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U-Haul Holding Co
Earnings Call Analysis
Q3-2024 Analysis
U-Haul Holding Co
U-Haul Holding Company's third-quarter fiscal 2024 report showcased a company trying to navigate through a challenging environment, exemplified by decreasing consumer demand in some areas and rising operational costs. While U-Box, their product for moving and storage demand, shows growth, it still represents a minor segment of the market. The company faces prolonged difficulties in bolstering their vehicle fleet due to manufacturers' hesitance since the onset of COVID-19. Despite these challenges, U-Haul maintains a consistent investment in building and acquiring self-storage facilities, considering it a strategically sound long-term investment.
The earnings for the third quarter stood at $99 million, halving from $199 million during the same quarter the previous year. Earnings per share reflected this decline, dropping to $0.51 from $1.02 for nonvoting shares. Despite an approximate 7% ($59 million) decrease in equipment rental revenue compared to the third quarter of last year, U-Haul emphasizes that revenue growth since pre-pandemic levels in December 2019 has increased by nearly 8% on a compounded basis, indicating some resilience in their business model. This positive indicator, however, is juxtaposed against a backdrop of challenges such as lowered average miles per transaction, suggesting that customers are preferring shorter moves.
The company's capital expenditures on new rental equipment for the first nine months hit $1.350 billion, a $334 million boost from the same period last year. Projections for full-year net capital expenditures have risen from $870 million to approximately $930 million. Additional truck sales have raised proceeds from the sale of retired equipment by $68 million, despite a decline in the average sales price per unit. Meanwhile, the self-storage segment saw an 11% revenue increase, with both the number of occupied rooms and average revenue per occupied square foot growing, albeit with a slight reduction in the all-in occupancy ratio to 82%.
A more moderate trend in U-Haul's storage facilities' occupancy is noticeable, with a 210 basis points decrease to 92.9% in same-store occupancy. Nonetheless, the company managed to eke out a less than 3% increase in asking rents for new customers across their entire portfolio year-over-year, underscoring a cautious approach in an inflationary environment.
Notably, operating expenses in the moving and storage segment rose by $37 million. Personnel costs accounted for a $13 million increase, and while the expenses included approximately $17 million considered nonrecurring, it still placed a spotlight on the operation's inflating margin levels. The company addressed this by noting it is part of a broader strategy to absorb legitimate costs promptly rather than deferring them, potentially indicating a strategic move to deal with inflationary pressures.
Investors highlighted the alarming rate at which operating expenses have increased relative to revenues, marking the highest margin in five years. This observation draws attention to significant increases attributed mainly to personnel costs, with inflationary trends being a probable cause. The company's response suggests operational efficiency and the containment of costs as likely strategic focal points for the future.
U-Haul has actively deployed cash balances into new investments but remains conservative with its cash and liquidity strategy. As of December 31, 2023, the cash and available loan facilities in the moving and storage segment amounted to $2.211 billion, reflecting a cautious stance amidst uncertain economic conditions and increased spending on equipment and acquisitions.
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Good morning. My name is Laura, and I will be your conference operator today. At this time, I would like to welcome everyone to the U-Haul Holding Company Third Quarter Fiscal 2024 Investor Conference Call. [Operator Instructions]. Mr. Sebastian Reyes, you may begin your conference.
Good morning, and thank you for joining us today. Welcome to the U-Haul Holding Company Third Quarter Fiscal 2024 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 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, 2023, 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.
Well, thank you all for joining us again for our quarterly report. There have been a few positive signs in the consumer demand for either truck sharing or storage rentals. Our U-Box continues to grow but it is simply too small part of the total market to be considered as an indicator of moving and storage demand. We are making some modest progress in backfilling the voids created in our fleet by vehicle manufacturers and willingness to build sufficient truck product basically since the beginning of COVID. This will take several years to work its way completed through the fleet, assuming someone will build trucks. We continue to build and buy self-storage, I believe the right locations managed over a period of years are a good investment for the company. Everybody has their own opinion of what's going on in the market.
Rising costs continue to pressure U-Haul and our customers. We are often unable to accurately predict future costs or to hedge them. My strategy is to try to absorb all legitimate costs into the present period rather than try to postpone them into an uncertain future. Our insurance subsidiaries are solid. Mark Haydukovich, the President and Chairman of our Oxford Life Insurance Group will be retiring this quarter after 45 years of leadership for this company. Mark will remain on the Board of Directors.
I'll now pass the call to Jason Berg for some analysis of the numbers.
Thanks, Joe. Yesterday, we reported third quarter earnings of $99 million compared to $199 million for the same quarter last year. This translates to earnings per share of $0.51 per nonvoting share this quarter compared to $1.02 per nonvoting share in the third quarter of last year. Beginning with equipment rental revenue results, compared to the third quarter of last year, we had a $59 million decrease, which is about a 7% decline. Over the last 18 months, we've had a $379 million decrease in U-Move revenue, giving back a portion of the $1.4 billion of increases we experienced the 8 quarters before that.
To give you a better sense of how much of those revenues we've maintained so far compared to the last quarter of the pre-pandemic, [ call it ] the third quarter, which ended December 31, 2019. We've increased our third quarter revenue results by over $218 million, third quarter 2 years ago to today or on a compounded growth basis -- I'm sorry, 4 years ago by nearly 8%. Average miles per transaction continued to decrease as customers are using our equipment on shorter mileage moves.
On a positive note, whereas transactions for the 9 months are down a little over 3% for the quarter, we were down just over 1%. And in fact, while we still had a revenue decrease in the month of December, transactions increased around 1% in the month. Unfortunately, we lost a bit of momentum in January as our results were undoubtedly affected by tough weather.
Capital expenditures on new rental equipment for the first 9 months were $1.350 billion. That is a $334 million increase compared to the same period last year. We've increased our fiscal 2024 full year net CapEx projection. From $870 million to approximately $930 million. So that's growth here just as net of proceeds. Proceeds from the sales of retired equipment are up $68 million for the 9 months to a total of $595 million. The increase in proceeds is coming from additional truck sales. Average sales price per unit has been steadily declining.
At our current pace this year, we should make maybe 2,500 to 3,000 truck dent in our rotation backlog. And our teams have been increasing the pace of truck retirements taking out older equipment. For self-storage, revenues were up $20 million or 11% for the quarter. We increased the total number of occupied rooms, and we're also able to improve average revenue per occupied square foot by almost 4%. The year-over-year improvement in revenue per foot has been coming down as we progress through the year. Our occupied unit count at the end of December was up nearly 29,000 units compared to the same time last year. Over that same time frame, we've added 42,000 new units into the inventory. It's this differential that's led to our average, call it, all-in occupancy ratio during the third quarter to decline to 82%.
The same moderation in occupancy can be seen in the same-store grouping of these properties that we put in our press release with an occupancy decrease of 210 basis points to 92.9%. Our asking rents for new customers on average across the entire portfolio are up a little less than 3% year-over-year.
During the first 9 months of this year, we've invested $969 million in real estate acquisitions along with self-storage in U-Box warehouse development. That's a $35 million decrease over last year. Spending on acquisitions of new properties has declined, while investment in development of the existing properties that we own has increased.
During the quarter, we added a little over 1 million new net rentable square feet, and we have just under 8 million square feet being actively worked on. Operating expenses and moving and storage increased $37 million for the third quarter. First, the good news from the quarter was that the fleet repair and maintenance was down $3 million. Conversely we had a $13 million increase in personnel. And the quarter also included approximately $17 million of cost that I would consider nonrecurring in nature, including a large vendor rebate that we netted against cost last year. That was a onetime event. Combined with some credit card accrual charges that were recorded this year that I would not expect to recur. Property taxes also were up about $4 million.
We have made progress in deploying some of our cash balances to new investments but we still intend to remain conservative in regards to cash and liquidity as of December 31, this year -- 2023, cash along with availability from existing loan facilities at our Moving and Storage segment totaled $2.211 billion.
With that, I would like to hand the call back to our operator, Laura, to begin the question-and-answer portion of the call.
[Operator Instructions]. Our first question comes from the line of Steven Ralston from Zacks.
Good morning. I actually only have one question and I'll start it by saying, the top line to me is roughly in line with expectations. It follows what management has been saying and what I also believe is that you're still on your historical growth rate after the blip up that caused by the pandemic. And given the economic environment, it is consistent with the premise. It's something I mentioned in the last earnings call, I have a quite detailed earnings model, and everything seems to be in line, except this particular metric that I monitor. And that's looking at the operating expenses for Moving and Storage. And it's the margin for that, so you divide it by the revenues of the self-moving equipment rentals.
And it's popped up considerably. And I have not been following you all for a very long time, only 5 years. And that's the highest margin or level of expenses relative to revenues in those previous 5 years. I look at the 10-Q, and you do mention it. It's attributed to personnel costs, property taxes and building maintenance. And as you just said, property taxes only went up $4 million, which doesn't account for that increase on margin. So I'm sort of concluding it's in personnel costs.
It seems like it's inflationary in nature. And I'd just like you to dive a little deeper into these operating expenses and what's driving this increase? Because the third fiscal quarter is relatively a clean quarter given its seasonal slowness relative to some of the others. And it just kind of sticks out at me that this operating expense number is accelerating higher than normal.
Well, I'll start with that. This is Jason. So first, our largest expense, personnel costs, that's been more of a function of the decrease in revenue, and there has not been a coincident decrease in personnel costs. We've tried to become a little more efficient at the home office with staffing and the headcount this year is only up about 2%. So we're not growing the size of the personnel so much. That's more a function of the revenue just has been coming down, and we have the capacity for more business.
The repair and maintenance this quarter compared to last year is down. If you were to go back 4 years, it's up probably $70 million on a quarterly basis. So that's still higher than what we would expect. As we put on the new equipment, and you see the depreciation expense climb associated with the new equipment, you would normally expect them to see the repair and maintenance come down and the utilization of the fleet increase, and both of those have been lagging this time around. And then I did point out in the comments there are about a little over $17 million of what I would say are kind of recurring costs in this quarter. But I think you're speaking to a trend a little bit more than just this quarter.
Yes. I mean everything else is, the quarter is actually pretty good. Considering the environment and what you're dealing with. I'm just looking at this personnel cost while I guess it might be something else.
The 2%, is that the headcount? Or is that the expenses, in other words, you might have to be paying the employees of a higher level of compensation in order -- in this environment.
That was headcount.
That was headcount. Okay. Are the -- are the compensation going up higher than usual?
I wouldn't classify it higher than usual. It's been going up the last several years on a per hour basis. I think for the 9 months, I think we're up somewhere close to $8 million to $10 million on medical benefits and the rest is wage activity.
Okay. Well, thank you for answering my question. And all in all, good quarter. I just had a little concern about the expenses. Thank you.
Question comes from the line of Keegan Carl from Wolfe Research.
I guess I'll start with the question I asked last quarter or 2, but just trying to think on a like-for-like basis, what you think the self-moving equipment rentals would have been down if you remove the new stores you would have added year-over-year. And I guess more broadly, how does that compare to the prior quarter? Are you seeing any sort of sequential improvement?
I don't know if Jason has a number. I would say probably 1% or less. That's a very -- you can't get as hard a number on that as you might think you'd be able to get. But -- so kind of another way to phrase that question is, did the new stores cannibalize same-store sales or were they additive. And I think they were probably about half the revenue they generated was additive. So that's going to be kind of my -- but I can't give you a hard number on that. But that's something, of course, to be concerned of.
As you know, we also go to the customer via what we call a U-Haul dealer. And so trying to balance total revenue and then the source of that revenue where the customer encounters the product is, of course, a concern is something we watch. And stores did a little bit more of the business than they did a year ago. So in a sense, you could say they cannibalized a little bit into dealer business. So to -- if we had stripped the stores out and hadn't done them I think we might have seen a percent maybe. Maybe not that much. I don't know, Jason, what do you...
Every couple of years, we do a study of this to see what happens when we put a new company location and the effect that it has on dealers. That hasn't been done now for a couple of years. But what we have found historically is that the entire market ends up coming up after we put a company location in. So my generalized response to that is it doesn't -- it shouldn't have a big negative effect. And I haven't seen a market where we've got a company location the overall market has gone down. It's always -- everyone I've ever looked at. It's always caught up.
That's really helpful. I guess shifting gears, just specifically on the self-moving business in January. I know you mentioned it was -- it didn't have an easy month but also is weather related. I guess I'm just curious, maybe as we work through that, are you seeing any incremental improvements? I know it's early in February, but just trying to get a better feel for, I guess, how you're expecting that portion of this to trend throughout this quarter?
Of course. Hope springs eternal, and as anybody who tells me the weather caused them to be down business, basically, you get to [indiscernible]. So we're not relying on that. But if you -- I think that we really did have some of that. We had a pretty decent first 10 days of February, but February, another one of those months, a son of a gun, every 6 or 7 years, we get slaughtered either in January or February, we got slotted in January. Could we get slaughtered in February? It still could happen. California had just had another run of nasty weather.
But so far, I'm -- again, I'm hopeful constantly. So I maybe the wrong person to say, but it doesn't look like there's anything negative in the market other than weather. In other words, not a competitive force happening. People, as Jason commented, are driving fewer miles, and we've seen this over 40 years. People are uncomfortable with their economic certainty, they tend to drive our truck shorter distances. It's -- we've seen that repeat and repeat. And there's a -- there's some kind of a little malaise kind of over consumers' heads right now that I don't have an explanation for totally.
But until that kind of turns to a little bit more positive view, I don't expect them to drive more miles. Now I don't think we're losing long rentals to competitors. We look at those kind of things. We don't see that happening. We just see that people are just a little hesitant. And when they get that way, it's kind of logical. They don't want to move us far. They don't want to -- they'll still move because they got married, but they just don't move to a distant city.
So all these things that drive business, these life events they continue on, but they're not quite as adventurous as they might have been when they were more -- they just felt more positive about their circumstance.
And this is Jason. If I could just -- I think people's definitions of slaughter might be very -- for us, that's not an accounting term, probably closer to, say, like a 5% or 6% decrease.
No, that's really helpful. I guess one specifically for Joe. The press release, I actually thought the commentary was pretty positive in the beginning. You mentioned that you're seeing pockets of modest growth in certain markets and product lines. Maybe go into some more detail on this and then what markets, in particular, are you seeing improvements in?
Well, it's kind of a red state, blue state analysis about the long and short of it, probably, I think probably the same as every other business, the restaurants would tell you the same thing. So where we have, well, just take Tennessee Health. Tennessee is just a wonderful place to do business today and just what it is. And I think everybody sees that, and we'll see how it goes. We kind of end up reflecting it. So you see some places like Tennessee, and you think we push ahead, but we don't always get -- opportunities don't always present themselves only in the better markets.
I also am seeing a lot of -- we're going back through and sorting back at a very detailed level. Where do we have the equipment? Where do we have the outlet? And population is still shifting in this country, not like it did during the pandemic, but people are moving around and as you know, there's a tremendous amount of inborn migration. And these people are creating new -- basically new pockets of manager, whether you want to call it. And so we need to keep adjusting our basis to market to those people. We largely do that in the initial phases with our independent dealers because they're in that market running a landscaping business or something else. And so they make a good combination with U-Haul.
But then we'll start to as those communities become a little more established, we may go ahead and put company operation in that area. So other than that but nobody wants to hear red state, blue state, I would just say, it's community is growing that maybe we weren't aware of last year, I get my best information from what we call our local traffic. We have 200 traffic offices across the country. And the people there see trends first. They see them and they try to alert us and say, well, this looks like it's going to go positive.
Of course, Florida has done great. Texas has done great, and it's about what you think. I would like to say that we had some marketing initiative that was catching fire, and I don't think we have a -- if we do, I'm not aware of it, I guess, what I'd say, other than equipment distribution. With us, it's so important to us to have the equipment where and when the customer wants it. So just because we own the equipment doesn't mean it's -- the correspondence to where the demand is. So we have a big operation trying to get that constantly trying to get it better and it's a constantly moving target because next week, we'll have tens of thousands of trucks in a different spot than they were this week. So you're constantly trying to re-optimize that.
Maybe shifting gears to storage here. I guess big picture, are you seeing any change in your average length of stay? And I know rate increases that are being sent out are obviously topical in the storage industry. I'm just curious, are you seeing any change in how customers are reacting to the rate increases you're sending out?
I'll say all just the rate increases. We continue to send rate increases. That's not what's going on in the industry. We have now a great slashing 50% off and more. And that's unsettled the customer because they want to know why [indiscernible] store, competitor X it's half our price. Well, they're half our price because they're going to jack you so hard 90 days from now, you're going to -- your head is going to spin. But we don't do that to people. We consider it anti-consumer activity, and we think it's destructive of the industry, but everybody has their own view of that.
So whipsawing rates. You're making a rate change more than 5%. You'd have to explain to me why something what was wrong with your original pricing. With the -- that's my feedback. And so you'll see us, typically, we're doing -- I think we did 3%, I that about what our asking rate is now over the whole portfolio -- over the whole portfolio. So -- the storage market is tighter by far than it was 2 years by far.
And so you're having to look to your knitting. Well, that's kind of our game. I believe -- I like to believe when that comes up, we start to gain and it energizes us. And so that's what we're attempting to do. Offer a better overall experience for the customer but not necessarily by slashing pricing. Maybe with increased value, we -- we push value really hard.
And Keegan, this is Jason. I haven't seen any dramatic shifts in the average stay.
Really helpful. And then last one for me. I guess this is another big picture question. But obviously, you guys have a lot of excess liquidity on your balance sheet in the form of cash. I guess I'm just curious how we should think about the utilization of that, especially if you take a look at the forward rate curve coming down, the interest income won't be as favorable. Just kind of curious where your heads are at on cash utilization.
Well, this is Jason. We've worked it down, give or take, close to $1 billion here from like, say, a year ago, January until now. So we're all about getting that reinvested back into self-storage. I would say that right now, we have somewhere close to or north of $1.6 billion in assets, that would include cost of acquisition and construction put into them so far that are, either have opened or not fully opened or have additional phases remaining. So I wouldn't call them fully realized yet.
So there's quite a bit going on there. We've kind of been sitting out on the real estate financing side. So we do have the ability to raise quite a bit of cash at some point if we need to. But as you can see, we're not doing that right now.
Great. That's it for me.
Our next question comes from the line of Jamie Wilen from Wilen Management.
Joe, you've always said that the fleet utilization for the trucks is one of the most important metrics you look at, with transactions being let's say, relatively flat. I mean, I realize you have to upgrade the fleet to better and better units all the time. But why are we increasing the size of our fleet while transactions are flat if we're trying to raise that fleet utilization percentage?
It's really because our deletions have quite -- so in other words, this is all the what goes on the top and what goes out the bottom. And we have some at the bottom, still needs to come out. Some just grounding, you believe it's better to rent a different truck, pending sale, of course, that doesn't put a big smile on Jason's face because we're just -- but until [indiscernible], that's kind of what happens. Now at the same time, we've down fleeted our pickup fleet maybe 2,300, 2,500. Jason, do you know where we are exactly?
The end of our fleet, mostly pick up some -- down close to 4,000 units.
Yes. If you do vans pickups, we're down almost 4,000 units. And I think that's -- we can most readily respond to. It's more liquid [ reset ]. Most of those trucks go to the auction. And through dealers and such. And so that's a much bigger market.
The -- our van trucks -- typically we read it ourselves. So it's not on -- some auction where you can clear 50 trucks a day. They kind of go out dribs and drabs. And since we stopped selling during the pandemic, we kind of turn off the faucet with buyers and buyers [indiscernible] other sellers or whatever buyers do. So in the last 12 to 15 months, we tried to get that coming on, but it's coming on slower than we expected. So I don't I think when we calculate utilization, you correct me, Jason, I believe we calculate all the products.
If it's actually in the, those aren't included.
Right.
But if it's -- but if you haven't actually classified them down.
Then water is down. So I think we're -- you're right, we have too many trucks, but I think it's because they're not sold yet because we have bought too many. And -- we still buy a license plate, but a bunch of this -- in more or less pending sale, and that's where -- it shouldn't be in the rental.
Right. Your fleet maintenance expenditures have declined a bit. Are you seeing any difference in the quality of the vehicles that you own that would give you any inclination that fleet maintenance and repair will not be a rising figure moving forward?
We're not that far along. You saw our repair expense been something like $200 million a year. And that was because of -- new vehicles. And basically, just like you with a family, if you like the mom and the dad, then it goes to the kid, it has a lot of variable costs associated with it, but not much fixed cost. And that's basically what's happened to a bunch of our trucks. We've depreciated, now want to drive it another 1,000 miles, you're going to have to pay for some maintenance every 100 miles. So Yes, we've seen some improvement. You can debate it, let's say, we booked 3,000 extra trucks, let's just I'm not sure about the number, but something like that. Okay. Well, that's 3,000 probably against 20,000 in particular because it matters by size. So it's not just the total number. Now we have to balance for every individual sized truck.
Ordinarily, if you had your druthers, you buy the same amount of -- his truck every year, and you have maintained a constant fleet. But because of supply considerations, this just doesn't happen. And so we have -- fleets where we have a whole bunch of high milage trucks and a whole bunch of low mileage trucks and no trucks in the middle. And that's kind of -- it goes through us like a snake smelling a rat. It just kind of goes through that to kind of work its way through. It doesn't just go through smoothly. So we're seeing some of that. It will balance out. And I'm not sure. I'm not going to predict next quarter a reduction in repair. But that should come as we bring in new trucks and then you'll see depreciation go up and they don't exactly correlative. The trends correlate exactly. The numbers don't.
And you're also seeing us paying for vehicles [indiscernible] that Ford claimed $11 billion of earnings and $7 billion of it was on fleet sales. While I cannot tell you how poorly we've been treated by Ford and General Manager on fleet sales. They've come through with 40% price increases. Price increase -- and on through with the rest of this. So they're making good product. I got no complaints about the product. But they have made a decision internally in both those companies finance, their losses on electric vehicle, customers like us, who we actually -- this isn't like at home, I just tell a kid to drive the car another year. But here, it's a business. When I need more trucks, I need more trucks, I'm going to have to buy them and they're leveraging that against us with everything they can. This is just in a really hard -- that's -- and when I saw it analyzed their earnings this morning and we were not hitting it. I mean that's what you've done to us. And this is all under the banner of electrification, with electrification solution for us, but we're financing it. And that's what they're doing with their customers. And of course, that's causing us to seek alternative suppliers. And that's just what that does.
And 2 little pieces of commentary. You increased the quarterly dividend by 25%. I'm glad you're seeing to share everything with shareholders. And we look forward to some overall increases along the way. And then also, I love that you are according to self-storage analysts that people understand that we have an incredibly large and growing self-storage business and that we've never talked to the analyst there before.
And I was wondering within the industry, if anyone else maintains the same organic growth that U-Haul has. I mean this is the most difficult thing to do when you start at 0%, but it also creates the most significant upside. Is our organic growth relative to everybody else at a higher level at this point?
Without -- I'm not going to say that I believe it was last year, but I don't -- we're trying to grow everywhere where it makes sense, and we're not constrained by capital. Our constrained are as our ability to execute, okay? You can just pour money into development, and you're not going to be as happy as you can -- cost can run out of -- don't have some in-house expertise. So we are trying to expand and we're not capital constrained, but we're not expanding everywhere because we just aren't able to execute in that many places on a given day.
So I don't have a number that I'm trying to -- I'm benchmarking against somebody like Extra Space and saying how I'm not doing that.
We're all in the marketplace. We're all doing stuff. We all have slightly different strategies. And sometimes I learn something by watching them and maybe sometimes they learn something by watching me. I'm not quite sure of that. But of course, I try to keep my eye on them. So I understand what they're doing to get themselves in a better situation.
As you look forward, are you looking to add 1 million square feet per quarter, is that going to be a relatively constant number?
I'd like to see it that personally, yes. Again, we have to fill the room we built more than we filled this last quarter, okay? So okay. Got that. We've done that before. It's not a thing. The question is, are those rooms -- and so I'm looking at rooms rented over the prior year by store. If I can manage that, okay, well, then this thing kind of all works itself out.
And then, of course, we're providing rate because your -- all these projects -- can't get the rate [indiscernible] the math is just going to go poorly. So we're watching all that. And I think we should be able to continuously build at that rate. I believe we should now. Our model indicates we should be able to build up that rate. something really changes in the macro environment, it will get us. But yes, that's the rate I see us being able to continue doing.
Okay. And lastly, on U-Box, you've continued to grow that business. Has the as the bottom line continue to keep pace with the top line growth? And how are the margins in that business for you?
Jamie, this is Jason. I would say that U-Box is maybe a little outperforming in that we had some revenue declines last year. It's now bounced back. And for the really over the last 6 months, we've had transaction increases this last quarter, we had revenue increase. So we don't do segment reporting here, but as proxies that I have for kind of an EBITDA number for that is that it's been down, but maybe in the 5% to 8% range. So in that sense, it's done a little bit better than the rest of the organization.
Next question comes from the line of Craig Inman from Artisan Partners.
Just real quick, technically, Jason, that $70 million you're talking about, I didn't catch that. Is that extra cost this quarter? Or there's some kind of year-over-year comparison? I just want to give some color on that.
So a little under $5 million of that was a credit last year that didn't recur this year. So it wasn't -- it reduced expenses last year. It didn't really increase in this year. But if you're comparing last year to this year, it looks like an increase. And then the remainder of that was an additional expense that we booked this quarter that should not come around again.
Okay. Got you. Okay. Because that was what I was going to just ask about, I mean, I know the priority is to get the fleet rotated, building out the self-storage and get that done. And so I was curious about than the cost base. You just -- we've seen a lot of businesses through this period where they had a lot of revenue from kind of the COVID changes and then you're lapping that and you have some excess cost in the business in certain places. Are you all not in that position. I mean, I know you are always very mindful of costs, but just curious about how the cost base stacks up versus what you would expect kind of given how you're looking at the revenue trajectory over the last 4 years and normalizing now?
I think you're going to see personnel be a touch area for 3 or 4 years. I think that there's a whole bunch of initiatives coming on at state and possibly at the federal level that's going to massively inflate wages and maybe that's a public policy, I don't know. But the question is, of course, can we earn that back through some value add with the customer or somehow get the customer to participate in that. And that's all kind of to be determined.
But if you follow the states, the states are -- there's been a lot of press about California's bumping fast food wages. By fast food, I don't know why they're bumping up. It's obviously political, but that will ricochet through my operation also in California. So we're labor is very fungible. And so if I can't stay competitive, they'll leave me and start making hamburgers, okay? So just the truth.
I think we've been through similar things, but there's quite a swarm of this coming at us right now. And I would expect it to keep this trend to go for 3 or 4 years. I don't have a crystal ball, obviously, but there's so many of these initiatives down to cities, New York is replete with minimum wages for salaried people. I mean, first a couple of times I heard that what do you mean minimal wage for salaried people. Well, I don't know. Can you quote it, Jason, I believe it's hovering around $80,000 right now in New York, okay? you can't -- I don't take that as survivable, but it's -- the minimum wage used to be about $34,000 for salaried people. So it was irrelevant.
And now they're actually franking this and it's going to affect places because -- because it does. There's different cost delivering. Maybe that makes sense on San Francisco is not going to make quite as much sense in Alabama, but it will carry through. So there's a lot of this that's just going on that's pure inflationary driven by legislation, and we're going to deal with it. We have initiatives all the time, which what I call productivity-enhancing initiatives, which is an attempt to get process to accomplish a task instead of a human. And we have made huge gains on that, but not enough to totally outweigh increased personnel costs. So we're still chasing it in my segment.
We're in the midst of a big revamp will probably take 3 years on our whole point-of-sale orientation, the net effect will be to customers do more self-service basically. We get a lot of self-service we've quoted to you before. I think a new press release recently, we've done more than 5 million, we'll be called 24/7 truck rent where the customer is self-dispatched and self return. Where, before it would have been somebody on our payroll or all of our dealers because it affects them equally. I would have had to accomplish that. The customer accomplishes that. That's a net savings for everyone, so long as the customer is good to go on it, everybody says f***.
We're focused on this. I keep thinking that we're -- we've gotten everything we can and then I find something else we're doing. It's kind of ignorant if you put it under -- a company's -- we can quit doing this or we can change how we do this and stabilize the personnel input without increasing a technology and put a greater amount than we reduce the personnel. So that's going on all the time. But we've been chasing it. We haven't been looking at it.
Okay. So -- but the cost base, where it is, Joe, you're not thinking this is way out of line and we need to take action yet. Those are just the ongoing pressures.
Yes. So you're talking to what we want to decimate the ranks. There's no reason to decimate the range. You will lose business if you decimate the ranks. Can I -- we run our own call center. Can we tune that up? Oh how we've tuned it up a bunch over the last 12 months? In the ratio of people to calls, to reservations. We've tuned it up a bunch, and we're going -- we are continuing to do that, and I expect to see double-digit increases in our productivity in that area alone this year.
But at the end of the day, it's really a vehicle. You really do have to clean when it comes back, you're really -- now we've got customers parking vehicles and a lot of them are damn happy to do that, okay? We tell them exactly where to put it electronically, and they put it to. So we had 0 of that business 5 years ago. Today, we have a considerable amount of that business.
Every time I get a customer to do that, they experienced no waiting in line and our personnel experienced less physical work. So we're very, very focused on that. But again, on balance chasing and not leading. And I would wish I could report we're ahead of it. It hasn't happened, but we're hard on it. And I would say compared to our peer group, we're at or ahead, I think, both in the self-storage and the self-move industry on this. We do a tremendous amount of customer self-move ins and outs and self-storage. Now we don't call that contactless or unmanned, but it's a version of that. Every time you get the customer who to do something, if the customer considers it in their best interest. Well, we get all benefit. And so we are in the do-it-yourself businesses, both our self-storage and our self-moves, the do-it-yourself. So most of our customers are willing to balance out. They do a little bit of effort and we reciprocate. Some [ men ] with them, they call that a fair trade.
Yes. That makes sense. And then just -- I know I've asked this before. So household formation. Home existing home sales obviously all weak. But what you're saying the data continues to indicate is your all transactions are more tied to the consumer and just economic general economic activity, consumer confidence for the housing market being a big driver here.
Yes, this is Jason. I was excited to see the last couple of reports on consumer confidence, that should, based upon what we've seen historically that, that should be a positive indicator for us. And it's not a great correlation, but it's the closest correlation we found. So I think that can hurt. And as far as in-market goes, if that opens up, it can't hurt us or it can really help us. on those fronts, I think we're looking at a couple of potential tailwinds here.
Yes. But it's not the -- you can't put your finger on so yes, it's clear that housing starts moving up and down just as a big driver to the one-way moves. That's not how it works.
We have so much noise right now coming out of COVID and the changing dynamics at work from home. It's hard to isolate any one of these variables right now. There's so many things happening.
Yes. Okay. All right. No, that's all for me. I appreciate it.
And we have our next question coming from the line of Stephen [ Pharell ] from Oppenheimer.
Good morning. You continue to see weakness in the one-way transactions. Can you comment a little on the level of transactions compared to 2019?
This is Jason. Compared to 2019, I'm not sure if we're quite back down to that level, but we're -- we've been working our way back to that. I would say, I mentioned December, we actually had a slight improvement in those. So our -- my hope is that we're hitting the trough on the transactions here. The in-town transactions are still ahead. And I would want to verify the statement before I make it. So I'll just say we're headed back towards that number. I can't verify for sure if we're back to it yet.
Okay. And you mentioned the truck pending sale, but still in the fleet. Is there a big carrying cost just to have those in the fleet while they're waiting sale?
No, I think you could just take cost of capital cost to interest, something like that, just throw it at it. No, there's not a big cost. The worst thing is the battery goes dead yet. Put it back on a battery charger, but no, they don't.
And they're not going down in value. If anything, they might be inching up in value, but I don't have enough frequency to where I'd be willing to predict that. But I could see them because new truck prices are just astronomical. And so typically, that kind of rough way flows through to used truck prices. So there's no absolute certainty. It doesn't cost us more to ensure that we're self-insured essentially. So unless we have an insurance event, if the trucks parked, it doesn't have an insurance event. You're basically looking at depreciation or -- and I think the depreciation is not a real cost. I think the value of them is flat or increasing, then you have whatever capital is tied up and whatever Jason wants to put on that for a cost.
Okay. That's good. And with the number of vehicles in the fleet growing, and you talked a little bit about this earlier, but is there an opportunity to sort of switch over one-way vehicles that are older to the in-town and local while the one-way transactions are down? Or do you still need their availability?
We're doing exactly that.
And for the older vehicles, returns are more a function of lower utilization because they're undergoing repair and maintenance or higher costs?
You're asking which vehicle is more profitable, a new one or an old one, I guess, is that question is?
Well, no, more specifically for the older vehicles. Are there returns more impacted by the downtime while they're being repaired or the higher cost of the repair.
Any individual truck that will dry. But as we model them out, our expectation and experience has shown that the increase in the -- increase in the maintenance costs, the decrease in the utilization, which takes into account the days out of the fleet for repair is largely offset by the significant decrease in the depreciation expense that we allocate towards them.
So we depreciate these trucks down to 20% by the end of year 7, or 30%. And then after that, we straight-line them down to 15% over like the next 8 years. So there's a low cost of depreciation there. And as a rich cohort that largely ends up offsetting the increased cost and lower utilization.
And to put a button on the question, I just checked, Stephen, and on trailing 12-month one-way transaction through December, we're still ahead of where we were in December 2020. So it hasn't pulled back as much as I have made it sound. We're still ways ahead.
And just one question on self-storage. What percentage of new supply for the non-same-stores, is new supply versus expansion and struggling stores there?
That's a good question. I don't -- I haven't broken them out that way, but that's a really good question. I could age that portfolio and see ones that have been in there. If they've been in there more than 4 years and haven't hit -- haven't hit the stabilized pool, then that would fall into that category of a lagging performer. I did not do that breakout this quarter.
There are no further questions at this time. I'd now like to turn the call back over to management for final closing comments.
Well, thanks, everyone, for the support. We look forward to speaking with you after we file our 10-K in May. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes your conference call today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.