Earnings Labs

American Express Company (AXP)

Q4 2014 Earnings Call· Wed, Jan 21, 2015

$315.23

Key Takeaways · AI generated
AI summary not yet generated for this transcript. Generation in progress for older transcripts; check back soon, or browse the full transcript below.

Same-Day

-3.76%

1 Week

-6.78%

1 Month

-8.41%

vs S&P

-12.41%

Transcript

Operator

Operator

Ladies and gentlemen, thank you for standing by and welcome to the American Express Fourth Quarter 2014 Earnings Call. At this time, all lines are in a listen-only mode. Later, there will be an opportunity for your questions and instructions will be given at that time. [Operator Instructions] And as a reminder, this conference is being recorded. I’ll now turn the conference over to your host, Rick Petrino. Please, go ahead sir.

Rick Petrino

Analyst

Thank you. Welcome and we appreciate everyone joining us for today’s call. The discussion today 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 earnings press release and earnings supplement which were filed in an 8-K report and in the company’s other reports already on file with the SEC. The discussion today also contains certain non-GAAP financial measures. Information relating to comparable GAAP financial measures may be found in the fourth quarter 2014 earnings release, earnings supplement and presentation slides, as well as the earnings materials for prior period 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 CFO, who will review some key points related to the quarter’s earnings to the series of slides included with the earning documents distributed. Once Jeff completes his remarks, we will move to a Q&A session. With that, let me turn the discussion over to Jeff.

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

Well, thanks Rick and good afternoon everyone, happy to be here to discuss the results that we reported today for both the fourth quarter and full year 2014. We are pleased to see both our fourth quarter and full year EPS growth rates at 15% and 14% respectively, within our on-average and overtime targets. This solid performance reflected familiar themes across the entire year, higher spending by our card members, modest acceleration in U.S. loan growth, credit indicators at or near historical lows, strong cost controls and a healthy balance sheet that enabled us to return a substantial amount of capital to shareholders in the form of repurchases over the past year. There was some complexity to our results this quarter and year. As we took advantage of the Q4 gain on the sale of our investment in Concur Technologies. And the Q2 gain on the creation of the business travel joint venture to fund incremental initiatives to position the company for the long term. This quarter, these initiatives included a restructuring, incremental investment in growth initiatives and an upfront cost related to the renewal of our relationship with Delta Air Lines. Given the increasingly competitive environment for co-branded partnerships, we are excited to have extended our relationship with Delta for the long-term. More broadly, we believe all of these incremental initiatives will provide flexibility as we deal proactively with the global economic competitive regulatory environment that continues to be uncertain and rapidly changing. As I begin with the financial summary on Page 2 of the Slide, I’ll discuss both the quarter and full year results. As we believe this helps highlight some of the key performance trends and challenges we face as we enter 2015. Our reported billings growth was 6% during the fourth quarter, but 8% on an…

Rick Petrino

Analyst

Great, thanks Jeff. Just before we start the Q&A I do want to say that in response to feedback we have been receiving, we’re going to try to provide a better opportunity for more analysts to ask a question today, so considering that I do want to ask that everyone in the queue please limiting yourself to just one question, seriously. And so thanks for your cooperation with that. And we can now turn it over and start the Q&A operator.

Operator

Operator

Thank you. [Operator Instructions] And our first question will come from Ken Bruce with Bank of America. Go ahead please.

Kenneth Bruce

Analyst · Bank of America. Go ahead please

Thank you, good afternoon. Could you possibly give us some more details around what the benefits from the restructuring charge will be in terms of you mentioned the reduced headcount but over what period of time should we really be thinking about the net benefits from that restructuring please?

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

That's a good question, Ken. We of course have been on a steady journey here for a number of years to continually evolve our business, how we operate, how we interact with our card members and our merchants, take advantage of evolving technologies, make sure we have the right footprint. And this is really a continuation of that strategy. Now, some of these moves are complicated and it will really take us the course of calendar 2015 to execute on pretty much all of the things that are in the restructuring charge that you see us taking in Q4. So there will be some benefits in 2015. The full run rate benefits of all the actions we’re taking, however, you will see as we get into 2016. So I think as we look at the actions we’re taking, we’re seeing it as something that will be helpful to us in 2015 to continue the kind of strong discipline you’ve seen us have on operating expenses and frankly we’re also position to get some further help in 2016 incrementally as the initiatives take full effect.

Kenneth Bruce

Analyst · Bank of America. Go ahead please

Thank you. I’ll honor the one question rule [indiscernible]

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

Great example.

Operator

Operator

Thank you, we’ll go next to Sanjay Sakhrani with KBW. Please go ahead.

Sanjay Sakhrani

Analyst

Thank you. Maybe along the same lines as well Ken was asking. Could you just talk about how we should think about the core operating efficiency ratio of the enterprise? You guys have been making a series of reengineering and restructuring or taking up a bunch of reengineering and restructuring initiatives. I would assume that that would take that core run rate lower but the last kind of update we got on that was kind of high 60s. Could you just talk about that a little bit? Thanks.

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

I think, Sanjay, it’s a good question. We’re a little cautious about setting a specific target because the way we run the business evolves over time and we don’t want to either set too high a target. Take advantage of all the opportunities we may have to become more efficient. And frankly, there are other times when there are things that we think can help drive long-term growth in the business that may run through various parts of our P&L and various parts of the expense structure that we think that are right things to do. We don’t want to preclude ourselves from spending. So I think the way we think about it is, as you go forward and you think to put your and Ken’s question together about the restructuring we’re just doing. We’re not setting renewal operating expense target publicly for now but you’re certainly not going to see us grow above 3% and you’ve seen us come in pretty flat the last two years, well below to 3% target we set. Certainly, that’s been an important part of our business model, providing the opportunity to spend on the growth opportunities we have and you’re going to see us, I think, very focused on continuing that discipline. I just want to be a little cautious about setting an exact operating efficiency ratio target.

Sanjay Sakhrani

Analyst

Okay great, thank you.

Operator

Operator

Thank you. And next we have Don Vendetti with Citigroup. Please go ahead.

Don Vendetti

Analyst

Yes, Jeff, I was wondering if you could give us your thoughts on when we might hear on the Costco US deal. And if you could talk a little bit around that, how you balance what appear to be sort of lighter economics on these co-brand deals with the potential lumpiness of a loss of a deal, how you sort of think through that.

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

Well, I appreciate the question. Clearly Costco is a very important and long-term partner of ours. Our U.S. relationship goes back to the 1990s. We think we've been great partners and create a lot of value for their members, our card members, and for both companies. Now, I would point out to you that I don't think we said anything about any ongoing discussions we're having with Costco. Obviously, with very important partners, we are always working every day to evolve the relationship to make it better and frankly to make sure it's working for both parties. You can presume we're doing that with Costco as we're doing it with all of our partners at any time and if and when we have any news as we did with Delta, which we chose to renew early, we would certainly tell you. In terms of thinking about the economics of these things, you've certainly heard a number of us, both Ken and I and some of our colleagues talk about the competitive environment for co-brands in recent months and quarters and that's true. I think you have to balance those comments with the fact that these are still one of many good economic growth opportunities we have as a Company. And while yes, the environment has become competitive and certainly there are cases where we conclude because we're pretty selective that we think we're better off not either getting into or proceeding with certain kinds of co-brand partnerships because we have so many other opportunities in our proprietary business, as a general matter these still are attractive and important parts of our overall business model and when we have great partners where our interests are really aligned and I'll go back to the recent renewals with Delta and Starwood, we think we can create great value together and for all parties involved.

Don Vendetti

Analyst

Thank you.

Operator

Operator

Thank you. Our next question is from Sheryl Tate with Morgan Stanley. Please, go ahead.

Sheryl Tate

Analyst · Morgan Stanley. Please, go ahead

Hi, good afternoon. Question on the - on U.S. billed business and clearly lower gas prices have been a bit of a headwind in terms of reduced spend. Just wondering if you can help think through some of the offsets as to the opportunity clearly with OptBlue and higher merchant acceptance and also if there's - if you're seeing sort of consumer willingness to increase spend in other non-gas related categories as potential offsets as well.

Jeffrey Campbell

Analyst · Morgan Stanley. Please, go ahead

Couple things, Sheryl. For us, gas is a relatively modest portion of spend. It's probably 3% or so or a little under 3 of our spend. If you look at the quarter it was probably down around 10%. So there's some impact on our overall billings. It's fairly modest. I think given the size of that and the context of our Company, it's probably premature or early for us to try to say whether or not there is an offset as consumers and companies take the savings, they're getting and spend elsewhere. It would probably just be hard for us to say, given the magnitude of our overall network versus what the spend on gas is. On OptBlue, we've been really pleased since we rolled the plan out early last year with the great acceptance it's gotten in the merchant acquirer world. We've been very pleased with the progress those acquirers have then made in signing up new merchants. I would just remind people that as we laid out the plan early last year, this is a multiyear effort and we are proceeding really nicely and we are right on track to make very significant strides in merchant coverage over the next couple years. There's a process of you have to expand the coverage, then you have to create awareness with card members and that's why we've always talked about this as a multiyear effort. We're really pleased by all the early signs on, but it's not something that in the fourth quarter I would have expected to have a particularly material impact on the overall billings.

Sheryl Tate

Analyst · Morgan Stanley. Please, go ahead

Thank you.

Operator

Operator

Thank you. Our next question is from Sameer Gokhale with Janney Capital Markets. Go ahead, please.

Sameer Gokhale

Analyst · Janney Capital Markets. Go ahead, please

Hi, thank you. The question I had was just around your provisions for the quarter and Jeff, you talked about that a little bit, the provision is being a little bit higher than where they've been at and you also talked about some specific provisioning there. But I'd like to get your view as far as what's going on with the underlying consumer and provisioning trends going forward because you had the lower gas prices, presumably they helped consumers a little bit. I know you target affluent consumers, so there's maybe less of a benefit. But you look at the charge-off rate improvements either the size of the provisioning, it seems like we should expect some pretty hefty growth in provisioning looking into 2015. So if you could just parse the provisioning for us a little bit and your outlook there, that would be helpful. Thank you.

Jeffrey Campbell

Analyst · Janney Capital Markets. Go ahead, please

So, Sameer, gosh, when you look at our credit metrics, actually are down year-over-year and what we are seeing in write-offs and delinquencies, there's really no sign of a tick upwards. I only of course joined the Company about a year and a half ago and I think I said on every single earnings call that I've done beginning in July of 2013 that well write off rates have to eventually go up but they have not. With the provision this quarter there's really as I said three things going on. Number one, remember we're growing loans at 7%. You also just have a seasonal phenomenon because the balances always go up in the December quarter, and we do just the way the rules work, we do set the reserves up for those balances and often the pattern would be that a little bit of that would roll off as you get into the beginning of next year. We also just had a few specific reserve items, which come and go. So it's not necessarily indicative of the future going forward. And we are relative to where we were, say, a year ago, two years ago, at a point where we're not further improving the metrics much. They're fairly flat, although they are have improved a little bit. So it's really those phenomenon that drove this quarter what was a sizable increase in provision at 22% increase in provision. But I think I'd be cautious about concluding from that that all else being equal, without other changes in the environment, that you should expect a big jump-up in provision next year. We'll have to see how the economy develops. We'll have to see how our metrics develop. But certainly we don't see in our metrics any sign of the weakening consumer credit environment and gosh, when you look at unemployment rates continuing to go down, I don't think that should surprise any of us.

Sameer Gokhale

Analyst · Janney Capital Markets. Go ahead, please

Okay, thank you.

Operator

Operator

Thank you, we’ll go now to Bill Carcache with Nomura Securities. Go ahead please.

Bill Carcache

Analyst

Thank you. Good evening. Jeff, can you talk about how the existence of the preferred debt you guys have issued, I think you did $750 million in the third quarter, better positions you for CCAR this year? And the degree to which you think of it as replacing equity, particularly since that prefers capable of absorbing losses under the severely adverse scenario.

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

So as you - good question, Bill. I think I explained but probably not for quite some time. When you look at the evolving capital rules it used to be that the tier 1 capital minimums were actually below the Tier 1 common minimums. We moved into a world where the tier 1 capital minimums are about 150 basis points above your tier 1 common. So if you're going to try to run the company efficiently, and be governed by to your point in the severe scenario what are you going to trip, you got to find the most cost efficient way if you will to fill that 150 basis point difference between the tier 1 common and the tier 1 ratio. And the preferred is clearly for us and for many other banks. You've seen quite a surge of issuance of these kinds of securities. That's why we put it into our CCAR 2014 submission last year. It's why you will see us do another issuance in the first quarter or this quarter and that will bring us about to where we want to be to provide that 150 basis point buffer. Certainly, this is one component among several that we think makes our CCAR submission this year even stronger. We have built over the past 12 months capital even though we returned a very significant amount of capital to shareholders many we have issued this preferred. We continue to work on all of the qualitative processes which we think are getting better in providing more insights to us. So we feel really good about our submission. All that said, we're not the judge the Fed is and we'll have to see where we come out probably towards the latter part of March.

Bill Carcache

Analyst

Thank you.

Operator

Operator

Thank you. Our next question is from Brad Ball with Evercore ISI. Please go ahead.

BradleyBall

Analyst · Evercore ISI. Please go ahead

Thanks. Jeff, you mentioned the heightened regulatory challenges and it looks like the EU is close to finalizing its card payment fee caps. Could you talk about how these new rules will impact your business in Europe and how you plan to adjust AmEx's business there to reflect the changes in the economics of the business?

Jeffrey Campbell

Analyst · Evercore ISI. Please go ahead

Well, as we've commented on for a while, we are very, very, very actively engaged of course with lots of parties across the EU in the ongoing process that will ultimately lead to a finalization of all the new rules. And I think one thing we've learned is we want to be a little bit cautious until the final, final rules are out and all the details spelled out and making any comments on the ultimate impact to us. All that said, I'd make a few general points. One, any regulation, even regulation targeted more at the two dominant networks tends to put some pressure even if it's indirect on our business model. Two, we do have a flexible business model and the closed loop gives us some unique ability to operate in a number of ways in response to evolving, not just regulatory, but competitive and other environments and you've seen us do some of those things in other parts of the world. Sometimes it takes us some time to evolve the business model. We'll have to see where the final EU rules come out. Three, I would say there are already some things happening in Europe that are going to have an impact on us even in the near term, even though the final payments directive has not been issued and there are some changes in the rules around cross-border acquiring that we think are already and even more so in 2015 will begin to put some pressure on our discount rate in Europe. And that's just one of the many challenges that I talked about in as I reflected overall on the challenges we have for 2015. On the broader overall impact for the payments directive, we’ll just have to see what the final language shows.

BradleyBall

Analyst · Evercore ISI. Please go ahead

Thank you. Very helpful.

Operator

Operator

Thank you. Our next question is from David Hochstim with Buckingham reserve. Go ahead, please.

David Hochstim

Analyst · Buckingham reserve. Go ahead, please

Thanks. I wonder since you mentioned your Starwood and Delta co-brands. Can you give us an update on how large they are as a percentage of loans and/or billed business and I guess could you expand on the negative financial impact that the renewal of those contracts might have?

Jeffrey Campbell

Analyst · Buckingham reserve. Go ahead, please

Well, we don’t, David, as you know, tend to call out the specific size of any of our portfolios and I would probably include Starwood.

David Hochstim

Analyst · Buckingham reserve. Go ahead, please

You did several years ago provide those, so I didn’t know if maybe you’d be willing to update that.

Jeffrey Campbell

Analyst · Buckingham reserve. Go ahead, please

Yes, I don’t think at this point. Obviously there’s also sense sensitivity with our partners so it’s not something David I want to do on a casual basis. You are correct, from time to time usually at an investor presentation kind of format we have provided a few numbers that we fully vet with the partners bank. So we’re not prepared to do that today. Clearly the fact that we have just resigned with Starwood tells you about how pleased we are and I think how pleased they are with the relationship and the growth potential it has going forward. You talk about the impact. I guess what I was very much trying to communicate in my comments earlier is that we are in these co-brand relationships for the long term, just like we run the Company for the long term. Often, these partnerships only get renewed every quite a number of years. These are not annual renewals. So when normal market commission have evolved for quite a number of years, when you renew a contract you can sometimes have a significant reset and we always structure these things so both parties have tremendous incentives to continue to grow the value and we’re pretty pleased overall with the role that all these partners have played in our financial performance over the years. So these latest renewals fall into all of those general fits of experience I just gave you. No one portfolio that’s the size of star is going to have that material an impact on us, but it’s one of the many, many factors we look at as we think about both our near term and our longer term financial performance.

David Hochstim

Analyst · Buckingham reserve. Go ahead, please

Would it be reasonable to expect higher reward cost, prospectively with Delta?

Jeffrey Campbell

Analyst · Buckingham reserve. Go ahead, please

Well, our relationship with Delta is very, very complex. You’ve got a co-brand partnership. You have their participation in membership rewards. They’re a very, very significant merchant for us. We have a lounge agreement with them. We are a huge - I’d remind you, we are still 60% owner of the largest business travel operation in the country. So there are a lot, lot, lot of moving economic pieces to our relationship with Delta. So that's why it's such an important relationship to them. It's why it's such an important relationship to us. And that's why we think it's so important to get it back in a status where it's been renewed for the longer term and that's where we are now and now we're both just focused on growing the relationship. I don't want to comment on any specific terms in anyone of the many areas because of course we both look at this relationship and try to balance it across all the many different components.

Operator

Operator

Thank you. Our next question will come from Bob Napoli with William Blair. Please go ahead.

Bob Napoli

Analyst · William Blair. Please go ahead

Thank you. Good afternoon. Just I was hoping to get a little bit of an update on a couple of our growth initiatives. The loyalty partners, and if that was getting to a point where it’s material enough to possibly breakout for us and we've been hearing around the market that American Express is getting more active in small business lending and I was wondering if you could talk about that at all, those two growth initiatives.

Jeffrey Campbell

Analyst · William Blair. Please go ahead

Well, we continue to be very pleased by the growth in loyalty partner. As you recall, we launched in Italy late last year - early last year. It is well into a very mature state in a number of other countries, Germany, Mexico, et cetera. The growth rates for that business overall are in the high double-digits and we're very pleased and I think you can continue to expect us to expand to new countries. In terms of breaking it out, I think we're still a ways from that. We will probably somewhat similar to the answer I gave earlier in response to things like Starwood metrics. We will from time to time usually in an Investor Day kind of setting give people a few metrics, but we're really pleased with the business. And I think it's also fair to say we're also learning, because it is a relatively new business for us, how to better optimize some of the synergies with our core card business and we're pleased with our progress there. In fact, I talked in my earlier remarks about strong growth in a number of European countries including Germany and one of the factors helping us in Germany are some of the synergies we're beginning to see between our core card business and loyalty partner. On small business lending, we obviously have a tremendous franchise with small businesses. And we were certainly the first to create an organization within the Company extremely focused on just trying to figure out how do we help drive success across our small business partners and it's given us a tremendous position in the marketplace. Small business Saturday has been a tremendous add to the overall range of the things we do with small business partners and growing our lending efforts in small business we would see as one of the many opportunities we have to do a little bit more lending than you've seen us do the last few years. I want to emphasize here that we're a long, long ways from doing anything that changes our spend centric focus. On the other hand, with our existing customer base, within our existing risk profile, with your example of small businesses as a really good example, we think we are really well positioned to accelerate growth rates from where we are today and we're very focused on doing it.

BobNapoli

Analyst · William Blair. Please go ahead

Great, thank you.

Operator

Operator

Thank you. Our next question is from Mike Taiano with Burke & Quick. Go ahead, please.

Michael Taiano

Analyst · Burke & Quick. Go ahead, please

Great, thank you. Just want to go back to the energy question, sort of the drop in oil prices. The deceleration that you saw in billed business volume in the fourth quarter, if there was anything that was noticeable related to any of the energy - the states that are more energy centric like Texas in the fourth quarter. And then just looking forward, sort of how you plan on sort of managing sort of the credit risk of some of those states. I know back when the housing crisis that you guys were very proactive in trying to rein in credit lines for those that you thought might be more exposed to housing. Just was curious on your thoughts on that.

Jeffrey Campbell

Analyst · Burke & Quick. Go ahead, please

That's a great question, Mike. I think in terms of the impact in Q4 on billings by geography, billings by industry type, as we've begun to scrub through the numbers, you really don't see anything that jumps out at you in terms of a pattern, but frankly that's not surprising to us because it's still pretty new when you think about Q4. I think we'll all have to see how things develop in 2015. I think that also really points to the importance of your second question. Believe me, as you would expect us to be, we are being very thoughtful and very focused on both industry and geographic concentrations and trying to be well ahead of anything that does start to appear in terms of how we're managing our credit profile across our business.

Michael Taiano

Analyst · Burke & Quick. Go ahead, please

Great, thank you.

Operator

Operator

Thank you. We'll go next to Moshe Orenbuch with Credit Suisse. Go ahead, please.

Moshe Orenbuch

Analyst · Credit Suisse. Go ahead, please

Great. Just back on the Delta, you've said that it's - I guess Delta said that they were going to double the benefits from that relationship with American Express to them as part of the new contract. Is there any way you could size, what percentage of your rewards costs relate to that both across the co-brand and the purchase of MR points?

Jeffrey Campbell

Analyst · Credit Suisse. Go ahead, please

I must admit Moshe, I missed their double comment but maybe…

Moshe Orenbuch

Analyst · Credit Suisse. Go ahead, please

They did an Investor Day a couple of weeks back in which they said that.

Jeffrey Campbell

Analyst · Credit Suisse. Go ahead, please

But look, they're a great partner for us and as I explained earlier, we have a really broad relationship with Delta that cuts across so many parts of both our companies. It's generated tremendous value for us and it's generated tremendous value for them. We last renewed it in 2008 and it's now locked in for quite some period of time and we're really pleased with that and we're both very focused on growing the very mutual interest we have in a common card member and flier base. All that said, they're a good partner and I think we've been pretty clear that in general there's a reset often when you do these kinds of renewals after a long time and I said on my earlier remarks Delta is no exception. You do see the one piece of the economics in the charges we took in Q4. And that is that there is an impact that caused us to reprice the bank of MR points so that basically tells you we're going to pay Delta a little bit more money when a membership rewards member transfers MR points to redeem a flight on Delta. That's actually very similar to something we did back in 2008, in fact the charge is almost the same size as something we took back in 2008. So that's not new. I think it's just sort of a standard part of the reset. Beyond that, I don't want to try to size the overall economics of a specific agreement as we have with Delta and there's many, many ways that they may think about the value so I actually couldn't tell you how they might have gotten to the

Moshe Orenbuch

Analyst · Credit Suisse. Go ahead, please

So is it fair then just to add to that the fact that you've got 5% of your co-brand, of your spending volume in the co-brand because that's not part of the MR program. Right. That’s a disclosure you made in the 10-K of that 5% of your spend is the Delta co-brand.

Jeffrey Campbell

Analyst · Credit Suisse. Go ahead, please

Yes, you are correct. And of course we spell that out arises leveled from an SEC perspective we should disclose.

Moshe Orenbuch

Analyst · Credit Suisse. Go ahead, please

Got it. Thank you.

Jeffrey Campbell

Analyst · Credit Suisse. Go ahead, please

Thanks, Moshe.

Operator

Operator

Thank you. And next, we have James Friedman with Susquehanna. Go ahead, please.

James Friedman

Analyst

I want to ask you about Delta.

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

No, Jamie, you can ask about whatever you like.

James Friedman

Analyst

I was going to ask about GCS. I was - if you could share with us your perspective about the general competitive environment for corporate cards. And then in the sales Concur, does that change your advantage in that it’s no longer a consolidated asset.

Jeffrey Campbell

Analyst · Bank of America. Go ahead please

Remember, our ownership stake in Concur was about 13% or so. And then back in 2008, we thought putting in place a series of operating agreements taking that minority of stake. We did put $1 billion on the board. It was really a good way to both - make sure we captured the operating synergies between the two companies and we’ve been very successful over the years and helping each other to grow. Well, frankly, letting Concur operate as an independent company to really grow and create the value that - they’ve really done a rather remarkable job of with the purchase by SAP. We are very excited frankly to take that partnership, longstanding partnership with Concur and continue it, but frankly expanded as they become a part of SAP and we think that’s going to open even more avenues of working together and we’ve - even as you would expect before the acquisition was announced, had a number of discussions along those lines. And so, we’re if anything more excited than we were about the ability to continue to work together to help drive both of our businesses forward. So I think we’re out of time. Operator, so I want to thank everybody for joining us on today’s call and participating in the Q&A. We are, to summarize, maybe pleased with the solid performance we showed for the full year of 2014. We do face increasing challenges in 2015, but we face the challenges from a strong position, many growth opportunities and we’re all focused on making sure we’re making the right decisions to position the company for the long-term. So with that, I wish you all good evening. Thanks for your continued interest in American Express.

Operator

Operator

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.