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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 of available units. We're launching some initiatives intended to improve our rate of units rented 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. By 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 is both moving in storage. But one component of it is storage. To the extent U-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 presence 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 and I plan to carry through on these capital expenditures. 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 and 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 a $162 million increase compared to 9 months -- 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 growth -- 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 and 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's 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.uhaul.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

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. 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 suburb of their existing town. They still move for a variety of reasons, which is basic underlying demand, but they move 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 U-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...

It's a shorter life asset, 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 onto 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 in 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. Just for talking points, let's say, Budget has 3,000 outlets and Penske has 3,500, but we're sitting with 24,000 and change. So as far as customer accessibility, we 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 algorithm. 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 one number. So when he says we have 100x box trucks, the size of those and 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 and van 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 bellyache 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, they 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 guarantee. 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. I 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 a vice 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 we're under. And it's on -- it gets to a totally micro analysis you can say overall blah blah blah, 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 a living 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 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. Both 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 let's say in Los Angeles, we have several locations 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 the back of it. In the cities I mentioned, the metropolitan areas 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 D.C. 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 metro areas, in 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 drive some -- 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 '25s 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 we 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 my 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 ricocheted 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 had 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 keep the 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 running. Yes, it all comes out in the wash. But during the interim period, it can affect people's motivations and I need to do that.

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 and 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 as 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 would be figure 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 of my 20-foot trucks, I have something like 12,000 lump going through it. And we can't digest 12,000 of those at 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 probing 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.

On the self...

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 of money, 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 when we see an opportunity, or it's something that's semi-distressed. We 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 us doing is selling a territory of well-occupied facilities that don't have U-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 wary of 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 it 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 guru. 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 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 mistreating it. 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 lamb to be petted 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 storage. It's not a storage. 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 of theirs 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 empty 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 as 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've 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 wanting to see the goose lay some golden eggs too. All right.

Appreciate your thoughts.

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

I just want to circle back around and tap Joe's experience and get a historical perspective. You've pointed out that you're in a very unique period with the emphasis 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 resolved 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 flipped 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. 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'd 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 know 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, you see. So you can see how I fell into the trap and think well hell, 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'd just let the fleet age by just what suited us and just at the price that suited us 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 who are trying to make fleet decisions 5 and 6 years from now 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 on. 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. No one 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 filled.

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 recognized 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 increased, so the rate of incident, potential incidents increased, well now we're dealing with as those incidents that happened back then are 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-Move 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% ranges 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.