Bread Financial Holdings, Inc. · NYSE:BFH
Bread Financial — Alliance Data Systems — Investor Presentation (January 2002)
16 slides from Bread Financial's investor presentation, Jan 18, 2002
Slide 1: Experienced Management Team
Experienced Management Team Name Responsibility Years of Experience Background Mike Parks Chairman, CEO and President First Data Ed Heffernan EVP and CFO First Data, Citigroup, CS First Boston Mike Beltz President, Transaction Services First Data Ivan Szeftel President, Credit Services Charming Shop
Slide 2: Growth, Visibility, Operating Leverage, Liquidity
• Organic Targets of "12%, 15%, 15%+" for Revenues, EBITDA and Cash Earnings per Share, respectively. • Tuck-in Acquisition Strategy to further enhance growth Visibility and Predictability • Strong Recurring Revenue Base • 95% of Revenue Retained Each Year • 3 - 5 Year Average Contract Term • Transa
Slide 3: Alliance Data Systems, January 2002
Alliance Data Systen ALLIANCE NYSE: ADS — January 2002
Slide 4: Safe Harbor Statement Forward Looking Statement
Safe Harbor Statement orward Looking Statement Statements contained in this presentation which are not historical facts may be forward-looking statements, as the term is defined in the Private Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology su
Slide 5: Alliance Data: Integration of Transaction Processing and Marketing Services
Alliance Data: Integration of Transaction Processing and Marketing Services « Build and Strengthen Loyal Relationships for Our Clients « Focus on 300 Specialized Relationships, not “Commodity” Items + Offer Full Suite of Services + Transaction Processing Services + Credit Services + Loyalty and Mark
Slide 6: Transaction Services
Transaction Services (50% of Company) Merchant (Acquiring) Issuer Services Utility Services Services (All Payment Types) (Private Label) (Both Requlated and Derequlated) Network Services Card Processing Merchant Bankcard Billing and Billing and Services Payment Payment Processing Processing Customer
Slide 7: Credit Services
Credit Services (25% of Company) *Private Label Credit Cards * Underwriting and Risk Management ° Merchant Processing * Receivables Financing
Slide 8: Marketing Services
Marketing Services (25% of Company) «Canada — Coalition Loyalty (Air Miles) Program ¢ U.S. — One-to-One Loyalty Programs — Database Marketing Services
Slide 9: Client logos
VICTORIA'S SECRET = ja) Bankof Montreal” SOUND| puGeN ENERGY] PHI (66) A EXPRESS DRESS BARN o |Georgia Natural Gas tunel) WZ gi loue <i Ssaz| ) SAFEWAY = JOSAFEWAY Hae o ng [Bath & Body Works|
Slide 10: Experienced Management Team
Experienced Management Team Years of Name Responsibility Experience Background Mike Parks Chairman, CEO and President 25 First Data Ed Heffernan EVP and CFO 16 First Data, Citigroup, CS First Boston Mike Beltz President, Transaction Services 19 First Data Ivan Szeftel President, Credit Services 19 C
Slide 11: Financial Themes
Financial Themes ALLIANCE - Growth - Visibility & Predictability - Operating Leverage - Liquidity
Slide 12: Growth
Growth Five Year Period EBITDA REVENUE $860 $770} to $865 $583 $451 1998 1999 2000 2001E 2002 1998 1999 2000 2001 2002 + Organic Targets of “12%, 15%, 15%+” for Revenues, EBITDA and Cash Earnings per Share, respectively. & + Tuck-in Acquisition Strategy to further enhance growth 10
Slide 13: Visibility and Predictability
Visibility and Predictability Strong Recurring Revenue Base 95% of Revenue Retained Each Year + 3-5 Year Average Contract Term Transaction Services (50%) + Primarily Non-Discretionary (“per click”) Credit Services (25%) + Full-Year plus of Stable Delinquencies + Lower Funding Costs as Loss Mitigant
Slide 14: Operating Leverage
Operating Leverage « Drivers Behind Margin Expansion * Increased Scale + Modest Capex (£ 5% of Revenues) + Deferred Revenue Model EBITDA Margin +1999 13.8% +2000 15.5% +2001 16.1% + Outlook — Targeting 50 bps Expansion Each Year 12
Slide 15: Liquidity
Liquidity + Focus on Investment Grade Profile + Debt / Operating EBITDA of _2.0x — 2.5x + Debt / Capital of 30% - 40% Robust Cash Flow ($MM) 2002 (est) + EBITDA $140-144 + Cash Flow Adjustment 20 + Operating EBITDA $160-164 + Less Capex (40 - 44) + Net Cash from Ops ($120 + Less: Interest / Taxes (5
Slide 16: Investment Highlights
Investment Highlights «Track Record of Growth «Compelling Growth Characteristics «Experienced Management Team ¢ Strong Financial Performance «Growth Visibility / Predictability «Operating Leverage « Liquidity 14
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