Bread Financial Holdings, Inc.

Good morning, and welcome to Alliance Data's fourth quarter and full year 2019 earnings conference call. At this time, all parties have been placed on a listen-only mode. Following today's presentation, the floor will be open for your questions. If you would like to ask a question, you will need to press star 1 on your telephone keypad. In order to view the company's presentation on the website, please remember to turn off the pop-up blocker on your computer. It is now my pleasure to introduce your hosts. Ms. Vicky Nukla of Advisory Partners. Ma'am, the floor is yours.

Thank you, Amy. By now, you should have received a copy of the company's fourth quarter and full year 2019 earnings release. If you haven't, please call Advisory Partners at 212-750-5800. On the call today, we have Charles Horn, Acton CEO, Executive Vice President and Vice Chairman of Alliance Data, and Tim King, Executive Vice President and Chief Financial Officer of Alliance Data. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. Alliance Data has no obligation to update the information presented on the call. Also on today's call, our speakers will reference certain non-GAAP financial measures, which we believe will provide useful information for investors. Reconciliation of those measures to GAAP will be posted on the Investor Relations website at alliancedata.com. With that, I would like to turn the call over to Charles Horn. Charles?

Thank you. Good morning. Thank you for joining us today. With me is Tim King, our CFO. We plan to keep our prepared remarks quite short today, and with that, let's go to page four and talk about our 2019 consolidated results. For the year, revenue decreased 2% to $5.6 billion, adjusted dividend net decreased 21% to $1.3 billion, and core EPS decreased 14% to $16.77, which is in the lower end of our range for the 2019 guidance. The weakness in 2019 was primarily at-card services. 2019 was a transition year at ADS, painful but productive. Let's begin with the transition at-card services toward more attractive clients and verticals. This process hurt 2019 profitability as we have sold $3.2 billion of non-core but income-producing receivables since 2017. The result is a healthier client base but lower revenue growth. We were slow to adjust our operating cost structure commensurate with the lower growth, but actions undertaken late in 2019 have rectified that. As part of a strategic review that commenced in 2018, we sold Epsilon in 2019 and Pressma in January 2020, simplifying our story and allowing increased investment in card services. Next, we streamlined our cost structure throughout ADS, reducing run rate expenses by over $200 million entering 2020. Lastly, after some executive management turnover, the Board of Directors hired a seasoned industry veteran in Ralph Andretta who joins ADS next week to lead the business going forward. During 2019, we reduced the parent level debts by $2.9 billion while extending the debt maturity ladder for the remaining debt with $2 billion extended from June 2021 to December 2022 and $850 million extended from June 2021 to December 2024. In addition, we spent $976 million on share repurchases during 2019. Our capital allocation priority in 2020 will continue to focus on debt retirement as well as internal investment to support new product capabilities and card services. Moving to page five, I'll turn it over to Tim.