Business Operations and Risks - As of March 31, 2025, the company had over 21,600 independent equipment rental dealers, with nearly 50% of U-Move rental revenue generated through this network[78]. - The company faces risks related to the significant increase in costs for acquiring new rental trucks, which could adversely affect the fleet rotation program[77]. - The company relies on a limited number of manufacturers for rental trucks, primarily Ford and General Motors, exposing it to production risks[76]. - Cybersecurity incidents pose a risk to the company's operations, with past incidents not resulting in material impacts but future risks remaining significant[91]. - The company has implemented security protocols and employs IT security team members to mitigate cybersecurity risks[87]. - The company’s ability to maintain its network of independent dealers is crucial for serving customers and could impact financial results if disrupted[79]. - The company faces significant competition in the truck rental and self-storage industries, which could adversely impact occupancy levels and rental rates[95][96]. - Economic conditions, including credit markets and inflation, may negatively affect the company's business and results of operations[98]. - The company is subject to numerous environmental laws and regulations, which could lead to increased compliance costs and potential liabilities[108][109]. - The company is actively developing new technologies to adapt to changing customer demands, but the success of these initiatives is uncertain[97]. - The company may face challenges in maintaining its competitive position due to rapid technological changes and the emergence of new competitors[97]. Financial Position and Market Conditions - The company reported $0.4 million of reinsurance recoverables and $32.4 million of reserves and liabilities ceded to reinsurers as of December 31, 2024[93]. - The company's largest exposure to a single reinsurer was $20.3 million as of December 31, 2024[93]. - As of March 31, 2025, the company had total debt outstanding of $7,229.3 million and operating lease liabilities of $47.0 million[101]. - A.M. Best affirmed the financial strength rating for Oxford and Christian Fidelity Life Insurance Company of A, with the outlook revised to negative from stable[100]. - The trading prices of the company's Voting Common Stock and Non-Voting Common Stock may be volatile, influenced by various market factors[107]. - Approximately 5.1% of the company's revenue was generated in Canada for both fiscal 2025 and 2024[260]. Interest Rate and Derivative Exposure - As of March 31, 2025, the company had $814.4 million in variable rate debt obligations, with $437.5 million not fixed through interest rate swaps[254]. - A 100 basis point increase in the Secured Overnight Funding Rate (SOFR) would decrease future earnings and cash flows by $4.4 million annually[254]. - The market value of the fixed maturity portfolio as of March 31, 2025, was $2,479,498 thousand, with a potential decrease to $2,372,291 thousand if interest rates increased by 100 basis points[257]. - The net market value of derivative hedges related to equity market exposure was $8.8 million as of March 31, 2025, with notional amounts of $326.2 million[258]. - The company does not hedge foreign currency risk as the exposure is not considered material[260]. - Interest rate swap agreements are used to mitigate exposure to changes in interest rates, with fixed rates ranging from 2.72% to 4.71%[254]. - The interest rate risk sensitivity of the fixed maturity portfolio indicates a decrease in fair value with rising interest rates, with a drop of $121,207 thousand at +300 basis points[257]. - The company does not use derivative financial instruments for speculative purposes, focusing instead on risk mitigation[253]. Regulatory and Tax Considerations - Regulatory pressures favoring electric vehicles may require significant infrastructure improvements, potentially impacting the company's business model[80]. - The Tax Cuts and Jobs Act and the CARES Act have introduced significant changes to U.S. tax laws that may adversely affect the company's financial condition[117]. - The company is classified as a "controlled company," with approximately 50.1% of Voting Common Stock owned by a small group of stockholders, potentially limiting governance standards[103][104]. - The company carries excess of loss insurance coverage to mitigate risks associated with potential terrorist attacks[119].
U-Haul pany(UHAL_B) - 2025 Q4 - Annual Report