Related Party Transactions

3 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

Related Party Transactions

11. Related Party Transactions

U-Haul Holding Company has engaged in related party transactions and has continuing related party interests with certain major stockholders, directors and officers of the consolidated group as disclosed below.

SAC Holding Corporation and SAC Holding II Corporation (collectively, “SAC Holdings”) were established in order to acquire and develop self-storage properties. These properties are being managed by us pursuant to management agreements. SAC Holdings, Four SAC Self-Storage Corporation, Five SAC Self-Storage Corporation, Galaxy Investments, L.P. and 2015 SAC-Self-Storage, LLC are substantially controlled by Blackwater Investments, Inc. (“Blackwater”). Blackwater is wholly owned by Willow Grove Holdings LP, which is owned by Mark V. Shoen (a significant stockholder), and various trusts associated with Edward J. Shoen (our Chairman of the Board, President and a significant stockholder) and Mark V. Shoen.

Related Party Revenue

	Quarter ended June 30,
	2024		2023
	(Unaudited)
	(In thousands)
U-Haul management fee revenue from Blackwater	$	7,715	$	7,696
U-Haul management fee revenue from Mercury		1,780		1,481
	$	9,495	$	9,177

We currently manage the self-storage properties owned or leased by Blackwater and Mercury Partners, L.P. (“Mercury”), pursuant to a standard form of management agreement, under which we receive a management fee of between 4% and 10% of the gross receipts plus reimbursement for certain expenses. We received management fees, exclusive of reimbursed expenses, of $9.3 million and $8.2 million from the above-mentioned entities during the first three months of fiscal 2025 and 2024, respectively. This management fee is consistent with the fee received for other properties we previously managed for third parties. Mark V. Shoen controls the general partner of Mercury. The limited partner interests of Mercury are owned indirectly by James P. Shoen and various trusts benefiting Edward J. Shoen and James P. Shoen or their descendants.

During the fourth quarter of fiscal 2024, Mercury exercised its option to purchase 78 U-Haul branded self-storage locations from W.P. Carey. The self-storage component of these properties was previously leased by Mercury from W.P. Carey and managed by U-Haul, while the non-self-storage portions of these properties were leased by U-Haul. Post acquisition, Mercury now owns all of these properties and U-Haul acts as property manager.

There were several changes recognized in the first quarter of fiscal 2025 and will continue to be going forward as a result of this transaction. Retail sales revenues along with the associated cost of goods sold previously recognized by U-Haul will now be with Mercury. U-Move and U-Box related revenue will remain unchanged; however, Mercury will earn standard commissions for the transactions at these locations. Management fees earned by U-Haul will increase as a result of the increased revenues attributable to Mercury and certain operating expenses at these locations that were formerly the responsibility of U-Haul will now be reimbursed by Mercury. The net effect of all of these changes is not expected to result in a material change to operating earnings.

Related Party Costs and Expenses

	Quarter ended June 30,
	2024		2023
	(Unaudited)
	(In thousands)
U-Haul lease expenses to Blackwater	$	604	$	604
U-Haul printing expenses to Blackwater		1,103		349
U-Haul commission expenses to Blackwater		22,695		22,703
U-Haul lease expenses to Mercury		38		—
U-Haul commission expenses to Mercury		6,128		—
	$	30,568	$	23,656

We lease space for marketing company offices, vehicle repair shops and hitch installation centers from subsidiaries of Blackwater and Mercury. The terms of the leases are similar to the terms of leases for other properties owned by unrelated parties that are leased to us.

SAC Holdings provides ancillary and specialty printing services to us. The financial and other terms of the transactions are substantially identical to the terms of additional specialty printing vendors.

As of June 30, 2024, subsidiaries of Blackwater and Mercury acted as independent dealers. The financial and other terms of the dealership contracts are substantially identical to the terms of those with our other independent dealers whereby commissions are paid by us based upon equipment rental revenues.

These agreements with subsidiaries of Blackwater and Mercury, excluding Dealer Agreements, provided revenues of $9.5 million and $7.7 million, expenses of $0.6 million and $0.6 million and we received cash flows of $8.6 million and $6.6 million, respectively, during the first three months of fiscal 2025 and 2024. Revenues were $138.9 million and $103.5 million and commission expenses were $28.8 million and $22.7 million, respectively, related to the Dealer Agreements, during the first three months of fiscal 2025 and 2024.

We determined that we do not have a variable interest pursuant to the variable interest entity model under ASC 810, Consolidation in the holding entities of Blackwater and Mercury.

Related Party Assets

	June 30,			March 31,
	2024			2024
	(Unaudited)
	(In thousands)
U-Haul receivable from Blackwater	$	33,643		$	31,950
U-Haul receivable from Mercury		39,105			24,536
Other (a)		(5,494	)		1,448
	$	67,254		$	57,934

(a)Timing differences for intercompany receivables and payable with insurance subsidiaries resulting from the three-month difference in reporting periods.