Lorie Leeson: So this was Portland specific. We are not intending to relocate all of our manufacturing to Mexico. There’s definitely a lot of benefits and value of having a U.S. manufacturing footprint. The facilities that we acquired was on (ph) 2019. They continue to perform well. And as you think through deliveries and the impact from ceasing the production at the Portland facility, they’re running at a very, very modest pace. So I would say it’s not something you’re going to really notice as — and looking at the quarterly delivery activity, particularly as in this first quarter, we had a larger number of units that we capital — are not capitalized, but are held as investments on our balance sheet, which will be syndicated in future periods, which will then become deliveries, right. So that will offset the wrapping up of rail production at Gunderson.
Ken Hoexter: Great. Thank you very much.
Operator: The next question comes from Allison Poliniak with Wells Fargo.
Allison Poliniak: Hi. Good morning. Lorie, back to your last point, those cars on balance sheet. I know that you guys mentioned the syndication obviously be beneficial. But is there a way to estimate or how you’re thinking about what you’re going to hold on in your only weeks I imagine that impacts the margin — or the profitability as we’re thinking through the year? Just any thoughts there.
Lorie Leeson: Well, I’ll get Brian to talk to that because he’s working really closely as we evaluate kind of which pieces of equipment we hold on to and which we syndicate.
Brian Comstock: Yeah, Allison, what we’re — our stated goal, just to maybe restate it is to hold about 2,000 cars a year on our balance sheet. I think in Q1, we originated about that many a little bit more. What we’re doing now is we’re going through the process of identifying which ones we want from a concentration and return perspective, and then we’ll begin to move some of those into the syndication channel. So Q1 was heavy in lease product. That’s one of the impacts, but that will start to get released throughout the year and our plan from a leasing perspective is, again, to keep about 2,000 cars throughout the year.
Allison Poliniak: Got it. That’s helpful.
Justin Roberts: And just from a production perspective, there are — we will be producing cars onto the balance sheet and then moving cars off the balance sheet through syndication throughout the year. This wasn’t a one-time thing. It’s just more a matter of it was more heavily weighted in this one quarter.
Allison Poliniak: Yeah. I guess I was just — because I think it doesn’t — maybe we can talk about this offline, Justin. The impact of the cars that you’re putting in your own fleet, you don’t necessarily recognize the profit. So I was just thinking if there was an impact we should be thinking through as you determine what you’re keeping and what you’re syndicating out.
Justin Roberts: You are exactly correct, Allison. We do eliminate that revenue and margin from the manufacturing business when they are on the balance sheet and when they go into the long-term fleet, then it’s just a matter of recognizing the lease income over the period of the lease. So again, we can clean up any details offline, but yeah, you are right about that.
Lorie Leeson: And I would say, this is something that is unknown, right? As we are building equipment that we will capitalize on our balance sheet and hold long term. We absolutely acknowledge that we are foregoing the profit in the moment, but believe that having that repeatable revenue, cash flow, tax advantaged cash flow is good as a balance to our strong manufacturing operation.
Allison Poliniak: Certainly. And then I know, Lorie, you mentioned revenue was in line with your expectations, but it sounds like production did slip a little bit to the right because of the supply chain. Is there any way to quantify what that number was in terms of production level that you guys had that kind of maybe get pushed to the right and is probably more back half weighted here, just any thoughts?
Justin Roberts: Sorry, you asked Lorie, but I was going to say a few like kind of $300 million to $500 million is probably slipped from the quarter from that perspective. The piece that was a little more punitive though, was the disruption and the inability to maintain consistency of production on certain lines throughout the quarter.
Lorie Leeson: Right, which impacts overhead absorption. So you just have more of that overhead falling through not being used efficiently.
