Alliance Data Systems Corporation (ADS) Q2 2020 Earnings Conference Call July 23, 2020 8:30 AM ET Company Participants Vicky Nakhla - AdvisIRy Partners Ralph Andretta - President & CEO Tim King - EVP & CFO Conference Call Participants Sanjay Sakhrani - KBW Andrew Bauch - Wolfe Research Bob Napoli - William Blair Eric Wasserstrom - UBS David Scharf - JMP Securities Dominic Gabriele - Oppenheimer William Ryan - Compass Point Mihir Mehta - Bank of America John Hecht - Jefferies Operator Good morning. And welco ...

Alliance Data NYSE: ADS Second Quarter 2020 Results July 23, 2020 ©2020 ADS Alliance Data Systems, Inc. Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "estimate," "intend," "project," ...

Index UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-15749 ALLIANCE DATA SYSTEMS CORPORATION (Exact name of registrant as specified in its charter) Delaware 31-1429215 (State ...

Alliance Data Systems Corporation (ADS) Q1 2020 Earnings Conference Call April 23, 2020 8:30 AM ET Company Participants Vicky Nakhla - AdvisIRy Partners Ralph Andretta - President & CEO Tim King – EVP & CFO Conference Call Participants Sanjay Sakhrani - KBW Darrin Peller - Wolfe Research Bob Napoli - William Blair Andrew Jeffrey - SunTrust Ryan Cary - Bank of America Dan Perlin - RBC Capital Markets Eric Wasserstorm - UBS Ashish Sabadra - Deutsche Bank Tim Willi - Wells Fargo Operator Good morning. And welc ...

Alliance Data NYSE: ADS ©2020 ADS Alliance Data Systems, Inc. Confidential and Proprietary First Quarter 2020 Results April 23, 2020 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "est ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-15749 ALLIANCE DATA SYSTEMS CORPORATION (Exact name of registrant as specified in its charter) Delaware 31-1429215 ...

Financial Data and Key Metrics Changes - Revenue for 2019 decreased by 2% to $5.6 billion, adjusted EBITDA net decreased by 21% to $1.3 billion, and core EPS decreased by 14% to $16.77, which is at the lower end of the 2019 guidance range [7] - The company sold $3.2 billion of non-core but income-producing receivables since 2017, impacting profitability in 2019 [7][9] - Parent-level debt was reduced by $2.9 billion, with extensions on debt maturities [9] Business Line Data and Key Metrics Changes - LoyaltyOne segment saw adjusted revenue increase by 5%, while adjusted EBITDA net was flat compared to 2018 [12] - AIR MILES adjusted revenue was flat, with a 1% decrease in AIR MILES redeemed [12] - BrandLoyalty's revenue increased by 8% on a constant currency basis, with adjusted EBITDA net increasing by 20% [13] - Card services reported credit sales up by 1%, with end-of-period receivables at approximately $19.5 billion, up 9% year-over-year [14] Market Data and Key Metrics Changes - The gross yield decreased by 50 basis points due to purchase accounting and decreases in the Fed fund rate [15] - Delinquency rates increased by 14 basis points, primarily due to portfolios acquired mid-2019 [16] Company Strategy and Development Direction - The company is focusing on transitioning card services towards more attractive clients and verticals, which has impacted profitability [7] - Cost structure has been streamlined, with a reduction of over $200 million in run rate expenses entering 2020 [9] - The company plans to invest in new product capabilities at Card Services while prioritizing debt retirement [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the LoyaltyOne segment for 2020, expecting low single-digit revenue and EBITDA growth [25] - The company anticipates a conservative outlook for 2020, with core EPS expected to increase by 22% due to cost containment measures [21] - Management acknowledged the need for improved onboarding processes and technology investments to remain competitive [42][43] Other Important Information - The company will implement CECL in 2020, anticipating an increase in the allowance for loan losses [23] - Corporate leverage ratio is approximately 2.4x, allowing room for capital returns [46] Q&A Session Summary Question: Key variables affecting card services and loyalty business outlook - Management highlighted the importance of new product introductions and maintaining relationships with clients as key variables for 2020 [27] Question: Confidence in guidance with new leadership - Management stated that the guidance is conservative and aligned with the new leader's vision [29] Question: Strategic vision for growing the portfolio - Management emphasized the need to re-energize core programs and onboard smaller clients for growth [32] Question: Delinquency trends and underlying performance - Management indicated that the overall delinquency rate remains stable, with pressures coming from acquired portfolios [65] Question: Changes in guidance for yields and loss rates - Management acknowledged a slight increase in loss rate expectations and adjustments in revenue impact due to the sale of Precima [81]

Alliance Data NYSE: ADS ©2020 ADS Alliance Data Systems, Inc. Confidential and Proprietary Full Year 2019 Results January 30, 2020 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "estim ...

Index UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-15749 ALLIANCE DATA SYSTEMS CORPORATION (Exact name of registrant as specified in its charter) Delaware 31-1429215 (S ...

Financial Data and Key Metrics Changes - Revenue increased by 1% to $1.44 billion, while EPS decreased to $2.41 per share due to restructuring charges and early debt retirement costs [15][17][29] - The company projected end-of-period receivables to be approximately $19.5 billion, down from the previous quarter forecast, with Q3 ending position at $17.9 billion [14][29] Business Line Data and Key Metrics Changes - LoyaltyOne reported a revenue decrease of 6% to $246 million, but adjusted for foreign exchange and presentation changes, revenue increased by 1% [19] - Card Services revenue was up 3%, marking a turnaround from a 4% decline in the previous quarter, with average receivables increasing and yields stabilizing [21][22] Market Data and Key Metrics Changes - The company has shifted its focus to healthier verticals, with over 60% of card receivables now coming from these newer verticals, up from less than half in 2016 [12][13] - New vintages now account for over 35% of card receivables, indicating a strategic shift towards growth in vibrant brands [13] Company Strategy and Development Direction - The company is undergoing a transformation to streamline operations and focus on differentiated value, aiming for consistent, sustainable growth [6][7] - Future growth is expected to come from expanding into new markets and leveraging emerging brands, with a commitment to technology and digital solutions [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced during the transformation but emphasized tangible progress and a commitment to improving the business model [5][28] - The outlook for 2020 includes expectations for lower operating expenses, low single-digit revenue growth, and mid- to high 20% growth in core EPS [30][31] Other Important Information - The company completed its corporate restructuring related to the Epsilon sale, with a focus on maintaining a healthy balance sheet and exploring strategic investments [28][39] - Management indicated that they are committed to cleaning up the balance sheet by disposing of held-for-sale portfolios [61] Q&A Session Summary Question: Clarification on guidance data points for revenues and expenses - Management acknowledged potential risks to EPS targets if the Fed lowers rates further, but expects yields to remain flat [34][35] Question: Capital management and board changes - Capital ratios are managed across three buckets: balance sheet health, strategic investments, and stock repurchases [39][40] Question: Portfolio acquisitions and health - Current guidance does not include large-scale acquisitions, but there is potential for healthy new vintages in 2020 [44] Question: Revenue and earnings growth rate - Long-term growth is expected to be high single digits for both revenue and throughput, with operating leverage driving low double-digit earnings growth [48][51] Question: Risk management and portfolio health - The company monitors the financial health of brands closely and has factored potential brand failures into their long-term plans [53] Question: Held-for-sale portfolio timing - Management is actively negotiating on portfolios and aims to clean up the balance sheet by year-end [61] Question: Core EPS outlook and GAAP translation - Core EPS improvements are expected to align closely with GAAP earnings, with no significant differences anticipated [64] Question: Reserve build and growth expectations - The increase in reserves is primarily due to higher receivables, with stable credit metrics expected moving forward [66]