U-Haul - Q1 2021
August 6, 2020
Transcript
Operator (participant)
Please note, this event is being recorded. I would like now to turn the conference over to Sebastien Reyes. Please go ahead.
Sebastien Reyes (Head of Investor Relations)
Good morning, and thank you for joining us today. Welcome to the AMERCO First Quarter Fiscal 2021 Investor Call. Before we begin, I'd like to remind everyone that certain of the statements during this call, including without limitation, statements regarding revenue, expenses, income, and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected.
For discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to Form 10-Q for the quarter ended June thirty, 2020, which is on file with the U.S. Securities and Exchange Commission. At this time, I'll now turn the call over to Joe Shoen, Chairman of AMERCO.
Joe Shoen (Chairman)
Thanks, Sebastien. Adversity, of course, separates out the hardcore from the rest of the pack. That has been true inside the company and relative to our competitors over the last five months. There is not much work from home that has been available for our team. We have taken advantage of what opportunities there were. For the most part, instead of work from home, it has been work in the midst of it. I personally have worked in at least 32 states since the start of COVID. Canada has remained closed to travel, but hopefully, it will open before September. We have had a massive effort in place to sanitize our equipment and facilities. We have had great success with this and have protected our customers and team members. All of our stores have remained open. We have been listening carefully to the public to learn their needs.
Obviously, we have lost many customers, so we have had to find new customers with need we can craft a solution to. We are determined to persevere and actually win. I thank you for being on the call, and I appreciate your feedback. I'll turn it over to Jason for the numbers.
Jason Berg (CFO)
Thanks, Joe. Yesterday, we reported first-quarter earnings, $4.47 a share. That's compared to $6.76 a share for the same period in fiscal 2020. As we discussed back on our fourth-quarter call in May, self-moving equipment rental revenue and equipment sales were the two areas most affected financially for us from COVID-19. Looking first at equipment rental, we saw a decrease of nearly 13%, or approximately $94 million for the quarter. Whether through actions taken by government authorities or from cautious behavior on the part of our customers, rental activity decreased during the first quarter. However, as the quarter progressed, we noticed improvement in transactions and revenue. In comparison to the same month last year, for example, April of this year was down 30% compared to April of last year.
May was down 8%, and by June, revenues were only down about 4%. We have an increase in U-Move revenue for the month of July compared with July of last year. The majority of our independent dealer network has reopened, and compared to the same period last year, we've increased the number of retail locations, independent dealers, and box trucks and trailers in the rental fleet. Capital expenditures on new rental trucks and trailers were $123 million this quarter. That's down from $561 million the first quarter of last year. While our original plans contemplated a decrease in fleet spending for this year, the majority of the decrease in the quarter was due to manufacturers unable to produce units. Our expectation for net fleet CapEx this year is still around $460 million.
However, there is quite a bit of uncertainty to this projection, both on the acquisition side and on the sales side, and it could end up lower. Proceeds from the sales of retired equipment decreased by nearly $84 million, to a total of $74 million in the first three months of the year. The decline is a result of commercial auction closures. We've seen July auction capacity improve and sales results have followed. Growth in storage occupancy has remained resilient so far through the first quarter. Revenues were up $11 million, or about 11%. Growth in revenues and units rented comes from a combination of occupancy gains at existing locations and from the addition of new facilities to the portfolio. Delinquency has climbed approximately 70 basis points beginning early in the pandemic and has remained fairly steady since then.
If you look just at our occupied room count at the end of June, we had an increase of 41,700 occupied rooms compared to the end of June last year. And looking at July, we are seeing this year-over-year positive variance begin to widen out a bit. Our stated occupancy rate of 68% continues to be diluted by the addition of new product.... This quarter, I took a look at our occupancy using one of our competitors' same-store calculations to see what it would look like for us. So for properties in our portfolio that have been at 80% or better for two years, we had 549 locations that met that definition, and their average occupancy was about 92.5%.
That would have been down about 80 basis points compared to the same calculation had we done that last year. Our real estate-related CapEx for the quarter was $103 million, down from $218 million last year. Both the pace of acquisitions and construction slowed during the quarter. Over the last 12 months, ending June thirtieth, we added 5.2 million net rentable sq ft to the storage portfolio. About 1.3 million of that came online during the quarter. Retail sales increased $11 million or 14% for the quarter, with all three of our major product lines reporting gain. As a reminder, the three major product lines that we have within retail sales are moving supplies, hitches and towing accessories, and the refilling of propane tanks.
Of these three, the largest increase in both dollars on a per- and on a percentage basis came from the installation and sales of hitches and related accessories. That includes automobile-mounted bicycle rack. Operating earnings in our moving and storage segment decreased $50 million to $152 million for the quarter. I wanted to touch on a couple of the expense highlights. Depreciation expense on the fleet increased $3 million for the quarter. As fleet additions have slowed, so has fleet depreciation, with the June expense actually decreasing year over year. Now that equipment is once again being produced by manufacturers and getting into our plants, we will likely see depreciation expense turn back up over the second half of this year. Related to this, gains on the sale of rental equipment decreased $16 million.
This relates to the decrease in auction activity during the quarter that I previously discussed. The decline was largely related to volume, as pricing has not declined materially. Depreciation on all other assets, primarily storage locations, was up $7 million for the quarter. Operating expenses were down $42 million. Repair costs associated with the rental fleet accounted for $28 million of that decrease. With the decline in transactions and miles driven, preventative maintenance costs have followed suit. Additionally, with reduced auction activity, we had fewer trucks being prepped for sale, thus reducing repair costs as well. We have not deferred any maintenance work or maintenance costs. To round out the three of our largest operating expenses, we also saw declines in personnel and insurance costs. I wanted to comment on our insurance company results for the quarter.
Their combined earnings from operations decreased about $9.5 million compared to the first quarter of last year. This was due entirely to two relatively recent accounting standards that have introduced some earnings volatility into their investment portfolio. The accounting standard that requires the mark-to-market of common equities through earnings reduced our insurance company earnings by a little over $6 million. Additionally, this quarter, we implemented the new rules for current expected credit losses. This further reduced their earnings by about just under $4.5 million. I'd like to remind everyone that our insurance companies report on a three-month lag in conformity with their state-regulated reporting conventions, so their investment portfolio valuations in this 10-Q were made as of March thirty-first.
As we've all seen since then, the financial markets have rebounded, and our insurance segment have seen these non-cash charges essentially cut in half. There's nothing fundamentally wrong in either insurance company with their core operation. We continue to improve our cash and liquidity position. As of June, at the end of June, availability, cash and availability from existing loan facilities at the moving and storage segment totaled $841 million. That's up from $498 million three months earlier at our year-end. With that, I would like to hand the call back to Ai Lee, our operator, to begin the question and answer portion of the call.
Operator (participant)
We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Our first question today comes from Ian Gilson with Zacks Investment Research.
Ian Gilson (Senior ananlyst)
Yeah, good morning, gentlemen. Congratulations-
Jason Berg (CFO)
Good morning, Ian.
Ian Gilson (Senior ananlyst)
superb results. As we look at the monthly progression of social distancing and location closing, basically, many states opened up, basically starting in March and April, and some of those states have found that they have increased their problems and are moving back to restrict movement. Have you found that this is impacting your very recent results, or have you maintained a modest decline on a year-over-year basis?
Jason Berg (CFO)
I would say we've not seen an impact. We're very wary of it, Ian. Of course, most of these-
Joe Shoen (Chairman)
... restrictions on movement are very questionable constitutionally, and we look forward to the government to try to respect the Constitution, at least in the United States. Canada has been more afflicted by restrictions on movement, and of course, they operate under a different system than the United States does. So in the United States, I think we can say we've not seen a downtick because of this. We're very wary of it, and of course, with our own team members and with our customers, we want to be sure that we're in no way contributing to any sort of an uptick, which I'm pretty satisfied we're not. It's anybody's guess, Ian, honestly, as to where things are going to go.
We have to just listen to the customer, and if they express some need, we have to see if we can get a solution to it that they'll pay us for, because we've lost volume of small repeat customers. These are marginal businesses that have been forced to close: caterers, florists. These people were, you know, a staple for many, many years, and they're just simply not here anymore, and we've had to try to replace them, and that's been a little bit of a stretch for us, but so far, we've pulled it off. So, I would just say it's very hard to make a prediction, but we're trying to be light on our feet as a big company can be.
Ian Gilson (Senior ananlyst)
Okay. As we had looked back on your prior statements regarding the availability of trucks, particularly on the Southern California area, has that now changed, or are you still finding a relative shortage at around Los Angeles, for example?
Joe Shoen (Chairman)
It's a terrible shortage in Los Angeles, a terrible shortage in the greater New York area, a terrible shortage in Boston, and I'll let you conclude why.
Ian Gilson (Senior ananlyst)
Okay, fine. Thank you very much.
Operator (participant)
Our next question comes from Jamie Wilen with Wilen Management.
James Wilen (President)
Hey, fellas. You made a comment about caterers, florists, and those types of small businesses not being active. Do you measure between what are consumer moves versus business moves? Is your consumer move staying relatively flat while the business moves have declined?
Joe Shoen (Chairman)
We can't. We don't have a definitive way to do that. Most of these small businesses are sole proprietorships, and they do business with us under a personal credit card. So they kind of fall through the cracks. Now, anecdotally, as I work stores, manager after manager says, "Well, I had a customer who used to come in once a week, and I haven't seen the person in three months." I mean, there's no doubt with people, this has declined.
James Wilen (President)
Mm-hmm.
Joe Shoen (Chairman)
We've done. We've picked up some business with home improvement. People have gone home improvement crazy, and we get into some of the transport of that, okay? And I think we may have picked up some storage from that, but I can't give you, I don't have real confidence in that. But since I see the pickup in the equipment rental related to home improvement, there's a certain number of people who put things in storage while they're redoing their bedroom or whatever, and I think we must have gotten some of those people, luckily. What's still ahead of us is whatever's going to happen when they quit the moratorium on foreclosures, evictions, and all this stuff. And it's going to be a little while, would be my guess, but I don't have a way to quantify that.
We've seen it a couple times locally, and it just puts a big pressure on a group of people or a group of Americans who are, at that time, marginalized either in their mortgage or their rent. And so that's going to create some activity, and we hope to be there to serve the public and offer them a solution and thereby, of course, pick up some business for ourselves.
James Wilen (President)
Jay, you've mentioned that fleet utilization is the major criteria that you look at within your truck rental business. Given that volumes are down, I'm surprised to see your fleet size increasing. How are you going to work toward increasing that fleet utilization number in the future?
Joe Shoen (Chairman)
Of course, we got slaughtered in March and April, as you might figure. You know, business value utilization can't make a thirty or sixty-day adjustment fleet. Or let me put it this way: We've not figured out how to. Now, at the same time, we are driving on utilization. I'll let Jason... I don't know what numbers we made public on that, but what you see in the total fleet number is that the sales market just died for basically ninety days, disappeared. Now, that's coming back, and so you're going to see, I think, in the big numbers, I think you're going to see a little trimming of the fleet in overall numbers. This is a very fluid situation. We didn't know how to predict when sales came back, so we basically put a real-...
Slow down on additions, and serendipitously, the manufacturers for some period of time were simply closed down, so they couldn't have sold them to them if we'd wanted them. So that factor has, you know, our fleet plan's changing month to month, I guess, what I could say to you now. Sales are holding good. If sales hold good, we'll probably by December be total fleet where we had planned to be. But we're gonna have another little bump come through here, and I don't, we've been trying to forecast just how it'll impact us, but which is we'll be selling some trucks a little later than we had planned to sell them, so we'll have a little more mileage on them. And we don't quite know how to, with certainty, forecast what the proceeds will be.
So there's gonna be a little unevenness in the gain or loss on equipment sale, probably for eighteen months, would be my guess, before it works itself back out. Of course, we're trying to work it out as fast as we can, and we're gonna get a lot of the way there. By December, the way things are looking now. But this is so up in the air and so dependent upon forces that aren't totally ours. We just have to try to be nimble and be watching for what the trend is and then respond to it. So far, the automakers have been very cooperative and helpful, and I think it's the benefit from decades-long relationships. So we all know that we're trying to cooperate in this, not get cross with each other.
And so it's, you know, everybody's suffered difficulties in this regard, and we work very closely with the automakers, and hopefully, we'll be able to come out of this okay. We're not in a catastrophe position. I think at the worst, and Jason, you help me if you know better, we had about three thousand vehicles hung up in the system. In other words, they've been prepped for sale.
Jason Berg (CFO)
That's about right.
Joe Shoen (Chairman)
And they weren't selling. So they weren't getting any income, but of course, they're - they got, we got all the expense. We continued to depreciate them and everything right on through, of course. So they, they were all dressed up with nowhere to go. Now, we, we worked that down substantially, and we're continuing to work that down, and at, at some point, it'll start to normalize. But Jason's turning to his computer, so he may have, he may have a better answer to the, to that.
Jason Berg (CFO)
Well, Jamie, I just wanted to put a little bit of a finer point to your comment about the number of trucks. So we ended up taking on probably somewhere around five thousand trucks that were in the pipeline at the beginning of this pandemic, that in a perfect world, we would've probably not taken shipment on because we couldn't sell the corresponding number of trucks and do our normal rotation program. So I think we're looking at kind of a momentary high point in trucks, but then as we sell through them, which is looking pretty good right now, we should see that the number come down by the end of the year and look a little bit more reasonable as what we planned on to start with.
James Wilen (President)
Okay. You mentioned the progression of rental volume between April, May, and June. Could you talk about July?
Jason Berg (CFO)
Yeah, July, we're seeing an increase over the previous year. So, it's been a steady improvement. You know, we'll see how that continues into August. Right now, with the way that the end of the month fell at August, it's hard to project much from the first week so far here, but July was a, the month looked good.
James Wilen (President)
Could you quantify that?
Joe Shoen (Chairman)
I think we shouldn't ought to do that, honestly.
James Wilen (President)
Okay.
Joe Shoen (Chairman)
We got every hand at the oar, okay? But we don't know just how this is gonna turn out. And, trust me, we're doing everything we can to be up, and we're... we aren't... I call it the siren song of failure. We're not listening to the siren song of failure, but that's a different thing from actually turning the money in every day. And, you know, we've got nearly 2,100 stores and 20,000 dealerships, and every day there's another little opportunity just to keep the place open, very frankly. At our worst, we had possibly as many as 6,000 of our dealerships closed. We did not close our stores. We had intermittent closures due to, you know, a bunch of confirmed cases of COVID, or, the riots that came through closed some stores.
We had a couple places where the local politicians put in a closure for several days. I mean, we worked through all that, and God knows if they're gonna implement that same thing again. I try to be very positive about this, what's actually happening in the workout with the reopening, because the last thing I want to hear is that the politicians say we're gonna start closing everything down again. We saw what closing everything down again looked like. You quoted a number on that, didn't you, Jason? The down in revenue. Didn't you quote a-
Jason Berg (CFO)
Oh, well, in April, it was down 30% when everything was kind of closed.
Joe Shoen (Chairman)
Okay. You know, that's Armageddon. You can figure that better than I can. 30% down doesn't work so good. So we found some new customers. And we're hard at it and optimistically, and of course, my plan is to see people earn bonuses. That's what my plan is. My plan isn't, you know, how many people we can terminate from employment. My plan is to see how many people we can have make a bonus this month and next month. So they all know my plan, and by and large, they're working towards that objective rather than just minimizing losses. And it's a different mindset more than anything else, Jamie. You just have to have a mindset you're gonna win rather than you're gonna not lose as bad as you thought you were gonna lose.
James Wilen (President)
Joe, on the self-storage side, what is your future program for CapEx and self-storage? And maybe we're slowing down a lot- a little bit to allow units to mature.
Joe Shoen (Chairman)
We've been-
James Wilen (President)
What's your outlook for this year or next year?
Joe Shoen (Chairman)
I'll let Jason try to quote a number. It's. Of course, we got three months of we couldn't get, you know, a guy to hang doors, and so, you know, just basic, stupid stuff. Couldn't get a roofer to put on a roof. So we have had a, whatever you wanna call it, a tremor in all of his numbers, but and he's been trying to keep readjusting constantly with this. We were cutting back before this hit, so I don't know, I'll just pick November or something. We've been cutting back, and it kind of, as you know, there's lags. We had some lags, and then we lost some finishing. So right now, I'm desperately trying to finish some projects so we can get them into revenue production. But we're queuing up fewer projects every day.
I'll let Jason see if he can quantify it.
Jason Berg (CFO)
Sure, Jamie. The statistics I normally quote are what we call active projects here, ones that are being worked. And last year, at this time, we had about 205 projects, or just under 11 million sq ft in development. And right now, we're looking at about 161 projects for about just under 7.8 million sq ft. So those numbers have come down over the last twelve months. A rough estimate of new projects that we've taken on, translated into net rentable sq ft would be maybe about 2 million sq ft of new projects that we've taken on. So all of those numbers have been trending down.
James Wilen (President)
You mentioned that July occupancy numbers were better than the June quarter. Could you quantify that as well? You increased occupancy, I guess.
Jason Berg (CFO)
Yeah. So the statistic I quoted was the number of rooms occupied versus the same time in the previous year. So at the end of June, we were at plus forty-one thousand seven hundred. Our peak performance level, which was last year, we did hit plus fifty thousand for a month. And we're trending, you know, it goes up or down, but it's been moving up, and I think so far in July, maybe we came close to plus forty-seven thousand.
James Wilen (President)
Wow! And I've never said this to a CEO before, Joe, but if you have traveled to thirty-two states in the last month, I hope you're doing it privately.
Joe Shoen (Chairman)
Oh, yeah. Yeah, we're flying the heck out of the company plane. And, you know, of course, people wanna see that the boss is working, too, since they're all working. Again, like I told you, we don't have a lot of work from home, so a lot of our team members have had to calm their own personal fears and then calm the fears of their loved ones so that they could continue to serve the public. And it's not been a totally comfortable situation for a lot of people. I'm very grateful in their debt for them being willing to carry on and try to serve the customer instead of just crawl into a hole someplace. So, but that's a day-to-day deal, and I'm sure you have loved ones and everything, and you have friends and family.
Some people are more terrified than others, but everybody's apprehensive, and we just have to continue to work through it.
James Wilen (President)
You guys done a nice job of doing that. On with nothing, thanks for your time.
Jason Berg (CFO)
Thanks, Jamie.
Operator (participant)
Our next question comes from Diane Huang with ThinkEquity.
Diane Huang (ThinkEquity)
Hi, thanks for taking my question.
Jason Berg (CFO)
Hi, Diane.
Diane Huang (ThinkEquity)
I want to get a better understanding on your moving and self-storage CapEx plan, for the rest of the year, because your spending this quarter was a lot less versus previous expectations. So, are you guys still planning on spending, I think, it was, like, roughly $400 million for equipment and $800 million for real estate? Has there been a change in strategy, or did the pandemic just constrain your ability to actually spend the CapEx dollars?
Jason Berg (CFO)
On the fleet, what we gave out, our initial projection was, I believe, $460 million, which is, I think we had initially projected somewhere around $850 million of gross purchases and then maybe $380 million of sales. Both of those numbers are moving around quite a bit right now, as you can imagine. I would say that the fleet CapEx spend is probably more impacted right now by the vagaries of COVID-19 as far as production being available and the auctions being open. On the real estate side, we don't really give out a projection for what it's going to be because it's more of an opportunistic type of program, and we go where the opportunities are.
We've certainly scaled back out of the interest of preservation of liquidity, which has been the primary reason behind us slowing that down versus market conditions, and we just went through a round of authorizing some projects to finish off or start up, but given what's happened in the first quarter, we'll most likely end lower on CapEx spending for real estate this year than we did last year, so it'll probably be the second year in a row that we're trending down.
Joe Shoen (Chairman)
Yeah, we're gonna trend down. We're gonna trend down more than we trended down last year. That's, that's what's really gonna happen, isn't it, Jason?
Jason Berg (CFO)
Yeah.
Joe Shoen (Chairman)
We were down last year. We'll be down probably harder this year. Again, we stand ready to cut anything at any time if we think cash is going to become, you know, our focus. And Jason's very hard focused on cash. He has a team of cash management people and, you know, of course, they're doing this every day, and it took us a little while to get some expenses turned down. We got them turned down. We got a lot of projects stopped, and now we're trying to do our best guess as what sort of business we can generate in there by cash flow for the next six months. It's a little bit uncertain, but we're... It's a, it's a full-time job. Jason's doing it every day, and he has a team of qualified people working with him.
Diane Huang (ThinkEquity)
Got it. Understood. And then, can you guys talk a little bit about what you're seeing in self-storage, what you guys saw in July and thus far this month? PSA said that their revenues will be more pressured, in the rest of the year, given rate pressure and difficulty in collecting fees. You guys have talked about overcapacity in the market for a while. So what are you guys seeing, and what is your outlook for self-storage?
Joe Shoen (Chairman)
We hope to be the last people to cut rates. The industry is a little fearful, and my guess is they'll get a little more fearful. I don't know that for a fact. We don't have a pipeline to them much better than you do. In fact, we may have a worse pipeline to them. So I think you should take what PSA says on its face as fact. You know, we have a slightly different plan, but we've had a different plan in storage all along. We're much more household goods-oriented, and household goods moves are more need-driven than some of their customers who are. They have a lot. I can anecdotally tell you they have a lot more small business customers. I can't give you a number, but I can tell you anecdotally, they have a lot more.
Those people, in good times, will do better than our customer will, but in poor times, maybe our customer will do better than theirs. Again, ours are driven by life events like births and deaths, marriage, divorce, that sort of thing. Not so much by overall economic activity, although it does impact us, and it's hurt us bad, but I think they're a little more impacted by that, which gives them, of course, a bigger rise in good times. So neither strategy is a sure deal. We're just slightly different strat.
Diane Huang (ThinkEquity)
Okay. You said that you guys are the last to cut rates. Can you talk about the declines that we're seeing in your rents per either occupied room or occupied square feet? Is that reflecting rate pressure, or is it more just like the mix of business?
Jason Berg (CFO)
I'd look at our rates on what's the average rate of people moving out, what's the average rate of people moving in. For our portfolio, including our new projects, our average rent per new room this year versus new room last year is up just slightly. It's not down yet. If you were to just look at our stabilized properties, excluding new rent ups, you might see a very small decrease, but it'd be less than 1%.
Diane Huang (ThinkEquity)
Okay. And I would just squeeze in one last one. Anything noteworthy in some of the key storage markets, maybe like LA, San Francisco, New York, or like Houston? Any place, any bright spots or places where it's, you're seeing extra pain?
Joe Shoen (Chairman)
It's been very selective. When the COVID first struck, and they closed schools, we offered thirty days free storage to any student, and we got a little bump in business. And we'll get a little bump of business depending on how the hurricanes come through here, both U-Move and U-Store. I think it would be generally, the harder the shutdown in the area, it more negatively impact the storage business. And that, I think you probably know those areas as well as I.
James Wilen (President)
Okay, thank you.
Operator (participant)
Our next question comes from Craig Inman with Artisan Partners.
Craig Inman (Portfolio Manager)
Hey, guys.
Joe Shoen (Chairman)
Hi, Craig.
Craig Inman (Portfolio Manager)
On the CapEx, I just want to clarify the net truck. Jason, you all are just, you know, obviously, it contains, but you're penciling in about $460 million for the year, and that's the net number?
Jason Berg (CFO)
Yeah, in my comments, I just wanted to highlight that there's probably a little more uncertainty to that number than in other quarters, just from all the moving parts. It might come in lower than that.
Craig Inman (Portfolio Manager)
Okay. And if you did finish up with that, you know, that net 460, you know, would that increase the total volume of trucks in the fleet, or would that hold it flat? Kind of what would that do to the count?
Jason Berg (CFO)
Our original plan was for the total fleet to increase a few thousand units. Now, with the sales market where it's at, I'm not sure we're going to catch up enough by the end of the fiscal year for that to happen, so it might be a little bit more. But the original plan and the intention was for it to grow just a few thousand units.
Craig Inman (Portfolio Manager)
Okay. You know, it's interesting, on the bonus side, Joe, you were talking about wanting to give employees a bonus. You know, a lot of companies, you know, meat processors, retailers, frontline workers, have handed out bonuses just for, you know, I guess you'd call it hazard pay. Why not take that approach? Well, I just, I'd love your thoughts on kind of how others are handling it versus y'all.
Joe Shoen (Chairman)
Of course, I only know what I read in the paper about other people, so I don't know much. The opportunity we have is every single person at risk because we're you know, we're in the equipment business, and it's in the retail business. Everybody's face to face. We put up sneeze shields and gloves and sanitizer and all that stuff. But the long and short of it is everybody's at risk. And a curious thing that I've noticed is that much of this is driven by fear more than actual contagion. And fear is a very, you know, a corrosive thing on your person, and fear doesn't actually have to do with, are you going to catch the COVID or whatever it is?
It's an internal thing, and I've learned to try to respect that with people and try to recognize that and do whatever we can to help them. But basically, every single person we have is engaged in some version of hazard, but the, how the individual perceives it is very different than from how you or I might perceive the identical situation. So, we haven't made any change there, and I don't expect that we will.
Craig Inman (Portfolio Manager)
Okay, so the bonus is-
Joe Shoen (Chairman)
We have a wonderful team. They're not asking for anything other than an honest day's pay for an honest day's work. They're people who have made this country great. They're, if you find out, we have a lot of longevity in our team. These people are dug in for the long term. They expect us to be fair with them, and we're doing our very best to be fair with them.
Craig Inman (Portfolio Manager)
Okay. On the storage business, Jason, I didn't catch, though, you threw out a same store number. How was that calculated again?
Jason Berg (CFO)
Sure. So the most objective calculation that I could find amongst the competitors is one where you look at a facility that's been open for, or has been at 80% occupancy for at least two years, so essentially, you start kind of measuring it in the second year where it's been stabilized, and so for those locations, we had about 40% of our locations fall into that category. And at those locations, our occupancy this year was right about 92.5%. If you would have looked at that number last year, I think it was like 93.1%.
Craig Inman (Portfolio Manager)
Okay, um-
Joe Shoen (Chairman)
Craig, I want to go back on that hazard pay. I don't think I answered it fairly as a reflection on the workforce. There is no amount of money that I would suggest I should induce anybody to jeopardize their personal safety or the safety of their loved ones. That's an individual decision that people make based on what they consider to be their responsibility to the public and to the country. And I'm very proud to say that far and away, the vast majority of our teams that just said, they thought about it soberly and said, "We're in." And I'll put that up against any other corporation in America. Very proud of how they behaved, and I would be, in my mind, insulting them, suggesting that if I give them X dollars, they should now put their family or themselves at risk. We're not in that business.
We're here to help the public. We're going to do it, and we're going to do it as carefully as we can.
Craig Inman (Portfolio Manager)
... Yeah, no, I, that is an admirable way to think about it, because I was curious to hear your thoughts, because other companies have, you know, they have stepped up pay in light of the more difficult conditions for frontline workers. They've taken a little bit different approach. So y'all's culture is slightly different there, and I was also getting at, is there potential for, you know, just from the numbers side, is there gonna be some pressure on pay because of these conditions?
Joe Shoen (Chairman)
There's huge pressure on pay. It's gonna continue. You almost can't hire today. It's impacted gravely by the $600 a week. We don't know how that's gonna work out in the Congress this week. It's massive. It's gonna continue. We're in a vice on that subject. We have a long-term plan. We've been. This is, this you could see this coming for a hundred reasons, but COVID's just aggravated it. But there's a steadily rising wage amongst frontline workers, and they're due every penny they can get. I'm all for it. But of course, in order to pay them, we have to make them more productive. And so we've had a tremendous program on attempting to make every single person at the frontline more productive and thereby create more value, which we can, of course, have them share in.
And that's our program, and we're hard at it as to a myriad of small things. Ones that you will probably relate to most easily are electronic tools that just allow people to speed up or, you know, get to the finish line quicker and eliminating basically busy work, and also getting the customer to participate more. This is a do-it-yourself business. This isn't a concierge business, and the customer expects to do some participation, and when the customer participates, it lessens the burden on the individual who we have on our side of the transaction.
Craig Inman (Portfolio Manager)
Have y'all seen with the 24/7 rental app, and online reservation system, have y'all seen a pickup there in terms of percentage of business coming through that channel?
Joe Shoen (Chairman)
Yes, it's constantly picked up now for three years, and it's, it accelerated slightly during COVID. But we were pretty well into it before that started, and so it continues on. You know, there's a lot of nuances to that. I think we've released ... Have we released any numbers on that, Jason? Okay, we haven't released numbers, so I can't quote you numbers, but sure, we're, we're working that for ... We are miles ahead of any provider I'm aware of. That doesn't mean there's not someone who's ahead of us, but I'm not aware of anyone who's ahead of us in a similar effort.
Craig Inman (Portfolio Manager)
Last one. I wondered, is there an update. I hadn't had a chance to read the queue yet. Is there an update on the refund status and size?
Jason Berg (CFO)
Sure. Of the amounts filed so far, we've filed for about $235 million. This week, we received the first part of that, $109 million, which then we deposited and is being used to pay down that $200 million loan that we took out, that's securitized by that. So we have another chunk of that still expected to come in. And then we have not yet filed our tax return for this fiscal year, which then we expect that to have another large refund associated with it. I think somewhere close to $250 million. So we're doing the work to prepare that filing, and we'll get that filed as soon as possible.
Joe Shoen (Chairman)
I'd like to clarify, this is all return of money we had previously paid the government. We have insignificantly participated in any program because it really hasn't been applicable for our organization, so we-
Jason Berg (CFO)
Yeah, the nature of our refunds are for amounts already paid and for recognizing essentially depreciation on capital investments that we've made to grow the business. And we've essentially that's been in the tax code for quite a while, and we're taking advantage of that. We are expected with the way that the timing of these filings are, that in fiscal 2022, we are likely to become a cash taxpayer.
Craig Inman (Portfolio Manager)
Okay, great. No further questions from me. Thank you.
Jason Berg (CFO)
Thanks, Craig.
Operator (participant)
Our next question is a follow-up from Ian Gilson with Zacks Investment Research.
Ian Gilson (Senior ananlyst)
Okay, thank you. As you look at your business, have you noticed any correlation between the number of new cases increased versus the level of business that you do in those locations?
Joe Shoen (Chairman)
Simple answer is no. This relates more closely to the fear index, which I don't have a generally accepted measurement of the fear index, but suffice it to say that it pretty much reflects the political realities of the nation.
Ian Gilson (Senior ananlyst)
I know that over the years, periods, excuse me, there are periods of peak activity that you employ a large number of part-time employees. Are we in that period? Are we increasing our employment, or are we basically at a level of full-time employee employment?
Joe Shoen (Chairman)
There's a lot of different parts to that, but overall, we're struggling to hold steady because of the lack of participants in the labor force at this time, Ian. I'm hoping that changes this week or next, but we're not driving that car.
Ian Gilson (Senior ananlyst)
Okay, fine. Thank you very much.
Sebastien Reyes (Head of Investor Relations)
This is Sebastian. I'll ask one last question on behalf of Keith Garcia at Pine Hill Capital Partners. How do you project the business will be affected by a large number of college students not returning to campus this year?
Joe Shoen (Chairman)
It's totally unknown. Amazingly, we had college students returning to campus last week of July. The way these schools are running it is a bit baffling to me, but we had some schools actually ask students to come back two weeks early, quarantine in the dorms, and they did it, and therefore they moved in last week of July. You could have knocked me over with a feather on the subject, so I'm absolutely baffled by what's happening, and, of course, we're trying to monitor it, but I'm sure you've all read the deal. It's one week they got this idea, and the next week they got another idea. We're having a hard time strategically positioning to meet these ups and downs in business. There's several of these colleges, as you all know, that are in some place like College Station, Texas, and Ames, Iowa.
The college activity is, you know, a 300%-400% increase in what goes on in those communities. When we can predict it in those four or five weeks in advance, we can position ourselves to be able to rise with the rising tide. When we're not seeing the patterns, and clearly we're not seeing the patterns, we're trying to find them. But it's... I, at first, I thought the business was gonna be down a lot. I'm not so certain it's gonna be down a lot, but it's gonna be unpredictable how the waves come in, and we may miss some that we would have gotten in a prior year. Is that enough for you there, Sebastian?
Sebastien Reyes (Head of Investor Relations)
I think that answers it. Well, I appreciate everyone being on this call. We look forward to speaking with you in a few weeks on Thursday, August twentieth, at our annual shareholder meeting, followed by our fourteenth annual Virtual Analyst and Investor Day, which is at 2:00 P.M. Eastern. Both can be accessed at amerco.com. After prepared remarks, there will be a live Q&A with members of the management team. Questions can be submitted ahead of time or live during the event. Thanks again for joining us today.
Operator (participant)
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.