U-Haul Holding Company (UHAL) Earnings Call Transcript & Summary

Hello. This is Joe Shoen, speaking to you from Phoenix, Arizona. U-Haul was started in 1945 by my parents when my father was discharged from the Navy, and they needed to move back home. Tires, gas and metal were in short supply as World War II was coming to a close. My parents, of course, grew up in the Great Depression. Scarcity shaped how the company was run in its earliest days. We continue to operate today under a similar premise of limiting waste. Our partnership with communities reduces vehicle registration and greenhouse gas emissions. Over the years, we have pioneered starch-based packing peanuts, permeable ground cover, cardboard box reuse, moving pads made from discarded fabrics, reuse of obsolete buildings, improving the fuel economy of our equipment and a long list of other recognized sustainable and community-enhancing business practices. Today, I will speak with you about our practices around the current catch phrase of ESG, environmental, social and governance. There is currently interest in this subject. And of course, all of us have an interest in our environment, the social order and corporate governance. Here at U-Haul, we do not use the ESG term much. We communicate in terms of the primary service objective and the concept of responsible management. The primary service objective is to provide a better and better product and service to more and more people at a lower and lower cost. The circular responsibilities illustrates how responsibility, accountability and authority flows from the customer and society through the Board of Directors, management, the person at the point of sale and back to serving the customer. These have both been company policy for at least 60 years. When implemented, this should result in the creation of more values than the company consumes, call that a profit or call that sustainability or good ESG. Let me be more specific as to company operations in the ESG space. This starts with our model of equipment sharing. U-Haul is in the business of specialization of ownership and division of use, the shared use business. This concept is one of good stewardship and careful management of the resources while making these resources readily available to more people. One of the primary metrics we use to evaluate our performance at U-Haul is workload, which at its core is how many different customers shared the same equipment in a given period of time. Our competitors use days rented. Done well, our measurement enhances sustainability. There's 3 key strategies involved. First is that concept of division of use and specialization of ownership. Truck and trailer sharing gives any individual access to moving and storage options greater than that they could access on an individual basis. Second is our emphasis on convenience through our network of locations. With U-Haul, products and services are convenient, both our customers and the environment are better off. With over 23,000 locations in all 50 states and 10 Canadian provinces, we drastically reduced the distance traveled locally or one way by helping customers to drive less distance to find a rental truck and trailer and then drive less distance to return it when finished. This lowers unproductive, unloaded distance traveled and resources consumed. The third is our North American footprint. Access to mobility is nobility. Physical mobility is a driver of economic mobility. We say at U-Haul, mobility is nobility. Obviously, operating just in and between major population centers like our competitors would reduce our cost. U-Haul, however, maintains a broad North American footprint of over 2,000 company stores and 21,000 dealer locations. We service most small population nodes as part of providing our services to more people. This is key to our social responsibility. As a result, U-Haul services a broad spectrum of communities from the Arctic Circle to the Mexican border, the rough inner city, the sparsely populated prairies as well as the obviously more affluent suburbs. This outreach necessarily entails serving all the various elements of society, all ethnic, economic and religious elements. Gender and other distinction is not related to our business simply disappear. We must communicate in French, Spanish and English. Our rental products must be usable to customers of many different physical capabilities. This then is our business model, not an ESG mandate. The next is our equipment design and the life of our equipment. We have long asked ourselves, how can we give the customer a better break. The answer is the distillation of social responsibility and governance. For decades, we have designed our trucks to be low profile, have rounded corners and chassis skirts to reduce wind drag and improve fuel economy by up to 20%. Since the 1973 Arab oil embargo, U-Haul has installed fuel economy gauges in its trucks. Most recently, we worked with Ford to install an information display that defaults to fuel economy information for the customer. We install our own fuel economy in GM trucks. Even though we don't buy the fuel, we have long understood this is better for customers and communities and increases our likelihood of winning repeat business. We remain the only company to offer short-term rental of automobile utility trailers on a continent-wide basis. Trailers, of course, were the start of it all. They remain the single most environmentally sound and cost-effective way to increase the utility value of a passenger car or SUV. This is as true with an electric or an internal combustion engine-powered vehicle. A rental trailer turns any car into the equivalent of a pickup at a fraction of the consumption. Our aerodynamic design helps optimize the fuel economy of the towing vehicle. Trailers, of course, do not emit CO2 or other greenhouse gases. Long life allows us to price very affordably. U-Haul rental trucks typically serve the U-Haul customer for 7 to 12 years, going from a very intense to a less intense use over that time frame. Other companies would use 2 or 3 vehicles to provide the same amount of customer service over the same time. The relative environmental impact of our strategy is significant. We repurposed many rental truck van boxes as self-storage rooms at the end of their chassis life. By building more quality and at the start, the cargo box has an economic value for 20 years or more beyond that of a truck chassis. You have heard me discuss our adaptive building reuse program many times. We have repurposed well over 1,000 buildings. None of us need a study to know its environmentally friendly to adapt an existing building for a new use when possible. Many of our U-Haul locations are equipped with energy-efficient lighting, HVAC systems and daylight, saving more than 42 million-kilowatt hours every year. Many of our locations also take part in permeable ground cover initiatives reducing storm water runoff, recharging the groundwater supply and reducing greenhouse gas emissions by limiting local heat islands and significantly reducing energy expended in water treatment. Storage reuse center, we pioneered this. We maintain a redistribution network in our self-storage locations for gently used household goods, which customers might otherwise throw away. Storage customers reuse more than 409,000 individual items from these centers every year, eliminating 14.5 million pounds of trash and the production of 2 million pounds of greenhouse gases. Our sustainable van box storage is self-storage created from retired box trucks. This reduces the need for new construction materials of concrete, wood and steel. To give you an idea, every 1,000 square feet of avoided concrete core alone eliminates at least 17.3 tons of carbon emissions. Take a Box, Leave a Box is a program that encourages customers to leave no longer needed cardboard boxes for other customers to reuse. Nearly 1 million boxes are used each year. U-Haul builds its boxes sturdy enough to be reused again and again. At the same time, our corrugated carbon boxes contain up to 90% post-consumer content. Biodegradable packing peanuts are made primarily of corn and potato starch. Our packing peanuts are nontoxic, will dissolve in water and biodegrade. They are an eco-friendly alternative to styrofoam. And we also rent plastic ready-to-go boxes that can be shared hundreds of times before being recycled. Our eco-friendly moving pads are made from 75% recycled content. They allow for the diversion of 1.8 million pounds of recyclable materials annually. This was formerly headed for landfills. U-Haul maintains more than 1,100 locations dispensing propane. We are the largest retail network of one of the nation's most versatile and clean-burning energy sources. We have also stepped forward with a renewable propane initiative. That is providing propane derived from renewable sources like grease residue and biomass feedstocks to deliver lower carbon options to our customers. When possible, we have priced this so our customers can benefit the environment at no additional cost to them. And finally, decision-making practice. At U-Haul, we practice the concept of subsidiarity managers down to the store level, see their results in a P&L format. All managers are encouraged to practice the law of the situation rather than blindly follow directions. The intent is to do what is right for all parties to a transaction. We maintained 5 different boards of directors for our various entities. We have had an independent governance committee at the America Board level for over 20 years. I've shared a small number of our programs, some spanning our entire 75 years. These are driven by our values, who we are, not at an aim for publicity or green washing. U-Haul has not engaged in trading environmentally questionable carbon credits or in pushing GHG responsibilities off to our suppliers or customers. We have not adopted well-intentioned but ill-conceived carbon footprint standards advocated by third parties. However, we have worked for decades on these important issues. In 2007, we hired Dr. Allan Yang, one of the first PhDs in sustainability in the United States, to help direct our environmental efforts and to discern the areas where we could have the greatest impact. Tell us a little bit about your credentials before you came to U-Haul.

I came from China originally. Okay. I came here to pursue a PhD study with a focus on sustainability and management at Arizona State University. I sort of developed my research interest on sustainability when I did my master degree study in China. That was in 1990s. So that time, as you may know, the manufacturing becoming the fastest-growing industry in China. At the same time, the environmental problem becomes a serious and serious challenge. So it's very natural to including sustainability in my master degree study on product design. That's also the reason I come to U.S. to pursue the PhD.

Yes. So you've got a master's degree in China. What subject was that in?

So that is a product design, sort of like a mechanical engineering.

So you actually know how things are built.

Yes. It is very natural because the environmental issues in China, it's very natural to try to include in the environmental consideration in the product design.

You also engage in continuing research here at U-Haul. Could you tell us a little bit about some of your studies and some of the organizations that you've cooperated with in doing this research?

Since I've been part of the U-Haul team, I've been invited to attending all the high-level advanced workshop, which is including the Harvard Business School, and another one from Stanford University School of Environmental Sciences. And with my background, of course, it's a very natural extension of my job to work collaboratively with the research institutes.

You've actually also been invited back to China to speak to Chinese organizations. Is that correct?

That is true. In 2016, I have been very proudly already invited to join a selected group of U.S. sustainability efforts coordinated by the U.S. Department of State, together with 30 U.S. mayors to attending the climate leadership summit in China.

You also have engaged in research since you've been at U-Haul, trying to validate the concepts. What are some of the institutions that you worked with in this research?

I just recently completed the study and published a paper, research paper in the proceedings of the International Conference on transportation and development. The research is a result of the partnership with National Renewable Energy Laboratory. So National Renewable Energy Laboratory is one of the world-class research institute under the U.S. Department of Energy, so together with the 6 scientists from federal government, National laboratory and Cornell University. So our focus is pretty much on how the COVID-19 pandemic affects the major moving disease in the United States. So we have 2 findings from this. We find that regardless of the pandemic, people are moving. U-Haul provides a low-cost moving resources, including our shared truck and trailers that help America overcome whatever the location-based varies. Another research, which is together with the Wayne State University. So Wayne State University in Detroit, Michigan and U-Haul has partnered to take on a comprehensive sustainable study since 2013. So the focus of the study is to determine what is the impact of U-Haul adaptive reuse projects have on the new center community in Detroit. So our findings here is besides the accountable environmental benefits such as avoided construction mature waste and actual energy consumption, the project generated positive social impact to the community, such as reduced unwanted light, increased local small business and job opportunity, reduce criminal activity in the surrounding areas.

You also have made a finding that when U-Haul commits a unit to a neighborhood and keeps it there over a period of years that actually vehicle registrations change. Can you tell us a little bit about that?

This actually surprised me why on my first day to U-Haul, even before that, before I founded this corporate department -- corporate sustainability department, you have long been a leader in addressing the issue of how to provide product services, you offer freely to our community. I come here just doing a study and find out every U-Haul truck available for short-term rental in a neighborhood will eliminate 19 large-capacity vehicles over a 10-year period of time.

So when a truck is available to share, then people come to rely on that, and they don't need to keep something around that they had been keeping around.

That is true. Truck is a very different product than those more pensioner cars. People -- not many people afford to own a large [ passenger ] vehicle. So it is because U-Haul in the community that provides tremendous opportunity for people to facilitate their low-cost moving.

Dr. Yang, public transportation is investing greatly in that in this country. What is the interrelationship between public transportation and U-Haul's moving in storage products?

It is the one of our findings from our research partner with the National Renewable Energy Laboratory. And through that research, we find more than 50% U-Haul customer will take public transportation or other alternative transportation like pooling to access U-Haul equipment whenever the infrastructure are widely available.

So they fit together.

That's true.

Yes. I often think of U-Haul as part of the public utility network, just like the buses and the trains. It's just one more way that people can share access to a fixed amount of products and everybody gets their part done. As our audience knows, U-Haul is a family-operated business. I have children and grandchildren. Allan has 3 children of his own. We're very committed to having a world in which our children can live and enjoy life. I'm very proud the actions U-Haul has taken and make concrete real steps, not just publicity towards making the earth a place that we can hand off to our children responsibly and with our head held high.

Hello, and welcome to the 2022 AMERCO Virtual Analyst Investor Meeting. Thank you for joining us today. During today's meeting, we'll look -- take a look back at our performance in fiscal 2022 and the first quarter of fiscal 2023. Before we begin, I'd like to remind all participants of this webcast that certain of the statements during this meeting, 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 the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to our most recent Form 10-K filing with the U.S. Securities and Exchange Commission, and any updates as may be provided in our periodic Form 10-Q filings. The virtual platform for this meeting is an important part of our corporate sustainability initiatives. This is our 16th consecutive meeting over a virtual format. At this time, I'll turn the webcast over to Sam Shoen, Vice Chairman of AMERCO.

Welcome to the live portion of today's virtual analyst and investor meeting. I'm Sam Shoen, Vice Chairman of AMERCO. Joining me today are a few key people from the U-Haul organization. Joe Shoen is the Chairman and President of AMERCO. He has been Chairman for 36 years and has worked at the company nearly his entire adult life. JT Taylor is President of U-Haul International and has held this position for 16 years. JT has been with U-Haul 41 years. Jason Berg, our Chief Financial Officer, has worked at U-Haul or its subsidiaries for 26 years. Whitney Beall is the Marketing Company President of Metro Phoenix. Whitney is 1 of 200 field executives, who operates a region of the U-Haul organization. Whitney employs 120 team members, serves customers with over 600 rental trucks and manages 12 locations. She is actively adding to that total with a $10 million project currently in development. Dr. Allan Yang is our Chief Sustainability Scientist and has been with U-Haul for 15 years. Dennis O'Connor is Vice President of Storage Operations and Property Management and has held this position for 23 years. He has been with U-Haul for 30 years. During the presentation, you can type in questions and commentary on your screen. After our prepared remarks, Sebastien will ask those questions on our panel here today. I'm now going to turn the meeting over to Jason to walk us through some of the financial highlights.

Thank you, Sam. I'd like to remind everyone that on our investor homepage amerco.com, there's a link to some supplemental financial materials that go into a little more depth. As usual, at this meeting, I'd like to start today talking about our equipment rental revenues. We went into fiscal year '22 building off of a strong fiscal year '21 performance. We had a 15% improvement in fiscal year 2021. We beat that with a 28% improvement in fiscal year '22 or about $877 million, the largest single year-over-year revenue increase that the company has ever experienced. It is important to note that as the time period went on through the year, the quarterly fluctuations did begin to reduce over time. We finished the first quarter of this year here in June with a 5% increase in equipment rental revenue. The COVID pandemic and all of the downstream effects of it created an environment of extreme demand for our customers, and we were there to serve their needs. When you look at fiscal year 2022 performance, there's really 3 things that led to the improvements. Start off first, increased transactions. We saw transactions grow in the in-town market, one-way markets across the truck fleet, the trailer fleet and the towing fleet. Second, we saw that our customers were driving on average more miles during each one of their transactions. And then third, with the increased demand, we did see an increase in the average revenue per mile that we experienced. At last year's meeting, the topic of the supply chain issues with our manufacturers came up. Well, it's still with us today. The slide that you see up on the screen right now shows our CapEx over the last several years. In fiscal year 2021, we invested $1.61 billion in new fleet, and that was only about 75% of what we had actually hoped to spend that year. So you can see the last couple of years have been down years for spending due to the availability of fleet. We went into fiscal year 2022 hoping to spend about $1.8 billion on new fleet. By the time we finished the first quarter, we've already reduced that estimate down to $1.5 billion due to delays in deliveries and cancellations. And I wouldn't be surprised to see that number continue to decrease as we work our way through the year. Moving on to self-storage. Starting with the number of total occupied rooms, if it's our occupancy rate or if it's the revenue that we're getting per foot, we're at historical highs for this time of the year. And we still have upside left. I'm going to show you in a moment, our pipeline of new product that's coming online. We still have the ability to stabilize existing properties. About 25% of our existing locations are still reporting occupancy beneath that 90%, so we have upside revenue potential there. And across the entire portfolio, we still think that there's ways to optimize our revenue per foot or rate. The challenge that we put forth last year at this meeting was we needed to increase the pace of new investments in self-storage, and we had a lot of success in doing that over the last 12 months. The slide that you're looking at right now shows deliveries of new net rentable square feet over the last 12 months or I should say, for fiscal years. Over the last 12 months ending in June, we've delivered about 5 million new net rentable square which is 40% increase over the pace that we had set last year at this meeting. And then the last 2 columns of that, I'm going to go into in a second here. Those are our pipeline of projected new properties that we still have yet to develop. So the next slide will give you a sense of how broad our expansion programs are. Those last 2 columns represent about 380 properties or so that we currently own and are working on developing, it's about 7.5 million square feet. Properties that we own but we have not yet started, they're either in entitlement, permitting or some other preparatory mode. That represents completely 9 million square feet. And then we always have a certain number of properties in escrow that we're looking to either close on in the next few months. We're hoping to continue to build on the momentum that we've established in the last 12 months and increase our deliveries from where they're at today to somewhere north of 5.5 million to 6 million net rentable square feet over the next 12 months. In the months following our last investor webcast, we entered into 2 private placement debt offerings. They totaled $1.2 billion across several tranches and they average about a 10-year maturity and a fixed cost of 2.65%. This capital is earmarked for our self-storage expansion. So we fixed our cost for the expansion efforts over the next several years. I mentioned last year that the next few years of investments in self-storage will look somewhat similar to what we did in fiscal year '18, '19 and '20. You can see from the chart that's up on the screen now those are periods of accelerated delivery of new net rentable square feet. We've worked our cash balances down by the end of 2020. Now we've built the cash balances back up. In the last 12 months, through fiscal -- through -- I'm sorry, June, we've invested just under $1.1 billion in new real estate acquisitions and construction, which is a 12-month high for us and about 85% ahead of the pace that we set last year. Also similar to those 3 years is the liquidity position. We went into fiscal year '18 with a high cash balance that we intended to work down over those years. We're in the same position today, albeit with perhaps a little bit higher cash balance than we had then. But the intent is to invest in the opportunities that we have over the next 3 to 4 years. Before I hand the presentation back to Sam, I do want to touch just briefly on our U-Box product, portable moving and storage product. We launched this in 2009. Over the last 5 years, if you were to calculate our average annual growth with this product, it's been about 30% with the number increasing as you move through that time frame. And in my estimation, we've built out the most broad and diverse distribution network for our customers to access that product. And we have quite a bit of upside still left in growing revenue there. So I thank you for your time. And Sam, I'll hand the presentation back to you.

Thank you, Jason. With that, let's get into the Q&A portion of our meeting. Sebastien, can you remind us of how the audience can communicate a question?

Sure. [Operator Instructions] The first question is, and Jason, it looks like one for you, at our great size, are we feeling constrained accessing debt capital in our historical sourcing channels? Is there a downside to pursuing the debt capital markets?

Okay. Well, I'll start off with a short answer, which is no. And then I'll go into my longer answer, which is our primary source of capital raising here at AMERCO is through the debt markets. We have a broad and deep relationship with a large amount of lenders. We have 2 fantastic treasurers, Toby Bridgeman and Kevin Harte, who worked this program every day. And talking with them, we don't feel constrained at all at this point. But our strategy for funding the debt is we ladder out our maturities over time. We certainly are expecting the debt markets to move as they always do in cycles. Right now, the capital is available. We've locked in our cost on the amount of capital that we need to grow the business over the next several years. And we're expecting that, at some point, those markets will tighten up. And we should be able to weather any sort of disruptions in those financial markets and manage around those.

Do we have data on customer awareness of our U-Box program? Would we consider active marketing of the product? And how is our capacity to meet demand growth in U-Box should it continue?

That's a question for me. We do, do active marketing for U-Box. We run short form all the way up to infomercial advertisements on cable and streaming avenues, and it has shown an increase in awareness. I would say, however, the best marketing for U-Box, BARNONE, is seeing our equipment in use and on display. No substitute for seeing it in your neighbor's driveway. I think the next part of the question had to do with do we have enough resources for the future, something like that. No, we've done -- our job is to get an aggressive plan for warehouses and containers. And like everything else at U-Haul, it's a fight for scarce resources, but it's my job to get us there.

What are the current information technology priorities?

I would list our top 3 as data security. Next one would be customer device-centric point of sale. And finally, modernization of our legacy systems. Data security is ongoing, much given and we have teams that are hard on that. A big one is the customer device-centric point of sale. Customers want that. They'd like to see us have it. It ties beautifully into our 24/7 program and allows our customer to do business with U-Haul via their mobile device or iPad or whatever they have. And finally, the modernization of our legacy systems ties mostly with our back end. It's not anything customer-facing. But on our back end side of things, we're making advances and continue to.

The return on equity for our life insurance business is in the single digits. We are a self-storage and moving company, why take on the risk of a bad outcome in a small noncore financially leveraged business that generates such low returns?

Let's give that to Jason.

So low returns, okay. For our Life Insurance business, the way it's designed is we have 3 different types of risks that we have. We have mortality risk, interest rate risk and mobility risk. The idea for all 3 of those is that it's unlikely that all 3 of them are going to happen or going to go south within the same year. What we've seen over the last 12 months is an increase in mortality risk, right? COVID has spurred an increase in deaths, which has affected Oxford and we've seen the results show that. But the company is conservatively managed. And what we've asked them to do is not create any surprises, and they've been very successful in that. The team over there is excellent at analyzing risk and asset liability matching. So when I look at their return, first, you have to strip out the market value gains or losses from the investment portfolio that are due to interest rate risk. So when you take that out of the equation, over the last 10 to 15 years, the average growth in their value was somewhere around 7%, which is a pretty good savings account. And we've long said that if there is a liquidity event at the moving and storage segment or an opportunity for us to grow that and we had to raise capital, the sale of Oxford would be one of those opportunities. But where we find ourselves today is in a situation where we aren't in a liquidity crunch or need to raise capital in order to buy something. So the business at Oxford will turn around. It's been a steady performer over time. But by its nature, there's usually always something that is performing a little bit below optimum levels and it evens itself out.

How are labor relations trending with AMERCO? There have been mentions of the workforce being great, but also exhausted. What is management doing to ensure good labor relations with employees? Also, any comments on compensation trends, particularly how fast compensation is rising?

I'd like to take the front of that one, Sam.

Sure.

Okay. Yes, first of all, we don't use the term labor management. That's the division that we're not growing and have not grown in the last 30 years in this company. We were very strong on subsidiarity, which essentially means people who are affected by a decision should participate in making it. When you do that, you don't have a labor management dichotomy. With that, Whitney, she actually is hiring people all the time and those are what the real story is.

Piggyback on that. I mean the biggest thing that we're doing is, I mean, just being active in our stores, where they're talking with our employees, and this is customer service representative, general managers, HIS pros. I mean I'm there every day in a store. I'm working with the day-to-day operations. And my biggest thing is just creating an environment in which all of our employees are proud to be a part of. The second one was about the compensation. And I mean, we're still seeing compensation rise, and it's just something that we have to stay on top of and we're constantly evaluating where, first off, we're starting new people coming in to be a team member, but also our general managers, making sure everyone is being compensated.

How do you judge the amount of self-storage to ultimately build?

Let's start with Dennis.

Okay. Sounds good. How much -- how do we ultimately -- I guess, I would say that we have underestimated the market for at least the last 2 years. That's what I believe. We have a presence in all 50 states and 10 Canadian provinces, as Joe mentioned in the video. So we have both strategic and opportunistic growth opportunities. They include reworking existing stores where we have done more than 500. You could call them replacing stores, but we rework the existing stores. We're doing conversions, as Joe pointed out in the video, new construction. So to answer the question, I don't know that there is a limit or the ultimate amount to build.

Dennis, when I graduated from Harvard Business School in 1973, that was what I did my thesis on with self-storage. At that time, I estimated the market at 1 square foot per person in the population. And where are we at today?

We're at almost 8, 7.75.

7.75. And when I estimated 1, people thought that was a high number. So this market has grown. We're in many markets that the -- there's more than 20 square foot per person. So this is a local market, not a national market. And as we find markets we can penetrate, we're going to continue to penetrate them.

As electric vehicles are pushed by regulations and OEMs, what is AMERCO doing in regard to exploring if and how the company would manage an electric fleet? And is it safe to assume an electric fleet can only operate in the in-town fleet?

Allan, before you comment on that, I'm sure you have a comment, I'd like to say something. I'm -- this is a subject that we're watching as closely as you would anticipate we should. I have a personal interest in this subject. I drive an EV as my daily driver since 2016. And you may have seen the rental car companies start to adopt EV in some of their customer options. But the truck rental business is very different from the car rental business. First and foremost, our customers are not asking us for electric trucks and our customers have not indicated that they will pay more for electric trucks. Secondarily, the duty cycle of the truck rental business is very different from the car rental business. The current generation, and I would argue what we've seen from the next generation of electric vehicles, still doesn't meet our duty cycle for things like range, for things like weight-carrying capacity and charging time, to name a few. Now that said -- cost, we haven't even talked about cost. So I would say once those issues get worked out, the future is very bright. I'm going to be excited for U-Haul 1 day to have electric vehicles in its fleet. And when we get to that point, you should expect us to adopt them progressively. Allan, do you want to expand on that?

Yes, sure. So I would like to add a point to these questions from a research perspective. On behalf of U-Haul, right now, I currently service as the chair-elect of the Industry Advisory Board of a National Science Foundation division called Sustainable Transportation System. So together with the scientists from the research institute and Professor from University, we have been taking a comprehensive study on electric vehicle and infrastructure issues since 2017. It is our goal to try to bring all the stakeholders along the value chain together. For example, the OEM manufacturers, the battery suppliers and charging station installers, charging software companies and, of course, fleet owner like U-Haul and utility companies and planning professionals from local cities. So together, we try to tackle the most challenging EV issues right now. For quick examples, how to optimize deployment of the vehicles nationwide and location of the charging station in both the rural and urban areas, and how to set up the utility rate -- I mean electricity rate. So in that way, we can take care of the low-cost charging for our EV owners, at the same time, maintain the high efficiency and security of our power grade. Besides those environmental considerations, we also put a lot of focus on the social side. For example, how we can continue to offer the feasible mobility solution to the disadvantaged and underserved communities. As Sam mentioned before, the significant barriers to EV adoption still remains, okay? That's just a reality, okay? But we, as U-Haul, it is our goal to working with all stakeholders to figure out a solution to continue to offer the sustainable product and services to our customers in an accountable, available, accessible and affordable manner.

How many, if any, additional company-owned rental locations do we target and over what time period?

Joe, would you take that?

Sure. Well, first, we have 2 different ways we go to market. First is as a U-Haul company-operated store and second is as a U-Haul dealership, an independent business. We have about 21,000 independent dealers and a little over 2,100 U-Haul company stores. Since I've been working here in the last 30 years, we've gone from something like 3,500 independent dealers to now 21,000. I believe that number can be significantly increased, and I hope to yet accomplish that in my career. On company stores, there's been a big change with the adoption of both U-Box and self-storage. So today, we have a few hundred stores that are really offering only primarily the truck share product. Those stores were in the process of upgrading to be able to offer self-storage or, hopefully, self-storage and U-Box. So those are a capital investment but not a new distribution or point of sale point. We also are aggressively going into underserved markets, and we're having so far very good success with pursuing them. So I think we have a strategy that will absorb the kind of investment that Jason talked about in his presentation over the next 3 to 5 years. Beyond that, I think the future is just going to be the future.

Jason or Dennis, this might be 1 for you. What is the difference in revenue per occupied square foot at stabilized and unstabilized storage facilities? Is there an opportunity to improve pricing closer to industry peers as the storage facility base matures?

Well, Dennis, I'll start off with this, if you don't mind. So I watch the competitors a lot. Dennis is looking at them on a location-by-location basis. I'm, like the rest of you, probably the person that asked this question, looking at it from a big picture. And I look at our rates compared to the competition by MSAs, the metropolitan statistical areas. And we're usually not at the top of the rate, but we're usually also not at the bottom of the rate. So I wouldn't say that we're lagging anyone else on rates. When we talk about stabilized versus unstabilized, one of the things that we do, and Dennis might speak more to it, is we don't go into a market and do a heavy discounting in order to get up. We normally go into the market with the rate that we think is reasonable. So the difference -- as I look at the whole portfolio, I couldn't give you a difference in revenue per stabilized properties and nonstabilized properties because there's too big of a mix where they're at that would account for the differences. But certainly, once the property gets stabilized, then Dennis puts into place his existing customer rate increase program from there. So I'll hand it off to Dennis.

I think you did really well, Jason. From a macro view, that's a really tough question to bring down to a micro answer as the dollars x. But as Jason said, we go into the market with a rate that we believe is close to the market rate. We -- I hope we're never at the bottom of the rate schedule. I've never seen us even close to that. So that's about all I got, Sam.