John Burns - SVP and CFO Brian Sondey - President and CEO.

Gregory Lewis - Credit Suisse Ken Hoexter - Bank of America Merrill Lynch Sal Vitale - Sterne Agee Helane Becker - Cowen Doug Mewhirter - SunTrust Art Hatfield - Raymond James Vincent Caintic – Macquarie.

Good morning, and welcome to the TAL International Group Fourth Quarter and Full Year 2014 Earnings Release Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to John Burns. Please go ahead..

Thank you. Good morning and thank you for joining us on today’s call. We are here to discuss TAL's fourth quarter and full year 2014 results, which were reported yesterday evening. Joining me on this morning's call from TAL is Brian Sondey, President and CEO.

Before I turn the call over to Brian, I would like to point out that this conference call may contain forward-looking statements as the term is defined under the Private Securities Litigation Reform Act of 1995 regarding expectations for future financial performance.

It is possible that the company's future financial performance may differ from expectations due to a variety of factors.

Any forward-looking statements made on this call are based on certain assumptions and analysis made by the company in light of its experience and perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate.

And any such statements are not a guarantee of future performance and actual results or developments may vary materially from those projected. Finally, the company's views, estimates, plans and outlook as described in this call may change subsequent to this discussion.

The company is under no obligation to modify or update any or all of the statements that are made herein despite any subsequent changes the company makes to its views, estimates, plans or outlook for the future.

These statements involve risks and uncertainties, and are only predictions and may differ materially from the actual future events or results. For a discussion of such risks and uncertainties, please see the Risk Factors located in the company's Annual Report filed on Form 10-K with the SEC.

With these formalities out of the way, I will now turn the call over to Brian Sondey.

Brian?.

Thanks, John. Welcome to TAL International's fourth quarter and full year 2014 earnings conference call. 2014 was a solid year for TAL. We generated $195 million of adjusted pre-tax income which translates to $5.81 of adjusted pre-tax income per share. We grew our container fleet by 6% and our leasing revenues by 4.2%.

And we continued to generate strong returns for our shareholders. We achieved an adjusted pre-tax return on tangible equity of 19.9% in 2014. And we used our strong cash flow to fund our asset growth, pay our substantial dividend and repurchased 900,000 shares while keeping our debt to revenue earning asset ratio, essentially unchanged.

TAL’s solid performance in 2014 was mainly driven by our high utilization. Our utilization averaged 97.6% in 2014 and finished the year at 98.1%. Our utilization currently stands at 98.0%.

Our high level of utilization continues to be supported by several factors, including a favorable global and supply demand balance for containers, TAL’s high quality of leased portfolio and TAL’s strong operating and re-marketing capabilities. [Freight] [ph] growth was stronger than expected in 2014 and leasing continued to take share from ownership.

We also benefitted from a full peak season for the first time in several years with the second and third quarters of 2014 representing our second and third best quarters ever for net container pick-up activity. TAL’s strong utilization is also supported by our high quality of leased portfolio.

Over 76% of containers on hire are covered by multi-year long-term or finance leases and these leases have an average remaining duration of 41 months. TAL’s disciplined lease structuring and extensive global operating and marketing capabilities also support our high utilization.

We were especially focused on ensuring that a large majority of our containers on lease get returned to locations with good leasing demand. And currently, almost 90% of our depot inventory of used leasing containers are in Asian locations.

While TAL continued to generate a high level of profitability and returns, our adjusted pretax income in 2014 was down 9% from a record profitability in 2013. Our income was mainly down to decreasing used container sale prices and a large reduction in our disposal gains. We also faced considerable pressure in 2014 from very low market leasing rates.

But we were able to offset much of this pressure and hold our leasing margin flat by refinancing a number of our debt facilities and reducing our average effective interest rate.

Unfortunately we expect it will become more difficult to offset the impact of low lease rates in 2015 since our average effective interest rate is getting closer to current market levels. Market lease rates are being driven to historically low levels by a number of factors. New container prices have decreased considerably over the last few years.

20-foot dry container prices fell from over $2500 during most of 2010 through 2012 to under $2000 for most of last year. Long term interest rates are exceptionally low.

Low cost debt financing has become widely available to smaller and mid-sized container leasing companies and many leasing companies continue to hold onto aggressive investment in growth ambitions despite the difficult investment environment.

These mix of factors have led to a deterioration in the pricing and quality of new lease transactions since 2013 and we passed an unusually large number of deals again in 2014. The aggressive lease rates being offered for new containers has also increased the headwinds we face upon lease renewals.

We estimate that the current market lease rate is roughly 25% lower than the average lease rate level in our portfolio. Fortunately though our strong lease portfolio still provides extensive protection against the very poor lease rate environment.

The average remaining duration of our long-term and finance lease portfolio is 41 months and the average remaining duration for the large batch of high rate leases originated from 2010 to 2012 is over 40 months. We finished 2014 with a solid fourth quarter.

We generated $1.48 of adjusted pretax income per share, which continues to represent a very attractive return on our assets and equity. And we finished 2014 with our utilization at 98.1% despite the fact that the winter is the slow season for dry containers.

As mentioned in the press release, we completed the share repurchase plan we implemented last September. We purchased 900,000 shares under the plan at an average price of $41.95 per share. With the completion of the plan, we repurchased nearly all of the shares that had been authorized by our Board.

So yesterday, our Board increased the share repurchase authorization by 3 million shares. We continue to believe that share repurchases are an attractive use of our excess cash flow. We expect fleet investments and our substantial dividend to continue to be our major focus.

We may consider using the recent authorization to purchase additional shares in 2015 if investment returns and fleet growth remain constrained. I’ll now hand the call over to John Burns, our CFO. .

Thank you, Brian. As we noted in our earnings release, TAL posted adjusted pretax income for 2014 of $195.5 million or $5.81 per share, down 9% from the prior year.

Our strong results were driven by growth in revenue earning assets and continued high utilization, resulting in a 4.2% increase in leasing revenue and a modest increase in our leasing margin, which includes gain on sale and trading margin. However these solid results were more than offset by the $20 million decline in our gain on sale.

The fourth quarter adjusted pre-tax income of $49.5 million was down 4% from the prior year, reflecting similar trends over the full year, including growth in leasing revenue of 4.5%, again supported by high utilization and asset growth but more than offset by the $3.6 million drop in gain on sale.

Our gain on sales dropped largely to the ongoing moderation of disposal prices. Dry container disposal prices were down roughly 23% from the prior year, reflecting the impact of lower new build costs along with more units becoming available for sale worldwide.

Though our gain on sale line was down significantly from the prior year’s periods, our per unit gains on the disposal of original TAL units remains relatively high and well above our long term accounting residuals.

However we purchased fewer newer containers in the late 1990s and early 2000s and as a result, we have fewer original TAL units available for sale. We have supplemented the reduced number of these older TAL units with investment in sale-leaseback transactions.

However the timing and structure of these leaseback transactions has resulted in these units having higher book values than TAL containers of similar age, and due to the drop in sale prices, we have started to recognize losses on sale for a large portion of these sale-leaseback containers.

However on an overall basis, the sale-leaseback transactions remain profitable as the high purchase prices are supported by high lease revenues. Our lease revenue was supported by the nearly $640 million in investment during 2014 in new and sale-leaseback equipment.

However revenue growth lagged behind the growth in our revenue earning assets, reflecting the weak pricing environment for both new and depot units. This lease rate pressure resulted in a roughly 6% reduction in our average lease rates for the prior year periods.

We’ve been able to offset some of this margin pressure as we’ve refinanced various debt facilities and lowered our interest rates, resulting in an effective interest rate of 3.7% for the full year and 3.6% for the fourth quarter.

While the improvement in interest rate has offset some of the margin pressure over the last year, our overall effective interest rate is relatively close to current market levels. Therefore the opportunities for further benefit in this area are limited.

In addition to our lowering effective interest rate, we continue to focus on locking in our interest expense through the use of long-term fixed rate debt facilities or long term interest rate swaps. Through this approach, we have minimized our exposure to the risk of rising interest rates for a number of years.

As of year-end, we have fixed our interest rates on 90% of our debt portfolio and the rates are fixed for a weighted average remaining duration of 5.7 years. Now I will return you to Brian for some additional comments..

Thanks, John. Looking forward into 2015, we expect to face a mixed market environment. We expect the global supply and demand balance for containers will remain tight. Trade growth is expected to remain solidly positive and we expect leasing to continue to take share from container ownership.

We’re off to a good start in fleet investments in 2015 and have awarded $160 million of containers for delivery this year. Utilization for leasing companies remains very high and inventories of used containers are tight in key Asian export locations.

And the labor dispute currently disrupting US West Coast port operations could create spot container shortages if the disruptions continue. On the other hand, it seems likely that market lease rates will remain very low. Fuel prices have fallen roughly 15% in recent months and planned the container prices could fall further.

Long term interest rates remain exceptionally low and we continue to see aggressive competition for every deal. Financially, the first quarter is almost always our weakest quarter of the year. The first quarter typically represents the slow season for dry containers which is our largest product line.

In addition, the first quarter has the fewest number of days which lowers our per-diem revenue. We also lose seasonal revenue from our domestic storage business and incur a variety of compensation expenses that peak in the first quarter.

In addition, we expect our first quarter results in 2015 to continue to be impacted by moderating disposal gains and weak lease rates. As a result, we expect our adjusted pre-tax income to decrease from the fourth quarter of 2014 to the first quarter of this year.

After the first quarter, we expect the improved seasonality and ongoing growth in our fleet to offset much of the pressure caused by weak lease rates.

For the full year, we expect our adjusted pre-tax income in 2015 will decrease from our 2014 level but we also expect our operating and financial performance to remain at the upper end of our industry and expect we will continue to achieve strong results for our shareholders. I will now open up the call for questions. .

[Operator Instructions] The first question comes from Gregory Lewis of Credit Suisse..

Brian, could you talk a little bit about – I mean you mentioned the decline in box pricing, estimates have them in the $1900 range -- when we think about -- I guess let’s call it, over the last couple of cycles, how low can box prices go from a historical perspective? And just really when you think about that and as you have a lot of boxes coming up for renewal over the next, let’s call it, 12 to 18 months, how do you think about repricing those in this market? Is it something where you look for longer -- you look for duration or you look for shorter duration and maybe a little bit higher per diem rate if that's even possible?.

Sure, I mean couple of questions there. In terms of box pricing, you mentioned $1900 or low 1900s, that is about where 20-foot dry container prices were for most of the fourth quarter and through January.

There hasn't really been much purchasing recently and we are approaching the Chinese New Year break, where typically the factory is closed for several weeks. And so there is right now not much active conversation going on for container purchases. I think it will be interesting to see where prices open up after Chinese New Year.

On the one hand, as I pointed out steel prices have decreased about 15% from where they were in the fourth quarter, which steel is still the main component of the container cost and that has a natural effect of driving price down.

On the other hand, container supply is pretty tight and especially I think if we see trade volumes increased faster than expected out of Chinese New Year, or if we see the West Coast port operations continue to be disrupted, you might see run on containers and that of course would support the price for containers.

And so in the near term it's hard to say exactly where they will go but through the rest of the year, if steel prices stay at their current level, we expect that the trajectory will be negative.

In terms of where this fits in context of recent history, container prices are pretty much already at the low end of where they’ve been over the last, call it, five years or five to seven years even.

They were much lower than this in the late 1990s when steel prices also were much lower than where they are now, we certainly hope it won’t go back in that range. And in fact, if you'd asked me at this time last year that I think container prices were likely to go up or down, I would have said more likely to go up than down.

But we really just have to see. I mean certainly our hope is that this will represent the low point for container prices but we don't really know and certainly the negative move in steel has been concerning. In terms of our lease expirations, I wouldn’t really say that we have a spike in the next 12 to 18 months for us.

We knew that the leases we were writing in 2010 and 2012 were high, the rates were high and so we very much actively try to stretch the expiration of those leases.

And we actually have a pretty even expiration schedule that kind of kicks off this year for the 2010 vintage units, but stretches fairly evenly all the way through 2019-2020 and what we intend to do is look at leases as they expire, in advance of when they expire, understand what the customer likes typically in terms of renewals and try to do transactions that maximize the NPVs of the units for the remaining life.

But obviously it’s better -- much better to have those conversations in a market where lease rates are strong. But our hope is to lease sometime between now and 2020 as we run through these expirations that the dynamics will change. .

The next question comes from Ken Hoexter of Bank of America Merrill Lynch..

Hey, Brian, can you just clarify maybe on that part of that last answer to the port strike in 2002 when you talked about seeing the benefit. Can you look back that far and talk about what kind of capacity was pulled out and what the impact to you really can be? I know that’s more short-term impact but just want to see how quickly.

And then I guess the longer-term question will be, in your career, what's the endgame in a low rate environment? When do other parties start to walk away from these low levels of returns or do you think maybe those who came in later are happy with these levels of returns? Just trying to get from your historical perspective when you think -- if you think this is kind of the bottom in terms of the competition really playing on the rate side?.

Yes, sure. In terms of the port strike, we did live through it in 2002 of course and we found that it actually had a pretty significant effect on demand for containers.

If I recall correctly, although my memory might be fuzzy on this, I think the port strike in 2002 occurred right at the end of the peak season and there it really had the effect of extending the peak season demand for container leasing at least, if I recall right through the end of the year.

And what happens of course is that as the operations in the port area get disrupted, the velocity of container flows around the world deteriorate.

And so exporters from Asia, they don't know how long the strike or disruptions may go on, they want to continue to load their other exports onto ships but the containers aren’t finding their way back from the US and so for every export new containers are needed and so this has the effect of really driving the need for container leasing just to handle a regular volume of exports.

And I sense that would be at least in the short-term but short-term might be a couple of quarters, could really drive a very nice change or even firming up supply and demand given that things already are so tight on the supply side.

In terms of your second question, in terms of -- where does the current environment fit into my career? Certainly I've never seen lease rates at this level even when container prices are much lower than they are now.

In the late 1990s, lease rates were higher and I think in addition to container prices being on the weaker side, what’s happening is these long-term interest rates are exceptionally low, and then on top of that, you’ve seen kind of a flattening in the access to capital among the leasing companies with the smaller and midsized companies for the last year or two having access to large amounts of revolving financing to buy containers and then access even to the securitization markets to take out those on temporary loans.

And that’s had the effect of – is it bringing more competition to every transaction. I am hopeful that we will start to see a rethinking among the industry and digest what makes an attractive use of their capital.

I also think we may start to see a tightening in the securitization market as these last year or two’s worth of deals become larger components of the collateral pools that support the securitizations and hopefully the rating agencies also will start to see the deterioration in quality and maybe rethink some of their own assumptions about how these especially smaller and midsized companies will be able to manage these portfolios over time, especially if they don’t have extensive operating capabilities.

So we are hopeful that some of the elements that have caused the weak pricing might change.

Again right now it’s kind of a perfect storm, of falling container prices, exceedingly low interest rates, widespread access to capital and no differentiation as how lenders are viewing the capabilities of leasing companies and if we just start to see some of those factors moving to more positive direction, it’d be very helpful. .

That’s really great insight, I appreciate that feedback. If I can just ask a follow up. John, you mentioned before about maybe doing some losses on sales going forward.

I just want to understand how big and meaningful that that could become? I understand you’ve got great lease rates on the interim you mentioned but how significant can the losses from those asset sales become for you?.

What I think, Ken, was that we were starting to experience losses on the sale-leaseback transactions we’ve done and those are separate from the TAL portfolio. As we did those transactions at prices that were higher relative to the like aged units in our fleet, but we have higher per diems and lease revenue on those.

So on a net basis, the profitability of those units is very positive..

And so what happens, Ken, is that when we look at these sale-leaseback deals, we do basically an NPV analysis of the expected cash flows which includes the per diem rates and the ultimate sale value at the end.

And what we found is that when you sell units early in the life of the deal, you pay the high price for this deal based upon the average expected lease payments coming out of the units. When you sell the units early, you obviously haven’t collected all the revenue on those units and haven’t depreciated it fully.

So your early sales can be negative and on a per unit basis we’re seeing some of the sale leasebacks having gains – excuse me, losses on sale but still we are running positive overall even that the TAL units are still quite positive..

But negative on the sale-leaseback while positive on the TAL side?.

Right. Exactly. .

Your next question comes from Sal Vitale of Sterne Agee..

So just as a follow-up to that last question.

So on an overall basis, should we see the gain on sale line turn negative in 2015?.

Well, we don't like to forecast any line items specifically. And so we don’t really want to comment exactly on what we see for that line item. Certainly the overall gain has come down and to the point where in the fourth quarter it was positive but not hugely so.

And certainly if we see another large reduction in sale prices, it's possible it turns negative. Our expectation is, I’d say, that sale prices will not fall at the same pace that they did in 2014.

In 2014, we saw sale prices basically come back into line with where they historically have been relative to the newbuild prices and we’re hoping that that lag will sort of support for sale prices going forward. But for sure if sale prices continue to slide at a fast pace, then that could turn negative, sure..

To put another way, if we assume flat used sale prices from the current level, you should best remain in the black..

Well, we don't want to talk specifically about that line item but –.

And then also just following up on what you said regarding the current market, I am hearing rumblings that at least at the margin, I guess competition is getting a little more rational, are you seeing any of that at this point?.

We did see – I think we talked in the last few calls that I felt the level of, say, reckless competition may be peak in the first part of 2014 and we did see a slight improvement in leasing structures, relative lease pricing in the second half of 2014.

I wouldn't say it’s gotten better from there and quite frankly I think what is going to take is just for whatever reason leasing company seems they still want to kind of pound the table and talk about their investment volumes and which to us, when you’re talking about returns that are marginal at best, it seems like a strange focus of the business and things to talk about.

So I think it’s just going to take still a further shift in mindset of companies deciding, are they in this business to make money or to drive investment volumes..

And then just the next question really just on the volume of your share buyback potentially.

So if I think about your operational CapEx, you have a framework in one of your recent presentations where you looked at, I think, replacement CapEx in roughly $400 million level, is that still about accurate?.

Yes, we typically think – our accounting policies are pretty accurate reflection of long-term expected container life.

And so in that presentation you’re referring to, we typically calculate replacement CapEx as the sum of depreciation expense, the net book value of containers that we’re selling and the principal payments on finance leases as representing the -- given our fleet size, about the amount of money you need to spend every year to replace the containers you are selling and to replace the finance leases that are running off.

And yes, we expect that – and for 2014 that number was $425 million..

And then based on that and based on the $160 million of CapEx that you just mentioned, and given that most of the CapEx at least on the dry side is front end loaded, are you pretty much gearing up to be at about replacement CapEx level, maybe little above that?.

I’d say a couple of things. First, we’re actually right at exactly the same place we were at this time last year. So I wouldn't say that the $160 million we’ve spent so far touched, seems low. In fact, we’re reasonably happy with where we are at this time.

But also I’d say we don't really have a strong view of exactly where we think we’re going to finish the year. We, I think as you described before, we typically maintain a shop of equipment that we sort of sized that shelf based upon our feelings about demand, our concern about where container prices might go and the cost of holding inventory.

Right now our shelves are a little smaller than usual just because we do have some concerns that dry prices in particular could fall further. But I think we’ll just have to see how demand materializes.

And again who knows, but my guess would be, if trade growth is in the same range as where it was last year and if market share continues to shift to leasing that I’d say the best mid-case estimate would be something like last year but we very much just need to see how the market shapes out and how aggressively we want to reach for these deals and so on..

And then on the buyback, 3 million share authorization, how do we think about the timing of that?.

Yes, I think the first thing I’d point out and we tried to mention this in the press release is that for us share buybacks are typically a third-order consideration. The main thing that we focus on with our cash flow is to make sure that we’re supporting our customers and keeping availability of equipment for them.

And because we think that's why they use us and that’s key to our franchise. The second focus for our cash flow is supporting our strong consistent dividend.

And then to the extent that we’ve got cash left over as we did in 2014, we then think of what we want to do with it and in 2014 it seemed that share purchases were pretty good alternative compared to other things you might want to do with our cash flow.

And at this time in the year, I’d say we don't have a tremendous amount of visibility as I was just saying in terms of just how the strong market is going to be in terms of trade growth or how attractive lease pricing is going to be.

And so I wouldn’t want to speculate at this time how much we will buy back, because again the share purchase is our third consideration. But if we get into the year and if we think again that we’re going to have a fair bit of excess cash flow, that will be something that we think about pretty carefully..

And the next question comes from Helane Becker with Cowen..

So just two questions.

One, given how low container prices have gone and so on, do you think the industry is potentially accounting for additional consolidation?.

I do. I think consolidation continues to make a lot of sense in our industry. The cost savings through consolidation are substantial. I think all the major companies, they have some business with virtually every major shipping line. We cover every port location with our operations.

And so when you put two container leasing companies together, a lot of cost savings do come out. At TAL, we have looked actively, I’d say, at pretty much every deal that's been out there. But I’d say we look very carefully.

We are aware, especially when you are acquiring some of the smaller and midsized companies, we’ve got concerns about equipment production qualities and concerns about the structure of the leases portfolios. And our general view is well, smaller companies generally win business when the bigger companies decide they don't want it.

And do you want to pay premiums to book value for a portfolio maybe you could have originated yourself. And so I’d say we think generally speaking deals make sense but we tend to be pretty hard-headed about valuation and cautious about risk..

And then the other question I have, is with respect to the Lunar New Year and Easter and what’s going on in the West Coast ports, given how early Easter is and how late the Lunar New Year is, is there any – I don’t know the right word, maybe risk that nothing happens in March because shippers are concerned about the port issue and they wind up shifting a lot of that Easter stuff to airfreight?.

I think, certainly it's a weird calendar this year, you are right. And I don't know that we know exactly what to make out of it. And I think with the West Coast possible port disruptions that if anything is a net positive for us and not that we are rooting for it of course. But I think it would support demand more than you’d see in shipping.

Just in terms of airfreight, I think just, when you think about the volume of goods that can be shipped by air versus by vessel, it’s orders of magnitude and difference. I think there are certain products that are crossover products that – I think those crossovers are meaningful in the context of airfreight.

But I don't really think they are meaningful in context of ocean freight..

That makes a lot of sense.

Did you see pre-ordering in January ahead of the New Year, because I guess that’s what this weekend or next weekend?.

We did. And in particular we saw several shipping lines pre-committing to leases in December and January. I think it was, for a few reasons, one, just container prices were pretty low and interest rates remained low until lease rates seemed really low.

So why not try to grab them now? And then secondly, I think that to some extent that the hedge against disruptions caused by the things going on in the West Coast and so it was kind of a win-win where they agreed to lease units early if they just happen to even [ph], because the West Coast port strike could be available, and if they didn’t need them for the West Coast, if the disruptions, if they don’t happen in March and April, it’s still not a bad lease rates pickup in April and May and June..

The next question comes from Doug Mewhirter of SunTrust..

Most of my questions have been answered. Just one question about your portfolio as it relates to gain on sale. You’ve actually been helpfully updating us for some time about the fact that you had a relative lack of organic CapEx in the early 2000s.

When -- about what year back then did it start to renormalize where you started to buy a proportional amount of organic CapEx back then which would imply then sort of a renormalization of your sale patterns?.

Yes, that’s a good question. We actually have a slide at our investor presentation that we show -- which shows them in bar-graph form the number of units that were purchased in each vintage year and then the average rate associated with those vintages as well.

But what you’ll see when you look at it is that the volume would become normal again in 2004 which is not coincidentally the time that we were sold from our former parent to become an independent company..

And the next question comes from Art Hatfield of Raymond James..

Most of my questions have been answered as well. But just maybe a couple of follow-ups.

Given where lease rates are and given the falling container prices, is there a level of container prices that you think that the manufacturers will go on an extended reduction of manufacturing capacity?.

Well, I think really it relates to the margin they make on the container sales. And so we’ve seen many times in the past that when container margins reached a certain level that the factories preferred just to close.

And over the last two years just given where steel prices were, that tended to be in the range of $2000 for 20-foot based upon steel being in the range of say $500 a ton in China or something.

With steel prices falling though, I think that that closing level also falls, as the manufacturers actually make a pretty nice margin where in the past they were breaking even. .

And then I wanted to ask the question about industry consolidation and I appreciate your answer there.

Have you explored any potential opportunities or mostly what you're thinking is theoretical at this point?.

As I said we have looked at a lot of the deals that are out there. We continue to be very open-minded about these things.

But – and again we don’t want to certainly comment anything in particular but generally speaking I’d just say that we see the value in these consolidations but are trying to – we’ll always be mindful of that, we don't give it all away to the other side of the deal or something..

Well, let me ask this.

Are expectations within deals getting close to the point where maybe it makes sense for you or are we still – is the delta still way too wide?.

I think that – it’s sort of a generic question and so it really would be impossible to answer. I think we’d just take each opportunity on its own merits as it came up and again I just would say we see that the benefit in general but any specific instance, we will be very careful. .

The next question is from Vincent Caintic of Macquarie..

Just want to ask about the share repurchases perhaps another way. So the authorization of 3 million shares is about 120 million at today’s stock price.

I am trying to think about that against say your cash flow spend on CapEx versus share repurchases and how you’re thinking about that?.

So I’d just say the main thing we do is again sort of prioritize our cash flows. I don't think we’re trying to give an impression that we’re going to reorder our priorities and sort of set aside cash flow that we may have used to support growth or might have support [ph] our dividend and buyback shares. I don't think we’ve reached that conclusion.

And so in 2014 again we bought back just under a million shares and that 6% asset growth and our current dividend level, that was about the amount we could buyback to hold our leverage constant. We typically want to keep our leverage in a reasonable range and so again I think we view further share repurchases as the use of excess cash flow.

And that's dependent on our probability of course and the level of investment. .

[Operator Instructions] The next question comes from Edward Notre [ph] from Macquarie..

Hi thanks. My question has already been answered. End of Q&A.

There are no questions -- further questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Brian Sondey for closing remarks..

Well, I just like to thank all of you for your time today and your ongoing interest and support of TAL. And we look forward to talking with you in the future. Thank you. .

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