Brian Comstock: Well, that’s a mix, honestly, that’s really what drives it.
Matt Elkott: Okay, great. Thank you very much. Really appreciate it.
Brian Comstock: Thanks, Matt.
Lorie Tekorius: Thanks, Matt.
Operator: The next question comes from Ken Hoexter of Bank of America. Please go ahead.
Unidentified Analyst: Hi, this is [Nathan] (ph) dialing in for Ken. And congrats on the quarter. I guess I’d like to just maybe start a little bit on Adrian’s comment about that continued strength in the syndication market, and how the team is seeing that opportunity trend here into the second quarter, and also maybe what you’re assuming in terms of syndication activity for the rest of the year when you’re talking about low-to-mid teens margin target.
Justin Roberts: I was going to say. So I think thinking about the syndication market, it continues to be strong. We continue to take leases — originate leases. We continue to have liquidity in the market and work with our syndication partners. We see a relatively stable cadence throughout this year kind of quarter to quarter to quarter, and I’m just pleased that we’re continuing to deepen the relationships with these partners that we’ve worked with over the last several years. And what was your second question, Nathan?
Unidentified Analyst: Yes. Just what you’re assuming in terms of — I think you just answered that — what you’re assuming regarding syndication in that low-to-mid teens margin target, and would I be right in assuming that’s going to be an equal cadence over the year?
Justin Roberts: Well, what I would say right now is we do see it being relatively stable throughout the rest of the year and it’s — you know, things change and that’s the biggest thing is we will continue to make decisions that benefit the business and ultimately our customers and shareholders. And sometimes that may mean things move around a little bit, but you’re getting our latest greatest snapshot.
Unidentified Analyst: Got it. Thanks, Justin. And maybe just a quick follow-up on the cash return side of the equation. I understand that the team has some pretty ambitious targets regarding lowering leverage as well as a capital plan. And maybe just could you kind of remind us again on what the cash priorities would be and when you’re thinking about investing to release fleets leverage target and shareholder returns?
Justin Roberts: Yes. So we’re going to start with the basics of we are investing in our manufacturing business and maintenance business with insourcing initiatives and other activities and maintenance. We are continuing to invest in Europe as well, and then you have our leasing business, which is a large number from an optics perspective, but again, bear in mind that we do lever it. And so it’s a much smaller equity piece. And then you think about safeguarding our dividend. We do look at periodic increases to that. We did increase it last July. So it is not on or off the table explicitly, but we do look at that pretty consistently. And then I would say that we do look at share repurchases opportunistically, given the ongoing volatility in our share price and kind of what we see going forward.
I think growth in the business is not necessarily off the table. It’s just that we are focusing on making the most of the current platform we have before we kind of move back into some type of an expansion mode. And I don’t know if…
Lorie Tekorius: One, I would say the one thing that I’d emphasize at least on the investments that we’re making, particularly in manufacturing here in North America is those are generating, we expect a return of $50 million to $55 million on an annual savings.
Justin Roberts: Moderate, yes. Yes.
Lorie Tekorius: So I think that’s a pretty darn nice return.
Adrian Downes: And then we’re also focused on reducing our recourse dash.
Justin Roberts: Thank you. That’s perfect, yes.
Unidentified Analyst: Great. Thank you so much.
Brian Comstock: Thanks, Nathan.
Operator: The next question comes from Allison Poliniak of Wells Fargo. Please go ahead.
Allison Poliniak: Hi, good morning. I want to get your thoughts on the latest storage data. I know one month doesn’t make a trend, but we did start to see some cars moving back into storage a little bit more than seasonality. Are those just specific car types that you were less worried about? Are you not seeing the orders? Or just any, how you’re thinking about that number?
Brian Comstock: Yes. Allison, this is Brian. A lot of that is seasonal when you start to look at some of the trends. And also keep in mind that as the plastic pellet car fleet expands, a lot of those cars are storage vessels that are used for the product. And as that grows, the ARCI continues to count those stored vessels that they’re beyond 30 days. So a lot of that number is a little bit skewed by that as well. But it’s really seasonality and the influx of pellet cars is driving that number artificially up a little bit.
