Matthew J. Flannery: Absolutely. You can imagine we have these conversations internally. So we feel good about where we are.
David Raso: Thank you.
Matthew J. Flannery: Thank you David.
Operator: Our next question will come from Rob Wertheimer with Melius Research. Please go ahead.
Robert Wertheimer: Thanks and good morning everybody. I had a couple more questions on how you’re thinking about the new leverage range and capital allocation. You’ve been on a multi-year, maybe five-plus years of deleveraging and in the recent past, you had sort of dipped below your old range as you are on that journey, and I think everybody understood that. Now that you’ve kind of reset the range, should we expect the 1.5% to be more of a floor or would you go below it, will you kind of hang out and maybe this is too much, but we hang at the low end of the range and say, the upside for acquisitions, as Matt mentioned, that’s a ton of capacity? And then last question, I’ll just ask them all at once, is this year, I don’t think it would take a whole ton of upside to get you right down to that 1.5% and so if you do go past it, I mean, do you use the excess cash for share buybacks, I know there was a potential to add fleet, just generally, how you think about working within that capital allocation range?
Thank you.
William Ted Grace: Yes, thanks for the question, Rob. So the idea is obviously to live within that range. As was the case with the prior range, nothing religious about that low end at the margin. We set our capital allocation plans for the year, obviously, in January. And so hypothetically, if EBITDA were to outperform and you ended up getting — for the sake of argument at 1.4, I don’t think you should look for us to suddenly step in and just for the sake of staying within that boundary do something that we otherwise hadn’t planned to do. We focus on being very disciplined when we go through these programs. That said, we do have every intention of living in that 1% to 2.5%, sorry, 1.5% to 2.5% range. And I’ll remind people, there is a cyclical overlay.
So the concept is obviously at around the peak, you want to be at the lower end of that range and conversely, when you’re at trough EBITDA, you want to be within the upper boundary. So please remember there’s a cyclical overlay. Even with all that said, it leaves us with tremendous firepower that we can use to augment earnings through acquisitions and other growth initiatives, whether it’s more organic growth through M&A.
Robert Wertheimer: Perfect, that answers that pretty cleanly. And then just one last on capital allocation on the dividend. You obviously took up the payments. Your earnings have been up more than by what you took it up and just to reiterate, if you would, your policy there. Will that over time just follow trend line earnings or how do you do that? And I’ll stop there. Thank you.
William Ted Grace: Yes, so the idea, as we said a year ago was to grow it in line with long-term earnings. We don’t want to get algorithmic, if you will. But certainly, we think that we’ve got the growth capacity and the cash flow growth capacity to support a growing dividend, which we recognize as an attractive aspect of the share profile. So what I would say is we look at companies that really benefited from dividends, call it that dividend aristocrat list. We’ve long said we aspire to be part of that group. That’s the intent. So I don’t want to kind of get too caught up in a formula of what dividend growth will look like, but our intent is absolutely to grow consistent with how we think about the long-term earnings power of the company. Matt, anything you’d add there?
Matthew J. Flannery: No. No. I think you said it right. Directionally, it will be aligned, but it won’t be mathematically exact.
Robert Wertheimer: Thank you.
Operator: Thank you. Our next question will come from Jerry Revich with Goldman Sachs. Please go ahead.
Jerry Revich: Yes, hi, good morning everyone. I’m wondering if you could just update us on how the Ahern integration is trending versus plan and within the guidance for 2024, what’s the magnitude of margin uplift that’s embedded from that in integration and on a separate note on GFN, now that we’re halfway through the five-year plan for that asset, I’m wondering if you could just update us on where we are on the OEC and EBITDA growth plan that you folks laid out to double that business over five years when you made the acquisition?
Matthew J. Flannery: Sure, Jerry. So on the Ahern acquisition, all the integrations fairly complete when we talked about we did the people first, then we went to the fleet and the facilities. And as we have talked about in Q3, that was going to roll through the end of 2023. We’re pleased to say that all that work has been done. We’ll continue to get efficiencies out of that business as some of those legacy Ahern facilities continue to adopt our processes and our technology, right? You can’t stick to 6-inch fire hose at them and have them drink everything at once. So we’ll continue to get further improvement in those — in that business. But as far as separate margin contribution, the egg is pretty scrambled. So these are all blended into our existing district and region networks out there, but we’re pleased with what we’ve seen so far.
And specifically pleased about the capacity that we added. From a GFN perspective, I don’t think we’ve been calling that out separately. What I’ll say, unless Ted, you have some different data but what I’ll say is we’ve been ahead of schedule really from year one. So when we talked about doubling that business in five years, we expect to achieve that sooner than the five-year mark. I don’t know, Ted, have you given any specifics about GFN.
William Ted Grace: No, no. I just said we’re ahead of target. The business has really complemented the rest of our business exceptionally well. The one thing I’ll add on the — I think Jerry asked specifically about some of the Ahern margin uplift in 2024 versus 2023, I guess now that we’ve lapped the deal, we can say we’ve really reached the targeted synergies and frankly, we gave ourselves 18 months. We probably got a super majority of the way there within 12. So there isn’t that much kind of carryover incremental benefit. It would be really deminimus because we were able to realize the synergies pretty quickly in 2023.
Jerry Revich: So, then can I ask just one last one. The cold starts that you’re planning were roughly 50, can you just give us a sense for mix between trends versus other lines of business just to help us get a feel and if that trajectory is any different from the mix within what you saw in 2023?
