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Executives

Stephen C. Hooley - Chief Executive Officer, President, Director and Member of Proxy Committee

Kenneth V. Hager - Chief Financial Officer, Vice President, Treasurer and Member of Proxy Committee

Analysts

David J. Koning - Robert W. Baird & Co. Incorporated, Research Division

Peter J. Heckmann - Avondale Partners, LLC, Research Division

David Togut - Evercore Partners Inc., Research Division

Gregory Smith - Sterne Agee & Leach Inc., Research Division

DST Systems (DST) Q4 2012 Earnings Call January 31, 2013 8:30 AM ET

Operator

Good morning, and welcome to the DST Systems Fourth Quarter Earnings Conference Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

Now, I would like to turn the conference over to our host, Mr. Steve Hooley, President and Chief Executive Officer of DST. Please go ahead.

Stephen C. Hooley

Great. Good morning. Thank you, and thank you for joining DST Systems Fourth Quarter and Full Year 2012 Earnings Call. I'm joined this morning here in Kansas City by our Chief Financial Officer, Ken Hager, and before we begin, I would like to remind everyone that in the course of our conference call today we will make forward-looking statements regarding DST and its businesses. Such statements are based on our views as of today and actual results could differ materially from forecast results.

There could be a number of factors affecting future results, including those risk factors set forth in our latest annual and quarterly reports we filed with the SEC. All such factors should be considered in evaluating any forward-looking statements that we may make.

So, last quarter I begin with an outline of key focus areas during my early weeks as Chief Executive Officer and while I had a significant perspective from my tenure as Chief Operating Officer, I approached this review with the intent of confirming our business strategies and developing a capital plan to support our operations and return value to shareholders. Now, I continue to spend significant time with our customers to understand their goals and how we can best support them, and we sought ways to add even more value to our products and services and remain committed to ensuring that our customers are serviced to the highest degree of satisfaction. I want to reiterate that our primary goal is to ensure that we're in the right businesses, and by that I mean businesses that drive consistent performance, growth and profitability.

DST is well positioned in our core business, and I'm pleased with our fourth quarter results. We believe there's significant opportunity for additional growth so long as we effectively and efficiently manage each of the businesses within our portfolio. As part of the review process, we have incurred onetime net income charges of approximately $77 million, or $1.67 of diluted earnings per share. And certain of these charges were taken as part of our effort to reposition the company for the future and ensure that DST is a leader in the markets we service. Good news is we're seeing positive momentum in segments of our businesses, namely ALPS, subaccounting and health care. With certainty around the survival of the Affordable Health Care Act, our clients are addressing their needs to comply. We believe this is -- results in an opportunity for us. Our Health Solutions business won new full service Medicaid business in the quarter, which will begin generating revenue in the first quarter of 2013.

Argus experienced increases in Medicare Part D and Medicaid claims and market research suggests that an estimated 10,000 people become Medicare eligible each day. We believe this trend will generate growth for DST as baby boomers reach retirement age in increasing numbers. ALPS also had a solid year, experiencing growth in both assets under distribution and administration. ALPS revenues were $26.5 million for the quarter, a 4.7% increase over third quarter of 2012. Assets under distribution grew 19% and assets under administration grew 9% in 2012. Our subaccounting business also continues to expand. Yes, we won a new subaccounting client with 300,000 accounts in the fourth quarter. In addition, we now expect that the new client announced last quarter will convert a total of 5.2 million subaccounts, which is 1.3 million higher than previously reported. Now, turning to our core transfer agency business, we continue to expect between $5 million and $6 million registered accounts to transfer to subaccounts in 2013 and similar to '12, we project approximately 30% of those accounts will convert on to the DST subaccounting platform. And as we've said in the past, our projections represent a combination of internal models and inputs from customers when available.

As announced today, we are renaming our Output Solutions segment to Customer Communications. This reflects our changing focus from predominantly physical output to a provider of data management and insight, electronic communication and physical communication. This change accelerated in 2011, when we made a number of acquisitions in this space with the goal of broadening our product offerings to meet our clients' needs across their customer base. Our Customer Communications North American business showed significant increases in both images produced and packages mailed, while revenue for the quarter was up 6.6%. Income for the quarter was negatively impacted by costs associated with client conversions. And we were pleased that North America generated a 10% margin during the quarter. Our Customer Communications U.K. operations continues to experience challenges and we continue to review this business and have committed to develop a plan to achieve reasonable profitability in the near-term. We have reduced our operating sites from 8 facilities with 657,000 square feet to 5 facilities with 511,000 square feet. In addition, we've reduced headcount from 1,700 to fewer than 1,300 people. We remain committed and focused on improving the performance of this business unit and continue to review all options to do so.

While our main focus was on performance in each of our business units, we are also taking action to deliver value to shareholders in the near-term. During the quarter, we received $113.6 million in proceeds through asset sales, including our position in Euronet and a portion of our State Street holdings, as well as distributions from private investments, resulting in $85 million of after-tax proceeds. We will continue to review on our nonoperating assets in the context of the overall strategy for the business and on an opportunistic basis for monetization or repositioning. We're also focused on our real estate portfolio and specifically on non-occupied properties. During the quarter, we sold 3 properties for a total of $8.1 million. In addition, our IFDS joint venture -- our IFDS Canada joint venture sold its 50% interest in a real estate partnership which owns the building in which IFDS Canada is a tenant. DST recognized $14.8 million from its portion of the gain on this transaction. We're going to continue to position our real estate portfolio to reflect our operating needs while ensuring the appropriate use of capital for the company that support our operating businesses.

Using cash generated from asset monetizations and operations, we were able to reduce DST's debt by $90 million during the quarter, and $369 million for the full year. At year-end, our debt outstanding was $1 billion. The company continues to enjoy a solid balance sheet, which provides us flexibility in our decision-making while supporting our growth areas and allowing us to capitalize on other opportunities that may arise from time to time. The DST Board has also announced its intention to pay a quarterly cash dividend and declared a $0.30 dividend payable in the first quarter. The board intends to be consistent on our dividend, however, as a practice we will review the dividend on a quarterly basis. We also announced this morning that the Board has authorized a 250 million share repurchase program, replacing our existing program. During the fourth quarter, we repurchased 1.25 million shares under our previous program at a total cost of approximately $74 million. We continue to believe dividends and share repurchases are an effective way to return capital to shareholders while providing flexibility in our use of cash to ensure we're making the best allocation decisions to position DST for success.

I want to acknowledge the announcement last week that Brent Law has joined the Board of Directors. Brent brings significant financial investment and tax expertise to the Board, and I look forward to working with him to drive shareholder value. I also want to thank Bob Jackson, who stepped down from the board last week, for his many contributions to DST. And we certainly wish Bob all the best.

So as you've heard this morning, there's significant activity under way and we expect there's more to come. While we continue to manage through headwinds facing our business, we believe there's a strong and profitable future ahead and one that will deliver solid return to investors. At this point, I want to go ahead and turn the call over to Ken Hager, our CFO, to review the financial results for the quarter.

Kenneth V. Hager

Thanks, Steve. We posted GAAP diluted earnings per share for the quarter of $0.82. Principal non-GAAP adjustments included the following: goodwill impairment and facility advancement costs associated with our U.K. Customer Communications business; net gains from monetization activities and distributions from private investments; income tax benefits resulting from the resolution of open items with the IRS; and employee termination cost as we continue to reshape the organization. On an adjusted non-GAAP basis, we had $1.19 of earnings -- diluted earnings per share for the quarter as compared to $1.07 for the fourth quarter 2011. DST earnings for the quarter increased $7 million, or 14.6%, to $55 million.

The remainder of our comments will address our non-GAAP results. Consolidated operating revenues increased $29.7 million, or 6.5%, to $487 million, and the consolidated operating income increased $6.5 million, or 9.2%, to $77 million. Excluding the effects of deferred compensation, consolidated operating income increased $3.2 million during the quarter, to $78.4 million. Financial Services operating revenues increased $24.7 million, or 8.3%, to $320.8 million. We recorded increases in revenue at DST Healthcare from higher pharmacy claims process and an increase in covered medical lives. We also recognized higher consolidated software license revenues of $3.9 million, primarily from our investment management software business. ALPS revenues increased from higher assets under management and distribution in a full quarter of revenue in 2012 versus 2 months in 2011. These revenue increases were partially offset by lower mutual fund revenues resulting from the decline in registered account serviced. We incurred increased client conversion, development and operating costs in our retirement and brokerage business units. These costs in the decline and mutual fund processing revenues resulted in a decline of Financial Services' income from operations of $3.7 million to $65.4 million, excluding the effects of deferred compensation costs.

As Steve mentioned, we have renamed the Output Solutions segment to Customer Communications to more appropriately reflect its product offerings. Customer Communications' operating revenues increased $4.3 million over fourth quarter 2011, from higher volumes in North America. Operating income increased $6.6 million over 2011, primarily from facility and personnel cost reduction efforts in the U.K.

Overall, equity in earnings of unconsolidated affiliates increased $3.5 million over fourth quarter 2011. Both IFDS U.K. and Canada have begun to see increased revenues from recent new client conversions and both recorded increased earnings over the prior period. IFDS U.K. will continue to incur costs for new life and pension clients and new unit trust clients will affect -- which will continue to affect of their results. The primary effect of affecting other income this quarter is lower amounts of unrealized appreciation recognized on securities held, which offsets the change in deferred compensation expense previously mentioned. Our 33.4% income tax rate for the quarter was less than our prior estimate of 38%. The primary reasons for the decline were a refinement in our state income tax accrual rate and the effect of changes both in the absolute amount and the relative mix of domestic and international income. The effect of the change in the reduction of income tax rate over the 2011 quarter resulted in an increase of $0.06 in diluted EPS.

We currently estimate that our income tax rate for 2013 will be approximately 35%, but, of course, this will vary based on the mix of income in 2013. Notwithstanding the 1,250,000 share repurchase in the fourth quarter of 2012, average diluted shares outstanding increased 1.4 million shares from the fourth quarter of 2011 from shares issued under equity compensation plans and the dilutive effect of a higher average stock price.

At this time, Steve and I will be available to take your questions. Operator, we are ready for the Q&A period.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Dave Koning with Baird.

David J. Koning - Robert W. Baird & Co. Incorporated, Research Division

I guess my first question is in the core financial segment. You returned to growth, pretty solid growth for the first time in several years. And I'm just wondering, when we look at the puts and takes, I guess, in the quarter, certainly license was a little better, some of the smaller units were growing pretty well, it looks like. I guess, what's the sustainability of growth and maybe growth at this level around mid-single-digit organic?

Stephen C. Hooley

I think it's pretty good, Dave. The health care business, and we talked about some of the broader trends that are impacting that. We expect to see good growth there. Our subaccounting business, we talked about we've had some good customer wins there and have a big conversion taking place this quarter. ALPS continues to win new business and the market uptick helps us quite considerably there, as the majority of their fees are paid on a basis point basis. And in our core business, we're doing a good job of overcoming the headwinds of subaccounting and we continue to watch that closely but feel like -- we feel like we can sustain that low single-digit kind of organic growth for the year. So we feel pretty good about the momentum. And obviously, we, Ken and I, both talked about the aging population and the trend there and that impacts a number of our businesses not only in the U.S. but really, in all of the jurisdictions that we operate around the globe.

David J. Koning - Robert W. Baird & Co. Incorporated, Research Division

Great, great. And I guess you mentioned health. And certainly, that's starting to pick up nice from a revenue standpoint. What are the profit margins looking like and maybe what's the opportunity over time? I mean, are we at a better profit level now and maybe something where the margin is starting to get fuller? Or are we still at a pretty low margin that can ramp over time?

Stephen C. Hooley

Yes. I think the gentleman that runs that for us is a very good operator and I think, Jonathan and his team have done a nice job over the last 24 months of repositioning that business, of getting it to a point where, from a systems perspective, it's much more efficient. And so, we don't break out the operating margins specifically on that business, Dave, but I would tell you it's in a much better shape than it was in 24, 36 months ago to the point that where we're quite pleased with the profit margins in that business. And we think that they are sustainable and at this point, hopefully, we'll see some top line growth and there should be some leverage there if we can do that.

David J. Koning - Robert W. Baird & Co. Incorporated, Research Division

Great. And then I guess my final question for now. The IFDS businesses within affiliates had been running pretty close to breakeven in terms of the way you reported your affiliate income for the last few quarters and, combined now, stepped up to about $5 million. And you mentioned there's still actually some cost within that $5 million of ramping some accounts. I mean, are we at least now at a plateau, where $5 million a quarter from those 2 IFDS affiliates -- is that a reasonable run rate at least for now if the costs are still a little bit higher? Or could we see that step back down?

Stephen C. Hooley

I'm pretty comfortable with that level. We converted a big block of business up in Canada during the fourth quarter, so we'll have the full year benefit of that. In our U.K. business, they have a big opportunity in the life and pension space and we're spending quite significantly from an investment perspective during this year and into '14 to capture that space. But again, I think, the conversions that took take place in the back half of last year -- and we invested, as you know, we invested heavily last year on those 2 businesses -- should give us a better run rate this year.

Operator

Your next question comes from the line of Peter Heckmann with Avondale Partners.

Peter J. Heckmann - Avondale Partners, LLC, Research Division

As regards ALPS, looks like that business is seeing some really nice growth on the EPS and closed end side. Is it possible to get a run rate or maybe a full year 2012 revenue for ALPS so that we can get some idea of how fast it was growing?

Stephen C. Hooley

I can...

Kenneth V. Hager

Pete, we have disclosed the quarterly revenues for ALPS in each quarter. We just need to go back and add them up and give it to you.

Peter J. Heckmann - Avondale Partners, LLC, Research Division

Okay. And then you said you sold a portion of the State Street position in the quarter. What would be your current number of shares held? About 8.5 million?

Kenneth V. Hager

It's closer to 9 million.

Peter J. Heckmann - Avondale Partners, LLC, Research Division

Okay. And then how about shares outstanding at the end of the quarter? Did you mention that?

Kenneth V. Hager

44.3 million.

Peter J. Heckmann - Avondale Partners, LLC, Research Division

And then as regards the dynamics around the fund business, I know you typically give this information in the first quarter call and look at the -- when you look at tax season, but I'm looking at the mutual fund numbers here and I'm just wondering if you're seeing intraquarter, any uptick in new account creation on the registered fund account side? Or is it too early to tell?

Stephen C. Hooley

Pete, again, I would tell you consistent with last quarter, I think, that business from an organic perspective is going to be a negative 1 to 1% mover for the full year 2013. We are seeing, so interestingly, right? You're seeing flows back into equity funds. The new accounts though are showing up as broker subaccounts. And so that's part of the reason you're seeing better organic growth in our subaccounting business than in our registered accounting -- registered book business. And we think that's a trend that will continue. That's part of the reason we made the big focus and push to get into subaccounting and it's part of the reason you're seeing organic growth rates there that are significantly higher than the registered book.

Peter J. Heckmann - Avondale Partners, LLC, Research Division

Okay. That's fair. And then last question. In terms of the share repurchase plan, do you have any thoughts in terms of timeline when you like to have -- to see that accomplished?

Stephen C. Hooley

No. We don't, Pete. We didn't put any timeline on it and, as you know, we have a long history of completing share repurchases and that would certainly be our intent at this point.

Operator

[Operator Instructions] Your next question comes from the line of David Togut with Evercore Partners.

David Togut - Evercore Partners Inc., Research Division

Nice to see the 10% EBIT margin in North America Customer Communications segment. Is that a sustainable level of profitability for that business?

Kenneth V. Hager

Yes, Dave. That's a good -- it's a good question. And as we talked about last quarter, I'm not prepared to tell you that I think that business can maintain a double-digit EBITDA margin on an ongoing basis. We're right kind of at the level where if revenues are strong, we'll get to the double-digits. If revenues dip, as you know, that business has a high fixed cost and capital content to it and it's just very hard to adjust the cost base on a short-term basis. So to the extent, revenues are strong. We feel like it's achievable, but, again, our ability to adjust the costs in that business short-term are very difficult and so -- and you've seen us quarters above the 10% and quarters below the 10%. We had a similar dynamic in our Customer Communications U.K. business, who had a very improved fourth quarter and it was driven by 2 factors: one, getting our costs aligned appropriately; and, two, they had a strong revenue quarter. So again, I'm not here prepared to tell you that we think that we're going to produce a 10% margin. As I said last quarter, that's certainly the goal, but I'm not confident at this point to tell you that we think that we're going to achieve that in 2013.

David Togut - Evercore Partners Inc., Research Division

I understand. Just shifting gears on the investment side. Ken, can you quantify the total EPS impact this year expected for investment, insurance, brokerage and retirement services?

Stephen C. Hooley

Dave, before I ask Ken to do that, let me take that one, if I can, and just give you a little bit of insight in terms of where those businesses are relative to maturity. So we've talked over the last 2 years about the investment in those businesses, right? And one of the things that's interesting is you've seen in the brokerage space and in the retirement space, a number of new customers that have -- that we've signed up that we're in the process of converting or that have converted. And so one of the dynamics that happens as you move from kind of a startup investment in a business, you start to win new customers and what happens is the cost begins to shift from pure investment to investments in completing conversions and investments in specific development for customer needs, as well as kind of the ongoing operations of the business. And so, a little bit hard for us to track, here's what we spent in investments in 2010, '11 and '12 and this is what it's going to be for '13, because as those businesses become more mature and, quite honestly, as they attract new customers, the shift of that expense, again, the pure investment expense, begins to shift into other categories. So, Ken, I don't know how you characterize the investment spend broadly.

Kenneth V. Hager

Well, I think, the way we've tried to characterize it has been to maybe include most of those elements in there, but although, as Steve points out, sometimes, it's difficult to assess. I think, given where -- what we see right now, we would expect those numbers to trend down a little bit in 2013, but probably not at a significant level at this time.

Stephen C. Hooley

Yes. So the one other insight I'd give you, Dave, is I'm pretty comfortable in both of those businesses that we have a very solid and competitive platform vis-à-vis competitors in the marketplace and our customers' needs. The development portion at this point, really is about building out specific needs that our customers are looking for as part of their conversion process or as they go out and try and attract new business in the marketplace.

David Togut - Evercore Partners Inc., Research Division

I see. Okay. So ballpark last year, investment spending was in the $0.50 to $0.60 range, I believe, on EPS, so we should assume that's down, but not down a lot? Is that fair?

Stephen C. Hooley

Yes, that's fair. It will -- if I had to put a number on it, David, we'd say it's going to be in the $0.40 to $0.45 range this year. And again, it's a shift of customer-defined development for the most part as well as other things that we'll do to keep the platforms contemporary.

David Togut - Evercore Partners Inc., Research Division

Just in terms of looking at capital structure, can you give us a sense, Ken, of 2013 interest expense?

Kenneth V. Hager

Well, David, we've got about $1 billion of debt right now and a higher percentage of that is really more of fixed-rate debt now because of the high replacement debt we put out, which is fixed, and the convertible debentures, which is fixed. The -- we would anticipate that the debt -- that overall interest expense should modify -- should be somewhat lower by probably 10% to 20% over 2012.

David Togut - Evercore Partners Inc., Research Division

I see. Okay. And then you've shown, Steve, that you're starting to sell noncore assets in real estate and the investment portfolio. So that's certainly very good to see. Can you give us a sense of how aggressive you'll be in this process going forward? I mean, in other words, you see a lot of opportunities near-term to monetize these assets on a favorable basis for DST shareholders.

Stephen C. Hooley

Well, listen, we're going to monetize these assets based on opportunities in the marketplace and, quite honestly, in the context of the overall balance sheet for the company and the capital plan for the company. So again, we've seen opportunities, particularly in the real estate. You saw us in the fourth quarter, there were 3 really small properties here in Kansas City that we had opportunities on and we took advantage of that. So, it's really not a single-threaded strategy. It is very much tied into overall capital plan and strategy for the company.

David Togut - Evercore Partners Inc., Research Division

I see. Just quick final question for me. I don't know if you gave the incremental ALPS revenue from acquisition in the quarter. So if we're looking sort of year-over-year Q4 '12 versus Q4 '11, what was the increment just from acquisitions?

Kenneth V. Hager

The overall revenue of ALPS in 2011 was -- over '12 over '11 was about $11 million of overall increase. Some of that was the inclusion of 3 months in '12 versus 2 months in '11 and some of it was growth. That's why we felt the sequential growth was a more meaningful number.

Operator

Ladies and gentlemen, we have one more time -- we have time for one more question. Our final question comes from Greg Smith with Sterne Agee.

Gregory Smith - Sterne Agee & Leach Inc., Research Division

When you filed the amended credit agreement back in November, the 7 -- where you had -- you got the right to use up to $750 million of proceeds from, let's just say, noncore assets, in this quarter, you monetized $113.6 million, can we -- should we subtract that from the $750 million to think about sort of what's potentially left? Am I thinking about that correctly?

Kenneth V. Hager

Greg, this is Ken. I think you're mostly thinking about that correct. As we pointed out, about $86 million was the sale of marketable securities and then we had some distributions from private equity investments. So, I would say that most of the $113 million counts, but probably not 100% of it.

Gregory Smith - Sterne Agee & Leach Inc., Research Division

Okay. So there's still -- okay, great. But still significant potential left, I guess. And then on -- and so, you guys sold some State Street during the quarter. Should we assume, and those were fully taxed shares, you paid the taxes. Should we assume that perhaps you'll sort of dollar cost average your way out of that position at this point? Or is still just dependent, there's no firm plan here?

Stephen C. Hooley

Yes. Again, Greg, as we said last quarter, the State Street shares are unencumbered. We did take the opportunity to monetize certain of the shares in the fourth quarter and we'll look at the investment portfolio again in the broader context of the overall balance sheet and capital plan for the company. So I think we -- we're taking a measured approach and looking at monetization opportunities on an opportunistic basis.

Gregory Smith - Sterne Agee & Leach Inc., Research Division

Okay. And then just back to the subaccounting. Just so as we look beyond 2013, there's still the question of just sort of what's left? Are you aware of any large broker-dealers that are not subaccounting that may begin to subaccount? Or are there any large fund families that aren't being subaccounted by the large broker-dealer? And then just the last question I'll throw in there is, are you still not seeing any IRAs moving to subaccounting?

Stephen C. Hooley

Yes. So, Greg, and let me take the first part of it, the big broker-dealers. We don't see any big broker-dealers that haven't begun subaccounting and quite honestly, most of them are pretty well of -- through the subaccounting of accounts that are on our platform. Again, that's the -- to give you a little bit of insight, the 5-point -- the $5 million to $6 million that we are talking about this year, as you know, and we've been very clear about -- we have our own internal models that we use. We then run that up against what our customers are telling us. At this point in the year, less than $1 million of those $5 million to $6 million that we're projecting are confirmed, okay? So no big broker-dealers that haven't started to subaccount and aren't significantly through the game. No mutual fund customers that haven't been impacted by it. On the tax-advantaged accounts, we did in the quarter and we announced this, I think 2 quarters ago, we did in the quarter see 150,529 accounts, get subaccounted. Again, that was something that we talked about relative to a certain broker-dealer who communicated that. On the IRA front, that's one that we're watching closely. We do know that there is -- there have been discussions with -- again, with a certain broker-dealer about the IRA accounts. We still contend that it's not as straightforward. We believe and we believe the marketplace feels that a move of an IRA account requires a positive consent from the owner of that account to change trustee, as well as these accounts, again, continue to be relatively, for the most part, low-dollar-value accounts, and there's pretty wide dispersion across our account base. So, it's being looked at by the broker-dealers and, again, we think it's not as straightforward as the registered accounts, but that's new information.

Gregory Smith - Sterne Agee & Leach Inc., Research Division

Okay. And if I can, just 2 more questions. In the past, when thinking about share repurchases, you guys have made some comments about -- some concern about the float. Is there any concern about that at this point or is that just not something you're worried about?

Stephen C. Hooley

No. I don't -- I mean, we obviously keep an eye on it. Interestingly, we've had discussion with some of our shareholders and I would tell you, the feedback from our shareholders is that there's -- they don't appear to be concerned about the float. So it's something we watch but we certainly wouldn't have put this new authorization in place and the Board would not have authorized it if we felt like it was going to create an issue from a float perspective.

Gregory Smith - Sterne Agee & Leach Inc., Research Division

Great. And then just hopefully, a quick one. Ken, I don't -- hopefully, you didn't give us, but what should we think about for tax rate for 2013?

Kenneth V. Hager

We said 35% in the release.

Operator

Thank you. That concludes our question-and-answer period. I would now like to turn the call back over to Mr. Hooley for any closing remarks.

Stephen C. Hooley

Great. Thank you, Lynn. Well, to conclude, we're making important changes in the way we view our business and I expect 2013 will be busy. We're pleased to provide shareholders with some near-term capital return opportunities through the quarterly dividend and additional share repurchase authorization. And at the same time, we expect additional benefit from continued monetization of noncore assets and real estate. We're very excited about the opportunities in front of us and I look forward to updating you on our progress. Thanks very much for joining us today.

Operator

This concludes today's conference call. You may now disconnect.

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