Hello and welcome to the Greenbrier Companies’ Fourth Quarter of Fiscal Year 2015 Earnings Conference Call. Following today’s presentation, we will conduct a question-and-answer session. [Operator Instructions] At the request of the Greenbrier Companies, this conference call is being recorded for instant replay purposes. At this time, I would like to turn the conference over to Ms. Lorie Tekorius, Senior Vice President and Treasurer. Ms. Tekorius, you may now begin.

Thank you, Grey. Good morning, everyone and welcome to Greenbrier’s fourth quarter and full fiscal year 2015 conference call. On today’s call, I am joined by our Chairman and CEO, Bill Furman and CFO, Mark Rittenbaum. We will discuss our results for the fourth quarter and fiscal year ended August 31, as well as provide an outlook for 2016. After that, we will open up the call for questions. In addition to the press release issued this morning, which includes supplemental data, more financial information and key metrics can be found in the presentation posted today on the IR section of our website. As always, matters discussed on this conference call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Throughout our discussion today, we will describe some of the important factors that could cause Greenbrier’s actual results in 2016 and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of Greenbrier. Greenbrier had a successful year. In financial terms, we had record quarter and year end revenue, net earnings, diluted EPS and adjusted EBITDA. In operational terms, we achieved record levels of new orders, production and delivery, and we exited the year with strong backlog. Highlights for the quarter include continued margin expansion to 22.8% with margins in each of our segments up sequentially, adjusted EBITDA of $147.6 million and earnings of $66.9 million or $2.02 per diluted share, on a record fourth quarter revenue of $765.5 million. Orders for the quarter totaled 2,900 new railcars valued at $470 million, and we ended our year with the diverse backlog of 41,300 units valued at $4.7 billion, at an average unit sales price of $114,000 per unit. This backlog, a portion of which is priced with attractive margins. We also announced that 33% increase in our quarterly dividend, raising it to $0.20 per share and the board authorized $100 million increase to our share repurchase program bringing cumulative authorization to $225 million. To date, we have repurchased $2.6 million shares or an 8% reduction in share count over two years. Since October 2013, we’ve returned nearly $145 million to shareholders in dividends and share repurchases. Now I will turn it over to Bill.

Thank you, Lorie, and good morning. Welcome to our call. This morning I’m going to try to make five brief key points, starting out with the essential one that Lorie just made. Today, we are pleased to report the strongest quarterly and strongest annual results in our history. And I believe and our team believes we’re poised for another successful year in 2016 and beyond. So some of the positives, our diversified product offering, our execution on our integrated business model, the vast investments that we’ve made to strengthen and reduce our cost in our manufacturing business, and our solid leasing business all are combined in this integrated model to produce results you see today. We have a strong platform for growth. We have a lower cost manufacturing. We have a strong partner base, this is not apparent to the industry, but is very, very important in the future such as our partnership with Watco, our partnership in Mexico, and our partnerships with other stakeholders all of whom have sizable financial resources more than our own. We have a strong management team. We’ve increased and diversified our debt. And we have considerable international momentum. Greenbrier’s results reflect the dedication and accomplishments of our employees, who work hard and collaboratively this year, as well as suppliers and many of our investment partners. These results along with our strong balance sheet, liquidity and favorable outlook enabled us to return $130 million to shareholders since October 2013. It also led the confidence that we have in this model and then our visibility has led to 33% increase in our quarterly dividend to $0.20 per share, and a newly authorized share program. A major tailwind in 2016 and beyond is our diverse backlog as Lorie mentioned, and you know the quantitative majors of that…

Thank you, Bill. I will make a few comments, forward looking and then we’ll open it up for questions. As Bill and Lorie mentioned, we believe Greenbrier is well-positioned entering to fiscal 2016. We ended August with over $440 million of liquidity from cash balances and available borrowings on our evolving credit facilities. The improvement in net debt to EBITDA ratio of 0.5 times along with our enhanced liquidity with the recently completed refinancing of our North American revolving credit facility with the new five year $550 million facility gives us tremendous flexibility and liquidity. As well this facility reduces our borrowing cost by 0.5% per annum and has attractive terms and I want to congratulate Lorie on the excellent job she did in completing this facility in a very short timeframe. And then I’d thank our financial partners who continue remain in the facility and new partners in the facility. We are confident about the opportunities in our 2016 and plan to build upon the operating momentum we achieved in fiscal 2015 including the strength of our integrated model, the execution against this model and our backlog, which again has margins. Based on current business and industry trends and our current protection plans, we expect deliveries in fiscal 2016 will be approximately 20,000 to 22,500 units. At the mid-point of that range, over 90% of these deliveries are in our firm backlog or in lease railcars held for syndication which are on our balance sheet. And as a reminder with these railcars all the numbers were constant from quarter to quarter similar to our manufacturing inventories, they’re constantly turning and they turn three to four times a year and while we are holding those railcars, we received rent that far exceeds the interest that we can earn on our…

[Operator Instructions] Your first question comes from Allison Poliniak with Wells Fargo. Please go ahead.

So solid obviously gross margins this cycle surpassing what your intended goal is, you know how should we think about, or what’s your guidance implying for 2016. Is there more – higher here, are we sort of maintaining this level, how should we think about that?

You’re referring to aggregate margin Allison?

Yeah. The aggregate gross margin obviously surpassed your goal, you didn’t set a new one out there today. So just trying to figure out how we should be thinking about that in 2016?

We are anticipating that we operating a similar range in 2016 than in 2015, and remind you that one of that bit would work little bit, a slight pressure on that is the acquisition of the WLR-GBX fleet that we announced after the quarter end with our intend to syndicate that fleet to institutional investors. We expect that we record that when we sell those in revenue and cost of revenues and we’re not forecasting 20% plus margins on that sale, very high rates of return that we – when you do the math on that, that’s what – but that would be the only real headwind that we – see to it.

But that should be a profitable, would be baked into our outlook.

Great. That’s helpful. The order this quarter for the industry was somewhat disappointing, but not surprising, just given the general industrial environment that we’re hearing about these days. Obviously since we’re close to the end of the your quarter, what’s the cadence of the orders that we’ve had this quarter, and any thoughts as we enter into next year? I know you talked about a positive outlook, but putting on the industrial side and it seems pretty higher these days.

Well, we know that many people think it’s – I hope they take their medication and survive it all. As Mark said, for us it’s a different environment. Currencies are not hammering our overall earnings, they’re helping our earnings. The pipeline of opportunities is still robust. As Mark has said many times, industry orders and even backlog is that linear. We’ve been operating in a period of extraordinarily high backlogs. When you have a high backlog and you’re competing with someone who has a very low backlog, it is in order space that’s additional dynamic as well. But we certainly see strength appropriate to levels of replacement demand and forecast demand by FTR, I really just don’t get it because the dollar is helping many, many things, oil is helping many, many things in US economy. It’s just shifting from one type of delivery to another. For example, automotive is helped with the consumer demand. For example intermodal and automotive were helped with consumer demand. US exports are suffering, coal has fallen, but foreign exports out of places like Brazil are becoming much easier and that is the advantage of a diversified footprint. We just do not share the view that that the industrial sector is going to continue to be gloomy. There will be rent adjustments in rail, but we think that this is just a period of – where we will be going through like we have many times before.

Great. Thanks for your thoughts.

Thank you. Your next question comes from Justin Long with Stephens. Please go ahead.

Hey good morning. This is actually Brian Coley on the line for Justin this morning. Congrats on the quarter.

Thank you.

So just wanted to ask about your visibility for tank car builds in the 2016, do you have enough visibility to say your tanker deliveries in fiscal 2016 will be flat to up versus 2015, or do you still need to secure some additional orders for that to happen?

You’re talking about our backlog in 2016, about 8%, 9% of our backlog is in it. So we had reversibility.

Right. I would say Brian, just as Mark was saying that at the mid-point of the range of guidance that we gave for delivery, we’ve got probably 90% of that in backlog or in railcars held for syndication at the end of the year. So that’s across all product type including tank cars. To your point, on tank cars, I would say that the mix, we don’t try – on mix, but I would say it will probably similar to maybe I would say about similar in 2016 compared to 2015.

And then secondly I wanted to ask about GBW, can you speak to the visibility you have in that business for 2016, given any contracts you have in place with the retrofits or certifications or any other work?

GBW, that assimilated – complicated shop network and cultures. Jim Cowan is doing a great job, coupled with the team of people from Watco and Greenbrier, while the financial contribution this year was relatively modest. He’s put 40s ex-principles every manufacture principles in place. We’re negotiating with several major energy owners of tank cars retrofits. A much more important option, misunderstood aspect of the tank car repair business though is the – is a wave of recertification’s that will be taking place. For example in calendar year 2014, the tank car qualifications were about 22,000 cars; 2015, 24,000, jumping to 37,000 in 2016; 2017, 44,000; 49,000 2018 and stabilizing 40,000 rate in 2019. So this is a real wave of work, it’s profitable work. It was the basis for the foundation with retrofits of the plant. So we’re looking at healthy EBITDA margins for that business and therefore we see it as a tailwind, whereas not a headwind and we are happy with the investment. I believe our partners Watco as well. And let them speak to that themselves.

Alright. Thanks for the time.

Thank you. Your next question comes from Ken Hoexter with Merrill Lynch. Please go ahead.

Hey good morning. Bill and Mark, if we could just take a step back I guess looking at your target for 20,000 to 22,000 builds you did 21,100. So you’re looking for I guess not much more the way of efficiency gains or expansion and capacity and it sounded like Bill you were saying to Allison’s question maybe no more, maybe a little bit margin expansion on the manufacturing side, but nothing much given you have this leasing to sell contract. And looking at your EPS outlook, bringing it all down to the EPS outlook here. This is basically peak as far as earnings, you’re just wondering how long you can sustain that peak. In terms of earnings I’m just to trying understand what message you’re sending with the outlook.

Well I don’t know if you know Mark personally or how well you know him, but I think you probably know that he is quite a conservative and cautious fellow. So I will say a couple of things and be candid about it, our manufacturing margins continue to exceed expectations quarter-over-quarter, and I don’t think they’re being sand baggy. The fact is we’ve put – the kind of capital we put into multiple plants and executed all these things that we did to make a lower cost platform. You’re going to continue to get cost reductions and margin enhancements throughout the cycle. We have a very flexible plant network as well, so we can size it very rapidly. I don’t think there is only one other company in our space that can match what we can do and we can compete head to head now with cost with anybody. So I think it’s really the issue and the future is not 2016 so much as it’s 2017, and that would be affected by the obvious things of demand and margin erosion from pricing if that were to occur. But again we’re looking at a normalized railcar business – 60,000 cars a year, and that’s a fairly stable looking outlook despite the groom and doom in industrial segment. These things occur and there is slight adjustment because of the strong dollar and commodities and coal, and velocity in the rail system. And it’s just a slight adjustment we believe. So I don’t think that side of the business is important, as the investment, the capital we’ve put in these businesses to get 25% rates of return on investment, those are our goals. When we invest, we’re getting that kind of rate of return. So I’m not – I am a strong believer that the cost reductions that will come from margin enhancement and investment and if we can keep stable production run, keep our backlog intact. There is a lot of concern that we can’t, well we can and we’ve been doing it, we may have a single cancellation and that we’re making money on anything we renegotiate. So I feel optimistic about it, and I think the answer will be in the cars. But Mark, we’ll say what we say.

The one thing that I would add Ken, as you’re aware we do have a diversifying backlog. So this year, particularly in the second half we’re making some adjustments, so switching over and starting up boxcars, which had a slightly lower production rate, so that’s where you have to sometimes dig into a little bit of detail and I know we can get into this on our follow up calls after this call. But that’s part of what blends into delivery and guidance as well as Mark.

Is something in there too, can I jump in with the second question. I guess just really a follow-on is maybe Bill or Mark what is, kind of where do you see best in class or peak margins at the manufacturing side. What do you think is technically feasible?

So there is always the question of mix, change over, lengths of production runs and all of the standard things that drive – that in addition to pricing and execution, production efficiencies to drive margins. But this last year, we reported margins over 22% and we believe that there is a – if we were to continue to run that same kind of mix going forward here, just to keep apples to apples, so that continue – that we would be grow margins by, I don’t know several 100 basis points from there. But all this is really kind of a – really kind of a hypothetical that depends on a lot of factors in manufacturing. But certainly the manufacturing group is not resting on – steps that we started several years ago is over here.

Wonderful. I appreciate the insight. Thank you.

Thank you. Our next question is from Matt Brooklier of Longbow Research. Please go ahead.

Hey thanks good morning. I know it’s a smaller part of your business, but on the marine side, what’s baked in, in terms of marine revenue for fiscal 2016?

Mark addressed that, we still have a strong marine backlog, we’re delivering two barges to one of the best companies in this space. And we have a good pipeline of opportunities. We see that as a stabilizing influence [indiscernible] got a good backlog there and we’re running double stack and intermodal looks strong over time. So Mark, why don’t you talk about marine?

This is Lorie. And I would say for 2016 we expect marine will probably be a bit better in 2016 than 2017, so not quite a peak of $100 million, somewhere around $75 million, between $75 million and $100 million on the top line. As you are aware, we launched the largest barge that Gunderson has ever built, what they currently won. They’re building their second curvy barge in fiscal 2016 and then have several other opportunities lined up.

I think I’ll add just – I think Lorie said 2016 compared to 2017, 2016 would be better, and I’ correct that, to say that in 2015 we don’t think 2016 is – so we’re comparing 2016 to 2015 and saying we think it will be upside and we do not think that’s as good as a guess for marine.

Okay. Understood. And then my second question, I think someone just tried to take a stab at it, but I’m trying to get a sense for how many retrofits are potentially baked into your 2016 guidance, I’m not sure if you’re comfortable about talking to a number given you’re in the process of negotiating with customers or maybe you could talk to – you’ve previously stated that your retrofit capacity is about 2,500, 3,000 cars, how utilized it will be next year, I’m just trying to get a better feel for the retrofit contribution to 2016.

Right. So this is Mark. And as a reminder the retrofits what we show up in GBW, which we account for only equity method, we do not consolidate it. Bill referred to sometimes I am bit conservative. I’ll just say that while we are very busy in our tank shops in doing fair amount of qualifications on the retrofit sides, I view that as upside, the orders that we’re working on there. So, we just haven’t baked much into this guidance that doesn’t mean that we’re writing it off, it’s just – we just don’t have much of it baked into our guidance here.

Okay. Fair enough. Thank you for the time.

Thank you. Your next question comes from Mike Baudendistel with Stifel. Please go ahead.

Thanks and good morning. Bill you’re [indiscernible] with my questions. I guess at a high level, could you talk a bit about your strategy for international diversification, do you have a target in terms of what percentage of revenue you’d like to have outside of North America, being pretty compelled with the orders to the Saudi area?

Sure. I will address that to the degree that we’re prepared to give specific targets. We have targets, I’m not sure that our board is prepared to share them yet. Foundation of our international strategy is a workforce of about 7,500 employees in Mexico. We have a substantial core of highly trained engineers. We have a cultural diversity program, we speak in the Greenbrier already, and which is 10 different languages. And Gunderson facility alone we have Russians, Cambodians, [indiscernible], so we have a great foundation for cultural transfer. Our Saudi contract is really part of a broader gulf co-operative council market, which then links in to Turkey and in selected cases with all US government support and transparency access into markets that US companies are being encouraged to access. So we believe that the first step is an American strategy linking Brazil, Mexico, and Latin America. Not necessarily just in railcars, but in those areas where our manufacturing expertise and engineering expertise, and frankly our growing powerful investor expertise, the ability to leverage our equity investments for high rates of return will pay off, so that’s the broad picture. Our Europe operation is actually under AR certification and US management manufacturing the railcars that the tank – wagons tank cars that will be going into the Saudi project. That’s a cost advantage to us and there are many, many other areas that we believe that foundation can pay off. There is a lot of turmoil in the CIS region, but in Poland and even the CIS countries, there are opportunities, particularly given the geo-political forces. One of the reasons we wanted Admiral Fargo to come on in our Board of Directors, as to bring some depth and experience, so that we can operate safely in those markets. So I think our aspirations are big. We do want to move the dial, but it’s pretty order set specific targets, but we are looking at meaningful expansion in the Americas and the Americas strategy a meaningful foundation for GCC and our Polish facility. There is an aging fleet in Western Europe and there is an aging fleet in the surrounding CIS. There is a lot of technical additions that we can contribute out of our polish operation, which is a very, very good home business right now.

So I want to briefly add on getting to the specifics of the contract that we did announce over there. I said earlier that we have begun production later this year for revenue purposes and delivery on the wagons that will occur principally in our fiscal 2017. Of course that is a very large contract and that would be absolutely a very positive factor and positive event – as we go into 2017.

We don’t see that as a discrete event, there is quite a lot of construction, but it is a challenging market, and we’re very cautious in that market. When we have the highest standards of integrity and I think is one of the reasons we were chosen for this project. And I think that will be an advantage to us in the region.

Great. That’s helpful detail. And then my second question is in the past you could talked about orders subsequent to quarter, and I don’t know if I’ve seen anywhere here. But you talk about orders for September or is that something you’re willing to share at this point?

Well, I want to share at this point. We’ve got lots of stuff going on, Mark has reminded everybody that orders are not sequential on linear. The – I think we’ll end up with a decent quarter. But we don’t have – we don’t want to talk about that right now.

Okay. Thank you.

Thank you. Your next question comes from J.B. Groh with D.A. Davidson. Please go ahead.

Hi, morning guys.

Morning.

I had a question on, you mentioned that 90% of your production is already in the backlog and you gave some specifics on what’s tank and – what sand in there. I’m assuming there is not a lot of tank car is the future in that production run rate for 2016. But could you maybe talk about level of increase, I know, we are only a couple of weeks into the new rigs, but maybe the level of inquiries on those types of tanks and retrofit.

So, about – so we mentioned earlier about the energy cars in our backlog and we also said that energy related tanks were about 10% of our backlog. And there will not be only types of tanks that we build and being more specific about that 10% of our backlog is non-energy tank cars to driven straight the diversity, but that had the backlog and that indeed those include a pressure vessels and non-pressure vessels. It would be incorrect to say that we’re delivering railcars that all the tank cars were delivering today are non-energy related. We are building some tank cars today that are energy related energy, and I would expect that new order activity that we see is principally non-energy related in the near-term. And that for the longer term in particularly with the rigs in the day coming up of 2019 that we still believe that there will be activity level related to a new railcars and retrofits before it’s offset in done. And just in the current environment that you should expect that, it’s not very robust on the new cars.

Hey, look at, we are building tank cars of the future of that portion of the tank car backlog we announced we that orders about 3,000 and these more robust tank cars. So we’re building them. But the two drivers would be the rigs themselves and then railroad operating behavior at pricing. I think everybody is aware has been due to interpretation of the rig, should we retrofit, should we not retrofit, should we wait, what we’re going to do. There is going to be a lot of cars simplest overtime. The railroads are raising rigs selectively on oil and energy and that’s complicated, because oil pricing is way down and people are shifting and they are wondering what to do. Side effects retrofits [indiscernible] new orders. But the essential mathematics are still exactly as they were and railroads price these cars has exceed the pricing these cars, more in the older cars including in the – non-oil, but in the ethanol or another products, another hazardous products, this is going to be a boost win the regulatory triple wire gets hit. I don’t think people for waiting and trying to figure all out is severely recent regulation. And that’s just basically what’s going on. The other wildcard, of course is oil an energy, while we are not an energy company and I do have a – earlier remark it kind of a resentment for getting branded that way. And we’ve been really working hard to diversify our base. It’s an upside in the future, this energy revolution in America is not ending and we continue to see our customer to reducing their cost and improvising invest American spirit. And that’s truly amazing and the frac sand business is not dead. Those who call the ethanol business dead, if a years ago, the same people are going to be eating those words about frac sand. So we haven’t had any real reason for customers to cancel frac sand orders, we’ve had customers who are trying to strengthen their advantage. Because they know that sand is going to be required. But try to tell the market that, we know what we know, and I think my remarks on these are consistent with some of our peers, I agree with them.

Thank you, Bill. And then just one cleanup what’s the interest expense that’s embedded in that – in the guidance number?

Probably about 1.5%.

$15 million.

15 million.

Okay. Thank you.

Thank you. Your next question comes from Tom Albrecht with BB&T. Please go ahead.

Hey, Bill and everybody. Thanks for the color and appreciate the Ag new quote there in the beginning Bill, [indiscernible] of negativism. I wanted to just – so I’m little slow sometime. So obviously, 30% of the backlog is energy related, you basically said, 10% energy tanks, 10% non-energy tank. So we can read the last 10% being those frac sand cars more or less, right.

All right. No, I think you’re a big, because with energy related we were including frac sand and just the energy portion of the tank. So it might inferred it a little bit of, break that down like this little bit over 10% of it is energy tanks, closer to 20% would be sand, and then 10% non-energy tanks.

Oh, okay, sure. Yes, yes, okay. And then I know Lorie, I think it was you commented a little bit on production similar to fiscal 2015, but I wanted to just make sure, I’m thinking about at the right way. As you articulated throughout last year, I think you’re shooting for about 7,000 tank deliveries in that 20,000 number that ultimately became 21,000 deliveries. Is that, what you’re kind of saying and again maybe around 7,000 would be tank whether to energy or not in this next year’s production.

I think it would probably a little bit less, as we shift to some pressurized tank cars that are well run at a little fraction rate. So probably, I’d say maybe closer to six, compared to the seven.

Okay. That’s helpful. And then I guess, you always saying on the whole retrofit issue, I don’t think this has been real well understood at least by those of a tie to Wall Street, but is it one of the issues that there is kind of a loophole for how the trains are run, obviously we had this big explosive in unit trains for energy tank car. But as I look at the rigs, isn’t it something like if there is fewer than 20 tanks in a row, and no more than 35 on a train then those tank cars don’t need to be retrofitted. Is that a correct understanding of the regulation.

Well, I think that the – I trying to simplify its bit more complicated than the way you expressed it. There are two horns of the pressure or retrofitting and replacement. The first horn is of course the regulation, and that regulation has been challenge for many constituencies are losing. And they’re going to lose. But I can tell they’ve challenge that and decided whether there was it slowing and making there is the question that do we retrofit or do we replace. I think, the people in the energy business who own tank cars, those who owned them and don’t lease them, they’re going to retrofit or replace. I don’t think they’re going to have a choice. The second horn of the pressure that’s coming on that market is simply the railroads themselves. Why, in conditions are plenty, with they want to have an unsafe car. The tank car of the future or a retrofit all the compliant car is six time safer in either ethanol or energy – and energy oil service. So inevitably, there is going to be demand from this, countered against that side of course, is there is a clinical supply given the production of older cars and the decline in some transportation. It’s having a – an effect and because there is supply for a conditions. Today, as long as they can move the cars, they’ve got, leasing companies as simply said, we’ll play out the strength. But an eventually has to happen, and then that will be something of a boost we believe. There is a bill in Congress to address the HHFT configuration make it apply to all cars like Canada, we support that bill, because we support safety. And we think that as a good chance of passing.

Okay. There is obviously a lot to monitor and watch, but I guess kind of that my original question is there sort of a loophole though on the way the trains are built and until let’s tightened up. Is that also delaying the decision making process?

I’m going to ask Jack Isselmann who is our political and – he is actually then very active in DC to address that, because he knows that regulation quite well. So it’s – you heard the question right.

Yes, yes. Good morning, Tom. So what you are referring to is the high asset play will train configuration and the reasons we saw the U.S. rules and not in the Canadian rules is the United States requires an elaborate cost benefit analysis. The Canada does not require. And the railroads and other shippers have come forward and said this arbitrary configuration cars, it does make sense, which is why choose bill in Congress that Bill just mentioned. The reality is crude go – crude and ethanol go by unit train and those configurations 20 and 35 cars. Simply aren’t the way the crude and ethanol are going to move. So in terms of the large majority of these legacy operating in crude and ethanol configuration, well some called a loophole really has no application. So I don’t think you are seeing it has at least that particular part of oil have a meaningful impact on the marketplace and we’re working to change it.

Okay. I appreciate that color. I was just thinking as crude by rail volumes have fallen so much that the shippers might try to put pressure on the train or the railroads to kind of exploit that loophole but I guess it’s an ongoing developing story, so thank you. I’ll jump back in the queue.

Just such a great question. The railroads themselves have lots of actions why, why would they use the car that’s unsafe in any unit train or any configuration. They don’t have the – they stop regulating, they have a lot of liberty, but how they run the railroads and how they price this stuff, their pricing these things out of existence. I’m sorry, those people who have those investments, we have appeal of our own, not many, maybe 100 or so. We’re going to retrofit those, but we like others delayed it, so we get the clarity of the landscape and unfortunately, they give us a three-year when they do it. So that’s really bottom line. It’s like OPA 90, everybody waits the last minute, and they rush for the door.

By price business you mean this, the premiums that there charging when those cars are actually on the trains, right.

They are doing it now, they are being challenge in court. But they are going to make that strict in my opinion Jack, you just agree, I agree, yes.

Okay, thank you.

Thank you. And then our final question comes from Bascome Majors with Susquehanna. Please go ahead.

Yes, thanks for fit me in here. I want to ask about the acquisition of WLR fleet after the quarter end. Can you give us a little color on kind of what you paid, what’s in that fleet and if you are going to step back just strategically in the thought process there. It just seems like a bit of a departure from working down the least fleet and going to more capital light model over the last several years.

Well. Bascome, we have a high respect for you. One of my personal goals is to make, your projections about our company seem conservative in a year or so. Because I think you’ve got it, you’ve got it nail pretty well. So I think we will give you some color because our respect for the analysis you’ve done. So you want to take shot at that market.

I think, yes, shot well.

I think the conservative year…

You get the conservative, you get as that we don’t want to disclose the purchase price for competitive reasons, because we reselling those into the marketplace. And obviously it not advantages for us to the disclose the price we pay when we sold. I can tell you that two years ago, we did disclose the purchase price at the time of $240 million for diversified portfolio of used rail cars that on average about ten years old. And at the time, the purchase price was $240 million and now we’ve bothered it is discounts to that purchase price. Why are we taking the trip we don’t – do not book first correct, some miss number that we may have created our own terminology. Our goal has then to minimum the longer-term investment and rail cars and indeed the line item equipment under operating lease on our balance sheet is come down meaningfully for more pleasure, couple of years ago. So our long-term ownership of assets, we’re not to most addition capital to own those long-term. We’re very efficient and originating and syndicating to multiple investors and then managing those assets. And as we’ve that said on a number of occasions, our strategy is to try more volume through that business as Bill mentioned earlier, we double the investor base. That we’re operating within just this last year loan, 12 new investors that we’re managing, originating and managing assets for in this area. So from a strategy view point, this is a natural extension on our end to continue to provide investors, notwithstanding that third of that we said about the third of our production last year went for syndication model. There is more appetite for investment and high quality rail car assets that we can generate to our own and manufacturing are. So we acquired cars in the secondary marketplace that is a consistent with our strategy to then sell them to investors and then manage them. The effect, when we talk about a capital light model and I think you’ve got point this out in the past with the rail cars, also this indication is in the short-term, the short-term ownership those balances are meaningful, but they constantly churn. And so I hope that so far in explaining to you. This is all about.

Let me interpret that very simply. We have a great partner and have had a great partner will [indiscernible] and who is a some brilliant member of his senior team remains on our board see, McManes work hard to do a creative deal. It’s a little bit like a good dog, bad dog things. Because we got a lot of really good cars in there, and we think we get on bundle of all and mix some other fleet and improve our syndication margins. It’s a very good, very strategic move and the others we will sell and some of them might even scrap. So it’s going to come out fairly brush fresh through the systems fairly quickly under the plan. And we believe in the plan and it’s going to help our syndication model, gives us more product.

I appreciate that the detail there. So just to be clear and make some understand this correctly. So you are going to carry that in your syndication balance. And that you have visibility into taking that down and in bundling with rail cars and then near mid-term here. I’m just – I guess I’m asking do you think the syndication balance is going to structurally higher than it was in the quarter for the foreseeable future. Or is this something that could temporarily add to that and then you work account as the cycle eventually tools.

We – I think you can anticipate that’s come to at the end of our first quarter in November, that’s the balance is going to be higher than it was in August, because we acquired these cars after quarter end. And while we expect this syndicate in the near-term it is likely that the bulk of that will take place in Q2 rather than Q1. As you look at the cadence for the year is a whole based on production plans in the mix of leased rail cars versus direct sale of rail cars. I think you’d see the balance come down in the second half of the year and by the end of the year. It is come down meaningfully from diverse half of the year.

Got it, guys. I appreciate the time.

Thank you very much. I appreciate your coverage.

Thanks.

Now, I’d like to turn the call back to Lorie for some closing comments.

Thank you everyone. We appreciate the time that you’ve taken this morning to read our release, listen to our comments. And we wish everyone a safe and happy Halloween.