U-Haul Holding Company (UHAL) Q1 2021 Earnings Report, Transcript and Summary

Good morning, and welcome to the AMERCO First Quarter Fiscal 2021 Investor Call and Webcast. [Operator instructions] Please note, this event is being recorded. I would now like to turn the conference over to Sebastien Reyes. Please go ahead.

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 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, 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.

Thanks, Sebastien. Adversity, of course, separates out the hard core from the rest of the pack. That has been true inside the Company and relative to our competitors over the last 5 months. There is not much work from home that has been available for our teams. 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 close 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 needs 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.

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 2 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 same months 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 in 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 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 3 months of the year, the decline as 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 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 widen out a bit. Our stated occupancy rate of 68% continues to be diluted by the addition of a 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 2 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 30, we added 5,200,000 net rentable square feet 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 3 of our major product lines reporting gains. As a reminder, the 3 major product lines that we have within retail sales are moving supplies, hitches and towing accessories and the refilling of propane tanks. Of these 3, the largest increase in both dollars on a percentage basis came from the installation and sales of hitches and related accessories. That includes automobile-mounted bicycle racks. 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 as 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 3 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 2 relatively recent accounting standards that have introduced some earnings volatility into their investment portfolios. 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 our earnings by about -- just under $4.5 million. I'd like to remind everyone that our insurance companies report on a 3-month lag in conformity with their state-regulated reporting conventions, so their investment portfolio valuations in this 10-Q were made as of March 31. As we've all seen, since then, the financial markets have rebounded, and our insurance segments have seen these noncash charges essentially cut in half. There is nothing fundamentally wrong in either insurance company with their core operations. 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 3 months earlier at our year-end. With that, I would like to hand the call back to [Ailee], our operator, to begin a question-and-answer portion of the call.

[Operator Instructions] Our first question today comes from Ian Gilson with Zacks Investment Research.

Congrats on the superb results. As we look at the monthly progression of social distancing and location closing, basically many states opened up basic 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?

I would say we've not seen an impact. We're very wary of it, Ian. Of course, most of these 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 where. We have to just listen to the customer. And if they express some need, we have to see if we get a solution to it that they'll pay us for because we've lost volumes of small repeat customers. These are these marginal businesses that have been forced to close, caterers, florists. These people were stable 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. So we're trying to be slight on our feet as a big company can be.

Okay. As we have 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?

It's a terrible shortage in Los Angeles. It's a terrible shortage in the Greater New York area. It's terrible shortage in Boston, and I'll let you conclude why.

Our next question comes from Jamie Wilen with Wilen Management.

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 moves staying relatively flat while the business moves have declined?

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 3 months. I mean there's no doubt these people -- this has declined. 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, I don't have real confidence in that. But since I see the pickup in the equipment rental related to home improvement, there's 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 is going to happen when they quit the moratorium on foreclosures, evictions and all this stuff. And it's going to be a little while to be my guess, but I don't have a way to quantify that. We've seen it a couple of 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.

Joe, you mentioned that fleet utilization is the major criteria that you look at within your truck rental business. Given that volumes were 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?

Well, of course, we got slaughtered in March and April, as you might figure. Business value utilization, you can't make a 30- or 60-day adjustment fleet -- or let's 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 the -- what you see in the total fleet number is that the sales market just died for basically 90 days. It 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. It's -- this is a very fluid situation. We didn't know how to predict when sales came back. So we basically put a real slowdown 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 want them. So that factor has -- our fleet plan is changing month-to-month, I guess, what I can say to you now. Sales are holding good. If sales hold good, we'll probably, by December, the total fleet where we had planned to be, but we're going to have another little bump come through here, and I don't -- we've been trying to forecast just how it will 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 going to be a little unevenness in the gain or loss on equipment sales probably for 18 months. It'd 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 going to get a lot of the way there. By December, the way things are looking now, but this is so up in the air and it's 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 that we benefit from decades-long relationships. So we all know that we're trying to cooperate in this, not get crossed with each other. And so it's -- everybody's suffered difficulties in this regard, and we work very closely with the automakers and hope that 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 even better. We had about 3,000 vehicles hung-up in the system. In other words, they've been prep for sale.

That's about right.

And they weren't selling. So they weren't getting any income, but of course, they are -- we got all the expense. We continue to depreciate them and everything ride on through, of course. So they were all dressed up with nowhere to go. Now we worked that down substantially, and we're continuing to work that down. And at some point, it will start to normalize. And Jason is turning to his computer, so he may have a better answer to that.

Look, 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 5,000 trucks that were in the pipeline at the beginning of this pandemic that in a perfect world, we would have 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 that 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 is what we planned on to start with.

Okay. You mentioned the progression of rental volume between April, May and June. Could you talk about July?

Yes. July, we're seeing an increase over the previous year. So it's been a steady improvement. I -- 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.

Could you quantify that?

I think we should not do that, honestly. We got every hand at the horse, okay? But we don't know just how this is going to 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 this iron song of failure, but that's a different thing from actually turning the money in every day. And 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 a bunch of confirmed cases of COVID or the riots that came through, closed some stores. We had a couple of places where the local politicians put in a closure for several days. I mean we worked through all that. And God knows that they're going to implement that some -- 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 politicians say we're going to start closing everything down again. We saw what closing everything down again would looked like. You quoted a number that didn't you, Jason? It was down revenue in[June] quarter...

Oh, well in April, it was down 30% when everything was kind of close.

Okay. That's Armageddon. You got -- you can figure that better than I can. 30% down doesn't work so good. So we found some new customers, and we're going -- we're hard at it and optimistically. And of course, my plan is to see people make earn bonuses. That's what my plan is. My plan isn't see how many people we can terminate from employment. My plan 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. It's a different mindset more than anything else, Jamie. You just have to have a mindset you're going to win rather than you're going to not lose as bad as you thought you're going to lose.

Joe, on the self-storage side, what is the -- your future program for CapEx in self storage. I knew you were slowing down a little bit to allow units to mature. What's your outlook for this year and next year?

We've been -- I'll let Jason had a quote a number. Of course, we got 3 months of -- we couldn't get a guy to hang doors. And so just basic stupid stuff, kind of getting a roofer to put on a roof. So we have had a whatever you want to call the tremor in all of his numbers, but -- and he's been trying to keep readjusting constantly toward 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.

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 square feet in development. And right now, we're looking at about 161 projects for about just under 7.8 million square feet. So those numbers have come down over the last 12 months. A rough estimate of new projects that we've taken on translated into net rentable square feet would be maybe about 2 million square feet of new projects that we've taken on. So all of those numbers are -- have been trending down.

You mentioned that July's occupancy numbers were better than the June quarter. Could you quantify that as well to the increase in occupancy [indiscernible] I would say?

Yes. So the statistic I go to is the number of rooms occupied versus the same time in the previous year. So at the end of June, we were at plus 41,700. Our peak performance levels, which was last year, we did hit plus 50,000 for a month. And we're trending -- it goes up or down, but it's been moving up. And I think so far in July, maybe we came close to plus 47,000.

Okay. And I've never said this to a CEO before, Joe, but if you have traveled to 32 states in the last few months, I hope you're doing it privately?

Oh, yes. We're flying the heck out of the Company plane. And of course, people want to see the boss is working too since they're all working. And 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 them 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 greatly in their debt with them being willing to carry on and try to serve the customer instead of just crawling to a hole someplace. But that's a day-to-day deal. And I'm sure you have loved ones and everything and you friends and family. And some people are more terrified than others, but everybody is apprehensive. And we just have to continue to work through it.

Our next question comes from Diane Huang with Cinctive.

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 constrained your ability to actually spend the CapEx dollars?

So 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. So both of those numbers are moving around quite a bit right now, as you can imagine. So 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 opened. 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 have 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're -- we'll most likely end lower on CapEx spending for real estate this year than we did last year. So it will probably be the second year in a row that we were trending down.

Yes. We're going to trend down. We're going to trend down more than we could have done last year. That's what's really going to happen, isn't it, Jason?

Yes.

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 our focus. And Jason is very hard focused on cash. He has a team of cash management people. And 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 our cash flow for the next 6 months. It's a little bit uncertain, but we're -- it's a full-time job. Jason is doing it every day and he has a team of qualified people working with him.

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 in 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 is your out -- what are you guys seeing? And what is your outlook for self storage?

Well, 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 stage is a fact. We have a slightly different plan, but we've had a different plan in storage all along. We're a 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 to 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. And those people, in good times, will do better than our customer will. But in poor times, maybe our customer would be better than theirs. It's -- 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 on different strategies.

Okay. You said that you guys are the last to cut rates. Can you talk about the declines that we're seeing in your rate -- rents per either occupied room or occupied square feet? Is that reflect -- is that reflecting rate pressure? Or is it more just like the mix of business?

So I'd -- I look at our rates on what's the average rate of people moving out, what's the average rate of people moving in. And for our portfolio, including our new projects, our average rent per new room this year versus new room last year is up just slightly. So it's not down yet. If you were to just look at our stabilized properties, excluding new rents up, you might see a very small decrease, but it will be less than 1%.

Okay. And I would just squeeze in one last one. Anything noteworthy in some of the key storage markets, maybe like L.A., New Mexico, New York or like Houston? Any price -- any bright spots or places where you're seeing extra paying?

It's been very selective. When the COVID first struck and they closed schools, we offered 30 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 impacts the storage business. And that, I think you probably know those areas as well as I do.

Our next question comes from Craig Inman with Artisan Partners.

On the CapEx, I just want to clarify, the net truck, Jason, you all just -- obviously, it continues, but you're penciling in about $460 million for the year, and that's the net number?

Yes. In my comments, it is right, I 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.

Okay. And if you did finish up with that net $460 million, 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?

Well, our original plan was for the total fleet to increase of 2,000 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.

Okay. It's interesting, on the bonus side, Joe, you were talking about wanting to give employees a bonus. A lot of companies, meat processors, retailers, frontline workers have handed out bonuses just for, I guess, you'd call it hazard pay. Why not take that approach? Or I just -- I'd love your thoughts on kind of how others are handling it versus you all.

Look, 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's at risk because we're in the equipment business, and it's in the retail business. Everybody's face-to-face. We put up sneeze shields and we got gloves and sanitizer and all that stuff. But the long and short of it is everybody is at risk and the curious thing that I've noticed is, is that much of this is driven by fear more than actual contagion. And fears is a very -- 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's 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.

Okay. So the bonuses...

We have a wonderful team. They're not asking for anything other than an honest day's pay for an honest day's work. Fair people who have made this country great, their -- you'll find out we have a lot of longevity in our team. These people are dug in for the long term. They except -- they expect us to be fair with them. And we're doing our very best to be fair with them.

Okay. On the storage business, Jason, I didn't catch though. You threw out a same store number. How has that calculated again?

Sure. So the most objective calculation that I could find amongst the competitors is one where you look at a facility that's been opened or has been at 80% occupancy for at least 2 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 were to look at that number last year, I think it was like 93.1%.

Craig, I want to go back on that hazard thing. I don't think any of that fairly is 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 love 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 team 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 behave. 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.

Yes. No, that is an admirable way to think about it. It's just I was curious to hear your thoughts because other companies have stepped up, paying in light of the more difficult conditions for frontline workers. They've taken a little bit of a different approach. So yours culture is slightly different there. And I was also getting at is there potential for -- just from the number side, is there going to be some pressure on pay because of these conditions?

There's huge pressure on pay. It's going to continue. We almost can't hire today. It's impacted gravely by the $600 a week. We don't know how that's going to work out in the Congress this week. It's massive. It's going to 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 100 reasons. It's -- COVID just aggravated it. But there's a steadily rising rage amongst frontline workers and they're -- they do 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 front line 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. It has to do with a myriad of small things, ones that you would probably relate to most easily, are electronic tools that just allow people to speed up or get to the finish line quicker and eliminating basically busy work and also getting the customer to participate more, this -- the 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 that we have on our side of the transaction.

Have you all seen what the 24/7 rental app, an online reservation system, have you all pick up there in terms of percentage of business coming through that channel?

Yes. It's constantly picked up now for 3 years, and it's -- it accelerated slightly during COVID. So we were pretty well into it before that started. And so it continues on. Now there's a lot of nuances to that. I think we've -- we released any numbers on that business. Okay. We haven't released numbers, so I can't quote you numbers. But sure, we're working that through. We are miles ahead of any provider I'm aware of. It 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.

Last one. I wanted -- is there a -- I hadn't had a chance to read the Q yet. Is there an update on the refund status and from -- and size?

Sure. The -- of the amount 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.

If I could clarify. This is all return of money we had prior paid the government. And we are -- have insignificantly participated in any program because it really hasn't been applicable to our organization. So we...

Yes. 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 '22, we are likely to become a cash taxpayer.

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

As you look at your business, have you noticed any correlation between the number of new cases increase versus the level of business that you do in those locations?

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.

As you look at your employment, 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 we are basically at a level of full-time employee employment?

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.

And this is Sebastien. I'll ask one last question on behalf of Gates Garcia of Pinehill Capital Partners. How do you project the business will be affected by a large number of college students not returning to campus this year?

Well, It's totally unknown. Amazingly, we acknowledge 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 that seems to come back 2 weeks early, quarantine on the dorms, and they did it. And therefore, they moved in last week in July. It 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 1 week, they got this idea, in the next week, they got another idea. We're having a hard time strategically positioning to meet these ups and downs of business. There's several of these colleges, as you all know, literally in some place like College Station, Texas and Ames, Iowa. The college activity is 300% or 400% increase in what goes on in those communities. And when we can predict it and know 4 or 5 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 are not seeing the patterns, we're trying to find them. But it's -- I first, I thought the business was going to be down a lot. I'm not so certain it's going to be down a lot. But it's going to be unpredictable how the waves come in, and we may miss some that we would have gotten in the prior year. Is that enough for you there, Sebastien?

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 20 at our Annual Shareholder meeting, followed by our 14th Annual Virtual Analyst and Investor Day, which is at 2 p.m. Eastern. Both can be accessed at amerco.com. After our 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.

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