Greetings, ladies and gentlemen, and welcome to the ITT Educational Services Fourth Quarter and Year-End 2013 Earnings Call. [Operator Instructions] As a reminder this conference is being recorded. Joining us today from the management of ITT Educational Services, we have Kevin Modany, Chief Executive Officer and Chairman; and Dan Fitzpatrick, Executive Vice President and Chief Financial Officer. Before we begin, ITT Educational Services, Inc. wishes to remind you that this conference call may include forward-looking information. Actual results may differ from the information presented during this call. For additional information, please review the section on forward-looking information contained in today's news release or in the company's public filings with the Securities and Exchange Commission. Thank you. Mr. Modany, you may begin.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us on our conference call to review our 2013 fourth quarter results. On the call with me this morning, as usual, is our Executive vice President and Chief Financial Officer, Dan Fitzpatrick. In our prepared remarks today, we plan to review our progress in executing on the key focus areas for the organization. We'll also provide you with additional color on the results reported in this morning's press release. We'll then spend some time providing more detail on the charges that we recorded in the fourth quarter related to our guarantee obligations associated with the 2 private education loan programs, some actions that we're evaluating in connection with those 2 programs and the potential impact of those actions on our financial statement. At the conclusions of -- conclusion of our prepared remarks, we'll open the lines for your questions. We have a great deal that we'd like to cover with you today, so we will attempt to be efficient with our remarks and provide ample time for your questions during the Q&A session. With that said, we'll begin by reviewing a few of the organization's current areas of focus. As we entered 2013, we noted that protecting and enhancing the student value proposition for our programs and effectively communicating it to prospective students was a key focus area of our organization. We noted that we believe that it was especially important given the current state of the post-secondary education environment. We indicated that we believe that prospective students were more sensitive to the costs of post-secondary education and were making educational decisions based on their perceived opportunity to derive value from their educational investment. Our analysis of prospective student behaviors led us to conclude that sensitivity to…

Thanks, Kevin. I'd like to start by providing a brief overview of the results reported in this morning's earnings release. Revenue decreased $37.9 million or 12.6% to $262.9 million in the 3 months ended December 31, 2013, compared to $300.8 million in the 3 months ended December 31, 2012. The primary factors that contributed to this decrease include an increase in institutional scholarships and awards provided to our students of for $43.1 million in the 3 months ended December 31, 2013, compared with the same prior year period; a 7.1% decrease in total student enrollment as of September 30, 2013, compared with September 30, 2012; and a 5.8% decrease in total student enrollment as of December 31, 2013, as opposed -- as compared to December 31, 2012. The increase in institutional scholarships and awards was primarily due to the introduction of the Opportunity Scholarship at the vast majority of the ITT Technical Institute campuses in the academic quarter that began in March 2013. The cost of educational services decreased $8.3 million or 6.4% to $121.1 million in the 3 months ended December 31, 2013, compared to $129.4 million in the 3 months ended December 31, 2012. The primary factor that contributed to this decrease was a decrease in compensation and benefit cost, resulting from fewer employees, which is partially offset by an increase in legal costs. Cost of educational services as a percentage of revenue increased 310 basis points to 46.1% in the 3 months ended December 31, 2013, compared to 43% in the 3 months ended December 31, 2012. The primary factors that contributed to this increase were a decline in revenue and an increase in legal costs, which were partially offset by decreases in compensation and benefit costs. Student services and administrative expenses increased $7.6 million to 8.1%,…

Thanks, Dan. Before we open the lines for your questions, would just like to note that we are very pleased with our overall operating results for 2013. And we're heading into 2014 with solid momentum on the operations front and a great deal of optimism regarding our ability to continue to successfully execute our strategic plan. While we recognize that we have a few areas of opportunity that will require a great deal of our attention and focus in 2014, and we have yet to see the type of consistency and transparency in the operating metrics that we'd like, we are very pleased with what we've accomplished as an organization in 2013. Therefore, I'd like to take this opportunity to thank the nearly 10,000 men and women of ITT Educational Services for their hard work, dedication and commitment to the students -- success of their students and graduates and the employers who hired them. Congratulations to each of you for your many contributions in 2013, which we believe was a transformational year for our institution. And here's to even more success in 2014 and beyond. Operator, would you please open the line for questions.

[Operator Instructions] And our first question comes from Jerry Herman at Stifel.

Kevin, just hoping that you'd give us more color on the sort of persistence and student quality, generally. I'm wondering if the Opportunity Scholarship is in, any way, bringing in, let's say, a less motivated or -- student or one with less skin in the game, thus that they drop out more quickly? And also noticing that bad debt figure is part of that question.

Sure. I like how you slipped about 3 of them in there, so that's [indiscernible], Jerry. Let me see if I can handle them all. If I miss one, you can come back through, and we'll try to catch it. In terms of the student quality and persistence, we're not seeing any indications of any change in the mix of students. And I can tell you one of the ways in which we do that, we have third-party demographic data that puts different students in different groupings based on a bunch of data that we collect. And as we analyze that, we look at each start group, and we try to see the mix of the type of students that we get, there's some correlation in that profile, if you will, the profile groupings and retention. And so we use that as an indicator of quality. I'll use that term for lack of a better term, but as an indicator of the quality of the mix of the incoming class. And so as we look at that, and we have looked at that over the past several quarters. And, certainly, since the implementation of the Opportunity Scholarship, we've not seen any indication of any shift in that profile mix or the proxy for quality. So it doesn't appear as if that is leading to any of the persistence changes. What we do see though as we look at the correlations is we see these courses, keeping in mind that we put all new courses out over the past couple of years when we shifted from 4 credits per course to 4.5 credits per course. There was substantive change to every one of the courses. And so these are relatively new courses. And with new courses, you typically see a little…

The next question comes from Corey Greendale at First Analysis.

Question on the charge. So first of all, I presume that of the $259 million in projected proceeds you've already received some of that. Could you give us a sense of if everything from here on were to go bad, what your potential, maximum exposure is? And a related question, I hear you on the difference in the experience with the Title IV loans and the private loans with the same students. But it seems to me there's a lot of variables that can play into that other than just the servicing like income-based repayment options of students we have on Title IV. And just at some point, do students hit a tipping, where they have too much debt and they can pay some and not others. So what gives you the confidence that you can improve the servicing? And then that would make the difference?

Well, Corey, let me clarify. As far as the net proceeds, what I was trying to make the point there was of the $420 million that was received initially, when it's all said and done, that, that will amount to be $259 million net. So that really the -- and maybe this isn't embedded in your question too. So that what we have left on the balance sheet right now of a reserve $127 million, that's the net present value that cash flows going forward. The ins and the outs on that program. So, hopefully, that provides a little bit of a clarification. But to your point as far as Title IV versus private. Yes, there are some distinction, as far as the timing and default and so forth. We try to take that out. You can't do it completely. We're also drilling down. There are other things. There are more options, which would be a good thing for the private loan programs too, by the way, as far as borrowing modifications. But we're trying to isolate exactly what the situation is on a co-borrower basis. So yes, there are some variations in the options available with the timing of default for the 2 programs. But at this stage of the game, there's clearly a distinction.

Corey, let me add just a couple of comments with regard to the second part of your question, I think, or the third part. With regard to what gives us confidence, so we can improve servicing. I would just say that with the transition from the self Title IV program to the direct loan program, there was an elimination of the guarantor agency activity or default management activity. And pretty much with the direct loan program, schools were forced to pretty much take on that activity. It was absent for a while, and we saw cohort default rates through the Title IV loan programs skyrocket. That's part of the put loan issue that we talked about many times before, but also, because that guarantor function was not there. We've subsequently taken on that activity. We have people who do default management services for Title IV loan programs. It's supplemental. We're not the servicer. There's Federal Services that service the Title IV loan programs. But we've become engaged in that activity as many institutions have. Again, we're been forced to do so with the elimination of the guarantor agencies, so we're doing that now. And we have firms that work with us in addition to our internal staff. And we've seen very positive results subsequent to our involvement in those types of activities. So again, throw that out as a proxy, not suggesting that's a guarantee that we could have a positive impact as we've evaluated the performance of these private loan programs and seeing what has happened behind the curtain with regard to the servicing on some of this stuff, it stands to reason that we think we could do better just from some of the stuff that we've seen transpire in terms of the administration and servicing. But also then, what we've done on the Title IV side, we've got an experience there and have had good results. That's another reason why we think that we could potentially have some positive impact. Just to be clear, none of that is factored into this reserve, none of that is factored into the accrual. There's no assumption of better servicing or improvement in servicing, none of that is here. Hopefully, it's clear that we certainly do not see any reason why we would try to be overly optimistic at this juncture in terms of our assumptions on that accrual. There's absolutely, positively no reason to do that, so I want to be clear on that, too. But if we take some actions, if we get engaged and there are some regulatory, there are statutory limitations on what we can do there, but if there are some opportunities there, we think there could be some upside. None of that's baked into this accrual at this juncture.

Next question comes from Paul Ginocchio at Deutsche Bank.

Just 2 questions, really, with -- related to the accrual. First, it sounds like it's 100% your idea to bring it on balance sheet. Is there -- or was there no other -- I think the SEC was looking to it at one point. Is there any -- are they questioning whether it should be on balance sheet or not? And then second, could you just break out that additional $60 million between PEAKS and the 2009 program? And where -- is there any -- is there a big difference between the reserve levels for either of those 2 programs?

Yes, so, let me talk to your first comment about any kind of potential financial statement adjustment and/or consolidation. Let us be very clear. The audit for 2013 is not complete. Any work on the audit at this point is preliminary and incomplete. That's not unusual at this time, when we're doing the January earnings release, but what's different this time is that there's some standard procedures yet remaining on the 2009 and PEAKS RSA. So we're not providing any conclusions with regard to where the auditors are, or where the audit results will come out with regard to consolidation. I think you would agree that it's prudent for us, given that there is review of this transaction by the SEC that there's extra precaution taken in terms of that audit. I don't say that to suggest what the outcome will be. If we have the outcome, we would tell you the outcome today. We don't know what the outcome will be, so the audit in and of itself is a separate matter that is incomplete. The results are preliminary and the review of the 2009 and PEAKS Program, it's still underway in terms of the audit. So put that separate to anything we're talking about with regards to activities that we may be taking. We also want to note that regardless of what happens with the audit, or regardless what happens with any SEC review that we are also evaluating what opportunities may exist, and have been for some time, in terms of trying to improve the economic impact to the company as a result of these programs. And some of those actions that we are contemplating could result in us crossing that line and potentially being engaged in activities that could result in consolidation. So 2 separate issues here not concluding on the first at all, speaking more to the second when we talk about our engagement in some of these activities. Hopefully, that's clear.

As far as your question, as far as the split between PEAKS and RSA for the incremental $60 million, I don't have the numbers in front of me. I can tell you it's larger for PEAKS. I'm guessing it's probably -- 60% to 65% of that is probably related to PEAKS, but I just don't have that in front of me. I do know that the PEAKS is a larger of the 2 components.

The next question comes from Trace Urdan, Wells Fargo.

The starts guidance for next year is a pretty wide range, and I'm wondering if you can comment at all on what you see as a likely progression? And related to that, I wondered if you could give us a sense of when you think the Criminal Justice declines bottom out? And whether that would represent a meaningful inflection in terms of how to think about student starts next year -- or this year, I should say?

Thanks, Trace. Let's try to hit both of those. As far as the range, it is a little bit wide. And I think that goes to the points we made in the prepared comments with regard to not yet being where we want to be with regard to transparency and clarity on some of these operating metrics. That being said, we continue to see positive inquiry trends, so demands are very good on the front end. We haven't seen sort of falloff in terms of our ability to convert that demand. And I think a lot of that is a result of the Opportunity Scholarship. When we implemented that, we saw that conversion rate improve. So I would just say, generally trending, continues to be fairly positive. Now I'll put one caveat around that. Let's speak to maybe just even heading into our March start right now, which is what we're recruiting for right now. We've seen impact of the weather. The weather is definitely having an impact on us right now. We've had fairly sizable numbers of schools closed for multiple numbers of days, and so that's impacting us. If we took a snapshot look, kind of coming into this week, we were down about 6% on net applications for the March period. I think we've got opportunity to overcome that just based on the trending, but we've got to get these schools back and up and running. We still have a handful of schools that are closed today due to the weather. So take that whether disruption out of it and just kind of look at the macro trends. And I think that we're cautiously optimistic. And we tried to speak to that a little bit in some of the prepared comments. We like the trends we're seeing. With regard to CJ, it continues to -- we continue to see downward trends there. And again, some -- the majority -- vast, vast majority of that, if not all of it, I hesitate to say an absolute. It's self imposed with our efforts to cease enrolling new students at select campuses that don't hit the outcome measures that we've placed as internal expectations. But looking again at March -- enrollments for March, it's down substantially again for CJ. So we've not yet reached that inflection point, but we're getting there. It's down to about 8% of the total census. And we're seeing numbers continue to decline, but it's probably later this year, maybe early next year before we see an inflection point from CJ. Right now, we're seeing good demand and good conversion rates and strong enrollment in the core tech programs that really kind of comping on some bad years. It's really driving some of this growth rate now. And then future programmatic expansion, we think, will add to that.

The next question comes from Sara Gubins, Bank of America Merrill Lynch.

Could you give us any sense of the timing of your review of how you might try to improve the financial outlook around PEAKS and the 2009 RSAs? And so when we might expect to see some more news around it? And also, can you walk us through some of your working capital assumptions to get to your free cash flow guidance? And did I hear you correctly that $75 million to $100 million already incorporates $30 million to $50 million of loan-related payments? Or is it before that you -- before those payments?

Okay, sure. I'll take the last one first. Yes you've heard us correctly that the $75 million to $100 million is after the estimated payment for guarantee and related obligations of about $30 million to $50 million, so that is correct. Flipping over to the first one. I think you were asking for some timing around some of these financial statement questions. And first, let me speak to the incomplete nature of the audit. Obviously, we have 10-K filing requirements, so it would be our expectation that we would have the audit complete and any ramifications from the audit. We would have conclusions from that prior to filing the 10-K. So we're looking at maybe a month out, maybe a month and a half at the most if necessary. And so we should have some news on that. In terms of us getting engaged to some activities, there's a lot of analysis that needs to go on, and we've been doing some of that, but it's a legal review. It's a regulatory review. We kind of have a good understanding of some of the things we can do per the agreement, at least in some of the programs, and we started with our 2009 RSA program, we started looking at what the options are there. And I would say that we could potentially, pending our review of all the different considerations, be looking at taking some actions there. Probably the latter part of Q1 heading into Q2. That's just a rough estimate, and I wouldn't say an absolute estimate, but that's probably a reasonable timeline think about our actions that could impact the economics.

Sara, as far as your comments or your question with respect to working capital assumptions, if you look at the guidance we have out there -- and the expectation is that the shares aren't going to change dramatically, nor is the effective tax rate. A couple of things to keep in mind. This year, we had -- we were able to be very efficient for CapEx. That's probably likely to get back into a more normal range, going forward. There's -- as much as we have RSA payments, it'll probably be similar to what we saw this year. We should see a little bit more of an efficiency, with respect to the tax payments, because we've -- as you can see, we've got some significant prepaid taxes, if you will, in the form of the deferred. And also just the cash receipts. With the Opportunity Scholarship, as we have it right now, the pricing construct is that the cash receipts should be a lot closer to revenue going forward. And we saw an improvement this year, and we expect to see that more so going forward. So I would like to think that it should be pretty realistic as to how you could get to that. And also, there is some more information with respect to this. There's a table, as far as the guidance in the earnings release. I think it's near the back, but it you take a look, you could see make more specificity on that.

Our next question comes from Suzi Stein at Morgan Stanley.

Just curious. If PEAKS is consolidated, how would that impact your current credit agreement? And also do you have a sense of how that would impact the financial responsibility ratio?

Sure. Thanks, Suzi. So a couple of things on that front. In terms of some of the covenants on the risk share agreement, generally speaking the risk share agreements take into consideration the, I'll say, outstanding balances for the other risk share program, so they sort of incorporate that already into the covenant. In terms of the bank covenants, the line of credit does not factor that in. However, the banks are very well aware of that. And in our conversations with them on a regular basis, we speak to it and speak to the impact with and without. And so that's not a new consideration for them. This would not be a new revelation to them. And we stay in contact with them and have kept them up to speed with regard to any of these considerations as we've gone along. Like we've said, we've been evaluating some of these activities on our own for some time and have grouped them into those conversations as it relates to how they would think about the covenant. So we have some degree of optimism there, just based on those conversations that we've had to-date with the bank that any issue if, in fact, we end in a consolidated status that we should be able to resolve them with the banks. Just begin optimism based on those conversations.

And our preliminary expectation too, that would hold true with the financial responsibility ratio as well.

But there probably wouldn't be....

There wouldn't be an impact, correct.

Our next question comes from Peter Appert of Piper Jaffray.

Sorry, I'm dense on this, but specifically, if the -- if you were to receive no further repayments on these various loan programs, the income statement impact would then be a write-off of $259 million, the cash flow impact would be $259 million, plus the $127 million of future guarantees, is that sort of how we could think about it? And then sort of related to this, can you give us a range, Dan, in terms of if you had to consolidate all of this, what the range of possible debt levels would look like for ESI?

So I'll take the last one first. I think it's really very difficult for us to speak to what this looks like from a consolidated perspective on our balance sheet and the impact there. Given the very preliminary and incomplete nature of the audits, I don't think we can -- we're in a position to give you specificity around that. I think you can understand in general perspectives what it would look like, obviously, what some of these obligations are, what the assets are. So in essence, there would be a gross up on our balance sheet, and I'm speaking in very macro terms. I don't want to give everyone the idea that we've got the specificity of this considered. Again, we're just in the midst of doing an audit at this point. Wanted to be clear with disclosures with everybody. But it's a gross up on the balance sheet is what we think it would be. And so as we think about what that means and the impact of that, we kind of went through the principal issues there. I think Suzi had asked those earlier with regard to covenants and with regard to financial responsibility ratios. So generally speaking, we feel pretty good about that. If, in fact, we have this gross up with the balance sheet. Also, no impact on net operations, no impact on cash flow. So that's kind of our very high-level review, but a lot of work would have to be done between now and us giving more specificity around what that looks like. In terms of your question on sort of the -- what it looks like if no one pays another loan back. I don't know that we can answer a question that doesn't make a whole heck of a lot of sense to us in terms of nobody paying it back. But we do, do ranges of accruals and look at the high range based on sort of Draconian assumptions in terms of repayment. And Dan, if you want to get the high end of the range?

Actually, I'm not exactly sure what that is. It's not going to vary dramatically of what you've seen as far as the range is going what we've reported in the back -- in previously. It's because we're -- what we've done is we've booked to either the high end or the midpoint for certain polls. But I will tell you, back to Kevin's point, that we've got 70% of the borrowers in repayment right now. So there is history there. As much as it -- the default range have been higher than what we've expected going into it, we're not at a point now that you'd say that you're not going to collect any future loan payments on these programs.

Our next question comes from Jeff Volshteyn at JP Morgan.

I wanted to ask, what assumptions are you using for either retention or persistence for your 2014 guidance? And as a follow-up, what would be the impact of the 7 campuses that you've identified on the start comparison of 2014 versus 2013?

Thanks. So for 2014 guidance, if you look at the retention component of it, breaking it out from grads, the retention piece of it, we have a slight uptick in our projections for 2014, not substantial but a slight uptick, and it's based on just some of the preliminary information we're seeing with regard to some of the activities that we're taking to try to improve the retention, if you will. So slight uptick, nothing material. In terms of the impact on campuses closed on 2014, the best metric we're giving on that at this point is just to look at sort of the impact that it had in the fourth quarter. And we threw a couple of other things in there as well, including the graphics design and CJ programs, kind of taking those out of the mix. I think if you take out the closed or relocated campuses and the impact on their enrollment, you take out those graphics programs, fourth quarter was up 14.5% versus the 4.5% in total. So that gives you some degree of understanding of what the impact is on this. I don't know that it's that substantial throughout the year in terms of that kind of a drag, but it's been somewhat impactful. The 4 campuses that -- excuse me, the 7 campuses that are no longer enrolling students that did enroll students, at least for a couple of quarters in 2013 that won't for 2014, obviously, had enrollment rates that were less than what the average would be, otherwise, they would not be in the predicament they're in. So that may give you a little more color to think about as well.

Our next question comes from Tim Connor at William Blair.

I just wanted to clarify the -- I think you said 70% of borrowers are in repayment, and you're assuming something like a 62% repayment rate for your accruals? Is that right? Did I get those numbers right?

Yes, it's just under. I think we're somewhere just north of 67% of all borrowers in repayment currently. And the modified assumption as far as default rate are right around the 64% range.

And just to clarify, I think you said repayment rate of 62%.

That's default rate, yes.

We have a default rate of 64% in the assumptions right now. It previously was 59% with the changes that we made. And Dan mentioned in his prepared comments, it now is in the 64% range.

Our next question comes from Paul Ginocchio, Deutsche Bank.

Just -- sorry if I missed it before, just 2 kind of housekeeping questions. Did you give ad spend growth in the fourth quarter? And second, you mentioned the acquisitions were accretive, I didn't have that in my model. Is it -- can you give a rough estimate? How accretive those new acquisitions are, more or less than $0.10?

Paul, before you go, could you repeat the first question? I missed that.

Ad spend growth on the fourth -- in the fourth quarter?

Oh, okay. Yes, so the ad spend growth -- let me get to that -- on the new acquisitions, the acquisition we had, the accretive nature of it. Just give you some very rough numbers on that acquisition about a $10 million business and probably EBITDA of about $1 million, so it's not substantial. There's some opportunities for some savings and synergies that we think are available to us that could move that a little bit but nothing substantial. And then in terms of the ad spend for the quarter, for the fourth quarter, we were up slightly over the prior year, 4% versus prior year. As we look forward to 2014 in the model, we've got expectations for also similar type to slightly higher expectations in terms of increased spending at this time. That's what's baked into our internal goals that we provide, excuse me.

The next question comes from Michael Tarkan at Compass Point.

Just curious. Can you tell us what percentage of the portfolio is in forbearance now?

Private loans, I don't believe we've disclosed that previously.

I don't think we have either.

Okay. If you're projecting a 64% default rate overall, and I know you mentioned you took default rate estimates up on the forbearance book, I'm just curious, do you have any kind of sense -- or can you give us any sense as to what default rates you're expecting on those loans that are in forbearance?

Yes. I think we mentioned without giving a lot of color on it. But part of some of the adjustments we made in the current quarter was the fact that we got better data on the forbearance activity. So we had assumptions for defaults on forbearance, because we haven't seen a lot of that activity play itself through the delinquency buckets and into default. And so we used industry average for similar credit profiles. With a collection of additional actual data, we saw that those assumptions were off and so we basically adjusted them downward in terms of recoverability on the forbearances. So without giving you specificity, because we haven't broken that out in some of our disclosures, I will tell you that there's a high rate of default in terms of expectation for the students in forbearance. Again, based on the experience that we've seen and recently collected over the last couple of months.

The next question comes from Trace Urdan at Wells Fargo.

I want to go back and ask about the persistence again. One question I have is I know there's an entrance exam that students take in order to begin the program. I'm wondering if your standards about the minimum acceptable score there have changed over the last couple of years? And whether that might have anything to do with the way that we've seen the persistence trend more recently?

Thanks for the question, Trace. So just to get everybody up to speed, probably, a couple of years ago, based on a lack of correlation between the testing scores that we had and the retention and student success rates, we discontinued that entrance exam and are open enrollment at this point, and again, have been for several years. What we do, do is we collect some data on students in terms of some characteristics that we believe to be correlated to their potential for success, and I would say that, that's probably in a test phase, so we don't have conclusive data on that. But in terms of making any changes over the last several years, since we've seen sort of this retention phenomenon, there would be no correlation to any shift in a test score, because, again, we've discontinued the use of that on the basis of lack of correlation to success and retention. I think we have time for maybe one more question.

Okay. The next question comes from Suzi Stein of Morgan Stanley.

Are you still making payments on behalf of borrowers? And can you tell us where this ended up at year end?

So we made a payment on behalf of borrowers in the early part of 2014. So I guess, you would, under that guide, say that, that has continued. And as far as looking forward for what we expect going forward, I don't know if we can give you definitive answers in terms of what's likely to occur there, but certainly, the range of payments that we're looking at -- we gave a $30 million to $50 million range, and we've also quoted -- commented in the prepared comments that, that range could change. One of the considerations amongst many is for us to be looking at allocating potentially additional payments to these obligations from a cash flow perspective as the balance sheet gets stronger, as operations turn positive, we start to feel more confident and sort of our position from a liquidity perspective and certainly want to look at capital allocation and prioritize capital allocation to get the best economic impact for the organization. And one could potentially conclude that allocating more dollars to the RSA programs just based on the interest carry that is embedded on our guarantees, would make some sense for us. So that's something that is being evaluated. With that commentary, I'm not suggesting that a course of action has been selected, but with the range of payments that we've talked about, and the fact that we've said that those could change, I think you should think that we're at least contemplating allocating more capital there and looking at the various options that are available to us to do it, again, because we think that's probably one of the best allocations of capital for the organization at this point.

Would you like to make any closing remarks at this point, Mr. Modany?

Thank you, operator. I just want to thank everybody for participating on today's call and look forward to talking with you in our next earnings call in April. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.