Prepared remarks
Hello, and welcome to the U-Haul Holding Company Fourth Quarter Fiscal Year End 2024 Investor Call. Please note that this call is being recorded, and I'll be standing by should anyone need assistance. I would now like to turn the conference over to Sebastien Reyes. Please begin.
Good morning. And thank you for joining us today. Welcome to the U-Haul Holding Company fourth quarter fiscal 2024 year end investor call. Before we begin, I'd like to remind everyone that certain 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 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. I'll now turn the call over to Joe Shoen, Chairman of U-Haul Holding Company.
Good morning. Thanks for joining the call today. The huge price increases that Ford and GM implemented over the last three years are manifesting themselves in less gain on sale. There's abundant product in the resale market, and resale pricing increases have so far failed to parallel new vehicle pricing increases. How this will go into the fall is still a guess. Positively, repair costs have come down and have the potential to decline further as we mitigate vehicle depreciation expense or vehicle repair expense. Ordinarily, this is a positive trade-off. Recent consumer confidence reports indicate some chance for an upturn in miles traveled per rental. So far, consumers remain cautious in our experience. Personnel costs are up due to a combination of government wage mandates and inflation. Our best way to combat this is through increased productivity, primarily at the retail level, through better IT and any product improvements we can achieve.
We continue to expand our footprint in self-storage. We are still filling rooms but at a slower rate than we are adding them. We have the broadest footprint in the self-storage business, yet there are still many markets where I believe it is smart for us to expand. Both moving and storage are need-based businesses. We, of course, aim to be the customer's best choice. I encourage you to patronize our products and services and encourage your friends to do the same. I look forward to talking to you in the Q&A section.
Thanks, Joe. Yesterday, we reported a fourth quarter loss of $863,000 compared to earnings of $37.4 million for the same quarter last year. For the full fiscal year 2024, we reported earnings of $628.7 million compared to $924.5 million for fiscal 2023. The most significant factors leading to the quarterly decline center around the continuing decline in gains on the disposal of retired equipment and increases in depreciation costs from both the fleet and real estate. To highlight this, if you look at our quarterly operating cash flow or income statement proxy EBITDA, you'll see that we actually had a slight improvement for the quarter. I'm going to start off with equipment rental revenue results. Compared to the fourth quarter of last year, we had a $10 million decrease or 1%. March was the first time in 19 months that we experienced a year-over-year improvement in equipment rental revenue.
Looking at combined April and May, we’re seeing revenue results flatten out compared to last year. To put this fourth quarter into context, we're $200 million better than we were in the fourth quarter four years ago. That translates into an average compounded annual growth rate of a little above 8% for the four-year period. Average miles per transaction continued to decrease but less than the previous nine-month rate. For the year, total truck transactions were down 3%, while the fourth quarter was down 1%. Revenue per mile was positive for the quarter and for the 12 months. Capital expenditures for new rental equipment for fiscal 2024 were $1,619 million, which is a $320 million increase compared to last year. Our initial fiscal 2025 projection is for about a $100 million increase in this number. Proceeds from the sale of retired rental equipment increased by $40 million to a total of $728 million in fiscal ’24.
The increase in proceeds is coming from additional truck sales. Average sales price per unit has been steadily declining. As we've both mentioned, a large component of the decrease in earnings for the quarter stems from a $32 million decrease in gains from the disposal of equipment compared to the fourth quarter of last year. As we previously commented, we'd expect these gains to continue to recede over the course of the next 12 months. We've made progress on our backlog of rotating new trucks into the fleet, and our estimate for fiscal 2025 projects further progress on getting us back to where we need to be on the fleet side. We've increased the number of trucks sold by nearly 20% compared to the year before. At the end of this year, we reported 188,700 trucks in the fleet, which is down about 3,500 from March 31, 2023. Now if you compare that to March 2020, we still have over 12,000 more trucks in the fleet today than we did four years ago.
For self-storage, revenues were up $17.5 million or 9% for the quarter and a little over $86.5 million or 12% for the full 12 months. The quarterly increase was a combination of a 6% increase in the number of units rented combined with about a 2.5% increase in revenue per occupied square foot. The year-over-year improvement in revenue per foot has been coming down as we've progressed through the year. Our total portfolio, with all of our locations combined, the occupancy ratio decreased by 140 basis points to just under 80%. That's largely due to the addition of 55,000 new units that we've constructed, while we increased the number of occupied units by 31,000. If you narrow this group down to the same store pool, we saw a 190 basis point decrease in occupancy to 92.3%. During fiscal 2024, we invested $1,258 million in real estate acquisitions along with self-storage and U-Box warehouse development, that's down $83 million from the year before.
Spending on the acquisition of new properties has declined, while investment in the development of these properties has increased. During the quarter, we added 2,424,000 new net rentable square feet, which brought our 12-month figure to 5,475,000 new square feet. Our pipeline of active and pending projects remains robust at 7.8 million and 9.2 million square feet respectively. Operating expenses at moving and storage were up $10 million for the fourth quarter and $100 million for the fiscal year. We've now had our second consecutive quarter of fleet repair and maintenance improvement with a decline of $11 million. Now the year was still up $33 million, but I would expect to see these costs continue to move down over the course of fiscal 2025. As we've been able to rotate in new trucks and begin to remove the oldest ones from the fleet, this has been positive for repair and maintenance. I mentioned in the press release the $9 million quarterly increase in personnel for the quarter and $50 million for the year.
We've also seen our liability costs increase $14 million in the fourth quarter as we had some negative development on accident claims this last year. Property costs including utilities, building maintenance, and property taxes were up $5 million for the quarter and $26 million for the year. We are filing our 10-K later today and that will be available both on the SEC website and on our investor website. This is our first financial statement audit with Deloitte, so you will see some slight changes in our presentation. Sebastien and I are always available if you have any questions about this. With that, I would like to hand the call back to our operator, Gian, to begin the question and answer portion of the call.
Questions and answers
And we'll take our first question today from Keegan Carl with Wolfe Research.
Maybe just starting on the fleet CapEx, because we ended on that. I guess what I'm just trying to understand is obviously we can expect more improvement as you refresh the fleet, but at the same time, we'd expect at some point the utilization also improves over time. So could you help us just understand sort of the puts and takes there on how an increase in utilization may offset some of the CapEx improvements?
You're essentially right; that's the aim: to keep increasing utilization. From my experience, utilization often improves in small increments, which is the most we can realistically achieve. However, our strategy does involve a conflict—while we strive for wider distribution, that can negatively impact utilization. As you might expect, our stores generally outperform dealers significantly in terms of utilization, yet we will maintain our dealer program and aim to expand it in the coming year. With a slight decrease in maintenance, there’s a corresponding rise in uptime, making our vehicles more available for rentals. Over the last 90 days, we've managed to keep the number of vehicles out of service quite stable. When a vehicle is scheduled for specific maintenance, we remove it from the rental list, and we've improved our control over this compared to last year, mainly through refreshing our fleet, which you mentioned.
In my prepared remarks, I highlighted that we currently have over 12,000 more trucks than we did before COVID, primarily because we have been retaining trucks longer than necessary. At the beginning of last year, our backlog for truck rotation was nearly a year, but we managed to reduce that by about two-thirds over the past year. This has allowed us to remove more units from our fleet. The number of trucks we hold is a key factor in this situation. Joe talked about utilization, which can be expressed in decimal points that are significant to us. As we remove older trucks, we expect utilization to improve or at least create the chance for improvement. I wouldn't be surprised if our total fleet size remains roughly the same, or possibly a few thousand trucks less, by the end of next year.
I would like to shift the focus a bit. The commentary in the press release suggests that current performance is still below our expectations. Can you help clarify how we should view this as we enter the peak leasing season, particularly regarding the percentage of your moves that are typically one-way? Additionally, any specific commentary about one-way moves in April and May would be very helpful.
I'll start off with some of the figures. Over the last 10 years, we've seen about 55% of our revenue coming from in-town moves and 45% from one-way moves. Going back over 15 years, it was closer to a 50/50 split. The differences in transactions have been more pronounced. During COVID, that split narrowed a couple of percentage points, with the number of one-way moves increasing several percentage points. The transaction distribution remained relatively stable, with longer moves allowing us to charge a bit more per mile. I’ll hand it over to Joe for any further insights.
When I said I think the consumer's still pretty conservative, that really results in fewer miles per rental. People still move because moving is a necessity and it's based on factors like marriage, birth, or death; these things tend to smooth out over time without a lot of peaks and valleys, steadily increasing over time. But how far people move and therefore, how large the dollar amount of the transaction depends on how they feel about life. For instance, saying, 'I’m going to go on my big adventure, move to San Diego, and start anew career.' That would be great for us. But when they get more conservative, they say, 'I’m going to move to another house in the neighborhood to keep my kids in the same school, keep my present job.' So that shortens the move. To a large extent, we have to recover costs based on mileage incurred, because our costs vary significantly with mileage incurred. So I don't see a significant shift. I thought we would pick up a little quicker than we have, and I'm still expecting we'll see this shift. We're not running behind last year, but I think we’re slightly behind historical trends, or at least how I anticipated they would play out. The housing turmoil or whatever it's called has some modest effect on this. However, I believe how people feel about the economy significantly impacts their life situation more than commercial real estate sales.
Let’s shift gears to storage. I thought the commentary in the press release regarding competitive pricing really stood out. I'm curious in two ways: What's changed in the past few months to cause you specifically to put that in the press release? And how has this affected your decisions around your street rates?
We have a different rate strategy than most of our larger competitors claim to pursue. The only way you really know rates is to diligently go out and make calls. It's not sufficient just to survey the internet. All our competitors have some form of a demand pricing model where when they believe demand is up, they significantly increase prices. When demand is down, they drop prices. We don't pursue that demand model; we're one of the few companies that posts room prices in our stores. In contrast, if you were to go to our competitor, it would not be unusual for the next customer in line to be quoted a rate that could be 20% to 40% different from the person right ahead of them. We have not adopted this strategy, and I think what we've done has proven to be reasonable, given our ability to maintain modest rate increases over the past 18 months. There's a lot of factors that go into this, and whether our competitors will follow the demand pricing model, which would suggest increasing prices as demand rises in the summer, I can't control any of that, and I have no insight except for monitoring pricing.
In my experience, price fluctuation confuses customers. They don't know if they're getting a good deal or a bad deal. We maintain a steadier approach to pricing. If we offer a discount, it's a real discount. It's not the case that we inflate the rate and then discount; rather, what you see in department stores where they inflate the cost and then provide a discount while making you believe you're getting a sale. I don't subscribe to that practice. Competitors believe that this drives revenue per square foot for them; however, it’s difficult for me to honestly assess that. But it does confuse customers if they see a competitor's pricing fluctuate dramatically from February to summertime. We actively deal with this, and my confidence that they will increase their rates at the beginning of the demand season is wavering. In short, if they successfully reduced prices when demand was low, I can't predict whether they will increase rates now as demand picks up.
On that note, are you seeing any change in your average length of stay, given what appears to be some macro concerns? Are you seeing any difference in how your customers are reacting to the rate increases you're sending out?
The ongoing discussions regarding rate increases are constant. As for changes in the macro environment, the whole storage business is certainly more competitive than it was 36 months ago, and maybe even a bit tougher than last summer. Are there changes related to consumer sentiment? The mindset that storage is scarce is no longer present. Consequently, customers are now asking us about the value. We have a long-standing tradition with customers of being a value pricing operation. We tend to accomplish this without offering significant discounts. This presents a challenge; my competitors are all quite aware of this, and they are all intelligent professionals attempting to implement what they believe is smart strategies.
Just to get to your question about average stay, I just looked at the year-end numbers compared to last year. In a couple of the buckets, there may have been a 1% change from what it looked like last year. Otherwise, we’re not seeing anything dramatic on that front.
Lastly, on supply in general. What are your views on the supply outlook in the space, and how should we consider your deliveries in the next 12 months impacting that?
You're talking about motor vehicle storage?
No, on self-storage.
Well, we're probably going to bring to market more rooms than we fill; that would be my guess. Of course, I'm trying to fill these rooms. I've placed pressure on everyone to fill rooms. They know that. All these new constructions we're doing, depending on location, is a 24-month process, and it could be 36 months in constrained areas like California or New York, but that's not something I'm going to simply turn off. I see the storage market as generally positive. As indicated in my remarks, I believe there is a smart path forward for us to expand. We will rent net more rooms as we grow in these markets. Thus, I will keep pursuing that trend, notwithstanding higher interest rates. Jason is encouraging me to be cautious as funding becomes costlier.
Our next question comes from Steven Ralston with Zacks.
I looked at your top line when it was reported, and it precisely met my estimate. Since I'm the only estimate out there, the top line was right on target. I was using your statement from a couple of quarters ago saying that you saw the company returning to the historic growth rate, excluding pandemic gains, and adding to that with quarter-to-quarter trends and seasonality, the top line looked good. From your tone, however, it seems like that's changing. What are you seeing going forward into fiscal 2025 where I should adjust that premise, if I should?
I’m focused specifically on truck rental, and I know truck rental pretty well. I think we're going to post increases, not decreases in the coming year. I believe that's appropriate; it's not a trick; I just see more opportunities out there, and we need to engage with customers. In self-storage, we will see growth in total rooms rented, but probably a slight decline in occupied square foot as a percentage of all square feet. Regarding rate and self-storage, we will attempt to maintain prices at least steady; we’re hoping for a small increase. In truck rental specifically, we are currently seeing a minor uptick in revenue per mile, and I believe with caution, we may be able to replicate that this year. These increases may just be a few additional cents per mile, but they add up. I would project that both truck rental and self-storage will experience a net gain a year from now, compared to the challenges we faced recently.
Profitability is slightly more uncertain due to the significant increases in entry-level personnel expenses mandated by the government. Ultimately, they are under immense inflationary pressure to earn more. In California, depending on whom you ask, they have everyone making $20 to $25 an hour, especially in healthcare and food service. They did not exempt U-Haul. This is going to push up wages. Therefore, we must drive productivity, which has its own risks. We have programs in place, but IT investments tend to take longer than expected. While I'm definitely positive about customer self-dispatch and return, increasing productivity remains a challenge. How far we can push it remains to be seen, but this business typically operates on a do-it-yourself basis, and if we can get it right, customers are eager to handle things on their own.
You mentioned depreciation, which is expected and has been a cycle for you for as long as you've been in existence. The personnel costs you've just addressed are influenced by productivity enhancements with IT and the liability insurance pricing. The way I view U-Haul is that those things are not true drivers of the company. Are there any other costs that concern you?
It's the diminished gains on sale. In other words, our gains on sale are currently down. The future outlook is uncertain. Over the last 24 months, automakers have introduced substantial price increases, often upwards of 50%. They have managed to secure these prices at retail, which has subsequently impacted resale prices. However, resale prices have not increased as much as original costs. How this will unfold is a challenge. For the last two years, manufacturers have pushed nearly their entire cost burden onto fleet customers like us, and we have been shouldering the expense of electrification initiatives without benefitting ourselves. A recent study from Ryder indicated potential increases in cost when switching to electrification, conservatively projected at 50% and realistic driven upwards of 100%. It seems this trend could be pressuring inflation by at least 50 basis points nationwide. This is undeniably impacting all sectors of transportation. The core issue roots back to the increasing requirements of electrification, where no cost-effective alternatives are currently in sight while funding is being heavily allocated.
Lastly, you mentioned you're using Deloitte now, which is why I noticed a new line item labeled 'other interest income.' Is that the interest on your cash balance? Could you verify that and clarify where it was previously?
We've historically had a line called net investment income due to our two insurance companies, where their interest income is recorded. Interest income from moving and storage cash balances has been minimal, so it was included in that line. However, as we've maintained higher cash balances alongside rising short-term rates, this figure has increased significantly. As a result, we've decided that interest income should not be included in our operational metrics. This year, we've reclassified it below what you would consider operating earnings. This means that additional effort will be required to ensure accurate comparisons. The other interest income, as you suspected, comes from moving and storage interest generated from our short-term investments, which mainly include government money market funds and some short-term treasuries.
I've used U-Haul products and services multiple times over the last two years, and I've observed productivity enhancements. Most actions are now performed via mobile phone, reducing the required employee interactions. You simply pick up your truck or call for the U-Box to have it delivered, and everything works seamlessly. Your employees have been very accommodating.
Thank you. We're working hard on that. Long term, it's crucial for us to stay ahead of the competition, and we are putting every effort into that.
Our next question comes from David Silver with CL King.
Just a couple of questions requiring some clarification. As you look to fiscal ’25 with your projected capital spending, could you point us qualitatively where you think capital spending will increase, and perhaps which buckets may see a decline? From your perspective, where is capital most needed or less needed compared to the previous couple of years?
I'll start off, and then let Joe clean up. Our top capex priority is typically fleet maintenance. Entering into next year, we are projecting a gross expenditure of around $1.7 billion compared to around $1.619 billion in the current year. Given the shortages we faced during the pandemic years, this is essentially all delayed maintenance capex. There isn't much growth capex included in this number; it is primarily catch-up. Our spending on real estate was reduced by about $83 million, but out of over $1.2 billion of total real estate expenditure, it's a minor amount. Of the total spent on real estate last year, approximately $925 million was dedicated to development construction while the remainder was for acquisitions. Projections for next year will reflect a similar spending strategy in the real estate category. On net fleet capex, we expect an increase from this year's approximately $880 million to closer to $1 billion. We will need to arrange $350 million to $400 million of working capital to support that. Joe?
I think you're pretty right on there, and I don't anticipate it being significantly less than that.
My last question is rather broad. In your prepared remarks, you referenced several comparisons between current conditions and those from four years ago. I’m wondering how you perceive your customer demographic has shifted from pre-pandemic to present. I'm curious about trends regarding remote work and whether this affects logistics or strategies to capitalize on that trend. Additionally, digitalization and continuously enhanced productivity linked to labor is evident. As we kick off fiscal year '25, what significant differences or features have emerged from four years ago?
I would say that we did not see the remote work phenomenon coming. It resulted in a massive influx of new customers who had never used U-Haul before. The shift is evident in customer feedback; they were unaware of many of our processes. That influx has gradually receded, although we still witness some boomerang effect, where certain customers are returning back to previous locations for work. The normalization is uncertain. Personally, I've instructed our team not to hire anyone preferring to work from home, as we lack remote work opportunities, except for telephone sales. There's a substantial awareness of the trend, but the workforce and company's preferences should normalize. Digitalization is a long-term trend, and I'm working to understand it better, given the misconceptions prevalent in the industry. Digital innovation has the potential to simplify doing business with U-Haul, which is crucial, as consumers lean towards more straightforward solutions. We are making continuous progress in reducing complexity in our processes.
Thank you for your insights. I'll follow up with more specific questions offline.
Our next question comes from Jamie Wilen with Wilen Management.
A couple of questions. First on the fleet. Did I hear you say we have 188,000 trucks in the fleet and that is near the optimal level? What's going to happen in the future is just replacing older vehicles with new ones, which means that number should remain flat moving forward?
No, if we said that, I apologize.
I believe my earlier comments might have confused the matter. Most of our capital expenditure this past year and likely into the next is maintenance-based. While we’re acquiring more trucks, we will also be selling more. This suggests the fleet size overall could decrease.
So if we expect a slight decline going forward...
It's more intricate than that. A truck that has 120,000 miles simply doesn’t have the performance of one that has 35,000 miles. The postponement of replacements for three years has resulted in too many high mileage trucks. If we compare this to the numbers from March 2020 before COVID, we still possess about 12,000 more trucks than we had four years ago. The business will inevitably expand due to population growth, which is the crux of it.
As we grow rentals over the next year or so, fleet utilization should increase by fractional percentages that are important?
That's precisely what we're aiming for.
Regarding the U-Box service, can you address the current state of that business and its profitability as you look towards 2024 and beyond into 2025?
The U-Box service has a higher proportion of one-way moves in comparison to local moves. We see a lot more moves over a hundred miles than under that threshold. This is partly due to the nature of the product and partly due to our focus. So over the coming months, we are investigating ways to provide a compelling economic proposition for shorter moves, which are logistically expensive when involving freight carriers. Common carriers become prohibitively expensive for moves around a hundred miles while they become economically viable for longer distances. Historically, our sweet spot has been these long-haul U-Box moves. However, we are attempting to tap into the shorter moves market while ensuring it remains profitable. In terms of pricing, we continue to align with common carrier rates, which, to our benefit, have decreased over the past 12 months. Hence, we are witnessing transaction growth, even if the dollar growth is modest and margins remain stable or slightly improved.
How would you evaluate your market share position within the U-Box business?
We don't have concrete numbers regarding market share. If someone does, I'd be intrigued to learn about it because we are presently unaware. Instead, we focus on our own activities and can easily identify various micro-markets where our performance either excels or doesn't. Comparing us to PODS, we have virtually no reliable market share information concerning them. They are a significant market player, and we are modestly increasing our customer satisfaction while continually seeking to penetrate this market.
As you expand your self-storage, how does the integration of U-Box storage within your locations present a competitive advantage?
I believe it gives us a competitive advantage. Currently, we're operating somewhere in the middle 600s on warehouses throughout the United States and Canada, which provides us with an incredible footprint advantage that allows us to be closer to our customers. Interestingly, many choose to store their belongings near their homes. Whether or not that preference significantly influences their choice of service is something we monitor closely. Ensuring enough available warehouse space helps us fulfill that customer expectation.
In the 600s range, does anyone know what PODS might possess?
I'm unable to provide a number, but I wouldn't attempt to make any comparisons.
Lastly, regarding self-storage, could you share your annual depreciation charge for 2024 and how it compares to 2023?
The fleet depreciation over the last 12 months was about $565 million, while for buildings, real estate, and service vehicle categories, it was $253 million.
What were these numbers compared to the prior year?
It was $520 million for the fleet and $213 million for buildings and real estate.
Our next question comes from Stephen Farrell with Oppenheimer + Close.
The last two quarters, fleet maintenance has decreased. However, going further back, I noticed fleet maintenance increased about $300 million since the end of 2021. As you rotate the fleet, how much of that increase do you expect to recoup?
I really don’t have a precise prediction, but I’m navigating through a lot of so many factors. There's always inflation in expenses relating to parts; all those costs have risen, as has labor. But a major portion of the increase was attributable to the need to keep older trucks in service longer and incurring repair costs for them rather than rotating them out of the fleet. Generally, repair expenses per mile tended to exceed depreciation rates per mile, assuming you’re past a certain mileage threshold. You’ll always incur maintenance, but the balance can become unfavorable at some point. We need to refresh the fleet to maintain balance. Let's say the total increase was $300 million; I’d estimate about $250 million of that was tied to holding onto older trucks longer than ideal. So I anticipate we can reclaim a significant part of that. However, repair part costs and labor costs present challenges in recouping that sum. Fortunately, we are positioned to reclaim a fair bit of that, but it will take a couple of years to bounce back, not just in one year.
Given your prior comments concerning personnel and various liabilities, what are your thoughts on the overall expectations regarding operating expenses?
Current elevated levels of both personnel and liability costs seem likely to persist in the near term, particularly over the next 12 to 18 months. Furthermore, inflation will be a consistent issue, with governments imposing various minimum wage mandates, especially in states like California and New York. Regulations are evolving rapidly, and the disparity in what constitutes a reasonable salary between states can be upwards of $20,000. Yet these new standards apply uniformly. We must navigate this evolving landscape and cope.
Moving to self-storage, last year you indicated a targeting plan of about a million square feet of new square footage per quarter. Given your somewhat cautious outlook for self-storage, do you anticipate that number will be lower moving forward?
I don't see a decline in that area right now. At this moment, we are pretty much committed to maintaining that growth. Once you break ground, it requires a minimum of 12 months to proceed. Additionally, projects often take about six months of planning before breaking ground, involving land acquisition and commitments, etc. Once you've committed, you must see them through completion to prevent waste, as we've all seen happen before. This typically wouldn't be a wise choice unless funding is constrained. We are carefully funded at this time and don’t foresee these kinds of issues arising over the next 18 months, as we are actively pursuing opportunities in various markets. I’m optimistic that our strategy will yield results in several areas, as storage availability varies widely across different markets.
Can you share specific geographic areas where you're observing these opportunities?
No, I won’t specify as it pertains to a closely-held group of associates. I simply don't want more competitors entering these markets alongside us, especially as I recognized that some experts can be quite perceptive. However, we strive to make the most of our large network of operations across numerous markets, including LA, which presents significant competition. But the extended completion timeline for deals and the increasing cost of entry will weigh on those calculations. We are wigging to pursue opportunities smartly and count on our extensive reach as we analyze each market's potential for success.
Thank you. We have no further questions at this time. I will now turn control of the conference back over to our presenters for any additional remarks.
Well, thank you, everyone so much for the support. As a reminder, we plan to file our 10-K later today. We look forward to speaking with you after we file our first quarter results in August. Thank you.
Thank you, everyone. This concludes today's conference. We appreciate your participation. You may disconnect at any time.