Ken Hoexter: All right. That’s helpful. Oh, go ahead.
Lorie Tekorius: I said, well said, Justin.
Ken Hoexter: Great. I appreciate your time and thoughts. Thanks guys.
Operator: The next question is from Steven Barger with KeyBanc Capital Markets. Please go ahead.
Steve Barger: Hey guys, good morning. Looking at Slide 12, with the fleet levered to 77% of book value, do you expect incremental debt from here to primarily just fund additions to the lease fleet at that ratio plus or minus?
Lorie Tekorius: Yes.
Steve Barger: And is lease fleet leverage the primary metric that you’re focused on going forward? Or is there a net debt-to-EBITDA target for the company. I’m just trying to think how you’re changing your mindset to think about the balance sheet.
Lorie Tekorius: Well, so I would say that as we think about our lease fleet and the leverage associated with that, as Brian had talked about, we’re very disciplined about what we’re putting on our balance sheet and then we want to leverage it appropriately locking in interest rates, thinking about the term, thinking about the conditions. I think the team has done a really of – being in the market at the right time and having the right sort of flexibility in the type of debt that we put on our balance sheet. We’ll take into consideration the market as to what’s going on at that point in time as to what’s the right debt. I think with the cash flow that we’ll be generating from the leasing business as well as the margins in our other businesses, we would expect to be paying down some of our corporate recourse debt over time.
Steve Barger: Okay. A couple of more leasing questions. The Slide 10, I think, says average term is 4.2 years. What is that for recent renewals?
Brian Comstock: So most of the renewals are coming in substantially longer. We’re seeing five to seven years on average. That’s what’s bringing up. As you look quarter-over-quarter, you’ll notice that it brings it up. But it takes a lot of renewals to move it incrementally beyond the 4.2 years. So – but most of the renewals are kind of coming in at the five to seven-year range.
Steve Barger: Got it. Thanks. And I know the lease fleet is still relatively small but growing, it is obviously a focus initiative for you. Do you anticipate putting out a lease renewal index similar to the LPI or the FLRD?
Lorie Tekorius: We were just talking about that the other day and trying to figure out what acronym we would come up with. Yes, [indiscernible] that, but we don’t have anything to unveil today.
Steve Barger: Okay. Great. Thank you.
Justin Roberts: Steve, this is Justin real quick. To answer the question, I know you usually ask is we do expect the back half of the year to be stronger from an operating cash flow perspective, and then that will also generate some free cash flow that we can deploy into delevering and other aspects of our business.
Steve Barger: I appreciate you anticipating that for me. Well, and that’s good to hear. I look forward to seeing that positive free cash flow. Thanks.
Justin Roberts: Definitely.
Lorie Tekorius: Thanks Steve.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Lorie Tekorius for any closing remarks.
Lorie Tekorius: Thanks, sir. I appreciate everyone’s time and attention. I know Justin will be speaking with some of you later today. Thank you and we look forward to sharing progress in the future.
Justin Roberts: Thanks, everyone.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
