UHAL - NYSE

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 Reyes. 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, 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.

Thank you, Sebastian. 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 proportionately. 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 trailer 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 reel these repair cost increases. As you all know, our customers drive the equivalent to the moon and back more than 12 times a day. So 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 slugfest. 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. The 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 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 nonvoting share in the second quarter of last year. Earnings before interest, taxes and depreciation, what we're calling adjusted EBITDA at our Moving and 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 units 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 $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 have 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 $2.032 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 the 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 in 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 and 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 was 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 for 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 Rathon with

I'd 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. Now to the 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?

Steven, 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 and then slows 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 expenses are -- purchases are going to be and also the pricing?

So again, I'll 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 and 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 up 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 and 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.

I want to add that -- Jason, I want to add that the question always is, do you take the hit every month or you take the 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 of depreciation. But these last 18 months, and it's really come clear here, the depreciation has been significantly greater. So when I look at this number, I add 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. I'm not consulting Jason here, but speaking from my personal opinion, I think we're a year away from the peak on the pickups and 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 of 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 many as you wanted, it actually dropped 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 in dollars wise?

This is Jason. So I'll take a shot at that. So from when we went into COVID to 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, I was quoting something $600 million in 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, 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, I've seen a lot of clips concerning 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, Steven. Yes, and that's a real exciting opportunity for us. We've had 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 the 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. But 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 and 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 just under half of our truck and trailer rental revenue. Today, they're running maybe 3 percentage points below where they've been running. So I think we've got it 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 overfleeted right now, which is why Jason reports we have a little bit lower utilization. So you see oftentimes in the past, I couldn't do this 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 opposite 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, we should see some results.

That's helpful color. Maybe thinking even further out than this -- 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 -- not just me, 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're going to -- you have to suck in a fair amount of revenue, and that may not be available in markets where there's plenty of U-Box and new 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 trailer rental revenue. And that would be, I think, a continuing pattern.

Okay. That's helpful. And then you've talked about, as you described, the slug fest in storage. Would you say that the competitive intensity there is equal to what it has 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 a little bit of an 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 it into their budget. So that causes our people at the point of sale to be quoting a first, say, 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 of the customer that we can't provide the product at 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 going to kind of be in a little bit of a slug fest. And -- but overall, we're -- I think relatively, we're coming out well. It's a tough thing to know because 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 and 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 breadth, primarily because we're already in all these markets because of truck and trailer 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 fine 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 is 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 and 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 boost 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 during COVID. We got a little longer rental and a little more percentage of one-ways. It was strangely that, 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 [indiscernible] try to drive a prediction.

The next question comes from Andy Liu with Wolfe Research.

So I appreciate a lot of the color around the depreciation here. I want to focus more on kind of like the cash side, right? So thinking through your comments of the input cost being higher 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 spent elsewhere, for example, on the storage side on the development you guys previously called out a 10% yield on this. So just wondering when you think about the avenues or where you can deploy capital, how does stand in the fleet versus storage compare?

I want to say one cautionary note, and that is what is the business cycle? And the problem with -- 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, where revenue is at 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, 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 the 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 -- the year-over-year trend for, say, July to September, has that been roughly the same through the 3 months? Or has 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 the same through the 3 months?

We -- yes, on transactions, we will have a good month and then we kind of recede a little bit. And I'd say 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. Got it. No, that's helpful. That's helpful. And then my last question, kind of shifting to the storage side. I know you guys called out last quarter that you're working through getting some tenants out who weren't paying. So I see there's some impact on the occupancy here. I just want to get a sense of, is that -- are you guys -- have you guys gone through the bulk of that and you're set up to backfill those spaces and get occupancy up? Or is there like still a good amount of addition 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 it where 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 out 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 yes, it was the right move. And now the question just is how fast can we drive rent.

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. We buy some Stellantis vans that are assembled in Mexico. We buy some General Motors products that are assembled in Mexico or final assembly, but these parts, you know 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 mine field successfully, be what 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 then 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 are working at their end. But so far -- but Ford has a little advantage here. I think they just -- they advertise that. They have higher domestic content and 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, if that makes sense. And this could change as time goes on. I'm sure they all hedge stuff and 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 costs 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 nondomestically. 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 put a lot of pressure on suppliers to hold prices. And again, I think a bunch of them could see this. And so they hedge 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.

The next question comes from Jamie Wilen with Wilen Management.

I just want 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's positioning? Obviously, the revenue growth in U-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? What's -- 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 in 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 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?

Yes. 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 a 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 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 the actual over-the-road getting boxes from one city 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 fill, just like the more storage rooms we fill, our margin profile is going to increase.

Okay. And does the length of time that new boxes 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. But do 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, partially because our existing footprint is -- we're strong in Wyoming. We're strong in North Dakota. So let'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, we have some locations we bought from either Public or Extra Space because they were fringe 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. With new construction, you'll be in nowhere and it costs about the 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 if 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...

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 low?

My experience is that it doesn't work that way. Now you got to adjust for size of the locations. 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, Wyoming than we will in California. And sometimes we'll do better in Wyoming than California because right now, storage is so hot, you go and 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. And I don't think that's -- I don't think that's a good investment.

And 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 of it 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 in storage and in walks a customer with a Starbucks and hands it to my manager, I think what the hell is that? So I asked. She said, "Well, that person is a storage customer, she brings me Starbucks every morning." Well, that costs more than the storage room. So obviously, there's more going on than just renting the room. They have a personal relationship. I'd like to say that people rent storage from other people and they rent trucks from companies. So not 100% true, but it's more true than false. So as we get a better quality manager and a manager, which 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 is -- where in the mix is there a rate opportunity. We essentially never do an across-the-board rate increase. It's always very specific to a type of storage room and the size of storage room. And if you just keep at that regularly, you'll kind of sort to what is the optimum price you can get in that market. So I'm overall proud that we've been able to get a little bit of increases -- the storage industry has struggled with increases lately. We're able to get them, but they're hard thought. But I think...

The next question comes from Stephen Farrell with Oppenheimer Close.

I just have a quick question about the 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 sedate 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 they're still $3,000 to $3,500 more expensive than what they would have been had we 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 to be set with costs that are staggering as they've attempted to adjust 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 an about-face. I think you could see that over the last 6 months. Even Mary Barra now recants this stuff. And it was -- it's been a political agenda all along and not a manufacturing agenda, but they're stuck but 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, we could 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 in 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 and say in California, you can't build a building unless you put in electric chargers. No one's 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 it wouldn't hurt a damn thing, and that's -- they've heard that from me. I made myself very clear to them.

And given that they moved away from ICE vehicles, how long do you think it would take for them to pivot back and increase 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 a utility vehicle. On passenger cars, I have no comment. I don't keep track of them, but apparently, electrics are very successful there. But in utility vehicles, something like what we rent, their total nonstarter 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 were terrifying to most people. So the cat is 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 the same thoughts.

And just with moving, the competitors are facing the same problems that you guys are having just with increased cost of new vehicles, and you guys were in a better position before the costs went up. Do you think that's led them 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 them. They say they're charging. We attempt to actually deal hard like a -- customer like was real money and see we can beat them down to. So they're a little bit flexible. My experience so far is they're still higher than us, so that the consumer net-net, in most applications will 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 has that leveled off?

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

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.