Ladies and gentlemen, thank you for standing by, and welcome to the American Express Second Quarter 2016 Earnings Call. At this time, all lines are in a listen-only mode. Later, there'll be an opportunity for your questions and instructions will be given at that time. And as a reminder, this conference is being recorded. I'll now turn the conference over to Toby Willard, Head of Investor Relations. Please go ahead, sir.

Thanks, Cathy. Welcome. We appreciate all of you joining us for today's call. The discussion contains certain forward-looking statements about the company's future financial performance and business prospects, which are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are set forth within today's presentation slides and in the company's reports on file with the Securities and Exchange Commission. The discussion today also contains certain non-GAAP financial measures. Information relating to comparable GAAP financial measures may be found in the second quarter 2016 earnings release and presentation slides as well as the earnings materials for prior periods that may be discussed, all of which are posted on our website at ir.americanexpress.com. We encourage you to review that information in conjunction with today's discussion. Today's discussion will begin with Jeff Campbell, Executive Vice President and Chief Financial Officer, who will review some key points related to the quarter's results through the series of presentation slides. Once Jeff completes his remarks, we will move to a Q&A session. With that, let me turn the discussion over to Jeff. Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Thanks, Toby, and good afternoon, everyone. Earnings per share for our second quarter was $2.10 and, as expected, included a number of discrete items, creating some complexity in our results. This complexity included a $1.1 billion pre-tax gain for the sale of the Costco cobrand portfolio, a continued slowdown in Costco-related volumes leading up to the date of the sale, a $232 million restructuring charge related to our ongoing cost reduction efforts, and an elevated level of investment spending. Looking beyond these discrete items, our underlying results for the second quarter were solid and consistent with the…

Thanks Jeff. As a reminder, our ongoing goal is to provide a greater opportunity for more analysts to ask a question during the session. Therefore, before we open up the lines for Q&A, I'll ask those in the queue to please limit yourself to just one question. Thank you for your cooperation in this process. With that, the operator will now open up the line for questions. Cathy?

Thank you. And our first question will come from Don Fandetti of Citigroup. Go ahead, please.

Yes, Jeff. Can you talk a little bit – I mean, you had a benefit from the new Amex cards to the former Costco cobrand cardholders? Is a lot of that in the run rate? Or should we see a continued incremental benefit there? And then also, can you elaborate on what you mean by complex dynamics in the U.S. card market in H2? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: So I think the point I'm trying to make, Don, is we were pleased by our efforts over the last, really year-and-a-half to put other Amex products into the hands of the former Costco cobrand card members. And that's why we feel comfortable with my statement that we'd expect to track to retaining over 20% of the out-of-store spending of those card members. So I would say that in the run rate for the most part in the second quarter, it continued to build even as we went through the second quarter and should stay in the run rate, subject to the complex dynamics, which I'll come to in a second. And I mentioned that 20% in the context of the disclosure we're making about our billings and revenue, and for that matter, loan growth rates where we pull Costco out of the prior-year base. Some of the growth does come from the efforts and the success we've had at putting other Amex products in the hands of the Costco cobrand card members. Complex dynamics. When you look at the back half of 2016, it's certainly not news to anyone on this call. It's a very competitive environment right now. And you have many changes that are wrought by the switch from Amex to Citi of the Costco cobrand. You have many other competitors who…

Thanks.

Thank you. Our next question is from Betsy Graseck with Morgan Stanley. Go ahead please. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Hi. Good evening. Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Hi. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Just wanted to touch base on the loan growth that you highlight on slide seven. Obviously it's on the ex-Costco basis but increasing accelerating growth rate over the last several quarters. Could you just give us a sense as to key drivers there? And how much of this is new account acquisition versus wallet share increase and other key drivers? And what the kind of trajectory is that you're anticipating? Thanks. Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: I'm just making a few notes here Betsy so I don't forget any parts of the question. I think the first thing that's important to think about is, we now for several years have been steadily growing loans at above industry rates and we've done that while maintaining best-in-class credit metrics and without seeing any significant increase in the credit metrics or changes in our overall risk profile. So this is a continuation of a trend. And that loan growth is coming from many different areas. We have a nice loan portfolio that's been growing steadily in our U.S. small business franchise OPEN. We have a range of consumer products targeted at attracting more of our customers' borrowing behavior. And for us, because traditionally and we talked a lot about this at our Investor Day in March, because traditionally over the last probably five years, six years we have probably underinvested in terms of our efforts to attract the borrowing behaviors of our own card members, both consumer and small…

Thank you. Our next question will come from Chris Donat with Sandler O'Neill. Go ahead please. Christopher R. Donat - Sandler O'Neill & Partners LP: Good afternoon. Thanks for taking my question. Wanted to see if we could get a little more quantification around the elevated expenses you expect for the remainder of this year and what they mean for 2017? And I'm asking this because if we look at the implied EPS for the back half of the year, it looks like it's less than a $1 a quarter. And then it seems like it would be a big leap to get from that to, say, a $1.40 a quarter which is what you need to do to do $5.60 a share in 2017. So just on the elevated expense piece, I know there's a lot of other moving pieces there, but can you help us understand what's elevated this year and might drop off next year? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Yes. That's a really good and I think important question, Chris. So couple of comments. The investment piece to start with, as you point out, we have made a decision that, as we look at all of the complex market dynamics, which I just talked about in response to the last question. We're going to increase somewhat in the second half of the year and increase for full year 2016 over 2015 our overall level of investments. Those investments take many forms. Some of them are pure marketing and acquisitioning investments, some of them are technology investments that are about building capabilities in infrastructure. All of them are targeted at a mixture of very short-term, medium-term and long-term benefits. And as we look at our performance in the first half of…

Next question, operator.

Thank you. That will come from Eric Wasserstrom with Guggenheim. Please go ahead.

Thanks very much. Jeff, maybe just to understand the – you made several comments about trends but can you just help me think through how I should anticipate billed business growth trends across the three business lines for the back half? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, let me focus on the global consumer versus the global B2B segment. For the most part I would think of GMS, Eric, is just reflecting the tire company. And I think the nuances to think about here and I'll talk about all of these numbers, taking Costco out of the base because it does affect both segments. In the consumer segment, you have had the biggest benefit from the phenomenon I described about the success we've had putting other Amex products into the hands of Costco cobrand card members. As we finish lapping that, you will actually see some just due to that effect alone, modest decline in the U.S. consumer rate. That's something we anticipate and it's consistent with all the plans we've laid out. Going against that, you have the efforts we have across a broad range of products to drive more billings through a range of efforts in the consumer segment. In the B2B segment, you continue as we talked about initially at Investor Day to have the tail of a couple of different segments of the market. We are seeing really nice growth in the small business and middle market area. And in fact, I would expect to see some acceleration in the middle market area in particular as we get into the back half of the year. The wild card is in the largest corporate clients where, as we pointed out at our Investor Day, that is not particularly a growth segment for us. And that continues to be a tough segment. I don't think there's many of the Fortune 500 who are going on calls like we're having right now and talking about growing their T&E budgets. And for us in that large segment, we predominantly still have a T&E franchise. So we'll have to see how all those things play out. And, of course, you have the whole range of external factors that I talked about earlier that are a little harder to handicap. But those are a couple of discrete things that I would watch for.

Thanks, Jeff. And as I recall, did you disclose that about 80% of the Costco volume was outside the store? Is that figure about right? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: So on the Costco cobrand spending, 70% of that spending was outside the store.

70%. Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Correct.

Okay. Thank you.

Thank you. We'll go next to Moshe Orenbuch with Credit Suisse. Please go ahead. Moshe Ari Orenbuch - Credit Suisse Securities (USA) LLC (Broker): Great. Thanks. Jeff, I wonder if you could kind of come back a little on talking about the things that you're going be doing actively in terms of expenses for 2017. I mean you talked about $1 billion worth of savings kind of run-rated by the end of 2017. But now it sounds like there's going be some amount of spending in 2016 that won't be there. Can you talk a little bit about that? And maybe you talked about those projects, but how you would think about, in terms of, obviously, marketing to the existing Costco customers is probably somewhat easier. You already know who they are and where they live. Like how do you think about marketing in terms of that for 2017? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, kind of two questions there, Moshe. Let me take them maybe in reverse order. On marketing to Costco cobrand card members, I would remind you that we sold the portfolio. And it's very different from our situation in Canada. So we no longer have any access, or for that matter, knowledge from a marketing perspective, of the former Costco cobrand card members unless they happen to have another Amex card. Now, those people drop anonymously into the broader U.S. prospect pool that we constantly, as our competitors are trying to target with attractive offers, attractive products. But we can absolutely not do any direct marketing to those people at this point. On the expense side, the way I think about it is that there's a couple of big components of the expenses. So people costs are the largest single…

Thank you. Our next question is from Chris Brendler with Stifel. Please go ahead. Christopher Brendler - Stifel, Nicolaus & Co., Inc.: Hi. Thanks. Good evening. I'd like to ask a question about the rewards competition, both in the U.S. and the UK. The U.S. seems to be getting more competitive but I don't think Membership Rewards is going through any sort of revamp. It seems like you're sticking with your current strategy and letting customers who are rewards sensitive just to try it, if necessary. But then in the UK, you've had interchange reductions and I think a lot of competitors have pulled back on rewards. I was wondering if you're picking up share in the UK, the 10% growth you mentioned, because of the lack of rewards competition there. Thank you. Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Two good questions. Let me take them in reverse, Chris. So the UK, it is true that since the EU interchange regulations came into effect in early December, you have seen a couple of competitors pull back on some rewards, although it's not universal by any stretch of the imagination. What I would say is while that may help us over time, the really good growth rates we're seeing in the UK have actually been there for quite some time and predate any of those changes. So look, we always say that regulation in our industry we think is generally not a good thing, not consumer-friendly and necessarily produce the best outcome, and regulation around interchange will not directly impacting us. It does have an impact that is unbalanced, not a good thing. All that said, it does at times create opportunities and the flexibility of our business model gives us a number of levers to…

Thank you. And next we'll have Jason Harbes with Wells Fargo. Please go ahead.

Yeah, hey guys. Thanks for taking the question. So, just wanted to get your outlook for credit. Specifically, as I look at the net write-off ratio this quarter, it looks like you benefited a little bit from the sale of the Costco portfolio, so, I think, stripping that out, you're closer to 1.8%. Is that a reasonable run rate as we think about the second half? And then just to expand on that, I think at the Investor Day, you said you expected a bit of normalization, probably in the 10-basis-point to 15-basis-point range over the next year or so. Is that still realistic? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, I'm actually a little puzzled by the math you're doing, Jason. So on balance the sale of the Costco portfolio didn't have a material impact on our metrics other than the phenomenon I talked about in my prepared remarks where, because we retained a small amount, $250 million, $260 million of the cancelled accounts, and those are heavily reserved, they impacted the delinquency rate by about 10 basis points this quarter. And they'll have a lot of probably similarly sized impact on the write-off rate in the next couple of quarters. Beyond that, what we laid out at our Investor Day was an expectation that you would see just because we're growing loans a lot, there's some seasoning of the portfolio, we expected you would see some modest uptick in write-off rates and then we painted some longer term scenarios where we talked about maybe write-off rates going up 10 basis points, 20 basis points a year. We haven't seen that yet. The legacy parts of our portfolios in most cases continued to actually strengthen. And the loan growth that we've been doing – we've been doing while still maintaining a very similar credit profile to what we've had for years. So if you look at our new card acquisitions this quarter, the FICO has averaged over 750 as they have for many, many quarters in the past. So there's really not a material change there. So look, I think we all are in the camp of saying credit rates will go up. They have to go up at some point with seasonal lows but we feel pretty good about the trajectory right now.

Okay. Thanks.

Thank you. We have a question from Craig Maurer with Autonomous. Please go ahead.

Yes. Hi. Thanks for taking the question. Regarding the new loans that you're putting on, the yield was lower overall than what we thought it would be. So could you talk about how aggressively you're using things like deferred interest promotions and perhaps balance transfers to bring that on? And what type of effect that could have on the NIM over the next few years? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Yeah, it's a good question, Craig. So a couple things I'd say. As you – I don't know exactly what calculation you're doing, but it is true that if you look at the competitive environment right now, like others on a lot of our lending products, there is some kind of introductory period, where there is an interest free period. When you suddenly, as you saw this quarter, lop off in effect all of the Costco loans, which were mature loans, not in that intro period, the percentage of the remaining portfolio that is in that introductory period all of a sudden pops up compared to the combined portfolio before. Nothing has actually changed in terms of the dollars. I think you see the proportion change. And so you do see a little bit of that effect this quarter. One of the complex lapping dynamics that I was referring to earlier in my prepared remarks is as we go through the next couple of quarters, the lapping impact of all of some of the offers and the customer behavior around the new Amex cards we've put in the hands of the Costco cobrand card members, well amongst other things cause billings to trend down a little bit because we've had this surge – adjusted billings to trend down a little bit, we've had this surge as we brought those card members on. It will also, though, have a very positive effect on net interest income and on revenue in a few quarters as we get the majority of those people past those introductory periods. So when you think very long term, what I would say is that the mix, overall mix that we're offering to new and existing card members from an interest rate perspective is not materially changing. This mix effect that I just described we will work through in the next couple quarters as we finish lapping all the effects of the last five or so quarters of some unusual dynamics around Costco. And once you're through all that I wouldn't expect to see a material change from the prior trends.

Okay. Thank you.

Thank you. Our next question comes from Sanjay Sakhrani of KBW Research. Please go ahead. Sanjay Sakhrani - Keefe, Bruyette & Woods, Inc.: Thank you. I guess when we look at the relatively strong underlying growth ex-Costco, how much of that is being driven by old accounts versus new? I guess when we think about some of these investments that you're making, you've talked about how it takes time for them to kind of spool to get you the growth you expect. Maybe you could just give us an outline of what today's investments will bring in the future and what the timeline would be based on your experience. Thanks. Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, that's a good and very complex question, Sanjay, because of course the dynamics are a little different whether you're talking about a consumer lend card, consumer charge card, an open small business card or new corporate card relationships. But let me maybe make just a few comments. Certainly our growth has been helped by the really nice progress we've made in the last five quarters on new card acquisitions. That growth manifests itself today particularly in the billings line, and then as the next couple of quarters roll by that growth will increasingly move from the billings line into the loan balance and net interest income line as balance is billed for those who are revolvers. And it will grow into the revenue line as we lap various introductory incentives, et cetera. That's a general statement. It's part of why we have said for some time, although I guess I haven't repeated it today now when I think about it, that as we get into the last quarter of 2016 in particular, we expect to see some sequential…

Thank you. We'll go next to David Togut with Evercore ISI. Go ahead please.

Thank you very much. What impact do you expect to see on future merchant discount rates from the recent Appeals Court decision to overturn the merchant interchange litigation settlement between Visa and MasterCard and several million U.S. merchants? And is that factored into your current guidance? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: I would say we factor into our current guidance everything we know about a wide range of internal and external factors including the legal environment. I would remind you that is a case that we were not a party to. We don't see it as having a direct impact on our pending appellate case with the DOJ, which we are still awaiting a verdict on and we'll have to see where it comes out. And look, we every day have to go out and negotiate with merchants and demonstrate the value we're providing. And we've been doing that for many, many years in the face of all kinds of changes in the environment. In the grand scheme of things, I don't think that particular legal judgment has a significant or material impact on those ongoing negotiations.

Just as a quick follow up. To the extent the default interchange rate is reduced as part of a new settlement, wouldn't you expect that to have an impact on your merchant discount rates going forward? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, I'm going be careful because I don't want to get in the middle of trying to opine on someone else's legal settlement. But I think we're always very clear. And Europe is probably the best example, David, that when you have some kind of regulatory or other external intervention that drives down interchange, even though we don't – we're not involved with interchange – that generally puts downward pressure on us. As merchants say, well, you need to remain competitive. So Europe being a good example where in most of those markets we have long had a premium, significant premium, to the interchange rates. As interchange rates come down, we tend to keep our premium. But the premium sort of stays the same and we move down as interchange moves down. So anything that results in a sharp downward movement of interchange is generally going to have a tough or a follow-on impact on us.

Thank you.

Thank you. Our next question is from Arren Cyganovich with D.A. Davidson. Please go ahead. Arren Cyganovich - D. A. Davidson & Co.: Thanks. I was just wondering if you could provide a little bit more granularity on your comments about the discount rate being less of a decline in the second half. I think you talked about it on a reported basis. How does that compare on a calculated basis? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, so the one big change between the first half and the second half is just Costco is no longer a merchant. And so we had a significant chunk, six, seven – I guess we haven't given the second quarter, we had significant chunk of our volume that was running through a merchant with a much, much, much, much lower than normal discount rate. All of a sudden all that volume goes away, and just the sheer mass of it pops the average discount rate up. That's really the only big change between the first half and the second half. And if you go back to our March Investor Day slides and you look at Anré William's presentation, he has a nice summary slide that lays out the components of that. But that's the one big change. Arren Cyganovich - D. A. Davidson & Co.: Thanks.

Thank you. We now have a question from Bob Napoli with William Blair Investments. Go ahead, please. Bob P. Napoli - William Blair & Co. LLC: Thank you. Just on 2017 again, if you could. Obviously, American Express stock is way below its historical valuation. I guess the S&P's at 18 times. Historically you've been around the S&P. Today you're closer to 11 times. And I guess to regain your multiple, I'd be curious if you agree or disagree that American Express had historically you need to deliver 2017 earnings in a quality way and give a good view to growth in 2018. Sounds like you're really confident on the expense side. I was wondering what's your confidence level and what you're expecting on that revenue side into 2017 and how you think of the medium term jumping off into 2018 and onward? Jeffrey C. Campbell - Chief Financial Officer & Executive Vice President: Well, it's a good question, Bob. We are laser-focused as a management team on getting back to the kind of consistent and fairly simple financial performance and financial model that drove this company for years. We are in an industry and with a business model that should allow us to get very consistent revenue growth. We have a heavily-fixed cost nature, which allows us to get steady operating expense leverage on that, and we're not very capital intensive. So we get a little bit of a capital kicker on top of that. We feel really good, and I think we've very consistently demonstrated that we can make real good progress on running the cost structure of the company more efficiently, and we're very committed to use of the balance sheet. I think it's fair to say that it was a competitive, economic and regulatory environment, what…

Yeah, thanks, Cathy. We're going cut it off there.

Okay. Thank you. Do you have any closing remarks?

Sure. Just want to thank everybody for joining the call and for your continued interest in American Express. Thanks very much.

Thank you. And, ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.