Slide 1: Alliance Data Private Label Frequently Asked Questions
Alliance Data NYSE: ADS Private Label Frequently Asked Questions
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may use words such as "anticipate,"
Slide 3: What is Private Label Services?
What is Private Label Services? Attractive Market - 1998-03: Double-digit Annual Growth for Outsourcers Services: Private Label Processing Customer Care / Call Center Credit: 700 Score, No Sub-Prime Targeting Database Marketing Services Income Streams: Split Between Processing and Credit Clients: Vi
Slide 4: How Big is the Private Label Market?
How Big is the Private Label Market? Adding New Clients Expanding Into New Retail Segments Expanding Our Product Offering Consumer Commercial Co-Brand Gift Card Product Expansion Solid Foothold Market Leader Position Emerging Other Outdoor Recreation Hard Goods Jewelry Online/ Catalog Home Furnishin
Slide 5: Why is Private Label Different to the Retailers?
Why is Private Label Different to the Retailers? It is About Repeatable Sales with the Consumer We are Able to Demonstrate to the Retailer that Our Card is Driving Incremental Sales Extension of Our Retailer's Marketing Function Our Contract is with the Retailer, because We have Demonstrated that Sa
Slide 6: Why is Private Label Different to the Consumer?
Why is Private Label Different to the Consumer? It is Not About the Interest Rate The Card is about the Shopping Experience Our Cardholders Choose to Use Our Cards for the Loyalty Aspect Personalized Touch Database Marketing and Directed Messages If the Consumer was Concerned about the Interest Rate
Slide 7: What is the Life Cycle of a Portfolio and How Does That Effect Yield?
What is the Life Cycle of a Portfolio and How Does That Effect Yield? Start up Program takes Approximately Three Years to Ramp Up Start up Phase is about Building Wallet Share After the Peak, the Portfolio will Hit a Normalized Run Rate Thereafter, We Optimize Client Profitability through Tailored P
Slide 8: Will the New Minimum Payment Rules Impact Alliance Data?
Will the New Minimum Payment Rules Impact Alliance Data? Simple Answer is No Two Factors Here with the Minimum Payment: Average Balance of Only $300 Minimum Payment of $10 or 3-6% Bankcard Closer to 2-3%
Slide 9: How Do FICO Accounts Generate High Yields?
How Do 700 FICO Accounts Generate High Yields? While This May Seem Contradictory, It is Due to the Small Balances Typical on Our Private Label Cards. Our Private Label Cards are an Extension of Our Client's Marketing Function The Majority of the Cards Carry a Fixed APR It is Important to Keep in Min
Slide 10: What are Zero Credit Limit Balances and What Does It Mean?
What are Zero Credit Limit Balances and What Does It Mean? Zero Credit Limit Accounts are Primarily Accounts That Are or Have Been Two Payments Past Due What is in the "Bucket" Delinquent Accounts Former Delinquent Accounts Customer Requested Closures CCCS Accounts We Actually Zero Out the Credit Li
Slide 11: What Drives Recovery Rates?
What Drives Recovery Rates? Recoveries are the Collection of Previously Written-off Balances Re-aging of Accounts All Accounts Written Off if 180-Days Past Due We Manage the Recovery Process In-house Competitive Advantage Our Recovery Rates Consistent Over Last 4 Years Recoveries Recognized Only Upo
Slide 12: What is the Intersegment Transfer?
What is the Intersegment Transfer? We provide a single source private label solution Marketing Processing Customer care Credit We Report the Customer Care, Processing and Marketing in the Transaction Segment and Credit in the Credit Segment Intersegment Pricing is Consistent SEC Reporting is at Mark
Slide 13: Any More Color on the Q3 Credit Loss Benefit?
Any More Color on the Q3 Credit Loss Benefit? Master Trust: Other: Private Conduits and on Balance Sheet ^ 20 bps = 1¢
Slide 14: What is Securitization and Gain on Sale?
What is Securitization and Gain on Sale? Securitization is an Off-balance Sheet Financing Vehicle that Provides Alliance Data with the Cheapest Cost of Funding Securitizations are Covered by GAAP and OCC Regulations Gain on Sale is Effectively Any Increase in the I/O Strip and is Primarily the Resul
Slide 15: Our Keys for Success
Services with Pricing Power Long-term Relationships 10 - 12 New Clients per Year 10 - 12 New Clients per Year 10 - 12 New Clients per Year 10 - 12 New Clients per Year Our Keys for Success