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Kevin ModanyThank you, operator. Good morning, ladies and gentleman. Thank you for joining us on our conference call to review our 2011 fourth quarter results. On the call with me this morning is our Executive VP and Chief Financial Officer, Dan Fitzpatrick. For our prepared remarks today, we will follow our standard format and limit our comments as to allot more time for your questions during the Q&A session. We'll start the call with an overview of the fourth quarter marketing and advertising results. From there, we'll provide a few comments regarding the new student enrollment results in the fourth quarter of 2011 that we reported this morning. We will then review student retention and persistence results in the 2011 fourth quarter. At that point, we'll provide an update on the graduate employment metrics of our 2011 graduates. I will then provide an update on the execution of our strategic plan. Before, I turn it over to Dan, I'll discuss our efforts to facilitate additional private financing options for our students. Dan will then provide more insight on the financial results reported in this morning's press release. I'll then give a brief update on the federal student loan default prevention efforts and the related impact on our cohort default rates. And lastly Dan will discuss our share repurchase activity in the fourth quarter and the full-year of 2011. At that point, we will open up the call for your questions. Let me begin by providing review of our 2011 fourth quarter marketing and advertising efforts. Advertising expenditures increased 9.7% in the fourth quarter of 2011 compared to the same period in the prior year. This was below our planned increase of 15% to 20% primarily due to our transition away from low-cost low-converting media sources and higher costs traditional media outlets to alternative media sources that generate higher rates of return.
Reallocation of media expenditures resulted in a reduction in the number of prospective student increase received in the fourth quarter 2011 compared to the same period in the prior year. However, we experienced an increase in the rate of which prospective student increase converted to new students in 2011 fourth quarter compared to the same prior year period.As of December 31, 2011, we had 22% fewer admission representatives than we had at the same date in the prior year. However, the productivity of the recruitment staff increased during the fourth quarter of 2011 compared to the same period in the prior year. We do not believe that the number of our admissions representatives at the end of 2012 will be materially higher compared to the end of 2011. For the second consecutive quarter as a result of self-directed changes to program offerings at select campuses, we experienced a more mature year-over-year decline in new student enrollment in the criminal justice programs in the fourth quarter compared to new student enrollment and other curricula. The year-over-year decline in new student enrollment in the school of criminal justice represented approximately 80% of the year-over-year decline in total student enrollment for the quarter. The combination of the events I just described led to the 14.7% decrease in new student enrollment in the fourth quarter of 2011 compared to the same period in the prior year. Moving onto a discussion of student persistence, the 270 basis points decline in our persistence rate as of December 31st, 2011 compared to the same date in 2010 was primarily due to an anticipated increase in the number of graduates in the fourth quarter of 2011 compared to the same academic period in 2010. The number of graduates in the three months ended December 31, 2011 increased approximately 20% compared to the same three-month period in the prior year. Student retention in the academic period that concluded in December 2011 was substantially similar to the student retention in the academic period that concluded in December 2010.
Now, a quick update on our graduate employment metrics. Our graduate employment rate continues to be impacted by the slow economy and the high unemployment rate. However, we continue to see signs of modest improvement. The graduate employment rate of our 2011 employable graduates as of January 24, 2012 was approximately 580 basis points higher than the graduate employment rate of our 2010 employable graduates as of the same date in 2011.Read the rest of this transcript for free on seekingalpha.com