U-Haul pany(UHAL) - 2026 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION This part details U-Haul Holding Company's unaudited financial statements, management's analysis, market risks, and internal controls Item 1. Financial Statements This section presents U-Haul Holding Company's unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows, with detailed explanatory notes Consolidated Balance Sheets%20Consolidated%20Balance%20Sheets) This section presents the Company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and March 31, 2025 Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | % Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------|:---------------| | Total Assets | $20,848,368 | $20,479,170 | $369,198 | 1.80% | | Cash and cash equivalents | $877,188 | $988,828 | $(111,640) | -11.29% | | Total Property, Plant and Equipment, net | $15,590,076 | $15,112,600 | $477,476 | 3.16% | | Total Liabilities | $13,187,600 | $12,981,027 | $206,573 | 1.59% | | Notes, loans and finance leases payable, net | $7,249,877 | $7,193,857 | $56,020 | 0.78% | | Total Stockholders' Equity | $7,660,768 | $7,498,143 | $162,625 | 2.17% | - Total assets increased by $369.2 million (1.80%) from March 31, 2025, to June 30, 2025, primarily driven by an increase in property, plant and equipment, net, which grew by $477.5 million (3.16%)[6] - Cash and cash equivalents decreased by $111.6 million (-11.29%) quarter-over-quarter[6] Consolidated Statements of Operations%20Consolidated%20Statements%20of%20Operations) This section details the Company's financial performance, including revenues, expenses, and net earnings for the quarters ended June 30, 2025, and 2024 Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | % Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------|:---------------| | Total Revenues | $1,630,470 | $1,548,490 | $81,980 | 5.30% | | Self-moving equipment rental revenues | $1,058,273 | $1,014,332 | $43,941 | 4.33% | | Self-storage revenues | $234,237 | $215,737 | $18,500 | 8.58% | | Total Costs and Expenses | $1,373,056 | $1,242,248 | $130,808 | 10.53% | | Earnings from Operations | $257,414 | $306,242 | $(48,828) | -15.94% | | Pretax Earnings | $185,381 | $256,392 | $(71,011) | -27.69% | | Net Earnings available to common stockholders | $142,331 | $195,417 | $(53,086) | -27.17% | | Basic and diluted EPS (Common Stock) | $0.68 | $0.95 | $(0.27) | -28.42% | | Basic and diluted EPS (Series N Non-Voting Common Stock) | $0.73 | $1.00 | $(0.27) | -27.00% | - Total revenues increased by $82.0 million (5.30%) year-over-year, driven by growth in self-moving equipment rental revenues (up $43.9 million) and self-storage revenues (up $18.5 million)[7] - Total costs and expenses increased significantly by $130.8 million (10.53%) year-over-year, leading to a decrease in earnings from operations by $48.8 million (-15.94%) and net earnings by $53.1 million (-27.17%)[7] Consolidated Statements of Comprehensive Income (Loss)%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the Company's comprehensive income, including net earnings and other comprehensive income (loss) components for the quarters ended June 30, 2025, and 2024 Consolidated Statements of Comprehensive Income (Loss) Highlights (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | Net Earnings | $142,331 | $195,417 | $(53,086) | | Total Other Comprehensive Income (Loss) | $29,118 | $(8,597) | $37,715 | | Total Comprehensive Income (Loss) | $171,449 | $186,820 | $(15,371) | - Total other comprehensive income (loss) significantly improved from a loss of $8.6 million in Q1 2024 to a gain of $29.1 million in Q1 2025, primarily due to unrealized net gains on investments and future policy benefits discount rate remeasurement gains[10] Consolidated Statements of Changes in Stockholders' Equity%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in the Company's stockholders' equity, including retained earnings and accumulated other comprehensive loss, from March 31, 2025, to June 30, 2025 Consolidated Statements of Changes in Stockholders' Equity Highlights (In thousands) | Metric | Balance as of March 31, 2025 | Balance as of June 30, 2025 | Change (QoQ) | |:-----------------------------------|:-----------------------------|:----------------------------|:-------------| | Total Stockholders' Equity | $7,498,143 | $7,660,768 | $162,625 | | Retained Earnings | $7,931,886 | $8,065,393 | $133,507 | | Accumulated Other Comprehensive Loss | $(229,314) | $(200,196) | $29,118 | - Total stockholders' equity increased by $162.6 million from March 31, 2025, to June 30, 2025, driven by net earnings of $142.3 million and a positive change in accumulated other comprehensive income (loss) of $29.1 million, partially offset by Series N Non-Voting Common Stock dividends[13] Consolidated Statements of Cash Flows%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the Company's cash flow activities, categorized into operating, investing, and financing, for the quarters ended June 30, 2025, and 2024 Consolidated Statements of Cash Flows Highlights (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | Net cash provided by operating activities | $598,376 | $453,903 | $144,473 | | Net cash used in investing activities | $(764,041) | $(803,318) | $39,277 | | Net cash provided by (used in) financing activities | $47,444 | $(31,438) | $78,882 | | Increase (decrease) in cash and cash equivalents | $(111,640) | $(381,383) | $269,743 | | Cash and cash equivalents at end of period | $877,188 | $1,153,161 | $(275,973) | - Net cash provided by operating activities increased significantly by $144.5 million year-over-year, while net cash used in investing activities decreased by $39.3 million[15] - Financing activities shifted from a net cash outflow of $31.4 million in Q1 2024 to a net cash inflow of $47.4 million in Q1 2025, contributing to a smaller decrease in cash and cash equivalents compared to the prior year[15] Notes to Consolidated Financial Statements%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes to the consolidated financial statements, covering accounting policies, earnings per share, investments, liabilities, derivatives, and segment information 1. Basis of Presentation This note clarifies the Company's fiscal reporting periods, the consolidation of insurance subsidiaries, and the unaudited nature of the interim financial statements conforming to GAAP - U-Haul Holding Company's fiscal quarter ends June 30, while its insurance subsidiaries' fiscal quarter ends March 31, with their calendar year reporting consolidated into the Company's fiscal year[17][19] - The Company operates through three reportable segments: Moving and Storage, Property and Casualty Insurance, and Life Insurance[22] 2. Earnings per Share This note explains the Company's earnings per share calculation using the two-class method, allocating undistributed earnings to Voting Common Stock and Series N Non-Voting Common Stock - The Company uses the two-class method for EPS calculation, allocating 10% of undistributed earnings to Voting Common Stock and 90% to Series N Non-Voting Common Stock[28] Basic and Diluted Earnings Per Share (In thousands, except per share amounts) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Net earnings available to common stockholders | $142,331 | $195,417 | | Undistributed earnings available to common stockholders | $133,507 | $186,593 | | Basic and diluted EPS of Voting Common Stock | $0.68 | $0.95 | | Basic and diluted EPS of Series N Non-Voting Common Stock | $0.73 | $1.00 | 3. Investments This note details the Company's investment portfolio, including available-for-sale fixed maturity and equity securities, noting a decrease in unrealized losses and credit loss allowance Available-for-Sale Investments (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | Fair Value | $2,521,166 | $2,479,498 | $41,668 | | Gross Unrealized Gains | $5,409 | $2,915 | $2,494 | | Gross Unrealized Losses | $(194,813) | $(228,875) | $34,062 | | Allowance for Expected Credit Losses | $(2,443) | $(3,104) | $661 | - The allowance for credit losses for available-for-sale investments decreased by $0.7 million in Q1 2026, compared to a $1.9 million net impairment charge in Q1 2025[42] Equity Investments (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | Common stocks (Fair Value) | $43,843 | $43,413 | $430 | | Non-redeemable preferred stocks (Fair Value) | $21,766 | $22,136 | $(370) | 4. Accounts Payable and Accrued Expenses and Other Reserves This note details the increase in accounts payable and accrued expenses, alongside significant self-insurance liabilities for public liability and property damage claims Accounts Payable and Accrued Expenses (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | Accounts payable | $297,570 | $263,280 | $34,290 | | Accrued expenses | $603,513 | $557,620 | $45,893 | | Total | $901,083 | $820,900 | $80,183 | - Self-insurance liabilities for public liability and third-party property damage claims were $376.0 million as of June 30, 2025, an increase from $360.8 million as of March 31, 2025[47] 5. Notes, Loans and Finance Leases Payable, net This note details the Company's long-term debt, totaling $7.25 billion net of issuance costs, and explains the year-over-year increase in interest expense Long Term Debt (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | Notes, loans and finance leases payable | $7,285,130 | $7,229,341 | $55,789 | | Less: Debt issuance costs | $(35,253) | $(35,484) | $231 | | Total notes, loans and finance leases payable, net | $7,249,877 | $7,193,857 | $56,020 | Interest Expense (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | Interest expense | $86,619 | $71,147 | $15,472 | | Total interest expense | $82,330 | $67,218 | $15,112 | - The weighted average interest rate during the quarter for revolving credit activity decreased to 5.63% in Q1 2026 from 6.63% in Q1 2025, despite an increase in the average amount outstanding[54] 6. Derivatives This note describes the Company's use of interest rate swaps for cash flow hedging and equity market contracts for indexed annuity products, with fair value changes recognized in income Derivative Fair Values (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | Interest rate swaps (Assets) | $3,331 | $4,381 | $(1,050) | | Interest rate swaps (Liabilities) | $546 | $777 | $(231) | | Equity market contracts (Assets) | $5,078 | $8,819 | $(3,741) | | Notional amount (Interest rate swaps) | $374,767 | $376,887 | $(2,120) | | Notional amount (Equity market contracts) | $297,871 | $326,218 | $(28,347) | - The Company recognized a decrease of $4.8 million in the fair value of cash flow hedges (net of taxes) in Q1 2026, compared to a decrease of $1.9 million in Q1 2025[56] - Net (gains) losses recognized in net investment and interest income from equity market contracts were $1.4 million for both Q1 2026 and Q1 2025[59] 7. Accumulated Other Comprehensive Loss This note highlights the improvement in Accumulated Other Comprehensive Loss (AOCI) from $(229.3) million to $(200.2) million, driven by unrealized investment gains and foreign currency translation Changes in Accumulated Other Comprehensive Loss (In thousands) | Metric | Balance as of March 31, 2025 | Balance as of June 30, 2025 | Change (QoQ) | |:-----------------------------------|:-----------------------------|:----------------------------|:-------------| | Foreign Currency Translation | $(57,540) | $(55,120) | $2,420 | | Unrealized Net Gains (Losses) on Investments and Impact of LFPB Discount Rates | $(174,320) | $(147,088) | $27,232 | | Fair Value of Cash Flow Hedges | $(56) | $(590) | $(534) | | Postretirement Benefit Obligation Net Loss | $2,602 | $2,602 | $0 | | Total AOCI | $(229,314) | $(200,196) | $29,118 | - The total other comprehensive income (loss) for the quarter ended June 30, 2025, was $29.1 million, a significant improvement compared to a loss of $8.6 million in the prior year period[61][63] 8. Dividends This note reports the Company declared a $0.05 per share dividend for Series N Non-Voting Common Stock in Q1 fiscal years 2026 and 2025 Non-Voting Common Stock Dividends | Declared Date | Per Share Amount | |:--------------|:-----------------| | June 4, 2025 | $0.05 | | June 5, 2024 | $0.05 | 9. Leases This note details a decrease in the Company's right-of-use (ROU) assets from $184.7 million to $129.7 million, alongside a year-over-year reduction in lease costs Right-of-Use Assets, Net (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | Finance ROU assets, net | $85,661 | $138,698 | $(53,037) | | Operating ROU assets, net | $44,048 | $46,025 | $(1,977) | | Total ROU assets, net | $129,709 | $184,723 | $(55,014) | Lease Costs (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | Operating lease costs | $4,874 | $5,605 | $(731) | | Total finance lease cost | $4,008 | $11,040 | $(7,032) | - The weighted average remaining lease term for operating leases is 24.8 years, significantly longer than finance leases at 0.4 years[68] 10. Contingencies This note addresses the Company's exposure to environmental regulations and litigation, with management expecting no material adverse effect on financial results - Compliance with environmental laws and costs of investigation/cleanup are not expected to result in a material adverse effect on the Company's financial position, results of operations, or cash flows[72] - Other claims and litigation arising from normal business operations are also not expected to have a material effect on the Company's financial position and results of operations[73] 11. Related Party Transactions This note details the Company's related party transactions with SAC Holdings and Mercury Partners, including management fees, lease, printing, and commission expenses Related Party Revenue (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | U-Haul management fee revenue from Blackwater | $7,778 | $7,715 | $63 | | U-Haul management fee revenue from Mercury | $1,804 | $1,780 | $24 | | Total | $9,582 | $9,495 | $87 | Related Party Costs and Expenses (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | U-Haul commission expenses to Blackwater | $23,571 | $22,695 | $876 | | U-Haul commission expenses to Mercury | $6,492 | $6,128 | $364 | | Total | $32,137 | $30,568 | $1,569 | Related Party Assets (In thousands) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | |:-----------------------------------|:--------------|:---------------|:-------------| | U-Haul receivable from Blackwater | $28,470 | $28,442 | $28 | | U-Haul receivable from Mercury | $13,351 | $12,517 | $834 | | Total | $40,473 | $45,003 | $(4,530) | 12. Reportable Segment Information This note disaggregates the Company's financial performance into three reportable segments: Moving and Storage, Property and Casualty Insurance, and Life Insurance Revenues by Reportable Segment (Quarter ended June 30, 2025, In thousands) | Segment | Revenues | |:-----------------------------------|:---------| | Moving & Storage | $1,553,859 | | Property & Casualty Insurance | $29,721 | | Life Insurance | $50,094 | Net Earnings Available to Common Stockholders by Reportable Segment (Quarter ended June 30, 2025, In thousands) | Segment | Net Earnings | |:-----------------------------------|:-------------| | Moving & Storage | $142,331 | | Property & Casualty Insurance | $9,420 | | Life Insurance | $2,084 | Gross Capital Expenditures by Reportable Segment (In thousands) | Segment | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Moving & Storage | $916,571 | $963,163 | 13. Geographic Area Data This note presents the Company's geographic data, showing the United States as the primary market for revenues, pretax earnings, and identifiable assets Geographic Area Data (Quarter ended June 30, 2025, In thousands) | Metric | United States | Canada | Consolidated | |:-----------------------------------|:--------------|:-------|:-------------| | Total Revenues | $1,543,342 | $87,128 | $1,630,470 | | Pretax Earnings | $180,092 | $5,289 | $185,381 | | Identifiable Assets | $19,891,368 | $957,000 | $20,848,368 | - Canada contributed approximately 5.3% of total revenues for the first three months of fiscal 2026[98][256] 14. Employee Benefit Plans This note details the net periodic postretirement benefit cost, which decreased to $0.5 million in Q1 2026 from $0.6 million in Q1 2025 Net Periodic Postretirement Benefit Costs (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Service cost for benefits earned during the period | $169 | $245 | | Total other components of net periodic benefit costs | $346 | $372 | | Net periodic postretirement benefit cost | $515 | $617 | 15. Fair Value Measurements This note describes the Company's fair value measurements for financial assets and liabilities using a three-tiered hierarchy (Level 1, 2, and 3) Financial Assets Measured at Fair Value (June 30, 2025, In thousands) | Asset Category | Total | Level 1 | Level 2 | Level 3 | |:-----------------------------------|:------|:--------|:--------|:--------| | Fixed maturities - available for sale | $2,521,166 | $— | $2,521,166 | $— | | Preferred stock | $21,766 | $21,766 | $— | $— | | Common stock | $43,843 | $43,843 | $— | $— | | Derivatives | $8,409 | $5,078 | $3,331 | $— | | Total | $2,595,184 | $70,687 | $2,524,497 | $— | Financial Liabilities Measured at Fair Value (June 30, 2025, In thousands) | Liability Category | Total | Level 1 | Level 2 | Level 3 | |:-----------------------------------|:------|:--------|:--------|:--------| | Derivatives | $546 | $— | $546 | $— | | Embedded derivatives | $6,389 | $— | $— | $6,389 | | Market risk benefits | $13,197 | $— | $— | $13,197 | | Total | $20,132 | $— | $546 | $19,586 | 16. Revenue Recognition This note disaggregates revenue by recognition timing, with the majority from self-moving equipment and storage recognized under ASC 842 (Leases) Revenue Disaggregation by Recognition Method (In thousands) | Revenue Category | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Revenues recognized over time (ASC 606) | $115,869 | $100,175 | | Revenues recognized at a point in time (ASC 606) | $116,187 | $113,725 | | Total revenues recognized under ASC 606 | $232,056 | $213,900 | | Revenues recognized under ASC 842 | $1,320,869 | $1,254,317 | | Insurance premium revenues recognized under ASC 944 | $42,334 | $43,148 | | Net investment and interest income recognized under other topics | $35,211 | $37,125 | | Total revenues | $1,630,470 | $1,548,490 | - Revenues recognized under ASC 842 (Leases) increased by $66.5 million (5.3%) year-over-year, while total revenues recognized under ASC 606 increased by $18.2 million (8.5%)[129] 17. Allowance for Credit Losses This note details the Company's allowance for credit losses on trade receivables, fixed maturities, and other investments, reflecting changes based on economic conditions - The allowance for expected credit losses for trade receivables was $5.5 million as of June 30, 2025, up from $5.1 million as of March 31, 2025, with an estimated loss rate of approximately 4%[135] Allowance for Credit Losses (In thousands) | Metric | Trade Receivables | Fixed Maturities | Investments, other | Total | |:-----------------------------------|:------------------|:-----------------|:-------------------|:------| | Balance as of March 31, 2025 | $5,082 | $3,104 | $448 | $8,634 | | Provision for (reversal of) credit losses | $3,555 | $(661) | $— | $2,894 | | Write-offs against allowance | $(3,105) | $— | $— | $(3,105) | | Balance as of June 30, 2025 | $5,532 | $2,443 | $448 | $8,423 | 18. Income Tax This note discusses the Company's effective tax rate of 23.2% in Q1 2026 and its evaluation of new tax legislation, including Canadian Pillar Two and the U.S. OBBB Act - The effective tax rate for the quarter ended June 30, 2025, was 23.2%, compared to 23.8% for the same period in 2024, differing from the federal statutory rate of 21.0% primarily due to state and local income taxes[144] - The Company does not expect the Canadian Pillar Two legislation (Global Minimum Tax Act) to have an impact on income tax provision or cash taxes[145] - The Company is currently evaluating the tax provisions of the newly enacted One Big Beautiful Bill Act (OBBB) and its impact on financial statements[146] 19. Accounting Pronouncements This note outlines the Company's evaluation of new accounting pronouncements, including ASU 2023-09, ASU 2024-03, and ASU 2025-05, and the SEC's climate disclosure rule - The Company is evaluating ASU 2023-09 (Income Taxes: Improvements to Income Tax Disclosure), effective for annual periods beginning after December 15, 2024[147] - The SEC's final rule on climate-related disclosures is currently stayed pending judicial review, and the Company cannot determine its future outcome[149] - The Company is assessing the impact of ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2026[150] 20. Deferred Policy Acquisition Costs, Net This note indicates that deferred policy acquisition costs (DAC), net, remained stable at $121.6 million, with capitalization offsetting amortization expense Deferred Policy Acquisition Costs Roll-Forward (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Balance, beginning of year | $121,729 | $121,224 | | Capitalization | $4,809 | $3,228 | | Amortization expense | $(4,917) | $(4,646) | | Balance, end of period | $121,621 | $119,806 | 21. Life Insurance Liabilities This note details life insurance liabilities, including future policy benefits and investment contracts, noting an increase in investment contract balances due to higher deposits Life Insurance Liabilities (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Balance, end of period (LFPB net) | $301,182 | $306,724 | | Life Insurance end of period balance | $370,950 | $384,875 | | Policy benefits and losses, claims and loss expenses balance, end of period | $871,530 | $841,861 | Liabilities from Investment Contracts (In thousands, except rate) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | |:-----------------------------------|:----------------------------|:----------------------------| | Beginning of year | $2,511,422 | $2,411,352 | | Deposits received | $135,224 | $76,417 | | Surrenders and withdrawals | $(121,531) | $(94,440) | | End of period | $2,537,848 | $2,406,464 | | Weighted average credited rate | 3.33% | 3.27% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the Company's financial condition and results for Q1 fiscal 2026, covering strategy, segment performance, liquidity, capital resources, and fiscal 2026 outlook General Overview and Strategy This section outlines the Company's strategy to maintain leadership in the North American 'do-it-yourself' moving and storage industry and its insurance segments - The Company's overall strategy is to maintain its leadership in the North American 'do-it-yourself' moving and storage industry by providing a seamless and integrated supply chain[164] - Primary focus areas include expanding moving equipment and storage units, increasing independent dealers and Company-operated locations, and leveraging Storage Affiliate and Moving Help® capabilities[165] - Property and Casualty Insurance focuses on providing and administering insurance to U-Haul and its customers, while Life Insurance aims for long-term capital growth through life, Medicare supplement, and annuity policies in the senior market[166] Description of Operating and Reportable Segments This section describes the operational focus and strategic objectives of the Company's Moving and Storage, Property and Casualty Insurance, and Life Insurance segments - The Moving and Storage segment focuses on expanding its dealer and center network, offering a complete line of moving products, and utilizing technology like the U-Haul mobile app and uhaul.com® for customer service and affiliate connections[169][170][171][172] - Property and Casualty Insurance aims to increase penetration of protection packages (Safemove®, Safetow®, etc.) into the moving and storage market[174] - Life Insurance provides life and health insurance products primarily to the senior market through direct writing and reinsuring policies[175] Results of Operations - Consolidated This section provides a consolidated overview of the Company's financial performance, detailing revenue by product line and key changes in costs, expenses, and net earnings Consolidated Revenue by Major Product Line (In thousands) | Revenue Line | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | % Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------|:---------------| | Self-moving equipment rental revenues | $1,058,273 | $1,014,332 | $43,941 | 4.33% | | Self-storage revenues | $234,237 | $215,737 | $18,500 | 8.58% | | Other revenue | $154,072 | $133,241 | $20,831 | 15.63% | | Consolidated revenue | $1,630,470 | $1,548,490 | $81,980 | 5.30% | - Total costs and expenses increased by $130.8 million, driven by a $44.4 million increase in Moving and Storage operating expenses (including $5.2 million in repair, $20.2 million in personnel, and $17.2 million in liability costs) and a $50.7 million increase in rental fleet depreciation[184][185] - Net earnings available to common stockholders decreased by $53.1 million to $142.3 million in Q1 2026, compared to $195.4 million in Q1 2025[188] Results of Operations - Moving and Storage Segment This section details the financial performance of the Moving and Storage segment, including revenue drivers, operating expenses, and depreciation impacts on profitability Moving and Storage Revenue (In thousands) | Revenue Line | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | % Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------|:---------------| | Self-moving equipment rental revenues | $1,059,031 | $1,015,163 | $43,868 | 4.32% | | Self-storage revenues | $234,237 | $215,737 | $18,500 | 8.58% | | Other revenue | $152,821 | $132,175 | $20,646 | 15.62% | | Total Moving and Storage revenue | $1,553,859 | $1,469,161 | $84,698 | 5.77% | - Self-storage revenues increased by $18.5 million, driven by occupancy gains, new capacity (1.2 million new net rentable square feet added during the quarter), and a 1.3% improvement in average revenue per occupied foot[178][190] - Depreciation expense for the rental fleet increased by $50.7 million due to more box trucks and expected decreases in resale values, while net losses from equipment disposals increased by $29.7 million[195] Moving and Storage Depreciation, Net of (Gains) Losses on Disposals (In thousands) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Change (YoY) | |:-----------------------------------|:----------------------------|:----------------------------|:-------------| | Depreciation expense - rental equipment | $208,212 | $157,528 | $50,684 | | Net (gains) losses on disposals of rental equipment | $22,125 | $(7,948) | $30,073 | | Depreciation, net of gains (losses) on disposals | $304,009 | $216,545 | $87,464 | Results of Operations - Property and Casualty Insurance Segment This section reviews the financial performance of the Property and Casualty Insurance segment, highlighting changes in net premiums, investment income, and pretax earnings Property and Casualty Insurance Performance (In thousands) | Metric | Quarter ended March 31, 2025 | Quarter ended March 31, 2024 | Change (YoY) | |:-----------------------------------|:-----------------------------|:-----------------------------|:-------------| | Net premiums | $23,300 | $22,000 | $1,300 | | Net investment and interest income | $6,400 | $6,100 | $300 | | Operating expenses | $12,300 | $11,600 | $700 | | Benefits and losses incurred | $5,500 | $5,000 | $500 | | Pretax earnings from operations | $11,900 | $11,500 | $400 | - Net premiums increased by $1.3 million, corresponding to changes in U-Haul moving and storage transactions[198] Results of Operations - Life Insurance Segment This section analyzes the financial performance of the Life Insurance segment, focusing on changes in net premiums, investment income, and pretax earnings (losses) Life Insurance Performance (In thousands) | Metric | Quarter ended March 31, 2025 | Quarter ended March 31, 2024 | Change (YoY) | |:-----------------------------------|:-----------------------------|:-----------------------------|:-------------| | Net premiums | $19,200 | $20,700 | $(1,500) | | Net investment income | $29,500 | $31,800 | $(2,300) | | Operating expenses | $2,800 | $10,100 | $(7,300) | | Benefits and losses incurred | $39,700 | $39,000 | $700 | | Amortization of deferred acquisition costs | $4,900 | $4,600 | $300 | | Pretax earnings (losses) from operations | $2,600 | $(200) | $2,800 | - Net premiums decreased by $1.5 million due to lower life and Medicare supplement premiums, despite deferred annuity deposits increasing by $66.0 million[202] - Net investment income decreased by $2.3 million, impacted by realized losses on derivatives and invested assets, partially offset by a $2.3 million increase from the change in provision for expected credit losses[203] Liquidity and Capital Resources This section evaluates the Company's liquidity and capital resources, including cash positions by segment, credit facility availability, and cash flow activities Cash and Cash Equivalents by Segment (In thousands) | Segment | June 30, 2025 | March 31, 2025 | |:-----------------------------------|:--------------|:---------------| | Moving & Storage | $726,069 | $872,467 | | Property & Casualty Insurance | $115,633 | $96,165 | | Life Insurance | $35,486 | $20,196 | | Consolidated | $877,188 | $988,828 | - Moving and Storage had $465.0 million in additional cash available under existing credit facilities as of June 30, 2025[211][232] - Net cash provided by operating activities increased by $144.5 million in Q1 2026, while net cash used in investing activities decreased by $39.3 million, and net cash provided by financing activities increased by $78.9 million[212][213][214] - The Company is owed a $129 million tax refund plus $20.7 million in interest from the IRS, which is currently being processed[231] Fiscal 2026 Outlook This section provides the Company's outlook for fiscal year 2026, outlining strategic priorities for self-moving equipment, storage, and life insurance segments - The Company will focus on increasing transaction volume, improving pricing, product, and utilization for self-moving equipment rentals, with new investment in the truck fleet expected to increase in fiscal 2026[234] - For the storage business, plans include completing current projects, increasing occupancy, acquiring new locations, and continued investment in the U-Box® program[235] - Life Insurance aims to expand its presence in the senior market by growing its agency force, expanding product offerings, and pursuing business acquisition opportunities[237] Consolidating Schedules by Segment This section provides detailed consolidating financial schedules for each reportable segment and elimination entries to reconcile to the consolidated totals - The consolidating schedules provide detailed financial statements for each segment (Moving & Storage, Property & Casualty Insurance, Life Insurance) and elimination entries to arrive at the consolidated totals[239][240][241][242][243][244][246][247][248][249] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the Company's exposure to interest rate and foreign currency exchange rate risks, including derivative use and cautionary statements on forward-looking information Interest Rate Risk This section discusses the Company's exposure to interest rate risk from variable rate debt and its use of interest rate swaps to manage this exposure - The Company is exposed to interest rate risk primarily from variable rate debt obligations and uses interest rate swap agreements to fix interest payments on certain SOFR-indexed variable rate debt through July 2032[251] Interest Rate Swap Agreements (June 30, 2025, In thousands) | Notional Amount | Fair Value | Fixed Rate | Floating Rate | |:-----------------------------------|:-----------|:-----------|:--------------| | $54,767 | $1,863 | 2.86% | 1 Month SOFR | | $66,500 | $745 | 2.72% | 1 Month SOFR | | $66,000 | $723 | 2.75% | 1 Month SOFR | | $100,000 | $(65) | 4.71% | 1 Month SOFR | | $87,500 | $(481) | 4.36% | 1 Month SOFR | - As of June 30, 2025, $447.5 million of variable rate debt obligations were not fixed through interest rate swaps; a 100 basis point increase in SOFR would decrease future earnings and cash flows by $4.5 million annually[251] Foreign Currency Exchange Rate Risk This section addresses the Company's foreign currency exchange rate risk, primarily from its Canadian operations, and its policy on hedging this risk - The Company's exposure to foreign currency exchange rate risk is primarily related to its Canadian business, which generated approximately 5.3% of revenue in Q1 2026[256] - A 10% change in the value of the U.S. dollar relative to the Canadian dollar is not considered material to net income, and the Company typically does not hedge this risk[256] Cautionary Statements Regarding Forward-Looking Statements This section provides cautionary statements regarding forward-looking information, highlighting inherent risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements identified by words like 'believe,' 'expect,' 'anticipate,' and 'plan,' which are subject to risks and uncertainties that could cause actual results to differ materially[257][258] - Key risk factors include potential future pandemics, economic environment, capital expenditures, legal outcomes, liquidity, competition, government regulations, and cybersecurity breaches[257][258] Item 4. Controls and Procedures Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were effective as of June 30, 2025[260] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[261] PART II OTHER INFORMATION This section covers other required information, including legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits Item 1. Legal Proceedings Information on legal proceedings is incorporated by reference from Note 10, Contingencies, with a $1 million disclosure threshold for environmental proceedings - Information on legal proceedings is incorporated by reference from Note 10, Contingencies[263] - A $1 million threshold is used for disclosing environmental proceedings where a governmental authority is a party[264] Item 1A. Risk Factors The Company reports no material updates to the Risk Factors previously described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - No material updates to the Risk Factors described in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025[265] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable to the Company for the current reporting period - Not applicable[266] Item 3. Defaults Upon Senior Securities This item is not applicable to the Company for the current reporting period - Not applicable[267] Item 4. Mine Safety Disclosures This item is not applicable to the Company for the current reporting period - Not applicable[269] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[270] Item 6. Exhibits This section lists the documents filed or furnished as part of the Quarterly Report, including various certifications and XBRL-related documents - The exhibits include Rule 13a-14(a)/15d-14(a) Certificates from the President/Chairman and CFO, Section 906 Certificates, and Inline XBRL documents[271]