U-Haul Holding Company (UHAL) Q4 2013 Earnings Report, Transcript and Summary

Good morning, and welcome to the AMERCO Fourth Quarter Fiscal 2013 Year-End Investor Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jennifer Flachman. Please go ahead.

Thank you for joining us today. Before we begin, I would like to remind everyone that certain of the statements during this call regarding general revenues, income and general growth of our business constitute forward-looking statements contemplated under the Private Securities Litigation Reform Act of 1995 and certain factors could cause actual results to differ materially from those projected. For a brief discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to Form 10-K for the year ended March 31, 2013, which is on file with the Securities and Exchange Commission. Participating in the call today will be Jason Berg. And I'll now turn the call over to Jason.

Thanks, Jennifer. Good morning. I'm speaking to you this morning from Phoenix, Arizona. Also on the call with me here in Phoenix is Joe Shoen, our Chairman and CEO; and from our offices in Reno, Nevada, Gary Horton, our Treasurer; and Rocky Wardrip, our Assistant Treasurer. Yesterday, we reported fourth quarter earnings of $1.93 per share as compared to $1.29 per share for the same period fiscal 2012. For the full year of fiscal 2013, we reported net earnings of $13.56 a share, as compared with $10.09 per share for the previous year. I'd like to remind everyone that included in the fiscal 2012 results was $1.61 noncash charge in the third quarter for the reserve strengthening that happened at our Property and Casualty Insurance subsidiary, Repwest. Excluding this charge, our adjusted earnings per share for fiscal 2012 were $11.70. At our Moving and Storage segment, which includes our core equipment rental and self-storage business and excludes our insurance operations, our operating earnings increased by over $5 million to nearly $55 million for the fourth quarter. And for the year, we're up nearly $30 million to $462 million. The most significant factor leading to this improvement and profitability is our growth in equipment rental revenues. For the fourth quarter, we increased these revenues by nearly $23 million or 7%. And for the full year, we had an $89 million increase or about 5%. I think it's worthwhile to note that the fourth quarter of last year was also aided nominally by the extra day in the month of February, which we didn't have this fiscal year. I'd like to highlight a few key items related to this revenue growth. First, for the fourth quarter and for the full year, we continued to post transaction gains for both our in-town and one-way markets. Generally speaking, with competition still being aggressive, we're growing revenue largely through transactions instead of any across-the-board improvement in rates. Second, we've increased our points of distribution. We added nearly 50 company-owned and operated locations during fiscal 2013, and we also expanded our independent dealer network by approximately 900 new dealers, bringing the total at March 31, to 16,400. From what we've seen during the first month or so of fiscal 2014, we are still finding additional upside in our revenue results. Over the course of fiscal 2013, we increased the size of our rental fleet by approximately 6,000 trucks and 7,000 trailers and towing devices as compared to March 31 of the previous year. Capital expenditures on new rental trucks and trailers increased $95 million to just under $600 million in fiscal '13, that's compared to fiscal 2012, while the proceeds from the sale of retired equipment were $221 million for this last fiscal year. Our initial projections for rental equipment CapEx in fiscal 2014 are in the neighborhood of $525 million. This is before netting any equipment sales proceeds against them. We remain focused on growing our portfolio of self-storage locations. Through improved occupancy at existing locations and by acquisition or development of additional storage facilities, we've increased our revenue by $6 million in the fourth quarter. And for the full year, we increased it $18 million. For all of fiscal 2013, our all-in average monthly occupancy rate increased just under 2% to 79% compared to fiscal 2012. This leaves us considerable room for additional self-storage revenue growth with little incremental cost to accommodate that. From March 31, 2012 through March 31, 2013, we added over 2.1 million net rentable square feet to the self-storage portfolio. Spending on real estate-related items, including construction, renovation and acquisitions, increased $68 million year-over-year to approximately $170 million. Speaking in broad geographic terms, the acquisition market for self-storage has become much more competitive. So while we're in this portion of the cycle, we could -- this could affect how much we're willing to invest in the purchase of existing facilities. Our plans are to continue to opportunistically expand our presence in the self-storage market through these acquisitions while continuing to work on conversions and development projects. Our operating margin at the Moving and Storage segment for all of fiscal 2013, which I calculate by dividing operating earnings before the equity in the insurance subsidiaries divided by total revenues, improved by about 20 basis points compared to fiscal 2012. During fiscal 2013, some of the more significant expense increases that we experienced were for commissions paid to our independent dealers, personnel costs, legal expense, property taxes and then operating expenses associated with the growth and expansion of our U-Box program. Maintenance costs for the fiscal year were largely flat compared to 2012 -- fiscal 2012. However, during the fourth quarter, we did see these costs increase compared to the same period the previous year. Depreciation expense, net of gains and losses on the disposal, increased $29 million for the 12 months compared to the prior year. Based upon current trends in fleet purchases and our financing options, we should see a similar, if not slightly greater, annual increase for fiscal 2014. However, we do anticipate that the decrease in lease expense will offset a large portion of this. Both of our insurance segments improved their operating earnings in comparison to fiscal 2012. The Life Insurance segment posted a nearly $3 million improvement for the year, and our Property and Casualty segment improved by nearly $51 million. During the third quarter of fiscal 2012, we took a $48 million charge at the P&C segment related to excess workers' comp reserves. We had no such reserve strengthening necessary this year, thus accounting for the majority of that improvement. Consolidated earnings from operations for the fourth quarter of fiscal 2013 were $72 million as compared to $58 million for the previous year. And for the full 12 months of fiscal 2013, we reported earnings from operations of $499 million as compared to $416 million the year before. Our cash, short-term investments and unused availability from existing borrowing facilities at the Moving and Storage segment was $544 million at March 31, 2013, compared to $628 million the year before. It's worthwhile to note that most of our expansion in self-storage during fiscal 2013 was financed through our existing cash balances. With that, I'd like to hand the call back to Emily to start the question-and-answer portion of this call.

[Operator Instructions] And our first question will come from Ian Gilson of Zacks Investment Research.

I've got some of my usual nitpicking questions on the financials. Fourth quarter tax rate was down significantly year-over-year and quarter-by-quarter. Now I know this is a balancing factor, but it was a contributory factor to earnings goals, net earnings goals. So what to do we expect the tax rate to be in 2014?

Our tax rate historically has run around 36.5% to 37%. We're probably -- and we're down to just over 35% this quarter. I would say that we're probably going to revert back to close to 36.5%. We had some onetime permanent differences. We had partial deductibility of the common stock dividend. And then on a few of the state taxes, we had -- some states changed their portion rate a little bit. However, I expect it to kind of float back towards 36.5%.

Looking at the operating expense line on the income statement as a percentage of rental revenue, in the fourth quarter of last year it was 74.7%. In the fourth quarter of this year, it was 78.1%. Anything in there I should be aware of?

We did have an increase in maintenance and repair costs for the quarter. We also -- last year, I think we took a larger reduction in insurance reserves. So our liability costs were also a little bit higher.

I'm x-ing that out, by the way, the last year. I treat that as an extraordinary item, so but I...

Okay.

Some of it should not have been in there. And looking at the Property and Casualty Insurance business in Repwest, is that -- I thought that was winding down? Are you writing any new business on Casualty Insurance?

All of the new business written at that segment is related to the Moving and Storage business. So within that segment of their business, that is increasing. So as our transactions increase and as we expand our presence in providing insurance on self-storage, tenant insurance, we're going to see their premiums increase there. But it's a business that we feel very comfortable with because it's related to our core business and we watch that very closely.

Oh, good, good. Net investment and interest income fourth quarter to fourth quarter was up another $10 million on $18 million last year versus $30 million this year. Anything in there? Interests rates certainly have not gone up.

Right. A couple of things. Just in general, as -- on something that we'll see moving ahead, Oxford has a larger invested asset base, and we'll see their investment income continue to increase. We also had a significant kind of onetime gain that took place at the insurance companies in the fourth quarter on a mortgage that they held that matured that ended up being about an $8 million pretax gain.

Okay. Excuse me as I hesitate while I'm writing all of this down. Okay. I think that pretty well settles most of my questions.

Our next question is from Jim Barrett of CL King & Associates. James Barrett - CL King & Associates, Inc., Research Division: Joe, could you give us your perspective? When you look back over the last 3 to 5 years, what has changed competitively and in terms of how you're managing AMERCO to explain the company's performance? Can you give us sort of broad strokes on that?

Well, sure. First of all, nothing has changed at all. Same program, same people, and things are simply coming together well. The competitive situation is, if anything, tightening, but you won't see that for another year or 2. But it's always been competitive in this business, whether it's the self-storage or the truck rental end of it, and its going to remain that way. Now, of course, Jim, we've now been in the self-storage business 40 years, 68 years in the trailer rental business, 53 years renting trucks. And so we know the business somewhat, and have a long-term group of men and women working here who are maxed [ph] in what they're doing. But it's -- as you know, we had never managed to an income number or income per share number, and we're not managing that way today. Okay? Just very simply, we're having a lot of programs coming together. These are systems that we've talked about over the years, whether it's our pricing system, which is light years ahead of anyone in the industry, or our inventory control system light years ahead of anyone in the industry. But those are developments that none of them take less than 5 years, most of them 10 years to get actually operating. So we're seeing a lot of this stuff coming together. And I think that our team is very focused on trying to get results, and I credit some of that to our employee stock ownership plan and I credit some of it to just the -- that we finally dispensed with the last of the harassing litigation from members of my nuclear family, which removed a tremendous burden off of people here and allowed them to just go to work instead of having to look over their shoulder all the time. So -- and I think all of those things are coming together. We have a good fleet. This whole truck deal is very dependent on maintenance. It's very dependent on what we we're able to buy, what the manufacturers can build. And right now, the manufacturers are building good trucks. And I visited with somebody from Ford here recently, and they said it's actually -- a problem in their dealership organization is that the warranty income is down. Well, it's down because they're building a better product. Well, that's all -- we're also the beneficiaries of that. They're building a better product, which we don't have to spend as much money to repair, relatively speaking. So we've had at different times in our histories a very dependable original equipment, manufactured equipment. We're in that spot right now. We have a -- the equipment we are able to buy is good equipment. Sometimes you buy a truck and the thing just costs you money from day 1. And we made the bet to stay with gasoline and not go with diesel and that -- what was going in, nobody knew for sure, but I think that has turned out to be a good bet for us. We've got a better fleet that is more affordable to run and that's more customer responsive. But that's kind of a moving target. But all those things have come together, the experience of the crew, our underlying technology that we run the company under. And a lot of people don't understand that, but there's a tremendous network of technology that allows us to do these things, like that Jason talked about, how do you add 900 dealers in 1 year and not just scramble the eggs so bad you can't find out what's going on. Well, we have a very robust technology network behind that, that allows us to do that and not have it be a -- just tearing us up with trying to keep track of everything. So all these things have come together. You see we got some good increases in self-storage occupancy this year that very, very much contributes to the bottom line. So it's a bunch of small things coming together. There's no one thing that you can relate it to. And again, for me, almost every program is 5 years in the making, which the good news is maybe it'll hold for a while, too. But we're constantly threatened by competitors and people are constantly benchmarking to us or trying to emulate us or think this is an easy market to make a fast buck in. And if you go look over a 40-year history, whether it's National Car or Transamerica, Ryder, the countryside -- Jartran -- the countryside is littered with people who lost hundreds of millions of dollars coming into this business, but they also inflicted injury on our company's ability to make a living while they went through this. But -- and I would expect we'll see more of those people come in because they're attracted. They think this is an easy money, fast buck. Well, talk to me after you've been in the business for 68 years and then we'll see how much a fast buck this business is. So our customer service is at the best level it's been in my lifetime with the company, okay? Now that doesn't mean it's acceptable because, of course, we're always missing the mark with some of our customers, but it's the best we've ever had. And I think at the end of the day, that's what can ensure a business' success is that it resonates well with the customers. So our customers are the happiest they've ever been, admitting, though, that we have -- of course we have unhappy customers. But relatively speaking, we're at a high, and I think that, that, again, is -- it's hard to say chicken or the egg, but that's the result of our inventory management systems, our reservation systems, us having an expanded dealer network. All those things go back and create customer satisfaction. So it's no one thing, but it's a -- the common thread is that we've been at this a while. We have a team in place who -- the individuals have been at it for a while. And people are energized. They're not just lethargic or resting on their laurels. So all those things come together, Jim. James Barrett - CL King & Associates, Inc., Research Division: Okay. Now when you say competition is tightening, your one publicly traded competitor is losing money, closing dealerships, reducing their company-owned locations and have informed investors they are going to restructure and reduce the size of their truck rental business. So should I interpret your comments to mean that the competition is tightening from privately owned competitors?

Well, I -- just a variety of people are starting to think this is a easy money business. So we'll pick Enterprise. Enterprise has spent 10 years trying to get into this market. They're doggedly pursuing it and they're tightening it and we're having to respond to them every day. There is -- what happens is, of course, as soon as we get a little bit of success, then everyone thinks this must be a good place to put additional capital. The storage business is phenomenally competitive and is -- there is a pretty adequate supply of storage in most markets. I'm not going to say everything's overbuilt, but there's a good supply. So if you're not a -- performing at a top level, you're simply not going to attract storage customers because they have other viable alternatives. Well, the storage market, while it is very much localized, it's still very intensely competitive. And we're succeeding there because we're performing at a very high level, way more than twice, I would say, the level of customer satisfaction from 10 years ago. So an enormous improvement in the storage customer satisfaction and that's in the face of everyone improving their performance. The -- over the years there have been many, many people who think they can finance some trucks and get into the truck rental business. And indeed, they can. You, I'm sure, have seen ABF. ABF is determined. They're sure that they can be in this business. And so they're just going to come in, that's all and we're going to deal with them one at a time or the customer will deal with them. We're going to serve the customer and let the customer decide who they want to do business with. James Barrett - CL King & Associates, Inc., Research Division: Okay. Okay, speaking of your customers, my last question, can you give us an update on how satisfied you are with consumers' response to your U-Box business venture?

Yes, consumer response is better than our ability to serve the market. So right now, we've spent a lot of time trying to see that we actually have a system that will work. And as we have discussed, we're attempting to put it in a North American footprint and really an international footprint, but certainly a North American footprint on that organization, which means we need to have the ability to have origins and destinations in myriad submarkets across the country. And we still struggle with that. I can't quote you the accurate number, but we're somewheres around 1,000 unique origins and destinations in North America right now. That puts us light years ahead of our -- the industry but still shy of what we think the consumer really wants to see. We think the consumer wants considerably more origins and destinations than that, that we can really serve. And if the thousands that are, I'll say is a round number where we are today, probably 250 of those are still pretty rugged as far as their real ability to execute. In other words, it's herky-jerky. I would say we have 750 origins and destinations that are functioning smoothly. It's at approximately the level you would expect as a consumer. But as we roll this product out, there's a learning curve and so some people are back on the learning curve. But we're seeing that there's a legitimate spot for that in the customer demand. I couldn't tell you if we're making any money. I don't know if Jason could, but I don't think we're losing barrels of money at it. But we're -- it'd be very hard to say we're making money on a full costed basis. But as you know, most of our stuff kind of goes in on a marginal basis because we're really just expanding the services we're providing our existing customer base. We're not actually -- it's not a total new business. And so certainly, on a marginal basis, I don't think we're losing money. But this -- we're in this about 4 or 5 years now. I'd expect by year 10, we'll be pretty polished at this. And it meets a need that people have who need to relocate and who are do-it-yourselfers but, for one reason or another, this solution is a better solution for them. And so, I don't know as a stand-alone business it would make any sense at all, but now that we're already in the business of solving moving and storage solutions, having this additional solution is clearly in the customers' best interest. And I think long term, they'll pay us enough to do this that we'll be able to continue to reinvest in it. And we're still refining it. It's a -- this is very much a moving target. We -- as you know, again, we've been in the truck rental business for over 50 years, and we're still learning what little wrinkle is in it. So this U-Box business, we'll be learning -- our learning curve year-to-year is pretty steep. And that's good, so we'll do a better job. We're up considerably in the business. It's still not enough money, but Jason is breaking it out. But we're up considerably and it just means customers like it.

Our next question is from Jamie Wilen of Wilen Management.

Just want to start first on the truck rental side. What is the current age of your fleet? And what is that relative to what it has been in the past?

I don't know what the current age of the fleet is. This is Joe. Jason, do you?

Yes, we -- I don't track a specific age of the fleet because our fleet is unique in that we have a certain group of trucks that need to be newer and we have a certain group of trucks that we specifically want to be a little bit older for the -- for cost purposes. So the overall -- I would say, based upon the CapEx spending that we've done over the last several years, it's -- it'll be one of the newer fleets that we've certainly had in a long time.

Okay. As maintenance expenditures have dropped, that's not a -- that's more a function of the quality truck -- of the truck as opposed to the age of the fleet?

It is a little bit of both, but the quality of truck is as far and away the driver there.

Okay. And in the competitive situation, are you able to gauge what your market share is? Or are you gaining as -- obviously, the competitors are transitioning, some are leaving, some are coming. But how would you gauge your market share in the past year?

In the truck rental business?

Yes.

Well, it certainly didn't go down. If it changed, it would be something in the neighborhood of less than 1%, something like that. But it didn't go down. So we don't have a -- there's not good comparable data, and no one knows for sure. So I don't want to -- when I went to business school, they knew how much share Coke had and Pepsi had and everybody somehow. We don't really have good information on the other people in the industry. But we do sampling. And of course, sampling is never quite the same as seeing someone's data. And I watch people who sample our data and, of course, they sometimes misperceive what's going on, and I think we have to be very careful there when we look at our market share that we're not misperceiving. Most of our competitors are also doing business in marketplaces we're not in. So we'll take Penske. I can't quote you a figure, but I'll bet the area where they're heads up against us is 10% of their business. That'd be a -- so when you go try to see, well, where is the share, well you can get a lot of -- you can misread it pretty easily. And so I kind of hesitate to really hit it. We don't internally publish a market share figure or we don't have one because we don't think that they're -- the data is good enough.

Okay. You've added 900 new dealers in the year. How many net new dealers do you have from the beginning of the year?

900 is the net number.

Yes.

That is the net number?

Yes, there's a whole bunch. It -- the numbers that are in that are the high industry [ph].

A lot of that should be industry [ph].

Yes, okay. Okay. On the self-storage side, you mentioned operating margins were up a couple of hundred basis points. Is that correct?

No, I said Moving and Storage was up about 20 basis points.

20 basis points?

Yes.

Okay. You didn't break out self-storage. You just said Moving and Storage?

Yes. We don't track those separately.

Okay.

What you could do, you can look at occupancy and margin kind of -- occupancy leads margin, obviously, and it's like any highly leveraged business. There's a -- and everybody in the storage business has a different opinion where they're -- they start really making money. But if you can drive occupancy, margin drives at a faster rate, obviously.

Right. You've made a lot of acquisitions in self-storage, yet you kind of alluded to how competitive it is to buy these properties. How will you -- if that's successful and are these properties accretive immediately to your operating earnings even though you're paying a little bit more for them?

I would say they've been, on balance, not a big drag. But I wouldn't say they're immediately accretive on it as a group. Jason?

Yes. No, I think for us where we target, was at 75% to 80% occupancy is where they really start to add. And on average, most of these that we're acquiring that are existing facilities are going to be a little bit below that number. So it's not a drag yet. It adds to what I call the slack in our portfolio that gives us upside in the future to earnings. But I think we're getting the big revenue bump, but I'm hesitant to say that a whole lot of the revenue bump from acquisitions has gone to bottom line yet.

And historically, how long does it take you to take an acquisition from its current operating level -- occupancy level to the rest of the company's operating level?

2 to 3 years.

Okay. All right. And lastly, as a shareholder, investor, which we all are, I would hope one day you'd consider a 3- to 4-for-1 stock split to create additional trading volume and liquidity in the stock. I think it could be a great benefit. I also think it'd be a benefit if the company traded under the name of -- the corporate name of U-Haul as opposed to AMERCO since every time there's a press release, they say the corporate name of AMERCO and then have to mention that it's the parent company of U-Haul. So I'd hope you'd consider those 2 things as a limited cost but great benefit to shareholders.

Our next question comes from Tara Reisbig [ph] of Moab Partners [ph].

I guess I'm sorry if I missed the first question on taxes, but I was just wondering if you could explain why your cash taxes were so much higher this year compared to previous years?

We've rolled through most of our NOLs and the bonus depreciation. So we're finally starting to get caught up in hitting a cash pay level.

Okay. So going forward, this level is a pretty good run rate?

Yes, it's going to be right around that rate, yes.

Right around the 35%, 36% level tax rate?

Yes. I'm trying to remember the -- in dollar amount. Our effective rate is going to be around 36.5%. The cash rate, I might need to get back to you on.

Okay, great. In terms of the CapEx that you've spent on new storage facilities, or net rentable square footage, do you have a kind of a target IRR for those? And how long does it typically take you to achieve that?

Well, the kind of...

Or occupancy that you kind of target towards?

Well, we have a return objective that we attempt to price to, and I think I'll look at that -- generally, we'll look at a 10- to 15-year look to see if we can hit that hurdle rate, which is going to be in excess of 10%. It's going to depend upon which market we're pricing it in as things are going to be a little different from market to market.

Okay. And lastly, can you talk at all about utilization on the Moving or truck rental business side? I know for storage occupancy is around 79% but just curious what the utilization is on the rental truck business?

There isn't a measurement. We don't use a days rented like what the car rental people do, and we don't disclose what our utilization is. But we're high enough utilization. So just moving something of the equivalent of 1/10 of 1%, I can see. It's a big fleet and little changes are significant. We're running, I think, at least competitive rates of utilization based on what we can intuit about other people in our business. But if you're familiar with the car rental business, they kind of have a measurement that they all use. And if there is one in the truck rental business, I'm not familiar with it. So we don't have a number -- our internal number we use is very convoluted. It wouldn't mean anything to you. And we don't disclose it. So I don't have a good answer for you.

Okay, no problem. And then lastly, I guess I'll just second the previous analyst's comments on the stock split and the corporate name change. I think that would be wonderful for your stock.

Our next question is a follow-up from Ian Gilson of Zacks Investment Research.

Yes, just to recap on the new locations, the company ones. Were they all the associated with new storage facilities?

Yes.

And the number of 16,400, are they the new or rather the total non-company-owned facilities? Or total, including company-owned facilities?

That's total, not including company-owned facilities.

Our next question is from Sarah Hunt of Alpine Funds.

I am not as familiar with the story as some of the folks on this call are. And you made a comment that part of the reason that you've seen such good results coming through on the bottom line have been systems that you've put in place and some investments that you had made over the last 5 years. I was just wondering sort of where we are in that process of harvesting. Is that something where you'll continue to see benefits from that going forward?

Of course. Sarah, this is Joe. That's my intent, obviously. But we're the only -- the proof's in the pudding. Of course that's our intent, and we're -- we don't -- we're, I think, fairly conservative on whether we capitalize all the investment in a new infrastructure program. Jason could talk about the accounting rules. But we try to aggressively expense those things so that if it's a belly flop, it doesn't drag us down. But you don't know if it's going to really work. And we had one we launched, I don't know, still-fated here not -- last weekend, and we had baited it twice. And the third time we baited it, we went ahead and rolled it out and it took our whole system down. So they don't always work as advertised. So of course, we're very aggressively doing that, and we believe that's part of the plan to ensure we have a good future. And of course, our competitors watch all that stuff, and they're making their plans how they're going to do something. And of course, you only get a limited time out of any single advance because then it becomes kind of standard and...

Right. I guess the question that I was trying to get at is, is this something where you see more opportunities to continue rolling through things like this? Or have you done all these investments and now they're sort of -- since I haven't been following you for very long, I'm just trying to get a sense of where you are in that process and whether it's continuous and there's more things to do, or if you're at a point where it's up to the next group of things to make -- to continue to move those margins and all that other stuff?

It's continuous. But the problem is it's -- I'll take an example, but this won't quite speak to what you want. But if you put a feature in storage, let's say individual door alarms, so we were one of the pioneers in putting individual door alarms and spent gads of money on it and it gave us a little occupancy bump. But what happens is now, every operator who comes in new, puts in individual door alarms, and pretty soon we can get nothing for it. Climatization is another one. We have a phenomenal amount of climatized storage. And originally you could get premiums of up to 40%. Now those have trailed off and you're getting 10% premiums. So you don't quite know how -- as you roll those in. . .

How it's going to work through, I see. Okay.

What rolls off on the back end. And of course, you're trying to work that niche submarket in a way that you'd -- you can see that if -- that you're getting the best amount of revenue you can out of a specific step ahead. But just the consumer is the one who dictates all this, and we're beneficiaries of us coming out of the debacle of 2008, 2009 as a whole country. And so that's -- of course, almost probably every business you follow is benefiting from a little bit of this improvement. So as things strengthen, I would hope that we would still see strengthening in our performance.

Okay. And then just one more quick one. On the 900 additional dealers, what's typical in a year?

Well, first off, we try to gain -- we've had years where we've actually had net losses in dealers. We've tried to gain. This is an atypical amount, I would say, because you can just look at -- what did you say there, 16,400, Jason, again over year end? If we gain 900 every year, we'd have 80,000 dealers.

Right. That's not -- it sounded high to me, but I guess, again, I just wanted to sort of get a gauge, yes.

It's high. We're out there competing. We have a good offering. What we're able to offer the dealer is attractive to them. And we've just come out of a -- our dealers are small business people. So we've just come out of a tough market. And so they're looking and have been looking for ways to increase income. As soon as they're really, really prosperous, well, then U-Haul's not quite so attractive to them because their base business is doing well and the opportunity to earn $5,000 or $7,000 a year net, which is really what most of these people is -- are going to see, something -- a number like that. Well, that's not a very compelling number. So we've been what we call prospecting, trying to bring dealers on very aggressively throughout the whole downturn because that's how you meet people and get people who are a little edgy and who will really go out and merchandise for us. So that's not -- I don't think we'll -- I don't want you to project that out for 6 years or something. No, I don't think that -- although internally, sure as heck, we're going for it. But it's going to depend on how attractive our offering is economically to the individual business owners so that they see this as being a positive thing in their economic future.

Sarah, to put it in historical perspective, last year we added 500. They year before, we added a net 100.

[Operator Instructions] I'm showing no further questions. This concludes our question-and-answer session. I'd like to turn the conference back over to Jason Berg for any closing remarks.

I'd like to thank everyone for following us, listening on the call today. And we'll be speaking to you again in this forum in the first to the second week of August with our first quarter results. Thank you very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.