U-Haul Holding Company

At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, May 29, 2025. I would now like to turn the conference over to Sebastian Reyes.

Please go ahead. Good morning and thank you for joining us today. Welcome to the U-Haul Holding Company fourth quarter fiscal year end 2025 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 is 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 discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-K for the year ended March 31, 2025, which is on file with the US Securities and Exchange Commission. I'll now turn the call over to Joe Schoen, Chairman of U-Haul Holding Company.

Hello, everybody. What you see, especially in our fourth quarter results, are decisions made in prior years working their way through the financial statements. On a more positive note, the original equipment manufacturers appear to have decided to make reliable, fuel-efficient ICE vehicles in volume at improved pricing. OEMs and U-Haul both need to get some emissions regulation relief from the administration to be able to better serve our customers with truck product. U-Haul, in the meantime, has defleated 3 quarters of our pickup fleet as we see no path to profitability with more than a small specialized pickup fleet. Resale prices on both vans and pickups are steady or improving. I expect We may struggle through October on resale pricing, but beyond then, it appears to be a clear path. Our customers are expressing optimism, at least our truck share customers are. Storage remains a bright spot wherever we execute with precision. Our programs work. It's a less bright spot where we execute with less precision. Both self-move and self-store are consumer needs, and I expect those needs to continue. It is my challenge to make U-Haul the customer's best choice. With that, I'll turn it to Jason to kind of get specific on the numbers.

Thanks, Joe. So yesterday we reported a fourth quarter loss of $82.3 million. compared to a loss of $863,000 for the same quarter last year. Our full year fiscal 2025 earnings were $367.1 million, down from $628.7 million in fiscal 2024. In terms of earnings per share, the fourth quarter of this year was a 41 cent per share loss per non-voting share loss. That's compared to less than a penny of share loss in the fourth quarter of fiscal 2024. Earnings before interest taxes and depreciation, EBITDA, that are moving in storage segment increased by $5.6 million for the quarter to 217.3, largely from revenue growth. Our full year fiscal 2025 EBITDA increased by just under $52 million to $1,619.7 million. Included in our earnings release and financial supplement is a reconciliation of EBITDA to GAAP earnings. I'm going to highlight three large differences between the two. First, fleet depreciation from the increased level of fleet acquisitions and the cost per truck over the last several years. Second, the reduced gains on the sales of retired pickups and cargo vans. And third, the declining interest income at the moving and storage segment as we reduced our short-term cash balances due to reinvestment. Of the $0.41 decline in earnings per share for the fourth quarter, about $0.16 was from fleet depreciation, $0.12 from the decrease in gains on sale of rental equipment, and $0.10 from the decline in interest income. For the fourth quarter, our equipment rental revenue results had a $29 million increase, just over 4%. Of note, during the prior year, we benefited from the extra day attributable to the leap year. I mention that because it added somewhere around $11 million to last year's results. For the fiscal year, we finished up just over $100 million for equipment rental revenue. That's about a 2.8% increase. During the fourth quarter, both our one-way and in-town transactions increased compared to last year at that time. as did our revenue per transaction. Our trailer and towing fleets also experienced improved revenue results. For the month of April and now into May, we've seen revenue continue to trend positively compared to the same period last year. Capital expenditures for new rental equipment for fiscal 2025 were $1,863,000,000. That's a $244,000,000 increase compared to fiscal 2024. while proceeds from the sales of retired rental equipment declined by $76 million to a total of $652 million. This is a combination of fewer pickups and cargo vans sold, along with slightly lower average sales proceeds on the units that we did sell. Our initial projection for net fleet capex in fiscal year 2026 is $1,295,000,000. That's compared to approximately $1,000,000,000 to 11 in fiscal 2025. Switching to self-storage, revenues were up $18 million, or 8% for the quarter. Our 12-month results were also up 8%, or just under $67 million. Average revenue per occupied foot continued to improve across the entire portfolio, up approximately 1.6%. And if you look at just the same store piece of that, we were up 3%. Our average move-in rates for the same store portfolio were up just over 4.5% compared to the fourth quarter of last year. Our occupied unit count at the end of March was up just over 39,000 units compared to the same time last year. This time last year when we were talking, that same statistic was a 31,000 unit improvement, so we picked up the pace a bit compared to where we were at last year. During fiscal year 2025, we added 82 new storage locations, 6.5 million new net rentable square feet across 71,000 new rooms. Our average occupancy ratio across all of our own locations during the fourth quarter declined about 2.5% to just over 77%. If you look at just the same store portfolio, average occupancy experienced about a 50 basis point decrease to 91.9%. During fiscal 2025, we invested $1,507,000,000 in real estate acquisitions, along with self-storage and UBOX warehouse development. That's a $249,000,000 increase over the previous year. During just the fourth quarter, we added 1.6 million new net rentable square feet. About a million and a half of that was newly developed locations, along with expansion at existing facilities. We currently have just under 7 million new net runnable square feet being actively developed and another 8 million square feet in the pipeline behind that. Our UBOX revenue results are included in other revenue in our 10K filing. This line item within the moving and storage segment was up just under $14 million of which UBOX was primary contributor. We are seeing both UBOX moving transactions and the related storage transactions grow. Over the last 12 months, we've increased our covered storage capacity or warehouse space for these containers by nearly 25%, and we're going to continue to see growth in that area. Operating expenses at moving and storage were up $53.6 million. Starting off on a positive note, we had another quarter of declining fleet repair and maintenance costs, this time down $6.7 million. Some of the larger expense increases that we had, personnel costs were up $12.8 million, although that was largely in line with our revenue increase. Other costs, including utilities, property taxes, and shipping costs associated with our U-Box moves, were up a little over $11 million. The largest outlier for the quarter was our liability costs associated with the fleet were up $27.8 million. As of March, end of March, our moving and storage segment had cash and availability totaling $1,348,000,000. On our investor relations website, investors.uhaul.com, we posted some supplemental materials in addition to earnings release and 10-K filing. They're right on the front page for you to click on. With that, I would like to hand the call back to our operator, Constantine, to begin the question and answer portion of the call.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press tar followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press tar followed by the number two. If you are using a speakerphone, please make sure you lift your handset before pressing any keys. Your first question comes from the line of Stephen Ralston from Zax. Please go ahead.

Good morning. Morning. Looking through the numbers, I noticed, and obviously you're in a seasonal business, that the fourth quarter was basically the strongest in the last six years, X-ing out 2021, which was an exceptionally strong year. And I'm interpreting this as the business itself, the top-line business, is strong. getting stronger. First of all, I'd like to see if you can interpret that as I do. And secondly, I know Joe, I asked him last year, at the beginning of the fiscal year, what his outlook was, given his decades of experience, was for the coming year. And basically, he said modest growth. And I don't know if he gave the exact numbers, but I interpreted like 2% to 3% top line growth. With all his decades of experience, what's his current outlook for the top line, you know, X-ing out the depreciation and the other things that are going on?

Yeah, this is Joe. I think it's picking up. We're seeing signs that customers are, you know, positive. Of course, you know, there's all these forces that You can read the paper and go crazy. But at the base store level, I think we're seeing a little bit of consumer optimism and willingness to start on some sort of a moving adventure. Every time someone moves, it's an adventure, to put it politely. So if they're kind of optimistic, they're doing a little more business. And I see them doing a little more business with this. They're accepting a little bit of rate increase. And when we execute with what I call precision, they're good with all this. It's not that people don't have the ability to spend money or something like that. They just want to see good value for the money or maybe even great value for the money, which we should be in the position of providing. We're kind of at the great value end of the spectrum. And so I'm pushing that real hard with my troops. And I think we're seeing a positive response from the customers.

Thank you. Now moving over to depreciation, and you spent a lot of time on that in this call and also in the press release. I consider depreciation just part of the nature of the business that you're in. I mean, you're in a constant investment stage of capital for replacing your vehicles and increasing capacity. And depreciation is just a byproduct of that. And you use it well to use that to offset as an expense, a non-cash expense. And at some point, you'll be able to benefit from that when there's an It increased demand. And that's just the nature of your business in the self-storage industry and also self-moving, obviously. But you're rather downbeat on it. I mean, this is just part of your business. Could you just comment on that? I mean, maybe some investors don't understand that.

I'm with you. Depreciation on self-storage is money in the bank. If you wanted to scratch me deep, that would be my response there. It's money in the bank. Relax. Equipment is different. Equipment really is a depreciating asset. And through this time, we had a number of things that happened. The cost of acquiring equipment exceeded our upper limit of projections. It was something that we'd not seen in 30 years. And then that was coupled with a shortage of equipment, which is what runs repair expense up and also causes us in the present year to be acquiring more trucks than we would on a normal adjusted basis. But I think you're absolutely right. Equipment depreciation, if we can have a reasonable handle on how we bring the equipment in and how we take it out, should match up to revenues in a positive way over a three- or five-year cycle for sure. And I expect it kind of is, but there's this anomaly. The automakers, and they're starting to fess up to this now if you read press, they've been grossly subsidizing electric vehicle misadventures by jacking the people who buy internal combustion engines, whether it's consumers or fleets. And that's created a net loss for everybody. The automakers lost money because they couldn't sell the damn electric vehicles and make any money. And then we've paid arguably too much for fleet. But that now is starting to come back towards normalization. We're not quite there if you look at it over a 10-year trend. But we're improving. And the feedback I get from the automakers is they're pretty much done with the charade of net zero. And it's going to allow them to right their boat. Most of these people are actually manufacturing behemoths. They're excellent at it if you let them go. But they have, whatever you want to say, drunk the Kool-Aid and not done which is their forte. And I think they're focused on getting back to their forte. And that will benefit us, although there'll be some little lumps and bumps getting there. But I think it's going to benefit us. I saw an article this morning where Mary Barra commented positively on tariffs. And of course, the article speculated whether she was trying to curry favor with the Trump administration or she actually believed this. She may be correct. These are complicated equations how this cost works through the economy. But costs that are just wasted, in other words, money spent to develop a vehicle that you can sell for 50 but cost you 100. That's just pure waste in the economy. And we've been the victim of that. And I think that's coming to a halt. And as that comes to a halt, the statement that depreciation is a normal thing will be absolutely true. It should be a normal thing. And I'm disappointed that we didn't properly see the extent to which this could go. In other words, the range of our projections did not encompass what actually happened on either decline in resale value or the amount that the automakers would attempt to make stick on acquisition prices. But those are now coming back. where they're more comprehensible, and normally they work well for the whole economy. So I expect this is going to straighten itself out, give it a little bit of time, and I'm with you 100%. Again, on storage, depreciation is just a piggy bank. It's not a cost. On trucks, it's real, but it should match to revenue.

Thank you very much for taking my questions.

Sure. Your next question is from the line of Steven Ramsey from Thompson Research Group. Please ask your question.

Hi, good morning. Maybe to start with the UBOX growth, it jumped up meaningfully in the quarter and growing three times faster than moving. What do you attribute that step up to? I saw the comment that moving and storage containers both increasing, were they increasing at similar rates? levels on a year-over-year basis?

Well, this is Jason. I'll start with that. The moving transactions, the UBOX moving transactions are growing at a faster rate than the UBOX containers that we're keeping in storage. Now, both are in the plus 20% range. It's just that the moving transactions are at the higher end of that. The storage transactions are at the lower end of that. So with as many containers that we have acquired and warehouse space that we've built out, our big opportunity is to keep more of those containers in storage.

Okay. And then the 17% growth, I mean, obviously you can't pinpoint it too specifically, but is that the right sort of range to think about going forward, or is it still something strong but maybe more moderate than that?

This is Joe. I think My expectation is to stay in that range. The market's vast. We've done this largely without cannibalizing our existing customer base. So we've been able to get growth in both of those segments. I see that the UBOX has a higher growth rate than the truck share operation. for many years to come. I just think that's the nature of it. Of course, it's smaller, but the market's less explored also. And it's not a simple cannibalization of our other customer. So yeah, I think you can project it being higher. I certainly am banking on that.

That's great to hear. Wanted to shift to real estate investments next year. your storage pipeline is down a million or so from the prior quarter and the Ubox warehouse space grew meaningfully last year. Do you expect real estate CapEx to be at similar levels in FY26 or do you expect it to moderate a bit? Just maybe your logic behind where you see it going.

Well, I'll touch it now that Jason, he's, He's the voice of reason here, which I think is the position you'd like him to play. I'm the voice of, you know, let's get there before somebody else does. So with UBOX, we've done a lot of just trying to get positioned in markets where we weren't positioned. And with the exception of a few major markets, and I'll pick Los Angeles as an example, we're woefully under UBOXed in Los Angeles, but That may end up being the situation for the next 20 years. But we have added UBOX capacity throughout North America, and I don't think we're in the emergency construction basis, which I would if you would have asked me a year or two years ago, I'd say it's an emergency. We need more, more, more. Now we need to calmly exploit the asset that we've built because, of course, that's where That's the whole point of this. So as Jason said, as we get more people into storage and continue to grow the moving franchise of the UBOX product, we'll be leveraging those assets and that should be positive leverage.

Okay, that's great. And then last one for me, again, to stay on the real estate side of things, you've brought a lot of storage capacity online recently that is self-storage. The maturity period, is it still moving at the historical clip on going from day one to year one, two, and three? And then secondly, you have a larger percentage of units in that early phase of ramp up right now, it seems. Can you talk about the impact that has on EBITDA and the timeline of transitioning from money losing to even a positive as storage units mature.

Steven, this is Jason. So our rough estimates is usually, you know, approaching 70% occupancy, you're paying your bills. We're not having any issues on the lease up of the portfolio through, say, the first three or four years. I would say that if there's any slowdown that we've seen, it's in the year going from year four to five, where you're going from the low 80s to getting into the low 90s. I would say that that's maybe a couple points, percentage points slower than what we've seen before. And I'm excluding the COVID years, which were unusual. So, and that would point to more of a management challenge versus a consumer challenge, you know, trying to get the facility filled up to the 90% plus. Otherwise, in the first three, four years, as we're monitoring these new facilities that come on, I'm not seeing any real weakness in how they're leasing up.

Okay. That's great. Thank you for taking my question.

Your next question is from the line of Andy Liu from Wolf Research. Please ask your question.

Hey, morning, everyone. And I appreciate you taking the question. I'm really excited to be on the call for the first time. So really, to kick it off, you guys talked about a lot of the positives early on the call, right, on the top line. And in the deck, you mentioned higher volume, higher transaction, higher revenue per transaction. It's all great news. So the big topic today is the tariffs, right? And that kind of happened. early April. So as you look at the business on a month-to-month basis on your customers' traffic, have you guys noticed anything, any meaningful shifts there? Perhaps, you know, folks that are thinking about moving and are saying like, hey, maybe I'll just stay put, you know, give it uncertainty or anything like that?

I'll answer this. You're going to get an opinion because there's not. If someone has a fact on that, I'd appreciate hearing it. But my opinion, my observation is is that if we communicate strong value, that the consumer is still positive. They're a little picky, and where I have stores that are poorly managed, my business is down. That would be my answer to you. I will never get every store managed with precision, but I can get the most of them there, and that's my task. So no, I'm not seeing this, and I've been very curious about this, like you state, are tariffs going to make consumers uncertain and then they do nothing? If you ask my opinion, when people are uncertain, they don't move. Okay, but we're seeing people move. So my answer would be, I don't think they're as uncertain as we might think.

Okay, got it, got it. No, that's totally fair, totally fair. you know, you've all been around for a very long time. You're super experienced here. So, you know, just wanted to kind of get your sense on, you know, you've seen things through the cycle before. So as you kind of look at, you know, where you are in sort of the cycle now, sort of what is your, what's kind of your outlook here and how things might play out on the housing and the moving side?

Yeah, I think, again, moving is a need for the consumers and That continues. The question is, it used to be for much of my career, it was, can we get them to do business with anybody? Are they going to move in the trunk of their car or the roof of their car or some damn thing, you see? They've always been moving. And, of course, you watch investors moving. They're moving in wagons, for God's sakes. So the question is, what's the mode? They're going to move. The question is, can you get them into a commercial transaction that works good for both sides? Can they see it as a value, and can we squeeze a profit out? And we work at that. Not so much as can we stimulate moving demand. Can we get people to move more often? No, we have no plans, no intent. Don't care. Don't accumulate any data on the subject. But can we get more of them to enter into a commercial transaction? And, of course, specifically with U-Haul. And so that's kind of our task. But if people shut down, and I've seen it where they've shut down, and it immediately reflects in distance of move in our statistics. They move a shorter distance on average. That's a gross statistic. But it's a pretty good indicator when the distance they move declines that Overall, there's a little bit of anxiousness in the consumer group.

Okay, got it, got it. That's super helpful, super helpful. So moving on to kind of the storage side, you know, I really appreciate you guys putting out that slide here on sort of the revenue upside on the development pipeline. I think I remember a couple quarters back, I kind of talked about, you know, these developments you could bring in sort of like, you know, 10% yield, 10% returns on these storage developments. On the real estate side, we kind of hear you know, maybe tariffs are making input costs go up or, you know, immigration policy could potentially, you know, um, affect the labor side of the equation. So would you, um, would that potentially impact some of the yields you guys, um, kind of initially expected for the future pipeline at 10%?

Andy, just Jason, I've spoken with, uh, with our real estate folks on the development side and, um, you know, two, two areas of concern for us would be, um, what goes into the concrete mixes and the steel. And in talking with our largest steel suppliers, we don't anticipate any significant increases in the cost of steel, at least due to tariffs right now. And likewise, we haven't seen anything manifest itself yet in the cost of concrete. So what we've actually been seeing, excluding the threat of tariffs, the costs of construction have been gradually coming down for us.

That's a combination of us being a little bit smarter, and also I think that people are just a little bit hungrier, and we can get people to sharpen their pencil. It doesn't mean that actual costs have declined, but what we're paying.

Okay, got it. Yeah, that's fair. That's helpful. It's helpful. It's, you know, really great that you guys are able to control that cost there. So really, following on on the storage side, you know, a lot of times you kind of look at your companies that has, you know, an operating side and a real estate side. Sometimes they could be disconnected in the valuation of the real estate, right? So looking at your storage business, you guys own a pretty sizable footprint. And then kind of look at, you know, the other storage names that we covered here. you know, or in the private market, sort of the value of a self-storage facility, right, kind of like $200, $300 a foot is kind of what the market norm is. So kind of looking at where you guys are trading, do you guys think there's a disconnect maybe in how folks are looking at the value on the storage portfolio?

This is Jason. I guess to answer that is, we've been trying to provide more details to help people value that. So that's an indication of, we think that there's a disconnect. We think that there's more, uh, as people understand us more that we think the company's worth more than, than where it's trading at. Um, you know, we, we've been working with Wolf, uh, and, and our other analysts in order to try to communicate that story. So, uh, As far as valuing the stock, everyone who's listening to this call is probably better at that. What we're trying to do is present more information that our investors are asking for so that everyone can better value the stock for themselves.

Yeah, for sure, for sure. And, you know, I really appreciate you taking my question today. You know, I'm happy to be launching on the name and, you know, looking forward to working with you guys more. Appreciate it. Thank you.

You're welcome. Your next question is from the line of Jamie Willen from Willen Management. Please go ahead.

Yes, as a follow-up to the previous question, it would seem like when one looks at the self-storage industry, whether public or private, and looks at the growth of your self-storage as well as floating in UBOX there, which most of the other self-storage people do not have a similar component, that the value of self-storage in UBOX exceeds the current stock price. So it seems like the truck rental business is being valued for less than zero. So one would hope, other than just putting out information to additional Wall Street analysts that the company can garner a plan for how to reduce that valuation gap since our self-storage is so undervalued relative to its peers in the market.

I think that's a great comment, Jamie, and of course, as you know, I'm invested in this, so optimizing that is in my selfish self-interest, and I welcome input on the subject and in trying to get there.

Would you all consider, you know, repurchasing shares at this tremendous discount to intrinsic value to close that valuation gap?

You know, I'm torn on that. You know, we did some repurchases, I don't know what, 10 or 12, 15 years ago. Some members of my family liked it because it felt like they were getting more, more wealthy or something, but it didn't give any more money to spend. So I don't know if it really did a lot, but at the same time, Jason's keeping a pretty, he's playing his position and trying to make sure we keep ourselves very liquid and very flexible because of, there is significant uncertainty in financial markets, I'll say relative to five years ago maybe, and So he's trying to keep me to keeping a fair amount of liquidity. So it's not been proposed. There's no proposal in front of the board or any particular board member that I recall who's agitating for a share back. And I'm not agitating for one, but if someone made the case, it certainly would talk about it. But I just, no, I don't. I don't know, it may be smart. You know, when we did it before, I was not very much in favor of it, but I try not to just run this as a hypocrisy.

I would submit that the valuation gap today is much, much greater than the valuation gap when you were repurchasing shares a dozen years ago. It's a different equation today. Well, I appreciate you making that point. Financially, the property and casualty business... Operating profits declined in the quarter from 25 to 10 million. Is there any particular reason that would happen?

Jamie, this is Jason. And this is due to one of my least favorite accounting rules on the face of the earth. And that is valuing a common stock that we hold in our investment portfolios to market and running that change through earnings. So we have a portfolio of common stock at the property and casualty company last year. During the fourth quarter, it went up in value compared to the beginning of the quarter and we had a large gain. This year, it happened to go down in value and then combined, I think that was something like a $10 million swing just from holding the common stock, not from anything actually happening.

Understood. As a shareholder, it intrigues me with the thought of potentially selling off our insurance businesses and using that liquidity to repurchase shares and close the valuation gap and be able to put forth more capital into the businesses that are growing and are our core businesses. Any thoughts in that direction?

Yeah, I think that's a valid consideration. It's discussed, but I don't want to tell you that something's going to happen. But the idea is clear. So I guess I'd leave it at that.

Okay. All right. Thanks, fellas.

Appreciate it.

The last question is from the line of Stephen Farrell from Oppenheimer. Please go ahead.

Good morning. I have a few questions about the fleet. What is the current age and how does that compare to pre-pandemic level?

I don't have a calculation. We don't run that statistic, but If you look at unused mileage, in other words, let's take 130,000 trucks, and how many miles do we have left in that fleet on a per truck basis than we did pre-COVID? Pre-COVID was our highest. We would have had the highest number of unused and therefore available miles in the fleet. steadily been increasing that and this year we'll increase it again and we I was just thrilled prior to COVID because I thought you know we got the company into a strong position there and and then COVID came and we had at first our own fear and then to acquire more capital trucks and then the automakers' inability or unwillingness to manufacture the trucks. So between the two of those factors, we declined rapidly. And you saw that in escalating repair expense. Our repair expense went up $200 million in a short period of time. Well, it's because the trucks, as on average, were not necessarily older, but had more miles or less unused miles available. And all these trucks have different amounts of miles that they're good for. There's not a one index number. So I think we're probably, by the end of this bill, which we'll go through, the one we're in now, basic, is going to go through next March. I think we're probably above 90% of what we had pre-COVID. But I don't have an absolute. calculation. We look at that twice a year and try to, you know, it's a whole bunch of suppositions and try to comprehend what it is. And so I don't have a number in front of my mind, but we're gaining ground, which is to me the point. Gain the ground and you gain a little ground, you'll get there. And there is no, you can get too much and have the fleet too new and it just costs too much. So you want to kind of want to have the fleet. If I had my druthers, I'd have an equal percentage of every model in every year of production, but it never comes in that way. And so sometimes I have to buy 30% of a particular model's fleet in one year because that's just what's available and what can be done. But it kind of puts a lump in the snake as we digest that. You can just see it kind of just like seeing a rat go through a snake. It's just kind of a little lump that kind of works itself out. Well, we're not as good as pre-COVID, but pre-COVID was the best We're way ahead at different times I've run this company. I mean, I'm proud of the fleet. I don't expect that if you randomly go into a place, you're going to get a rough truck. I'd expect you're going to get a good truck. There's been times in my career where I'd say, you've got a 50-50 chance you may get a rough truck. You're not going to experience that today. So that helps build our business because consumers somehow communicate about that. They know, I can even tell by model, when they think our truck is a little bit not up to their expectations. So it's, I think we're not seeing, we're not, we're not, that's not being a problem for us right now. That makes sense. It's not a problem, but we're paying, we're paying up for it. That's what you see in this depreciation. We're paying up.

Right. And that's, I just wanted to follow up with that. You can correct me if I'm wrong, but when there were no supply constraints with the fleet rotation, I always kind of thought of, A maintenance expenses increasing as the depreciation is decreasing in the two more or less rounds out over the life of the vehicle and. Is it now we have a significant increase in depreciation that's outpacing the decrease in maintenance expense? And is that just a new normal? Because there was a big lump of spend this year and last year. and not much before that, or do you think it will eventually balance out?

I'm sorry. I would not characterize it as the new normal. Again, I expect that automakers will continue to improve quality and maybe even pricing going ahead. They have room there if they can get themselves focused on it and get their costs allocated so they're not constantly trying to subsidize another vehicle. So they're very good at this. They're very knowledgeable people. And in my conversations with them as of late, that is their focus. I couldn't have said that two years ago. So if they get focused on this, I think they'll do a good job, and that will trickle through to us. And then we have to do, of course, a good job of what trucks we buy. We buy the right ones in the right amount. And then there's always the issue that Jamie Weiland brought up, Or are you really making a profit or not? Because there's so many things. And on what we call a box truck, in other words, a truck that has a square U-Haul box on the back of it, you're not out of the woods for seven or eight years. That's just the truth. And that's always been the truth. And it's not a scary thought to us. We deal with that all the time. So you make a projection. And an eight-year projection is kind of a long projection. And we try to be real sober about that because because we intend to be here seven or eight years from now in our positions, and we don't want it to be reflecting poorly on us. So we're trying to do that to the very best of our ability. And it will become easier as the automakers focus back on their core competency, because they're more predictable. Things are predictable. All this green business has just disrupted go to a car dealer and talk to the dealer, his tale alone will be frightening. He has a bunch of unsold inventory and a bunch of orders for vehicles he can't source. Well, that just means the supply chain's been disrupted and we need to rationalize the supply chain, which I think is speedily being addressed. And they will get it right because that is what they do well at.

That's good. Thank you very much.

There are no further questions at this time. I'd like to turn the call back to the management team for closing comments. Sir, please go ahead.

Well, thank you, everyone, for your support. We look forward to speaking with you in August after we report our first quarter results. Thank you.

This concludes today's conference call. Thank you very much for your participation. You may now disconnect.