction into a local transaction.

So there's -- so U-Box, and I'll let Sam elaborate on this. U-Box, we've had our greatest success with long-distance transactions. So to the extent that it tracks U-Haul, it will kind of track it. U-Box will track it but maybe a little more exaggerated as a percentage of business.

Right. Yes, Steven, that's a great question. I think this is getting to kind of what you're asking. U-Box operates in almost primarily in what you move considers the long zones. So for rental trucks, what might be a 20% of our one-way business in the long zones, for U-Box might be 80%. And so I think the question you asked was does U-Box track the one-way moving market, certainly in that way it does. And then, of course, as we have distribution as we're using rate to control distribution, now we're pricing U-Haul trucks in a certain way and our customers are seeing that and getting to incorporate that into their choice. So I think the short answer to your question is yes.

You've discussed the depreciation line, a great deal. And I think I'm missing something because I just -- could you please explain it. Depreciation is up dramatically, but sequentially, from the second fiscal quarter to the third fiscal quarter, depreciation actually went down. What's happening on an accounting basis on that?

So this is Jason. A couple of things going on. First, the depreciation of the box truck fleet is a dynamic depreciation where every time a truck passes its 1-year anniversary, the depreciation rate steps down on it. right? So our -- the first year that we buy a box truck, we charge off 16% of the cost. The second year is 13%. And that keeps going down. So if we don't do anything, the depreciation on the box truck fleet will gradually just continue to step down.

The second part of that is on our pickup and cargo van fleet, which is a -- it's a smaller fleet...

Shooter live assets, right?

Yes, exactly. We hold it a shorter period, and those depreciation rates we're adjusting from quarter-to-quarter based upon what we see in the resale market. And as we've essentially almost finished selling through the model year '23 units. Now we're under the '24. And so we're -- that depreciation number is getting adjusted from quarter-to-quarter.

Your next question is from Steven Ramsey from Thompson Research Group.

Maybe to start with, what did you think about from the high level for your business? You've continued to invest in growth in all areas of the business in the time of subdued activity. If you think about moving competitors against you and the traditional moving and U-Box space, have you seen capacity reductions from peers or another angle maybe is how you're expanding in the dealer space to position you to perform well now and perform much better on the other side of this?

I'll answer that. Yes, on both moving fleet and locations. The numbers aren't hard. I can't give you a hard number of, let's say, how many outlets Penske or Budget has. But we have a bunch of other indicators we get from various industry sources that causes us to be fairly confident they're both reducing fleet and reducing outlets. So that should we see an upturn or should we get a -- another way to put it, should we do a better job of understanding and satisfying customer needs, we'll be in a position to fill that demand. And that's the way I look at it a lot more in where we failed to appreciate what our customer needs. And if we will find that failure and remedy it, the customer will reward us with more transactions, and we'll be in a better position. We'll have more outlets and convenience is kind of part of our overall strategy.

So we're far and away. And just for talking points, let's say, Budget has 3,000 outlets and Penske has 3500, but we're sitting with 24,000 and change. So as far as customer accessibility just we dominate. And that's part of our strategy. It's a judgment how far to push that. Frankly, it's not an algorithm. Maybe there is, but it isn't one that we [ have a math ] problem that solves that out. So one other thing that you don't see and Jason, I don't think he really talked about is, inside our fleet isn't homogenous. It isn't 1 number. So when he says we have 100x box trucks the size of those of the age matters when you're trying to manage the whole fleet. So we have been playing catch-up to massive disruptions in the supply chain caused by both COVID and the government's insistence on electrification.

Curing those takes a while. You can cure it in the pickup advanced fleet maybe in 24 months because you rotate that fleet. In our box truck fleet, it's at least an 8-year opportunity. So sometimes we're buying a little more trucks than we need because we need a certain size truck or that truck is now available and it wasn't available before. So there's a bunch of adjustments inside of the big number. And if you went back to, let's say, 2016, we had it at that point, the best I've ever had in my life. We had tuned that pretty good. And that falls through as profitability. So as we get this fleet rebalanced, and I wish I can tell you a date, I wish -- I'm trying to get my own self a date as to when that will be back in balance. I don't know.

We've had -- you've heard me belly ache about the administration and the drive towards electrification. You see that really caused the manufacturers to do 2 things. One, they increased the price massively I'm talking 30% and 50% price increases; and two, the allocated vehicles. We couldn't get the model we want and the quantity we want. We had to take what their supply chain was able to produce. And this caused disruption in the age and size of our trucks, and we're working very hard to remedy that. And you see this year, the year we're just kind of finishing, we bought very arguably, a little more vehicles than is reasonable. But if you get into the details, you would see we're attempting to get this balance back out. So 2, 3 and 4 years from now. it's the right mix in the age of vehicles to serve the market.

So we're very aware of it. But it's all judgment. It's not absolutely guaranteed. I think that I've been elated because the administration has done everything I could imagine it to kibosh on the electrification. So you and I'm sure all your peers have seen what -- our good friends in the manufacturing business, Mary Barra announced, I think, $6 billion or $5 billion write-off. Jim Farley announced $19.5 billion write-off. Well, that gives you some idea of the disruption at their level, and that disruption kind of is like a ripple of a pond that carries through to people like me or to car dealers, if you have any car dealer clients, you'll see that they're not getting the exact mix of vehicles that they wish they had.

But this will balance out. The carmakers are smart people. And once they shed themselves of this electrification, I don't know what it is this for you. I'm not sure the right name for it. But as they get out of that, they're going to deliver the mix of vehicles that customers want, and customers will respond. So if that kind of addresses your question, it may be too much information. I don't know.

No, that's helpful perspective. I appreciate that. wanted to think about the expense management side of things? I know it's been a focus for you. Do you think this needs to be a more intensified effort over the next 6 to 12 months? Or would you say the structure is actually in a good place, but it's more waiting on volume to come back?

I've been pounding through on -- we run on the system of budgets like a lot of people. So I've been pounding through budgets. Trying to get the correct response out of the various parts of the corporation. And I think I'll see some results in the present calendar year and a little bit more the next year. repair hasn't been too bad. It's a lot of money somewhere is approaching $800 million on an annual basis. But is coming in somewhere in a normative -- we calculate all repair by model, by year, by cents per mile. We have a pretty good ability to forecast that.

So repair, we've got half way under control. Personnel is kind of -- we're stuck [ in advice ] on that. I think many, many people or organizations are, which is cost of living for our workforce is rising at a pretty good clip, and they're pretty hard pitched. So we're going to see that increase steadily over the next 2 or 3 years, I think, for sure. And our job is to outpace that, and when I look at that, we look at that on a location-by-location basis. Basically, we need to get a nexus of revenue enough that will support the complement of people to be open the hours we want to be open. We may likely have to adjust some hours over the coming 12 months because the -- it's not going to generate enough surplus to pay the wages for the hours the store is presently open in my judgment.

Now that's not done, but that's the kind of pressure [ wonder ]. It's on -- it gets to a totally micro analysis you can say overall [ bla bla bla ]. But every morning, we open about 2,400 stores. So I got to have a body there. It's very specific. And then some days in the week, I got to have several bodies there. So -- and those people have to be paid [ diluted ] wage.

So there's going to be tension there. I think -- I don't know what part of the country you're from, but this year, the West Coast of the United States, let's say California, Oregon or Washington have put in greatly increased minimum wages that have processed, or have in place plans that will automatically do it next year. And in many jurisdictions, they've done this for both salaried and hourly. Most of us are used to a minimum wage per hourly personnel. But they're not putting in minimum wages for salaried personnel. And it's going to stress a significant number of our stores profitability.

So of course, we're going to pay the people, but we have to boost productivity. Full self-storage and U-Box have been a relief valve for that in many instances. We've been able to expand that presence in the location, but other locations are limited by the geographic footprint. There's only so much you can do on that piece of land. So I would see in Los Angeles, we have several occasions that are just slightly over half an acre. There's no [ wiggle ] there. So those are under intense pressure. And I don't have a simple solution to it, but we're very cognizant of it. We're working on it.

Okay. That's helpful. And then last one for me. You've talked some about U-Box in the major markets that you are building out. Can you clarify if construction is going on in those markets for warehouse capacity? And then secondly, can you talk about U-Box usage both moving and storage in large metros that you already have established warehouse presence. Trying to think about the potential upside in the big cities once it's built out.

I'll take the brunt of that question and let Sam take you back to it. In the cities I mentioned, the metropolitan areas as I mentioned, at the minimum, we own property. We're somewhere between land use and putting the roof on it at these locations. These are all -- to me, each one is a big saga, okay. So I know too much information on it. We'll pick DC. We've had the steel building on the ground for 2 years. That's how between COVID and normal city bureaucracies, how much it set us back. We thought 2 years ago, we were going to break ground. We ordered the building, they delivered it. We still haven't broke ground. So it's not because we're not trying. It's just -- it's quite elaborate. But in all those cities, we own the property or metros and all those metro areas, we own the property.

I'd say, I'll pick Vancouver Island. That's a readily apparent thing. If we don't have a significant warehouse capacity, there's just going to be no U-Box business at all. So we have to have real warehouse capacity there. So -- but in the rest of Canada, we've done a great job for the Maritimes, up and through Ottawa, down to Montreal, all through the Greater Ontario or the whole belt people between Toronto and Detroit, we've got a fairly adequate footprint. And so I believe the business will follow. Sam?

Sure. I'll add some more color. Metros for U-Box is something we're certainly maybe a little extra excited about because Joe had the foresight to design our product and our strategy specifically around the size of container that thrives in the metro areas with challenges of space. So for example, our container size unlike a lot of our competitors fits in an apartment parking spot, no problem.

A lot of the challenging metro areas are restrictions on where they can be laid in terms of needing permits or having outright restrictions to be placed on the street. Our container option delivery method with the trailer gives it a license plate, which means it can go in anywhere that's a legal parking spot. So those are tremendous differentiators in our product versus the competition, and those were deliberate. And of course, we're hoping they continue to drive some exciting results in the metro besides the fact that a lot of these -- the metro demand is for a smaller-sized container in the first place. So getting the right-sized product to those customers is what we do. So I think we've got a big advantage.

Steven, this is Jason. I just want to make sure that there isn't any misunderstanding. In these markets, our customers already have access to the U-Box product. We're just looking to improve their access to it. It's not that we aren't in those markets.

Your next question is from Jeff Kauffman from Vertical Research Partners.

I just had a question more for Jason. You talked about we're almost through the 2023 cargo van cohort and starting to work on the '24s. Can you give us an idea of how many vehicles we have left to kind of get caught up to the current market and maybe the differential between your average acquisition costs and where you're depreciating the '24s versus what that spread looks like for the '23s.

Sure. I'll give you some big picture numbers. On the '24s, we probably have somewhere around 6,000 of those left, and those were the most expensive ones, a little bit more pricey than the '23s. And then we have, say, close to 19,000 of the model year '25 that then were maybe $3,000 cheaper than the '24s. So now we're going to be in the process of rotating out the model year '24s, which we have been we've been hitting those with this increased depreciation. So part of -- answered the question earlier, I think it was for Steve Ralston, that's been part of the depreciation increases. We've been hitting those modeling years here before we have to sell them, hoping to minimize any loss on disposal. And we'll see how successful we are here in the next 12 months on that.

Okay. But is your sense that -- because, look, it's going to come out either way, right, either through depreciation or loss on sale. But is your sense, we've got the '24 model years mark-to-market fairly at this point in time? Or is there still kind of going to be this deferred catch-up on loss on sale?

I think it would be fair to expect a loss on sale for those units. I don't know if we're fully there yet.

Let me address it. It's you make your estimate of what you're going to get on sale when you're going in, you set up your books. We've had to come back with adjustments because the way the market has developed that estimate turned out to be wrong. And as far as I can tell, it's wrong because as the automakers get away from electrification and get their supply chains reorganized, they're now, in fact, selling new vehicles for less than last year's new vehicle and maintaining a margin. They need to make a profit. I'm all for it.

But that takes the resale value and kind of gives it a little bit more of a hit. And we haven't in recent years, at least not in the last 15 years, had a market where the new prices kept being under the old price. And so I think we poorly estimated this, and of course, we figured this out, I don't know, 1 year, 1.5 years ago, when we start to act on it, and everybody was confident going into this particular year we're in that we're finally through it. And then, of course, what happened, another round of opportunistic. So we're acquiring the fleet cheaper, but that may mean that these trucks that we just put in are going to retail for less or wholesale when we get rid of them for less than you thought.

So we're I've got people here pretty tuned up. And I think we will try to -- if we see it declining what my direction has been, try to adjust depreciation to where you're going to basically be neutral at sale because the problem with the sale is that by the time you get it, you forgot how much you paid for it and all that. So we should suffer the pain monthly, and that also puts pressure on money marketing people because they basically incur that depreciation cost as part of their charge or whatever you want to call it that, as part of what they know they have to hit, it's harder for them to -- for me to hold them accountable for recouping a loss on sale, but they really didn't have a budget or a forecast that adequately presented that.

So I'm very hopeful we're going to get it right, but you've seen how just this whole thing has just kind of ricochet through and it's given everybody some things they didn't really totally appreciate, and I'm kind of a glass half empty person, and I've kind of pushed our people. Of course, they're all marketing and now we're going to sell our way out of it. Well, I think it's pretty clear when the pickup or van prices declined 2 years in a row, you're not going to sell your way out of it. You're just going to respond to the market. So I think it's a collaborative effort to guess -- make these estimates. I won't call them guesses, but they're kind of a guess. But your estimate of what that thing is going to go out for 18 months from now is an estimate. Of course, there's other industry people making this estimate. We're not the only people trying to figure this out.

So I have some belief that we may now hit the bottom of this whole declining group of factors coming together. But should next year, GMC lower prices again. Because they improve their margins and they've written off all the garbage. They have the same problem. They add some garbage on the books because they were attempting to respond to government. And I don't want to call it third-party greeny pressure. People who didn't know what the facts were but nevertheless had power positions. They tried to respond to them has really cost them greatly. It hasn't hit us as hard, but it's costing us, and we will work through it, and every effort is being made to [indiscernible] fleet.

I've always [ prided ] myself over the last 40 years, of always having the fleet on the books for less than it's worth. Because when push comes to shove, if you're on the books for more than it's worth, it can be a very unpleasant time. So I've pushed real hard and we've missed it 2 years in a row on our pickup and van fleet. And we should have it right this time, but only time is going to tell. It's important. We're trying to undershoot without just being stupid. If I put too much depreciation on, of course, my rental teams will say we can't possibly make we can't make any of our goals. It's impossible that you've afflicted us with. So I have to not try to be not too low or too high.

So -- but on the other hand, I'll say that the whole company has overestimated resales for 2 years [ long ]. Yes, it all comes out [ awash ]. But during the interim period, it can affect people's motivations and I need to do [ that, too ].

Your next question is from Jamie Wilen from Wilen Management.

Joe, you've always mentioned that fleet utilization was your prime objective in managing the business. How did you arrive at only reducing the fleet expenditures in the coming year by $0.5 billion as you look forward, are you going to spend $0.5 billion less in future years as well?

Right. Now I'll start with the year, we're finishing up. So we call that fiscal '26, [ I believe ]. In fiscal '26, you're actually seeing an increased -- significantly increased fleet expense. That is aimed at trying to rebalance. If you don't buy some trucks, well, 4 years from now, you don't have those trucks at that mileage and that cost parameter. And so you create imbalances to the whole fleet. And that also impacts on what can you buy next? So in the year just finished, we put in something like 10,000 10-foot trucks. That's beyond replacement considerably.

We have a whole bunch of considerations. And that [ truck]; in our present plan for the coming year, we reduced that massively because we think we know what we're doing there. In my 20-foot truck, I have a disproportionate amount of fleet that's 8 or 10 years old. So while my total number is okay, my mix is off. A 10-year-old truck can't perform quite like a 5-year-old truck or a 4-year-old truck. So I'm buying a fair amount of those a little bit more than you might say is replacement simply because I have a lump of them that are 8- or 10-years old, and I've got to try to smooth that out. The perfect life of the -- [ trigger ] the life of the truck, divide that in the fleet, make that fleet purchase every year. That would be wonderful. But they just don't become available.

And in the past 5 years, it's been aggravated because of all these supply chain disruptions. The worst being we're on allocation. They would say, you can buy x trucks that -- we haven't seen that since the Korean war. So that caught us off balance, I would say, and resulted in a couple of times, we made huge buys because they would sell them to us. We had to have something, so we made a huge buy. So we're going to we're going to reduce this, and then we have to see what we can do with sales because that problem, it's a buying problem. It's also a selling problem. Can you take that many trucks into the sale market and can you move them. So we'll see in case my 20-foot trucks, I have something like 12,000 [ lump ] going through. And we can't digest 12,000 on a resale in one year and probably couldn't do it less than 3 years.

So depending on how -- but if I don't buy for 3 years, I'm just creating another lump that I'll have to face down the road. So I'm going to do some modest buys that may accelerate sales and see where that -- where we can find the balance. And so we're proving that, I'll say, specifically on the 20-foot truck right now. How much can we -- how many of those trucks can we put into the resale market successfully, and we should buy at least that many of them. this year so that we don't have another month in our supply chain.

So on the sales -- go ahead, I'm sorry.

I'd say on the self-storage side, as far as capacity utilization there, is there any thought of slowing the pace of development to a more modest level.

It slowed a lot. I think Jason thinks it's down $400 million. It's not a -- these numbers are a little bit soft. But we've slowed it down. A ground-up self-storage location is probably a 3-year process. So if I slow it down, you won't totally see it until 3 years from now. Now the other problem is if we want to speed it up, you won't see it for 3 years. So you got to be a little thoughtful going both ways.

So we have slowed it down. I'm still going ahead with what I consider to be strategic. So the U-Box warehouse as I mentioned, I believe they're strategic, and we would be foolish not to build them. Although -- so the -- it's going to be a significant amount -- enough money that I'm watching it. For self-storage, we're a little more opportunistic as we're going ahead now. We [ either ] think it's a market that we know better than somebody else and we see an opportunity, or it's something that's semi-distressed. [indiscernible] just bought location in Olive Branch, Mississippi. It doesn't mean much to you, but we already had a store there. We bought a second store. We paid well less than 3/4 of the cost of construction for it. And I think Olive Branch, Mississippi is going to [ be fine ] over the next 10 years, although it's probably not on your horizon. But it's a good solid growing area. I determined that was opportunistic and we go ahead with it.

Okay. You guys have done an excellent job of building value, but less than a stellar job of creating value for shareholders. If I were a Board -- pardon me?

I'm with you on that.

Okay. If I were a Board member, here's what I would suggest to you to help crystallize a bit more of that value. We all know how undervalued self-storage is relative to the rest of the world. And we'd like to help the investment community as well as analysts recognize a bit of that. What I would suggest is doing is selling a territory of well-occupied facilities that don't have box storage in there because I don't want to eliminate the competitive advantage we have with the rest of the world [ in ] U-Box.

But I would take an area where we have stabilized occupancies over 80% like a Tennessee or New Jersey and hopefully, no U-Box storage or not much. And I would want to sell that to one of the publicly held REITs, which could crystallize value for how much we have value if we have created there and recycle the proceeds. If we get $1 billion or $2 billion, use half of them to buy back stock, the rest to pay down debt. We'll build new facilities. But it would help crystallize what we built and hopefully not impact the growth of the core business there. What do you think of that?

I kind of understand the math of it. I won't say I am hot on the proposal. Of course, part of the opportunity is every one of those I work to get. And so I'm a little bit where you are selling it. And should the market turn up, we may rue the day we sold it. But I think that's a fair position to explore. I'll explore a little bit with Jason. He's pretty good on the numbers. So we'll explore that a little bit.

The stock buyback, I kind of go both ways on also. I'm not -- we went and did the stock dividend and a bunch of other stuff, tried to bring some analysts in, changed the exchange, we were going all in an effort to, I guess, improve liquidity or make the stock more interesting to people with, I think, very minimal results, okay? I don't think anybody at my end is a stock [ do ] -- we don't -- that's just not where we all live. I was underwhelmed with the response of the market when we did that. But these are -- we have to do something to demonstrate value.

Another way to demonstrate value is put these stores at 90% occupancy, then, of course, now it's a little bit easier. I'm sitting here with -- depending on how you want to count it, somewhere around 80% effective occupancy. Now it varies by every store, but that's an overall not a bad estimate. And that's been dragged down by -- every time I open a new store, I lower that number. So I believe that the market is significantly larger, but it's being say, mistreated. The customers are being mistreated by the industry now, and I'm going to try to see if I can communicate that to the customer that we're not the ones mistreated.

So we'll see how that goes. But a bunch of people have come into this industry, which you probably know them, and I don't. But they're big money operators, and they kind of view storage as a cow to be milked and I look at it more as a land to be patted and taken care of. So they're a little rough on the customer would be the nicest way to put it. And I think we can distinguish on our customer service, and I think there's enough people in the market now who -- this is their second or third time running storage, and they know that storage room is not a [ story ]. It's not a [ story ]. We'll see if I can communicate that to the wider group of customers.

Overall, I think we've been outperforming our peer group, if you wanted to find that as the big REITs, I believe we've done a better job of being able to maintain rates and expand customer base. Now, I don't get any numbers on there that you don't see. So I don't have any special look into their numbers, but it seems that they're having difficulty holding move in rates at or above move-out rates. We're still able to maintain a differential there. I think that's significant. I'm optimistic I can fill more rooms, but I've got it pretty close to the edge, I think, Jamie, as far as -- we're pushing somewhere as -- Jason may have a better number, 220,000, 230,000 units, something like that.

If you include the managed portfolio, so U-Haul-branded stores were about 290,000 rooms available.

Okay. So all of those are depending on either a liability or an opportunity. So as a shareholder, you're probably seeing a little bit of a liability because you're paying for them and get nothing for it. I think we're going to see significant progress in filling those rooms and that's how I have my teams wound up. At the same time that we've increased successfully, we've increased total customers every year in conventional self-storage. We've done the same thing. We've introduced something like 100,000 storage customers in the U-Box.

So from the point of view of operating a facility that manager is looking at a total storage customer base. So I'm not disgusted with our performance. But I think our performance has to be better because we've invested the money. But I think we're showing we're resonating with the customer as much or better than anybody else in the business.

I believe you have 2 customers here. One is the person who rents your storage facilities and truck rentals and the other customer are investors. And investors would love to see you harvest some of the value you've created where you turned $1 into $4, but we can't see it. Whatever you can do in that respect would be a good thing for...

I got it...

It's a consolation, I'm 76. I'm kind of getting a little closer to what -- and see the goose lay some golden eggs. All right. Thank you very much.

Appreciate your thoughts.

[Operator Instructions] And your next question is from Steven Ralston from Zacks.

I just want to circle back around in -- [ tap Joe's ] experience and get his historical perspective. You've pointed out that you're in a very unique period with the [ advent ] on EV vehicles and the demand that came through COVID. When you think about the situation in your past, does it remind you of any time in the past where you and resolve the situation and how it happened and you use that as like key markers in managing the company?

In a general sense, yes. But in fleet, we've always been able to buy all the fleet we had money for. Our problem up until recently was we always were capital constrained. And then this slipped to COVID and post-COVID, and we can buy what someone says we can have. That's -- that -- we don't have a lot of markers in there. But of course, we're working on it regularly. And I think if I had to do this all over again, coming out of COVID or I'll say post-COVID, I would not have -- when they went on allocation, I have told them to keep their trucks. That's what I'll tell them next time. They keep their trucks and when they jack prices, they can keep their trucks because I can sweat out 2, 3, 4 years, and I think my customer will support me.

I think I was over eager to buy trucks because we had such a nice balance in '16. I wanted to get back to that balance quickly. And I didn't stand firm enough when they came through with massive price increases. I just don't they weren't -- it's unsupportable. Now they had all this talk, and we all saw it and I think everybody is a little guilty of this saying that, as Mary Barra did, she had something, I don't know, after 2037 or something, GM will not make an internal combustion engine.

Well, if you're on my end of the deal, that's a frightening thought because the other ones don't run. So you can see how I fell into the trap [ that well ], if she's not going to build any, but then my friends at Ford didn't make quite as broad a statement, but practically speaking, they were running their investment as if they were no longer willing to make it.

An example, they quit the second shift to one of their truck plants. We've been the beneficiaries of that second shift for at least 10 years. So when they put a second shift to that plant, I will -- where the hell is trucks going to come from. So I think we'd have come out better if we just let the fleet age by just what suited us and just at the price [indiscernible] and we wouldn't be trying to digest all this excess cost. But that's not what happens. So now we've got to digest it and want to work it in a way that it doesn't come back and plague. People are trying to make fleet decisions 5 and 6 years and I want to try to smooth it out. And so that's causing us in some models to buy a few more trucks than an analyst would testify, but when you look at the age of the truck and what that's going to do to you going ahead, I think experience tells me you want to buy some trucks.

So -- so no, I don't have a marker and experience on this. self-storage, I have a lot of markers and experience. I'm fairly confident that, that's -- those are all good money bets. But the timing is too slow, and it's not enough to command investor support, which I understand I'm an investor here, too. So -- but we have markers. We can look at market penetration by various markets and storage market. The demand for that product has far exceeded anyone's expectations. I think you could say that of any of the major companies, [indiscernible] really appreciated how much demand there was for that product or there is for that product, and it's still being served in a spotty fashion. So filling in those gaps is an opportunity for someone if they can identify them and then get them [ until there ].

There are no further questions at this time. I will now turn the call back over to Sebastien Reyes for closing remarks.

Thanks, Jenny. I have one question that I wanted to post here that came in during the call. U-Haul's profit margins, excluding depreciation have been in constant decline for the last decade. Please explain why margins have been so persistently weak since 2016, and please explain your plan to restore the profitability of this great company.

Well, this is Jason. I'll take that one. Well, 2016 is picking the high point of our EBITDA margin. So that our earnings over the history of the company have been a little bit cyclical largely in relation to how much we expand the organization over a certain timeframe. So to pick 2016, which I think was maybe 35%, 36% EBITDA margin. The 10 years before that, our EBITDA margin was 25%. And the 10 years since 2016, our average EBITDA margin has been 33%. So there has been actually a structural improvement in how the organization has been run. And we've included a slide that shows this trend of improving EBITDA margins that I don't think it's happenstance that it coincides with our growth in the self storage and the U-Box market.

Since fiscal '16, we've had some up years and down years. I would say that during COVID years where we got back up to the mid 30% range, there was some recognition of revenue and not the recognition of the associated expenses that went along with it. So for example, the repair and maintenance that we were incurring during the work from home phase where revenues shot up. Under current accounting rules, you can't accrue for expected maintenance based upon how much the truck is going right now. So we accrued all of these miles and recognize the revenue and then there was a couple of years after that, that we've been paying for the repair and expense associated with that. Then we also had the somewhat idiosyncratic event where our former auditors failed to see the wisdom in how we chose to reserve for our self-insurance liabilities, and they took -- I think it was $88 million out of our self-insurance reserves in order to sign the opinion. And now over time, I think we've seen that we would have been much better off to leave those reserves on the books, and that would have been a little bit more of a shock absorber, right?

Because during COVID transactions increase, so the rate of incident, potential incidents increase, well now we're dealing with as those incidents that happened back then or developing. They're becoming a little bit worse than what was originally thought. It's always ifs and buts. But for this quarter, if we had a normal [ U-Haul ] revenue quarter of 4% growth, and we didn't have the reserve strengthening, we would be looking at an average EBITDA margin.

So I'm hesitant to agree with the premise that there's something structurally wrong with the how we're operating the business from an expense perspective, I would say that it's a revenue issue, and then it's a cycle. We've been in an unprecedented growth cycle how much we've grown the fleet and how much we've grown self-storage. And frankly, I think we've done a reasonably good job in keeping the EBITDA margins where they're at, while we're going through this process.

Now all of that to say, a decent EBITDA margin for us over a 12-month period is going to be in the low 30% range, and we are underperforming that this year.

Well, thanks again, everyone, for your participation. We look forward to speaking with you again after we report our year-end results in May. Thanks.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining you. You may all disconnect your lines.

Good morning, ladies and gentlemen, and welcome to the U-Haul Holding Company Second Quarter Fiscal 2026 Investor Conference Call. [Operator Instructions] This call is being recorded on Thursday, November 6, 2025.

I would now like to turn the conference over to Sebastien areas. Please go ahead.

Good morning, and thank you for joining us today. Welcome to the U-Haul Holding Company Second Quarter 2026 Investor Call.

Before we begin, I'd like to remind everyone that certain of the statements during this call, including without limitation, statements regarding revenue, expenses, income and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-Q for the quarter ended September 30 and 2025, which is on file with the U.S. Securities and Exchange Commission.

I will now turn the call over to Joe Shoen, Chairman of U-Haul Holding Company.

Thanks, Sebastien. The earnings crush of increased depreciation and change from booking gains on equipment sales to booking losses on equipment sales became evident this quarter. We reported this over 2 years ago that we were having to pay too much for trucks. This pounding is likely to continue for some time as OEM manufacturers continue to bring current pricing in line. Resale values will likely decline roughly proportionally. While I'm glad to bring on new vehicles at lower cost, this likely will depress earnings in the current period.

Since July, we have been working to expand our dealer network well above the historical pace. This should help us better balance truck and trader inventories by increasing demand. I expect some success here. We spent more on repair in the quarter than I had anticipated. We are working a plan to slightly realize repair cost increases. As you all know, our customers drive the equivalent to the moon and back more than 12 times a day, tool repair or maintenance will always be significant cost. Mileage, however, is not up, so we can reel this expense back a bit.

Self-storage is a positive but it remains a slug fit. Not very many gains are coming easily even on good projects. I am focused more on expanding our footprint than increasing our depth. Competition is strong, customers are value conscious. That is an environment that U-Haul usually competes in well. Self-storage is still viewed positively by lenders, which is encouraging new competitors to enter in some markets. administration is having success in reducing ICE regulation that has driven unnecessary dislocations in the transportation economy. It has long been a dirty little secret that these regulations are politically and not environmentally driven. As the unproductive regulations on vehicle manufacturers and users subside, I expect a reordering that will benefit citizens and businesses alike. This is very positive for the transportation economy. Although the transportation economy overall will have to eat some huge residual costs from the old conceived green regulation.

In summary, our various business lines are solid and our results have covered a lot of expenses but are short in return to shareholders. I will now turn the meeting over to Jason to closer review the financial results.

Thanks, Joe. Yesterday, we reported second quarter earnings of $106 million. That's compared to $187 million for the same quarter last year. This is a $0.54 per nonvoting share EPS number this quarter compared to $0.96 per share non-voting share in the second quarter of last year.

Earnings before interest, taxes and depreciation, what we're calling adjusted EBITDA and our moving storage segment increased 6% or nearly $32 million for the quarter. This is about the same amount of improvement that we saw in the first quarter of this year. Revenue growth across all of our moving and storage product lines led to this increase. Included in our earnings release and financial supplement is a reconciliation of adjusted EBITDA to GAAP earnings. Once again, this quarter, the largest difference between adjusted EBITDA and GAAP earnings is depreciation, and that's also the cause of the largest negative variance in earnings year-over-year.

During the second quarter of this year, we reported a $38 million loss on the disposal of retired rental equipment, whereas last year at this time, we reported an $18 million gain. Cargo vans that we purchased over the last 2 years that are now being sold came into the fleet with a higher cost and the current market resale values are not reflecting that resulting in the loss. We have increased the pace of depreciation on the remaining use to reflect this new reality. Additionally, we have depreciation from increasing the size of the box truck fleet by approximately 10,000 units compared to September of last year. Between fleet depreciation and the loss on disposal, we experienced a $107 million cost increase for the quarter compared to the same time last year, translated to EPS that's about $0.43 a share. As a reminder, our total decline in earnings per share for the quarter was $0.42.

For the second quarter, our equipment rental revenue results had a $23 million increase, that's about 2%. Revenue per transaction increased for both our In-Town and One-Way markets compared to the same time last year. There was a decrease in overall transactions. In a move intended to improve customer convenience, we're increasing the number of independent dealer locations across our network. In the last 12 months, we've added nearly 1,000 new locations. In fact, for the first time in our history, we've eclipsed the 25,000 location count and the plan is to continue adding. This, in conjunction with the increase in the size of our truck fleet, we believe there's an opportunity to grow moving transactions. October results came in below trend. We're working for an improved November.

Capital expenditures for new rental equipment for the first 6 months of this year were $1.325 billion. That's up $169 million compared to last year. For the last 12 months, so the trailing 12 months, our gross fleet spend has been approximately $2.32 billion. If you net out equipment sales, it was $1.358 billion. I estimate that close to $640 million of the growth spending was growth related. We had another strong quarter for self-storage. Storage revenues were up nearly $22 million, which is about 10%. Average revenue per foot continued to improve across the entire portfolio by just under 5%, while same-store was up about 4%. We are seeing the cumulative effects of our rate increases flowing through to revenue. Our same-store occupancy decreased by 350 basis points in the quarter to 90.5%.

As I mentioned last quarter, in July, we took on an effort system-wide to increase number of available units at our existing locations by focusing on delinquent units. This effort did not affect revenue directly as we don't record revenue until it's collected, but it did have the effect of reducing our reported occupancy levels for now. Of that 350 basis point decline in same-store occupancy, about 220 basis points of that was related to removal of delinquent tenants. Net tenant move-ins, while slower than recent years, has picked up compared to where we were at last year, adjusted for delinquent units. During the first 6 months of fiscal 2026, we invested $526 million of real estate acquisitions, along with self-storage and U-Box warehouse development. That is down $208 million over the first 6 months compared to last year's first 6 months. During the second quarter, we added 23 locations with storage that translates to about 1.6 million new net rentable square feet. And we currently have 6.5 million square feet being actively developed across 116 projects.

Our U-Box revenue results are included in other revenue in our 10-Q filing. This line item increased $12 million, of which U-Box was a large part of that. We continue to have success increasing moving transactions as well as increasing the number of containers that our customers keep in storage, although the pace of growth for both slowed in the quarter.

Moving to storage operating expenses were up $19 million for the second quarter. As a percent of revenue, we improved compared to the second quarter of last year. The largest component of the -- one of the larger components of the increase is personnel, which was up $12 million, but that increased at about the same rate as revenue increase. Our liability costs associated with the fleet were up $23 million and fleet repair and maintenance, as Joe mentioned, was up $10 million. Regarding the liability costs. We've made progress on the self-insurance reserves from moving and storage. Over the last 6 months, we've increased our liability by $43 million. As of September 2025, cash, along with availability from existing loan facilities at our moving and storage segment totaled $1.376 billion. Supplemental financial information as of the end of September is available at our investor website, investors.uhaul.com under what we call Investor Kit.

With that, I would like to hand the call back to our operator, Angeline, to begin the question-and-answer portion of the call.

[Operator Instructions] Your first question comes from Stephen Ralston with Zacks.

I like to talk about the forest. Looking at the forest instead of the trees. I'd like to congratulate you on a record top line of any quarter in the company's history. Granted the second fiscal quarter is your strongest seasonal quarter, but nevertheless, it's a record [indiscernible] trees.

As we all know, the depreciation expenses have recently been a drag to the top line. I'd like to start the conversation by clarifying your method of depreciation. I think in the past, you've mentioned that you use accelerated depreciation now. But I've noticed that sometimes the depreciation is higher in the seasonally high quarters. Is there any component of usage involved in the depreciation scheduling?

Steve, this is Jason. So when -- for our rental fleet, we have 2 basic methodologies for depreciation. The first would be for our box trucks. And that's a dynamic depreciation model that depreciates faster in the earlier years have been slowed down over time. We hold those assets generally 12 to 15 years, and that schedule has not changed. But it does result if you have uneven purchases of box trucks, you can have that number either go up or down in a year.

The second part of the fleet is our cargo vans and pickups that we hold anywhere from 12 to 24 months. That's a straight-line method that is a little more responsive to what the resale market is because we sell them so much quicker. So what we're seeing today is a cargo van that would have depreciated at a certain level 3 years ago is now depreciating 2 to 3x that rate per month because of what we're seeing in the resale market.

When do you expect the depreciation expenses to peak on a quarterly basis? You have better insight into what your anticipated expense is the purchases are going to be and also the pricing.

So again, I look at it in 2 components. On the box truck fleet, I think our initial look into next year is we're going to be buying fewer of those trucks. I would expect the box truck depreciation to peak towards the end of this year, beginning of next year then start to trend down. On the cargo vans, whereas the price that we're looking to pay for model year '26 cargo vans is going to be coming down. That's going to be dependent on the resale market, and that's tough to judge right now.

So I'd like to think that we're peaking by the end of this year, and then it should maybe flatten out will start to come down. We are not increasing the size of that part of the fleet. So at least the total number of units subject to additional depreciation isn't growing.

Can I add there, Jason. I want to add that the question always is you take the hit every month, you take a hit when you turn the vehicle. And it's a bit of a guessing game. And so then we will routinely look at that and then mid-course make a correction because it's just how things work out. So we try -- we go in with what we think is a reasonable rate in depreciation with this last 18 last months, and it's really come clear here, the depreciation has been significantly greater. So when I look at this number, I had the depreciation and the loss on sale to try to understand what's going to be the peak.

And it's a little bit hard for us to forecast not consulting [ Jason ] here, but speaking from my personal opinion, I think we're a year away from the peak on the pickup of vans. But so much of this depends on how the new vehicles get priced because used vehicles just kind of are a reflection of new vehicle pricing. And if new vehicle pricing comes down, it could affect our assumptions [indiscernible] in depreciation.

A little harder question is -- could you anticipate what level of depreciation is going to be at the next trough? And to put it into context, in the beginning of the 2000s, actually pre-COVID, your level of depreciation on an annual basis was about $600 million. And actually, during COVID because you weren't buying more vehicles as you -- as many as you wanted, it actually grow below $500 million for 2 years. Now we're at a run rate of basically $1.1 billion of depreciation.

If you could get back to a trough of $600 million, the earnings this quarter would have tripled from what you reported. That's how much of an effect this has, given this run rate of over $1 billion in depreciation at some point, it should peak and then trough out. Do you have any idea where that trough would be dollars wise?

This is Jason. So I'll take a shot at that. So from when we went into COVID where we're at today, the fleet is at least 20,000 units larger and the trucks are costing more. So those are the 2 factors that are pushing the annual depreciation number up, right? If we were ever to get to a point where we bought the same number of trucks every year, we would our maintenance CapEx number would end up becoming our depreciation number over time. And going into COVID, I was -- at that time, it was quoting something $600 million for the trucks at least, not including trailers or the U-Box containers. Where we should end up is going to be much closer hovering around the $700 million to $750 million range, I would think, at a normalized number given the size of the fleet today, but it's going to take a little bit of time to get there.

That's very helpful. Last question on a completely different topic. I've noticed on social media. You have seen a lot of clips because earning some of your employees talking about day-to-day operations and innovations and equipment design. Is that a new effort of yours? Or have I just been missing it prior to this?

This is Sebastien. I think what you might be seeing a lot of is around our toy hauler, Stephen. Yes. I mean that's a real exciting opportunity for us. We've got a lot of really great pickup on that from really big automotive publications. And I think it's a market that we weren't serving as good as we could have before and is just a natural extension of 80 years of being in the trailer business. So I think there's a lot of excitement around that. I think public is starting to realize that as well.

The next question comes from Steven Ramsey with Thompson Research.

I wanted to ask a couple of questions on growing the dealer network you're optimistic on that effort. Can you share some of the reasons why you're optimistic? And what is the time line for gaining momentum on this effort as far as driving more moving transactions?

This is Joe. I'll speak to it. I think I'm expecting to see visible numbers by May, maybe before then, it depends how well I can get the organization to perform. Always, you're looking at market penetration. And when I segment out market penetration across various markets. I continue to see areas where we're lagging our own performance. I don't believe that the market is that different or the potential is that much different in one market or another. So let's say, eliminating Manhattan in places like that. But going to more communities, Denver, Phoenix, there's -- I think that there is substantial opportunity for increased penetration and dealers is our most effective way to enter that.

Over the last 30 years, dealers have hovered at just under half of our truck and trader rental revenue. Today, they're running maybe 3 percentage points below where they've been running. So I think we've got out of kilter about that much. Now nothing is certain, but I have significant indicators that tell me we've neglected this and whether -- so I think there's a nice increase here. And also for better or worse, we actually are a little bit over fleeted right now, which is why Jason reports we have a little bit lower utilization. So you see oftentimes in the past, I couldn't lose maneuver. I didn't have enough equipment to allocate. So today, I have equipment I can allocate. So to me, it's a big opportunity.

Now of course, if I can't do this, then Jason and other people in the company will insist we squeeze the fleet down a little bit in order to up utilization. These are just kind of ops and forces. I believe there's significant room in market penetration, and that's what I'm driving on. And we should see results by June, I believe. I'll see them sooner than that because I'll see different numbers than you see, but I believe by then you should see some results.

That's helpful color. Maybe thinking even further out on this effort to grow the dealer network. Can you talk about the long-term insights or goals as far as creating new owned U-Haul locations and the potential benefits of more U-Box warehouses in these markets if this were to come about, is this something 2 years out, 4 years out, if this comes to fruition?

Well, I've been steadily driving the whole company. The whole company has been steadily driving on increasing our storage and U-Box footprint quicker than our U-Move footprint. And I think that's because to justify a big company-owned operation, you to have suck in a fair amount of revenue, and that may not be available in markets where there's plenty of U-Box and e-store business. So of the stores that we've opened in the last, I don't know, 2 or 3 years, nearly every one of them is going to do more self-storage than it does. Truck and trade or rental revenue. And that would be, I think, a continuing pattern.

Okay. That's helpful. And then you talked about, as you described the slugfest in storage. Would you say that the competitive intensity there is equal to what it had been? Or is it intensifying further? And what are you looking for to -- that might show this is evolving to be a bit more healthy competitive environment than it has been in this recent period?

Well, Jason always brings me move in, move out rental rates for our competition. They quote that. And their move-in rental rates are massively below their move-out rates, which means they're bringing you in on kind of little bit of a over the zealous discount and then cranking the rate up. My experience is that offends a lot of customers, they would rather just be told about what it's going to cost them and then they'll figure into their budget. So that causes our people to point of sale to be quoting a first 3 or 4 months' rental rate that's going to be higher than what they're going to quote from the competition and 30% would not be a big gap. I've seen 50% gaps.

So this is, to me, is foolish. It sets up an expectation on the customer that we can't provide the product to that at those low rates, it's not economical for anyone. So -- but our competition, the big REITs primarily are dead set on that pricing mechanism. And so we're just -- it just kind of being a little bit of a slugfest and -- but overall, we're -- I think relatively, we're coming out well. It's a tough thing to know cause everybody does their information a little bit different, but I think we're coming out well overall. And I see a lot of runway ahead of us. As I said in my prepared comments, we're focusing a little bit more on breadth of coverage, the depth of coverage where I think due to their management structure, a lot of our REIT competitors are focusing more on depth of coverage than [ depth ], primarily because we're already in all these markets because of truck and trader rental. So we have just a little different strategy. I'm not saying it's a better or worse strategy, it's a little different, which is buying for me, I like a little differentiation.

Okay. That's helpful. And then last quick one for me. I know your activity in moving and storage generally tied to overall economic activity and life events. But in this time period with existing home sales being so depressed, I'm curious if you think in a recovery scenario on existing home sales, if that would be a wave that would lift the growth of one-way moves and lift new box growth even further, maybe just the general linkage of one-way moves in U-Box to existing home sales.

I don't think it will be enough of a boost that you'll be able to see it. No doubt, there's some moves there, but the transaction volume it takes to move that is pretty significant. I think that there's been a lot of consumer confusion or uncertainty. And I think as that becomes stable, my experience has been that we see a little more One-Way rentals and a little bit longer One-Way rentals, And we're not seeing that presently. So this is a pattern I've seen 3, maybe 4 times in my career, and it's -- I don't have a good way to estimate how long this will continue, but this has been a trend for a little while now. So we'll see. We saw just the opposite very coated. We got a little longer rental and a little more percentage of longways. It was strangely that turned out people were very eager to move.

So no, I don't think that home sales are going to be something that would be good for you to use as a 1 state to try to drive a prediction.

The next question comes from Andy Liu with Wolfe Research.

Yes. So I appreciate a lot of color around the depreciation here. I want to focus more on kind of like the cash side, right? So digging through your comments of the input cost being hired to get the new trucks in the secondhand market, not catching up to that. I just wonder on a capital allocation standpoint as you look at it today, how does the returns there compared to like money to spend post where, for example, the storage side on the development you guys previously called out, so a 10% yield on this. So just wondering when you think about the avenues of where you can deploy capital, how tested in the fleet versus storage compare?

I want to say one cautionary note, and that is what is the business cycle. And the problem is not the problem, but part of what you have to look at with the truck. It's a little bit longer asset than many people think. And certainly, storage is. So with that, I'll let Jason speak to it.

I was going to say about the same thing. So comparatively speaking, where costs are at revenues that today, the return on trucks has directionally gone down from where it used to be. But it's a combined product offering for us. And there was times when storage wasn't returning quite as well and the trucks and trailers carried the day for us. So I don't think we're going to -- because of -- just the current cost structure for a few years, but we're going to adjust the long-term strategy of the company, but we do have some work to get out of this cycle.

Okay. Yes, I totally hear you on that point there. So double clicking on the sort of moving side of business. You guys mentioned sort of the transaction volume side has been coming down. I'm just curious how that has kind of trended through the quarter like on a year-over-year basis, have things been year-over-year trend for, say, July to September? Has that been roughly the same through the 3 months? Or have things been trending better or worse throughout the quarter? Just want to get a sense of -- I get that the quarter is down, but just wondering how that trended, is it sequentially improving through the quarter? Or is it about to say the 3 months?

Yes, on transactions, we will have a good month and then we kind of receive a little bit. And I think the fourth quarter of last year, the first quarter of this year, that 6-month period, we were -- we had started to trend up in transactions. And then this quarter, we took a little bit of a step back. We saw a little bit more of that same sort of step back trend in October. So it's been the last couple of years, it's been tough to get the transaction number to turn.

Got it. No, that's helpful. And then my last question, kind of shifting to the storage side. I know you guys called that last quarter that you're working through getting some tenants out who aren't paying. So I see there's some impact on the occupancy here. Just want to get a sense of is that -- have you guys gone through the bulk of that and you set up to tackle those days and get occupancy up? Or is there like still a good amount of additions that you guys have to do on the storage front?

Yes. This is Joe. We're through that, and we're now in the cycle of what I want us to be, which is now re-rent those rooms all to paying customers. And we're making some gains there. Of course, going in the fall is the wrong time to execute this maneuver because overall demand isn't as strong as it is in the spring. So seeing gains right now, I think we did the right thing, overall, revenue is up. So if you measure money, which a lot of us do, the money is working up correctly.

Now it also, psychologically, with my managers opened up more opportunity. And I think that, that's going to have a subtle but very positive effect as we come into spring, just how -- the winter is always a little bit goofy, but it's always down a little bit, but sometimes not as much. So we're going to continue to drive on this. And I think we're through it. And it was the right move and now the question just is how fast can we drive revenue.

The next question comes from Jeff Kauffman with Vertical Research Partners.

A number of my questions have been asked, so I'm going to just kind of go in a different direction. I know you buy most of your vehicles domestically, Ford and General Motors, but have you seen any impact to vehicle prices or vehicle costs from the tariffs that are out there?

I'll try this and we buy some Stellantis fans that are assembled in Mexico. We buy some General Motors products that are assembled in Mexico or final assembly. These parts come from better than I do come from all over the planet. So they would be who we thought we would see the worst impact. So far, they've been picking their way through that minefield successfully. People I would say in other words, when it reflects down to us, and we see the net cost, they're still not clear out of the ballpark. Going in, we thought we might see the GM product built in Mexico be 15% or 20% noncompetitive. We're not seeing that presently. It's -- I don't know how the numbers work at their end. But so far -- but Ford has a little advantage here. I think they just -- they advertise that they have hired domestic content they're a little bit less influenced. But here again, some of their raw materials come through this foreign supply chain, and it's very complex.

In speaking with people, they all are dreading it, but none of them have something they can make stick with the end user. Does that make sense. And this could change as time goes on. I'm sure they all hedge stuff, did a whole bunch of things. We're kind of living on that right now.

Now does this show up primarily in the cost of your vehicle purchases and CapEx? Or does some of this show up in repair and maintenance cost for you?

It's going to be primarily in new vehicle costs. Although parts prices are going up. That's just a fact of life. And a lot of these components, let's pick an alternator, many of those are made non-domestically, they're sourced on domestically. And so they're going to encounter some tariff difficulties.

In the big number, it's not showing up yet, but everybody who's in the purchasing end of this is very wary and constantly trying to find some way to wiggle and hold prices a little longer. And we've put a lot of pressure on suppliers to hold prices. And again, I think a bunch of them could see this, and so they hedged their situation somehow and have kept the price increases way below these. You see numbers quoted on tariffs of 20% and 25%. We're not seeing that come through. I don't know, Jason, do you want to address that?

No, I haven't seen that either. Jeff, thanks for initiating coverage. Also, we appreciate that.

The next question comes from Jamie Wilen with Wilen Management.

I just wanted to touch base on U-Box a little bit. First, when does it come to the point in time where it has to be its own segment. I thought it was 10% of revenues. I think we're approaching that. But can you discuss U-Box is positioning? Obviously, the revenue growth in new box is far greater than the rest of the company. So what are the dynamics there that are causing U-Box to have such large increases and are they gaining market share, which -- and lastly, as their revenues increase, should they reach an inflection point on operating profitability.

Jamie, this is Sam Shoen. Can you repeat the last part of your question one more time?

As revenues are gaining and growing on U-Box, is there an inflection point where profitability dynamically moves forward?

Got it. I'll let Jason answer that last part, but I'll just touch on some general U-Box subjects. It's good to hear from you. Thanks for the questions.

As you noted, we continue to find success in U-Box. We had a very hot summer and then ended the quarter with a little bit of a whimper. But compared to the same period last year, in all our big revenue components of U-Box, we had increases on a percentage basis and a gross basis as well. Those are shipping income, storage rent and delivery income. Those are the real drivers for U-Box revenue. When you think about U-Box, expenses freight is where you need to focus on, those are under control. assets aren't limitation right now, plenty of containers, plenty of warehouse space, plenty of delivery equipment. You mentioned some of the things that are different about U-Box. A lot is the same. U-Box is a hard work business, just like the rest of U-Haul, but we're still poised for it to be an exciting cornerstone of the future. Does that help give you some color?

Do you see us gaining market share? Are we having a greater percentage of the business that's overall there? Or is the market for that type of moving growing significantly as well?

No, we're gaining market share. We're -- we've got our eyes set on becoming the market leader. That's our goal. There's no doubt. You talk to anybody in the competition we're making their life of living hell. And we're gaining market share unquestionably.

Living hell is good. And as far as the profitability inflection point?

Jamie, this is Jason. So the interesting thing about the U-Box is it has the profitability profile of both U-Move and U-Store, right? So on the moving transactions over the years, Sam has made great strides in the logistics side of the business and locking down those costs and being able to quote. So I think we're on actual over the road, getting boxes from 1 day to another through either over-the-road carriers or through our customers delivering the boxes for us. I think we're at a good margin level there.

So then the remaining piece of the puzzle where we can really take off is getting these -- more of these boxes in storage. And the overall occupancy in our facilities is a fraction of where we're at with the self-storage product. So there's a big upside on that as far as profitability explosion. My rough estimate continues to be that we're typically on a quarter-to-quarter basis within a couple of percentage points of the overall moving and storage margin. But the more boxes we feel, just like the more storage rooms, we fell, our margin profile is going to increase.

Okay. And does the length of time that a U-Box is in storage, has that changed at all over the last year or 2?

No. Generally, it's very similar to what we're seeing in traditional storage, which I think is a positive.

Okay. Good. Last question about capital allocation. Obviously, we're still having a whole bunch of self-storage, which does not contribute to profitability for a while. Would you ever think of selling off a bit of the self-storage that might be not our target markets and not our larger areas, so we can sell those off at full price to be able to increase where we do have some market strength and get some greater synergies?

I'll take that one. With very few exceptions, the answer is no, but partially because our existing footprint is we're strong in Wyoming. We're strong in North Dakota. So that's compare and contrast, let's say, to public. Well, public isn't so motivated in those 2 states because they don't have operations. And so for them to initiate anything, it's -- they have to make a big push, not to say they won't eventually make that push, but they have different priorities. So we have some locations that I would say that -- well, actually have some locations we bought from either public or extra space because they were fringed for their the way they look at the market, but not so fringe for us. And I don't think that's a good strategy for us at this time. We're not totally stressed. And typically, not always, but typically those locations have a decent return. They're not disadvantaged. If you get a lower rate, typically, you have a little lower going in cost.

Now that's not true with new construction of new construction. You'll be in nowhere [indiscernible] it costs of outlook construction costs in every metro area. So -- but on existing storage, you don't end up paying -- you pay a little discount in the market because it's basically NOI driven or rate driven.

I guess the question is the public storage wanted to go into Wyoming, wouldn't it be to their advantage to buy a leading participant in the market and pay full price to get there?

Yes, then that is what they will do, they will do that. Absolutely. You can count on that happening. I don't -- they don't share anything with me, obviously, but...

It would seem like a logical thing that if we could get full price for a state or 2 and then utilize those funds to go into other areas where we could get greater returns because we're selling at high prices and buying well.

My experience is that it doesn't work that way. Now you got to adjust for size of the location. Smaller locations have marginally less contribution just because that's the nature of rents. But if the locations are similarly sized, my experience is that we will do as well in a, let's just say, a Wyoming than we will in California. And sometimes we'll do better at Wyoming than California because right now, storage is so hot, you go in even tertiary markets in California are priced really, really strong for sale market. So I mean, I don't know. I'm sure 1,000 places a year pass in front of me, maybe more for Jason and then our real estate and field people more. You can kind of get a feel for the trends on this. So I don't think there's an opportunity to sell in those areas and reinvest in more densely populated areas. No, I don't think that's a good idea.

Last self-storage question. People have talked about the overbuilding of self-storage over time, yet our revenues per foot are up nicely in this past quarter. How do you explain that we're able to do that in a market that's theoretically saturated?

Well, a great deal that has to do with how well you manage at that level. At that level I was in a store the other day, and of course, we're doing trucks and storage and in walks a customer with a Starbucks and hands it to manager. I think what the hell is at. So I asked him well, that person's storage customer, she brings me in Starbucks every boarding. Well, [indiscernible] or the story true, okay? Obviously, there's more going on than just renting the room. They have a personal relationship. I like to say that people rent storage from other people, and they rent trucks for companies.

So not 100% true, but it's more true than false. So as we get a better quality manager and a manager that just simply is it's just a better quality, more service oriented. We're able to squeeze a little more rate out and we do a decent job of surveying rates on a repetitive basis, sorting for where were in the mix is there a rate opportunity. We essentially never do it across the board rate increase. It's always very specific to a type of storage or the size of storage done. And if you just keep at that regular, you'll kind of sort to what is the optimum pricing can get in that market. So I'm overall, proud that we're able -- we've been able to get a little bit of increases to the storage industry has struggled with increases lately. We're able to get them. But it's hard thought. But I think [indiscernible].

The next question comes from Stephen Farrell with Oppenheimer Close.

I just have a quick question about box trucks. Have you seen any relief in the pricing from manufacturers yet?

This is Jason. I'll start. On the box trucks, the percentage increase over the last couple of years has been a little more to date than what we've seen on the pickups in the cargo vans. That's really where the more material issue has been. We're seeing some relief on those.

But if you were to take the 10-year average of what inflation was on those units, pre-COVID to where we're at today, I would say that there's still 3,000 to 3,500 more expensive than what they would have been had we've never gone through this inflation cycle. On the box trucks, it's -- don't get me wrong, they're still up, but maybe it would go from, say, a 4% average annual increase to maybe 7% to 8%.

I'll give a slightly different answer to that question, which is Ford and General Motors, our primary suppliers have been beset with costs that are staggering as they've attempted to and just to a political agenda that didn't match the realities of the marketplace. So they've committed God knows how many billions of dollars and disrupted God knows how many supply lines laid off tens of thousands of internal combustion engineers and they have been attempting to recover those losses on customers like ourselves or the retail customer. And that's just the position they're stuck in.

They have now done in about pace. I think you could see that over the last 6 months. Even [ Mary Barra ] now recaps this stuff. And it was -- it's been a political agenda all along. And not a manufacturing agenda, but they're stuck with -- they actually build things for money. And so they've had to overspend and overinvest and they're looking for somebody to lay these costs out on over. If you look at this over a 30-year cycle, you can go to the manufacturer and say, "Hey, you want to complete a second shift". We can buy so many units. And we can all talk reasonably. That really has -- they've been precluded from doing that, but they just now, I would say, in the last 6 months have shown a little more willingness to let's all figure out how a bunch of us can make a profit as they back away from these unwanted and unneeded costs.

So -- and that goes clear across the line on transportation from pickup trucks up through Class 8 vehicles. Everybody is seeing the same dilemma and different people are in deeper. We're very lucky in that. We did not -- we did a lot of poking around, and we did plenty of test trucks, but we didn't go and commit a significant amount of resources to alternative means of propulsion. And although we've been compelled in, say, California, you can't build the building unless you put an electric chargers. No one is going to use them, but you can't build the building. And these costs are all inflationary. And to the automakers, there's so much -- they're covered up with them. But they're trying now, and we're going to see, I think they could hold prices constant for 2 or 3 years and I wouldn't hear a [indiscernible] that they heard that from me, I make myself very clear to it.

And given that they moved away from ICE vehicles, how long do you think it would take for them to take it back and increased supply?

They're already there in many models, and they're going absolutely as fast as they can make it happen because they've now admitted internally. Again, this was not a customer-driven agenda. And in capitalism, ultimately, the customer drives the market and the customer is driving away from it on anything that's utility vehicle. On passenger cars, I have no comment. I don't keep tracking that, but parent electrics are very successful there. But in utility vehicles, something like what we rent their total non-starter and have been -- and everybody has known it. It's been a dirty little secret, like I said, but nobody wanted to raise their hand because the political repercussions are telling the truth, we're terrifying to most people.

So the cat's out of the bag now, and I think people will speak freely about it. I won't be the only person in a transportation company who would express these same thoughts.

And just with moving, the competitors are facing the same problems that you guys are having just with increased costs of new vehicles and you guys were in a better position before the cost went up. Do you think that's led then to sort of cut prices and keep utilization high?

No. I'm doing a round of that in the middle of one right now, trying to see if we can ascertain what's really being priced in the market. And we've seen some discounting, but there's always some discounting. And when we do a price check, we don't just survey the computer and see what the computer shows they say they're charging, we attempt to actually deal hard like a customer would like it was real money and see we can beat them down to. So they're a little bit flexible. Like experience so far is they're still higher than us so that the consumer net-net. In most applications, we'll be very competitive, not in all applications. Nobody can be in all applications.

And year-over-year, I know that fleet maintenance was up $10 million in the quarter compared to last year. Operating expenses were up about [ $50 million ], I think. I know that you had greater insurance and liability expenses in the last 2 years. Are those still big drivers of the increase? Or is that leveled off?

So we -- are you talking about the 6 month numbers? Or the...

Yes, 6 months.

Yes. So for the 6 months, personnel was up about $32 million, repair and maintenance, $15 million and liability costs, $40 million. So yes, those are still the largest components, those 3. Everything else kind of a much smaller scale.

There are no further questions at this time. I will now turn the call over back to the management for closing remarks. Please go ahead.

Well, we look forward to speaking with everyone for our next quarterly earnings call that will be in February. Thank you very much.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Hello, and welcome to the 2025 U-Haul Holding Company Annual Meeting of Stockholders.

Before we begin, I'd like to remind all participants of this event that certain of the statements, including, without limitation, statements regarding revenue, expenses, income and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to our most recent Form 10-K filing with the U.S. Securities and Exchange Commission and any updates as may -- as may be provided in our periodic Form 10-Q filings.

I will now turn the meeting over to Joe Shoen, Chairman of U-Haul Holding Company.

Good morning, and welcome. I'm Joe Shoen, Chairman of the Board of Directors of U-Haul Holding Company, and I will be presiding today as the Chairman of this meeting.

I'm calling the 2025 Annual Meeting of Stockholders of U-Haul Holding Company to order. On behalf of our Board of Directors and management team, I welcome all of you. I would like to acknowledge those stockholders and others who are viewing the meeting by means of the webcast. This year, once again, we're conducting our annual meeting both in person and via live webcast as part of the company's sustainability initiatives.

We encourage our stockholders to attend the meeting by means of the webcast, and we encourage our stockholders to access our annual proxy statement materials electronically over the Internet. This virtual meeting platform reduces the cost and the carbon footprint of the annual meeting.

This is our 19th year using this format. I want to acknowledge our Board of Directors who are present here in person James Acridge, John R. Brogan, James J. Grogan; Richard J. Herrera; Karl A. Schmidt; Roberta R. Shank and Samuel J. Shoen as well as our director -- our nondirector members, Thomas Hayes and Doug Ducey. For those of you here in person, if you have not already done so, please register with the secretary of the meeting.

By affidavit of Broadridge Financial Solutions, Inc., we have been informed that proper notice of this meeting was distributed to certain stockholders on July 2, 2025. At that time, our stockholders were provided with notice of the meeting and access to our 2025 proxy statement and fiscal 2025 annual report.

Certain other stockholders were mailed paper copies or were sent electronic copies of these proxy materials beginning on July 2, 2025. The materials were distributed to those persons who are stockholders of record as of June 23, 2025, the record date for this meeting. I have been informed that a quorum is present, and I declare that this is a duly constituted meeting of the stockholders of U-Haul Holding Company. It's my objective to encourage open communication and the free expression of ideas that are conducive to the best interest of the stockholders of the company and to conduct an informed meeting in a fair and orderly manner.

Accordingly, at the end of the meeting, I will take questions and comments from stockholders or their proxies. If you would like to address this meeting at that time, please wait to be recognized by me, then state your name, state whether you are a stockholder or a proxy. And if you are a proxy, state the name of the stockholder you represent. Then you may concisely state your business or pose your question, limiting your statements to 2 minutes. For those stockholders viewing the annual meeting through the webcast, on your computer screen, there is an Ask a Question text box.

If you have a question or comment, please type it into the box and include your name. Our General Counsel and Corporate Secretary, Christine Campbell, will assist with any questions or matters that may arise relating to the rules or conduct of the meeting. At 11:00 a.m. Pacific Time today, we will hold our 19th Annual Virtual Analyst and Investor webcast. All stockholders are encouraged to join us there to learn more about our organization from a variety of U-Haul managers. You can sign into the investor webcast at investors.uhaul.com. We have 4 proposals for consideration at this meeting. The proposals are as follows: Proposal 1, the election of the following directors, each to hold office and serve as a member of the Board until the 2026 Annual Meeting of Stockholders. Edward J. Shoen, James E. Acreage, John P. Brogan, James J. Grogan; Richard J. Herrera; Karl A. Schmidt, Roberta R. Shank and Samuel J. Shoen.

Proposal 2, the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending March 31, 2026, and then Proposal 3. This is a proposal received from company's stockholder proponents to ratify and affirm the decisions and actions taken by the Board and the executive officers of the company with respect to U-Haul Holding Company, its subsidiaries and its various constituencies for the fiscal year ended March 31, 2025.

Proposal 4 is a proposal to approve the U-Haul Holding Company stock option plan. The Carideo Group, Inc. as the designee of Broadridge Financial Solutions, Inc. has been appointed as a vote tabulator and Inspector of Elections at this meeting. You should have already reviewed with Carideo any proxies that you intend to vote in person at this meeting. If you have not done so, please do so at this time.

[Voting]

Thank you. There was no additional voting. Voting is now concluded. No further votes, proxies, changes, substitutions or revocations are permitted. Before we get to the vote tally, I would like to comment on our operations and our results from fiscal year 2025. Over the fiscal year, we surpassed 24,000 rental locations in neighborhoods across the United States and Canada. This distribution, of course, is one of our strengths.

We finished with a modest increase in equipment rental revenue year-over-year. Moving customer optimism has gradually improved. This improvement has not yet been enough to declare a definitely positive trend.

The depreciation realized on the fleet this fiscal year reflects higher cost for replacement equipment and additional investment made to increase capacity or the size of the fleet. The effects of these decisions will continue into fiscal year 2026. Our moving customers desire self-storage and vice versa. During the fiscal year, we added 6.5 million net rentable square feet of self-storage and increased our covered storage capacity for U-Box by nearly 25%. Consumer awareness continues to grow for U-Box as both a moving product and a storage solution. U-Box is a definite part of the company's future.

After 80 years in business, and this begins our 80th year, this summer begins our 80th year of U-Haul is blessed with a cadre of home office and field personnel. I have had some success growing their knowledge and expanding their ranks. This will ensure the company's survival and prosperity. I will now ask Robert Johnson of the Carideo Group, our independent Inspector of Election, to provide a preliminary vote tally. Robert?

Thank you. Preliminary voting results indicate that in excess of 17.2 million shares were voted in person or by proxy, representing more than 87% of shares eligible to vote. Based on these preliminary results, each of the 8 Board nominees received in excess of 91% of votes cast for their election and have been duly elected. Deloitte & Touche LLP has been approved as the company's independent registered public accountants for fiscal year ended March 31, 2026. The proposal to ratify and affirm the decisions and actions taken by the Board and executive officers of the company has been approved, and the company's 2025 stock option plan has also been approved. Thank you.

Thank you, Robert. You've heard the preliminary results of the voting. The final election results will be filed on Form 8-K with the U.S. Securities and Exchange Commission. We'll now take questions from the audience or anything submitted over the webcast. Sebastien, do we have some questions?

Joe, there are no questions at this time.

Well, I'm tempted to ask questions because, of course, I'm also a shareholder as well as being an officer. And one of the questions is, why do we ask the shareholders to ratify the action of the officers and directors of the company. That's very common in private organizations, very uncommon in publicly held corporations. We do it, and it's possible. You tell me, is that the least popular with the -- of all the motions with the shareholders, Robert? I believe it's the least popular.

Yes.

It's the least popular thing with the shareholders. And I'd like you to reflect on that and see if it isn't the most popular. What we're trying to do is, first of all, attract talent and talent doesn't -- isn't attracted to lawsuits over decisions made 3 years ago. Now of course, this affirmation of the officers and directors, you can't affirm fraud.

So if someone's committed fraud, that's a wholly different thing. But judgment. And that's what we pay our officers and directors to have. Judgment can always be questioned. And the way we do it is we hold the judgments open for a year. And if there's no serious questions about them, we get the shareholders or ask the shareholders to affirm those. So it just basically cleans the slate and shortens the tail of possible decisions. Personally, as a director, I'm pleased that the corporation does that.

And I would suggest that if some of you reflect, you may find that you too would see it's in your best interest. I have no further questions. So there's no further business requiring stockholder action, and I now adjourn the 2025 Annual Meeting of Stockholders of U-Haul Holding Company. Thank you. Thank you.

Hello. Thanks for joining us again. I'm Joe Shoen. In June of this year, U-Haul started its 80th year in business. Today, I'm here at the U-Haul Technical Center in Tempe, Arizona. The U-Haul Tech Center opened just 55 years ago in June of 1970. A lot of people don't understand that we design, engineer, test and then manufacture most of our own rental equipment and have done so since essentially the start of the company.

Of course, our business has changed over time. Trailers is how U-Haul started, and then we began the truck business in 1958. Yet both remain important to our service to our present customers. Because we build our own trailers, we've been able to standardize parts, maintenance and particularly road service in a very cost-effective manner. Our quality standard allows many of these trailers to be on the road for decades. This makes a value proposition for our customers that's hard for them to beat anywhere else.

Of course, you've all seen the change in the highway of large capacity vehicles, these big SUVs and pickup trucks. Actually, today, vehicles can tow more than they ever could. So more people can tow and they can tow more behind them. As this market has evolved, so have we.

So today, we'll look a little more closely at the exciting new U-Haul toy hauler. This is Jeff. Jeff is the Director of the U-Haul Technical Center. Jeff, how long have you been with U-Haul?

37 years.

Okay. What jobs have you held over 37 years?

Director of the tech center, manufacturing plant president and the R&D shop manager where we're standing right now for 20 years building prototypes for U-Haul.

And where did you start at U-Haul?

I started at the towers in a work pool temporary program.

And then where did your career go?

Went to accounting and then came out to the tech center.

Jeff is a little casual in talking about this. Jeff is a little casual in talking about this. Jeff actually has 1,400 people in manufacture and assembly who report to him at about 10 different spots across North America. A lot of people don't know this about U-Haul, but we're buying steel, cutting steel, welding steel all across the United States. This particular trailer is a good example of Jeff's work and the work of the tech center. How did this trailer come into being? What was the process here at the tech center?

The process was we were trying to task with this building a larger trailer, and we decided to do a little thing on Orthodox. We had three different groups at the tech center build the trailer, a prototype, independent of each other, nobody know what the other group did. And then we pulled them all together and picked a little bit from all three trailers. And what you have today is what we turned up with this particular trailer that we're building now. It was very exciting during that time of development here at the tech center.

What started out as a trailer to maybe fill the need the customer has to transport a large pickup truck behind a U-Haul truck very quickly morphed into a more general purpose trailer?

We were looking for building a larger auto transport for cars and vehicles. And as we got into it, we started studying more about what the customers really wanted. This trailer evolved to be kind of a larger vehicle hauler. So what we have is it pretty much looks like an auto transport in the front. It's the same kind of tongue assembly. We use a lot of common parts. So that way, we can -- we don't have to stock as many parts in our particular warehouse.

We went through with the design of this trailer, one of our models was every piece should have two purposes. Example is on our deck, we put these coin blips in here. Every little hole is a place for a customer to put a tie down, and they have unlimited places to secure their load for safety.

We designed the fender so the customer drive straight up the trailer. If they would have bought a trailer, they would be flat fenders. They would have to come up, pull off to one side, drive over the fender with one tire and then center the vehicle back on the trailer. And they can still open their door when the vehicle is on the trailer because of the low clearance of the fender. We've actually applied for a patent on this fender. So no one else is making this style fender.

We added a third ramp on the back. That's for UTV's three-wheeled motorcycles, Polaris motorcycle goes right up here. That was more of a feature for our customers that needed closer together ramps, adding the third ramp gives them that functionability to be able to load something on here and not have to come up with their own stuff like plywood and 2x4s that this just makes it easier for them.

Jeff, how many currently are you building of this trailer?

We're building 5,000, and we're at 1,300 right now.

And how many are you making a week?

About 110 a week.

So it's going to take you the balance of the year to complete this.

Yes.

And how do you distribute them?

We build trucks at the same locations we're assembling the trailer. So what we do is we hook the trailer up to the truck as it goes out to our field locations to our centers. We drop off a brand-new truck and a brand-new trailer at the same time to our center, and that's gets them out to the field a lot more economically.

What else are you manufacturing at the time you're also making this?

We're doing a 26-foot truck, a 17-foot truck, a 15-foot truck, which is our DC. We are doing AV trailers. We are doing UV trailers. Those are smaller van trailers at the same time as building this trailer. That's what we're doing in assembly. And when we build trailers and trucks at the same time, that's where we get our distribution really works out because we -- every truck leaves with a brand-new trailer.

We're building this trailer for the customer. And the customer has so many unique things that they need. So we have to get it right out of the box. That's why there's so many tie-downs on this. That's why the ramps are lightweight, easy to store because you don't want to have to bend over even just the length of the scrap on the ramp trying to figure out how much should a person bend over while they're pushing the ramp in. That was all designed and thought out for our U-Haul customer.

Yes. Now you also had to watch total weight here, didn't you?

Yes, we did. Total weight overall, total weight at the back of the trailer, total weight at the front of the trailer, the axle position, just adding the third ramp through our calculations out where we had to redesign again. It just all turned into a big puzzle. And then once the puzzle is all put together, this is what you see today.

And so myself, I can tow this trailer behind my personal midsized SUV and still have 1,500 pounds of load carrying capacity. It's a big deal. You look at it first, you think, oh, man, who's going to tow this? Well, my little SUV tows it just fine.

This is Jasmine Spencer. Jasmine is program manager for all of U-Haul's towing devices and then a number of what we call support rental items like hand trucks, furniture dollies, pads.

Jasmine, how long have you been with U-Haul?

23 years.

How many of these various items do you have in inventory at one time? How many towing devices, let's start with?

About 35,000.

How about going into furniture pads, dollies, so sort of.

Sure. We have about 4 million furniture pads, over 40,000 appliance dollies, over 60,000 utility dollies and then another 40,000 furniture dollies.

You keep calling this a toy hauler.

Right.

What does that mean? What is a toy hauler?

Well, it fits your off-road vehicles, race cars, ATVs, side-by-sides and vehicles and cargoes. So really, it's everything you needed to be trailer. We really had a market for people needing to haul those big side-by-sides with oversized tires.

I see. So I went out and bought a side-by-side, got it home and then found out I couldn't get it to wear one to go off-roading.

It's something a lot of people don't think about. It really gives the customer more power in an economical way to get this home.

You've been on this from the very start. What do you see this is going to do for the customer?

Giving us a way to say yes to the customer. It empowers them to not only move their heavy-duty vehicles, but also any cargo they're looking to move. This trailer has over 6,800 pounds of towing capacity. The only thing we have larger in our fleet is our 26-foot truck.

So this can accomplish big loads and also small loads. What's the reception? I know you only have 1,300 of them now. So it's hard to gauge it. But what are you seeing as far as the reception by the customer?

It's been very positive. We're surveying every customer that rents a toy hauler. And we've had overwhelming positive feedback. They appreciate all of the tie-down points and it fits their various loads and that gives them the flexibility to use the straps or tie-downs that they may already have or can purchase from us. And they also really love that drive-over fender.

And in this world of social media, how is that playing out for you?

We have been approached by quite a few influencers from the racecar community, drift clubs to just backyard trailer mechanic enthusiasts. It's really been fun to see all of the response to the trailer.

Yes. I think we can safely say you haven't seen this much excitement about a trailer in a decade.

Correct. Correct.

This is exciting your customer base, isn't it?

It is. I recently brought one to the Overland Expo and Overlanders is a community of tampers. They have big oversized off-road vehicles. They are definitely a do-it-yourself community. We had so many U-Haul stories from this audience about where they needed to tow their vehicle, whether it got stuck somewhere. We're definitely a part of that lifestyle community.

You mentioned the racecar community. Why would someone with a racecar be interested in this?

Well, a lot of people with race cars don't necessarily have their own trailers. Actually, my dad was a racecar driver when I was growing up, and we didn't have the space at our home to store a trailer. He would just rent one each week and bring it to the track and the toy hauler really accommodates that wide wheel base and the oversized tires that a lot of race cars have.

Jasmine, you mentioned that customers want to transport quads that a quad is a toy. So how does this trailer work for that person?

This trailer is really helpful because you can use the middle and a side ramp and drive the quad right up here. Millions of people have these. And the great thing about this trailer is can take your whole family out using trailer and you can all adventure together.

That's a huge thing, isn't it?

Yes.

Otherwise, you see quad in the back of a pickup and you got to have five pickups to take the family quad. Any other kind of toys you've seen that kind of surprised you?

I've seen farmers or people going to tractor shows.

Tractor shows. What's a tractor show?

Well, enthusiasts who can restore these old tractors and they like to go show them off with other people who appreciate them. So they've got three wheels. They really need that third ramp in order to haul them somewhere. You put a lot of money into that tractor. Now you can get an inexpensive trailer to just haul it for a day.

Well, I see these ramps and you're telling me you own a quad. Can you handle a big heavy ramp like this?

Yes. Luckily, it's not too heavy. It's made of aluminum. Check on wheel. So I can do it myself.

So, no muss, no fuss.

Correct.

Okay. Great. Anything else that odd cargo or something you've learned from the customer they want to move?

Yes. I've learned that we can really never anticipate what the cargo that the customer is going to move. We've tried to design with everything in mind, but they're always surprising us. We've seen boat docks and chicken coops and playground equipment, hot tubs and I even had an airplane photo sent to me last week.

When we first started this part of our problem we were trying to solve for was to be able to allow a moving customer to transport one of these big pickup trucks as part of their move. How well have you covered the market with this trailer?

We can fit 96% of all vehicles in our database on this toy hauler, but 90% of pickup trucks fit on this as well.

Okay. So you've got a tremendous amount of fitability.

We do. The auto transport, which is still a great trailer, fit 36% of pickup trucks. So this is a really big game. With 4 of the top 10 vehicles being sold in 2024 being pickup trucks and another four were SUVs. This is really an evolution we needed to make with our design to fit the evolving market.

It's where the market is going.

Yes.

Yes. I had an anecdote. My grandson works in the U-Haul store and his dad told him about this and he was very so what. Then he came back the next day and said, I could have rendered it 3x today because he had no idea how many people we were saying no to because the vehicle was just physically too large.

Yes. My son actually works on the phone in the hitch department, and he takes reservations as well. And once I told him about this trailer, really stuck in his mind and every day, he would call me, I had another toy haul customer.

Hello, and welcome to the 2025 U-Haul Holding Company Virtual Analyst Investor Meeting. Thanks for joining us. Today, we'll look back at our performance in fiscal 2025 and the first quarter of fiscal 2026.

Before we begin, I'd like to remind all participants of this webcast that certain of the statements, including without limitation, statements regarding revenue, expenses, income and general growth of our business may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to our most recent Form 10-K filing with the U.S. Securities and Exchange Commission and any updates as may be provided in our periodic Form 10-Q filings.

This virtual platform is a very important part of our corporate sustainability initiative. This is our 19th consecutive year holding a meeting this way.

At this time, I'll turn the webcast over to Sam Shoen, Vice Chairman of U-Haul Holding Company.

Welcome again to the live part of today's Virtual Analyst and Investor Meeting. Joining me today are a few key people from the U-Haul organization. Joe Shoen is Chairman and President of U-Haul Holding Company. He has served as Chairman for 39 years. JT Taylor is President of U-Haul International and has held this position for 19 years. JT has been with U-Haul for 44 years. Jason Berg, our Chief Financial Officer, has worked at U-Haul or its subsidiaries for 29 years. Dennis O'Connor is Vice President of Storage Operations and Property Management and has held this position for 26 years. He's been with U-Haul for 33 years. Jasmine Spencer is the Program Manager for towing and Support Rental Items. She's held this role for three years and has been with U-Haul for 23 years. Erica Marquez is President of U-Haul of Western Arizona. Erica has held this position for three years and has been with U-Haul for nine years.

During the presentation, you can type in questions on your screen. After our prepared remarks, Sebastien will ask those questions of our panel here today.

I'm now going to turn the meeting over to Jason to walk us through some of the financial highlights.

Thank you, Sam. Before we start today's question-and-answer portion, I did want to touch on a few highlights. 2025 marks the 80th anniversary of U-Haul serving the North American do-it-yourself moving and storage customer. With this rich history to draw from, it helps our management team stay the course, and I think it also would help you as investors understand where we've been and where we're going to go.

Another useful document that I think helps explain the company to current and potential investors is the shareholder value proposition. This was a letter written by Joe Shoen, our CEO, and published in the 2004 annual report. And it does an excellent job of explaining our approach to managing the organization. The document -- the approach wasn't created in 2004. The company has always been managed that way. This was just the last time that we put it out publicly.

Over the last 20 years of operating under this approach, we've had quite a bit of success. We've increased our retail network, the number of locations by 60%. We've doubled the size of the truck fleet. And we've taken U-Box from an idea to where it is today, arguably the second largest competitor in that niche of the market. We now find ourselves at a stage where there's a new opportunity, we believe, to capture more of the do-it-yourself market. We've increased the size of the fleet, and we intend to do that a little bit more through this year. We've also increased the number of dealers. And the work at hand right now is matching this equipment with these new locations in order to make them both productive.

On the self-storage side, we've been successful in filling rooms. We believe that our past investments in self-storage and future investments create long-term value for our shareholders.

Similar to self-storage, we've had a significant amount of success on the U-Box side. Also like self-storage, the CapEx investments that we've made for U-Box take place well before we realize the full potential revenue and earnings of the program.

On this next slide that we're going to put up, it shows something that I like to refer to as the evolution of the organization over the last 20 years. I'm going to direct you to the tick marks at the top and the bottom of the page. Towards the top of the graph, this represents the portion of our total U-Haul revenue that comes from equipment rental. The tick marks towards the bottom of the page represent self-storage and U-Box revenues.

So 20 years ago in 2005, equipment rental revenues accounted for 82% of our total revenues and self-storage 5%. U-Box didn't even exist at that time. You fast forward 20 years to our last fiscal year, equipment rental revenue was 68% of the total. U-Box and self-storage made up just under 1/4 of that. So in the last 20 years, we've closed the gap by about 33%, which might not seem terribly impressive to some. But when you consider over that 20-year period, we've averaged 5% growth in our equipment rental revenue. You can see how fast we've been growing the other two lines of revenue.

The next slide I've shown over the years shows our CapEx numbers. And a few things I wanted to point out here. First, trailing 12-month real estate CapEx is actually down for the first time in a while. I would expect that trend to continue now for at least the next couple of years. You also see that spending on the fleet has been well above historical averages.

The last few years, we've been catching up on rotation. When I say rotation, I'm referring to us removing older equipment and putting in new equipment. Much of that has been accomplished. The expected increase in fleet CapEx this year is largely going to come from growth. I mentioned earlier the opportunity that we see in capturing more of the do-it-yourself market, we are investing accordingly for this. Now if our success varies from what our expectations are, we'll certainly modulate our behavior, and that would be some combination of cutting back on how many trucks we purchase or selling additional trucks.

Most of you on this call are in one form or another measuring our performance, whether it's the financial measurements, which would be return on capital, return on equity or assets or margin analysis, GAAP operating earnings or EBITDA margins. The last few years, we have been below historical averages and in some cases, well below historical averages. Our plan is to increase revenue and better utilize these assets. We're well down the path to achieving this. And we think that at the end of the day, we'll get these measurements back up to the way they've historically been.

Sam, I appreciate the time. Thank you very much.

Thanks, Jason. With that, let's get into the Q&A portion of our meeting. Sebastien, can you remind us how the audience can communicate a question?

Sure. When you sign into the webcast, there's an Ask-a-Question feature. That question will get sent to me, and then I'll pose the questions of our panel here today as time allows.

The first question is, what is your view on the general storage environment now? Can you remind us some of the history of past storage cycles and how that worked out for you guys?

Dennis, can you talk about this?

Sure. Thanks, Sam. Well, through multiple market cycles, storage has proven to be a resilient asset. We've maintained steady growth, rate increases, and we've avoided jumping after short-term market fluctuations. What we've seen is some regions are modestly oversupplied. This is causing most of the energy industry to back off of building right now and bringing new product to market.

U-Haul is going to continue to build and invest in our future. We have a positive forecast for growth on that. However, should recession, something like that occur, historical cycles have told us that we might be expecting a 3% to 5% decrease. That's about all I have.

Great. On the self-moving side, what is the long-term, say, 30-year revenue growth rate? Some data seems to indicate that American's moving rate have consistently been going down for the past couple of decades. How confident are you in maintaining that long-term revenue growth?

J.T., can you talk about U-Move?

Sure. I'm glad to. I think every year since I've been here at U-Haul, some statistics, census or otherwise have said that the moving rate is going down. I got a whole file on it. Yet, as Jason commented earlier here, the last 20 years plus, we continue to see growth year-over-year, and it's been very, very positive.

This is not an easy business, I would say. It's not one for the faint of heart, but we have an excellent team. We have solid fundamentals, great leadership. And I am very confident in the future. I think our past results are a good indicator of what our future performance will be.

Thanks.

Certain expenses are currently impeding U-Haul's earnings growth. Could you reflect on other times in the company's history when two particular expense line items, depreciation and personnel costs challenged the company? And how are those situations resolved? For reference, the recent years in which the company's depreciation increased in the double-digit range were fiscal 2006 to fiscal 2009 and fiscal 2017 to 2018. Possibly, such double-digit increases in depreciation also occurred in the 20th century, concerning periods of high inflation, the years from 1974 to 1981 come to mind.

Joe, that's a long question about depreciation.

Okay. That covers many, many subjects. The two periods that are cited by the questionnaire. The first period was when we changed our depreciation method to make it more accelerated. Being caught upside down in your fleet, in other words, that you're carrying your fleet at a higher value than you could get out of your fleet has been a cursor in this truck rental business the entire time I've been in it. You've seen it with our competitors. It's always a scary thing to go into. So we've typically been very conservative on depreciation. That's what you saw in the '06, '09 period.

The more recent one, the 2017 was a situation very similar to what we're in now, which is the big truck, we had to overpurchase the amount of big trucks and the big truck costs the most. So when you overpurchase it or purchase more than you than a normalized amount, it just hits your depreciation line heavier. With both of those times, I would say what we needed to do is just buy our lip and carry on. Going ahead, we're going to see some of this depreciation remain outsized on our income statement.

The -- I think there's other expenses that I worry about, and I would suggest as shareholders, you want to be at least aware of. One of them is insurance. Insurance, we're operating on the highways. Our customers are banging things as they go down the road. And insurance costs are rising and claims are rising and plaintiffs law firms are rising. There's all new techniques coming in. This is just a plague and societal trend.

Of course, we're digging in on everywhere we can. That's one of the advantages of having our Republic Western claims handling company. We see the claims perhaps before they become multimillion dollar claims, so we can maybe see a trend, pick up something in our instructions so we could tune up. Every once in a while, we pick up something in the equipment, we could tune up or make a little different.

So -- but that's a -- right now, I don't see it as a problem, except for in our pickup and van fleet. Right now, and I've been over this multiple times in the past, prices for pickups and vans went through the roof two years ago when the automakers attempted to subsidize the green energy initiatives by overcharging for ICE vehicles. They crucified our industry, sometimes increases as high as 60%, 40% price increases were common. And now that all comes back to bite you because that vehicle is not worth that amount of money. In retrospect, I wish I'd increased depreciation on a monthly basis sooner than I did. I think we caught it about 2/3 of the way through. And so we're now going to suffer what will show up as loss on sale.

The other one, okay, I'd say the other one, of course, is interest, and we all have that same cost. And it's a little bit high. Maybe it will come down a percentage point. Well, that will be a significant change for us. The good thing about the interest rate right now is it's depressing new construction and self-storage. And I'm happy for that. It seems kind of weird, but I'm happy for it because I intend to be in business 5 years, 10 years, 15 years from now. So it's not causing me to change my investment decisions very significantly.

Great. Thanks.

How long will it take you to get a toy hauler distributed throughout your network? How many will you build?

Toy hauler fan. Jasmine, would you take this?

Sure. Well, we're actively in distribution of the U-Haul toy hauler right now. We're in the middle of building 5,000 units. So once that's done, we'll evaluate and see if there will be more. These trailers are being built at four plants across the country. These plants are also building U-Haul trucks. So once they're ready to be released, they're hooked on the back of a rental truck. They go straight to a rental location where they are immediately available to rent.

We're really encouraging one-way rentals, especially to high-demand areas. We are lucky already. We have a toy hauler in every U.S. state except Hawaii, and almost every Canadian province. But we're probably six to nine months away from a full distribution to all major markets.

Great. Thanks.

Why wouldn't U-Box eventually compete with U-Haul's one-way moving truck business? Same implied that U-Box wouldn't compete with the one-way move truck business on the earnings call.

Well, that's not quite how I look at it. Certainly, it competes. What I've observed is that all our -- we've -- it has not cannibalized U-Move anywhere near what people had anticipated. Of course, the customer is coming to U-Haul expecting us to be the moving experts. And to the extent that we can understand their moving problem, we try to present the products that we have available for sale and for rent. And U-Box has given us an ability to serve a customer that we were either not serving at all or serving poorly with a combination of U-Move and self-storage.

So the bottom line is that U-Box and U-Move are complementary rather than competitive.

What is management's plan on filling in more of the storage space? How confident are you in the overall occupancy rate starts increasing again? And when do you anticipate that to happen?

Dennis O'Connor, could you take that?

Yes. Thanks, Sam. What we have is two things going on right now. We are still building faster than we are filling rooms, okay? And we can anticipate that continuing through the end of the fiscal year.

If we look at same-store or stabilized locations, I would say we've hit the trough in the economic cycle, and we're likely to see room gains in rooms occupancy in the first fiscal -- toward the end of this fiscal year, beginning of next.

Thanks.

On fleet rotation, have you seen the OEM increase production for gas trucks? How is the truck cost trending? And what is driving the weak used car market?

This is a Joe question.

There's a lot of factors there. Yes, the OEMs are going to increase production of gas vehicles. Ford calls it building trucks for the essential economy as opposed to the nonsense economy, which is the electric trucks are Ford.

You've heard me on this subject, and I'm somewhat of a broken record, but the steps the administration has taken over the last 60 days may solve a lot of problems for a lot of people, U-Haul included. Additionally, now there's all this tariff talk and it's very confusing. Automobiles very commonly will cross either the Canadian or the Mexican border multiple times, parts, subassemblies. It's not -- knowing what the math is really going to work out to be is unclear to anybody. It could be as much as a 10% impact on real cost for the car companies, depending again where they've made their production commitments. So far, tariffs have not hurt us, but that's all in front of us, and it may hurt us before we're done here. I'm kind of hoping that Trump blusters and pushes and then backs down, and we don't see huge increases. We see common sense increases.

On the used truck market, there's two things. Is it weak in volume or weak in price? It's weak in price. Volume is good. There's customers out there, and it's weak in price relative to MSRP. So MSRP is what the dealer quotes when they talk about it, and then they all talk about their discounts. Well, any of you who watch advertising, you've seen that automakers are touting discounts they weren't doing two years ago. Well, there's that causes -- that has a real effect on new vehicle pricing. It's now lower than what is stated. And then that depresses or holds the used car pricing down.

Now again, tariffs could change all that. If tariffs jump in and hit hard, well, used prices will go up. So I'm on both sides of the tariff problem. I'll make out on selling my used vehicles, and I'll lose on buying my new vehicles. So I don't know if overall, the effect is going to be tremendous, but it could impact either end of this fairly significantly.

Great. Thanks.

Self-moving rental revenue as a percent of your fleet assets has been steadily declining over time. Are the efficiency gains being passed on to the customer? Or is there something else going on?

Jason, could you take this?

Sure. So that sounds like a calculation of how efficient we are with earning revenue on our asset base. And we've touched on the topics already that are affecting this. So first, we've been increasing the size of the fleet, and we haven't seen a commensurate increase in the amount of business that goes along with those trucks. But the bigger issue, Joe just touched on, which is the cost of the trucks. So over the last couple of years, we've probably paid somewhere north of $600 million more than what we would have normally expected to pay, and that's having this effect of pushing measurements like this down.

So there isn't really an easy answer to it. The answer is we're going to have to work through it, right? If you think about our box truck fleet, there's 12 to 15 cohorts of trucks, different model years embedded in that fleet. And over that time frame, you're going to have some that cost a little bit more and some that were a little bit less. We've now layered on a couple of years of higher cost equipment, and we're going to have to work through that. And the working through that is trying to pass along some of those costs and share them with the customer. We're trying to get higher utilization. And if we can't fully cover it with those two, then that measurement is going to be a little bit depressed for a while.

Will network economics of U-Box get better with scale network synergies like the truck business did. People pay you to re-optimize your network of trucks, which is a massive competitive advantage. Or do you think the optimization of the U-Box network will be more costly?

I think I understand your question. I think you're asking about how we control distribution in the U-Box world. I grew up at U-Haul watching us try to work on the distribution problem of our U-Move trucks and trailers, and it was quite dawning. And it became apparent to me that we've developed a set of tools and techniques over these 80 years to manage that. Of course, in U-Box, I've looked at this problem as something that's much easier because, of course, first of all, I'm starting with all those tools and techniques that we've developed for U-Move, which some people kind of consider U-Haul secret sauce. So I'm starting there.

But on top of that, I have the ability to move U-Box inventory much easier than we can move a truck or a trailer. For example, I can take a seasonal freight low and pack 10 units, put them in a U-Box units, put them in a freight vehicle and send them to where I'm projected in need inventory. I know J.T. wishes he could do that with trucks and trailers, but we can do it with U-Box and it gives us a tremendous advantage. So the bottom line is it's much easier to deal with that problem in U-Box.

On the latest earnings call, you referenced cleaning up some storage delinquency. Just wanted to get a sense of magnitude here. How big is this pool? And is this better, worse or the same as you've seen it historically?

Storage delinquency. Dennis, can you talk about that?

Sure. To that particular comment, that comment in the earnings call was that this problem is an occupancy issue, not a revenue issue.

To give you a sense of the magnitude of it, for the last eight months, we've been running elevated delinquencies over our standard, but we're still in the industry norms range. What -- delinquency is a small part of the occupancy. But what our difficulty is with that is you have to manage delinquency on a customer-by-customer basis, which is very time consuming. So what we've done is rebalanced personnel and some other things to make that happen. And what we're doing is we've now opened inventory for future revenue growth. So it's -- I look at it as a positive.

Thanks.

Home Depot and Lowe's reported this week and U-Haul usually trades right on top of them. I think it will help if you can talk through what investors are missing out on by treating U-Haul as a HomeGoods proxy. You are more than that.

Thanks for the compliment. Joe, do you want to talk about how you think we relate to the HomeGoods people?

Sure. First of all, I don't follow Home Depot and don't really know how they trade. I did see a nice article within the last week where the article was proposing that Home Depot is facing a little wall because new home sales are down. That particular wall does not affect U-Haul in a way that you could see it in the big numbers at all. So new home sales aren't the reason for good performance or the excuse for poor performance. In those kinds of markets, the biggest thing we can do is execute our plan and normally, we've done fine. And we've been through these stages many times before.

Of course, what we're trying at U-Haul to do is address people's needs. And just like you saw with that new trailer, so many large pickup trucks have penetrated the market. There's such a need to transport them not on their own drivetrain. -- we've just introduced a new product, and I think we'll do fine with that product, although it would have been -- it would have just sat if we had made those 10 years ago, they'd have done nothing.

So we view this as what's our solution for people's mobility needs. J.T. commented earlier on what's actually happening with mobility. Well, it's misreported or underreported. What we've seen is when we listen to people and carefully respond that they answer us with more rentals, and I would expect that to continue to happen.

Great. Remind us what the main drivers are for moving. Do you think that this has changed post pandemic with more remote workers? And how important does mortgage rate affect self-moving revenue?

Well, the first part of that question was about why people move. Erica, you're probably closer to the customer than any of us up here. Why are people moving?

Sure. Life events is what we see at centers and why our customers move -- excuse me. And we see a wide range of this at our centers, starting with the Happy couple who has just got married and purchased their first home together that they're moving into.

And on the flip side of that, we see a sad devastated family who's just lost a loved one, and they've got to move their belongings out of a home that they've potentially lived in for 20-plus years. And then we see everything between that. We see these anxious, nervous parents who are dropping their child off on a college campus for their freshman year of college.

And the opposite side of that, we see proud, excited parents who are now moving their child off of the college campus because they've just graduated and potentially moving across the country for a brand-new job opportunity. And at our centers, we get to see a small part of this and be a part of all of these life events of our customers because we are the moving professionals.

Great. There was a part two of that question, I think was talking about mortgage rates. Joe talked about it a little bit, talked about home sales. Jason, do you want to talk about mortgage rates? Or you think we covered it?

Well, I'll always make another comment. Yes, Joe's comment about the effect on the self-storage market and new supply. I think interest rates have forced a little bit of discipline back into the pricing of new self-storage projects and increased discipline in pricing, I think, is washing out some of the more speculative people, and I think that's a positive for us.

What is the useful life of a trailer? When do you sell them?

That's a Jasmine question.

Well, our trailers are designed for longevity and high utilization. So most of our trailers are in the rental fleet for about 25 to 30 years. This is because of how durable they're built and designed, their regular maintenance.

Actually, as a program manager, I've inherited a fleet and most of them were built decades ago before my time here, but these are still reliable and renting.

As for when do we sell them, that's an easy one. We don't. We don't sell the U-Haul trailers. Our trailers are built for rental purpose, rough use, and they are really not comparable to the retail aluminum trailers that you might find. But I would say, lucky, for consumers as most people don't really need to own a trailer in my experience. And U-Haul has trailers that are a low-cost alternative to ownership. And with over 20,000 locations, it's like having one in your backyard anyway.

That's very good. Thanks.

Proud program manager over there, selling all the time, we love.

Looking at a subsegment of the in-town self-moving market, specifically small businesses using U-Haul rentals on a regular basis, what are the dynamics of this niche? What is its size and revenues relative to other in-town self-moving rentals? Also, what are the profitability and revenue attributes of this subsegment in terms of profit margin and stability or growth of revenues generated, respectively?

That's a small business customer question. Erica, what do you see with small businesses?

Small businesses are important to our business. I could specifically think of two customers that we deal with on a regular basis. We've got [ George Karimi ], who rents from our [ 19th Ave Hatcher ] location every week. He owns a used furniture store. So he rents from us, but he also drives business to us because his customers that are unable to get the furniture they've purchased from him in their personal vehicle, he sends them down the road and they rent a truck or trailer from us. So he is beneficial for us in that way.

And then we've got another customer, Stephen Binion. He rents from us here in Phoenix, but also in L.A. and he sells his merchandise at Dodger Games and D-backs games. And when he's in Phoenix, he runs from our I-17 and McDowell location, always runs the cargo van. And he loads up his storage unit -- loads up his merchandise from his storage unit into the cargo van game day, heads down to the stadium, sets up shop, does his thing. And typically, he returns after hours. And this is where he provides valuable information to us as far as the U-Haul app. He gives us valuable information to be able to see the customer perspective and how we can improve it. But not only that, he is the eyes and the ears for us after hours. So he lets us know if there's anything out of the ordinary that's going on at our location when we're not there.

Do our small business customers good leads for selling trucks? What do you think about that?

Yes, of course. George is a prime example of that. He's purchased some of our for-sale trucks from us, but still continues to come back and rent from us as well.

Sam, I think it's important here to reference that these aren't discounted rentals. Oftentimes, you think a B2B rental is a discounted rental. The discount we'll give a B2B on occasionally will allow them to bill and pay on a periodic basis than on every rental. But even there, we discourage that and encourage just use of credit cards. It's a simpler way to go. So as far as the profit, the profit would be the same other than what Erica talked about, sometimes these people actually look out for us, which is a curious thing. They're actually helping us because they want to see us continue in business.

Thanks.

This sounds like one for Joe. U-Haul's performance has lagged behind its peers for 10 years. Is the problem poor capital allocation, a weaker business model or bad execution? We believe much of it stems from potential misalignment between shareholders and management, leading to limited disclosure and communication with investors. We believe there are simple solutions to this, which the company refuses to entertain, for example, stock buybacks, segment EBITDA reporting and IR consultant. Why? Claiming a longer-term orientation than the market is not reasonable as investors have been tolerant of this dramatic underperformance over a decade.

Well, first of all, I not going to agree with your premise, which our performance has lagged behind our peers for 10 years. That's interesting, but that's not been my observation.

And then, of course, what are the factors maybe that tend to this? The questioner says that we have limited disclosure and limited communication with investors. My guess is this person is a recent shareholder. If this is bad, it was much worse, I guess, is what I can say. So we're doing much better there, not much worse there. So we have, I don't know, two of three analysts where at one time we got down to maybe none for 6 months or a year. But we have two or three, three I believe, right now, competent people trying to follow and Jason tries to work with them within the bounds of the law to where they're able to do a good job. So no, I don't see the limited communication with investors.

As far as some further financial disclosure, the people who read our financial disclosure the most are our competitors. It's pure and simple it. I'm played by competitors following me around. It's curious that they follow me around if they're beating me, okay? So you can ask them that why they do that, okay?

Then you say there's some simple solutions, stock buybacks, segment EBITDA and an IR consultant. On stock buybacks, we've done stock buybacks, but it's been a while. I was asked the same question a year ago, and I said probably a pretty firm, very unlikely. I would say today, I'll go back and talk with the Board about this. I don't -- I'm not a stock buyback guru. I'm not even sure I could calculate the real value of a stock buyback. If it benefits shareholders, my family is a shareholder, I stand to benefit more than the average. So if it's a good thing, I would want to be aware of it.

Again, Jason quoted my letter from 2004, I think it was at the year 2004. And yes, I've got a long-term orientation. I don't know what to say here, I'm now 76 years old. So you're thinking, well, how long term is your orientation, you're going to be pushing up daisies sooner than not. But the organization has a life of its own. The organization is going to go on. And part of what I view as my job is to protect both our customers and our team members by ensuring the organization is going to exist. So I had fun. I have a director who's now no longer on the Board, but he, all through this time when the people who owned Olive Garden and the Red Lobster were told what they needed to do by all the financial big know-it-alls. And what I can tell you as a customer, what I see now is the lines aren't as long at Olive Garden and the portions are smaller at Red Lobster and Joe is not happy.

Now maybe it worked out great for those organizations. I actually don't think it did. So I have my view of the world. And U-Haul investing in U-Haul is not for everyone. I think it's a good investment. I'm putting my marbles there. I continue to do that. And I think that the business cycle is much different than anyone knows.

Self-storage, for an instance, has had six or seven years of a blind pig could make money in the business is the common is that's the deal to where lending standards basically disappeared. You just had to say self-storage, they say, here's the money. Well, that's not smart. It's just like anything else. It's going to have good and bad times. It's going to have oversupply and undersupply, good and bad management. These are all normal things in the business. So self-storage isn't as good as people have said, but it's not bad either. It's just a business. Go out there, serve the customer, they'll reward us, move on, serve them again, reward us, move on. We're continuing to grow our self-storage. I don't know, Jason, if you have a growth rate on the last three or four years in self-storage.

On square footage, it's been close to, I think, 10% or higher.

Yes. So we've been growing it. I think people will be running self-storage 10 years from now. It's not a fad. It's not a sign of Americans greed and avarice or surplus of money. When you really get down to it, it's what Erica said, people are storing not because they own too many things, but because their life changes. And it's -- when you really get down to it, it's one of the spouses died and the other spouse hung on to some of his or her stuff. But you know what, they're entitled to it. That's what they want to do they want to spend $100 a month storing their dead wife's things or in my wife's case, it's her dead mother's things. her mother's dead, my wife wants to store her things good for her. It's America.

So these are valid reasons people have, and these aren't going away. I want to be prepared to serve people in more markets and more people and of course, produce a profit at all times.

What purpose did the company aim to achieve by creating a dual-class share structure that a simple 10:1 split would not have achieved. Your B shares currently trade at a 10% to 12% discount to your A shares, which seems to be at odds with any stated objective. What is your plan to repair this?

Joe, would you talk about that again?

Sure. First question is, was there a difference between a split and a dividend, and I'd say technical differences that in the end, you end up with more shares. So I don't think that's a big deal.

What we were trying to do, of course, was increase the float the company is both blessed and afflicted with a bunch of insider shareholders, basically the Shoen family. And the Shoen family doesn't do much trading in the stock. It's very -- there's just not a lot of it. So -- and then we have the ESOP and those shares kind of halfway tied up. So there's a bunch of the holdings that aren't part of the real active trading float. So we were hoping to increase the number. At that time, our stock was trading somewhere around $600, and now it trades somewhere around $60. The idea was -- and this was at the suggestion of shareholders, it wasn't my particular idea that, that might help increase the float.

At the same time, Jason went on a campaign to try to get more and better analyst coverage. Again, that was a suggestion. Additionally, at that time, we changed the name of the company from AMERCO, A-M-E-R-C-O to U-Haul Holding Company. Again, this is suggested by shareholders that this might give the stock a little bit more cache. I am flummoxed by why the share trades much off the price of the other share. There's just not enough difference to justify that.

And if someone understands that, I'd appreciate in communicating to Sebastien or Jason, and we'll try to understand it. I've been flummoxed by it. I've asked people who stock is their business. I'm not in the stock business. I don't really follow a whole bunch of stocks. So if I understand the reasons, I'll try to address them. But I honestly do not understand the reasons.

Thanks.

We got a couple of U-Box questions here. Sam, this might be a good one for you regarding U-Box warehouse investment. Can you clarify if warehouse capacity is still in good shape? And do you plan to keep adding capacity this year even if capacity is satisfactory?

Well, this past year, we had a huge boom in U-Box warehouse expansion, and it was painfully obvious that it needed to happen, and it's really given the whole organization a boost, certainly the program a boost.

Of course, we're going to continue to grow U-Box warehouse capacity. We're going to do it much more strategically. I think we went from a situation where we were desperate to now we can think a little bit more clearly and act a little more strategically. So the short answer is yes. We're going to continue to expand, and we're blessed that we have a program where we need to expand.

I'd like to weigh in on that one. I drive a lot of the real estate activity. And U-Boxes geographically necessary. In other words, you don't do business where you don't have a warehouse, if that makes sense.

So I have this next year. Hopefully, I'm going to get a warehouse going in Manhattan. And hopefully, I'm going to get a warehouse going in Los Angeles. And both of them will be $20 million or $30 million CapEx items, probably closer to $30 million. Those are good markets. We're going to invest in them. I think we'll do fine over a period of time. Both of them I've been trying to build for three years. So maybe I won't get it this year, maybe I will, I'm going to try.

Also, we have a strategy at U-Haul of serving the entire nation. Everyone else in either the U-Box or the U-Move business is a regional competitor. Shake it down, they don't serve as many people as they do serve. That's not our statistic.

Jason, you always like to quote some how many MSAs were within x miles of. Do you remember that statistic?

Sure. So there's a couple that I use. First would be that we're within -- I think it's a little close to 90% -- we're within 5 miles of 90% of the U.S. population. And then as far when you break it down into metropolitan statistical areas, MSAs, there's something like around 388 of those. I believe we're in about 80% of those.

Yes. So this is a big checkerboard we're on. And I want to -- in addition to surviving, I would like to dominate. That's just the facts. So we have more opportunity here. And as we get better at this, we'll probably still find more opportunity here. We were desperate for warehouses four years ago. Would that be -- we were renting everything we could find. It was just desperate. We're not desperate today. We're serving a lot of markets very effectively today. And we'll still invest this next year. And like I said, I have two projects between the two of them are going to run $50 million or $60 million, and they need to be made. That's all. And they will resonate with the customer within a fairly short time and do some good business. So yes, we're going to continue to go with U-Box warehouses, but the massive push is completed.

I have some -- nobody wants me to give you the actual information, of course, because, of course, the people are on the edge of their chair for this discussion are all our competitors. But we've got them outgun on locations, and we're going to keep them outgun on locations, and we're going to keep being closer to the customer and winning the hearts and the minds of the customer. My belief is that in capitalism, customers determine outcomes. Nobody else, customer determines the outcome, and I intend to make the customer happy.

Staying on U-Box, might be one for Jason or Sam. What is the difference in revenue per foot for a U-Box storage transaction versus a traditional storage rental in the same location? What is the upside to potential revenue if current U-Box capacity is fully utilized?

Well, Jason could probably answer that last. Did you want to take it, dad? Jason could probably answer the last part of the question. Right now, U-Box is in its infancy. Our occupancy is much lower than traditional storage. We haven't gone through our ability to optimize like Dennis is optimizing in traditional storage. So it's coming in lower than what traditional storage is. But certainly, it should be equivalent or in my mind, exceed because of the principle, it adds more convenience. And you've maybe heard some people call this the valet storage market.

Well, that's because there's an extra convenience component to it. We deliver it to you, and we're going to get that additional revenue. And so that's where we're building towards, but that's not where we're at, at this exact moment. Do you want to answer the last part of the question or...

Sure. I'll touch on it. So it might not be the last part of the question, but as far as comparability to storage rates, it's effectively a 5x8 storage room. So there -- we index them very closely to a similar sized storage room in those markets. So the U-Box storage rates are going to vary by market depending upon what you can get for storage.

As far as the revenue potential, we have a slide in our supplement that shows the revenue potential for storage. We haven't taken that step yet for the U-Box storage boxes. we're still, I think, at the point figuring out exactly how occupied will these warehouses get. I would say on the -- when we price the warehouses when we get into them, we're assuming a much lower stabilization rate as far as number of boxes in storage versus what we would assume for a storage property. So if we're able to outperform those conservative assumptions at all, there's an even bigger upside on the return part of this equation, certainly.

Joe, this might be one for you. I wanted to follow up on the comment earlier on regions of over supplied self-storage. Which markets, in particular, are you seeing the most elevated supply? And what gets you comfortable with continuing to build and invest into more self-storage capacity in the near term given this backdrop?

Of course, what we're looking for is locations where the market is undersupplied or is undersupplied in the product that we rent. So there's clearly two types of storage out there. One is drive-up garage storage. It could have electrical, it could have lights, it could not have lights. But other than that, it's cold storage, pure and simple. The other one is indoor or controlled access inside a building, self-storage, which oftentimes has heating and cooling, which is a vast difference. And if you're storing your own goods, it's a difference between storing your things in your garage versus in your wife's closet.

Now at my home, as in every one of your homes who has a garage, what you will find is all your wife's stuff is in the closet. And when it gets too much, she gets the front wall of the garage and you get the side wall. And eventually, you get a little 2 or 3-foot area next to the door. And all of your stuff turns to rubbish over a period of time. Well, that's exactly how self-storage is. If you're not storing plumbing parts or hard goods, you put anything that's a household good in a drive-up self-storage room for three years, you come back just throw in the dumpster.

So we're in the everything we built in the last 10 years or some huge high percentage, not everything, but most of what we built is this interior climate controlled access self-storage. That market still has holes in it. So when you see statistics on storage, they're the best statistics try to estimate square feet of storage per population.

Now I'm starting to see some people are trying to say climatize self-storage square foot per population. That's much less and has much more variability. So that's more of the product that we do. There's still holes in the market, but you have to go look for them. And we're blessed in that we do business. I can't say this for sure, but if there's a town with under 10,000 people that we don't have a location in, somebody is not doing their job. And when I find out they're going to fix that. We're there. We're in these towns. We don't have to wonder what happens in all these different towns. We're in them. I just ask people. I can go to Alabama, go to our facilities there and says, well, where are we underrepresented? Well, they know exactly where we're underrepresented because we are represented in that market. Additionally, we have about 5,000 independent self-storage locations are U-Haul dealers. This is an enormous advantage we have.

The U-Haul dealers are constantly giving us their feedback. They're independent people in business, renting self-storage. So -- can I find places where we're going to do well and we should build? I'm absolutely confident I can. Now getting them built, that gets a little trickier every year. And we've even heard the President talk about what's happening in Americas, we have these burdensome local restrictions on building from everything, it's a local competitor. I won't say the town, but the town in Kentucky, the guy owned all the storage was the mayor's best friend and the mayor finally told us you're just not going to get a building permit, move on. Well, thanks for telling us the truth, so we can move on. Otherwise, you have a myriad of land restrictions.

And I would say our typical project, best case is from when we see the property to decide to build it three years to get open. That's our best case. Five years, this is not uncommon. This drives Jason out of his mind because here, we bought the property, and it's just basically sitting. But that's just the reality of trying to develop today. Development is very difficult. Of course, you have the opportunity to buy, and we've done some more buying this year of existing. Why? Because someone has already gone through all that pain. And if it happens to be in a market that we consider what we would like to be in, we're going to go with it.

So I think there's selective what we're building. There's less of it in the climate-controlled product. And then we further refine that climate controlled product in ways I don't want to talk about. But we further refine it to where we think we have a little tiny edge with the consumer and we get a little bit of brand identity with the consumer that they'll get that standard should they trade with U-Haul for their self-storage needs.

So, yes, I think there's growth beyond my lifetime and growth greater than the expansion of the population of the self-storage business. Now is it the wild and crazy of 1982? No. No, you can't just put one anywhere and expect it's going to fill up, no. But there's still plenty of opportunity.

Could you provide an update on budgeted CapEx gross or net for the self-moving fleet for fiscal 2026?

Jason, could you take that?

Sure. So our plans for spending on the fleet, when I say fleet, I'm going to include trucks, trailers, towing devices and the U-Box containers. So our gross spend this year is expected to be about $2.080 billion in total. When you net out the sales with that, I think we're going to come in somewhere around $1.275 billion.

Thanks.

Over the next few years, what handful of key performance indicators would management want investors to track to monitor success or failure of the business?

Joe?

I would suggest EBITDA and that, I think, is a nonstandard accounting measurement that our auditors we just approved don't approve of, more or less, but it's common knowledge. As far as how we run the company, every single business unit runs off of what we call a profit and loss statement.

So Erica, who we have here today, she runs off profit and loss statement that's updated daily and finalized monthly. Every one of her locations operates off a subsidiary profit and loss statement that again updates daily and closes monthly.

So I think Erica could tell you what is she watching? She's actually where the money is changing hands.

Yes. So our P&L is the best what we have for this at our disposal. When I talk to my team, we refer to it as our scoreboard and our scouting report. So at the end of every month, it tells us, did we win or did we lose? At the beginning of every month, it changes to our scouting report and it tells us where do we need to increase our defense where can we optimize more offense.

And when we talk to our GMs, we focus on a few areas on the P&L. One being we want to drive our income forward, and we want to control our expenses so we can increase our profits. And when we have complete buy-in from our GMs in this area and they understand how to manage and read their own P&Ls, then we're going to continue to win month after month every year.

Great. Are the economic incentives throughout the organization driving the desired outcomes for shareholders? How often have you revisited them to ensure they are appropriate?

Joe, do you want to talk about that?

Well, again, most of these people who are working off a P&L, let's say, Erica and her team members, they also participate in what we call incentive compensation. And so we look at that twice a year, basically a summer and a winter simply because volume is a little lower in the summer, and we still want people to participate.

They don't see a balance sheet on most items. When you finally get to the balance sheet, it comes up basically to Jason and I, although all of Erica's entities pay rent. And rent is, of course, runs parallel to your real estate assets. So they're all very aware of their real estate assets and that they have to pay rent. And that if they don't cover that, nothing is going to happen, very good for them.

So, we don't have people incentivized to where they're going to see 40% of their income come from incentive. I think that causes more problems than it cures, but they all have enough of an incentive that they're in the game, and they want to see if they can get the results to win the incentive.

What is the average life of a U-Box container? How much does it cost to make? Does U-Haul make or purchase the containers?

Well, this is an interesting discussion. Today, we design, engineer, manufacture, assemble and repair all of our new containers. And you heard earlier, Jasmine talk about she estimated the useful life of a U-Haul trailer to be 25 to 30 years. What's fascinating is really our U-Box containers, our new ones are really a trailer with no wheels. And so certainly, that gives you a good indication of what we think the useful life is.

Our original set of containers are wood containers. They're aging very, very well in a lot of cases. We've even acquired containers that are older than the entire U-Box program is, and those are still aging well and serving customers. Aging is less a function of time than it is container handling. So it's not necessarily the number of years old a container is. It's how many times it's been touched, how many times it's been moved, how many times it's been shipped.

And so what's interesting is that as utilization -- as the U-Box program gains utilization, we're also gaining some insights and efficiencies into some of our logistics and operations. So we're not seeing an increase of utilization tanking the useful life of our containers because we're figuring out how to touch them less, move them unnecessarily less. And it's -- we're seeing -- we're not getting hurt by this increase in business. So, yes.

Returns on capital recently have likely been at or below your cost of capital. Is this business capable of consistently generating a double-digit return on invested capital?

Joe? Or Jason?

Yes, I think it is. Again, there's all these vagaries. And right now, I'm pushing a bow wave of empty storage rooms. I'm doing it on purpose. So we're certainly not making 10% on that. Am I making 10% on storage places that are stabilized, mature? Oh absolutely and then some. Now how to balance that out where I take my lips is always a good question. Additionally, this last year, we saw something like $110 million shift between gain-on-sale to loss-on-sales in the ballpark was $110 million. Well, that's a pretty big wackadoodle. If you want to go look at what your return is. Well, you're just trying to balance these things.

So absolutely, our assets are returning that. The trucks generally get right on program and the storage takes three years normally before I'm going to say it's making money. We have exceptions of five years and you have exceptions of one year. I had a woman rent 700-and some rooms in 90 days this year, and I take my hat off tour, okay? So that place is going to make money right away. But that's unusual. That's not normal. So yes, I think we can do somewhere like a 10-year.

The other curious thing is, of course, is we're always depreciating these assets. And the question is how much of this depreciation is real, how much is not real? And how do you want to estimate your costs going ahead? So when I first got in the storage business, we were building storage for $7 a square foot. Garage places not counting the land, we were $7 a square foot. But we get higher rent than that right now in 1 year.

So these things -- but I still have some that we paid $7 a square foot for. So of course, I don't know how you and we probably depreciated them down to $3.50 a square feet. So it's -- there's a big mix of assets, and there's not a simple answer to the question.

And are you going to take a lick doing development? Yes, absolutely. If you develop, you're going to book some losses or further capital costs. Now the nice thing is most of that expense, we write off in the current period. Most of this -- unlike a lot of developers are capitalizing this cost, we're not doing that. So we run it right through the P&L. It's a more rigorous way of doing it. I think it's more reasonable because maybe your big dream won't come true. So people aren't shocked and surprised. But yes, I think we can do somewhere in the 10% range, sure.

At last year's event, you mentioned you added capacity to store over 325,000 U-Box containers. Does that mean you had 325,000 U-Box containers? How many do you have now? Am I correct to assume approximately 224 U-Boxes per facility? The person is using 325,000 boxes and 1,448 locations. If I use 1,528 co-locations as of this first quarter, does that imply another 1,700 or 17,920 U-Boxes today?

Well, I had a little bit of trouble there following at the end. I think what it's getting at is when we buy and acquire a new U-Box warehouse, do we have a proportional amount of empty U-Box containers that we add immediately to that warehouse. And the short answer to that is no.

I guess you could maybe liken it a little bit to buying a new fridge. You don't immediately that same day go and add a bunch of empty tupperware into the fridge, right? You have this buffer of growth and you eventually get there and you have the capacity to get there and you have the utilization capacity for it. But we, of course, have a fleet plan for U-Box containers and the fleet plan is separate than the opportunities we have on the warehouse side. And as you probably expect, this coming year, we're building slightly more U-Box containers than we did the previous year.

What gives you confidence that your incremental investments in trucks, storage and U-Box will clear a competitive return hurdle at an acceptable level of risk. How has your assessment of the return and risk level of those reinvestments changed over this last year?

Jason, do you feel?

I'll start this one off. So I'm going to break it down into a few pieces. So first off, when we look at new locations, which would be self-storage and U-Box primarily, each one of those we're evaluating individually. So there's certainly a red light, green light there as far as if it doesn't meet our expectations, we haven't changed our pricing expectations this last year. I said it's been close to 10 years since we've really adjusted what our expectation is for a return on a new location. So those, we evaluate each one. We have 2,400 -- almost 2,400 existing locations. So we have this wealth of information from which to form assumptions about what we think is going to happen in the future. That gives us some faith in the estimates that we're coming up with going into a project.

When we look at fleet decisions, that's more of a model year calculation. So we look at the model year of trucks and we see what they're going to cost. That's usually not a go/no-go decision. There's a certain amount of trucks we need to buy each year in order to take out the older trucks. And if you don't buy those trucks, you're compounding the problem, right? And we've seen that the last couple of years, not by any decisions we made, but by just the availability of trucks. So now we go through the process and we can calculate, okay, here's the increase in utilization, the increase in price that we would need in order for these to sort of match the rest of the fleet. But those are largely going to go.

Now when we talk about a new product to the rental fleet, so the toy hauler as an example, or if we were to think about introducing a new truck into the fleet. That's certainly a no-go or go or no-go decision, right? We're going to decide should we get into that product or not upfront. And clearly, we made the decision on the toy hauler that we think the economics of that are positive to us. It's going to pay off in the long run, and we'll progress from there.

U-Box has been a popular subject today. I'll try and squeeze a few more for our times up here. How do the unit economics change when a U-Box has to be stored for longer than 30 days? How about when the customer pays to transport the U-Box to another location? What is the attachment rate for these additional services?

Well, you very rightly point out that selling ancillary services to the U-Box transaction is a massive opportunity. There is moving help, there's moving supplies, there's protection packages. Those are just a couple of examples. Some of those we do, we have a better take rate than U-Move. Some of those we don't. But I think you also point out really the granddaddy of a mall, the ultimate is storage, right? And that's the one we really have our eyes on.

And you pointed that out in your question. I mean, certainly, that alone massively affects the return. And we have our eyes on it. And if we can methodically build a war chest of these subscription streams, we'll be right where you're wanting us to be.

What is your expected long-term margin profile for U-Box?

Jason?

I think it's a very interesting question because the U-Box product contains aspects of the moving margin line as well as the storage margin line, right? So when we're talking about shipping these boxes around or dropping them off with customers, it looks like the equipment rental business because there's a much higher personnel component, and we also have rolling stock and depreciation attached to that. Once we get the boxes and we put them into storage, now it looks -- the return and the margin profile looks a lot more like a self-storage product.

So where we're at today is that the majority of the revenue coming in for U-Box is on the moving portion of it. And we're working to increase the storage component. So in my opening remarks, I showed a slide about the percentage of revenue from U-Box and self-storage, and that's been growing. And I think what we'll see is if you cut through all of the noise that we introduce every few years with depreciation, I think you're going to steadily see a margin improvement over time as we saturate more storage, either in the form of self-storage or these containers in storage.

You said on the last earnings call that you hope U-Box can become as big as moving. What do you believe is the market potential of U-Box?

Well, I think that's referring to me. I'm the one who was asked that question. I appreciate the opportunity to get a second crack at it and be a little more articulate.

I think the first question you have to ask yourself is what time frame are you breaking it down into. So if we look at it from a short-term perspective, you need to look right to what our current performance is. And I think that answers your question. From a medium-term perspective, our best guess is that pods is doing 2x to 3x our U-Box revenue. And I don't think we've been bashful about our intent to dominate the industry.

And then as far as long term goes, obviously, that's the trickiest out of all of them, but there's some amazing potential that is there. I'll just give you one example. Right now, our U-Move products and services, they're in effect limited to the U.S. and Canada. Of course, U-Box breaks that open where we can serve destinations worldwide, right? So I mean that's just one of many factors that you need to look at when you're talking about the long-term prospects of U-Box. But I think needless to say, I'm very bullish and excited.

I think that's all we have time for today. Just a reminder to everyone that we'll have a replay of this webcast today on our website, hopefully, by tomorrow.

Sam, any final comments?

Sure. Well, once again, I want to thank you for joining us. We appreciate your feedback and your continued support of the company. As always, we encourage you to stop by one of our locations and evaluate our products and services for yourself. We look forward to seeing you the same time next year.

Good morning, ladies and gentlemen, and welcome to the U-Hall Holding Company First Quarter Fiscal 2026 Investor Call Conference. [Operator Instructions] This call is being recorded on Thursday, August 7, 2025.

I would now like to turn the conference over to Sebastien Reyes. Please go ahead, sir.

Good morning, everyone. Thanks for joining us. Welcome to the U-Hall Holding Company first quarter 2026 investor call.

Before we begin, I'd like to remind everyone that certain of the statements during this call, including without limitation, statements regarding revenue, expenses, income and general growth of our business may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Security Act -- Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings in Form 10-Q for the quarter ended June 30, 2020, which is on file with the U.S. Securities and Exchange Commission.

I will now turn the call over to Jason Berg, Chief Financial Officer of U-Haul Holding Company.

Thanks, Sebastien. I'm speaking to you today from our offices here in Phoenix, Arizona. Joe Shoen, our Chairman and CEO, is unable to attend today's call. However, he is going to be available to speak to you at length and answer questions in 2 weeks at our Annual Investor and Analyst webcast. We do have Sam Shoen, the Vice Chairman of our Board of Directors here with us today to answer questions.

Yesterday, we reported first quarter earnings of $142 million compared to $195 million for the same quarter last year. In terms of EPS, that's $0.73 per nonvoting share this quarter versus $1 per nonvoting share last year at this time.

Earnings before interest, taxes and depreciation, that -- I'll refer to this as adjusted EBITDA, in our Moving and Storage segment increased 6% or nearly $31 million for the quarter, driven by strong revenue growth across our product lines -- all of our product lines. Included in our release and our financial supplement is a reconciliation of adjusted EBITDA to GAAP earnings.

The largest difference between adjusted EBITDA and GAAP earnings is depreciation, and this is also the cause of the largest negative variance in earnings year-over-year. During the first quarter of this year, we swung to a $22 million loss on the disposal of retired rental equipment as compared to an $8 million gain last year. Cargo vans that we purchased over the last 2 years that are now being sold came into the fleet with higher initial costs, and the current market resale values are not reflecting this that's resulting in a loss. We have increased the pace of depreciation of the remaining units to reflect this new reality.

Additionally, we have depreciation from increasing the size of the box truck fleet by approximately 8,600 units compared to June of last year. Pricing on new cargo vans for the upcoming model year indicates some nominal improvement. Of the $0.27 decline in earnings per share in the first quarter, $0.21 is from fleet depreciation and $0.12 is from the increase in losses on rental equipment sales.

For the first quarter, our equipment rental revenue results had a $44 million increase, just over 4%. Revenue per transaction increased for both our in-town and one-way markets compared to the first quarter of last year. Overall transactions largely held steady with what we saw in the first quarter of last year. For the month of July, we've seen revenue continue to trend positively compared to the same period last year, but we haven't yet seen a big improvement in transactions.

Capital expenditures for new rental equipment in the first quarter were $585 million. That's a $46 million increase compared to the same time last year. This increase was spread across acquisitions of box trucks, trailers, towing devices and cargo vans.

Self-storage continues to be positive. Storage revenues were up $19 million, which is about a 9% increase for the quarter. Average revenue per foot continued to improve across the entire portfolio, up just over 1%, while our same-store portfolio was up, but it was up just under 1% per occupied foot.

Our same-store occupancy decreased by 100 basis points to just under 93%.

In July, we took on an effort system-wide to increase the number of available rooms at our existing locations by focusing on delinquent units. While this effort will not affect revenue directly as we don't record any revenue until it's collected, it will serve to reduce our reported occupancy level a few points if we don't refill all of those rooms in time for September reporting.

In our financial supplement, you will see that we have a slide that shows where future storage revenue growth is coming from, and the future revenue growth from our existing portfolio has increased. This is partially from us making these rooms now available to paying customers.

During the first quarter of this year, we invested $294 million in real estate acquisitions, along with self-storage and U-Box warehouse development. That's down $108 million from the first quarter of last year. During the 3 months, we added 15 locations with storage, and it's about 1.2 million new net rentable square feet. We currently have approximately 6.5 million new square feet being developed across 124 projects.

Our U-Box revenue results are included in other revenue in our 10-Q filing, and this line item increased $21 million, of which U-Box is a large part. U-Box revenue by itself was up about 16%. We continue to have success increasing U-Box moving transactions as well as increasing the number of these containers that customers are keeping in storage.

Moving in storage operating expenses increased $44 million for the quarter. As a percent of revenue, we were even with the first quarter of last year. The largest components of the increase were personnel, which was up $20 million. Liability costs were up $17 million, and we did see an increase in fleet repair and maintenance due to the increased size of the fleet. That was up about $5 million.

As of June -- the end of June this year, cash, along with availability from our existing corporate revolver at the Moving and Storage segment totaled $1.19 billion.

We are holding our 19th Annual Virtual Analyst and Investor Meeting on Thursday, August 21 at 11:00 a.m. -- at 2:00 p.m. Eastern Time. This is an opportunity to interact directly with company representatives through a live video webcast, which you can find at investors.uhall.com. Once again, we'll have a brief presentation by the company, followed by a question-and-answer session. Please feel free to submit questions to us early through the Investor website or send it to Sebastien. Or you can just submit them live during the webcast would be good either way.

With that, I'd like to hand the call back to our operator, Chloe, to begin the question-and-answer portion of the call.

[Operator Instructions] Our first question comes from the line of Steven Ralston from Zacks.

I had some questions specifically for Joe, but I also have one specifically for Sam. I'll delay my questions for Joe until the Investor Conference.

The top line is improving, like Joe expected. And I had one specific question about U-Box, which I know Sam heads. U-Box once again has achieved double-digit growth this quarter, and it's through that tried and true formula of U-Haul that by adding capacity and then, specifically, in the case of U-Box, increasing warehouse space along with the number of containers and the number of delivery equipment.

This is a growing area, and I assume ultimately will be broken out as a segment as it reaches 10% of revenues. How much potential do you still think there's left in U-Box? It's been growing. Do you think it's like 10% done or 25% done? Or is it just too early to tell?

Well, thanks for the question, Steve. This is Sam talking. I think you started off some wise observations. Of course, it's way too early to tell. I'm on the more optimistic side. I don't see why there's any reason that U-Box couldn't be as big as U-Haul is today. And I think we're just at the infancy.

I think you really can't start answering that question until you start to get some real clarity on -- from the consumer of if they understand what this product and service really is. Of course, we're so blessed with traditional U-Haul that if you're 6 or 96, you know exactly what U-Haul is and what it does. And when you see it parked on the side of the road, you know exactly what it's there for.

The customer isn't quite there -- the consumer isn't quite there with the U-Box portable moving and storage model. When they do, I think we'll really be able to answer the question you have. But I think it's -- the market is quite large. And as time goes on, you'll see it continue to grow as a pillar of U-Hall Company.

Let me just ask it in a slightly different way. Of the number of locations that you have across the United States, how many have functionality for you U-Box? What is -- it's the same question.

Sure. So it depends what you're defining as you a U-Haul and, of course, most of the time in -- within the company, we look at our outlets, including our dealers. So if you want to make the calculation from that, you're looking at somewhere between 5% and 10%. If you're looking based on company stores, you're looking a little closer around half.

So needless to say, it -- that's not necessarily assuming that you've got adequate build-out of the U-Box product piggybacked at those locations. So for example, you take a rather large market like Phoenix, you're still barely scratching the surface of the capability that we need to service the customer. And we're going to -- we're just going to have to keep building it out. And if what you're trying to do is make a projection to say should this double, triple, quadruple, 10x, you're going in the right direction.

Our next question comes from the line of Steven Ramsey from Thompson Research Group.

I wanted to start with U-Box, and I would just assume that transactions in U-Box is more associated with One-Way moves. Are you able to see if U-Box One-Way moves are growing faster than the rental segment One-Way moves? Or said another way, with One-Way transactions being up, is that a rising tide for U-Box?

Well, this is Jason. I'll start and just set the scene with the truck One-Way transactions -- truck and trailer. Those have been from flat up to slightly -- up 10,000 or 20,000 transactions in the quarter.

So I'll let Sam to juxtapose his experience with U-Box One-Way transactions.

Yes. U-Box One-Way transactions are leading the way. They're exceeding our truck rental transactions as a percentage. I -- as far as a rising tide, I think they're decoupled in many ways. I certainly don't look at the performance of the One-Way shipping of U-Box product and juxtapose it against the truck rental numbers and say, "Well, we only have so much we can go or capped or one number is dragging down the other."

I don't necessarily see it that way. And I think what you should expect is for U-Box performance as a percentage to exceed the truck rental gains that we're able to make. There's little doubt of that.

Okay. That's helpful. And then wanted to think about the margin profile of the business, 35%, virtually flattish year-over-year, even with Moving transactions up and then Storage and U-Box with a higher margin profile also growing faster.

Can you maybe dissect what is causing margin trends in the quarter or if it's better to reflect over the recent past and maybe the puts and takes to the company margin?

Sure. This is Jason. I'll start with that. We put a new slide in the investor deck this time around that shows a proxy for cash flow, which would be adjusted EBITDA, the EBITDA margin and then the share of equipment rental revenue versus the share of storage revenue. And we don't have U-Box revenue in there yet.

But the 2 newer revenue line, Storage, which is strange calling that newer, but it's newer than the original equipment rental revenue, both of those, when we include those in new projects, it has the effect of increasing the projected return.

Now as you know, and you've been to some of our facilities, you see how everything kind of interacts and interrelates, it is very hard for us to break it out separately, but we certainly have seen that when we add more of each of those products to a location, the profitability improves.

Okay. That's helpful. And then maybe to think about the -- some of the dynamics playing out in the Storage segment, a lot of new facilities and units in the total base. Maybe as a headwind to the margin profile of the slides in the last couple of quarters have been helpful to see that.

Can you maybe talk about the glide path there of how units getting soaked up can be positive to margin, certain thresholds that need to be hit to elevate the margin within the Storage business?

Yes. On the slide in the deck that we have that shows where future storage revenue is coming from, there's a portion of that, that shows Storage revenue from existing locations, or what we call non-same-store locations, ones that haven't hit 90%. And that number, taking it from where it is today to where it would be at 90% is somewhere -- it's going to be somewhere around $260 million, give or take.

By the time we get there, there's likely going to be rate increases that will be a little bit more -- those are at locations where we've opened, and the expense load has largely been recognized in our financial statements. So that additional revenue, a very rough estimate would be maybe 80% of that, give or take, is going to flow to the bottom line.

In some locations, it will be more than that. At some of the newer locations, that might not be all of that, but as a general rule of thumb, to give you a sense. So a lot of the headwinds that we're facing right now on the EBITDA margin or on the GAAP operating margin are truck related.

It's the liability costs associated with the fleet. We've seen an increase in the severity of claims. I don't think we're seeing more accidents. I think the fleet is in real good conditions as far as accidents go. But the severity of those that we're running into is a little bit more significant, and we're building reserves back up, and that's affecting the margin. And that does hit earnings and EBITDA for both of those.

And then for the earnings cycle, it's this depreciation headwind that we're facing. We're going to have to work through this cohort of trucks -- cargo vans we purchased the last 2 years. And then likely after this year, the spend on the box truck fleet will begin to slow a bit. And then we should peak on depreciation and then hopefully trend back down.

Okay. That's helpful, Jason. And the last quick one for me. When looking at the pending and developed storage square footage currently at 14.8 million, that's been sliding down for a few quarters. Is that a number that you expect to kind of gradually keep coming down over the next few quarters? Or is there a level of developed and pending square footage that you think it's a minimum level that we do not want to go under?

There's certainly an amount that we don't want to go under. I don't think we're close to that right now. But what we've been trying to do is slow the spend not because we don't believe in sell storage or not because we don't want to expand, but because we want to be rational in our capital allocation and make sure that we have enough to last us.

And with the way that the fleet has been chewing up some capital during this time frame, we're pulling back a little bit on real estate spend. But you don't want to pull back too much or you have what happens to us during COVID, where we shut a bunch of stuff down, and then it takes a while to start it back up, and you get kind of this unusual amount.

If we could stay somewhere in the, say, 4.5 million to 6 million square foot range each year, I think that's something that operationally, we've proven that we can handle. And if we do that, spending is likely to continue to decrease.

Our next question is from Andy Liu from Wolfe Research.

So really just wanted to double click first on the transaction volume. You guys talked about kind of flat to maybe slightly up in the quarter. Just wondering if you guys noticed anything in terms of sort of like the month-to-month trends. It's flat in the quarter, but had the month-to-month trends kind of like improving through the quarter. Or is it kind of pretty steady through the quarter? Any kind -- any color would be helpful.

Sure. All of our comparisons are going to be year-over-year because our business doesn't really compare well month-to-month. So our best quarter for Moving is really our second quarter. The second best would be the first quarter that we just finished, and then it goes third quarter and the fourth quarter are worst. So we're always comparing with how we did the year before because, largely, moving activity tends to look the same year-over-year.

So what I mentioned for July is we're again seeing revenue increase from rates that we're having to charge because our cost of doing business has gone up. But we haven't yet seen traction on the -- on transactions. And we're going through a process right now.

I mentioned that the fleet -- the size of the fleet has increased. I think from last year, we're up maybe 5,700 trucks. From the last quarter, we're up about 5,000 trucks. But we're also up close to 800 locations compared to last year between dealer locations and our company locations.

So we're going through the process, which is fairly difficult of placing this new equipment in places that we think is going to be productive and opening dealers and doing that in an efficient fashion. And that's what we're working on now.

Now if that doesn't work out the way that we think it is, we'll probably end up increasing the sales of trucks and reduce the size of the fleet. But right now, we think there's opportunity to use these trucks. To give you a sense of the challenge that we're facing, in the last 2 years, the number of locations that we've added is equal to the size of our second largest truck competitor, right?

So in opening that many locations and distributing trucks across them and getting customers and our team to be able to route customers at those locations is a bit of a challenge, and that's what we're working through right now. And we're working through it at the same time that we're investing quite a bit in the fleet. But our plan is that all of this is going to pay off in the years to come.

Got it, got it. And sorry, about that. I should have worded my question a little clear. I meant monthly trend as how did April year-over-year; go, how did May year-over-year and June year-over-year. Is that -- has it been kind of year-over-year flat for all 3 months? Or has it been maybe improving on a year-over-year basis from April through June?

Got it. Okay. I went astray on that one, didn't I? So the revenue has been steadily up year-over-year. I would say that transactions, we have some on weeks and some off weeks. And we deal with the same issue that we've dealt with since the very beginning of the company, and that is people tend to move at the end of the month.

So you get this cluster of transactions at the end of the month. And depending upon how the calendar falls from year-to-year, you can see these weird oddities. So looking at it over a 3-month period, you tend to flatten some of that out. And what I would say is we still haven't got traction, however you want to look at it.

Month over month versus last year or for the 3 months, the traction still hasn't hit. And I'm not seeing that in July yet either. But it's not like we're far off. There are some weeks that we're up on transactions. So we're right there. We're right there.

Okay. Got it, got it. That's helpful. And then kind of shifting over to the storage side -- I mean, the storage stuff. I know you guys added a new slides here. So I think that segment is getting -- you guys are pushing for a little more focus on the segment. So I really want to ask on that slide on the future revenue coming out online.

You guys gave what the future would look like on a revenue basis. Have you guys looked at it maybe on even an NOI or an EBITDA basis, kind of what that future pipeline is? I know you guys don't disclose margins, but just want to get a sense if that is the revenue number, how that hits the bottom line.

Yes. I answered the question for Steven just now. On the non-same-store locations that are already open, the additional revenue, somewhere around, I would say, 80% of that should probably fall to the bottom line. If you're asking about the other ones that haven't opened yet, those are tougher because as a whole, most of them have all of our product lines embedded. And so I don't have a clear answer to give you on that because we -- I mean, breaking out storage revenue as part of that.

No. It's really to give you on that front. So kind of, I guess, asking another way maybe on the development, the spending side of it, kind of how much does it cost for you to put this pipeline up? As I look at your slides, right, and if you have a 5-year look-back period, you did about $5.5 billion of investment, and you brought 26 million square feet of new space online. So that kind of backs into like $200 a foot. I'm not sure if that's a good proxy for the spend going forward.

Yes. I don't know if I would be here this long if I allowed a bunch of $220 a foot storage to -- so that -- on that slide, the $5.8 billion is -- represents the amount that we spent in that 5 years. So it's not exactly -- that's not for the -- that doesn't represent the 26 million square feet that went on. It represents a big portion of it.

But I'd say there's 2 complicating factors to that calculation. One is because we do all this development on balance sheet, there's a certain amount that we've spent that isn't yet productive, right? We bought the properties. We started -- we have construction in progress, but they're not renting rooms yet.

For the last couple of years, that number has run about $1.7 billion. We're probably about $1.690 billion in capital we've invested that isn't really producing revenue right now. And I would say, 5 years ago, that number was probably closer to $1 billion.

So then I would take $650 million out of the numerator because that really is extra money that's spent on assets that aren't productive yet. And then the part that's a little also challenging to figure out is that also includes building U-Box warehouse space.

And if you were to convert the amount of covered spaces that we've added the last 5 years to storage square foot because each one of those boxes is a 5x8 storage room. That's going to add somewhere between 8 million to 9 million square feet of self-storage space. So in reality, what the number could get to for our investment per foot should be much closer to say $150 a foot. That's the long story to get to the short answer, which is it should be about $150.

Okay. Got it, got it. Super helpful. And then sort of last question for me. I know you guys -- I asked last quarter as well. The development -- the yield that you guys set on these storage developments, you guys mentioned it was closer to like -- I think it was like 10%, right? So it will be -- so just curious how you guys closed that 10% number. Is that 10% on the $150 of per square-foot spend that you just referenced? Or is there a different method you're using to calculate the 10%?

Yes. That's going to be the unlevered IRR. So you take your total investment in the property, and we're looking out, I think it's 7 to 10 years of then capping it at the end of that time frame and looking to see how it performs over that time frame. If you were to try to convert that to a cap rate, it's probably going to be somewhere between 7.5, 8.

There are no further questions at this time. I would now like to turn the conference back over to management for the closing remarks.

Well, this is Jason. I hope everyone is just holding their questions for the Annual Investor Day, which is going to be in about 2 weeks. If you have any feedback in between, please feel free to shoot to us. Otherwise, we will -- we look forward to seeing you then. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.