Bread Financial Holdings, Inc. · NYSE:BFH

Bread Financial — Alliance Data Systems — Non-Deal Roadshow (March 2009)

16 slides from Bread Financial's roadshow presentation, Mar 9, 2009

  1. Slide 1: Alliance Data Q1 2009

    Exhibit 99.1 Alliance Data Q1 NYSE:ADS 2009 ©2009 ADS Alliance Data Systems, Inc.

  2. Slide 2: Alliance Data: A Unique Business Model

    Q1 2009 ADS Roadshow 2 Alliance Data: A Unique Business Model Largest and Most Comprehensive Provider of Transaction- based Marketing and Loyalty Solutions • Highly sophisticated transaction-based programs are measurable, trackable and allow for micro-segmentation of clients’ customers. • Drives hig

  3. Slide 3: Growth & Shift In Operating EBITDA (Op. Cash Flow)

    Q1 2009 ADS Roadshow 3 Growth & Shift In Operating EBITDA (Op. Cash Flow) 2005 20% CAGR 2009 $352MM $720MM 24% 44% 30% 35% 9% Loyalty Epsilon PL Services PL Credit 23% 15% 20% Loyalty/Epsilon/Private Label Services 56% 70% Private Label Credit 44% 30% ©2009 ADS Alliance Data Systems, Inc.

  4. Slide 4: Loyalty Services Canada AIR MILES Reward Program

    Q1 2009 ADS Roadshow 4 Loyalty Services Canada AIR MILES ® Reward Program (constant currency basis) (1) “Key driver (reward miles issued) had lowest growth ever in Q4” • Not true: 2001 & 2002 had lower quarters (see chart) (2) “Q4 is the start of a trend” • Not true – there has never been a quarterl

  5. Slide 5: Loyalty Services Canada AIR MILES Reward Program

    Q1 2009 ADS Roadshow 5 Loyalty Services Canada AIR MILES ® Reward Program Year over Year % Change in Reward Miles Issued 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 2001 2002 2003 2004 2005 2006 2007 2008 Sequential % Change in Reward Miles Issued 20.0% 15.0% 10.0%

  6. Slide 6: Loyalty Services Canada AIR MILES Reward Program

    Q1 2009 ADS Roadshow 6 Loyalty Services Canada AIR MILES ® Reward Program (constant currency basis) (3) “Weak issuance, if continued, will decimate this year” • Not true • 2001 & 2002: Revs & Adjusted EBITDA grew 18% & 20% annually • Issuance does not drive current year earnings - Deferred and recog

  7. Slide 7: Loyalty Services Canada AIR MILES Reward Program

    Q1 2009 ADS Roadshow 7 Loyalty Services Canada AIR MILES ® Reward Program (constant currency basis) (4) Recession will cause massive redemptions and destroy cash flow • Not true • Redemptions are paid from a Trust account with money already set aside • Redemptions therefore don’t impact cash flow •

  8. Slide 8: Epsilon Marketing Services

    Q1 2009 ADS Roadshow 8 Epsilon Marketing Services (6) “Q4 was flat. Pressure on marketing budgets will cause big declines in 2009 performance” • Not true – • Majority of business (database, analytics, digital) tied to massive multi-year loyalty programs - very stable – double-digit growth • Remainin

  9. Slide 9: Private Label Credit Services

    Q1 2009 ADS Roadshow 9 Private Label Credit Services (8) Credit Losses: • Typically, run about 100-120bps above unemployment • Initially set losses at 8.8% • Using high-end of Fed’s latest numbers Dec. End ’09 Avg. Losses 7.2% 8.8% 8% 9.2% • 40bps increase = ($17MM) hit = 3% of cash earnings • Jan:

  10. Slide 10: Private Label Credit Services

    Q1 2009 ADS Roadshow 10 Private Label Credit Services (10) “Higher credit loss rates will crush earnings” • Mitigants: (+) Strong portfolio growth (+) Stable to increasing gross yields (+) Lower funding costs • LIBOR is low, but spreads can come in • FDIC insured CDs – huge liquid market • Governmen

  11. Slide 11: Private Label Credit Services

    Q1 2009 ADS Roadshow 11 Private Label Credit Services (11) “Cramdown” Mortgage Legislation • Minimal, if any, impact • Our small credit lines ($700) and lack of general utility (12) Guidance • Mitigants will largely offset higher credit losses • No material I/O strip hit (+) Growth (off balance shee

  12. Slide 12: Etc., Etc.

    Q1 2009 ADS Roadshow 12 Etc., Etc. (13) “Recent organization change complete surprise.” • Board started the process a few years ago • Chairman & CEO: 12 years on the job • Remaining as Exec. Chairman (i.e., executive officer) • Focusing daily on top 500 leaders (out of 7,000 employees) • “The New Gu

  13. Slide 13: 2009 Guidance

    Q1 2009 ADS Roadshow 13 (15) 2009 Guidance • Revenues: $2,150MM • Operating EBITDA: $ 720MM • Adjusted EBITDA: $ 680MM • Cash EPS: $5.15 - $5.20 17% – 18% • Free Cash Flow /share $5.75 (20% yield) • Q1 Cash EPS $1.10 -Includes $10MM Adjusted EBITDA hit for FX; or 10¢ drag on Cash EPS -Q1 toughest FX

  14. Slide 14: 2003-2009e Adjusted EBITDA and Cash EPS

    Q1 2009 ADS Roadshow 14 2003-2009e (in $MM, except per share) $5.15 - $5.20 Adjusted EBITDA $680 Cash EPS $4.42 $655 $632 $3.88 $3.14 $498 $321 $1.99 $255 $1.54 $189 $1.00 2003 2004 2005 2006 2007 2008 2009e 2003 2004 2005 2006 2007 2008 2009e ©2009 ADS Alliance Data Systems, Inc.

  15. Slide 15: Alliance Data's Safe Harbor Statement/Forward-Looking Statements

    Q1 2009 ADS Roadshow 15 Alliance Data’s Safe Harbor Statement/Forward-Looking Statements • This presentation may contain 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 st

  16. Slide 16: Financial Measures

    Q1 2009 ADS Roadshow 16 Financial Measures • In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the Company presents financial measures that are non-GAAP measures, such as adjusted EBITDA, operating EBITDA and cash earnings per share. The Compa

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