CPLA
#<UNK>, this is <UNK>.
You have it essentially correct that the major change is the accounting change which was about 1.5 in revenue.
When you look at the first versus the second quarter you can have shifts that happened related to starts, monthly starts as well as this mix shift.
I would say for the second quarter, the one you are referring to, is that yes, we have the accounting change.
We still have this mix shift because we're not expecting doctoral to turn positive from a total in growth perspective for awhile here yet.
What's being offset by that mix shift is our price increases that we have.
So that 2% increase is offsetting some of the mix shift you have.
Yes, I think that will be pretty much when we are in line.
It is going to be continuing this trend line of making sure that we have the long-term trends of that gap between growth at the doctoral level that negative growth dissipates.
So that is really going to be the headwind that we have got.
But I think overall on a basis we would expect revenue per learner to be down about one and a half maybe up to a couple of this point and half maybe up to a couple of points for 2016 just mainly relating to that accounting change.
It was a little bit more related to the accounting change.
So it was 3% last year and (Inaudible) this year so that 120 basis points was a little bit more weighted toward the accounting change side of it.
I don't know if you are going to quite see that differential going forward.
I think that is going to dissipate a little bit as we come in, but we do obviously expect the improvement year-over-year until we lap this accounting change in first quarter of next year I guess.
That's okay.
No, it doesn't.
And the reason it is higher in the second quarter is just related to our annual grant periods happen in the first quarter and just from the way we do our accounting related to when somebody is retirement eligible we accelerate the expensing of those costs.
So you saw the same thing I think last year that we had higher in the first part of the year than the second part of the year.
So that will start coming down throughout the rest of the year.
Yes, <UNK>, it is <UNK>.
So I would say we actually see it as a big market.
Woman aresignificantly under represented in IT.
And we know from our diligence and our interaction with Hackbright that employers are actively seeking ways to increase women's participation in their companies.
So, A, we see a big market.
I would say, secondly, I think coding and software engineering is a growth segment but at some point will mature and you are going to need differentiation, and we see Hackbright as a highly differentiated model both in terms of what they offer because they go beyond coding into the fundamentals of software engineering which I think provides more career currency for their graduates, and we think they are well positioned with their user experience.
I think what Hackbright discovered is that an immersive experience, an immersive culture to give their learners in this case women the tools and confidence to be successful in that environment.
I think they have discovered there are challenges in that environment and their model directly addresses those need.
And the proof is in the pudding, they are having great success.
So I can tell you in the case of Hackbright thus far most of their students and graduates have a degree and what they are looking for is a pathway into technology careers and Hackbrightis providing that.
They are not only providing the content and the training but they are providing the cultural support to do that as well.
In the case ofRightSkill our initial product was mobile web development.
And the folks that were attracted there were people that had some web development skills but couldn't do mobile.
And there it was a mixed bag I would say of some people with degrees and some not.
As we expand depending upon the segment I think ---+and RightSkill is really a discreet skill set that we are trying to give people in a relatively short period of time that allow them to take that next step.
So I would say RightSkill is definitely not replacing degrees at all.
It is more about increasing people's portfolio to help them be competitive for a job that their current skilldoesn't allow them.
I would say in the case of Hackbright I don't know that it is necessarily a replacement for a computer science degree, but it begins to approach that in some cases.
This is <UNK>.
So related to the course cost for Hackbright they have two basic programs; one is there immersive full time fellowship program and the tuition for that is around 16,000.
And then they have a part time program which is really mainly related to people who already have jobs but are getting some introductory into programming.
That pricing is consistent with others that are in the San Francisco Bay marketplace for coding software engineer schools.
I'm sorry.
I didn't understand the question.
Well, I said it is consistent with what the market is in the Bay area.
The current model is obviously immersive in person, intensive studying there.
Some day some road down the future there could be certain components of it that you might have as pathways into the fellowship program.
I think it is really important to note that the experience that she receives within the fellowship program is very, very unique, and that the mentorship that is provided, the community support that is provided things of that sort would be more challenging to go ahead and replicate online.
So we have no intentions here in the front end to convert that into an online program.
It was meant for the sort of model they have.
But down the road there are aspects of it that you could go ahead and migrate.
That is a question we get a lot and we will probably get that even more now that we have donean acquisition.
I would say that our capital allocation has not changed from what we have said in prior calls.
Obviously the first thing that we look at is to invest in our core business to increase its differentiation and innovation in to new models so what we do in the competency based learning area and FlexPath things of that are important to us.
Beyond that we obviously have significant liquidity in our balance sheet and doing the acquisition of Hackbright doesn't significantly alter that.
We continue to look for others opportunities in the 21st century skills marketplace for other offerings that are out there to get into access to other markets, but nothing in a large transformational way.
It would be more modest from that perspective.
This doesn't really alter the way we look at our dividend policy or even related to share repurchases.
We continue down that particular path because we do generate a significant amount of free cash flow.
We are very mindful of the liquidity we have and have been very shareholder friendly in returning that back to the shareholders.
I would also mention in our allocation process part of the divestiture of Arden University the analysis was redirecting some of our resources from the international marketplace into theU.S. domestic 21st century skills, so that was part of the our analysis as well.
And as you know we are in the process of divesting of Arden that we would expect that to be completed here sometime in2016.
This is <UNK>.
If I could just jump in here, because I want to make sure that the larger point around all of this is not missed in today's discussion, and that is that we have avery strong position in our core business but we are looking to accelerated our growth.
And we are trying to position theCompany to take advantage of changing demand patterns and new models that are unlocking new forms of growth.
So whether we're talking aboutFlexPath or RightSkill or Hackbright or some other model we may choose to invest in the future all of that is around positioning the Company for accelerated growth and positioning ourselves to take advantage of changing demand patterns in the market place.
So when the question is asked would we consider additional acquisitions, our answer is we are always looking for investment opportunities that make strategic sense that will enhance both our growth rate and our ability to create shareholders value.
I just want to make sure it is clear that this is about positioning the portfolio for accelerated growth.
And there is more work to do is the point I'm making here.
The expectations was in the disposition that it is going to be we're going to have cashproceeds coming to Capella.
<UNK>, it is <UNK>.
So I wouldn't say they stopped.
I think what we are seeing is that both the department and the creditors are being deliberate and we understand that.
We have to keep in mind a direct assessment programs are new to everybody and the creditors and the regulators they want to get it right.
And so we support that, that they are being deliberate in their approach.
And I would expect that at some point as they get more experience with it we see the cycle times improve.
So that is how I would characterize the environment.
In terms of Capella we're waiting for approval on our FlexPath BSN program.
But in the mean time we have a lot to work with.
So we are focusing on growing the programs that are improved.
By the way we are seeing very good growth on our BSN FlexPath without federal financial aid.
I think that indicates the potential of that market.
So it is a process that we are working through and as we ---+ and I think what it is going to do is it is going to make for a healthy category which is really key to the long-term sustainability of this growth for Capella and anybody else that is going to be in this category.
<UNK>, this is <UNK>.
I think it is going to come across mostly from the probably in the marketing and general administrative line.
Yes.
Okay.
Thank you, Zach.
I just want to thank everyone for being on the call this morning.
To wrap up I would like to remind you of our goal is to outperform the education market, and as I said earlier accelerate our growth trajectory to deliver long-term sustainable shareholder value.
I think we are uniquely positioned with our competency based infrastructure and direct assessment capabilities to build accelerated growth in the job ready skill market and we are excited about our progress.
We are off to I think off to a good start.
Thank you for joining us today and if you have follow up questions be sure to contact <UNK> <UNK>.
Thanks again, and hope everyone has a great day.
