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

Hello. This is Joe Shoen with U-Haul. I'm speaking to you today from Phoenix, Arizona. And I have David LoPresti with us. You may remember, David, as the Head of our moving Help program. Recently, we changed David's job and as part of our drive on digital initiatives with our customer, David is now running what we call the U-Haul app. We're constantly under assault by people who say they're going to revolutionize our industry by doing something digitally. And so as you know, I have a lot of pressure on, lets us be the people in that space, not the people reacting. Tell us a little bit about the reinvigorated U-Haul app?

Sure. U-Haul has had an absence 2016, it was launched to coincide with the release of the Truck Share 24/7 product. And at the time, it was built and very purposely for that type of transaction. But as we've seen over the last couple of years, we have seen customers really drive towards these retailers and products and services that are focused on convenience and being where the customer needs. When we came to the conclusion that we were going to relaunch the app focused on not just that particular product, but all of our products and services, it really gave us an opportunity to take what we have that none of these other companies offer, which is decades and decades of experience of knowing what the customer needs and where they need it, how do we take that knowledge and how do we put it into a platform where the customer is recognized at the point of entry, and we can make sure that they have access to those things that we know they need. And I think that's really where our advantage is, is -- we have the fleet size and the location sites. Now we have this digital platform that is really robust enough to say, welcome, David, here's what we know about you. Here's the products and services that you have transacted with. And here are the things that you personally are going to need in order to be successful.

So this is not so much about upselling. This is just meeting needs.

We're really in a unique position where our entire focus since we started this project was on customer experience. You and I have had a number of conversations at no time has there been a discussion about the primary purpose of this is we need to drive revenue. The purpose of this is how do we take care of our existing customers.

You're pretty familiar with these digital disruptors.

Yes.

And part of what I understand we're doing with the app is we're building a moat of convenience and ease, which they will have to traverse in order to access our customer. And your belief is you can make that moat just about foolproof.

Having a flashy map and showing equipment on a map and letting the customer make the transaction. Those are all things that can be -- we do today. Of course, I think we always have the opportunity to evolve and to make it more elegant. But that's really the only thing that these companies can try to compete with us on is that initial -- the wow factor, if you will, of what the app looks like. At the end of the day, the transaction has to be completed.

What are you seeing on numbers? do you have any numbers you can -- you've been -- you've had this out...

Officially on March 1, and I'm happy to say in our first 5 months, we've already crossed 2 million downloads of the app since March 1. In fact, just this past weekend in the month July, we had almost 95,000 downloads just for that Friday, Saturday, Sunday time frame.

Is that a competitive number in the marketplace...

I would say it's not just competitive, it's pretty astounding. For example, Apple and Google both make it very easy for us to see how our outperforms compared to competitors. Since we launched at the beginning of March, we've been in the top 25 in our categories of the Apple App Store. In fact, this last weekend because of the immense amount of downloads, we actually crossed in the top 10, putting us in the category of companies like Uber, Lyft, American Delta Airlines, Expedia. I mean, companies that you expect to have the strong digital presence from.

David, you hear me all the time going on about productivity-enhancing tools -- what -- how does this fit into being a productivity enhancement for our point-of-sale teams?

Before the app, the customer would drop the truck off at the lot and then the team would come in and they have to process all of those returns in the morning. Now, the customer can just open up the app. We know where they are. We know they're at the location. They can process the return immediately. And then the center comes in and they're ready to get that equipment ready to rent for the next customer.

How long do you think it should take a customer returning after hours.

I've run through that process of a number of times and it's -- I've clocked it every time at just about 3 minutes.

And you're also then actually reducing disputes with the customer because when the customer drops after hours and we have a photograph of the fuel of the mileage, it's pretty clear, and we can make sure that their transaction occurs very precisely. I'm here with Lindsey Williams. Lindsey is a program manager in our self-storage division. Lindsey, tell us a little bit about yourself, how long have you been with you all?

I've been with U-Haul for the last 16 years. I've worked always in some capacity in our storage department, did some rates, center operations stuff. And now primarily I've been working on how we position ourselves online to the storage customer. We have an online move-in process that's been quite successful for our customers and our team members. It allows the customer to select their room, fill out their account information, sign their agreement with us, pay and give them access to their storage unit.

So a customer can show up and actually move in online. Never have to go into [indiscernible].

Absolutely, no interaction with our team members.

People are actually interested in doing that, is there demand for that.

There is a large appetite for that. As you can imagine, with all the retail spaces, this, of course, became much more apparent after the pandemic. We were already positioned with this process in place. So our customers truly took to it and now the storage industry has aggressively taken to it as well. It started out as just a way for a customer to rent a room at a location that we are managing remotely. Quickly, it turned into the process of that storage customers rent at any of our locations. And any time of day, the majority of these rentals, these online move-ins occur when we're open. So it's not in an after-hours program at any regard.

Well, now you can't just willy-nilly move people into storage just because they have a credit card can you?

No. This is a secure process. We've worked hard at making sure that is happening. Truck share has been an incremental part of that progress that we've been able to piggyback on. So we're sharing those resources.

Our phones have been ringing off the hook with people who either forgot their room number or forgot their access code.

They have the app downloaded with one simple selection, they'll be able to see their room number, their access code as we evolve this access instructions, various features about the storage facility.

I'm here with Steve Dudley, our Vice President of Retail Sales. Steve tells us a little bit about your background with U-Haul.

Sure. I've been with U-Haul for 23 years now. I started in our Tempe repair shop as a parts specialist. From there, went on to our U-Haul purchasing team. And then from that in the e-commerce, where I was doing some web sales management, ran our boxes and moving supplies program up until to the point that I got to manage the retail sales group.

We've been talking here today about the U-Haul app and how we're able to better help the customer. Can you speak a little bit to it?

Sure. You always want to try to create more value after the purchase, particularly with some of our retail product. And in one way we've done that with boxes and moving supplies, is, of course, finding a way and finding a tool and a feature within our U-Haul app to continue to get the customer to do business with us or to come back to the U-Haul app. And so the belongings organizer is allowing customers to store pictures of their goods on their device for quick access. -- in particular, where you see the need in moving is I've got a bunch of boxes named kitchen, which one in particular has the frying pan I'm looking for so that we can cook dinner tonight. I think that feature extends much beyond moving because it's just a home organization tool as well, of which there's a lot of people that do this and there's a lot of companies that make their business on home organization.

Have you had any anecdotes with the customer who used it in the way you didn't anticipate...

Christmas lights. I think Christmas Lights is the example that we see all the time, which is, of course, it's at home, packed away in a box, where are the Christmas lights. And so rather than opening 10 boxes trying to figure it out, I go to the app. I see exactly what boxes in. It makes it for a pretty seamless.

Can you give me an example of maybe how you're integrating videos [indiscernible] this.

Sure. We're North America's #1 in solar of trailer hitches. One of the best features, I think, of this is, of course, logging in on the phone versus logging in onto a desktop is so much different with the biometrics that are involved in a phone, right? It's -- you look at your phone, you're logged in. And so, of course, knowing that we've installed a hitch on a very specific type of vehicle allows us to personalize and cater that experience to that customer and give them loading, unloading videos of our particular pieces of equipment, different bike racks and some different things that go along specific to their vehicle.

Like many retailers were struggling to keep adequate personnel on the front line serving customers. How or is this helping our frontline personal?

Yes, I think it is, and it will well into the future here. There are some particular things. I think rolling self-checkout into the U-Haul app has been a tremendous feature.

So a customer can actually go into a store and check themselves out? They don't have to go to the counter?

Yes. Yes. It was quite surprising, I think, when we first introduced this to even our own field teams, seeing somebody walk in, scan a couple of barcodes and then walk out the door because, of course, you think well, did that person pay for it. So we've had to build some checks and balances in a place to know our point-of-sale systems, things like that would have taken time at the counter and allows our field teams to spend more time with the customers that might need the extra attention. And we get them both, right? The customer knows exactly what they want. They want to come in, they want to get in, they want to get out. And then the other person that needs a little bit of explanation. So other examples to like notifying a customer when their hitch installation is done. Previously, our process was pick up the phone and try to call that customer or send them an e-mail to let them know that their vehicle is done. Today, you can opt in on the app and know exactly when the vehicle is done.

Speaking here today with Evan Johnson. Evan is our Vice President for our entire contact center. Evan give us a little background on your history with U-Haul.

I've been with U-Haul for 8 years. I started in our internal audit department before transitioning to our accounting team where I was working on special projects, process improvements. And then from there, I joined our risk management team. Our risk management team is responsible for things like workers' compensation, environmental health and safety, team member safe driving and much more. And then about 2.5 years ago, joined our contact center team.

And can you give me kind of a wild idea of how big a group that is that you're managing?

Sure. We have roughly 2,000 team members all throughout the United States and Canada. We're available 24/7, 365 days a year.

We've been talking today about the U-Haul app and how it might be a productivity-enhancing tool. And also give the customer a higher level of satisfaction. Phone answering is kind of almost a tragedy in the United States today. It seems like if you're going to call a centralized phone position, you just better be ready to be on hold. What are you seeing as what the app can do to help that problem.

We received millions of calls between our -- the 2 groups I'm responsible for, sales and reservations and customer service. And I would classify many of those calls as repetitive and redundant, right? And so 2 examples would be confirming a reservation that was previously made and then making a storage payment. Through our revamped U-Haul app, customers will be able to use that self-service, not have to call in, not have to wait on hold potentially, not have to talk to a live representative. And then our team will benefit as well by being available for customers who maybe need more or have more complex needs or maybe just need to talk to a live representative for whatever reasons. And we are already seeing some of that volume is shifting to self-service and certainly customers having a more frictionless experience. And so we've created the ability to where if you hit pound when you hear that menu prompt, we're going to deliver a link to download the U-Haul app via text message. And since March, since we've kicked off this initiative, more than 167,000 customers have selected that prompt received the app and are leveraging self-service and having a better customer journey as a result.

We're being more of a self-service, do-it-yourself company, but we're increasing their satisfaction and maybe decreased at least 100,000 calls to you didn't you?

For sure 100%...

The U-Haul app allows us to deal with people who want to deal with us in an accessible, personalized and very secure way. I'm sure different stores have adopted the app and varying proportions.

I was having a conversation with our [indiscernible] President last week about that park slope specifically and asking him how the app was being received. I thought it was very interesting. The anecdote was they have a new challenge at that location, which is it's become so easy for their customers to do these transactions that the team at the location now has to be -- they're now being refocused on meeting the customer on the floor and selling boxes and discussing the benefits of U-Box, they have the ability to really engage with our customers more personally now.

Do you think this will take a flurry of 1.5 years of work and we'll have it in the bag? Or how do you really see this project?

The mobile device is with the customer 24 hours a day, 7 days a week, and we're already learning so much about customer behavior. No, I think this is going to be a centerpiece of our customer experience moving forward. It will just continue to grow as we continue to add more features and functionality and really meet the customers' needs.

Great. Thank you very much, David.

Hello. Welcome to the 2023 U-Haul Holding Company Virtual Analyst and Investor Meeting. Thanks for joining us today. During this meeting, we'll take a look back at our performance in fiscal 2023 and the first quarter of fiscal 2024. 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 the company'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 17th consecutive year hosting a virtual meeting. At this time, I'd like to turn the meeting over to Sam Shoen, Vice Chairman of U-Haul Holding Company.

Welcome again to the live part of today's Virtual Analyst and Investor Meeting. Joining me today are a few key people from the U-Haul organization. Joe Shoen is the Chairman and President of U-Haul Holding Company. He has served as Chairman for 37 years and has worked with the company for nearly his entire adult life. JT Taylor is President of U-Haul International and has held this position for 17 years. JT has been with U-Haul 42 years. Jason Berg, our Chief Financial Officer, has worked at U-Haul or its subsidiaries for 27 years. Dennis O'Connor is Vice President of Storage Operations and Property Management and has held this position for 24 years. He's been with U-Haul for 31 years. David LoPresti, is our Director of Applications and has been with the company for 19 years. During the presentation, you can type in questions on your screen. After our prepared remarks, Sebastien will ask those questions of 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 very much, Sam. I'd like to remind everyone that we have a supplemental financial exhibit that is on the homepage of our Investor Relations website, investors.u-haul.com. I'd encourage you to click on that and look at. It goes into much more detail than what I'm about to go into. Since we met in this format last year at this time, we've had a lot of exciting developments that have taken place on what I call the Investor Relations front. We've changed the name of the company from AMERCO to United to U-Haul holding company. We've instituted a brand-new class of common stock, nonvoting common stock, there's a significant amount of additional shares available for trading. We instituted a dividend policy on that new class of shares. We changed our listing from the NASDAQ to the New York Stock Exchange. We've been steadily increasing and improving our public disclosures, both in our SEC filings and in our press releases. And the most recent piece of exciting news is we now have a new research firm that's following us. Wolfe Research has initiated coverage of the company, and we're very excited about that. So as I normally do, I'd like to start off today talking about our largest revenue line item, which is equipment rental revenue or what we refer to as U-Move. So to put the last 12 months into context, it hasn't been a great 12 months. Transactions have been down. Average miles per transaction have been down, and this has resulted in our revenue being down. Now conversely, average revenue per mile has improved. Over the course of the -- call it post pandemic, we've seen strong improvements in revenue per mile. And even in this most recent down transaction environment, we've still seen some nominal improvements along those lines. We're expecting to see some positive movement on fleet rotation this year. And I think all of us believe that there's still transaction opportunities available in the marketplace for us and that we can still go out and get those. To put this into context, I have a quick graphic that I want to put up. This shows U-Move revenue increases from the beginning of -- I started in the middle of fiscal 2010, all the way through this last quarter. And I did so to kind of get some round measurement periods. What this shows is through the first 10 years of the graph, so mid fiscal 2010 through mid-fiscal 2020. We experienced revenue gains totaling a little over $1.3 billion, which on an average growth rate ran about 6.5%. Then we ran into the pandemic and the government-mandated lockdowns. And for the next 3 quarters, we ended up giving back about $110 million of the revenue gains. Once we cleared the initial part of the pandemic and the government lockdowns were lifted, the U.S. and Canada went on a mobility tear, so to speak. And over the next 24 months, we had over $1.4 billion of revenue gains, which is in excess of 20% average gains annualized over that same -- over that time period. Now over the last 12 months, we've given some of those gains back to the tune of about $228 million. The purpose of this slide I wanted to show you was that in the grand scheme of U-Move revenue, we still feel like we're in a very strong position. and we look forward to what's to come. I mentioned -- our fleet plan, I mentioned fleet rotation. This year, we're looking at bringing in a significant number of new trucks compared to what we've been able to bring in the last 3 years. Now we're also hoping to sell a whole bunch more trucks as well. So from a financial perspective, I would classify this year as 100% maintenance CapEx year and no real growth CapEx. Self-storage remains a strong contributor to our revenue lines. Our most recent results that we reported, our same-store occupancy numbers were in the mid-90% range. We're also reporting strong revenue per occupied square foot. Fiscal 2023 was a great year for this. I believe we're somewhere in excess of 9% growth on that front. And we still feel like over the rest of this fiscal year that we have additional room to grow revenue per occupied foot. On the development front, in the last 12 months, we've added 5.7 million net rentable square feet. $1.1 million of that is in the form of existing self-storage, which leaves about $4.6 million of that coming from development. At this meeting last year, we reported about $4.4 million. So we're kind of falling into a pace here of about $4.5 million square feet, which is important to keep in mind when we look at this chart that shows our pipeline. So the second to the last column on this chart shows the number of properties that we have plans to develop on. Right now, we're sitting at about 314 properties that we plan to either build new storage or expand on. Of that, about 159 are currently active. When we eventually complete all 314 of these, it should result in somewhere north of 16.5 million net rentable square feet. And also U-Box warehouse space for an additional 235,000 containers. The last piece, the furthest right column of this chart shows what properties that we have in escrow. And if you were to compare it to last year's chart, we're about half of where we were. And this is strategic. It has nothing to do with any sort of negative sentiment that we have on self-storage. We're still very excited about storage. But what we're looking at is the pipeline line, which is up from 282 properties last year to 314. So we've strategically slowed new acquisitions in regions of the country where we have several projects already active. One last thing before I hand the presentation back to Sam it's on our corporate finances. I said during the last earnings call that we placed a premium on adequate cash and availability or liquidity. And certainly, opinions vary on what the definition of adequate is. And over the last several years and on the lead up to this meeting, I've received several of your opinions on what the definition of adequate is. But as we look at this environment, what we're facing is we're still seeing inflation, particularly on the fleet side. and we're going to see that for the next several years. We're also seeing the financial markets doing everything that they can do to tighten credit, whether in availability or in cost. And that's our main form of credit raising outside of reinvesting earnings. But juxtapose with that, we still see many opportunities to reinvest back into the business in order to better serve customers. So I've been tasked and our treasury team has been tasked with placing the company in a very conservative financial stance. And I'll define that as higher than typical cash balances, continued minimization for interest floating interest rate risk and continued discipline on laddering out our maturities. And with those goals in mind, I feel like we've had a pretty good last 12 months. So I appreciate everyone's time. And Sam, I'd like to hand the presentation back to you.

Thank you, Jason. So with that, let's get into the Q&A portion of our meeting.

[Operator Instructions] The first question is, can you give us an update on the fleet replacement? Is it fair to think that as the supply chain issues get worked through, there will also be more supply on the market that will impact the pricing you get for your used fleet?

That sounds like a good question for you, Joe.

I'm not as sure that the supply chain issues are going to all be resolved. There may be a reset at a different point as more trucks are available retail, of course, we're going to see our resale prices, no doubt drop. Now in absolute dollars, they may go up because new equipment is going up. But as far as ratio of resale to acquisition costs, we're probably going to see that gap widen and we're going to get less than we have been recently.

How much did moving transaction volumes decline in the quarter? Any thoughts on when you would see this bottoming as well as long-term growth assumptions?

Moving transaction volumes. Why don't you take that one, JT?

Sure. I believe in Jason's charts that he showed, he showed overall moving transactions down. I think this past quarter, they were down about 5%. Of course, understanding what that means is very nuance because there's a truck, there's trailer, there's in-town, there's one way. There's the U.S. or Canada, not all those markets are down. So -- but for the last quarter, we've showed down 5%. As far as bottoming out, looking at current customer trends, the renting patterns, I project that and feel like we will see a bottoming out here in the third quarter, and I always continue to believe there will be ongoing growth into the future.

Given a challenging self-storage operating environment, how are your new development deliveries leasing up? How does this compare to the average pace pre-pandemic?

I think that's a question for Dennis.

Okay. I'll talk about our new facilities post COVID, which are leasing up on pace with the lease-up rates that we experienced during COVID. and slightly better than the pre-COVID facilities that we purchased. In the last 3 years approximately, we had about a 10% growth rate in lease-up over previous years. That, I think, is partially due to our investment in customer-facing online experiences such as the app, such as what Lindsey had talked about in the video, on online self-storage rentals, 24/7 truck rental. All those things are I believe, really helping our lease-up and partially at least contribute to that 10% growth.

How do you think about opening a new company-owned location versus signing a new dealer? What are the implications in terms of margins, return on capital and unit economics?

Well, independent dealers, will let JT talk about that, Jason could talk about that.

Well, I'll start off, I guess, Candidly, I think about dealers and centers all the time. And I think we need both of them. Dealers remain a key part of our strategy to serve the customer base we have. Many communities continue to grow. And with that growth means there's a need for more dealers and demand for more dealers. Our dealers play a significant role in providing convenience and help to our customers. And oftentimes, they're able to do that in areas where maybe it wouldn't be economically prudent to have a center. That would be my view. One of the advantages of a dealer is that they're part of the community, and they're ready to go, ready to rent immediately. So that's -- both are important and dealers are a key player in our strategy.

I'd like to address the second part of that question about the returns on dealers versus centers. And the great thing about being part of a business that's been around for nearly 80 years is that there's been time to fine-tune these things. And I've long said that we're agnostic as to where a customer wants to pick up or drop off a truck or who they want to do business with, whether it's a company location or someone that they know who happens to be a dealer. So as soon as you introduce some sort of financial incentive for someone to do something different, it's going to affect the whole rest of the system. So from a financial perspective, whether it's a one-way transaction, an in-town transaction, whether it originates from a dealer or a company center, it doesn't have any lasting effect or any effect on our bottom line.

Has the U-Haul nonvoting Series N stock become eligible for the Russell 1000 or 2000 indices? Have passive index funds such as Vanguard, Fidelity, Schwab or BlackRock now become eligible to purchase the U-Haul nonvoting Series and stock. If not yet, do you believe the Series N stock can become eligible in the future?

Can you comment on that, Jason?

Sure. So the end shares or UHL.b is in the Russell 1000. Recently, the S&P lifted any prohibitions that they have against nonvoting shares being included in the index. So I think that's positive. And as I look at the trading activity and the ownership numbers for places like Fidelity or BlackRock or Vanguard, I'm seeing shares trading both out and in those funds. So I believe that they're active in the B shares.

You mentioned on the last earnings call that you're still in a rent roll-up period on storage, where the move-in rates are higher than the move-out rates. How can you work to close this gap? And how does it compare to pre-pandemic levels?

Self-storage rates, sounds like a good question for Dennis.

Thank you, Sam. Our move-in rates are about 3% to 4% lower than our move-out rates. That's absolutely correct. That's a result of our continued ability to increase rental rates over time. It's also partially the result of acquisitions of properties where the rental rate at the acquired -- when we acquired it is below market, essentially our upside to which my people work to drive that rental rate up to market.

What is management's target long-term growth rate for the business?

Well, this is definitely a Joe-adjacent question.

Well, I think we want to grow all we can in our 2 major markets, which would be self-move and self-storage, we believe that there's still opportunity for growth in his slide deck, Jason shows how our growth in truck rental compares to census data that's reported, and it consistently shows that we've outperformed what you might call inherent growth or the growth of the moving public. And that's done by a variety of methods. Oftentimes, it's converting someone from what we call owned and borrowed into using our equipment. So their first commercial experience and moving is with the U-Haul rental. So I think we're going to continue to grow. We break all this down to very specific market entities. And so we have a plan for, let's say, Manteca, California, okay? So we have a very specific plan there. In that particular case, we're putting an emphasis on U-Box growth because we're a little bit behind the curve there, but we could be in a different marketplace, and we could be putting the emphasis on U-Move growth, our self-storage or -- when we can, if we open a point, we'd like to open it with all 3 major lines and then kind of fine-tune what is going to be best responsive to that market area. So I think there's plenty of growth left ahead.

How are you thinking about implementing more technology throughout your business to generate more operational efficiencies?

Implementing technology. That's -- David, why don't you take that one?

Thanks, Sam.As you can see in the video, we believe that the U-Haul app is an example of generating tremendous operational efficiencies. When we relaunched the app in March, we did so with this focus on customer experience and personalizing the customers' needs. By doing so, creating a self-service portal that really does drive customer overall sentiment as well as reducing costs associated with supporting those transactions. Since March 1, when we relaunched, we have officially crossed 2.5 million downloads amongst Apple and Android users. July, we saw over 600,000 downloads as well as 1.6 million of our customers utilize the app and some capacity to manage their move.

Joe, this might be a good one for you. Can you please share your thoughts on a stock buyback.

Well, as I talked to you about with growth, we have a lot of opportunity ahead of us. I think my opportunity is managing -- matching performance to opportunity. So some places that we're doing better than others, obviously. I'm not a big proponent of a stock buyback, there's a little tension between keeping the market very liquid, and we're just at the tip of the iceberg of learning what the recent change with the voting, nonvoting and how this is going to play out. And I think we're -- we may not even be halfway through seeing how that is recognized by financial markets. And I wouldn't want to do anything short term that limited the amount of shares out there personally. That would be my position. And I think the Board is -- I'm going to kind of speak for them. They're a little bit exhausted they had a specific committee that worked on all this, and they did a lot of study on it. So I think we're a little exhausted on that subject right now.

You mentioned that given the ongoing construction of multifamily units across the U.S. that you need to consider adapting your business to cater to this customer. What are some of the ways that you can do this? And how do you think your portfolio is set to meet these needs today.

I'd like to take that one. Certainly, U-Box is a great example of us being responsive to multifamily units. I think that's for a couple of different reasons. First of all, box trucks can sometimes be disruptive to multifamily lot layouts and certainly can sometimes cause damage to parking canopies, but U-Box doesn't have those problems. U-Box fits in any legal parking space, takes up way less room than a truck. Apartments often view this as an attractive part of U-Box. And certainly, apartments are always grappling with this lack of on-site storage for their community. And so of course, U-Box can play a critical role in that as well I'd say generally interestingly, certainly in premium communities, although a lot of those residents are still do-it-yourselfers, they are interested in paying a premium not to drive. So of course, because of that, they're also very interested in U-Box.

In truck rental, you have stated that fleet utilization is your #1 statistic, with industry revenues flattening, why don't we slow down the purchases of new vehicles to just what we are selling, to maintain the size of the fleet, but with newer units as opposed to expanding the fleet which pushes down fleet utilization. And lastly, are newer vehicles being constructed better, so our maintenance costs can decline.

Well, there's a couple of questions there. Why don't we give that to Joe or Jason?

Let me touch on our newer vehicles, cheaper to maintain, very unlikely, they're full of more expensive parts, so not alternated cost much more than alternated it 10 years ago. And additionally, there are full of a bunch of new parts. So my vehicle, the steering is electronic. There's no actual steering mechanism connecting to the wheel, it's electronic. And these electronic parts are all a little pricey and they're going to continue to be that way. So I don't see a salvation there. But on the other hand, there's a huge trade-off between depreciation and maintenance expense, maintenance expense is basically linear with total mileage. So if your fleet has an average of 60,000 miles, it is going to cost x per mile. If the average is 70,000 miles, it's going to be x plus per mile. So the pandemic forced us to accumulate more miles per truck, and we're going to have to work out of that over the next couple of years, bring that total cost down, and that will again, trade depreciation for lower maintenance costs. And we kind of have opinions of where the sweet spot is in that exchange. And we think we're a little bit too deep in maintenance costs right now and too light in depreciation.

One part of U-Haul's numerous competitive strengths is the historical operational experience of the management team and how the company blocks and tackles in a variety of economic environments. In the recent earnings call, management provided a very good overview of the pricing strategy in the self-storage market. At this point, could you provide details of 2 other aspects of blocking and tackling in the truck rental business, namely, number one, how your regional teams attempt to maximize revenues in terms of repositioning equipment, scheduling maintenance, pricing, et cetera? And number two, what are the dynamics of trying to manage operational costs in terms of cost per mile. So let me maybe read that again. How are your regional teams attempting to maximize revenues, number one. And number two, what are the dynamics of trying to manage operational costs in terms of cost per mile.

Blocking and tackling in the truck rental business. JT, could you address that?

Yes. I like that term blocking and tackling. The -- our regional office over time have gained some basic fundamentals that they work on a day in and day out basis. All of them driven to increasing transactions and driving on productivity of our equipment. So there's intense effort on ensuring that equipment is arriving at locations that can be most productive with that equipment that have shown that they can rent it more often. All of that is driving on utilization of our equipment. I heard Sebastien say something about scheduling repair. That's an ongoing deal. We know before our equipment lands at one of our locations if it needs maintenance, what it needs, our customers help us with that. So we're constantly working that and scheduling that into the shop and then back to our locations so that the next customer can get it. So we're continually driving on that. On the second part, I think managing operational costs. It's almost answered by the first part. If we can manage operational costs if we drive utilization and productivity of equipment that's going to increase our overall revenue that's going to manage our -- lower our overall costs. So while we have and are currently driving on a budgeting -- we're budgeting for our -- all our locations on all our various lines, again, the best part -- or best way to do that is to increase utilization and productivity of the equipment.

With some slowing in the U.S. moving market, has the burden on the workforce been reduced? How would the company characterize the labor market currently?

I think I'd like to take that one. First of all, as Joe said in the intro video, we really need to recognize the U-Haul team members in the field. Certainly, they're performing admirably and been the key to our success. Undoubtedly, post-COVID, there's still this psychological friction that's going on with any retail business, not just U-Haul, but any retail business. You've got people coming into your store in a mask, you've got increased expectations of service. And so I think we've been certainly dealing with all that and view it as a macro trend. But -- that notwithstanding, it's undeniable that the labor market is tight, and we expect it to remain so.

Has anything changed with regard to how the company builds or operates self-storage post the 2020 to 2022 period.

Joe, why don't you take that one?

Well, as Lindsey said in the video, we've instituted more self-service options in the storage business, and there's a variety of them, but you can self-service, move in, move out, pay online, those sorts of things. And that's a little bit more complex than it seems. So we actually had that as again, she referenced in the video, we had that going maybe 3 or 4 years before COVID, but then COVID really got everybody in the operations on board because they could see how the customer would respond. I don't think there's anything much more post -- there was some rules on when you could evict a tenant or those sort of things. That's just all kind of ameliorating is not going to be a big problem going ahead.

Given the actions taken to split the stock, create 2 shareholder classes and change the company name since the last virtual Analyst Meeting, what would management say has and hasn't worked given those actions? And are there any actions being considered to return more cash to shareholders in the future?

Stock actions. Jason, would you comment on that?

I'll start off with it. On the part that you can actually measure the amount of shares trading and the dollar volume of that, I would say the results started off a little bit mixed on that front. I think we're picking up a little bit of steam. It's hard to -- after that, it's hard to attribute specific things. I would say the most recent news that we have with Wolfe Research initiating coverage has something that I've been working on for quite some time along with Sebastien and hadn't fallen into place. And now after all of these changes in the last 12 months, we were able to get something done. So I think that, that certainly helped on that front. And Joe mentioned earlier, some of these things are still evolving, I believe. It's going to take a little bit more time. You see some weeks where the trading volume starts to behave more like what we thought it would. And other times it pulls back. And as we speak with you more often, I'm learning things every day, and we'll see where it goes. But I'm certainly excited about what we've seen so far, and I think it's just going to get better.

I think part of that question also is we're holding relatively more cash than we've held for the prior 20 years. And I think that's a combination of we're able to hold it at a very modest cost because Jason's team is able to reinvest in basically treasuries at above the rate of interest we have some of these prices fixed at. That's a very unusual circumstance. Additionally, we're hoping that an opportunity comes our way. We're looking for opportunities. We want to have some money we can take advantage of an opportunity. And finally, there's a lot more uncertainty in my mind, than there is in the Wall Street Journal as to how self storage is going to go. So -- and the whole economy. So having some money put away could be the happiest thing I ever did. We're not paying a huge price for it. I think it's both giving us a hedge if trouble days come. I'm a big believer in 7 prosperous years followed by 7 years of famine. And so I don't -- I want to be -- make sure we're set when we have that 7 years of famine.

What is the split between homeowners and renters in the moving segment? Is it safe to assume that renters are the bigger portion?

Renters versus homeowners, let's give that to Joe.

Statistically somewhere around 35% of the population are renters. There's a lot of pressure, which you probably are more familiar than I am by big money players to try to increase the number of people renting. And there, you see people putting in single-family home rental units, a gated community of 400 or 500 homes. That's a big development. They're clearly trying to push more people into being renters. So while renters are numerically lower than owners, renters move more often. With a few exceptions, we'll say Manhattan where people would rent and stay there 20 years. In most places, renters move more often than owners. And so if you added up all of our customers, I think you would find a slight -- the balance would be in favor of renters just because they rent more often. And this trend could likely grow. It's not -- there's so many other factors working, but there's so much activity. You all have seen in your communities, these 4- and 5-story apartment buildings going in that are really going to encourage people to move. They're not encouraging you to live there for 20 years. They want you to trade up or trade to a different community inside of their product mix. So they're going to actually encourage people to move, I believe.

Maybe along those lines is, is looking at mortgage applications a good gauge for demand and self-moving equipment.

Joe, how do you feel about that?

Short answer, no. And we've tried to find it, but the answer to that is no.

How are you thinking about floating rate debt exposure and fixing it out to have more visibility on your interest expense going forward?

That's definitely Jason question.

I'll take that one. I'm going to throw our production team a little curveball here to see if they're awake at the controls. I had a debt slide a little bit earlier. If you could put that up on the screen. We've been highly focused on reducing our exposure to floating rate debt. When I say we -- I've got 2 all stars on the treasury team, Kevin Hart and Toby Bridgeman are effectively the treasurers over real estate financing and fleet debt. And we've made significant progress. So I think at the end of this last quarter, we had less than 8% of our outstanding debt was floating rate that's somewhere around $490 million, I believe. And that debt -- there's going to be a certain amount of floating rate debt that we always have. And that's a function of the type of collateral that it's supporting. In this case, it's supporting our pickup and cargo van fleet. So we're going to continue to push hard to not expand that.

David, it looks like we have an app question for you. Congratulations on the significant number of downloads, downloads are one part of the equation. What are you seeing with app retention?

Sure. Yes. There's ultimately 3 things that we want to measure, I think, to determine the effectiveness. One is, can we get the customer to download the app onto their phone? Can we get them to utilize the app for their move? And lastly, can we keep the app on their phone at post moved to continue to have that relationship with them. The installs in the installed base is something that has been very easy for us to monitor. I'm proud to say that in June, we actually implemented some advanced logging techniques to make sure that we really understand what's going on. And in the period of time in the last 2 months, we've been measuring that, we've been able to determine that the customer is utilizing the app on 4 distinct occasions. And we anticipate that, that number would continue to grow as we build new functionality, and we build new features. As we mentioned before, like the Box organizer is a great tool, can we build something and can we give the customer something that encourages them to continue to utilize and maintain that relationship with us even when they're not considering that they're moving particular needs. And I think we've seen some success, and we're going to continue to build on that.

Any thoughts on the recent Simply PSA transaction at roughly $196 a square foot.

It sounds like a good question for Jason.

Sure. Well, first off, I think the $196 a foot is spread over owned and managed square foot. So I think if you look at just the owned properties, they probably paid a little bit more than that per foot. But Public Storage, Extra Space have just done a fantastic job on these large acquisitions and mergers, and that's kind of where they play. Our primary play in the market is developing our own properties, purpose-built for our specific uses. And I think if you compare our performance, I had mentioned 4.5 million square feet of new development in my opening remarks. If you compare our volume of new development versus theirs, I think we stack up very favorably and are probably one of the leaders in that part of the marketplace.

If there is a shift over time where there's more permanent move to lower mileage traveled, would you give any consideration to increasing either the mileage rate or price to rent the truck?

Let's give that to JT.

I'm not so sure I expect to see a continued decline. However, if as the question asked, if there was a permanent shift, the simple straightforward answer would be absolutely. We'd do that. We wouldn't -- we'd look at that and move in that direction.

Does the return hurdle for self-storage projects, which is the vast majority of growth CapEx today, increase if U-Haul share price is low? How do you calibrate returns from growth CapEx against returns from repurchasing shares at cheap prices.

Joe, why don't you take that one?

There's a lot in that. Of course, if our shares are at cheap prices, this is a big opportunity for all of you here today. So I encourage you if that's where they are priced, avail yourself of it. we don't do a comparison of project or CapEx against repurchasing shares. We have repurchased shares in years past. There's nothing currently on the agenda that I'm aware of, and I would probably be aware of it. Certainly, in every evaluation we do have a project and we evaluate real estate projects on a one-off basis, we have to assume a cost of capital, which would be composed of both debt and equity. So we have some inherent hurdles that we put into that, that caused us to come to the prices that we're willing to pay for self-storage. So we do consider it, but not on the basis of will we be better allocating the money to repurchase shares at this time.

Here's a few questions about moving help. Maybe David, you can take some swings at them. How many moving firms are signed up for the program? What are the number of moves in the past 12 months? What is the average ticket size for moving help and the growth rate? Is this a margin-neutral activity?

Yes, I can step in an old hack here real quickly, I guess. Right now, moving helpers. We have roughly 7,400 across the United States and Canada. Last 12 months, we had 681,000 completed jobs, which -- moving our business will generally ebb and flow alongside U-Move transactions, but at least over the last 10 years that we've been tracking at that penetration rate of moving help completed jobs has increased year-over-year in comparison. In terms of the average ticket size, I would believe that number currently is roughly in the $260 range would be at the average price. As regard to margin neutral, yes, I mean the moving help fee structure is built on a 15% flat fee. Moving Help really doesn't have any asset costs other than the labor to manage the business. So is that Moving Help business increases, so does the measurement of that revenue that, that program generates. So.

Great. Sounded like a question from a venture capital firm wanting to fund another Internet startup to come in and butt heads with us, they would do well to save their money based on our experience over the last 10 years. David could name them, but the battlefield is littered with people who think that's an easy thing and that you can conquer it with a good piece of software. About how many years? Are we 15 or 16 years in that business? David, do you remember or Sam?

Yes, I think 16 years, yes.

16 years of that. Like everything else I've ever been in, it's a slugfest. And we've slugged it out and survived and clearly have the best network times 3? Or is there even a comparison, David?

I would say times 4 would be more accurate.

Times 4. We have the best network times 4 of anybody out there, and it's not like falling out of bed in the morning. So -- but that's a very, very active area for people who think they're industry disruptors, well, we disrupted the industry 15 years ago. That you may or may not remember, but I promised you we would do that, and we've been doing it, and we will continue to do that.

How does the price volatility and seasonality of propane affect how U-Haul manages the business? How does this affect how you price propane to customers and purchase inventory?

Propane JT?

Yes. First, we generally don't carry a significant amount of inventory across all our U-Haul centers. We are updating both our cost and pricing on a regular ongoing basis, no longer than monthly. So I don't know that we're seeing tremendous volatility as it relates to that. We have a really nice advantage, I believe. Our -- each one of our local U-Haul locations are able to adjust and manage the pricing according to the cost that they're receiving the inventory in. And so they can be very adaptive to whatever local market conditions and dynamics are. So I right now think that end of the business is being managed very effectively, and I think it's going well.

Relatedly on propane, are you seeing and forecasting an increase in automotive vehicles using propane?

We watch that market very closely. We haven't seen significant growth here recently. We are the largest retailer. We have well over 1,100 locations that are set up with high-speed pumps. We're ready to do it. Historically, we have worked with fleets to provide them with fuel and service, and we continue to do that. So we're set to go, although we haven't seen significant growth over the last year or so.

For self move, in your opinion, what are the best public company peers that we can benchmark your firm to? Do you consider United Rentals a decent comp?

Joe, could you address that?

Well, the answer to United Rentals is I have not studied any of their material, but they're in a totally different business with us, and I think they follow a different business cycle. And so I think that would be a poor comparison of our self-storage business, you can compare us to a variety of REITs that have some information out there. On the self-moving business, there's really nothing that I think that really compares to us and that would give you a lot of insight, particularly nothing that's publicly available. So the people, if we picked, it's [pigskin] budget and said, they're the industry comps. Well, there's not enough information because that data is buried in their financial statements as well. So I don't think you have a lot of help from publicly traded companies.

For self-storage, have the returns changed over the last 5 years for the better or for the worst. When will you know you're done expanding? How do you decide how much to grow per year?

These are good questions for Dennis.

Thanks, Sam. Generally speaking, our returns increase the longer that we own a facility. In the last 5 years, certainly, we have grown the portfolio, which, of course, brings with it more mature facilities, which then increases the returns that we get. When do you know you're expanding? That's the million-dollar question isn't it. And I think I said last year that we underestimated the storage market. Therefore, we're continuing to rework existing facilities, convert obsolete buildings, acquire new properties and look at developing in markets where we are undersupplied. The rate growth is projected to be good. And the net rentable square feet per person is low. And it's a lot to ask, but that's what we're looking for. Are there markets that we're going to discontinue development in. Of course, there will be. But the vast majority of markets, we're still in a development and acquisition mode, so we can steadily feed the supply of storage as well as locations so we can continue to serve the customer.

Recently, Life Storage was purchased for north of $11 billion, with at least 2 bidders competing for it. Life Storage appears to be of similar size to our self-storage operation. Our metrics for self-storage are partially obscured within the rest of our businesses, but theirs are perfectly exposed. Can you comment on whether our metrics for sales per square foot, operating profit margin, square footage growth and occupancy rates are similar to Life Storage?

Well, Jason talked about the Public Storage acquisition. Why don't we see if Joe can comment on Life Storage being acquired?

First, I would encourage you that their financial statements aren't just simple. They have a vast network of managed stores. I believe it's about 50-50. I'm not remembering the exact numbers today. So when you read their financial statements, you have to do that with that thought in mind in order to comprehend it. Overall, I would say, live storage has on the average, greater square foot per location than U-Haul does. Margin is very much influenced by gross revenue, margins, 1% of gross revenue. And you have certain costs that are relatively stable, whether you have 40,000 feet or you have 80,000 feet. Life storage is more likely going to have 80,000 foot. Everything we've done in the last 7 or 8 years has been towards the big side. So our newer properties are probably very close to what Life Storage is seeing. But that would be a subset, and I can't quote you a number here today, It would be a subset of our total properties. So it's -- I always get down to the specific property before I start trying to really evaluate the gross margin. So we've got a lot of facilities that have something like 20,000 foot of net rentable square feet that we put in maybe prior to 1990. Well, you wouldn't build that today where we can, we're buying a budding and expanding or if we have land that we could redevelop we're doing redevelopment constantly. But I think that we would be a good comparison to life on everything that's gone on in about the last 5 years. I think is the answer. Square footage growth is another kind of a confusing one. As Jason said, I think we're in new development about equal to them, but because they have this initiative to manage facilities that did factor in some way, you can say they're growing faster than us. Jason, would you add to that or what?

No, everything you just said, if you can find like facilities in like areas, I think we're going to look very much like them. because by definition, we're within a 1 or 2-mile radius, our rates are going to have to be very close to theirs, right? Or you're just not going to be able to compete against them. On a margin basis, for -- I've said this before, for our properties that look like theirs, where there isn't a lot of non-storage revenue, you see margins at those locations that approach the high 60s. And so we're a couple of points off of what they report. And -- and before I pass it back to you, I'm sitting at the far end from where Dennis is at and one of his earlier answers, I may have misheard, but I just want to clarify just in case that the our move-in rates right now are higher than what our move-out rates are. So I just wanted to make sure -- I might have misheard that sitting this far down, but I think that's -- I think we're a little bit different than what the rest of the industry has seen right now, and I think it's an important point.

A multipart question here on U-Box. You had previously asserted that operating margins are similar to truck rental. Do you still see that as being true? How quickly is this portion of the rental business growing for the industry? And is U-Box gaining or losing share? And lastly, as we've been building self-storage to include space for a U-Box component, how much of a competitive advantage is this?

Well, I'll take that question. Maybe just to nitpick with the question a little bit. I don't believe we've ever said that U-Box operating margin is equivalent to U-Move operating margin. And I think -- there's a couple of reasons for that. First and foremost, as everyone knows, U-Box is a moving and storage product. And so when you're comparing it singularly to just U-Haul's U-Move or just U-Haul self storage divisions. You run into some allocation problems and some things because of that it's not quite apples-to-apples. Where is it going? Maybe is -- was kind of the point of that question? I think that ultimately, U-Box continues to evolve positively. And our expectations are that its operating margin will be in the -- ultimately in the zone of U-Haul's combined -- excuse me, in the same zone as U-Hauls's, U-Move and storage operations combined. Hopefully, that made sense.

Why is same-store occupancy down in the quarter? What are the drivers? And how low could occupancy go?

Before he answers that, I think there was a part 2 of the other question. Could you go back to the last question and read the second part? I think [indiscernible] left that part.

Right. I guess in regard to competitive advantage, we've been building self-storage to include space for U-Box component. How much of a competitive advantage is this?

Okay. Sorry about that. So a question about U-Box warehouses. U-Box warehouses are continuing to come online, very excited. They're a unique competitive advantage, obviously, because in growing U-Box, we have to be able to stage and store containers that have been shipped or in the middle of being shipped or will be shipped. But uniquely, it also gives us -- U-Box Warehouses give us a interesting high-density proxy for traditional self-storage in areas where we need it. So I would say it's a very exciting competitive advantage. Sorry, thank you. We can go on to that other question.

To repeat the question, why is same-store occupancy down in the quarter? What are the drivers? How low could occupancy go?

It's a traditional self-storage question? And Dennis, why don't you take that one?

Okay. Well, I'll go back, Jason, is all the way at the other end for me, and I believe he is correct as I misspoke there. The move-out rates are higher by 3% or 4% than the move in rates. Okay. And then I'll go back to same --

Reversed it.Just reversed it. So if you get a new tenant, will they be paying more per square foot or less than the tenant that just vacated.

New tenant will pay less.

Yes, I'll take that. Yes, I think there's a little bit of confusion because we don't normally refer to -- I think the question was roll up and our use of industry jargon is -- we have our own jargon here internally, and that causes some confusion when we attempt to translate that to analyst and REIT to speak. So our average revenue per foot for people that are moving in today is at a higher rate than the average revenue per foot for people that are moving out today. So there's still room within the portfolio for us to certainly increase rates. And that's why in the prepared remarks that I had at the beginning, we think that we still have some room to increase revenue per occupied foot this year compared to where it was last year because even though our revenue per foot increased by about 9% last year, I think we were trailing some of the competition a little bit, and that's given us a little bit longer runway this year in order to get some revenue increases. So I hope that helps.

Next question. To build shareholder value, what is the best route for the company, increasing the dividend, paying out special dividends, repurchasing shares or selling off some assets to crystallize just how much they've appreciated?

I might want to take this question. Could you repeat it one more time?

Yes, to build shareholder value, what is the best route for the company, increasing the dividend, paying out special dividends repurchasing shares or selling off some assets to crystallize just how much they have appreciated?

Well, they're -- I'll take it. There's -- there might be an intentionally missed option that was left off the list, which was reinvesting in rental assets. And that, of course, is our primary goal right now for building shareholder value. I think all the other additional options you mentioned are thoughtful, and they have been discussed, and I anticipate they're going to continue to be discussed.

The last question we have time for today. U-Haul is a very well-managed company. However, no real succession plan is visible. Any hint of what it is?

Joe, let's give that to Joe.

Okay. Well, first of all, I'm planning to continue to work as long as I'm effective, and I have the support of the shareholders and the team members. So there's not something imminent that I'm aware of. As you hopefully saw in the video, we brought on a whole cadre of people who are young, but are very experienced in U-Haul. And I expect those people and others like them to continue to grow with the company, get promotions and lead the company into the future. And then finally, for the last 4 or 5 years, I forget how long we've had Sam in the position of Vice Chairman. So if the -- if I drove off a cliff on the way to work today, I presume that tomorrow, the Board would take some action and they have an easy choice for Sam to at least bridge the gap to whenever they end up wherever they end up.

Well, I just want to thank everyone for the questions today, even the ones we didn't get to help us calibrate our thinking and prepare for future discussions with all of you. So thank you and just as a reminder, a replay of this presentation will be on our website by early next week. Sam, any final thoughts?

Well, thanks again for joining us. We appreciate your feedback and continued support of the company. And of course, as always, we encourage you to stop by one of our locations and evaluate our products and services for yourself. So we look forward to seeing you the same time next year.