Good morning, and welcome to AMERCO's Third Quarter Fiscal 2012 Investor Call. [Operator Instructions] I would now like to hand the call over to Jennifer Flachman. You may begin.

Good morning, and thank you for joining us today, and welcome to the AMERCO Third Quarter Fiscal 2012 Investor Call. Before we begin, I would like to remind everyone that certain of the statements during this call regarding general revenues, income and general growth of our business constitute forward-looking statements contemplated under the Private Securities Litigation Reform Act of 1995, and certain factors could cause actual results to differ materially from those projected. For a brief discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to Form 10-Q for the quarter ended December 31, 2011, which is on file with the Securities and Exchange Commission. Participating in the call today will be Joe Shoen, AMERCO's Chairman. I will now turn the call over to Joe.

Thank you, and good morning. Welcome to AMERCO's third quarter investor call. I'm speaking to you from Phoenix, Arizona. I have Jason Berg here with me. Gary Horton and Rocky Wardrip are participating via the telephone. A week ago we released very disappointing news regarding the reserve increases at Republic Western. This is discouraging news in the face of what otherwise is a solid third quarter. Our various U-Haul teams across North America continue to merit the patronage of the self-moving customer. As we can best measure, our customer satisfaction is high and is trending up. Our truck fleet remains well-positioned across the United States and Canada and in good operating condition. Our trailer fleet likewise is experiencing good growth and we will be manufacturing trailers for the rental fleet going into the end of this year and into the first half of next year. The U-Box product line continues to develop. Of course like in a lot of things, the more we learn the more we find out we don't know. There are many subtleties to this business, and we are gradually mastering them. We currently offer the product at about 1,500 locations and expect to add 500 more through the spring. Our current good results were the result of countless small initiatives coming together. Additionally, this quarter we have benefited from a very mild winter. I look forward to a good finish to our fiscal year. Now I'm going to let Jason walk you through the numbers. Jason?

Thanks, Joe. Yesterday we reported third quarter earnings of $0.04 per share compared with $0.80 for the same period last year. Included in this quarter's results is $1.61 noncash charge for the reserve strengthening at our property and casualty insurance subsidiary, RepWest. I'll go into a little more detail on that adjustment here in a few moments. Taking into account this charge, adjusted earnings would've been $1.65 per share for the 3 months ended December 31, 2011. Again, that's compared to $0.80 per share for the same period last year. Excluding our insurance subsidiaries, operating earnings at our core Moving & Storage segment increased $17 million, nearly $62 million for the quarter. For the 9 months, we've generated a $62 million increase in operating earnings or approximately 19% at the Moving & Storage segment. eMove revenues in the third quarter of fiscal 2012 increased almost $33 million or about 10%. Transactions continue to increase for both our in-town and one-way Truck Rental business. In the quarter, we saw about an 8% increase in total transactions, and for the 9 months we're up just over 6%. The average number of trucks in the fleet continues to be greater this year versus the same period last year by about 3%. It's worthwhile to note that this marks the ninth consecutive quarter of U-Move revenue growth for us. Initial indications from January, so the U-Move revenue results are continuing to trend positively compared to last year. For the first 9 months of this year, capital expenditures on new rental trucks and trailers increased nearly $74 million to about $335 million compared to the same time last year. Proceeds from the sale of retired equipment were $138 million. Our projections for rental equipment, growth capital expenditures in fiscal 2012 are likely to be near…

Thanks Jason. We'll go to the moderator now and accept questions from anybody who'd like to offer us one.

[Operator Instructions] Your first question comes from the line of Kyle Shawn with CL King & Associates.

This is Galji Luptash [ph] with CL King & Associates for Jim Barrett. My question is how has your pricing been? Could you comment on that, please?

Sure, this is Joe speaking to it. As you may be aware, we've spent considerable effort rolling out an entire new pricing matrix about 4.5 years ago. It took us 2 or 3 years to really master the implementation of it. And now we have a pricing system that allows us to discriminate almost endlessly, and it better matches our approach to the market because we, unlike most of our competitors, we service the entire North American population -- every small town in Canada and the United States. And so we need to be able to do very, very discriminating things with pricing, which we're now able to do. So I think that while industry pricing is sluggish, when you get down to point-to-point pricing, we're able to and have seen opportunities in specific origin/destination combinations that are unique to U-Haul. So in other words, from a very small town in Alberta to some very small town in North Dakota, we're able to price right to that rather than in a more generalized function. And I think that really helped our situation, but I think that's probably a company phenomenon, not an industry phenomenon.

Okay. And in terms of your average life of your trucks and the trends on used truck prices, could you comment on that, please?

Ask that one more time, could you?

In terms of the trends in the used truck prices and the average life of your truck prices?

Sure. New truck prices are going to continue to inflate because vehicle manufacturers are under constant pressure to add features to new equipment. And from a macro point of view, used truck prices are always going to kind of trend the way new truck prices are, which is up. Of course right now, the economy is seeing a little bit of an upswing and so truck prices are a lot firmer than they were 3 years ago. So there's kind of a macro, and then at the very specific term is just right now, used truck pricing is pretty decent.

Okay. Could you provide me a little color on the U-Box part of your business?

Sure. Our strategy is just to offer the product comprehensively, not just in major metros. So that gives us a different strategy than any other entrant I'm familiar with in the business. And we see lots of anecdotal information that the customer very much would like this product. The question is how to provide it at a quality level that the customer considers acceptable, and at the same time make a profit to us. So at this time I could say with no doubt we're not making any money, but I also would say that we're pretty much expensing our costs in a responsible manner. So we're not building a big, bow wave of unamortized cost ahead of us. We're feeding them as we go. So I think it's going to be a success, it's just a question of when. I thought we'd be successful by now and I could announce that to you all, but we're not there yet. But we're definitely headed in that direction in my judgment.

Will the CapEx increase going forward on the U-Box business?

It's kind of getting buried a little bit in some of the real estate and in some of the equipment. It's not going to be a great big chunk, no. But for instance, if today I was to buy a new facility in the Albany area or build a new facility, I'd put an accommodation for U-Box there whether that'd be -- it would be a $200,000 to $500,000 accommodation would be a pretty good guess. So that'd be on a project that otherwise would maybe be a $3 million project or $2 million. So it might bump a new real estate project as much as 10%, but it's not going to be, in my judgment, at least, you're not going to see something -- a $50 million bump or something of that nature, no.

Okay. And in terms of a general macro trend, they've reduced mobility in society, how do you reconcile that with your revenue growth?

Well, we're just trying to do a better job. And we have a 65-year history with people and a lot of people give us a chance at their business because they've been served acceptably in the past. And as I mentioned, our customer satisfaction index, which is part of the measure, but as near as I measure it is up. And I think that the principle of a free economy is you go to the highest-value, least-cost provider, and we're attempting to do both. It doesn't always work out for us. But right now, we're getting a pretty good matchup with the customer being both the highest-value and lowest-cost provider.

[Operator Instructions] Your next question comes from the line of Ross Haberman with Haberman Management.

I just had 2 quick questions. The $406 million of cash, was that at the holding company or was that including the cash at the insurance companies as well?

Well, Rocky or Gary, you want to answer that?

Actually, Ross, it's kind of split between the parent and U-Haul International, but that's all held outside of the insurance companies.

Okay, the $406 million. Okay. And I think I might have missed it, did you say how much you're spending on new trucks for the coming calendar year?

No, we didn't. And what we do is we kind of commit about 90 days at a time. And so I think our truck expenditures will be equal to or maybe up a little bit. How exactly it flows into the financial statement, of course, depends on our split between lease and buys. So I mean, do you have a projection, Jason?

Yes, Ross, to wrap up the year, our projection for the 12 months was growth CapEx of about $480 million with expected sales around $165 million, so our net CapEx should be about $350 million for this year that's compared to about $209 million net CapEx in fiscal '11. And then for the fourth, I don't have a projection yet for fiscal '13, but how that would flow through the fourth quarter would be net CapEx of about $118 million in the fourth quarter compared to $95 million last year.

Got it, okay. And just pricing for used trucks, up, down or about the same?

Well, we're in a wide spectrum as I think you know, Ross, everything from year-old pickups and vans to possibly as old as a 15-year old, 6-wheel truck. So there's not any one statement. But pricing is firming up and it's not -- there's no indication that it's going to fall off the edge of the earth. And if you just look at what the new vehicle manufacturers are having to do, they're having to add more content and more value and so prices of new goes up and to a certain extent over a period of time, used prices just simply follow the trend of new. And new is going up, it's just whether it's the new field economy standards that are being put through. They're going to raise the price of new vehicles. Now, that's good for used vehicle sales but we're buying new all the time, too, so not so good news for new. So they kind of are proceeding in tandem. We try real hard not to have ourselves in a position where if sales go to hell for a 180-day period or something, that we're all of a sudden caught in some kind of a bind, you understand? So we're constantly trying to manage our position so that because it's a key economic factor managing these whole businesses, can you take out the bottom what you've put in the top. And I have the same team in place I had all last year and the year before, I don't have a new team or an inexperienced team. And they're managing this, I think, as well as we ever have in the last 30 years. But we're subject to -- if there's some big macroeconomic thing that happens and it beats down prices of used vehicles, we just simply will stop buying new and let them all age out another year. You see, we're not necessarily in a spot where everything has to flip every time. Now of course, on the other hand when you can flip them, let's keep them flipping. So we're busy selling trucks right now.

Just one final question then. I know it's sort of a hypothetical. How many years out are we away for you to convert over your fleet to natural gas like we're hearing from other, I guess, maybe not moving but other fleets of...

Give or take 50 years. What you want is a baloney answer. I'll say we're very active at this. We have a strong sustainability initiative and we're going to do everything we can to ensure a good life for my children and grandchildren, which I have plenty of.

But you're saying it's a number of years away?

Well yes, sure. You just go log on to any manufacturer's website and see what they're selling.

Right.

Now if the government mandates this, this will be an economic catastrophe and lower the standard of living of most Americans and we'll offer that truck. But in the meantime, that truck is not likely to happen. There's no infrastructure to fuel that truck. There's no mechanics knowledgeable in maintaining that truck. And pilot programs, which of course we engage in various pilot programs at all times, pilot programs are just that, they are pilot programs. And every one we do costs us money. It doesn't make us money. Now, that doesn't mean we -- we're socially conscious, we've got the idea and we're clearly doing that. But I can impact carbon footprint to this company by a factor of 10 or 20 by other clearly known means than going to an oil fuel right now. Now when the oil fuel becomes reasonable, we're going to be all over it.

Again, I just mentioned it because I'm hearing from other types of other non-moving fleets that they're moving toward that within a year or 2?

I don't want to be discouraging, but I don't want to fool you, either. Of course, whatever works for the environment, we're going to do. But right now, we have ways, we know, we demonstrate. I have a PhDin sustainability on the payroll full time. I don't take a casual attitude towards it, but I have real grandchildren, I want to breath the real air not baloney, you understand? And so a baloney program, I'm not for. A program that gives clean air to my grandchildren, I'm very, very much in support of and we're very aggressive on that. So total carbon footprint, we're reducing not increasing. But it's not through at this time. It's not through oil fuels. Oil fuels is still a tentative thing, and even if the manufacturer, you see the fiasco for the GM company with their recent electric vehicle, I have no reason to believe they're anything other than totally sincere and I know they're competent, hardworking people, and they've got themselves an economic mess on their hands. So, we're monitoring it. We're aware of it, but it's still beyond the reach of anybody I've met.

[Operator Instructions] At this time, there are no further questions. I would like to turn the call back over to management for closing remarks.

Well, thank you again for your support over the prior 90 days, over the prior year and over the prior 5 years. As you've heard me say before, the business cycle at U-Haul isn't one year, which is good news because present trends will probably continue for a little while, but it also means the thing doesn't turn on a dime. The results you see today are the results of actions we took 2, 3, 4, 5 years ago. My thanks, and look forward to talking to you again at our next earnings call.

Thank you. This concludes today's conference. You may now disconnect.