Slide 1: Fourth Quarter & Full Year 2021 Results
Alliance DataFourth Quarter & Full Year 2021 Results Perry BebermanEVP & CFO January 27, 2022 Ralph AndrettaPresident & CEO © 2022 ADS Alliance Data Systems, Inc. Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 © 2022 ADS Alliance Data Systems, Inc. Non-GAAP Financial Measures This release 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
Slide 3: Our Business Transformation
Our Business Transformation 3 © 2022 ADS Alliance Data Systems, Inc. Leading provider of tech-forward payment and lending solutions Expanding our Product Suite & Developing Strategic Relationships Improving our Capital Ratios and Reducing our Leverage Enhancing our Core Technology & Advancing Digi
Slide 4: Key Highlights
Credit Sales UpdateCredit sales held strong in the fourth quarter, up 15% year-over-yearHoliday sales were strong with beauty and jewelry each up 30% from 4Q20In-store credit transactions increased year-over-year Business Development and Product UpdateLeveraged strong pipeline & robust business deve
Slide 5: Brand Partner Highlights
Brand Partner Highlights Select New Brand Partners Brand Partner Renewals Select New Bread Direct Acquisition Partners TBC Corporation including brands like: 5 © 2022 ADS Alliance Data Systems, Inc.
Slide 6: Financial Results
Financial Results ($ in millions, except per share) 4Q21 4Q20 % Change FY21 FY20 % Change Income from continuing operations, net of taxes $61 $74 (18) % $797 $208 283 % (Loss) income from discontinued operations, net of taxes (44) (62) (30) 4 6 (38) Net income $17 $12 42 % $801 $214 275 % **********
Slide 7: Fourth Quarter 2021 Financial Highlights
Fourth Quarter 2021 Financial HighlightsContinuing Operations Credit sales of $8.8 billion were up 15% year-over-yearFourth quarter average receivables of $16.1 billion were up 2% year-over-year Revenue increased 11% year-over-year, while total non-interest expenses declined 12%Income from continuin
Slide 8: Full Year 2021 Financial Highlights
Full Year 2021 Financial HighlightsContinuing Operations Credit sales of $29.6 billion were up 20% year-over-yearFull year average receivables of $15.7 billion were down 4% year-over-year, with end-of-period receivables up 4%Revenue was nearly flat year-over-year, while total non-interest expenses d
Slide 9: Financial Results – Continuing Operations
Financial Results – Continuing Operations ($ in millions, except per share) 4Q21 4Q20 % Change FY21 FY20 % Change Total interest income $1,017 $950 7 % $3,868 $3,952 (2) % Total interest expense 84 112 (24) 383 499 (23) Net interest income 933 838 11 3,485 3,453 1 Total non-interest income (78) (69)
Slide 10: Net Interest Margin
Net Interest Margin Average interest-earning assets($ in billions) Average interest bearing-liabilities ($ in billions) 10 © 2022 ADS Alliance Data Systems, Inc.
Slide 11: Credit Quality and Allowance Reserve Rate
Credit Quality and Allowance Reserve Rate ($ in millions) Net Loss Rate Delinquency Rate 5 year Max rate: 7.6% 5 year Min rate: 3.9% 5 year Avg rate: ~6.0% * Calculated as the percentage of the Allowance for credit losses to end-of-period Credit card and other loans. Revolving Credit Risk Distributi
Slide 12: Full Year 2022 Outlook
Full Year 2021Actuals Full Year 2022Outlook Commentary Average receivables $15,656 million Up high-single to low-double digits Continued sales momentum and net partner additions driving strong growthExpect year-end receivables growth year-over-year to be slightly stronger than full year average rece
Slide 13: Appendix
Appendix © 2022 ADS Alliance Data Systems, Inc.
Slide 14: Average Receivables and Credit Sales
Average Receivables and Credit Sales ($ in billions) Receivables continue to inflect higher with strengthening credit sales providing momentum entering 2022 14 © 2022 ADS Alliance Data Systems, Inc.
Slide 15: Total Non-Interest Expenses
Total Non-Interest Expenses $ in millions $ in billions -12% -3% Total non-interest expenses were down 12% versus 4Q20Employee compensation and benefit costs increased 15% primarily driven by continued digital and technology modernization-related hiring, as well as higher volume-related staffing lev
Slide 16: Key Metrics 4Q21 vs Prior Periods
($ in millions) 4Q21 4Q20 4Q21 vs 3Q21 4Q21 vs FY21 FY20 FY21 vs 4Q20 3Q21 FY20 Credit sales $8,778 $7,657 15% $7,380 19% $29,603 $24,707 20% Average receivables $16,086 $15,759 2% $15,471 4% $15,656 $16,367 (4)% End-of-period receivables $17,399 $16,784 4% $15,690 11% $17,399 $16,784 4% End-of-peri
Slide 17: Quarterly Key Metrics Trend
($ in millions) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 FY20 FY21 Credit sales $6,099 $4,799 $6,152 $7,657 $6,043 $7,401 $7,380 $8,778 $24,707 $29,603 Year-over-year change (3)% (36)% (21)% (18)% (1)% 54% 20% 15% (20)% 20% Average receivables $18,294 $16,116 $15,300 $15,759 $15,785 $15,282 $15,471 $
Slide 18: Quarterly Financial Results Continuing Operations
($ in millions, except per share) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 FY20 FY21 Total interest income $1,227 $860 $915 $950 $942 $915 $994 $1,017 $3,952 $3,868 Total interest expense 146 127 114 112 107 100 92 84 499 383 Net interest income 1,081 733 801 838 835 815 902 933 3,453 3,485 Total non
Slide 19: Net Interest Margin 4Q21 FY21
Net Interest Margin 4Q21 FY21 ($ in millions) Average Balance Interest Income / Expense Average Yield / Rate Average Balance Interest Income / Expense Average Yield / Rate Cash and investment securities $3,711 $2 0.21% $3,480 $7 0.21% Credit card and other loans 16,086 1,015 25.25% 15,656 3,861 24.6
Slide 20: Capital and Liquidity
Capital and Liquidity Banks Combined Capital Ratios 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Common equity tier 1 capital ratio(2) 15.9% 18.3% 18.8% 18.4% 21.0% 22.1% 22.6% 20.0% Tier 1 capital ratio(3) 15.9% 18.3% 18.8% 18.4% 21.0% 22.1% 22.6% 20.0% Total risk-based capital ratio(4) 17.3% 19.7% 20.1
Slide 21: Sales and New Account Data
Sales and New Account Data In-store vs. digital sales Digital includes all non-store new accounts and Bread $ in billions In-store vs. digital new accounts in millions 21 © 2022 ADS Alliance Data Systems, Inc.