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Edited Transcript of UHAL earnings conference call or presentation 8-Aug-19 3:00pm GMT

Q1 2020 Amerco Earnings Call

RENO Aug 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Amerco earnings conference call or presentation Thursday, August 8, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jason Allen Berg

AMERCO - CFO

* Sebastien Reyes

U-Haul International, Inc. - Director of External Communications

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Conference Call Participants

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* Craig Inman

Artisan Partners Limited Partnership - Portfolio Manager

* George James Godfrey

CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst

* Ian Trevor Gilson

Zacks Investment Research, Inc. - Senior Special Situations Analyst

* James R. Wilen

Wilen Investment Management Corp. - President and Chief Compliance Officer

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Presentation

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Operator [1]

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Good morning, and welcome to the AMERCO First Quarter Fiscal 2019 (sic) [2020] Investor Call and Webcast. (Operator Instructions) Please note, this event is being recorded, and the correct title is AMERCO First Quarter Fiscal 2020 Investor Call and Webcast.

I would like to now turn the conference over to Mr. Sebastien Reyes. Please go ahead, sir.

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Sebastien Reyes, U-Haul International, Inc. - Director of External Communications [2]

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Good morning, and thank you for joining us today. Welcome to the AMERCO First Quarter Fiscal 2020 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 a 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 30, 2019, which is on file with the U.S. Securities and Exchange Commission.

I'll now turn the call over to Jason Berg, Chief Financial Officer of AMERCO.

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Jason Allen Berg, AMERCO - CFO [3]

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Thanks, Sebastien. Speaking to you today from Phoenix, Arizona, after a few minutes of prepared remarks, we'll open it up for question and answers, like usual.

Yesterday, we reported first quarter earnings of $6.76 a share compared to $6.53 a share for the same period in fiscal 2019. Equipment rental revenues increased just over 4%, up approximately $32 million. We saw an overall improvement in the number of transactions, along with revenue per transaction. Revenues from both the one-way and In-Town markets increased, and these trends were similar for both truck and trailer. Compared to the end of the quarter last year, we had a modest increase in the number of independent dealers in our network, along with an increase of approximately 80 company-owned location. U-Move revenue growth has continued into July.

Capital expenditures on new rental trucks and trailers were $561 million this quarter compared to $440 million. Our truck purchase schedule is skewed heavier to the first half of the fiscal year.

Proceeds from the sale of retired equipment decreased by nearly $29 million to $158 million in fiscal 2020. The decline in proceeds was a result of the pace of sales in the first quarter of last year being higher than usual, rather than there being any weakness in the retail market this year. In fact, gains from the disposal of rental equipment were flat for the quarter, while the number of units sold decreased by a few thousand. The sales process is giving us an indication that we've made some progress on the equipment damage issues that we've mentioned here over the last couple of years.

Storage revenues were up $12 million or 14%. Average monthly occupancy throughout the first quarter of this year for the entire portfolio was 68%.

To give you a sense of same-store occupancy performance. On this call, last year, I reported to you that locations opened at least 3 years had average occupancy of just over 87%. Well, looking at those same locations this year, they're up to 88.5% or about 0.5% improvement. A large portion of the revenue gain came from the growth in occupied rooms. The average number of occupied rooms during the first quarter of this year increased 40,100 rooms compared to the same time last year. If you look at just the end of June instead of the 3-month average, the increase came in at just over 43,000, about a 70% improvement in the pace of net movements compared to last year at this time. And we've continued to accelerate this pace now into July.

Our real estate-related CapEx for the first quarter of this year was $218 million. That's just about what it was last year at this time. However, within those figures, there's been some reallocation. The portion attributable to acquisitions has declined, while the amount coming from construction and improvement has increased. Over the last 12 months, we've added 5,780 million net rentable square feet to the portfolio, about 1.9 million of that came on here during the first quarter.

Operating earnings in the Moving and Storage segment increased to $1.5 million to $202 million for the quarter. I wanted to touch on a couple of items here. First, depreciation expense on the rental fleet was up $8 million. While depreciation on all other assets, largely storage-related assets, increased by about $6 million. Gains on the sale of rental equipment were flat, and we did recognize a $1.6 million gain on the disposal of real estate. This was due to the condemnation of a portion of one of our properties out in Texas. Personnel costs, property insurance expense, property taxes and freight expense are 4 of the larger expenses that generated increases in the quarter. These expenses, in aggregate, were up approximately $31 million. Of note, we did see some relatively small decreases in fleet maintenance expense for the quarter.

As of June 30, cash and availability from existing loan facilities at our Moving and Storage segment totaled $576 million.

One last comment before we go to questions. As of April 1 of this year, we adopted -- we were forced to adopt the new accounting standard for leases. The adoption resulted in nearly $1 billion of net property, plant and equipment being re-classed to a new balance sheet item called right-of-use asset finance. As of June 30, 2019, the balance of this new line item includes rental equipment that we purchased under financing liability leases or what I would call capital lease. Operating leases, primarily locations that we're leasing the ground from moving centers, are included now in the right-of-use asset operating. In our earnings release, we've included a non-GAAP table on the last page to help compare our PP&E from this year to previous years.

I would certainly welcome any feedback from our investors on how to improve this disclosure related to the new standard. While this caused the geography of our balance sheet to change, there was no economic impact to our business from the adoption of this new accounting standard.

With that, I would like to hand the call back to Nancy, our operator, to begin the question-and-answer portion of this call.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Ian Gilson from Zacks Investment Research.

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Ian Trevor Gilson, Zacks Investment Research, Inc. - Senior Special Situations Analyst [2]

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Revenue was up 4.5%. Revenue was up 3%. So we sort of squeezed the margin somewhere, and this has basically been happening over the past year since last year. When can we see a reversal basically of that trend?

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Jason Allen Berg, AMERCO - CFO [3]

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Great point, Ian. We're working very hard right now to reverse that trend. On the equipment side, I would say that the first half of this year, we're increasing the fleet. From a timing perspective, it's going to happen more in the first half. And we're going to need to try to catch up to the fleet growth here on the transaction side, and that didn't happen in the first quarter. So utilization was down just a little bit.

On the storage side, much of the focus in the organization has been on filling storage rooms. And I would say that in the first quarter, we had quite a bit of success in doing that. And from what I've seen in July, we've increased that pace even faster. So our issue right now is utilization of the assets that we've invested in, and the financial performance is reflecting the fact that we're not fully utilized.

I don't have a specific time where I can tell you in 2 years it's all going to be fixed. Some of it will continue to depend upon the pace of reinvestment. But I think it's important to understand that there's continued demand for renting the equipment, and we're seeing a good pace of filling these rooms that we're building. So at some point, we're going to start seeing the payback. But on the storage side, I think we're starting to turn the corner there.

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Ian Trevor Gilson, Zacks Investment Research, Inc. - Senior Special Situations Analyst [4]

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Okay. From the depreciation line detail, in 2018, it was $126 million. 2019 (sic) [2018], $126 million. And then this year, $141 million. Now basically, you said what we have $8 million...

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Jason Allen Berg, AMERCO - CFO [5]

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The equipment went up $8 million for the quarter compared to last year at this time. And everything else, which is largely buildings, improvement and the equipment that we put in the building is up about $6 million for the quarter.

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Ian Trevor Gilson, Zacks Investment Research, Inc. - Senior Special Situations Analyst [6]

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Should that stabilize looking forward?

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Jason Allen Berg, AMERCO - CFO [7]

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We're going to see depreciation continue to decline this year. With the amount of box trucks that we're buying -- in particular, we're buying a lot of the 26-foot truck, which is our most expensive truck. That's front-loaded at the first half of this year.

Our dynamic depreciation on the fleet, we take the largest depreciation charges in the first year. So we're going to see a depreciation on the fleet continue to increase throughout the year. And I think as we put more of these real estate assets online and we build out of them, we're going to see that continue to decline also. So I don't think we're going to see that number come down here in the near future.

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Ian Trevor Gilson, Zacks Investment Research, Inc. - Senior Special Situations Analyst [8]

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So what I'm hearing you say basically is you are going to continue to emphasize fleet purchased as compared to fleet leasing.

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Jason Allen Berg, AMERCO - CFO [9]

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To us, it's one and the same however we choose to buy it, but I'll say fleet acquisition.

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Ian Trevor Gilson, Zacks Investment Research, Inc. - Senior Special Situations Analyst [10]

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Okay. And has the new accounting regulation changed your perspective on how to invest?

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Jason Allen Berg, AMERCO - CFO [11]

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No, we haven't seen our lenders react in the changes to how they want to finance the equipment. So most of what we're doing right now is capital leases. Those were on balance sheet before for us.

So again, I haven't seen anything where there's been an economic impact to us from that standard. There's just been a whole lot of work for the accountant.

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Operator [12]

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And our next question comes from Jamie Wilen of Wilen Management.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [13]

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Hey, Jason, in the last call, Joe talked about his most important figure in looking at truck rental was the utilization rate. Obviously, that's down a little bit. But the utilization rate is a very simple number, the number of trucks out there and how many rentals we have. My question is, why don't we reduce that denominator? Why don't we reduce -- why are we greatly expanding our truck fleet so much?

I love to see U-Haul trucks on the road, but I'm really not in favor of when I go past the dealership seeing 25 trucks sitting there. Why don't we try to optimize this truck fleet as opposed to maximize it so we can optimize the utilization rate?

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Jason Allen Berg, AMERCO - CFO [14]

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Well, our whole goal here is to try to optimize that. So I would hope that when you see the 25 trucks, that's on a Wednesday and not on a weekend. But I completely get your point.

Where we're at today is our team seize opportunities that with additional fleet, when we get it distributed to the right markets where we think it's going to be needed, I think we'll see utilization climb. Now we saw that last year. We slowed purchase a little bit. Utilization improved. This year, we wanted to go back and hit the fleet a little bit. We have a little bit of extra purchases this year in our largest truck because Ford is getting ready to change over the model and have a new engine.

And for a whole number of reasons, including our ability to efficiently repair those units in the future, we're probably buying a little bit heavier than what we normally would buy right now. But it's going to give us the flexibility in the future to do the kind of pivoting that you're talking about that if we want to do the -- the quickest way for us to adjust fleet size is through sale, not necessarily through on the acquisition side. You want a certain amount of new trucks coming in.

At our current size, gross fleet spend a year is probably going to be somewhere around $1 billion in order to maintain a size of fleet this much. And from what we can tell, we still think that we're going to be able to get to that optimization point with this many truck.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [15]

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Would you believe your fleet expenditures next year to be larger, equivalent to or smaller than what you're going to do this year?

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Jason Allen Berg, AMERCO - CFO [16]

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I think it'll be less next year because I don't think we're going to have a little bit of displacement from the 26-foot truck.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [17]

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Okay. And then as you look out on the self-storage side, when do you reach that inflection point, where you say let's slow down our capital expenditures and just run with what we have to improve, again, the utilization rate of the self-storage operation as well as profitability? Because as we know, the new ones we open don't really add to income. They're -- they detract for a couple of years.

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Jason Allen Berg, AMERCO - CFO [18]

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Yes. And I think we're at that point, and it's probably not the easiest to see. But in the first quarter, we spent $218 million on acquisitions and construction, which is what we spent last year. But in that, the acquisition piece of that was down from $124 million to $73 million. So we bought fewer properties, and we've been trending down that way, and we've been spending more on trying to complete the project that we have so that we can start renting of them and getting some cash flow out of them.

So there has been a bit of a, I'll use the word again, a bit of a pivot to completing what we have and not bringing in new properties for that.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [19]

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So as you look out to next year, would you expect your capital expenditures on self-storage to be lower than what it's going to be this year?

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Jason Allen Berg, AMERCO - CFO [20]

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No. I think if anything, maybe we have another year of high construction cost, which might fill in the gap for decreased acquisitions. But I view that as a good thing.

We have this large group of less than productive assets on the balance sheet right now that you're talking about, I've been talking about. And the sooner we can get those projects built out and finished and our guys renting them, guys and gals renting them, the better off we're going to be.

So on the acquisition side, that's kind of opportunistic, but I think we're a little bit more focused right now on finishing what we have versus finding a whole bunch of new stuff.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [21]

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Okay. The existing self-storage units, you mentioned the 3-year figure, they've gone from 87% to 88.5% occupancy rates. How are the rates on per square foot that we are renting those facilities for?

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Jason Allen Berg, AMERCO - CFO [22]

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There's a lot going on...

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [23]

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Have they changed?

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Jason Allen Berg, AMERCO - CFO [24]

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There's a lot going on in the quarter. So if I try to dig down into a same-store rate to get a health -- a pulse of what the health is on same-store rate, I think we're probably up 1% or 1.5% on rates.

Overall for the quarter, I think if you were to do the math, it would look like our average revenue per unit decreased a bit, and I think we used our promotional special or 1-month free storage with the rental of a truck was a little more prevalent this quarter versus the first quarter of last year was probably -- affected the revenue per storage unit a little bit there.

But otherwise, the underlying health of the storage rate has been fairly resilient for us, and we're seeing smaller increases whereas we used to see maybe a 3% increase for the year. It's less than that, but we're still seeing some increases.

And our asking rent for people who are moving in today are above where they're at before, whereas some people are getting all of their revenue increases from the in-place customers, we're still seeing some health at the asking rent.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [25]

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Okay. And then the new facilities you're leasing is going -- you mentioned July was a bit of an accelerated rate. How is the household market out there? How much additional discounting do you have to do to increase those occupancy rates?

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Jason Allen Berg, AMERCO - CFO [26]

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For us, what we found, it's our people paying attention to the product. And the increased utilization of the discount from the truck rent is what I think is a reflection of just us paying a little bit more attention to where -- we have a captive customer who's utilizing another one of our products, and we should be offering them storage in the process. And I think that that focus now has resulted in us having a little more success in filling rooms faster. So I think that's a big part of what's happening here.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [27]

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Okay. And lastly, on self-storage. In the last year, how many of your units that were relatively immature have now crossed over to where they are positive cash flowing as supposed to negative?

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Jason Allen Berg, AMERCO - CFO [28]

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Great question. I don't have the number of units. I would say, in previous calls, and I think we discussed on the Analyst Meeting last year, we've been tracking the cash flow profitability of locations over the last 18 quarters. And that number continues on a year-over-year basis to improve. So the -- on those, say, 395 properties that we've been tracking here over the last 4 years, I think there's been about a $5.5 million improvement in NOI quarter-over-quarter here.

So I think -- I'm looking at them in quarterly cohorts, and I think we picked up 2 or 3 more quarters that turn -- of acquisitions that turned profitable or turned positive, I should say.

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James R. Wilen, Wilen Investment Management Corp. - President and Chief Compliance Officer [29]

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Okay. And has Joe made any progress on changing the corporate name from AMERCO to the more well-known U-Haul?

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Jason Allen Berg, AMERCO - CFO [30]

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I think he's out filling rooms right now, and that's a little bit down the list.

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Operator [31]

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The next question comes from George Godfrey from CL King.

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Jason Allen Berg, AMERCO - CFO [32]

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George, are you there? Are you on mute, George?

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [33]

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Can you hear me?

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Jason Allen Berg, AMERCO - CFO [34]

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I can you now, yes.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [35]

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Can you hear me now?

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Jason Allen Berg, AMERCO - CFO [36]

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Yes.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [37]

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Okay. Sorry about that. I was on speaker phone, but usually, I don't have that issue. Jason, I heard everything you said about the investments in the fleet and the rooms, the storage facilities. If I look at net CapEx for FY '17 and '18, actually the net CapEx was down due to strong proceeds from the sale of property equipment. But if I looked at '19, the year that we just completed, net CapEx was up 90%. And listening to your comments and looking at Q1, the net CapEx being up again another 90% in Q1. You're expecting a real -- a large net CapEx figure for 2020 relative to what we saw in the prior years coming into '19, is what I'm taking away.

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Jason Allen Berg, AMERCO - CFO [38]

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Yes, it's going to slow down over the next 3 quarters. This is going to be the heaviest that we see, but yes, it's still going to be heavy.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [39]

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Okay. And then the piece of rooms being filled up, do you see the occupancy rate being at an inflection point here, 68.4% in Q1? Or do you think that that still trends down as you're bringing on the square footage?

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Jason Allen Berg, AMERCO - CFO [40]

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I look so little at that overall occupancy rate because it's affected by how good we're -- how good of a job we're doing by adding rooms into the portfolio, and we've been doing a better job at adding rooms.

I'll say that the spread between the percentage of rooms occupied and the percentage changing the rooms available, those 2 numbers have been coming together. So I think that's a good point. I don't think we're quite at that inflection point yet because we're -- it's easier to add rooms than it is to fill room, and we're doing a good job of adding the rooms. But those 2 numbers are coming together. And whereas we were plus 43,000 here at the end of June, I think we got that number closer to plus 50,000 here at the end of July.

So our team is really hard at that. And I don't think we're quite there yet, George, but I think we're getting closer.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [41]

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And you said you're having more success at filling up those rooms. Is there something that changed in the market that is leading to that greater success in filling up the rooms?

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Jason Allen Berg, AMERCO - CFO [42]

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No, it's the same thing that's usually the issue for us. On a performance basis, how much we focus on it and how -- when we decide to actually getting our act together and go at it. And this summer, Joe has led the charge on focusing on filling the storage room, and so the organization as a whole has put most of their attention on that.

So you may see that in other areas, but right now, the storage program is certainly benefiting from that focus. But I don't think that there's anything in the storage market. If anything the storage market continues to be more challenging. This is just more of a reflection of when we put our minds to something what we can accomplish.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [43]

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Got it. And my last question, I'm looking at the slide presentation from last year's Investor Day, and I know the next one were coming up here in a couple of weeks, specifically, the pipeline of self-storage, and it looks like it's about 11.8 million in square footage, the pipeline from a year ago. Do you happen to know what that is approximately as you sit here today?

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Jason Allen Berg, AMERCO - CFO [44]

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Yes. The projects that we have active right now that we're working on is about 10.9 million square feet. And then we have another group of projects that aren't as far along on the permitting or land-use process, but I can give you a number. It's about a little over 3 million, 3.25 million square feet. But I can't give you a date as that's much more squishy as far as when we'll be able to start those projects.

But the big decrease has been -- I don't recall the specifics on that slide, but the pipeline of projects in escrow that we're looking to buy, that number have come way down.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [45]

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Okay. So that's what I was going to -- so the 10.9 million that you just quoted there, is that comparable to the under contract figure that you had in your slide from a year ago of 6 million?

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Jason Allen Berg, AMERCO - CFO [46]

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No. I think the under contract -- is that the last column on the slide?

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [47]

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Yes.

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Jason Allen Berg, AMERCO - CFO [48]

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Yes, that -- those are -- that number is probably closer to like 1.5 million square feet now.

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George James Godfrey, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [49]

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Okay. So the pipeline and under contract figures from a year ago have both come down?

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Jason Allen Berg, AMERCO - CFO [50]

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Yes, we closed on most of the under contracts and that would have shifted up into the other numbers I just gave you. And then new stuff that we haven't bought yet, but under contract is what I just told you.

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Operator [51]

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The next question comes from Craig Inman from Artisan Partners.

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Craig Inman, Artisan Partners Limited Partnership - Portfolio Manager [52]

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I was curious about leverage and with the CapEx build and the truck cycle being a little heavier, how do you feel about balance sheet flexibility? And specifically, should economic conditions change? What kind of -- how do you ensure we have enough liquidity to move through a down cycle doing the CapEx builds on the self-storage?

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Jason Allen Berg, AMERCO - CFO [53]

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Sure. Well, we have a prioritization process on the storage side, where conversion projects are at the top of the list because those are the easiest and the cheapest to complete and get up and running. And then we're a little more selective on which ground-up projects we choose to start because those take much longer or heavier from a CapEx perspective. And we usually have a little bit -- well, quite a bit less invested in just the land. So it's a little bit easier to put those up on the shelf and get to them a little bit.

So if something were to happen, we would immediately hit the prioritization thing and probably start benching a bunch of the ground-ups, and then we try to do our 2 conversions in phases. So there's a point where we could stop and we just try to fill what we have and not spend any more money at -- on those -- until they're more self-sufficient.

On the equipment side, we've certainly put ourselves in a position with the spending that we've done in the fleet that we could go for a while without spending a whole lot on box truck. There's a certain amount of rotation that we need to do on the pickups and cargo vans each year, but that's fairly capital self-supportive. It's not a huge working capital spend for us.

So -- and from a liquidity perspective, we've been very fortunate to have an excellent and broad lending group who buy into our business plan and have been very receptive to lend it on our assets. So we've tried to bring back some liquidity from assets that we purchased that aren't stabilized yet but are certainly on their way to stabilization, and we've had good success with terms and rates on bringing some cash in the interim on those.

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Craig Inman, Artisan Partners Limited Partnership - Portfolio Manager [54]

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Yes. It makes sense. What about depreciation? I can get kind of close to this figure, but I'm curious if you can talk about it. Depreciation as a percentage of the figure that's tied to real estate, how would you think about the number?

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Jason Allen Berg, AMERCO - CFO [55]

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I guess I haven't thought of that number in that relationship before, so I'd have to think about that and maybe get back to it. I haven't really looked at that.

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Craig Inman, Artisan Partners Limited Partnership - Portfolio Manager [56]

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Okay. And then Rider called out, I know their trucks are different, weakness in the used market in terms of pricing. Are you guys seeing any of that in the vans, trucks or even the box cars?

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Jason Allen Berg, AMERCO - CFO [57]

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On the box cars, no, not so much. I mean, we've done some things where we're selling the equipment a little bit differently so we probably have -- the gains on the box trucks sales have decreased a bit, but that's just a small piece of the overall sales picture. Our big thing is the pickups and the cargo vans, and that market has still been strong.

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Craig Inman, Artisan Partners Limited Partnership - Portfolio Manager [58]

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Okay. And 1% change in utilization still about -- was it $5 million in revenue for the self-storage?

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Jason Allen Berg, AMERCO - CFO [59]

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I think we're at like $5.3 million right now.

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Operator [60]

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This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

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Jason Allen Berg, AMERCO - CFO [61]

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Thanks, Nancy. First, I'd like to thank everyone for participating in this call. Thank you, and I want to remind you on that August 22, here in a couple of weeks, as George said, we have a few important meetings for shareholders. So at 9 a.m., call it Arizona time, on the 22nd, we're going to start off with our Annual Shareholder Meeting. Once again, this is going to be a live video feed broadcast over the Internet so anyone can participate in this meeting. And then about 2 hours after that, at 11:00 Arizona time, we're going to do our Virtual Analyst and Investor meeting. Joe Shoen, our CEO, is going to be moderating both of these meetings, and we're going to have some key executives for some brief presentations and then questions and answers. So please feel free to start submitting your questions to Sebastien ahead of time.

Last year, we had great participation from those who submitted their questions early. I think we had more questions than we could even get to. But this does allow us to get to as many of the questions as possible and gives us the chance to prepare better answers for you.

So I look forward to speaking to you all in a few weeks. Thank you very much.

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Operator [62]

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The conference has now concluded. Thank you for attending today's presentation. You may now disconnect, and enjoy the rest of your day.