Hello and welcome to our third quarter 2015 financial results conference call. On the call today are Eric Lefkofsky, Rich Williams, and Brian Kayman. The following discussion and responses to your questions reflect management's views as of today, November 3, 2015 only and will include forward-looking statements. Actual results may differ materially from those expressed or implied in our forward-looking statements. Additional information about risks and other factors that could potentially impact our financial results is included in today's press release and in our filings with the SEC, including our Form 10-Q. We encourage investors to use our Investor Relations website as a way of easily finding information about the company. Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information, and select press releases and social media postings. On the call today, we will also discuss the following non-GAAP financial measures – adjusted EBITDA, non-GAAP earnings per share and free cash flow as well as FX-neutral results. In our press release and our filings with the SEC, each of which is posted on our Investor Relations website, you will find additional disclosures regarding non-GAAP measures including reconciliations of these measures with U.S. GAAP. Unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2014 and are excluding year-over-year changes in foreign exchange rates throughout the quarter. In addition, historical results have been recast to reflect TMON as a discontinued operation and all financial information and operational metrics discussed on this call pertain to continuing operations. And now, I'll turn the call over to Eric.

Thanks, Genny. As you may have seen in our early release, this is my final call as CEO, as I hand the range over to Rich Williams. When I became CEO two-and-a-half years ago, I hoped that the day would come when the foundation of the business would be solid enough for me to return to my role as Chairman, and that the board and I would find the right person to take over. That day is here. Let me start with Rich. Having served as our Chief Marketing Officer, President of North America and most recently our Global Chief Operating Officer, Rich has proven to be a tremendous operator; but more importantly, he's also a dynamic leader with great strategic insight. I've worked alongside Rich for years, and there is no one, I would rather have replaced me today. In 2013, our business was facing huge obstacles from years of rapid and fragmented international expansion and a reliance on an eroding e-mail business. To surmount these obstacles and ultimately thrive, we needed to completely transform the business and build a local commerce marketplace. Over the past few years, we've accomplished a great deal. Our marketplace is now at scale, as search accounts for nearly one-third of our North American business, and we have nearly 570,000 deals live on our site, up from just 1,000 when we went public. We've also invested heavily in mobile and as a result, well over 55% of our business comes from the over 115 million people that have downloaded our apps. Our mobile and marketplace efforts have allowed us to grow by more than 32% from the $2.3 billion in revenue we had when I took over two-and-half years ago, while simultaneously increasing adjusted EBITDA and free cash flow. On a trailing 12 month…

Thanks, Eric. We're going to cover a lot of ground today, but the most important topic is simple – growth – specifically, the changes we're making in order to put Groupon on a more exciting growth trajectory. I'm going to run through three key strategic shifts that we believe are designed to achieve exactly that. First, is increasing our investments in marketing. Second, is further streamlining our international footprint and operations, and third, is moving away from empty calories in shopping. But before I discuss our future plans, I just want to take a moment to thank the board for their support, especially Ted Leonsis, who's been such an advocate for Groupon over the past five years, serving as its co-CEO, its Chairman, and now its Lead Independent Director. I also want to recognize Eric's significant contributions to the company. We wouldn't be here today without Eric's belief in the business and his tireless efforts as CEO over the past two-plus years. Eric set out on a mission of stabilizing Groupon and building a foundation that would support its next growth story. He did exactly that. I'm inheriting a leaner, faster, more focused organization, and a business that is a clear leader in a massive addressable market. Now, without question, our road hasn't always been smooth. Smooth roads are rare for pioneers. And while we've already been the fastest growing company in history, I believe our best days lie ahead. I couldn't be more excited about the opportunity to lead Groupon and I'm looking forward to working with the team and the board as we move into our next great chapter. So, why do we think our best days are still ahead? First, is our team; one of Groupon's core values is that great people make great companies. In keeping…

Thanks Rich. I'm going to start by summarizing our Q3 results. The details are also available in this afternoon's press release. Please note that all comparisons, unless otherwise stated, refer to year-over-year growth and are FX-neutral. Gross billings, our measure of marketplace activity, increased 6% to $1.47 billion in the quarter. Our increase in gross billings was largely driven by a 12% increase in North America, which I will further discuss in our segment summary. Revenue increased 7% to $714 million in the quarter. While we saw many of the same trends as other e-commerce companies, our $714 million of Q3 revenue, reflects a focus on North America shopping gross profit and the focus of our international operations on our restructuring efforts. Gross profit was $329 million or about flat to last year's third quarter had it not been for a $26 million FX headwind. Our North America gross profit increased 9% in Q3. Adjusted EBITDA was $56 million for the quarter. GAAP loss per share was $0.04, reflecting a charge for our announced restructuring and increased accrual related to our securities litigation and a gain on the deconsolidation of our India operations. Non-GAAP earnings per share was $0.05. Free cash flow for the third quarter was negative $35 million, bringing free cash flow for the trailing 12 months to $228 million. We repurchased approximately 44 million shares during Q3, bringing our share count down to 623 million at quarter-end. Approximately $270 million remains available for repurchase under our existing authorization. The timing and amount of future repurchases is based on many factors and is subject to routine evaluation. Turning to our notable non-financial performance metrics, active customers grew 4% year-over-year to 48.6 million for the quarter. North America active customers were 25.3 million, growing 8%. Customer spend was $132…

Thanks, Brian. We've shared some big decisions today, but we believe they're the right ones and that they help better position us for growth long-term. We're choosing to get out of what's not working, what's not sustainable, or what's not aligned to achieving our long-term vision and to driving long term stockholder value. That means we'll be more streamlined and more focused, even if it means operating in fewer countries and moving away from empty calories that boost short-term revenue or billings. We're willing to get smaller in order to get bigger. In turn, we're choosing to double down on what's clearly working and on those things that are aligned to helping us capture the long-term opportunity. Seven years into our journey, we're still far better positioned than anyone else in our space to turn our vision into reality. That means we'll continue to invest in improving our products, in improving the quantity and quality of supply and in developing winning solutions and high frequency use cases. It also means that we'll invest in adding more new customers to unlock more growth. These aren't the kinds of investments that pay off instantly, they're the kind of investments that build sustainable growth and competitive advantage. That's what we're here to do. I look forward to leading Groupon through such a challenging and exciting time. With that, let's take some questions.

Our first question comes from the line of Douglas Anmuth of JPMorgan. Your line is open. Please go ahead.

Great. Thanks for taking the questions. Two things. First, just on the 2016 outlook, probably a little bit easier to understand the EBITDA impact from marketing. But can you help us just bridge down on the revenues as well, and I guess how much in particular is from the international markets that you're shutting down and what else is in there? And then secondly, on the marketing investments, can you give us more color on the kind of media that you'll be doing and obviously it's a lot more money, but what is different in terms of how you're going to invest those dollars? Thanks.

Thanks, Doug. I'll – we'll do a little bit of tag team on that. I'll take the marketing piece and Brian will take the guidance piece. But before I do that, let me just say a couple of quick things. I mean first and foremost, look, I'm happy to be here today. I'm glad to be here and I'm looking forward to leading Groupon through this next stage. I mean, it's an exciting time for Groupon and it's obviously an exciting time for me personally. With that, I want to thank Eric and Ted and the board for the opportunity and as well, thank the team across Groupon for what's been just overwhelming support in my time here. As I've said, we covered a ton of ground in the prepared remarks. You've picked up obviously on two big pieces there that we should cover. And you're going to, I think, see a couple of things as we respond here, I mean, one, look I think now I'm an hour and 34 minutes into the job, and I recognize that the magnitude of the changes are significant and that's not missed on me by any stretch. You're going to see that, look, we're moving fast. We're being bold and we're being decisive, and kind of the key there is that, look, I've been here for that four-and-half years. I've had the support of the team; I've been able to have the time to see what we need to do to learn across the business in basically every core function here. And as a result, I just don't – I don't need the proverbial 100 days or that extra time to have a point – a strong point on view of what we need to do and what we need to change. Within that, we're ultimately doing what I believe is right – having been here for the past four-and-half years – and that means doubling down on what's working, walking away from what's not, and ultimately, it just means we're here – we're here to win and we're playing to win. So you're going to see some of that even if it means some short-term pain. Because playing to win isn't always going to be easy and you're going to see some of that reflection in 2016 on the outlook as well as in our Q4 outlook as well. I will turn it over Brian now for him to cover and then I'll loop back around at the end on marketing.

Thanks, Rich. Doug, I'm going to cover your question on the revenue side here first, and then I'll walk through the rest of the guidance so there's a pretty clear picture. So, on the revenue side, we have a range of $2.7 billion to $3.05 billion in 2016. Rich talked about the changes we're making in shopping and that is one of the big drivers. We're placing a greater focus on third-party inventory and higher margin growth and less on categories like consumer electronics. It's a big change and it could result in about a $250 million reduction of revenue for the overall shopping category. Second, we've assumed continued underperformance in our international business due in part to the disruption, as we focus and rationalize our international operations. With the restructuring program we announced in September, we've begun to take a lot of actions to right-size our international operations, which have been relatively flat for the past two quarters. And while it's best for the long-term health for the business, it's begun to create some disruption that we expect to continue in the near-term. These two factors make up the majority of the reduction versus our prior expectation. We've also broadened the range to provide some flexibility as we continue to explore the strategic alternatives in our international markets that might not be a good fit for us.

Awesome. Thanks, Brian. So on the marketing side, a couple of – couple of things there – one is, I do think it's worthwhile taking a bit of a step back. I mean, obviously we're signing up for what's a pretty big commitment to marketing, a bigger one than we've made in a very long time. We haven't invested at this kind of level really since, what I'd say is kind of in the 2011 time zone, into the 2012 range. We've been much, much lower than this. But we should be clear that it's not a hair-trigger call. I mean, this is data that I've been watching for a long time. I mean, I was the CMO for a long time here, but it's – but it's simple – like we're choosing to double down on what's working and one of things that's working best is the historical return on our marketing investment, specifically our new customer investments. A lot of that data is in the slides. I think if you take a real clean look at the slides and one to pay attention to is, just look at the billings growth trends and how they correlate to new customer growth. As you see, there's a lot of times when we were growing new customers at 20%, the business is growing at 20%, but it's hard, as Eric mentioned in the prepared remarks, it's hard to expect to grow much faster than that, much faster than single digits when your customers are growing the basic single digits. The math, like how we get here is ultimately, take a look at what I'd say in slide 15, it's the most basic math, but it's probably the most compelling where you can see our investment relative to return over time; and…

Doug, I do want to – I want to add just a little bit of color on a couple of other things that I think you might find helpful. So, on the adjusted EBITDA side, you mentioned it's clear from the marketing side, roughly $150 million to $200 million in incremental marketing. We also expect to extend our payback periods in order to get there from 6 months to 12 to 18 months. And so, we're expecting that it's going take some time for that spend to reach the optimal efficiency levels. And so our investments will start to pay off first in the back half of 2016 and so, we're assuming very little payback in 2016 with our return on investment starting in 2017. I also want to add that on the adjusted EBITDA side, as we talked about the softness in the international markets for a number of other reasons that I covered on the revenue side, we could have an additional drag of roughly $50 million next year. Also thought that it made sense to just to cover a little bit about Q4, because many of the same factors are applying in Q4. I mentioned that our – that we've got a number of focus areas on shopping and looking at the international side and we're seeing these exact same trends. Our revenue range of $815 million to $865 million reflects our efforts to deemphasize low margin shopping and we began to actually see this in Q3, and we're going to increase our efforts, particularly in North America and the Rest of the World. We could – we expect that this could have a $50 million to $100 million impact on Q4 revenue. Also in light of the underperformance we're seeing in international, again due in part to some of the disruption in our efforts to focus and nationalize our international operations, we're guiding to flat revenues in our international business in Q4. So the combined impact of the shopping and the international side gets us to our new revenue range. And it's similar on adjusted EBITDA, our margins in our shopping business in particular, in EMEA are trending below historic levels. We've made some progress in this past quarter as reflected by the 240 basis point increase to 14.9%, but they're not recovering fast enough. So the combination of some of the pressures that we've noted in our international business and our margins create about a $20 million drag on adjusted EBIT this quarter. And I'll close by saying that our guidance assumes an additional – an incremental $20 million in marketing investments in the fourth quarter.

Great. Thanks for color and congrats on the new role, Rich.

Thanks, Doug.

Thank you. Our next question comes from the line of Paul Bieber of Bank of America Merrill Lynch. Your line is open. Please go ahead.

Hi, thanks for taking my question and questions and congratulations, Rich, on the new role. How should we think about the Group's gross margins in Q4? I think usually your quite promotional. Excluding consumer electronics, do you plan on being promotional in the goods category similar to previous years and then how should we think about the local take rates as we head into Q4?

So I'll – thanks Paul for that, I appreciate it – I'll cover the first part in shopping and then I'll turn it over to Brian to talk about local take rates. But so, I think the real key point on shopping as we move into Q4, is that, what we talked about doing here, which is deemphasizing low/negative margin goods, is different than excluding consumer electronics from our business. I mean, deemphasizing it and backing it off, is really what we're talking about and making it a smaller part of our overall mix, but a much more strategic part. I think one of the things that I've learned in my time in e-commerce working – when I was working at Amazon or otherwise – is you can run a couple of different kinds of goods businesses. You can run a razor-thin CE business – a consumer electronic business – that chases empty calories largely and where you're constantly looking for the next big hit in order to make your results. Or you can build one that's much more strategic and use these low margin items to drive traffic, using it really as a marketing mechanism, where you're driving that traffic into a funnel that does a way better job of having high attach, high margin items to bring the overall margin of the baskets up. And that's what we ultimately started to do in Q3. I think you're going to see more of that moving into Q4, where of course, the CE and low margin items are going to be a smaller part of our overall mix, but where they're visible and accessible and where we're putting promotion horsepower behind them, they're going to be more focused on overall basket quality. And I think you could see that in the net results in Q3, that so far, our progress on that direction is pretty sharp. Bit with that, I'll turn it over to Brian to talk about local take rates

Sure. We were 34% in Q3 and down from 34.5% in Q2, which was largely an increase in order discount spending. So, as you look at it, our take rates are roughly around the same spot and we'd expect that to continue into Q4.

And any update on the CFO search?

Look, at this point, now I'm an hour and forty-five minutes into the job, up from an hour and forty-one a couple of minutes ago. Look, I think that the biggest thing to take away on this front is that the team here is amazing. I've inherited a lot of talent. Brian, frankly, is a testament to the depth of the team here, that he was able to step into the CFO role on an interim basis and do a great job. But like I'll do with any team I've ever inherited, I'm going to give us time to get into a good rhythm and get it to lock in on a cadence that is high trust and high confidence and that gives me an opportunity to assess where we have gaps or where we need to add additional talent to the team. So, I'm going to need some time before I make those assessments across a CFO role or even thinking about a COO role or anything else, given that I'm kind of moving out of one and into another. So, we'll have to keep you updated on that across the board, but again, expect us to keep building our team and expect us to keep building the team from within.

Okay. Thank you.

Thank you. Our next question comes from the line of Ross Sandler of Deutsche Bank. Your line is open. Please go ahead.

Thanks, guys. That was a whole lot to take in, so I guess, I'll just – I have two questions, one just on the – expanding on the marketing, and then another one on just key metrics. So, Rich, you've been a marketing guru for most of your career and have figured this stuff out at Amazon and now Groupon, so we like the idea of investing behind your strengths. But having said that, awareness I don't think has been a real problem for Groupon, historically. It's been more about balancing merchant density and merchant satisfaction with the customer side, and it looks like you have that in North America – that flywheel going – but not in these other markets. So, I guess the first question is, what countries is this marketing going to flow into? And is it as simple as moving back the payback period or do you need to fix other aspects of the business first? And then, of these 36 countries that we're still in, how many of those – is every one of them that you're not spending the marketing against going to get shut down or sold eventually? That would be the first section of questions, I guess. And the second question for Brian is, with this pivot, it seems like the model is shifting something closer to Amazon, where you're trying to run the operating income at close to zero and focus on generating free cash flow. So, what is the key metric? Should we look at EBITDA generation or should we look at some other metric to assess whether this pivot is successful? Historically, investors have looked at North America local billings growth as kind of a key precursor for the business. What is the primary metric that you guys are now focusing on internally? Sorry about the 10 minute question.

No. I mean, hey, you called me a marketing guru, Ross, you can ask 10 minute questions all you want. So I'll cover the first parts obviously, and then Brian will cover the second. So there's a lot in there on the expanded marketing side and look, I think one of the things we've seen as we've expanded supply and we've improved the product, both of which are in the best position they've ever been in North America, we can grow the business, but it's not as exciting as we want that growth to be. And ultimately, as we've started to focus some marketing investments on a hyper-local level and some of these market tests we've talked about in the past, I mean, you really see that when you get supply, demand and product all working together at once, you can drive accelerated growth. So that's obviously our focus. Over the last couple of years, we've been more focused on supply and product and now it's time in places like North America to start layering on the demand piece, especially as we understand it far better than we ever have and we have more data to prove that it's a smart investment. Now, how that flows into international? As I said earlier, look, there are some countries that are in a really good position. When we talk about the UK, France, Germany, Italy, Australia, their market positions and their marketplaces are further along than many other countries in international. In those locations, or those kinds of locations where we have a strong position and a strong marketplace and good momentum, we'll start to invest more in marketing. That said, the majority of our marketing investment will likely be pushed against North America – this $150 million to $200 million that we're talking about, that's going to be largely deployed in North America with some strategic or smart investments in some of the countries that are further along in marketplace development. So what does that mean about the other countries? Look, it's too early to say with specificity where we're thinking about exiting. And exiting could mean a couple of things as we've demonstrated in the past. It could mean strategic partnerships; it could mean selling off a part of the business; or it could mean an outright closure. I just can't give you details on that now as we're really just kicking off on the incremental round of our strategic review there. But again, it's going to be a core focus of, is it – what markets do we believe that where the opportunity just isn't in line with the return on investment of time, technology, product, supply, et cetera. And those are the areas where we're going to focus our energy to find a strategic alternative. So with that, I'll turn it over to Brian to cover the other part of your question.

Sure. Gross billings growth is still obviously an important metric as we go into the future. I would say that EBITDA – adjusted EBITDA and free cash flow – are the main barometers of where we're going. But I think you need to take a look out at 2017, 2018, 2019 as – sort of the real measure is – once we get through the initial investments here in our marketing and look at the paybacks then.

Thank you. Our next question comes from the line of Tom White of Macquarie. Your line is open. Please go ahead. Tom White - Macquarie Capital (USA), Inc.: Great. Thanks for taking my questions. Just first, North America local gross billings growth in the quarter, I think you guys said in the last earnings call and kind of early to mid-August that it was going to accelerate to double-digits. It actually slowed a tick or was basically stable. Anything that happened kind of in the back half of the quarter that you could touch on it as to why that maybe didn't accelerate? And then, just again on the marketing side, you spent some time talking about your comfort from the cohort data and some sort of tests that you guys had been running. Can you just clarify, I'm trying to understand, is there any uplift from these investments reflected in the 2016 revenue outlook or was that commentary around sort of pushing back the payback period, is that sort of more reflective of kind of what you guys expect the real returns to come from this additional $150 million to $200 million? Thanks.

Sure. Thanks for that. So, I'll cover the local piece first. And as you said, that local grew at around 8% again, so quarter-over-quarter relatively stable; year-to-date continues to hover around that 10% range. Earlier we did expect – we did expect it to accelerate a little bit there – but ultimately, it stayed stable over the last couple of quarters. I think there's nothing significant to point out on that front; the business continues to be solid. The only thing on the short-term side that I'd say there'll be some pressure potentially coming from a lower mix of order discounts, as we increase some of the other points of marketing expense. But other than that, nothing major to call out and the team continues to focus on all the right things, driving high-quality supply, better density of supply, and continuing to build out high frequency use cases in food and drink and health and beauty and specifically, our activities business of things to do. So everything is steady as she goes there and moving in a great direction. Ultimately, I think that business just like the business overall, will benefit from increased marketing expense. So, talking about that with guidance, I'll turn over – I'll turn it over to Brian to cover the expectations around 2016 – but I would generally recommend, again, just taking a look at slide 15 and how this money flows over time and consider those points that I made earlier around 12 to 18 month payback horizon, as well as the ramp to that kind of efficiency that we'd expect to see. So while we're going to start to ramp up spend now, I'd expect it to take about six months before we're really humming at the kinds of efficiencies that we want to see, and then you have 12 to 18 months from there. But for that, Brian?

I think Rich really just summarized the – how we've incorporated that into our guidance. We're really looking at paybacks of – that really don't start till 12 to 18 months after the fact. So, and that's all included in our guidance. Tom White - Macquarie Capital (USA), Inc.: Thank you.

Thank you. And ladies and gentlemen, that does conclude our question-and-answer period for today as well as our teleconference. Thank you for your participation in today's call. You may all disconnect. Have a great rest of your day.