Question-and-Answer Session
Operator
Our first question comes from Frank Magdlen with the Robins Group, please go ahead.
Frank Magdlen - Robins Group
Good morning.
Mark Rittenbaum
Hi Frank.
Frank Magdlen - Robins Group
A couple of questions. Your comment that the barge manufacturing railcar repair et cetera would come to $800 million, are you including new car deliveries in North America in that $800 number?
Mark Rittenbaum
No, we are including new car deliveries in Europe, refurbishment and parts, marine barge and leasing and services. Those entities in aggregate we anticipate would approach about $800 million.
Frank Magdlen - Robins Group
Alright, sothe number of barges inthe backlog?
Mark Rittenbaum
Approximately 11.
Frank Magdlen - Robins Group
11 at this time, alright, I’ll jump back in queue.
Mark Rittenbaum
Thank you Frank.
Operator
Thank you our next question comes from Mike Roarke with McAdams Wright Ragen. Please go ahead with your question.
Mike Roarke – McAdams Wright Ragen
Hi Mark, good morning, I just have a quick question regarding the refurbishment and parts division. Is that margin through the inhospitable economic environment that you describe, is that margin fairly sustainable between the 15% and 18% range that we’ve kind of seen over the last five quarters here?
Mark Rittenbaum
In varying environments I think that is a good range, for the near term we expect it to be around the 15%, at the lower end of that range, but from what we’ve seen today we do believe the 15% is sustainable inthe current environment.
Mike Roarke – McAdams Wright Ragen
Okay and would that hold true going into the back half of the year too when you’re?
Mark Rittenbaum
Yes.
Mike Roarke – McAdams Wright Ragen
?expecting things to bea bit better. Okay. Second question too with the leasing margin dropping below 50%, does that look like the sustainable rate over the next few quarters too?
Mark Rittenbaum
Well I think a good part of the reason it’s below the 50% is when you look at gains on equipment sales and there’s some other items similar to that, there’s when we hold rail cars on the lease fleet on a temporary basis before we sell them to other leasing companies, those in essence generate 100% margin because there’s no related cost of sale. Soin this quarter those amounts were very low, so we’re actually anticipating that our margins will bea little bit higher for the balance of this year because we’re expecting a little bit more activity in both of these areas.
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