0001101215-21-000036 | 10-K | XBRL Viewer | Alliance Data Systems Corp

Print Document View Excel Document

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2020	Feb. 26, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-15749
Entity Registrant Name	ALLIANCE DATA SYSTEMS CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	31-1429215
Entity Address, Address Line One	3075 Loyalty Circle
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	729-4000
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	ADS
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		49,695,051
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001101215
Amendment Flag	false
Entity Public Float			$ 2.1

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 3,081.5	$ 3,874.4
Accounts receivable, net, less allowance for doubtful accounts ($4.0 and $3.4 at December 31, 2020 and 2019, respectively)	383.8	451.1
Credit card and loan receivables:
Credit card and loan receivables - restricted for securitization investors	11,208.5	13,504.2
Other credit card and loan receivables	5,575.9	5,958.9
Total credit card and loan receivables	16,784.4	19,463.1
Allowance for loan loss	(2,008.0)	(1,171.1)
Credit card and loan receivables, net	14,776.4	18,292.0
Credit card receivables held for sale		408.0
Inventories, net	164.3	218.0
Other current assets	534.9	268.4
Redemption settlement assets, restricted	693.5	600.8
Total current assets	19,634.4	24,112.7
Property and equipment, net	310.9	282.3
Right of use assets - operating	233.2	264.3
Deferred tax asset, net	359.2	45.2
Intangible assets, net	81.7	153.3
Goodwill	1,369.6	954.9
Other non-current assets	558.1	682.1
Total assets	22,547.1	26,494.8
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	328.2	300.8
Accrued expenses	444.7	327.8
Current operating lease liabilities	23.6	22.6
Current portion of deposits	6,553.9	6,942.4
Current portion of non-recourse borrowings of consolidated securitization entities	1,850.7	3,030.8
Current portion of long-term and other debt	101.4	101.4
Other current liabilities	220.9	338.3
Deferred revenue	898.5	807.9
Total current liabilities	10,421.9	11,872.0
Deferred revenue	105.5	114.1
Deferred tax liability, net		80.0
Long-term operating lease liabilities	276.4	291.7
Deposits	3,238.7	5,209.3
Non-recourse borrowings of consolidated securitization entities	3,859.2	4,253.2
Long-term and other debt	2,704.3	2,748.5
Other liabilities	419.5	337.7
Total liabilities	21,025.5	24,906.5
Commitments and contingencies (Note 18)
Stockholders' equity:
Common stock, $0.01 par value; authorized, 200.0 shares; issued, 117.1 and 115.0 shares at December 31, 2020 and 2019, respectively	1.2	1.1
Additional paid-in capital	3,427.2	3,257.7
Treasury stock, at cost, 67.4 shares at each of December 31, 2020 and 2019	(6,733.9)	(6,733.9)
Retained earnings	4,832.1	5,163.3
Accumulated other comprehensive loss	(5.0)	(99.9)
Total stockholders' equity	1,521.6	1,588.3
Total liabilities and stockholders' equity	$ 22,547.1	$ 26,494.8

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Accounts receivable, net, allowance for doubtful accounts (in dollars)	$ 4.0	$ 3.4
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	200.0	200.0
Common stock, issued shares	117.1	115.0
Treasury stock, shares	67.4	67.4

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues
Services	$ 116.9	$ 215.5	$ 295.4
Redemption, net	473.1	637.3	676.3
Finance charges, net	3,931.4	4,728.5	4,694.9
Total revenue	4,521.4	5,581.3	5,666.6
Operating expenses
Cost of operations (exclusive of depreciation and amortization disclosed separately below)	2,077.3	2,687.8	2,537.2
Provision for loan loss	1,266.2	1,187.5	1,016.0
General and administrative	105.7	150.6	162.5
Depreciation and other amortization	98.5	79.9	80.7
Amortization of purchased intangibles	85.3	96.2	112.9
Loss on extinguishment of debt		71.9
Total operating expenses	3,633.0	4,273.9	3,909.3
Operating income	888.4	1,307.4	1,757.3
Interest expense
Securitization funding costs	165.9	213.4	220.2
Interest expense on deposits	219.5	225.6	165.7
Interest expense on long-term and other debt, net	108.5	130.0	156.4
Total interest expense, net	493.9	569.0	542.3
Income from continuing operations before income taxes	394.5	738.4	1,215.0
Provision for income taxes	99.5	165.8	269.5
Income from continuing operations	295.0	572.6	945.5
(Loss) income from discontinued operations, net of taxes	(81.3)	(294.6)	17.6
Net income	$ 213.7	$ 278.0	$ 963.1
Basic income (loss) per share (Note 4):
Income from continuing operations (in dollars per share)	$ 6.17	$ 11.25	$ 17.24
(Loss) income from discontinued operations (in dollars per share)	(1.70)	(5.89)	0.32
Net income per share (in dollars per share)	4.47	5.36	17.56
Diluted income (loss) per share (Note 4):
Income from continuing operations (in dollars per share)	6.16	11.24	17.17
(Loss) income from discontinued operations (in dollars per share)	(1.70)	(5.78)	0.32
Net income per share (in dollars per share)	$ 4.46	$ 5.46	$ 17.49
Weighted average shares (Note 4):
Basic (in shares)	47.8	50.0	54.9
Diluted (in shares)	47.9	50.9	55.1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 213.7	$ 278.0	$ 963.1
Other comprehensive income:
Unrealized gain (loss) on securities available-for-sale	22.3	15.5	(3.1)
Tax (expense) benefit	(1.6)	(2.3)	1.1
Unrealized gain (loss) on securities available-for-sale, net of tax	20.7	13.2	(2.0)
Unrealized (loss) gain on cash flow hedges	(0.7)	0.1	(0.1)
Tax benefit	0.1
Unrealized (loss) gain on cash flow hedges, net of tax	(0.6)	0.1	(0.1)
Unrealized gain on net investment hedge		6.5	39.1
Tax expense		(1.6)	(9.5)
Unrealized gain on net investment hedge, net of tax		4.9	29.6
Foreign currency translation adjustments (inclusive of deconsolidation of $3.8 million and $26.8 million for the years ended December 31, 2020 and December 31, 2019, respectively, related to sale of businesses)	74.8	20.0	(25.4)
Other comprehensive income, net of tax	94.9	38.2	2.1
Total comprehensive income, net of tax	$ 308.6	$ 316.2	$ 965.2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Deconsolidation related to sale of businesses	$ 3.8	$ 26.8

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions	Common Stock	Preferred Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings Period of Adoption Adjustment	Retained Earnings	Accumulated Other Comprehensive Loss	Period of Adoption Adjustment	Total
Balance (Accounting Standards Update ASC 606) at Dec. 31, 2017					$ 9.6			$ 9.6
Balance (Accounting Standards Update ASU 2016-01) at Dec. 31, 2017					(1.5)			(1.5)
Balance at Dec. 31, 2017	$ 1.1		$ 3,099.8	$ (5,272.5)		$ 4,167.1	$ (140.2)		$ 1,855.3
Balance (in shares) at Dec. 31, 2017	112.8
Increase (Decrease) in Stockholders' Equity
Net income						963.1			963.1
Other comprehensive income							2.1		2.1
Stock-based compensation			80.8						80.8
Repurchases of common stock				(443.2)					(443.2)
Dividends and dividend equivalent rights declared						(125.9)			(125.9)
Other			(8.2)						(8.2)
Other (in shares)	0.2
Balance at Dec. 31, 2018	$ 1.1		3,172.4	(5,715.7)		5,012.4	(138.1)		2,332.1
Balance (in shares) at Dec. 31, 2018	113.0
Increase (Decrease) in Stockholders' Equity
Net income						278.0			278.0
Other comprehensive income							38.2		38.2
Stock-based compensation			54.5						54.5
Issuance of preferred stock			42.1	(42.1)
Issuance of preferred stock (in shares)		0.2
Conversion of preferred stock to common stock (in shares)	1.5	(0.2)
Repurchases of common stock				(976.1)					(976.1)
Dividends and dividend equivalent rights declared						(127.1)			(127.1)
Other			(11.3)						(11.3)
Other (in shares)	0.5
Balance (ASU 2016-13) at Dec. 31, 2019					$ (485.0)			$ (485.0)
Balance at Dec. 31, 2019	$ 1.1		3,257.7	(6,733.9)		5,163.3	(99.9)		1,588.3
Balance (in shares) at Dec. 31, 2019	115.0
Increase (Decrease) in Stockholders' Equity
Net income						213.7			213.7
Other comprehensive income							94.9		94.9
Stock-based compensation			21.3						21.3
Dividends and dividend equivalent rights declared						(59.9)			(59.9)
Common stock issued as consideration for acquired business	$ 0.1		149.1						149.2
Common stock issued as consideration for acquired business (in shares)	1.9
Other			(0.9)						(0.9)
Other (in shares)	0.2
Balance at Dec. 31, 2020	$ 1.2		$ 3,427.2	$ (6,733.9)		$ 4,832.1	$ (5.0)		$ 1,521.6
Balance (in shares) at Dec. 31, 2020	117.1

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended				12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.21	$ 0.21	$ 0.21	$ 0.63	$ 0.63	$ 0.57

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 213.7	$ 278.0	$ 963.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	183.8	249.3	487.3
Deferred income taxes	(222.8)	(186.1)	16.3
Provision for loan loss	1,266.2	1,187.5	1,016.0
Non-cash stock compensation	21.3	54.8	80.8
Amortization of deferred financing costs	36.5	43.4	47.3
Gain on sale of business	(13.7)	(512.2)
Loss on extinguishment of debt		71.9
Asset impairment charges	63.7	52.0
Change in other operating assets and liabilities, net of acquisitions and sales of businesses:
Change in deferred revenue	60.8	2.9	(17.5)
Change in accounts receivable	64.9	4.1	(93.0)
Change in accounts payable and accrued expenses	62.1	(255.0)	(93.7)
Change in other assets	145.4	(46.8)	(29.8)
Change in other liabilities	(50.3)	32.9	49.8
Originations of credit card and loan receivables held for sale			(4,799.0)
Sales of credit card and loan receivables held for sale			4,928.8
Other	51.1	241.0	198.5
Net cash provided by operating activities	1,882.7	1,217.7	2,754.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in redemption settlement assets	(40.7)	(9.5)	(42.2)
Change in credit card and loan receivables	1,783.5	(2,586.8)	(2,749.6)
Proceeds from sale of business	26.7	4,409.7
Payments for acquired businesses, net of cash and restricted cash	(266.8)	(6.7)
Proceeds from sale of credit card portfolios	289.5	2,061.8	1,153.5
Purchase of credit card portfolios		(924.8)
Proceeds from sale of real estate		15.1
Capital expenditures	(54.0)	(142.3)	(199.8)
Purchases of other investments	(40.4)	(20.2)	(89.5)
Maturities/sales of other investments	76.5	60.0	47.4
Other		4.5	8.2
Net cash provided by investing activities	1,774.3	2,860.8	(1,872.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under debt agreements	1,276.0	3,111.3	4,575.3
Repayments of borrowings	(1,320.5)	(5,981.8)	(4,893.0)
Non-recourse borrowings of consolidated securitization entities	2,419.2	4,851.8	3,714.6
Repayments/maturities of non-recourse borrowings of consolidated securitization entities	(4,095.7)	(5,219.0)	(4,871.0)
Net (decrease) increase in deposits	(2,370.0)	355.6	864.1
Payment of debt extinguishment costs		(46.1)
Payment of deferred financing costs	(18.8)	(45.4)	(25.8)
Proceeds from issuance of common stock	2.8	12.4	17.6
Dividends paid	(60.6)	(127.4)	(125.2)
Purchase of treasury shares		(976.1)	(443.2)
Other	1.1	(27.0)	(31.3)
Net cash used in financing activities	(4,166.5)	(4,091.7)	(1,217.9)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	14.6	3.6	(12.0)
Change in cash, cash equivalents and restricted cash	(494.9)	(9.6)	(347.0)
Cash, cash equivalents and restricted cash at beginning of year	3,958.1	3,967.7	4,314.7
Cash, cash equivalents and restricted cash at end of year	3,463.2	3,958.1	3,967.7
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	487.6	671.9	719.8
Income taxes paid, net	$ 267.5	$ 1,070.6	$ 234.0

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

12 Months Ended

Dec. 31, 2020

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of the Business—Alliance Data Systems Corporation (“ADSC” or, including its consolidated subsidiaries and variable interest entities, the “Company”) is a leading provider of data-driven marketing, loyalty and payment solutions serving large, consumer-based industries. The Company creates and deploys customized solutions that measurably change consumer behavior while driving business growth and profitability for our clients and brand partners. The Company operates in two reportable segments: LoyaltyOne^® and Card Services. LoyaltyOne provides coalition and short-term loyalty programs through the Canadian AIR MILES^® Reward Program and BrandLoyalty Group B.V. (“BrandLoyalty”). Card Services is a comprehensive provider of market-leading private label, co-brand, general purpose and business credit card programs, digital payments, including Bread^®, and Comenity-branded financial services.

Basis of Presentation—The Company’s financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation. The Company’s consolidated financial statements have been presented with its former Epsilon^® segment as a discontinued operation. See Note 7, “Discontinued Operations,” for more information.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation—The accompanying consolidated financial statements include the accounts of ADSC and all subsidiaries in which the Company has a controlling financial interest. Controlling financial interest is determined either by a majority voting interest and the absence of substantive third party participating rights or in the case of variable interest entities, by whether ADSC has power and potentially significant economic exposure through its direct and indirect interests. All intercompany transactions have been eliminated.

In accordance with Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing,” and ASC 810, “Consolidation,” the Company is the primary beneficiary of certain trusts. The Company, through its involvement in the activities of these trusts, has the power to direct the activities that most significantly impact the economic performance of such trusts, and the obligation (or right) to absorb losses (or receive benefits) of the trusts that could potentially be significant. As such, the Company consolidates these trusts in its consolidated financial statements.

For investments in any entities in which the Company owns 50% or less of the outstanding voting stock but in which the Company has significant influence over operating and financial decisions, the Company applies the equity method of accounting.

Cash and Cash Equivalents—The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable, net—Accounts receivable, net consist primarily of amounts receivable from customers, which are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated credit losses inherent in its accounts receivable. The Company analyzes the appropriateness of its allowance for doubtful accounts based on its assessment of various factors, including customer-specific experience, the age of the accounts receivable balance, customer creditworthiness, current economic trends, and changes in its customer payment terms and collection trends. Account balances are charged-off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote.

Credit Card and Loan Receivables— Credit card and loan receivables consist of credit card and loan receivables held for investment. The Company sells a majority of the credit card receivables originated by Comenity Bank and by Comenity Capital Bank to master trusts, which are restricted for securitization investors. All new originations of credit card and loan receivables are deemed to be held for investment at origination because management has the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, management considers the short average life and homogenous nature of the Company’s credit card and loan receivables. In assessing whether these credit card and loan receivables continue to be held for investment, management also considers capital levels and scheduled maturities of funding instruments used. Management believes that the assertion regarding its intent

and ability to hold credit card and loan receivables for the foreseeable future can be made with a high degree of certainty given the maturity distribution of the Company’s money market deposits, certificates of deposit and other funding instruments; the historic ability to replace maturing certificates of deposits and other borrowings with new deposits or borrowings; and historic credit card and loan payment activity. Due to the homogenous nature of the Company’s credit card and loan receivables, amounts are classified as held for investment on an individual client portfolio basis.

Credit Card and Loan Receivables Held for Sale—Credit card and loan receivables held for sale are determined on an individual client portfolio basis. The Company carries these assets at the lower of aggregate cost or fair value. The fair value of the credit card and loan receivables held for sale is determined on an aggregate basis. The Company continues to recognize finance fees on these credit card and loan receivables on the accrual basis. Cash flows associated with credit card and loan portfolios that are purchased with the intent to sell are included in cash flows from operating activities. Cash flows associated with credit card and loan receivables originated or purchased for investment are classified as investing cash flows, regardless of a subsequent change in intent.

Transfers of Financial Assets—The Company accounts for transfers of financial assets under ASC 860, “Transfers and Servicing,” as either sales or financings. Transfers of financial assets that result in sales accounting are those in which (1) the transfer legally isolates the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee’s right to pledge or exchange the assets and provides more than a trivial benefit to the transferor and (3) the transferor does not maintain effective control over the transferred assets. If the transfer of financial assets does not meet these criteria, the transfer is accounted for as a financing. Transfers of financial assets that are treated as sales are removed from the Company’s accounts with any realized gain or loss reflected in the consolidated statements of income during the period of sale.

Allowance for Loan Loss— Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Measurement of Credit Losses on Financial Instruments.” Under this standard, referred to as Current Expected Credit Loss (“CECL”), the Company utilizes a financial instrument impairment model to establish an allowance based on expected losses over the life of the exposure rather than a model based on an incurred loss approach, which was the Company’s historic accounting prior to January 1, 2020.

Under CECL, the allowance for loan loss is an estimate of expected credit losses, measured over the estimated life of its credit card and loan receivables that considers forecasts of future economic conditions in addition to information about past events and current conditions. The estimate under the CECL model is significantly influenced by the composition, characteristics and quality of the Company’s portfolio of credit card and loan receivables, as well as the prevailing economic conditions and forecasts utilized. The estimate of the allowance for loan loss includes an estimate for uncollectible principal as well as unpaid interest and fees. Charge-offs of principal amounts, net of recoveries are deducted from the allowance. Charge-offs for unpaid interest and fees as well as any adjustments to the allowance associated with unpaid interest and fees are recorded as a reduction to finance charges, net. The allowance is maintained through an adjustment to the provision for loan loss and is evaluated for appropriateness.

In estimating its allowance for loan loss, for each identified group, management utilizes various models and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. These models utilize historical data and applicable macroeconomic variables with statistical analysis and behavioral relationships with credit performance. The Company’s quantitative estimate of expected credit losses under CECL is impacted by certain forecasted economic factors. The Company considers the forecast used to be reasonable and supportable over the estimated life of the credit card and loan receivables, with no reversion period. In addition to the quantitative estimate of expected credit losses, the Company also incorporates qualitative adjustments for certain factors such as Company-specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the allowance for loan loss reflects the Company’s best estimate of current expected credit losses. As permitted by ASC 326, “Financial Instruments—Credit Losses,” the Company excludes unbilled finance charges from its amortized cost basis of credit card and loan receivables. See Note 8, “Credit Card and Loan Receivables,” for more information about the Company’s allowance for loan loss.

Inventories, net—Inventories, net are stated at the lower of cost and net realizable value and valued primarily on a first-in-first-out basis. The Company records valuation adjustments to its inventories if the cost of inventory exceeds the

amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future market conditions and an analysis of historical experience.

Redemption Settlement Assets, Restricted—The cash and investments related to the redemption fund for the AIR MILES Reward Program are subject to a security interest which is held in trust for the benefit of funding redemptions by collectors. These assets are restricted to funding rewards for the collectors by certain of the Company’s sponsor contracts. Investments in equity securities are stated at fair value, with holding gains and losses recognized through net income. Investments in debt securities are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive loss, as the investments are classified as available-for-sale.

Property and Equipment—Furniture, equipment, computer software and development, buildings and leasehold improvements are carried at cost, less accumulated depreciation and amortization. Land is carried at cost and is not depreciated. Depreciation and amortization for furniture, equipment and buildings are computed on a straight-line basis, using estimated lives ranging from one to eleven years. Software development is capitalized in accordance with ASC 350-40, “Intangibles – Goodwill and Other – Internal–Use Software,” and is amortized on a straight-line basis over the expected benefit period, which ranges from three to seven years. Leasehold improvements are amortized over the remaining lives of the respective leases or the remaining useful lives of the improvements, whichever is shorter. Long-lived assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows. See Note 13, “Property and Equipment,” for additional information.

Goodwill—Goodwill is not amortized, but is reviewed at least annually for impairment or more frequently if circumstances indicate that an impairment is probable, using qualitative or quantitative analysis.

Intangible Assets—The Company’s identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their respective estimated useful lives. Definite-lived intangible assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows. Indefinite-lived intangible assets are not amortized, but are reviewed at least annually for impairment or more frequently if circumstances indicate that an impairment is probable, using qualitative or quantitative analysis.

Income Taxes— Income tax returns are filed in federal, state, local and foreign jurisdictions as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.

Deferred income tax assets and liabilities are computed on differences between the financial statement bases and tax bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities associated with components of other comprehensive income are charged or credited directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets when realization is less than more-likely-than-not.

Liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on the technical merits of the positions. Additionally, liabilities may be established for uncertain tax positions when, in our judgment, the more-likely-than-not threshold is met, but the position does not rise to the level of highly certain based upon the technical merits of the position. Estimated interest and penalties related to uncertain tax positions are included as a component of income tax expense.

The Company uses the portfolio approach relating to the release of stranded tax effects recorded in accumulated other comprehensive loss. Under the portfolio approach, the net unrealized gains or losses recorded in accumulated other comprehensive loss would be eliminated only on the date the entire portfolio of available-for-sale securities is sold or otherwise disposed of.

Derivative Instruments—The Company uses derivatives to manage its exposure to various financial risks. The Company does not enter into derivatives for trading or other speculative purposes. Certain derivatives used to manage the Company’s exposure to foreign currency exchange rate movements are not designated as hedges and do not qualify for hedge accounting.

Derivatives Designated as Hedging Instruments—The Company assesses both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in the hedging transaction, including net investment hedges, have been highly effective in offsetting changes in the cash flows or remeasurement of the hedged items and whether the derivatives may be expected to remain highly effective in future periods. The Company discontinues hedge accounting prospectively when (1) it determines that the derivative is no longer highly effective in offsetting changes in cash flow of the hedged item; (2) the derivative expires or is sold, terminated, or exercised; (3) it is no longer probable that the forecasted transaction will occur; or (4) it determines that designating the derivative as a hedging instrument is no longer appropriate. Changes in the fair value of derivative instruments designated as hedging instruments, excluding any ineffective portion, are recorded in other comprehensive income (loss) until the hedged transactions affect net income. The ineffective portion of this hedging instrument is recognized through net income when the ineffectiveness occurs.

Derivatives not Designated as Hedging Instruments—Certain foreign currency exchange forward contracts are not designated as hedges as they do not meet the specific hedge accounting requirements of ASC 815, “Derivatives and Hedging.” Changes in the fair value of the derivative instruments not designated as hedging instruments are recorded in the consolidated statements of income as they occur.

The Company’s derivative instruments were immaterial to the consolidated balance sheets and statements of income for the periods presented.

Other Investments—Other investments consist of marketable securities and U.S. Treasury bonds and are included in other current assets and other non-current assets in the Company’s consolidated balance sheets. Investments in equity securities are stated at fair value, with holding gains and losses recognized through net income. Investments in debt securities are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive loss, as the investments are classified as available-for-sale.

Revenue Recognition—The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” The Company recognizes revenues when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. In that determination, under ASC 606, the Company follows a five-step model that includes: (1) determination of whether a contract, an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied.

See Note 3, “Revenue,” for more information about the Company’s revenue and the associated timing and basis of revenue recognition.

Earnings Per Share—Basic earnings per share is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of options or other dilutive securities. Diluted earnings per share is based on the weighted average number of common and potentially dilutive common shares (dilutive stock options, unvested restricted stock units and other dilutive securities outstanding during the year) pursuant to the treasury stock method. For periods with participating securities, the Company computes earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders.

Currency Translation—The assets and liabilities of the Company’s subsidiaries outside the U.S. are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates, primarily from Canadian dollars and Euros. Income and expense items are translated at the average exchange rates prevailing during the period. Gains and losses resulting from currency transactions are recognized currently in income and those resulting from translation of financial

statements are included in accumulated other comprehensive loss. The Company recognized net foreign transaction losses of $0.5 million for the year ended December 31, 2020, gains of $1.3 million for the year ended December 31, 2019, and gains of $0.6 million for the year ended December 31, 2018.

Leases —The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease right-of-use assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. As the implicit rate is typically not readily determinable in the Company’s lease agreements, the Company uses its incremental borrowing rate as of the lease commencement date to determine the present value of the lease payments. The incremental borrowing rate is based on the Company’s specific rate of interest to borrow on a collateralized basis, over a similar term and in a similar economic environment as the lease. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recognized on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Additionally, the Company accounts for lease and nonlease components as a single lease component for its identified asset classes. As of December 31, 2020, the Company does not have any finance leases. Similar to other long-lived assets, right-of-use assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows. See Note 12, “Leases,” for additional information.

Marketing and Advertising Costs—The Company participates in various marketing and advertising programs with certain clients. The cost of marketing and advertising programs is expensed in the period incurred. The Company has recognized marketing and advertising expenses, including on behalf of its clients, of $165.7 million, $229.4 million and $244.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Stock Compensation Expense—The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation.” Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized ratably over the requisite service period.

Management Estimates—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Standards

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 eliminates certain exceptions within ASC 740, “Income Taxes,” and clarifies certain aspects of ASC 740 to promote consistency among reporting entities. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. This ASU is elective and is effective upon issuance for all entities. The Company is evaluating the impact that adoption of ASU 2020-04 will have on its consolidated financial statements.

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” or ASC 326. This standard, referred to as CECL, required entities to utilize a financial instrument impairment model to establish an allowance based on expected losses over the life of the exposure rather than a model based on an incurred loss approach. Estimates of expected credit losses under the CECL model are based on relevant information about past events, current conditions, and reasonable and supportable forward-looking forecasts regarding the collectability of the loan portfolio. The Company adopted CECL on January 1, 2020 and recorded an increase in its allowance for loan loss at adoption of $644.0 million, which was recorded through a cumulative-effect adjustment to retained earnings, net of taxes. CECL also expanded the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating its allowance for loan loss. See Note 8, “Credit Card and Loan Receivables,” for the Company’s CECL disclosures. In addition, CECL modified the impairment model for available-for-sale debt securities and provided for a simplified accounting model for purchased financial assets with credit deterioration since their origination. CECL impacts the Company’s valuation of its accounts receivable and available-for-sale debt securities. The Company’s adoption of CECL with respect to accounts receivable and available-for-sale debt securities did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements from ASC 820, “Fair Value Measurement.” The Company’s adoption of this standard on January 1, 2020 did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” ASU 2018-15 requires customers in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40, “Intangibles—Goodwill and Other—Internal-Use Software,” to determine which implementation costs may be capitalized. The amendments in ASU 2018-15 can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 on January 1, 2020 on a prospective basis and the adoption did not have a material impact on its consolidated financial statements.

REVENUE

12 Months Ended

Dec. 31, 2020

REVENUE

REVENUE

3. REVENUE

Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company’s contracts with its customers state the terms of sale, including the description, quantity, and price of the product or service purchased. Payment terms can vary by contract, but the period between invoicing and when payment is due is not significant. Taxes assessed on revenue-producing transactions are excluded from revenues.

The Company’s products and services are reported under two segments—LoyaltyOne and Card Services, as shown below. The following tables present revenue disaggregated by major source, as well as geographic region based on the location of the subsidiary that generally correlates with the location of the customer:


					Corporate/
Year Ended December 31, 2020	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Major Source:

Coalition loyalty program	$	262.5	$	—	$	—	$	262.5
Short-term loyalty programs		487.7		—		—		487.7
Servicing fees, net		—		(174.9)		—		(174.9)
Other		1.8		—		0.1		1.9
Revenue from contracts with customers	$	752.0	$	(174.9)	$	0.1	$	577.2

Finance charges, net		—		3,931.4		—		3,931.4
Investment income		12.8		—		—		12.8
Total	$	764.8	$	3,756.5	$	0.1	$	4,521.4


					Corporate/
Year Ended December 31, 2019	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Major Source:

Coalition loyalty program	$	290.1	$	—	$	—	$	290.1
Short-term loyalty programs		635.5		—		—		635.5
Servicing fees, net		—		(180.7)		—		(180.7)
Other		94.9		—		0.4		95.3
Revenue from contracts with customers	$	1,020.5	$	(180.7)	$	0.4	$	840.2

Finance charges, net		—		4,728.5		—		4,728.5
Investment income		12.6		—		—		12.6
Total	$	1,033.1	$	4,547.8	$	0.4	$	5,581.3


					Corporate/
Year Ended December 31, 2018	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Major Source:

Coalition loyalty program	$	352.3	$	—	$	—	$	352.3
Short-term loyalty programs		613.8		—		—		613.8
Servicing fees, net		—		(97.3)		—		(97.3)
Other		90.7		—		0.6		91.3
Revenue from contracts with customers	$	1,056.8	$	(97.3)	$	0.6	$	960.1

Finance charges, net		—		4,694.9		—		4,694.9
Investment income		11.6		—		—		11.6
Total	$	1,068.4	$	4,597.6	$	0.6	$	5,666.6


					Corporate/
Year Ended December 31, 2020	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Geographic Region:

United States	$	11.1	$	3,756.5	$	0.1	$	3,767.7
Canada		286.9		—		—		286.9
Europe, Middle East and Africa		332.6		—		—		332.6
Asia Pacific		80.5		—		—		80.5
Other		53.7		—		—		53.7
Total	$	764.8	$	3,756.5	$	0.1	$	4,521.4


					Corporate/
Year Ended December 31, 2019	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Geographic Region:

United States	$	40.1	$	4,547.8	$	0.4	$	4,588.3
Canada		352.2		—		—		352.2
Europe, Middle East and Africa		449.1		—		—		449.1
Asia Pacific		121.7		—		—		121.7
Other		70.0		—		—		70.0
Total	$	1,033.1	$	4,547.8	$	0.4	$	5,581.3


					Corporate/
Year Ended December 31, 2018	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Geographic Region:

United States	$	23.1	$	4,597.6	$	0.6	$	4,621.3
Canada		411.3		—		—		411.3
Europe, Middle East and Africa		463.2		—		—		463.2
Asia Pacific		122.0		—		—		122.0
Other		48.8		—		—		48.8
Total	$	1,068.4	$	4,597.6	$	0.6	$	5,666.6

LoyaltyOne

LoyaltyOne provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty. The AIR MILES Reward Program is a coalition loyalty program for sponsors, who pay LoyaltyOne a fee per AIR MILES reward mile issued, in return for which LoyaltyOne provides all marketing, customer service, rewards and redemption management. BrandLoyalty designs, implements, conducts and evaluates innovative and tailor-made short-term loyalty programs for grocers worldwide.

Total consideration from the issuance of AIR MILES reward miles is allocated to three performance obligations: redemption, service, and brand, based on a relative standalone selling price basis. Because the standalone selling price is not directly observable for the three performance obligations, the Company estimates the standalone selling price for the redemption and the service performance obligations based on cost plus a reasonable margin. The Company estimates the standalone selling price of the brand performance obligation using a relief from royalty approach. Accordingly, management determines the estimated standalone selling price by considering multiple inputs and methods, including discounted cash flows and available market data in consideration of applicable margins and royalty rates to utilize. The number of AIR MILES reward miles issued and redeemed are factored into the estimates, as management estimates the standalone selling prices and volumes over the term of the respective agreements in order to determine the allocation of consideration to each performance obligation delivered. The redemption performance obligation incorporates the expected number of AIR MILES reward miles to be redeemed, and therefore, the amount of redemption revenue

recognized is subject to management’s estimate of breakage, or those AIR MILES reward miles estimated to be unredeemed by the collector base.

Redemption revenue is recognized at a point in time, as the AIR MILES reward miles are redeemed. For the fulfillment of certain rewards where the AIR MILES Reward Program does not control the goods or services before they are transferred to the collector, revenue is recorded on a net basis. Service revenue is recognized over time using a time-elapsed output method, the estimated life of an AIR MILES reward mile. Revenue from the brand is recognized over time, using an output method, when an AIR MILES reward mile is issued. Revenue associated with both the service and brand is included in service revenue in the Company’s consolidated statements of income.

The amount of revenue recognized in a period is subject to the estimate of breakage and the estimated life of an AIR MILES reward mile. Breakage and the life of an AIR MILES reward mile are based on management’s estimate after viewing and analyzing various historical trends including vintage analysis, current run rates and other pertinent factors, such as the impact of macroeconomic factors and changes in the program structure. For the years ended December 31, 2018, 2019 and 2020, the Company’s breakage rate was 20%. For the years ended December 31, 2018, 2019 and 2020, the Company’s estimated life of a mile was 38 months.

The short-term loyalty programs typically last between 6 and 20 weeks, depending on the nature of the program, with contract terms usually less than one year in length. These programs are tailored for the specific retailer client and are designed to reward key customer segments based on their spending levels during defined campaign periods. Revenue is recognized at the point in time control passes from BrandLoyalty to the retailer.

Contract Liabilities. The Company records a contract liability when cash payments are received in advance of its performance, which applies to the service and redemption of an AIR MILES reward mile and the reward products for its short-term loyalty programs.

A reconciliation of contract liabilities for the AIR MILES Reward Program is as follows:


	Deferred Revenue
	Service		Redemption		Total

	(in millions)
Balance at January 1, 2019	$	248.0	$	627.3	$	875.3
Cash proceeds		192.0		313.3		505.3
Revenue recognized ⁽¹⁾		(193.7)		(309.2)		(502.9)
Other		—		0.6		0.6
Effects of foreign currency translation		12.3		31.4		43.7
Balance at December 31, 2019	$	258.6	$	663.4	$	922.0
Cash proceeds		173.1		286.2		459.3
Revenue recognized ⁽¹⁾		(188.8)		(211.5)		(400.3)
Other		—		1.4		1.4
Effects of foreign currency translation		4.3		17.3		21.6
Balance at December 31, 2020	$	247.2	$	756.8	$	1,004.0
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	$	141.7	$	756.8	$	898.5
Deferred revenue (non-current)	$	105.5	$	—	$	105.5

(1)

Reported on a gross basis herein.

The deferred redemption obligation associated with the AIR MILES Reward Program is effectively due on demand from the collector base, thus the timing of revenue recognition is based on the redemption by the collector. Service revenue is amortized over the expected life of a mile, with the deferred revenue balance expected to be recognized into revenue in the amount of $141.7 million in 2021, $75.1 million in 2022, $29.5 million in 2023, and $0.9 million in 2024.

Additionally, contract liabilities for the Company’s short-term loyalty programs are recognized in other current liabilities in the Company’s consolidated balance sheets. In 2020, the beginning balance as of January 1, 2020 was $122.8 million and the closing balance as of December 31, 2020 was $66.9 million, with the change due to revenue recognized of approximately $375.9 million, offset in part by cash payments received in advance of program performance revenue during the year ended December 31, 2020. In 2019, the beginning balance as of January 1, 2019 was $110.2 million and the closing balance as of December 31, 2019 was $122.8 million, with the change due to cash payments received in advance of program performance, offset in part by revenue recognized of approximately $526.6 million during the year ended December 31, 2019.

Card Services

Card Services is a comprehensive provider of market-leading private label, co-brand, general purpose and business credit card programs, digital payments, including Bread, and Comenity-branded financial services. Card Services provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services.

Finance charges, net. Finance charges, net represents revenue earned on customer accounts owned by the Company, and is recognized in the period in which it is earned. The Company recognizes earned finance charges, interest income and fees on credit card and loan receivables in accordance with the contractual provisions of the credit arrangements, which are within the scope of ASC 310, “Receivables.” Interest and fees continue to accrue on all accounts, except in limited circumstances, until the account balance and all related interest and other fees are paid or charged-off, in the month during which an account becomes 180 days delinquent for credit card receivables or 120 days for installment loan receivables. Charge-offs for unpaid interest and fees as well as any adjustments to the allowance associated with unpaid interest and fees are recorded as a reduction to finance charges, net. Pursuant to ASC 310-20, “Receivables - Nonrefundable Fees and Other Costs,” direct loan origination costs on credit card receivables are deferred and amortized on a straight-line basis over a one-year period or over the life of the loan for loan receivables and recorded as a reduction to finance charges, net. As of December 31, 2020 and 2019, the remaining unamortized deferred costs related to loan origination were $38.0 million and $47.1 million, respectively.

Servicing fees, net. Servicing fees, net represents revenue earned from retailers and cardholders from processing and servicing accounts, and is recognized as such services are performed. Our credit card program agreements may also provide for payments to the retailer based on purchased volume or if certain contractual incentives are met, such as if the economic performance of the program exceeds a contractually defined threshold. These amounts are recorded as a reduction of revenue.

Revenue earned from retailers primarily consists of merchant and interchange fees, which are transaction fees charged to the merchant for the processing of credit card transactions. Merchant and interchange fees are recognized at a point in time upon the cardholder purchase.

Revenue earned from cardholders primarily consists of monthly fees from the purchase of certain payment protection products purchased by our cardholders. The fees are based on the average cardholder account balance, and these products can be cancelled at any time by the cardholder. Revenue is recognized over time using a time-elapsed output method.

Contract Costs. The Company recognizes an asset for the incremental costs of obtaining or fulfilling a contract with the retailer to the extent it expects to recover those costs, in accordance with ASC 340-40. Contract costs are deferred and amortized on a straight-line basis that is consistent with the transfer of services, which is generally the term of the contract. Depending on the nature of the contract costs, the amortization is recorded as a reduction to revenue, or costs of operations, in the Company’s consolidated statements of income. As of December 31, 2020 and 2019, the remaining unamortized contract costs were $311.1 million and $406.8 million, respectively, and are included in other current assets and other non-current assets in the Company’s consolidated balance sheets.

Amortization of contract costs recorded as a reduction to revenue totaled $65.3 million, $71.8 million and $68.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Amortization of contract costs recorded to

cost of operations expense totaled $11.9 million, $11.9 million and $9.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The Company performs an impairment assessment when events or changes in circumstances indicate that the carrying amount of contract costs may not be recoverable. Due to deteriorated economic conditions from COVID-19 resulting in retail store closures and a significant decline in credit sales, the Company’s impairment assessments for certain of its Card Services deferred contract costs resulted in asset impairment charges of $38.1 million that are included in cost of operations in its consolidated statement of income for the year ended December 31, 2020. No impairment related to deferred contract costs was incurred during the years ended December 31, 2019 and 2018.

Practical Expedients

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which the Company has the right to invoice for services performed.

The Company has elected the practical expedient from ASC 340-40 with respect to contract costs, and expenses the incremental costs as incurred for those costs that would otherwise be recognized with an amortization period of one year or less. These costs are recorded to cost of operations expense in the Company’s consolidated statements of income.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2020

EARNINGS PER SHARE

EARNINGS PER SHARE

4. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net income per share of common stock for the periods indicated:


	Years Ended December 31,
	2020		2019		2018

	(in millions, except per share amounts)
Basic income per share:
Numerator:
Income from continuing operations	$	295.0	$	572.6	$	945.5
Less: Dividends declared on preferred stock		—		2.8		—
Less: Allocation of undistributed earnings		—		6.8		—
Income from continuing operations - basic		295.0		563.0		945.5
(Loss) income from discontinued operations, net of tax		(81.3)		(294.6)		17.6
Net income - basic	$	213.7	$	268.4	$	963.1

Denominator:
Weighted average shares, basic		47.8		50.0		54.9

Basic income (loss) attributable to common stockholders per share:
Income from continuing operations	$	6.17	$	11.25	$	17.24
(Loss) income from discontinued operations	$	(1.70)	$	(5.89)	$	0.32
Net income per share	$	4.47	$	5.36	$	17.56

Diluted income per share ⁽¹⁾:
Numerator:
Income from continuing operations	$	295.0	$	572.6	$	945.5
(Loss) income from discontinued operations, net of tax		(81.3)		(294.6)		17.6
Net income	$	213.7	$	278.0	$	963.1

Denominator:
Weighted average shares, basic		47.8		50.0		54.9
Weighted average effect of dilutive securities:
Shares from assumed conversion of preferred stock		—		0.8		—
Net effect of dilutive stock options and unvested restricted stock ⁽²⁾		0.1		0.1		0.2
Denominator for diluted calculation		47.9		50.9		55.1

Diluted income (loss) attributable to common stockholders per share:
Income from continuing operations	$	6.16	$	11.24	$	17.17
(Loss) income from discontinued operations	$	(1.70)	$	(5.78)	$	0.32
Net income per share	$	4.46	$	5.46	$	17.49

(1)	Computed using the if-converted method, as the result was more dilutive.

(2)	For the years ended December 31, 2020, 2019 and 2018, a de minimis amount of restricted stock units was excluded from each calculation of weighted average dilutive common shares as the effect would have been anti-dilutive.

On April 25, 2019, the Company entered into an exchange agreement with ValueAct Holdings, L.P. pursuant to which ValueAct exchanged an aggregate of 1,500,000 shares of the Company’s common stock for an aggregate of 150,000 shares of Series A Non-Voting Convertible Preferred Stock (“preferred stock”). In October 2019, ValueAct converted all 150,000 shares of preferred stock back to common stock.

For the year ended December 31, 2019, the Company’s calculation of basic and diluted EPS was computed using the two-class method for those periods in which participating securities were outstanding. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings.

ACQUISITIONS

12 Months Ended

Dec. 31, 2020

ACQUISITIONS

ACQUISITIONS

5. ACQUISITIONS

2020 Acquisitions:

Bread

On September 28, 2020, the Company acquired 3.5 million preferred Series D Shares of Lon Inc., a Delaware corporation (“Bread”), for approximately $25.0 million, which represented an approximate 6% ownership interest in Bread. Bread is a technology-driven digital payments company, offering an omnichannel solution for retailers and platform capabilities to bank partners. On December 3, 2020, the Company acquired the remaining interest in Bread. In accordance with ASC 805, the Company’s approximate 6% interest was remeasured at fair value when control of Bread was obtained on December 3, 2020; no gain or loss was recognized on the remeasurement.

Consideration for the 100% ownership of Bread consisted of cash of $275.0 million, equity of $149.2 million with the issuance of 1.9 million shares of the Company’s common stock, and deferred cash consideration of $75.0 million due December 2021, subject to customary closing purchase price adjustments. Consideration, net of cash and restricted cash acquired, was $491.0 million.

The following table summarizes the allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed in the Bread transaction as of the acquisition date, net of cash acquired:


	As of December 3, 2020
	(in millions)
Installment loan receivables	$	111.7
Accounts receivable		0.2
Other current assets		0.6
Property and equipment		0.3
Developed technology		90.7
Right of use assets - operating		3.6
Deferred tax asset, net		7.0
Intangible assets		11.3
Goodwill		369.6
Total assets acquired		595.0

Accounts payable		2.0
Accrued expenses		2.9
Operating lease liabilities		3.5
Non-recourse borrowings of consolidated securitization entities		95.6
Total liabilities assumed		104.0

Net assets acquired, net of cash and restricted cash	$	491.0

The goodwill resulting from the acquisition was not deductible for tax purposes. Bread utilizes certain statutory trusts to securitize its installment loan receivables. As part of its acquisition, the Company acquired $111.7 million of installment loan receivables restricted for securitization investors. In addition, the Company assumed two warehouse facilities of $95.6 million utilized to fund securitized loan receivables. See Note 17, “Debt,” for more information.

2019 Acquisitions:

On February 7, 2019, the Company acquired certain assets as well as the assembled workforce and related office lease agreements of blispay inc. (“Blispay”), a financial technology company, for cash consideration of $6.7 million, and a $1.0 million limited guarantee was issued by the Company as part of the transaction. The acquisition was determined to constitute a business combination under ASC 805, “Business Combinations.” Total assets acquired were $7.3 million, including $5.0 million of capitalized software and $2.3 million of goodwill, with the fair value of the guarantee determined to be approximately $0.6 million on the acquisition date.

DISPOSITION

12 Months Ended

Dec. 31, 2020

DISPOSITION

DISPOSITION

6. DISPOSITION

On January 10, 2020, the Company sold Precima^®, a provider of retail strategy and customer data applications and analytics, to Nielsen Holdings plc for total consideration of $43.8 million. The purchase and sale agreement provided for $10.0 million in contingent consideration based upon the occurrence of specified events and performance of the business, with two earnout determinations in September 2020 and September 2021, respectively. In September 2020, the Company received cash of $5.0 million upon the earnout determination date. At December 31, 2020, the Company estimated the fair value of the remaining contingent purchase price at approximately $1.5 million, which is included in the total consideration below. Precima was included in the Company’s LoyaltyOne segment. The pre-tax gain was recorded in cost of operations in the Company’s consolidated statements of income.


	January 10,
	2020
	(in millions)
Total consideration ⁽¹⁾	$	43.8
Net carrying value of assets and liabilities (including other comprehensive income)		26.8
Allocation of goodwill		3.2
Strategic transaction costs		5.8
Pre-tax gain on sale of business, net of strategic transaction costs	$	8.0

(1)	Consideration as defined included cash associated with the sold Precima entities, which was $10.8 million.

DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2020

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

7. DISCONTINUED OPERATIONS

Effective April 12, 2019, the Company entered into a definitive agreement to sell its Epsilon segment to Publicis Groupe S.A. for $4.4 billion in cash, subject to certain specified adjustments. Beginning in the first quarter of 2019, Epsilon met the criteria set forth in ASC 205-20, “Presentation of Financial Statements — Discontinued Operations.”

The sale of Epsilon was completed on July 1, 2019, and the pre-tax gain is shown in the table below.


	July 1,
	2019
	(in millions)
Consideration received ⁽¹⁾	$	4,451.9
Net carrying value of assets and liabilities (including other comprehensive income)		3,939.7
Pre-tax gain on deconsolidation	$	512.2

(1)	Consideration as defined included cash associated with the sold Epsilon entities, which was $42.2 million.

The Company recorded transaction costs of approximately $79.0 million for the year ended December 31, 2019 and recorded an after-tax loss on sale of $252.1 million, which is included in loss from discontinued operations, net of taxes.

Following the sale of Epsilon, Card Services has continued its existing contractual relationships with Epsilon for digital marketing services.

The following table summarizes the results of discontinued operations for the periods presented:



	Years Ended December 31,
	2020		2019		2018

	(in millions)
Revenue	$	—	$	999.6	$	2,175.1
Cost of operations (exclusive of depreciation and amortization disclosed separately below)		110.0		993.9		1,744.4
Depreciation and other amortization		—		29.7		115.4
Amortization of purchased intangibles		—		43.5		178.3
Interest expense ⁽¹⁾		—		64.1		128.3
Gain on sale of Epsilon		—		(512.2)		—
Income before (benefit) provision from income taxes		(110.0)		380.6		8.7
(Benefit) provision for income taxes		(28.7)		675.2		(8.9)
(Loss) income from discontinued operations, net of taxes	$	(81.3)	$	(294.6)	$	17.6

(1)

The Company’s credit agreement, as amended, provided that upon consummation of the sale of Epsilon, a mandatory payment of $500.0 million of the revolving credit facility was required and all of the Company’s outstanding senior notes were required to be redeemed. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s $500.0 million mandatory repayment of its revolving line of credit and redemption of its $1.9 billion in senior notes outstanding.

For the year ended December 31, 2020, loss from discontinued operations reflects a loss contingency associated with indemnification issues with the purchaser. For the years ended December 31, 2019 and 2018, loss from discontinued operations reflects the results of operations of the Company’s former Epsilon segment, direct costs identifiable to the Epsilon segment including a loss contingency associated with indemnification issues with the purchaser and the allocation of interest expense on corporate debt. See Note 18, “Commitments and Contingencies,” for additional information with respect to the loss contingency.

Depreciation and amortization and capital expenditures from discontinued operations for the periods presented are as follows:


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Depreciation and amortization	$	—	$	73.2	$	293.7
Capital expenditures	$	—	$	55.8	$	106.5

CREDIT CARD AND LOAN RECEIVABLES

12 Months Ended

Dec. 31, 2020

CREDIT CARD AND LOAN RECEIVABLES

CREDIT CARD AND LOAN RECEIVABLES

8. CREDIT CARD AND LOAN RECEIVABLES

Quantitative information about the components of the Company’s credit card and loan receivables is presented in the table below:


	December 31,		December 31,
	2020		2019

	(in millions)
Credit card receivables	$	16,376.4	$	19,047.8
Installment loan receivables		118.0		—
Other		290.0		415.3
Total credit card and loan receivables		16,784.4		19,463.1
Less: Credit card and loan receivables – restricted for securitization investors		11,208.5		13,504.2
Other credit card and loan receivables	$	5,575.9	$	5,958.9

Allowance for Loan Loss

Effective January 1, 2020, the Company adopted ASC 326 on a modified retrospective approach and applied a CECL model to determine its allowance for loan loss. The allowance for loan loss is an estimate of expected credit losses, measured over the estimated life of its credit card and loan receivables that considers forecasts of future economic conditions in addition to information about past events and current conditions. The estimate under the CECL model is significantly influenced by the composition, characteristics and quality of the Company’s portfolio of credit card and loan receivables, as well as the prevailing economic conditions and forecasts utilized. The estimate of the allowance for loan loss includes an estimate for uncollectible principal as well as unpaid interest and fees. Charge-offs of principal amounts, net of recoveries are deducted from the allowance. The allowance is maintained through an adjustment to the provision for loan loss and is evaluated for appropriateness. Prior to January 1, 2020, the Company’s allowance for loan loss was determined utilizing an incurred loss model under ASC 450, “Contingencies.”

Credit Card Receivables

ASC 326 requires entities to use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. As part of its CECL implementation, the Company evaluated multiple risk characteristics of its credit card receivables portfolio, and determined delinquency status and credit quality to be the most significant characteristics for estimating expected credit losses. To estimate its allowance for loan loss, the Company segregates its credit card receivables into four groups with similar risk characteristics, on the basis of delinquency status and credit quality risk score. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. The Company’s credit card receivables do not have stated maturities and therefore prepayments are not factored into the determination of the estimated life of the credit card receivables. In determining the estimated life of a credit card and loan receivable, payments were applied to the measurement date balance with no payments allocated to future purchase activity. The Company uses a combination of First In First Out (“FIFO”) and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (“CARD Act”) methodology to model balance paydown.

The Company’s groups of pooled financial assets with similar risk characteristics and their estimated life is as follows:


	Estimated Life
	(in months)
Group A (Current, risk score - high)		14
Group B (Current, risk score - low)		19
Group C (Delinquent, risk score - high)		17
Group D (Delinquent, risk score - low)		26

analysis and behavioral relationships with credit performance. The Company’s quantitative estimate of expected credit losses under CECL is impacted by certain forecasted economic factors. Management utilizes a third party service to analyze a number of scenarios, but uses one scenario to determine the macroeconomic variables over the forecast period. The Company considers the forecast used to be reasonable and supportable over the estimated life of the credit card receivables, with no reversion period. In addition to the quantitative estimate of expected credit losses, the Company also incorporates qualitative adjustments for certain factors such as Company-specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the allowance for loan loss reflects the Company’s best estimate of current expected credit losses. As permitted by ASC 326, the Company excludes unbilled finance charges from its amortized cost basis of credit card and loan receivables. At December 31, 2020, unbilled finance charges were $219.4 million and included in other credit card and loan receivables in the Company’s consolidated balance sheet.

Installment Loan Receivables

As part of its acquisition of Bread, the Company acquired certain installment loan receivables, and in accordance with ASC 326, the Company established on the date of acquisition, an allowance for loan loss of approximately $5.7 million, which was recorded through the provision for loan loss. The allowance for loan loss was established by utilizing a migration model over the remaining life of the loans. The model segmented accounts based on three attributes: delinquency, risk score and remaining term. As of December 31, 2020, the allowance for loan loss related to installment loan receivables was $5.7 million.

Allowance for Loan Loss Rollforward

The following table presents the Company’s allowance for loan loss for its credit card and loan receivables for the years indicated.


	Years Ended December 31,
	2020 ⁽¹⁾		2019		2018

	(in millions)
Balance at beginning of year	$	1,171.1	$	1,038.3	$	1,119.3
Adoption of ASC 326 ⁽²⁾		644.0		—		—
Provision for loan loss		1,266.2		1,187.5		1,016.0
Allowance associated with credit card and loan receivables transferred to held for sale		—		—		(54.8)
Change in estimate for uncollectible unpaid interest and fees		10.0		—		25.0
Recoveries		204.6		234.5		214.2
Principal charge-offs		(1,287.9)		(1,289.2)		(1,281.4)
Balance at end of year	$	2,008.0	$	1,171.1	$	1,038.3

(1)	With the acquisition of Bread in December 2020, the Company acquired certain installment loans which represented a separate portfolio segment. As the amount of the allowance for loan loss was immaterial, the amounts were included in the above table.

(2)	Recorded January 1, 2020 through a cumulative-effect adjustment to retained earnings, net of taxes.

During the year ended December 31, 2020, the increase in the allowance for loan loss was due to a $644.0 million cumulative-effect adjustment for the adoption of ASC 326 as well as deterioration of the macroeconomic outlook due to COVID-19.

Net Charge-offs

Net charge-offs include the principal amount of losses that are deemed uncollectible, less recoveries and exclude charged-off interest, fees and fraud losses. Charged-off interest and fees reduce finance charges, net while fraud losses are recorded as a cost of operations expense. Credit card receivables, including unpaid interest and fees, are charged-off in the month during which an account becomes 180 days contractually past due, except in the case of customer bankruptcies or death. Installment loan receivables, including unpaid interest, are charged-off when a loan is 120 days

past due. Credit card receivables, including unpaid interest and fees, associated with customer bankruptcies or death are charged-off in each month subsequent to 60 days after the receipt of notification of the bankruptcy or death, but in any case, not later than the 180-day contractual time frame.

The Company records the actual charge-offs for unpaid interest and fees as a reduction to finance charges, net. For the years ended December 31, 2020, 2019 and 2018, actual charge-offs for unpaid interest and fees were $717.4 million, $808.6 million and $803.1 million, respectively.

Delinquencies

An account is contractually delinquent if the Company does not receive the minimum payment by the specified due date. It is the Company’s policy to continue to accrue interest and fee income on all accounts, except in limited circumstances, until the account balance and all related interest and other fees are paid or charged-off, typically at 180 days delinquent for credit card receivables and 120 days delinquent for installment loan receivables. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent. The collection system then recommends a collection strategy for the past due account based on the collection score and account balance and dictates the contact schedule and collections priority for the account. If the Company is unable to make a collection after exhausting all in-house collection efforts, the Company may engage collection agencies and outside attorneys to continue those efforts.

The following table presents the amortized cost basis of the aging analysis of the Company’s credit card and loan receivables portfolio:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Loan Receivables
	31 to 60 days delinquent		61 to 90 days delinquent		91 or more days delinquent		Total delinquent		Current		Total

	(in millions)
As of December 31, 2020⁽¹⁾	$	272.5	$	203.3	$	439.8	$	915.6	$	15,578.8	$	16,494.4

As of December 31, 2019	$	399.1	$	293.9	$	698.4	$	1,391.4	$	17,656.4	$	19,047.8

(1)	With the acquisition of Bread in December 2020, the Company acquired certain installment loans. As the amount of the delinquencies related to installment loans was immaterial, the amounts were included in the above table.

The practice of re-aging an account may affect credit card receivables delinquencies and charge-offs. A re-age of an account is intended to assist delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating a certain pre-defined amount of their account balance. With re-aging, the outstanding balance of a delinquent account is returned to a current status. For the years ended December 31, 2020, 2019 and 2018, the Company’s re-aged accounts represented 2.8%, 2.4% and 2.1%, respectively, of total credit card and loan receivables for each period and thus do not have a significant impact on the Company’s delinquencies or net charge-offs. The Company’s re-aging practices comply with regulatory guidelines.

Modified Credit Card Receivables

Forbearance Programs

In response to the COVID-19 pandemic, the Company offered forbearance programs, which provide for short-term modifications in the form of payment deferrals and late fee waivers to borrowers who were current with their payments prior to any relief. Specifically, the Company provided for late fee waivers and payment deferrals for up to two months for approximately $2.2 billion of credit card receivables, based on the balance in the month of enrollment, through December 31, 2020 and the extension of certain promotional plans of approximately $89.0 million for up to three months. As of December 31, 2020, the credit card receivables in these deferral forbearance programs was approximately $157.4 million. Additionally, the Company instituted two short-term programs with durations of three and six months,

which provide concessions consisting primarily of a reduced minimum payment and an interest rate reduction, the balance of which was $67.3 million as of December 31, 2020.

As these short-term modifications were made in response to COVID-19 to borrowers who were current prior to any relief, these are not considered troubled debt restructurings under the Interagency Statement guidance on certain loan modifications and an interpretation of ASC 310-40, “Receivables—Troubled Debt Restructurings by Creditors.”

Troubled Debt Restructurings

The Company holds certain credit card receivables for which the terms have been modified. The Company’s modified credit card receivables include credit card receivables for which temporary hardship concessions have been granted and credit card receivables in permanent workout programs. These modified credit card receivables include concessions consisting primarily of a reduced minimum payment and an interest rate reduction. The temporary programs’ concessions remain in place for a period no longer than twelve months, while the permanent programs remain in place through the payoff of the credit card receivables if the credit cardholder complies with the terms of the program. Additionally, the Company instituted two temporary hardship programs with durations of three and six months with similar terms to our short-term forbearance programs, for borrowers who were not current as of their most recent billing cycle prior to April 2020. As of December 31, 2020, the outstanding balance of credit card receivables in these two short-term temporary hardship programs treated as troubled debt restructurings totaled approximately $39.9 million.

Troubled debt restructuring concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments. In the case of the temporary hardship programs, at the end of the concession period, credit card receivable terms revert to standard rates. These arrangements are automatically terminated if the customer fails to make payments in accordance with the terms of the program, at which time their account reverts back to its original terms.

Credit card receivables for which temporary hardship and permanent concessions were granted are each considered troubled debt restructurings and are collectively evaluated for impairment. Modified credit card receivables are evaluated at their present value with impairment measured as the difference between the credit card receivable balance and the discounted present value of cash flows expected to be collected. Consistent with the Company’s measurement of impairment of modified credit card receivables on a pooled basis, the discount rate used for credit card receivables is the average current annual percentage rate the Company applies to non-impaired credit card receivables, which approximates what would have been applied to the pool of modified credit card receivables prior to impairment. In assessing the appropriate allowance for loan loss, these modified credit card receivables are included in the general pool of credit card receivables with the allowance determined under the contingent loss model of ASC 450-20, “Loss Contingencies.” If the Company applied accounting under ASC 310-40, “Troubled Debt Restructurings by Creditors,” to the modified credit card receivables in these programs, there would not be a material difference in the allowance for loan loss.

The Company had $489.8 million and $308.7 million, respectively, as a recorded investment in impaired credit card receivables with an associated allowance for loan loss of $165.8 million and $75.4 million, respectively, as of December 31, 2020 and 2019. These modified credit card receivables represented less than 3.0% of the Company’s total credit card receivables as of both December 31, 2020 and 2019.

The average recorded investment in the impaired credit card receivables was $412.4 million and $295.4 million for the years ended December 31, 2020 and 2019, respectively.

Interest income on these modified credit card receivables is accounted for in the same manner as other accruing credit card receivables. Cash collections on these modified credit card receivables are allocated according to the same payment hierarchy methodology applied to credit card receivables that are not in such programs. The Company recognized $30.1 million, $22.6 million and $27.9 million for the years ended December 31, 2020, 2019 and 2018, respectively, in interest income associated with modified credit card receivables during the period that such credit card receivables were impaired.

The following table provides information on credit card receivables that are considered troubled debt restructurings as described above, which entered into a modification program during the specified periods:

Year Ended December 31, 2020

Year Ended December 31, 2019

Pre-

Post-

Pre-

Post-

modification

Number of

Outstanding

Number of

Outstanding

Restructurings

Balance

Restructurings

Balance

(Dollars in millions)

Troubled debt restructurings – credit card receivables

391,049

554.5

552.6

259,311

381.4

380.8

The table below summarizes troubled debt restructurings that have defaulted in the specified periods where the default occurred within 12 months of their modification date:


	Year Ended December 31, 2020			Year Ended December 31, 2019
	Number of	Outstanding		Number of	Outstanding
	Restructurings	Balance		Restructurings	Balance

	(Dollars in millions)
Troubled debt restructurings that subsequently defaulted – credit card receivables	118,600	$	161.8	126,476	$	170.8

Credit Quality

Credit Card Receivables

The Company uses proprietary scoring models developed specifically for the purpose of monitoring the Company’s obligor credit quality for its credit card receivables. The proprietary scoring models are used as a tool in the underwriting process and for making credit decisions. The proprietary scoring models are based on historical data and require various assumptions about future performance, which the Company updates periodically. Information regarding customer performance is factored into these proprietary scoring models to determine the probability of an account becoming 91 or more days past due at any time within the next 12 months. Obligor credit quality is monitored at least monthly during the life of an account. The following table reflects the composition of the Company’s credit card receivables by obligor credit quality as of December 31, 2020 and 2019:


	Amortized Cost Revolving Credit Card Receivables
	December 31, 2020				December 31, 2019
			Percentage of				Percentage of
			Amortized				Amortized
Probability of an Account Becoming 91 or More Days Past	Amortized		Cost Basis		Amortized		Cost Basis
Due or Becoming Charged-off (within the next 12 months)	Cost Basis		Outstanding		Cost Basis		Outstanding

	(in millions, except percentages)
No Score	$	204.1	1.2	%	$	298.4	1.6	%
27.1% and higher		1,390.4	8.5			1,648.8	8.7
17.1% - 27.0%		848.8	5.2			1,108.5	5.8
12.6% - 17.0%		937.0	5.7			1,171.7	6.2
3.7% - 12.5%		7,305.5	44.6			8,292.1	43.5
1.9% - 3.6%		2,939.5	17.9			3,375.3	17.7
Lower than 1.9%		2,751.1	16.9			3,153.0	16.5
Total	$	16,376.4	100.0	%	$	19,047.8	100.0	%

Note: The Company’s credit card receivables are revolving receivables as they do not have stated maturities and are exempted from certain vintage disclosures required under ASC 326.

The proprietary scoring models are based on historical data and require various assumptions about future performance, which the Company updates periodically. Obligor credit quality is monitored at least monthly during the life of an account.

Installment Loan Receivables

With the December 3, 2020 acquisition of Bread, the Company acquired installment loan receivables. At origination of these loans, credit bureau scores from Fair Isaac Corporation (“FICO”) were obtained relating to the customer’s broader credit performance as a tool in the underwriting process and for making credit decisions. As of December 31, 2020, the amortized cost basis of the Company’s installment loan receivables totaled $118.0 million, with approximately 86% of these loans originated by customers with FICO scores 660 or above, and approximately 14% of these loans originated by customers with FICO scores below 660.

Transfer of Financial Assets

During 2018, the Company originated loan receivables under one previous client agreement, and after origination, these loan receivables were sold to the client at par value plus accrued interest. These transfers qualified for sale treatment as they met the conditions established in ASC 860-10, “Transfers and Servicing.” Following the sale, the client owned the loan receivables, assumed the risk of loss in the event of loan defaults and was responsible for all servicing functions related to the loan receivables. Effective July 2, 2018, the Company no longer originates loan receivables for this client. Originations and sales of these loan receivables held for sale were reflected as operating activities in the Company’s consolidated statement of cash flows for the year ended December 31, 2018.

Portfolios Held for Sale

The Company had certain credit card portfolios held for sale, which are carried at the lower of cost or fair value, of $408.0 million as of December 31, 2019. As of December 31, 2020, there were no credit card portfolios held for sale.

During the year ended December 31, 2020, the Company sold a credit card portfolio for cash consideration of approximately $289.5 million and recognized a gain of approximately $20.4 million on the transaction, which was recorded in cost of operations in the Company’s consolidated statements of income. The Company recorded portfolio valuation adjustments, which are reflected in cost of operations, of $7.5 million for the year ended December 31, 2020. In September 2020, one of the Company’s credit card portfolios totaling approximately $81.9 million was transferred from held for sale to held for investment and was included in total credit card and loan receivables at December 31, 2020.

During the year ended December 31, 2019, the Company transferred one credit card portfolio totaling approximately $510.3 million into credit card receivables held for sale, and sold 13 credit card portfolios for cash consideration of approximately $2.1 billion and recognized approximately $43.9 million in net gains on the transactions. The Company recorded portfolio valuation adjustments of $189.8 million for the year ended December 31, 2019.

For the year ended December 31, 2019, the portfolio sales were as follows:

●

In April 2019, the Company sold one credit card portfolio for final cash consideration of approximately $356.6 million and recognized a $0.4 million loss on the transaction.

●

In June 2019, the Company sold three credit card portfolios for final cash consideration of approximately $217.7 million and recognized approximately $2.9 million in gains on the transactions.

●

In August 2019, the Company sold one credit card portfolio for final cash consideration of approximately $70.4 million and recognized a $1.7 million gain on the transaction.

●

In September 2019, the Company sold one credit card portfolio for final cash consideration of approximately $334.7 million and recognized a $15.2 million gain on the transaction.

●

In December 2019, the Company sold seven credit card portfolios for final cash consideration of approximately $1,082.4 million and recognized approximately $24.5 million in net gains on the transactions.

Portfolio Acquisitions

During the year ended December 31, 2019, the Company acquired four credit card portfolios for cash consideration of approximately $924.8 million, which consisted of approximately $843.5 million of credit card receivables, $35.7 million of intangible assets and $45.6 million of other non-current assets. No portfolio acquisitions were made during the year ended December 31, 2020.

Securitized Credit Card and Loan Receivables

The Company regularly securitizes its credit card and loan receivables through its trusts. The Company continues to own and service the accounts that generate credit card and loan receivables held by the trusts. In its capacity as a servicer, each of the respective entities earns a fee from the trusts to service and administer the credit card and loan receivables, collect payments and charge-off uncollectible receivables. These fees are eliminated and therefore are not reflected in the consolidated statements of income for the years ended December 31, 2020, 2019 and 2018.

The trusts are VIEs and the assets of these consolidated VIEs include certain credit card receivables that are restricted to settle the obligations of those entities and are not expected to be available to the Company or its creditors. The liabilities of the consolidated VIEs include non-recourse secured borrowings and other liabilities for which creditors or beneficial interest holders do not have recourse to the general credit of the Company.

For its securitized credit card receivables, during the initial phase of a securitization reinvestment period, the Company generally retains principal collections in exchange for the transfer of additional credit card receivables into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.

The Company is required to maintain minimum interests ranging from 4% to 10% of the securitized credit card receivables. This requirement is met through transferor’s interest and is supplemented through excess funding deposits. Excess funding deposits represent cash amounts deposited with the trustee of the securitizations. Cash collateral, restricted deposits are generally released proportionately as investors are repaid, although some cash collateral, restricted deposits are released only when investors have been paid in full. No cash collateral, restricted deposits were required to be used to cover losses on securitized credit card receivables in the years ended December 31, 2020, 2019 and 2018.

The tables below present quantitative information about the components of total securitized credit card and loan receivables, delinquencies and net charge-offs:


	December 31,		December 31,
	2020		2019

	(in millions)
Total credit card and loan receivables – restricted for securitization investors	$	11,208.5	$	13,504.2
Principal amount of credit card and loan receivables – restricted for securitization investors, 91 days or more past due	$	200.8	$	321.8


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Net charge-offs of securitized principal	$	756.1	$	907.7	$	927.0

INVENTORIES, NET

12 Months Ended

Dec. 31, 2020

INVENTORIES, NET

INVENTORIES, NET

9. INVENTORIES, NET

Inventories, net of $164.3 million and $218.0 million at December 31, 2020 and 2019, respectively, primarily consist of finished goods to be utilized as rewards in the Company’s loyalty programs. For the year ended December 31,

2019, asset impairment charges of $18.4 million related to the discontinuance of certain reward product lines within inventory were recorded to the LoyaltyOne segment.

OTHER INVESTMENTS

12 Months Ended

Dec. 31, 2020

OTHER INVESTMENTS

OTHER INVESTMENTS

10. OTHER INVESTMENTS

Other investments consist of marketable securities and U.S. Treasury bonds and are included in other current assets and other non-current assets in the Company’s consolidated balance sheets. Marketable securities include available for sale debt securities, mutual funds and domestic certificate of deposit investments. The principal components of other investments, which are carried at fair value, are as follows:


	December 31, 2020								December 31, 2019
	Amortized		Unrealized		Unrealized				Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value

	(in millions)
Marketable securities	$	219.0	$	6.4	$	—	$	225.4	$	257.2	$	3.0	$	(0.4)	$	259.8
Total	$	219.0	$	6.4	$	—	$	225.4	$	257.2	$	3.0	$	(0.4)	$	259.8

The following table shows the unrealized losses and fair value for those investments that were in an unrealized loss position as of December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position. Unrealized losses as of December 31, 2020 were de minimis.


	December 31, 2019
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(in millions)
Marketable securities	$	18.8	$	(0.2)	$	13.1	$	(0.2)	$	31.9	$	(0.4)
Total	$	18.8	$	(0.2)	$	13.1	$	(0.2)	$	31.9	$	(0.4)

The amortized cost and estimated fair value of the marketable securities at December 31, 2020 by contractual maturity are as follows:


	Amortized		Estimated
	Cost		Fair Value

	(in millions)
Due in one year or less ⁽¹⁾	$	44.9	$	44.9
Due after one year through five years		1.0		1.0
Due after five years through ten years		—		—
Due after ten years		173.1		179.5
Total	$	219.0	$	225.4

(1)	Includes mutual funds, which do not have a stated maturity.

Market values were determined for each individual security in the investment portfolio. Effective January 1, 2020, the Company adopted ASC 326, which replaced the other-than-temporary impairment model for available-for-sale debt securities. For available-for-sale debt securities in which fair value is less than cost, ASC 326 requires that credit-related impairment, if any, be recognized through an allowance for credit losses and adjusted each period for changes in credit risk. The Company typically invests in highly-rated securities with low probabilities of default and has the intent and ability to hold the investments until maturity, and the Company performs an assessment each period for credit-related impairment. As of December 31, 2020, the Company does not consider its investments to be impaired

There were no realized gains or losses from the sale of investment securities for the years ended December 31, 2020, 2019 and 2018.

REDEMPTION SETTLEMENT ASSETS

12 Months Ended

Dec. 31, 2020

REDEMPTION SETTLEMENT ASSETS

REDEMPTION SETTLEMENT ASSETS

11. REDEMPTION SETTLEMENT ASSETS

Redemption settlement assets consist of restricted cash and securities available-for-sale and are designated for settling redemptions by collectors of the AIR MILES Reward Program in Canada under certain contractual relationships with sponsors of the AIR MILES Reward Program. The principal components of redemption settlement assets, which are carried at fair value, are as follows:


	December 31, 2020								December 31, 2019
		Amortized	Unrealized		Unrealized					Amortized	Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value

	(in millions)
Restricted cash	$	55.4	$	—	$	—	$	55.4	$	39.3	$	—	$	—	$	39.3
Mutual funds		26.9		—		—		26.9		25.1		—		—		25.1
Corporate bonds		592.3		19.1		(0.2)		611.2		536.0		2.4		(2.0)		536.4
Total	$	674.6	$	19.1	$	(0.2)	$	693.5	$	600.4	$	2.4	$	(2.0)	$	600.8

The following tables show the unrealized losses and fair value for those investments that were in an unrealized loss position as of December 31, 2020 and 2019, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:


	December 31, 2020
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(in millions)
Corporate bonds	$	46.2	$	(0.1)	$	10.3	$	(0.1)	$	56.5	$	(0.2)
Total	$	46.2	$	(0.1)	$	10.3	$	(0.1)	$	56.5	$	(0.2)


	December 31, 2019
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(in millions)
Corporate bonds	$	166.6	$	(1.3)	$	155.1	$	(0.7)	$	321.7	$	(2.0)
Total	$	166.6	$	(1.3)	$	155.1	$	(0.7)	$	321.7	$	(2.0)

The amortized cost and estimated fair value of the securities at December 31, 2020 by contractual maturity are as follows:


	Amortized		Estimated
	Cost		Fair Value

	(in millions)
Due in one year or less ⁽¹⁾	$	144.9	$	146.0
Due after one year through five years		470.2		488.0
Due after five year through ten years		4.1		4.1
Total	$	619.2	$	638.1

(1)	Includes mutual funds, which do not have a stated maturity.

ability to hold the investments until maturity, and the Company performs an assessment each period for credit-related impairment. As of December 31, 2020, the Company does not consider its investments to be impaired.

There were no realized gains or losses from the sale of investment securities for the year ended December 31, 2020. For the years ended December 31, 2019 and 2018, realized gains and losses from the sale of investment securities were de minimis.

LEASES

12 Months Ended

Dec. 31, 2020

LEASES

LEASES

12. LEASES

The Company has operating leases for general office properties, warehouses, data centers, customer care centers, automobiles and certain equipment. As of December 31, 2020, the Company’s leases have remaining lease terms of less than 1 year to 18 years, some of which may include renewal options.

The components of lease expense were as follows:


	Years Ended December 31,
	2020		2019

	(in millions)
Operating lease cost	$	40.5	$	41.1
Short-term lease cost		1.0		2.7
Variable lease cost		6.2		6.8
Total	$	47.7	$	50.6

Lease expense was $47.5 million for the year ended December 31, 2018.

Other information related to leases was as follows:


	December 31,		December 31,
	2020		2019
Weighted-average remaining lease term (in years):
Operating leases		10.8		11.5
Weighted-average discount rate:
Operating leases		5.2%		5.2%

Supplemental cash flow information related to leases was as follows:


	Years Ended December 31,
	2020		2019

	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	45.8	$	46.6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	7.6	$	28.4

Maturities of the lease liabilities as of December 31, 2020 were as follows:


	Operating
Year	Leases
	(in millions)
2021	$	38.8
2022		41.2
2023		38.3
2024		36.0
2025		35.2
Thereafter		209.6
Total undiscounted lease liabilities		399.1
Less: Amount representing interest		(99.1)
Total present value of minimum lease payments	$	300.0

Amounts recognized in the December 31, 2020 consolidated balance sheet:
Current operating lease liabilities	$	23.6
Long-term operating lease liabilities		276.4
Total	$	300.0

The Company evaluates its right of use (“ROU”) assets for impairment in accordance with ASC 360, “Property, Plant and Equipment,” when events or changes in circumstances indicate that a ROU asset’s carrying amount may not be recoverable. The Company performed an impairment assessment for the ROU assets associated with its locations where it ceased use with the intent to sublease. As a result, the Company recorded an asset impairment charge of $18.4 million in its Card Services segment. The impairment charge is included in cost of operations in the Company’s consolidated statements of income for the year ended December 31, 2020. Following the incurred impairment, the ROU assets for these locations will be amortized on an accelerated basis in accordance with ASC 842.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

13. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:


	December 31,
	2020		2019

	(in millions)
Computer software and development	$	410.5	$	327.1
Furniture and equipment		151.0		164.3
Land, buildings and leasehold improvements		122.7		126.0
Construction in progress		32.9		46.2
Total		717.1		663.6
Accumulated depreciation and amortization		(406.2)		(381.3)
Property and equipment, net	$	310.9	$	282.3

Depreciation expense totaled $65.5 million, $40.6 million and $41.2 million for the years ended December 31, 2020, 2019 and 2018, respectively, and includes purchased software. Amortization expense on capitalized software totaled $35.5 million, $39.3 million and $39.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2020 and 2019, the net amount of unamortized capitalized software costs included in the consolidated balance sheets was $165.5 million and $74.0 million, respectively. With the Bread acquisition on December 3, 2020, the Company acquired $90.7 million of developed technology, which is being amortized over a 5.0 year life. See Note 5, “Acquisitions,” for more information.

In addition, with the acquisition of Bread, the Company determined certain capitalized software was no longer expected to be used and an impairment charge of $4.1 million was incurred, which is included in cost of operations in its consolidated statement of income for the year ended December 31, 2020.

In the fourth quarter of 2020, the Company determined it would reduce its real estate footprint and cease use of certain properties with the intent to sublease, which triggered an impairment analysis of certain property and equipment in accordance with ASC 360. As a result of the analysis, the Company recorded asset impairment charges of $3.0 million and accelerated depreciation expense of $24.7 million, both within its Card Services segment.

Sale of Real Estate

In October 2019, the Company sold a building and land for cash proceeds of $15.1 million and simultaneously entered into a new 15 year lease agreement for the building, with four consecutive tenant options to extend the lease for five-year terms. Under the criteria of ASC 842, the transaction met the definition of a sale and the Company recognized a $6.1 million gain on the transaction, which was included in cost of operations in the Company’s consolidated statement of income for the year ended December 31, 2019.

INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2020

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

14. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets consist of the following:


	December 31, 2020
	Gross		Accumulated
	Assets		Amortization		Net		Amortization Life and Method

	(in millions)
Definite-Lived Assets
Customer contracts and lists	$	363.0	$	(354.5)	$	8.5	3-7 years—straight line
Premium on purchased credit card portfolios		137.2		(72.8)		64.4	3-13 years—straight line
Collector database		55.0		(54.5)		0.5	5 years—straight line
Tradenames		35.0		(30.1)		4.9	4-15 years—straight line
Non-compete agreements		2.2		—		2.2	5 years—straight line
	$	592.4	$	(511.9)	$	80.5
Indefinite-Lived Assets
Tradename		1.2		—		1.2	Indefinite life
Total intangible assets	$	593.6	$	(511.9)	$	81.7


	December 31, 2019
	Gross		Accumulated
	Assets		Amortization		Net		Amortization Life and Method

	(in millions)
Definite-Lived Assets
Customer contracts and lists	$	325.1	$	(278.7)	$	46.4	7 years—straight line
Premium on purchased credit card portfolios		192.6		(93.2)		99.4	1-13 years—straight line
Collector database		53.9		(52.9)		1.0	5 years—straight line
Tradenames		31.8		(26.5)		5.3	8-15 years—straight line
	$	603.4	$	(451.3)	$	152.1
Indefinite-Lived Assets
Tradename		1.2		—		1.2	Indefinite life
Total intangible assets	$	604.6	$	(451.3)	$	153.3

With the Bread acquisition on December 3, 2020, the Company acquired $11.3 million of intangible assets, consisting of customer relationships of $8.8 million, a non-compete agreement of $2.2 million, and a tradename of $0.3

million, which are being amortized over weighted average lives of 3.0 years, 5.0 years, and 4.0 years, respectively. See Note 5, “Acquisitions,” for more information.

As part of the portfolio acquisitions during the year ended December 31, 2019, the Company acquired $35.7 million of intangible assets, consisting of $21.8 million of customer relationships being amortized over a life of 2.7 years and $13.9 million of marketing relationships being amortized over a life of 5.9 years.

Amortization expense related to intangible assets was approximately $82.8 million, $96.2 million and $112.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows:


	For the Years Ending
	December 31,
	(in millions)
2021	$	25.8
2022		21.0
2023		16.1
2024		11.2
2025		2.4
Thereafter		4.0

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019, respectively, are as follows:



	LoyaltyOne		Card Services		Total

	(in millions)
Balance at January 1, 2019	$	693.1	$	261.7	$	954.8
Goodwill acquired during the period		—		2.3		2.3
Effects of foreign currency translation		(2.2)		—		(2.2)
Balance at December 31, 2019	$	690.9	$	264.0	$	954.9
Goodwill acquired during the period		—		369.6		369.6
Goodwill allocated to sale of Precima		(3.2)		—		(3.2)
Effects of foreign currency translation		48.3		—		48.3
Balance at December 31, 2020	$	736.0	$	633.6	$	1,369.6

Approximately $3.2 million of LoyaltyOne goodwill was allocated to Precima upon sale in January 2020, based on a relative fair value allocation of the businesses.

As part of the acquisition of Bread in December 2020, the Company acquired $369.6 million of goodwill. See Note 5, “Acquisitions,” for further information.

The Company completed annual impairment tests for goodwill on July 31, 2019 and 2018 and determined at each date that no impairment exists. On July 1, 2020, the Company voluntarily changed its annual goodwill impairment testing date from July 31 to July 1 to allow additional time for testing due to the COVID-19 pandemic and current uncertainty in the macroeconomic environment. Accordingly, management determined that the change in accounting principle is preferable under the circumstance. This change has been applied prospectively from July 1, 2020, as retrospective application is deemed impracticable due to the inability to objectively determine the assumptions and significant estimates used in earlier periods without the benefit of hindsight. This change was not material to the Company’s consolidated financial statements as it did not delay, accelerate, or avoid any potential goodwill impairment charge. As of December 31, 2020, the Company does not believe it is more-likely-than-not that the fair value of any reporting unit is less than its carrying amount. No further testing of goodwill impairments will be performed until July 1, 2021, unless events occur or circumstances indicate an impairment is probable.

RESTRUCTURING AND OTHER CHARGES

12 Months Ended

Dec. 31, 2020

RESTRUCTURING AND OTHER CHARGES

RESTRUCTURING AND OTHER CHARGES

15. RESTRUCTURING AND OTHER CHARGES

In 2019, the Company, under the direction of the board of directors, evaluated the cost structure and executed on certain cost saving initiatives at each segment. These charges included restructuring and other exit activities related to reductions in force, terminations of certain reward product lines, reduction or closure of certain leased office space, asset impairments, changes in management structure and fundamental reorganizations that affect the nature and focus of operations. Restructuring and other charges incurred at the Corporate segment were recorded to general and administrative expense in the Company’s consolidated statements of income, and restructuring and other charges incurred in the LoyaltyOne and Card Services segments were recorded to cost of operations in the Company’s consolidated statements of income. These charges related to actions taken in 2019 did not continue in 2020. The restructuring and other charges incurred in 2020 relate to changes in the Company’s original estimate and consisted of adjustments to the Company’s liability.

The following tables summarize the restructuring and other charges incurred by reportable segment for all restructuring activities for the periods presented:


	Termination		Asset		Lease		Other
Year Ended December 31, 2020	Benefits		Impairments		Termination Costs		Exit Costs		Total

	(in millions)
Corporate/Other	$	—	$	—	$	—	$	—	$	—
LoyaltyOne		0.1		—		—		—		0.1
Card Services		(8.3)		—		—		—		(8.3)
Total	$	(8.2)	$	—	$	—	$	—	$	(8.2)


	Termination		Asset		Lease		Other
Year Ended December 31, 2019	Benefits		Impairments		Termination Costs		Exit Costs		Total

	(in millions)
Corporate/Other	$	18.6	$	11.1	$	7.0	$	1.2	$	37.9
LoyaltyOne		7.6		40.7		0.2		2.3		50.8
Card Services		27.3		0.2		1.9		—		29.4
Total	$	53.5	$	52.0	$	9.1	$	3.5	$	118.1

The Company’s liability for restructuring and other charges is recognized in accrued expenses and other liabilities in its consolidated balance sheets. The following table summarizes the activities related to the restructuring and other charges, as discussed above, for the periods presented:


	Termination		Asset		Lease		Other
	Benefits		Impairments		Termination Costs		Exit Costs		Total

	(in millions)
Liability as of January 1, 2019	$	—	$	—	$	—	$	—	$	—
Charged to expense		53.5		52.0		9.1		3.5		118.1
Adjustments for non-cash charges		—		(52.0)		0.7		(0.1)		(51.4)
Cash payments		(18.8)		—		(9.8)		(3.3)		(31.9)
Liability as of December 31, 2019	$	34.7	$	—	$	—	$	0.1	$	34.8
Charged to expense		—		—		—		—		—
Adjustments for non-cash charges		(8.2)		—		—		—		(8.2)
Cash payments		(23.2)		—		—		(0.1)		(23.3)
Liability as of December 31, 2020	$	3.3	$	—	$	—	$	—	$	3.3

The Company’s outstanding liability related to restructuring and other charges is expected to be settled by the end of 2021.

ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2020

ACCRUED EXPENSES

ACCRUED EXPENSES

16. ACCRUED EXPENSES

Accrued expenses consist of the following:


	December 31,
	2020		2019

	(in millions)
Accrued payroll and benefits	$	116.9	$	133.4
Accrued taxes		57.6		18.1
Accrued other liabilities		270.2		176.3
Accrued expenses	$	444.7	$	327.8

DEBT

12 Months Ended

Dec. 31, 2020

DEBT

DEBT

17. DEBT

Debt consists of the following:


	December 31,		December 31,
Description	2020		2019		Maturity	Interest Rate

	(Dollars in millions)
Long-term and other debt:
2017 revolving line of credit	$	—	$	—	December 2022	⁽¹⁾
2017 term loans		1,484.3		2,028.8	December 2022	⁽²⁾
BrandLoyalty credit agreement		—		—	April 2023	⁽³⁾
Senior notes due 2024		850.0		850.0	December 2024	4.750%
Senior notes due 2026		500.0		—	January 2026	7.000%
Total long-term and other debt		2,834.3		2,878.8
Less: Unamortized debt issuance costs		28.6		28.9
Less: Current portion		101.4		101.4
Long-term portion	$	2,704.3	$	2,748.5

Deposits:
Certificates of deposit	$	6,014.9	$	8,585.2	Various – Jan 2021 to Dec 2025	0.15% to 3.75%
Money market deposits		3,790.2		3,589.8	Non-maturity	⁽⁴⁾
Total deposits		9,805.1		12,175.0
Less: Unamortized debt issuance costs		12.5		23.3
Less: Current portion		6,553.9		6,942.4
Long-term portion	$	3,238.7	$	5,209.3

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,423.8	$	4,891.0	Various – Feb 2021 to Sep 2022	2.03% to 3.95%
Conduit asset-backed securities		2,205.1		2,405.0	Various – Apr 2022 to Oct 2022	⁽⁵⁾
Secured loan facility		86.3		—	November 2022	⁽⁶⁾
Total non-recourse borrowings of consolidated securitization entities		5,715.2		7,296.0
Less: Unamortized debt issuance costs		5.3		12.0
Less: Current portion		1,850.7		3,030.8
Long-term portion	$	3,859.2	$	4,253.2

(1)	The interest rate is based upon LIBOR plus an applicable margin.

(2)	The interest rate is based upon LIBOR plus an applicable margin. The weighted average interest rate for the term loans was 1.90% and 3.30% at December 31, 2020 and 2019, respectively.

(3)	The interest rate is based upon the Euro Interbank Offered Rate plus an applicable margin.

(4)	The interest rates are based on the Federal Funds rate plus an applicable margin. At December 31, 2020, the interest rates ranged from 0.38% to 3.50%. At December 31, 2019, the interest rates ranged from 1.84% to 3.50%.

(5)	The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At December 31, 2020, the interest rates ranged from 1.39% to 1.89%. At December 31, 2019, the interest rates ranged from 2.79% to 2.96%.

(6)	The interest rate is based upon LIBOR plus an applicable margin. At December 31, 2020, the weighted average interest rate for the secured loan facility was 3.90%.

At December 31, 2020, the Company was in compliance with its financial covenants.

Long-term and Other Debt

Credit Agreement

The Company, as borrower, and ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Alliance Data International LLC, Comenity LLC and Comenity Servicing LLC, as guarantors, are party to a credit agreement with various agents and lenders dated June 14, 2017 (the “2017 Credit Agreement”).

On April 30, 2019, the Company amended its credit agreement to provide that, upon consummation of the sale of Epsilon, the maturity date of the credit agreement would be reduced by one year from June 14, 2022 to June 14, 2021, a mandatory payment of $500.0 million of the revolving credit facility would be required, the aggregate revolving credit commitments would be reduced in the same amount (to $1,072.4 million), all of the Company’s outstanding senior notes would be required to be redeemed, net proceeds from future asset sales in excess of $50.0 million must be applied to repayment of the credit agreement and certain other minor amendments.

In July 2019, with the proceeds from the sale of Epsilon, the Company made the mandatory prepayment on the revolving credit facility and extinguished all of its then outstanding senior notes of $1.9 billion. As a result, the Company incurred a loss from the extinguishment of debt of approximately $71.9 million, resulting from the redemption price of each of the notes of $49.9 million and the write-off of deferred issuance costs of $22.0 million.

On December 20, 2019, the Company amended its credit agreement to extend the maturity date from June 14, 2021 to December 31, 2022, reduce the aggregate revolving credit commitments from $1,072.4 million to $750.0 million, add a consolidated minimum tangible net worth covenant upon certain triggering events and make certain other amendments. The amendment also required the Company to prepay the term loans to $2,028.8 million upon consummation of the offering of the $850.0 million aggregate principal amount of 4.750% senior notes due December 15, 2024 (“Senior Notes due 2024”), which obligation was satisfied in full with a prepayment of $833.0 million, representing the net proceeds from the offering of the Senior Notes due 2024.

At December 31, 2019, the credit agreement, as amended, provided for $2,028.8 million in term loans (the “2017 term loans”), subject to certain principal repayments, and a $750.0 million revolving credit facility (the “2017 revolving line of credit”). Total availability under the 2017 revolving line of credit at December 31, 2019 was $750.0 million.

The loans under the credit agreement are scheduled to mature on December 31, 2022. The 2017 term loans provide for aggregate principal payments of 1.25% of the $2,028.8 million term loan amount, payable in equal quarterly installments beginning on March 31, 2020. The credit agreement is unsecured.

The credit agreement contains the usual and customary negative covenants for transactions of this type, including, but not limited to, restrictions on the Company’s ability and in certain instances, its subsidiaries’ ability to consolidate or merge; substantially change the nature of its business; sell, lease, or otherwise transfer any substantial part of its assets; create or incur indebtedness; create liens; and make acquisitions. The negative covenants are subject to certain exceptions as specified in the credit agreement. The credit agreement also requires the Company to satisfy certain financial covenants, including a maximum total leverage ratio and a minimum ratio of consolidated operating EBITDA to consolidated interest expense, each as determined in accordance with the credit agreement. The credit agreement also includes customary events of default.

In September 2020, the Company amended its credit agreement to (a) increase the maximum total leverage ratio, (b) decrease the minimum interest coverage ratio, and (c) increase the maximum permitted average delinquency ratios, for the periods ending March 31, 2021 through June 30, 2022, and to make certain other amendments. The amendment also required the Company to prepay the term loans upon consummation of the offering of the Senior Notes due 2026 with a prepayment in an amount equal to the net proceeds from the offering, which obligation was satisfied in full with a

prepayment of $493.8 million. The prepayment was first applied to the scheduled quarterly installments payable in September 2020 and December 2020, and second, to the bullet payment of the term loans due at maturity.

As of December 31, 2020, the Company had $1,484.3 million in term loans outstanding with $750.0 million total availability under the revolving line of credit.

BrandLoyalty Credit Agreement

BrandLoyalty and certain of its subsidiaries, as borrower and guarantors, were parties to a credit agreement that provided for an A-1 term loan facility of €90.0 million and an A-2 term loan facility of €100.0 million, subject to certain principal repayments, a committed revolving line of credit of €37.5 million and an uncommitted revolving line of credit of €37.5 million. In September 2019, the Company repaid the €115.0 million in term loans outstanding under the BrandLoyalty credit agreement, originally scheduled to mature in June 2020, and repaid the €32.5 million amount outstanding under the revolving line of credit.

In April 2020, BrandLoyalty and certain of its subsidiaries, as borrowers and guarantors, terminated its existing facility and entered into a new credit agreement (the “2020 BrandLoyalty Credit Agreement”) that provides for a committed revolving line of credit of €30.0 million ($36.6 million as of December 31, 2020), an uncommitted revolving line of credit of €30.0 million ($36.6 million as of December 31, 2020), and an accordion feature permitting BrandLoyalty to request an increase in either the committed or uncommitted line of credit up to €80.0 million ($97.7 million as of December 31, 2020) in aggregate. Each of the committed and uncommitted revolving line of credit are scheduled to mature on April 3, 2023, subject to BrandLoyalty’s request to extend for two additional one-year terms at the absolute discretion of the lenders at the time of such requests.

All advances under the 2020 BrandLoyalty Credit Agreement are denominated in Euros. The interest rate fluctuates and is equal to EURIBOR, as defined in the 2020 BrandLoyalty Credit Agreement, plus an applicable margin based on BrandLoyalty’s senior net leverage ratio. The 2020 BrandLoyalty Credit Agreement contains a senior net leverage ratio financial covenant, as well as usual and customary negative covenants, representations, general and information undertakings and events of default.

As of December 31, 2020, there were no amounts outstanding under the 2020 BrandLoyalty Credit Agreement.

Senior Notes

The senior notes set forth below are each governed by their respective indenture that includes usual and customary negative covenants and events of default for transactions of these types. These senior notes are unsecured and are guaranteed on a senior unsecured basis by certain of the Company’s existing and future domestic restricted subsidiaries that incurs or in any other manner becomes liable for any debt under the Company’s domestic credit facilities, including the 2017 Credit Agreement.

Due 2024

In December 2019, the Company issued and sold $850.0 million aggregate principal amount of 4.750% senior notes due December 15, 2024 (the “Senior Notes due 2024”). The Senior Notes due 2024 accrue interest on the principal amount at the rate of 4.750% per annum from December 20, 2019, payable semi-annually in arrears, on June 15 and December 15 of each year, beginning on June 15, 2020. The Senior Notes due 2024 will mature on December 15, 2024, subject to earlier repurchase or redemption.

Due 2026

In September 2020, the Company issued and sold $500.0 million aggregate principal amount of 7.000% senior notes due January 15, 2026 (the “Senior Notes due 2026”). The Senior Notes due 2026 accrue interest on the principal amount at the rate of 7.000% per annum from September 22, 2020, payable semi-annually in arrears, on March 15 and

September 15 of each year, beginning on March 15, 2021. The Senior Notes due 2026 will mature on January 15, 2026, subject to earlier repurchase or redemption.

Deposits

Comenity Bank and Comenity Capital Bank issue certificates of deposit in denominations of at least $100,000 and $1,000, respectively, in various maturities ranging between January 2021 and December 2025 and with effective annual interest rates ranging from 0.15% to 3.75%, with a weighted average interest rate of 2.58%, at December 31, 2020. At December 31, 2019, interest rates ranged from 1.33% to 4.00%, with a weighted average interest rate of 2.66%. Interest is paid monthly and at maturity.

Comenity Bank and Comenity Capital Bank offer non-maturity deposit programs through contractual arrangements with various financial counterparties. Money market deposits are redeemable on demand by the customer and, as such, have no scheduled maturity date. As of December 31, 2020, Comenity Bank and Comenity Capital Bank had $3.8 billion in money market deposits outstanding with annual interest rates ranging from 0.38% to 3.50%, with a weighted average interest rate of 1.00%. As of December 31, 2019, Comenity Bank and Comenity Capital Bank had $3.6 billion in money market deposits outstanding with annual interest rates ranging from 1.84% to 3.50%, with a weighted average interest rate of 2.05%.

Non-Recourse Borrowings of Consolidated Securitization Entities

An asset-backed security is a security whose value and income payments are derived from and collateralized (or “backed”) by a specified pool of underlying assets. The sale of the pool of underlying assets to general investors is accomplished through a securitization process. The Company regularly sells its receivables to its securitization trusts, which are consolidated on the balance sheets of the Company under ASC 860 and ASC 810. The liabilities of the consolidated VIEs include asset-backed securities for which creditors or beneficial interest holders do not have recourse to the general credit of the Company.

Asset-Backed Term Notes

For the year ended December 31, 2020, no asset-backed term notes were issued, and the following asset-backed term notes matured and were repaid:

●

In May 2020, $450.7 million of Series 2017-A asset-backed term notes, $50.7 million of which were retained by the Company and eliminated from the Company’s consolidated balance sheets.

●

In August 2020, $625.0 million of Series 2015-B asset-backed term notes, $150.0 million of which were retained by the Company and eliminated from the Company’s consolidated balance sheets.

●

In October 2020, $619.7 million of Series 2017-C asset-backed term notes, $27.5 million of which were retained by the Company and eliminated from the Company’s consolidated balance sheets.

As of December 31, 2020, the Company collected $291.8 million of principal payments made by its credit cardholders during the accumulation period for the repayment of the Series 2018-A notes, which matured in February 2021. The cash is restricted to the securitization investors and is reflected in other current assets in the Company’s consolidated balance sheet as of December 31, 2020.

Conduit Facilities

The Company has access to committed undrawn capacity through three conduit facilities to support the funding of its credit card receivables for certain of its trusts. Borrowings outstanding under each facility bear interest at a margin above LIBOR or the asset-backed commercial paper costs of each individual conduit provider. During the year ended December 31, 2020, the Company reduced the commitments under its conduit facilities by $1.5 billion and extended the respective maturities to April 2022 and October 2022. Total capacity under the conduit facilities was $3.2 billion, of which $2.2 billion had been drawn and was included in non-recourse borrowings of consolidated securitization entities in the consolidated balance sheets.

Secured Loan Facility

With the acquisition of Bread in December 2020, the Company assumed two warehouse facilities used to fund their securitized loan receivables. In December 2020, one of the warehouse facilities was terminated and the Company repaid $28.5 million owed under the agreement. The second warehouse facility was amended to a secured loan facility with an outstanding balance of $86.3 million at December 31, 2020. The secured loan facility accrues interest on the principal amount at the rate of LIBOR plus an applicable margin. The principal amount is due upon maturity at November 19, 2022, with prepayment permitted.

Maturities

The future principal payments for the Company’s debt as of December 31, 2020 are as follows:


					Non-Recourse
					Borrowings of
	Long-Term				Consolidated
	and				Securitization
Year	Other Debt		Deposits		Entities

	(in millions)
2021	$	101.4	$	6,555.6	$	1,852.1
2022		1,382.9		1,739.6		3,863.1
2023		—		966.1		—
2024		850.0		530.6		—
2025		—		13.2		—
Thereafter		500.0		—		—
Total maturities		2,834.3		9,805.1		5,715.2
Unamortized debt issuance costs		(28.6)		(12.5)		(5.3)
	$	2,805.7	$	9,792.6	$	5,709.9

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

18. COMMITMENTS AND CONTINGENCIES

AIR MILES Reward Program

The Company has entered into contractual arrangements with certain AIR MILES Reward Program sponsors that result in fees being billed to those sponsors upon the redemption of AIR MILES reward miles issued by those sponsors. The Company has obtained letters of credit and other assurances from those sponsors for the Company’s benefit that expire at various dates. These letters of credit and other assurances totaled $150.5 million at December 31, 2020, which exceeds the amount of the Company’s estimate of its obligation to provide travel and other rewards upon the redemption of the AIR MILES reward miles issued by those sponsors.

The Company currently has an obligation to provide AIR MILES Reward Program collectors with travel and other rewards upon the redemption of AIR MILES reward miles. The Company believes that the redemption settlement assets, including the letters of credit and other assurances mentioned above, are sufficient to meet that obligation.

The Company has entered into certain long-term arrangements with airlines and other suppliers in connection with reward redemptions under the AIR MILES Reward Program. These long-term arrangements allow the Company to retain preferred pricing subject to meeting agreed upon annual volume commitments for rewards purchased.

Regulatory Matters

Comenity Bank is regulated, supervised and examined by the State of Delaware and the Federal Deposit Insurance Corporation (“FDIC”). Comenity Bank remains subject to regulation by the Board of the Governors of the Federal Reserve System. The Company’s industrial bank, Comenity Capital Bank, is regulated, supervised and examined by the State of Utah and the FDIC. Both Comenity Bank and Comenity Capital Bank are under the supervision of the

Consumer Financial Protection Bureau (“CFPB”), a federal consumer protection regulator with authority to make further changes to the federal consumer protection laws and regulations, and the CFPB may, from time to time, conduct reviews of their practices.

Quantitative measures established by regulations to ensure capital adequacy require Comenity Bank and Comenity Capital Bank (collectively, the “Banks”) to maintain minimum amounts and ratios of Common Equity Tier 1, Tier 1 and total capital to risk weighted assets and of Tier 1 capital to average assets. Based on these guidelines, the Banks are considered well capitalized.

The actual capital ratios and minimum ratios as of December 31, 2020 are as follows:


					Minimum Ratio to be
			Minimum Ratio for		Well Capitalized under
	Actual		Capital Adequacy		Prompt Corrective
	Ratio		Purposes		Action Provisions
Comenity Bank
Tier 1 capital to average assets	19.0	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	20.7		4.5		6.5
Tier 1 capital to risk-weighted assets	20.7		6.0		8.0
Total capital to risk-weighted assets	22.0		8.0		10.0

Comenity Capital Bank
Tier 1 capital to average assets	14.8	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	15.6		4.5		6.5
Tier 1 capital to risk-weighted assets	15.6		6.0		8.0
Total capital to risk-weighted assets	16.9		8.0		10.0

The actual capital ratios and minimum ratios as of December 31, 2019 are as follows:


					Minimum Ratio to be
			Minimum Ratio for		Well Capitalized under
	Actual		Capital Adequacy		Prompt Corrective
	Ratio		Purposes		Action Provisions
Comenity Bank
Tier 1 capital to average assets	12.9	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	14.6		4.5		6.5
Tier 1 capital to risk-weighted assets	14.6		6.0		8.0
Total capital to risk-weighted assets	15.9		8.0		10.0

Comenity Capital Bank
Tier 1 capital to average assets	11.9	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	14.4		4.5		6.5
Tier 1 capital to risk-weighted assets	14.4		6.0		8.0
Total capital to risk-weighted assets	15.7		8.0		10.0

On September 10, 2019, Comenity Capital Bank submitted a bank merger application to the Federal Deposit Insurance Corporation (“FDIC”) seeking the FDIC’s approval to merge Comenity Bank with and into Comenity Capital Bank as the surviving bank entity. On the same date, Comenity Capital Bank and Comenity Bank each submitted counterpart bank merger applications to the Utah Department of Financial Institutions and the Delaware Office of the State Bank Commissioner, respectively, in connection with the proposed merger. The merger application remains subject to regulatory review and approval and no guarantee can be provided as to the outcome or timing of such review.

Cardholders

The Company’s Card Services segment is active in originating private label and co-brand credit cards in the United States. The Company reviews each potential customer’s credit application and evaluates the applicant’s financial history

and ability and perceived willingness to repay. Credit card loans are made primarily on an unsecured basis. Cardholders reside throughout the United States and are not significantly concentrated in any one area.

Holders of credit cards issued by the Company have available lines of credit, which vary by cardholder. These lines of credit represent elements of risk in excess of the amount recognized in the financial statements. The lines of credit are subject to change or cancellation by the Company. At December 31, 2020, the Company had 45.5 million total accounts, including both active and inactive, having unused lines of credit averaging $2,367 per account.

Indemnification

On July 1, 2019, the Company completed the sale of its Epsilon segment to Publicis Groupe S.A. (“Publicis”). Under the terms of the agreement governing that transaction, the Company agreed to indemnify Publicis and its affiliates from and against any losses arising out of or related to a United States Department of Justice (“DOJ”) investigation. The DOJ investigation related to third-party marketers who sent, or allegedly sent, deceptive mailings and the provision of data and services to those marketers by Epsilon’s data practice. Epsilon actively cooperated with the DOJ in connection with the investigation. On January 19, 2021, Epsilon entered into a deferred prosecution agreement (“DPA”) with the DOJ to resolve the matters that were the subject of the investigation. Pursuant to the DPA, Epsilon agreed, among other things, to pay penalties and consumer compensation in the aggregate amount of $150.0 million, to be paid in two equal installments, the first in January 2021 and the second in January 2022. In accordance with ASC 450, the Company records a loss contingency when a loss is probable and an amount can be reasonably estimated. For the year ended December 31, 2019, the Company recorded a loss contingency of $40.0 million, or $32.9 million net of tax, which was included in loss from discontinued operations. For the year ended December 31, 2020, the Company recorded an additional loss contingency of $110.0 million, or $81.3 million net of tax, which was included in loss from discontinued operations.

Legal Proceedings

From time to time the Company is involved in various claims and lawsuits arising in the ordinary course of business that it believes will not have a material effect on its business, financial condition or cash flows, including claims and lawsuits alleging breaches of the Company’s contractual obligations.

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2020

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

19. STOCKHOLDERS’ EQUITY

Stock Repurchase Programs

During the year ended December 31, 2020, the Company did not repurchase any shares of its common stock. During the years ended December 31, 2019 and 2018, the Company repurchased approximately 6.3 million and 2.2 million and shares of its common stock, respectively, for an aggregate amount of $976.1 million and $443.2 million, respectively.

2018 Authorization

On July 26, 2018, the Company’s board of directors authorized a new stock repurchase program to acquire up to $500.0 million of the Company’s outstanding common stock from August 1, 2018 through July 31, 2019.

For the year ended December 31, 2018, the Company acquired approximately 0.8 million shares of its common stock for $166.0 million under its previously authorized stock repurchase program and acquired approximately 1.4 million shares of its common stock for $277.2 million under its authorized 2018 stock repurchase program.

For the six months ended June 30, 2019, the Company acquired a total of 1.3 million shares of its common stock for $222.8 million under its stock repurchase program. As of June 30, 2019, the Company did not have any amounts remaining under its authorized stock repurchase program.

2019 Authorization

In July 2019, the Company’s board of directors authorized a new stock repurchase program to acquire up to $1.1 billion of its outstanding common stock from July 5, 2019 through June 30, 2020.

On July 19, 2019, the Company commenced a “modified Dutch Auction” tender offer to acquire up to $750.0 million in aggregate purchase price of its issued and outstanding common stock at a price not greater than $162.00 nor less than $144.00 per share, to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in the Offer to Purchase dated July 19, 2019 and in the related Letter of Transmittal. The tender offer expired on August 15, 2019, and the Company repurchased 5,050,505 shares of its issued and outstanding common stock at a price of $148.50 per share, for an aggregate cost of approximately $750.0 million. Additionally, the Company incurred approximately $3.3 million of direct costs related to the repurchase, including $2.2 million in commissions, which have been recorded to treasury stock in the Company’s consolidated balance sheets.

As of December 31, 2019, the Company had $347.8 million remaining under its authorized stock repurchase program.

The stock repurchase program expired on June 30, 2020, and $347.8 million of this program expired unused.

Stock Compensation Plans

The Company has adopted equity compensation plans to advance the interests of the Company by rewarding certain employees for their contributions to the financial success of the Company and thereby motivating them to continue to make such contributions in the future.

The 2010 Omnibus Incentive Plan became effective July 1, 2010 and reserved 3,000,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants who performed services for the Company or its affiliates, with only employees eligible to receive incentive stock options. The 2010 Omnibus Incentive Plan expired on June 30, 2015.

The 2015 Omnibus Incentive Plan became effective July 1, 2015 and reserved 5,100,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants who performed services for the Company or its affiliates, with only employees eligible to receive incentive stock options. The 2015 Omnibus Incentive Plan expired on June 30, 2020.

In March 2020, the Company’s board of directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”), which was subsequently approved by the Company’s stockholders on June 9, 2020. The 2020 Plan became effective July 1, 2020 and expires on June 30, 2030. The 2020 Plan reserves 2,400,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants performing services for the Company or its affiliates, with only employees being eligible to receive incentive stock options. The maximum amount that may be awarded to any independent member of the Company’s board of directors in any one calendar year may not exceed $1.0 million.

On June 9, 2020, the Company registered 2,400,000 shares of its common stock for issuance in accordance with the 2020 Plan pursuant to a Registration Statement on Form S-8, File No. 333-239040.

Beginning February 15, 2017, the restricted stock unit award agreements under the 2015 Plan and the 2020 Plan provide for dividend equivalent rights (“DERs”), which entitle holders of restricted stock units to the same dividend

value per share as holders of common stock. DERs are subject to the same vesting and other terms and conditions as the corresponding unvested restricted stock units. DERs are paid only when the underlying shares vest.

Terms of all awards under the 2020 Plan are determined by the board of directors or the compensation committee of the board of directors or its designee at the time of award.

Stock Compensation Expense

Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized ratably over the requisite service period.

Stock-based compensation expense recognized in the Company’s consolidated statements of income for the years ended December 31, 2020, 2019 and 2018, is as follows:


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Cost of operations	$	12.5	$	16.5	$	23.3
General and administrative		8.8		8.6		21.1
Total	$	21.3	$	25.1	$	44.4

Effective April 12, 2019, the Company entered into a definitive agreement to sell its Epsilon segment to Publicis for $4.4 billion in cash, subject to certain specified adjustments. The agreement provided for certain unvested restricted stock units held by Epsilon employees to be modified, with original vesting conditions to be accelerated upon consummation of the sale of Epsilon. Additionally, the agreement provided for certain other awards held by Epsilon employees to be forfeited upon consummation of the sale of Epsilon, which occurred July 1, 2019. As a result, in April 2019 the Company recorded $19.4 million of incremental stock-based compensation expense in discontinued operations related to the modifications, net of forfeitures. Stock-based compensation expense included in loss from discontinued operations totaled $29.7 million and $36.4 million for the years ended December 31, 2019 and 2018, respectively.

The income tax benefits related to stock-based compensation expense for the years ended December 31, 2020, 2019 and 2018 were $3.0 million, $3.6 million and $7.3 million, respectively.

As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Company’s results of operations has been reduced for estimated forfeitures. In connection with the Company’s adoption of ASU 2016-09, the Company elected to continue to estimate forfeitures at each grant date, with forfeiture estimates to be revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience, with a forfeiture rate of 5% for the years ended December 31, 2020, 2019 and 2018.

As of December 31, 2020, there was approximately $24.7 million of unrecognized expense, adjusted for estimated forfeitures, related to non-vested, stock-based equity awards granted to employees, which is expected to be recognized over a weighted average period of approximately 1.5 years.

Restricted Stock Unit Awards

During 2020, the Company awarded 241,610 service-based, 219,186 performance-based and 20,770 market-based restricted stock units. In accordance with ASC 718, the Company recognizes the estimated stock-based compensation expense, net of estimated forfeitures, over the applicable service period.

For service-based and performance-based awards, the fair value of the restricted stock units was estimated using the Company’s closing share price on the date of grant. Service-based restricted stock unit awards typically vest ratably over a three year period. Performance-based restricted stock unit awards typically vest ratably over a three year period if specified performance measures tied to the Company’s financial performance are met. For the performance-based restricted stock units awarded in 2020, the pre-defined vesting criteria typically permit a range from 0% to 150% to be

earned. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition. For the year ended December 31, 2020, stock compensation expense was not accrued for the 2020 performance-based awards, as the probable outcome was 0% achievement.

For the market-based award granted in 2020, the fair value of the restricted stock units was estimated utilizing Monte Carlo simulations of the Company’s stock price correlation (0.52), expected volatility (32.5%) and risk-free rate (1.4%) over two-year time horizons matching the performance period. Upon determination of the market condition, the restrictions will lapse with respect to the entire award on February 15, 2022, provided that the participant is employed by the Company on such vesting date.

The following table summarizes restricted stock unit activity under the Company’s equity compensation plans:


					Weighted
	Market-	Performance-	Service-		Average
	Based ⁽¹⁾	Based ⁽¹⁾	Based	Total	Fair Value
Balance at January 1, 2018	28,172	450,579	329,059	807,810	$	207.45
Shares granted	28,057	263,542	138,160	429,759		233.98
Shares vested	—	(188,680)	(130,823)	(319,503)		224.62
Shares forfeited	—	(102,199)	(18,955)	(121,154)		227.66
Balance at December 31, 2018	56,229	423,242	317,441	796,912	$	218.81
Shares granted	37,878	420,239	246,118	704,235		161.05
Shares vested	—	(262,773)	(178,730)	(441,503)		218.45
Shares forfeited	(69,819)	(350,436)	(126,257)	(546,512)		188.40
Balance at December 31, 2019	24,288	230,272	258,572	513,132	$	172.06
Shares granted	20,770	219,186	241,610	481,566		89.11
Shares vested	—	(42,097)	(127,921)	(170,018)		175.09
Shares forfeited	(22,831)	(186,135)	(38,447)	(247,413)		166.93
Balance at December 31, 2020	22,227	221,226	333,814	577,267	$	103.89
Outstanding and Expected to Vest				345,266	$	105.49

(1)	Shares granted reflects a 100% target attainment of the respective market-based or performance-based metric. Shares forfeited include those restricted stock units forfeited as a result of the Company not meeting the respective market-based or performance-based metric conditions.

The total fair value of restricted stock units vested was $29.8 million, $96.4 million and $71.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. The aggregate intrinsic value of restricted stock units outstanding and expected to vest was $25.6 million at December 31, 2020. The weighted-average remaining contractual life for unvested restricted stock units was 1.5 years at December 31, 2020.

Stock Options

Stock option awards are granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Options typically vest ratably over three years and expire ten years after the date of grant. There were no stock options outstanding as of December 31, 2020.

The following table summarizes stock option activity under the Company’s equity compensation plans:


	Outstanding			Exercisable
		Weighted			Weighted
		Average			Average
	Options	Exercise Price		Options	Exercise Price
Balance at January 1, 2018	11,859	$	23.87	11,859	$	23.87
Options granted	—		—
Options exercised	(886)		12.70
Options forfeited	(119)		2.74
Balance at December 31, 2018	10,854	$	25.01	10,854	$	25.01
Options granted	—		—
Options exercised	(10,854)		25.01
Options forfeited	—		—
Balance at December 31, 2019	—	$	—	—	$	—
Options granted	—		—
Options exercised	—		—
Options forfeited	—		—
Balance at December 31, 2020	—	$	—	—	$	—

Based on the market value on their respective exercise dates, the total intrinsic value of stock options exercised was approximately $1.3 million and $0.2 million for the years ended December 31, 2019 and 2018, respectively. There were no stock options exercised during the year ended December 31, 2020.

Dividends

During the year ended December 31, 2020, the Company declared quarterly cash dividends of $0.63 per share for the three months ended March 31, 2020 and $0.21 per share for each of the three months ended June 30, 2020, September 30, 2020 and December 31, 2020, for a total of $59.9 million. The Company paid cash dividends and dividend equivalents aggregating $60.6 million for the year ended December 31, 2020, and $0.6 million of dividend equivalents were accrued but not yet paid at December 31, 2020.

During the year ended December 31, 2019, the Company declared quarterly cash dividends of $0.63 per share, for a total of $127.1 million. The Company paid cash dividends and dividend equivalents aggregating $127.4 million for the year ended December 31, 2019, and $1.2 million of dividend equivalents were accrued but not yet paid at December 31, 2019.

During the year ended December 31, 2018, the Company declared quarterly cash dividends of $0.57 per share, for a total of $125.9 million. The Company paid cash dividends and dividend equivalents aggregating $125.2 million for the year ended December 31, 2018, and $0.7 million of dividend equivalents were accrued but not yet paid at December 31, 2018.

On January 28, 2021 the Company’s board of directors declared a quarterly cash dividend of $0.21 per share on the Company’s common stock, payable on March 18, 2021 to stockholders of record at the close of business on February 12, 2021.

EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2020

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

20. EMPLOYEE BENEFIT PLANS

Employee Stock Purchase Plan

In March 2015, the Company’s board of directors adopted the 2015 Employee Stock Purchase Plan (the “2015 ESPP”), which was subsequently approved by the Company’s stockholders on June 3, 2015. The 2015 ESPP became effective July 1, 2015 with no definitive expiration date. The Company’s board of directors may at any time and for any reason terminate or amend the 2015 ESPP. No employee may purchase more than $25,000 worth of stock under the 2015 ESPP in any calendar year, and no employee may purchase stock under the 2015 ESPP if such purchase would cause the

employee to own more than 5% of the voting power or value of the Company’s common stock. The 2015 ESPP provides for six month offering periods, commencing on the first trading day of the first and third calendar quarter of each year and ending on the last trading day of each subsequent calendar quarter. The purchase price of the common stock upon exercise shall be 85% of the fair market value of shares on the applicable purchase date as determined by averaging the high and low trading prices of the last trading day of the six-month period. An employee elects to participate and have contributions deducted through payroll deductions. The 2015 ESPP provides for the issuance of any remaining shares available for issuance under the 2005 ESPP, which were 441,327 shares at June 30, 2015. The 2015 ESPP reserved an additional 1,000,000 shares of the Company’s common stock for issuance under the 2015 Plan, bringing the maximum number of shares reserved for issuance under the 2015 ESPP to 1,441,327 shares, subject to adjustment as provided in the 2015 ESPP.

On June 5, 2015, the Company registered 1,441,327 shares of its common stock for issuance in accordance with the 2015 ESPP pursuant to a Registration Statement on Form S-8, File No. 333-204759.

During the year ended December 31, 2020, the Company issued 65,430 shares of common stock under the 2015 ESPP at a weighted-average issue price of $46.73. Since its adoption on July 1, 2015, 514,112 shares of common stock have been issued, with 927,215 shares available for issuance under the 2015 ESPP.

401(k) Retirement Savings Plan

The Alliance Data Systems 401(k) and Retirement Savings Plan is a defined contribution plan that is qualified under Section 401(k) of the Internal Revenue Code of 1986. The Company amended its 401(k) and Retirement Savings Plan effective December 3, 2020. The 401(k) and Retirement Savings Plan is an IRS-approved safe harbor plan design that eliminates the need for most discrimination testing. Eligible employees can participate in the 401(k) and Retirement Savings Plan immediately upon joining the Company and after 180 days of employment begin receiving company matching contributions. In addition, “seasonal” or “on-call” employees must complete a year of eligibility service before they may participate in the 401(k) and Retirement Savings Plan. The 401(k) and Retirement Savings Plan permits eligible employees to make Roth elective deferrals, which are included in the employee’s taxable income at the time of contribution, but not when distributed. Regular, or Non-Roth, elective deferrals made by employees, together with contributions by the Company to the 401(k) and Retirement Savings Plan, and income earned on these contributions, are not taxable to employees until withdrawn from the 401(k) and Retirement Savings Plan. The 401(k) and Retirement Savings Plan covers U.S. employees, who are at least 18 years old, of ADS Alliance Data Systems, Inc., one of the Company’s wholly-owned subsidiaries, and any other subsidiary or affiliated organization that adopts this 401(k) and Retirement Savings Plan. Employees of the Company, and all of its U.S. subsidiaries, are currently covered under the 401(k) and Retirement Savings Plan.

The Company matches an employee’s contribution dollar-for-dollar up to five percent of the employee’s eligible compensation. All company matching contributions are immediately vested. Company matching contributions for the years ended December 31, 2020, 2019 and 2018 were $15.7 million, $35.3 million and $44.8 million, respectively.

The participants in the plan can direct their contributions and the Company’s matching contribution to numerous investment options, including the Company’s common stock. On July 20, 2001, the Company registered 1,500,000 shares of its common stock for issuance in accordance with its 401(k) and Retirement Savings Plan pursuant to a Registration Statement on Form S-8, File No. 333-65556. As of December 31, 2020, 341,096 of such shares remain available for issuance.

Group Retirement Savings Plan and Deferred Profit Sharing Plan (LoyaltyOne)

The Company provides for its Canadian employees the Group Retirement Savings Plan of the Loyalty Group (“GRSP”), which is a group retirement savings plan registered with the Canada Revenue Agency. Contributions made by Canadian employees on their behalf or on behalf of their spouse to the GRSP, and income earned on these contributions, are not taxable to employees until withdrawn from the GRSP. Employee contributions eligible for company match may not exceed the overall maximum allowed by the Income Tax Act (Canada); the maximum tax-deductible GRSP contribution is set by the Canada Revenue Agency each year. The Deferred Profit Sharing Plan (“DPSP”) is a legal trust

registered with the Canada Revenue Agency. Eligible full-time employees can participate in the GRSP after three months of employment and eligible part-time employees after six months of employment. Employees become eligible to receive company matching contributions into the DPSP on the first day of the calendar quarter following twelve months of employment. Based on the eligibility guidelines, the Company matches an employee’s contribution dollar-for-dollar up to five percent of the employee’s eligible compensation. Contributions made to the DPSP reduce an employee’s maximum contribution amounts to the GRSP under the Income Tax Act (Canada) for the following year. All company matching contributions into the DPSP vest after receipt of one continuous year of DPSP contributions. LoyaltyOne matching and discretionary contributions were $1.7 million, $1.8 million and $1.7 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Executive Deferred Compensation Plan and the Canadian Supplemental Executive Retirement Plan

The Company also maintains an Executive Deferred Compensation Plan (“EDCP”). The EDCP permits a defined group of management and highly compensated employees to defer on a pre-tax basis a portion of their base salary and incentive compensation (as defined in the EDCP) payable for services rendered. Deferrals under the EDCP are unfunded and subject to the claims of the Company’s creditors. Each participant in the EDCP is 100% vested in their account, and account balances accrue interest at a rate established and adjusted periodically by the compensation committee.

The Company provides a Canadian Supplemental Executive Retirement Plan for a defined group of management and highly compensated employees of LoyaltyOne, Co., one of the Company’s wholly-owned subsidiaries. Similar to the EDCP, participants may defer on a pre-tax basis a portion of their compensation and bonuses payable for services rendered and to receive certain employer contributions.

As of December 31, 2020 and 2019, the Company’s outstanding liability related to these plans and included in accrued expenses in the Company’s consolidated balance sheets was $19.9 million and $33.3 million, respectively.

ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2020

ACCUMULATED OTHER COMPREHENSIVE LOSS.

ACCUMULATED OTHER COMPREHENSIVE LOSS

21. ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of accumulated other comprehensive loss, net of tax effects, are as follows:


									Accumulated
	Net Unrealized		Net Unrealized		Net Unrealized		Foreign Currency		Other
	Gains (Losses) on		Gains (Losses) on		Gains (Losses) on		Translation		Comprehensive
	Securities		Cash Flow Hedges		Net Investment Hedge		Adjustments ⁽¹⁾		Loss

	(in millions)
Balance as of January 1, 2018	$	(8.7)	$	(0.1)	$	(42.0)	$	(89.4)	$	(140.2)
Changes in other comprehensive income (loss)		(2.0)		(0.1)		29.6		(25.4)		2.1
Balance at December 31, 2018	$	(10.7)	$	(0.2)	$	(12.4)	$	(114.8)	$	(138.1)
Changes in other comprehensive income (loss)		13.2		0.1		4.9		(6.8)		11.4
Recognition resulting from the sale of Epsilon's foreign subsidiaries		—		—		—		26.8		26.8
Balance at December 31, 2019	$	2.5	$	(0.1)	$	(7.5)	$	(94.8)	$	(99.9)
Changes in other comprehensive income (loss)		20.7		(0.6)		—		71.0		91.1
Recognition resulting from the sale of Precima's foreign subsidiaries		—		—		—		3.8		3.8
Balance at December 31, 2020	$	23.2	$	(0.7)	$	(7.5)	$	(20.0)	$	(5.0)

(1)

Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates.

In accordance with ASC 830, “Foreign Currency Matters,” upon the sale of Precima on January 10, 2020, $3.8 million of accumulated foreign currency translation adjustments attributable to Precima’s foreign subsidiaries sold were reclassified from accumulated other comprehensive loss and included in the calculation of the gain on sale of Precima. Upon the sale of Epsilon on July 1, 2019, $26.8 million of accumulated foreign currency translation adjustments

attributable to Epsilon’s foreign subsidiaries sold were reclassified from accumulated other comprehensive loss and included in the calculation of the gain/loss on sale of Epsilon segment. Additionally, as of January 1, 2018, a cumulative-effect adjustment of $1.5 million, net of tax, was reclassified from accumulated other comprehensive loss to retained earnings related to the adoption of ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” Other reclassifications from accumulated other comprehensive loss into net income for each of the periods presented were not material.

INCOME TAXES

12 Months Ended

Dec. 31, 2020

INCOME TAXES

INCOME TAXES

22. INCOME TAXES

The components of income from continuing operations before income taxes and income tax expense are as follows:


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Components of income from continuing operations before income taxes:
Domestic	$	281.7	$	591.9	$	1,052.7
Foreign		112.8		146.5		162.3
Total	$	394.5	$	738.4	$	1,215.0
Components of income tax expense:
Current
Federal	$	209.2	$	126.0	$	152.2
State		36.6		35.8		58.0
Foreign		47.8		11.5		52.8
Total current		293.6		173.3		263.0
Deferred
Federal		(135.1)		(11.8)		48.0
State		(37.6)		6.7		14.7
Foreign		(21.4)		(2.4)		(56.2)
Total deferred		(194.1)		(7.5)		6.5
Total provision for income taxes	$	99.5	$	165.8	$	269.5

A reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate for all periods to income from continuing operations before income taxes is as follows:


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Expected expense at statutory rate	$	82.8	$	155.1	$	255.1
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit		(0.8)		33.6		57.4
Foreign rate differential		4.1		(2.3)		11.6
Foreign restructuring		3.6		—		(48.0)
Impact of 2017 Tax Reform		(2.4)		(30.2)		(29.7)
Global intangible low-taxed income		(7.8)		8.7		15.5
Non-deductible expenses (non-taxable income)		8.3		9.1		3.7
IRC Section 199, net of tax reserves		12.5		—		(0.8)
Other		(0.8)		(8.2)		4.7
Total	$	99.5	$	165.8	$	269.5

H.R. 1, originally known as the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Reform”) was enacted on December 22, 2017. The 2017 Tax Reform permanently reduced the corporate tax rate to 21% from 35%, effective January 1, 2018 and implemented a change from a system of worldwide taxation with deferral to a hybrid territorial system. This system taxes excess foreign profits above a deemed routine return through the Global Intangible Low-Taxed Income (“GILTI”) regime. The Company recognizes tax on GILTI as an expense in the period incurred.

For the year ended December 31, 2020, the Company recorded an income tax benefit of approximately $2.4 million related to the rate benefit for a capital loss that will be carried back to a year preceding the 2017 Tax Reform rate reduction. Additionally, the Company recorded a benefit of $7.8 million for the year ended December 31, 2020 related to the impact of the final regulations issued by the Treasury and Internal Revenue Service regarding GILTI. The Company is currently under audit with the Internal Revenue Service for years 2012-2017. For years 2012-2014, the audit is limited in scope to research and development tax credits and IRC Section 199 deductions claimed on amended returns. As a result of the preliminary audit findings, the Company increased its reserve for IRC Section 199 deductions by $12.5 million during the year ended December 31, 2020. For years ended December 31, 2019 and 2018, the Company recorded an income tax benefit of approximately $30.2 million related to a decrease in unrecognized tax benefits as a result of a tax accounting method change required by the 2017 Tax Reform and an income tax benefit of approximately $29.7 million related to the impact of the 2017 Tax Reform rate differential as a result of certain tax accounting method changes related to projects initiated in 2018, respectively.

Deferred tax assets and liabilities consist of the following:


	December 31,
	2020		2019

	(in millions)
Deferred tax assets
Deferred revenue	$	29.2	$	9.5
Allowance for loan loss		482.3		267.6
Net operating loss carryforwards and other carryforwards		106.2		69.0
Stock-based compensation and other employee benefits		3.8		13.7
Lease liabilities		74.4		74.4
Accrued expenses and other		81.0		40.3
Intangible assets		5.5		23.2
Total deferred tax assets		782.4		497.7
Valuation allowance		(50.1)		(64.0)
Deferred tax assets, net of valuation allowance		732.3		433.7
Deferred tax liabilities
Deferred income	$	290.9	$	365.6
Depreciation		25.2		41.8
Right of use assets		57.0		61.1
Total deferred tax liabilities		373.1		468.5

Net deferred tax asset (liability)	$	359.2	$	(34.8)

Amounts recognized in the consolidated balance sheets:
Non-current assets	$	359.2	$	45.2
Non-current liabilities		—		(80.0)
Total – Net deferred tax asset (liability)	$	359.2	$	(34.8)

At December 31, 2020, included in the Company’s U.S. tax returns are approximately $146.4 million of U.S. federal net operating loss carryovers (“NOLs”) and approximately $33.8 million of foreign tax credits. With the exception of NOLs generated after December 31, 2017, these attributes expire at various times through the year 2037. Pursuant to Section 382 of the Internal Revenue Code, the Company’s utilization of a portion of such NOLs is subject to an annual limitation. The Company does not believe it is more-likely-than-not that all of its NOLs will be utilized and has therefore, in accordance with ASC 740-10-30, “Income Taxes—Overall—Initial Measurement,” established a valuation allowance against a portion of the NOLs. At December 31, 2020, the Company has state income tax NOLs of approximately $232.3 million and state credits of approximately $3.0 million available to offset future state taxable income. The Company also has state capital losses of approximately $10.6 million to offset capital gains. The state NOLs, capital losses and credits will expire at various times through the year 2039. The Company believes a majority of these NOLs and all of the capital losses will expire before utilization and has therefore established a valuation allowance

against those NOLs and capital losses expected to expire unutilized. The Company has $240.9 million of foreign NOLs and $6.6 million of foreign capital losses at December 31, 2020. The foreign NOLs and capital losses have an unlimited carryforward period. The Company does not believe it is more-likely-than-not that some of the NOLs or any of the capital losses will be utilized and has therefore, in accordance with ASC 740-10-30, established a valuation allowance against those unlikely to be utilized. The Company’s valuation allowance, and corresponding NOLs, decreased $13.9 million during the year ended December 31, 2020, due primarily to nondeductible expenses in foreign jurisdictions. The Company’s valuation allowance increased $27.7 million during the year ended December 31, 2019 and decreased $40.1 million during the year ended December 31, 2018.

Should certain substantial changes in the Company’s ownership occur, there could be an annual limitation on the amount of carryovers and credits that can be utilized. The impact of such a limitation would likely not be significant.

At December 31, 2020, the Company did not have any excess financial reporting basis over tax basis from a U.S. federal tax perspective primarily as a result of the GILTI regime pursuant to the 2017 Tax Reform. The Company may have, in certain state or foreign jurisdictions, amounts of financial reporting basis that exceeds tax basis as of December 31, 2020. However, these amounts are immaterial and no additional state or foreign tax liability has been recorded. Finally, despite the immaterial nature, the Company intends to permanently reinvest any previously undistributed earnings of our foreign subsidiaries in the operations outside the United States to support its international growth.

Net deferred tax assets increased by $159.0 million in 2020 as a result of the adoption of CECL. This tax impact was recorded to retained earnings.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):


Balance at January 1, 2018	$	208.3
Increases related to prior years’ tax positions		41.3
Decreases related to prior years’ tax positions		(9.6)
Increases related to current year tax positions		61.5
Settlements during the period		(1.0)
Lapses of applicable statutes of limitation		(4.2)
Balance at December 31, 2018	$	296.3
Increases related to prior years’ tax positions		2.7
Decreases related to prior years’ tax positions		(76.6)
Increases related to current year tax positions		58.3
Settlements during the period		(0.6)
Lapses of applicable statutes of limitation		(5.8)
Balance at December 31, 2019	$	274.3
Increases related to prior years’ tax positions		64.7
Decreases related to prior years’ tax positions		(63.5)
Increases related to current year tax positions		10.7
Settlements during the period		(4.6)
Lapses of applicable statutes of limitation		(8.3)
Balance at December 31, 2020	$	273.3

Included in the balance at December 31, 2020 are tax positions reclassified from deferred income taxes. Deductibility or taxability is highly certain for these tax positions but there is uncertainty about the timing of such deductibility or taxability. Because of the impact of deferred tax accounting, other than interest and penalties, this timing uncertainty, if realized, would not have a material effect on the annual effective tax rate but could accelerate the payment of cash to the taxing authority to an earlier period.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company has potential cumulative interest and penalties with respect to unrecognized tax benefits of approximately $74.7 million, $67.0 million and $66.7 million at December 31, 2020, 2019 and 2018, respectively. For the years ended December 31, 2020, 2019 and 2018, the Company recorded approximately an $7.6 million expense, a

$0.8 million benefit and a $24.5 million expense, respectively, for potential interest and penalties with respect to unrecognized tax benefits.

At December 31, 2020, 2019 and 2018, the Company had unrecognized tax benefits of approximately $257.8 million, $255.1 million and $247.7 million, respectively, that, if recognized, would impact the effective tax rate. The Company does not anticipate a significant change to the total amount of unrecognized tax benefits over the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. With some exceptions, the tax returns filed by the Company are no longer subject to U.S. federal income tax and state and local examinations for the years before 2015 or foreign income tax examinations for years before 2013.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2020

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

23. FINANCIAL INSTRUMENTS

In accordance with ASC 825, “Financial Instruments,” the Company is required to disclose the fair value of financial instruments for which it is practical to estimate fair value. To obtain fair values, observable market prices are used if available. In some instances, observable market prices are not readily available and fair value is determined using present value or other techniques appropriate for a particular financial instrument. These techniques involve judgment and as a result are not necessarily indicative of the amounts the Company would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

Fair Value of Financial Instruments—The estimated fair values of the Company’s financial instruments are as follows:


	December 31, 2020				December 31, 2019
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value

	(in millions)
Financial assets
Credit card and loan receivables, net	$	14,776.4	$	17,301.2	$	18,292.0	$	19,126.0
Credit card receivables held for sale		—		—		408.0		436.2
Redemption settlement assets, restricted		693.5		693.5		600.8		600.8
Other investments		225.4		225.4		259.8		259.8
Derivative instruments		0.4		0.4		0.2		0.2
Financial liabilities
Derivative instruments		1.5		1.5		0.3		0.3
Deposits		9,792.6		10,015.9		12,151.7		12,303.6
Non-recourse borrowings of consolidated securitization entities		5,709.9		5,783.4		7,284.0		7,333.6
Long-term and other debt		2,805.7		2,875.1		2,849.9		2,878.8

The following techniques and assumptions were used by the Company in estimating fair values of financial instruments as disclosed herein:

Credit card and loan receivables, net — The Company utilizes a discounted cash flow model using unobservable inputs, including estimated yields (interest and fee income), loss rates, payment rates and discount rates to estimate the fair value measurement of the credit card and loan receivables.

Credit card receivables held for sale — The Company utilizes a discounted cash flow model using unobservable inputs, including forecasted yields and net charge-off estimates to estimate the fair value measurement of the credit card portfolios held for sale, as well as market data as applicable.

Redemption settlement assets, restricted — Redemption settlement assets, restricted are recorded at fair value based on quoted market prices for the same or similar securities.

Other investments — Other investments consist of marketable securities and U.S. Treasury bonds and are included in other current assets and other non-current assets in the consolidated balance sheets. Other investments are recorded at fair value based on quoted market prices for the same or similar securities.

Deposits — For money market deposits, carrying value approximates fair value due to the liquid nature of these deposits. For certificates of deposit, the fair value is estimated based on the current observable market rates available to the Company for similar deposits with similar remaining maturities.

Non-recourse borrowings of consolidated securitization entities — The fair value is estimated based on the current observable market rates available to the Company for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction.

Long-term and other debt — The fair value is estimated based on the current observable market rates available to the Company for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction.

Derivative instruments — The Company’s foreign currency cash flow hedges and foreign currency exchange forward contracts are recorded at fair value based on a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs.

Financial Assets and Financial Liabilities Fair Value Hierarchy

ASC 820, “Fair Value Measurement,” establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

●

Level 1, defined as observable inputs such as quoted prices in active markets;

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

●

Level 3, defined as unobservable inputs where little or no market data exists, therefore requiring an entity to develop its own assumptions.

Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. The use of different techniques to determine fair value of these financial instruments could result in different estimates of fair value at the reporting date.

The following tables provide information for the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2020 and 2019:


			Fair Value Measurements at
			December 31, 2020 Using
	Balance at
	December 31,
	2020		Level 1		Level 2		Level 3

	(in millions)
Mutual funds ⁽¹⁾	$	26.9	$	26.9	$	—	$	—
Corporate bonds ⁽¹⁾		611.2		—		611.2		—
Marketable securities ⁽²⁾		225.4		34.2		191.2		—
Derivative instruments ⁽³⁾		0.4		—		0.4		—
Total assets measured at fair value	$	863.9	$	61.1	$	802.8	$	—

Derivative instruments ⁽³⁾	$	1.5	$	—	$	1.5	$	—
Total liabilities measured at fair value	$	1.5	$	—	$	1.5	$	—


			Fair Value Measurements at
			December 31, 2019 Using
	Balance at
	December 31,
	2019		Level 1		Level 2		Level 3

	(in millions)
Mutual funds ⁽¹⁾	$	25.1	$	25.1	$	—	$	—
Corporate bonds ⁽¹⁾		536.4		—		536.4		—
Marketable securities ⁽²⁾		259.8		26.2		233.6		—
Derivative instruments ⁽³⁾		0.2		—		0.2		—
Total assets measured at fair value	$	821.5	$	51.3	$	770.2	$	—

Derivative instruments ⁽³⁾	$	0.3	$	—	$	0.3	$	—
Total liabilities measured at fair value	$	0.3	$	—	$	0.3	$	—

(1)	Amounts are included in redemption settlement assets in the consolidated balance sheets.

(2)	Amounts are included in other current assets and other non-current assets in the consolidated balance sheets.

(3)	Amounts are included in other current assets and other current liabilities in the consolidated balance sheets.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31, 2020 and 2019.

Financial Instruments Disclosed but Not Carried at Fair Value

The following tables provide assets and liabilities disclosed but not carried at fair value as of December 31, 2020 and 2019:


	Fair Value Measurements at
	December 31, 2020
	Total		Level 1		Level 2		Level 3

	(in millions)
Financial assets:
Credit card and loan receivables, net	$	17,301.2	$	—	$	—	$	17,301.2
Total	$	17,301.2	$	—	$	—	$	17,301.2

Financial liabilities:
Deposits	$	10,015.9	$	—	$	10,015.9	$	—
Non-recourse borrowings of consolidated securitization entities		5,783.4		—		5,783.4		—
Long-term and other debt		2,875.1		—		2,875.1		—
Total	$	18,674.4	$	—	$	18,674.4	$	—


	Fair Value Measurements at
	December 31, 2019
	Total		Level 1		Level 2		Level 3

	(in millions)
Financial assets:
Credit card and loan receivables, net	$	19,126.0	$	—	$	—	$	19,126.0
Credit card receivables held for sale		436.2		—		—		436.2
Total	$	19,562.2	$	—	$	—	$	19,562.2

Financial liabilities:
Deposits	$	12,303.6	$	—	$	12,303.6	$	—
Non-recourse borrowings of consolidated securitization entities		7,333.6		—		7,333.6		—
Long-term and other debt		2,878.8		—		2,878.8		—
Total	$	22,516.0	$	—	$	22,516.0	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property and equipment, ROU assets, deferred contract assets, goodwill, and intangible assets. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, including when there is evidence of impairment. For the year ended December 31, 2020, the Company recorded asset impairment charges of $63.7 million related to certain deferred contract costs, fixed assets and ROU assets. The fair value was determined utilizing discounted cash flow models over the estimated life of each asset. The principal assumptions used in the Company’s impairment analysis were forecasted future cash flows and the discount rate, which are considered Level 3 inputs. See Note 3, “Revenue,” Note 12, “Leases,” and Note 13, “Property and Equipment,” for more information regarding asset impairments.

For the year ended December 31, 2019, as part of restructuring and other charges, the Company recorded asset impairments of $52.0 million. See Note 15, “Restructuring and Other Charges,” for more information.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

PARENT-ONLY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2020

PARENT-ONLY FINANCIAL STATEMENTS

PARENT-ONLY FINANCIAL STATEMENTS

24. PARENT-ONLY FINANCIAL STATEMENTS

The following ADSC financial statements are provided in accordance with the rules of the Securities and Exchange Commission, which require such disclosure when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets. Certain of the Company’s subsidiaries may be restricted in distributing cash or other assets to ADSC, which could be utilized to service its indebtedness. The stand-alone parent-only financial statements are presented below.

Balance Sheets


	December 31,
	2020		2019

	(in millions)
Assets:
Cash and cash equivalents	$	0.2	$	0.2
Investment in subsidiaries		5,127.0		5,326.2
Other assets		41.8		3.4
Total assets	$	5,169.0	$	5,329.8
Liabilities:
Current portion of long-term and other debt	$	101.4	$	101.4
Long-term and other debt		2,704.3		2,748.5
Intercompany liabilities, net		742.0		806.7
Other liabilities		99.7		84.9
Total liabilities		3,647.4		3,741.5
Stockholders’ equity		1,521.6		1,588.3
Total liabilities and stockholders’ equity	$	5,169.0	$	5,329.8

See Note 17, “Debt,” for more information regarding the Company’s long-term and other debt.

Statements of Income


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Interest from loans to subsidiaries	$	12.6	$	19.2	$	17.9
Dividends from subsidiaries		256.3		922.6		810.1
Total revenue		268.9		941.8		828.0
Loss on extinguishment of debt		—		71.9		—
Interest expense, net		109.5		130.0		281.2
Other expenses, net		1.7		(0.7)		(0.4)
Total expenses		111.2		201.2		280.8
Income before income taxes and equity in undistributed net income (loss) of subsidiaries		157.7		740.6		547.2
Benefit for income taxes		21.2		42.1		7.0
Income before equity in undistributed net income (loss) of subsidiaries		178.9		782.7		554.2
Equity in undistributed net income (loss) of subsidiaries		34.8		(504.7)		408.9
Net income	$	213.7	$	278.0	$	963.1

Statements of Comprehensive Income


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Net income	$	213.7	$	278.0	$	963.1
Other comprehensive income, net of tax		—		4.9		29.6
Total comprehensive income, net of tax	$	213.7	$	282.9	$	992.7

Statements of Cash Flows


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Net cash (used in) provided by operating activities	$	(137.6)	$	(1,029.1)	$	82.3
Investing activities:
Investment in subsidiaries		(3.2)		(135.0)		—
Proceeds from sale of business		—		4,118.3		—
Dividends received		256.3		922.6		810.1
Net cash provided by investing activities		253.1		4,905.9		810.1
Financing activities:
Borrowings under debt agreements		1,276.0		3,083.0		4,527.0
Repayments of borrowings		(1,320.5)		(5,778.2)		(4,838.3)
Payment of debt extinguishment costs		—		(46.1)		—
Payment of deferred financing costs		(9.1)		(20.7)		(4.6)
Purchase of treasury shares		—		(976.1)		(443.2)
Dividends paid		(60.6)		(127.4)		(125.2)
Proceeds from issuance of common stock		2.8		12.4		17.6
Other		(4.1)		(23.6)		(25.7)
Net cash used in financing activities		(115.5)		(3,876.7)		(892.4)
Change in cash, cash equivalents and restricted cash		—		0.1		—
Cash, cash equivalents and restricted cash at beginning of year		0.2		0.1		0.1
Cash, cash equivalents and restricted cash at end of year	$	0.2	$	0.2	$	0.1

Non-cash investing and financing activities related to the parent-only statement of cash flows for the year ended December 31, 2020 included the issuance of approximately 1.9 million shares of the Company’s common stock as non-cash consideration in the acquisition of Bread on December 3, 2020. For more information, see Note 5, “Acquisitions.”

Non-cash investing activities related to the parent-only statement of cash flows for the year ended December 31, 2019 included a $3.0 billion non-cash dividend in the form of an intercompany return of capital from ADS Alliance Data Systems, Inc. to ADSC.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2020

SEGMENT INFORMATION

SEGMENT INFORMATION

25. SEGMENT INFORMATION

Operating segments are defined by ASC 280, “Segment Reporting,” as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The operating segments are reviewed separately because each operating segment represents a strategic business unit that generally offers different products and services.

As discussed in Note 7, “Discontinued Operations,” in the first quarter of 2019, the Company’s Epsilon segment was classified as a discontinued operation and was sold on July 1, 2019. The Company operates in the LoyaltyOne and Card Services reportable segments, which consist of the following:

●

LoyaltyOne provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty; and

●

Card Services provides private label, co-brand, general purpose and business credit card programs, digital payments, including Bread, and Comenity-branded financial services. Card Services provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services.

Corporate and other immaterial businesses are reported collectively as an “all other” category labeled “Corporate/Other.” Income taxes are not allocated to the segments in the computation of segment operating profit for internal evaluation purposes and have also been included in “Corporate/Other.”


					Corporate/
Year Ended December 31, 2020	LoyaltyOne		Card Services		Other		Total

	(in millions)
Revenues	$	764.8	$	3,756.5	$	0.1	$	4,521.4

Income (loss) before income taxes	$	111.0	$	501.5	$	(218.0)	$	394.5
Interest expense, net		(0.8)		385.4		109.3		493.9
Operating income (loss)		110.2		886.9		(108.7)		888.4
Depreciation and amortization		78.0		102.8		3.0		183.8
Stock compensation expense		5.5		7.0		8.8		21.3
Gain on sale of business, net of strategic transaction costs		(8.0)		—		—		(8.0)
Strategic transaction costs		0.4		0.3		15.2		15.9
Asset impairments		—		63.7		—		63.7
Restructuring and other charges		0.1		(8.3)		—		(8.2)
Adjusted EBITDA ⁽¹⁾		186.2		1,052.4		(81.7)		1,156.9
Less: Securitization funding costs		—		165.9		—		165.9
Less: Interest expense on deposits		—		219.5		—		219.5
Adjusted EBITDA, net ⁽¹⁾	$	186.2	$	667.0	$	(81.7)	$	771.5

Capital expenditures	$	24.3	$	29.4	$	0.3	$	54.0


					Corporate/
Year Ended December 31, 2019	LoyaltyOne		Card Services		Other		Total

	(in millions)
Revenues	$	1,033.1	$	4,547.8	$	0.4	$	5,581.3

Income (loss) before income taxes	$	103.1	$	991.7	$	(356.4)	$	738.4
Interest expense, net		2.3		439.0		127.7		569.0
Operating income (loss)		105.4		1,430.7		(228.7)		1,307.4
Depreciation and amortization		80.1		89.3		6.7		176.1
Stock compensation expense		7.2		9.3		8.6		25.1
Strategic transaction costs		1.0		—		10.7		11.7
Restructuring and other charges		50.8		29.4		37.9		118.1
Loss on extinguishment of debt		—		—		71.9		71.9
Adjusted EBITDA ⁽¹⁾		244.5		1,558.7		(92.9)		1,710.3
Less: Securitization funding costs		—		213.4		—		213.4
Less: Interest expense on deposits		—		225.6		—		225.6
Adjusted EBITDA, net ⁽¹⁾	$	244.5	$	1,119.7	$	(92.9)	$	1,271.3

Capital expenditures	$	41.5	$	44.2	$	0.8	$	86.5



					Corporate/
Year Ended December 31, 2018	LoyaltyOne		Card Services		Other		Total

	(in millions)
Revenues	$	1,068.4	$	4,597.6	$	0.6	$	5,666.6

Income (loss) before income taxes	$	153.8	$	1,381.6	$	(320.4)	$	1,215.0
Interest expense, net		5.6		385.9		150.8		542.3
Operating income (loss)		159.4		1,767.5		(169.6)		1,757.3
Depreciation and amortization		84.8		101.1		7.7		193.6
Stock compensation expense		10.0		13.3		21.1		44.4
Adjusted EBITDA ⁽¹⁾		254.2		1,881.9		(140.8)		1,995.3
Less: Securitization funding costs		—		220.2		—		220.2
Less: Interest expense on deposits		—		165.7		—		165.7
Adjusted EBITDA, net ⁽¹⁾	$	254.2	$	1,496.0	$	(140.8)	$	1,609.4

Capital expenditures	$	34.0	$	53.8	$	5.5	$	93.3

(1)

Adjusted EBITDA is a non-GAAP financial measure equal to income from continuing operations, the most directly comparable financial measure based on GAAP plus stock compensation expense, provision for income taxes, interest expense, net, depreciation and other amortization, and amortization of purchased intangibles. Adjusted EBITDA also excludes the gain on the sale of Precima, strategic transaction costs, which represent costs for professional services associated with strategic initiatives, asset impairments, restructuring and other charges, and loss related to the Company’s extinguishment of debt in July 2019.

Adjusted EBITDA, net is also a non-GAAP financial measure equal to adjusted EBITDA less securitization funding costs and interest expense on deposits. Adjusted EBITDA and adjusted EBITDA, net are presented in accordance with ASC 280 as they are the primary performance metrics utilized to assess performance of the segments.

The table below reconciles the reportable segments’ total assets to consolidated total assets:


		LoyaltyOne		Card Services		Corporate/ Other		Total
		(in millions)
Total Assets
December 31, 2020	$	2,422.3	$	19,884.6	$	240.2	$	22,547.1
December 31, 2019	$	2,338.0	$	23,931.1	$	225.7	$	26,494.8

With respect to information concerning principal geographic areas, revenues are based on the location of the subsidiary that generally correlates with the location of the customer. Information concerning principal geographic areas is as follows:


					Europe,
	United				Middle East
	States		Canada		and Africa		Asia Pacific		Other		Total

	(in millions)
Revenues
Year Ended December 31, 2020	$	3,767.7	$	286.9	$	332.6	$	80.5	$	53.7	$	4,521.4
Year Ended December 31, 2019	$	4,588.3	$	352.2	$	449.1	$	121.7	$	70.0	$	5,581.3
Year Ended December 31, 2018	$	4,621.3	$	411.3	$	463.2	$	122.0	$	48.8	$	5,666.6

Long Lived Assets
December 31, 2020	$	1,874.9	$	310.7	$	714.3	$	11.4	$	1.4	$	2,912.7
December 31, 2019	$	1,361.1	$	311.1	$	696.2	$	12.8	$	0.9	$	2,382.1

As of December 31, 2020, 2019 and 2018, revenues from L Brands and its affiliates represented approximately 10.3%, 10.6% and 10.8%, respectively, of consolidated revenues and are included in the Card Services segment.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

SUPPLEMENTAL CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2020

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

26. SUPPLEMENTAL CASH FLOW INFORMATION

The consolidated statements of cash flows are presented with the combined cash flows from discontinued operations with cash flows from continuing operations within each cash flow statement category. The following table provides a reconciliation of cash and cash equivalents to the total of the amounts reported in the consolidated statements of cash flows:


	December 31,		December 31,		December 31,
	2020		2019		2018

	(in millions)
Cash and cash equivalents	$	3,081.5	$	3,874.4	$	3,863.1
Restricted cash included within other current assets ⁽¹⁾		326.3		44.4		60.7
Restricted cash included within redemption settlement assets, restricted⁽²⁾		55.4		39.3		43.9
Total cash, cash equivalents and restricted cash	$	3,463.2	$	3,958.1	$	3,967.7

(1)

Includes cash restricted for principal and interest repayments of non-recourse borrowings of consolidated securitized debt and other restricted cash within other current assets. At December 31, 2020, restricted cash included $291.8 million in principal accumulation for the repayment of non-recourse borrowings of consolidated securitized debt that matured in February 2021.

(2)	See Note 11, “Redemption Settlement Assets,” for additional information regarding the nature of restrictions on redemption settlement assets.

Non-cash investing and financing activities for the year ended December 31, 2020 included $75.0 million of deferred consideration and the issuance of approximately 1.9 million shares of the Company’s common stock as non-cash consideration in the acquisition of Bread on December 3, 2020. For more information, see Note 5, “Acquisitions.”

Non-cash financing activities for the year ended December 31, 2019 included an exchange agreement with ValueAct Holdings, L.P. pursuant to which ValueAct exchanged an aggregate of 1,500,000 shares of the Company’s common stock for an aggregate of 150,000 shares of preferred stock, and ValueAct’s subsequent conversion of all 150,000 shares of preferred stock back to common stock.

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

12 Months Ended

Dec. 31, 2020

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

27. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Unaudited quarterly results of operations for the years ended December 31, 2020 and 2019 are presented below.


	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
	2020		2020		2020		2020

	(in millions, except per share amounts)
Revenues	$	1,381.8	$	979.3	$	1,050.5	$	1,109.8
Operating expenses		1,217.8		804.6		759.5		851.1
Operating income		164.0		174.7		291.0		258.7
Interest expense, net		138.6		127.7		115.1		112.5
Income from continuing operations before income taxes		25.4		47.0		175.9		146.2
Provision for income taxes		(4.6)		8.6		42.6		52.9
Income from continuing operations		30.0		38.4		133.3		93.3
Loss from discontinued operations, net of taxes		—		—		—		(81.3)
Net income	$	30.0	$	38.4	$	133.3	$	12.0

Basic income (loss) per share:
Income from continuing operations	$	0.63	$	0.81	$	2.79	$	1.93
Loss from discontinued operations	$	—	$	—	$	—	$	(1.68)
Net income per share	$	0.63	$	0.81	$	2.79	$	0.25

Diluted income (loss) per share:
Income from continuing operations	$	0.63	$	0.81	$	2.79	$	1.93
Loss from discontinued operations	$	—	$	—	$	—	$	(1.68)
Net income per share	$	0.63	$	0.81	$	2.79	$	0.25


	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
	2019		2019		2019		2019

	(in millions, except per share amounts)
Revenues	$	1,334.2	$	1,348.5	$	1,437.6	$	1,461.0
Operating expenses		977.3		1,011.2		1,133.4		1,152.0
Operating income		356.9		337.3		304.2		309.0
Interest expense, net		143.9		143.5		140.0		141.6
Income from continuing operations before income taxes		213.0		193.8		164.2		167.4
Provision for income taxes		34.8		51.4		42.6		37.0
Income from continuing operations		178.2		142.4		121.6		130.4
Loss from discontinued operations, net of taxes		(29.1)		(3.4)		(229.2)		(32.9)
Net income (loss)	$	149.1	$	139.0	$	(107.6)	$	97.5

Basic income (loss) per share:
Income from continuing operations	$	3.36	$	2.72	$	2.47	$	2.73
Loss from discontinued operations	$	(0.55)	$	(0.07)	$	(4.69)	$	(0.70)
Net income (loss) per share	$	2.81	$	2.65	$	(2.22)	$	2.03

Diluted income (loss) per share:
Income from continuing operations	$	3.35	$	2.71	$	2.41	$	2.74
Loss from discontinued operations	$	(0.55)	$	(0.07)	$	(4.54)	$	(0.69)
Net income (loss) per share	$	2.80	$	2.64	$	(2.13)	$	2.05

SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2020

SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II

ALLIANCE DATA SYSTEMS CORPORATION

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS


	Balance at		Charged to		Write-Offs		Balance at
	Beginning of		Costs and		Net of		End of
Description	Year		Expenses		Recoveries⁽¹⁾		Year

	(in millions)
Allowance for Doubtful Accounts—Accounts receivable:
Year Ended December 31, 2020	$	3.4	$	1.1	$	(0.5)	$	4.0
Year Ended December 31, 2019	$	0.4	$	3.5	$	(0.5)	$	3.4
Year Ended December 31, 2018	$	0.1	$	0.4	$	(0.1)	$	0.4

(1)	Accounts written off during the year, net of recoveries and foreign exchange impact.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation—The accompanying consolidated financial statements include the accounts of ADSC and all subsidiaries in which the Company has a controlling financial interest. Controlling financial interest is determined either by a majority voting interest and the absence of substantive third party participating rights or in the case of variable interest entities, by whether ADSC has power and potentially significant economic exposure through its direct and indirect interests. All intercompany transactions have been eliminated. In accordance with Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing,” and ASC 810, “Consolidation,” the Company is the primary beneficiary of certain trusts. The Company, through its involvement in the activities of these trusts, has the power to direct the activities that most significantly impact the economic performance of such trusts, and the obligation (or right) to absorb losses (or receive benefits) of the trusts that could potentially be significant. As such, the Company consolidates these trusts in its consolidated financial statements. For investments in any entities in which the Company owns 50% or less of the outstanding voting stock but in which the Company has significant influence over operating and financial decisions, the Company applies the equity method of accounting.
Cash and Cash Equivalents	Cash and Cash Equivalents—The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Accounts Receivable, net	Accounts Receivable, net—Accounts receivable, net consist primarily of amounts receivable from customers, which are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated credit losses inherent in its accounts receivable. The Company analyzes the appropriateness of its allowance for doubtful accounts based on its assessment of various factors, including customer-specific experience, the age of the accounts receivable balance, customer creditworthiness, current economic trends, and changes in its customer payment terms and collection trends. Account balances are charged-off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote.
Credit Card and Loan Receivables	Credit Card and Loan Receivables— Credit card and loan receivables consist of credit card and loan receivables held for investment. The Company sells a majority of the credit card receivables originated by Comenity Bank and by Comenity Capital Bank to master trusts, which are restricted for securitization investors. All new originations of credit card and loan receivables are deemed to be held for investment at origination because management has the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, management considers the short average life and homogenous nature of the Company’s credit card and loan receivables. In assessing whether these credit card and loan receivables continue to be held for investment, management also considers capital levels and scheduled maturities of funding instruments used. Management believes that the assertion regarding its intent and ability to hold credit card and loan receivables for the foreseeable future can be made with a high degree of certainty given the maturity distribution of the Company’s money market deposits, certificates of deposit and other funding instruments; the historic ability to replace maturing certificates of deposits and other borrowings with new deposits or borrowings; and historic credit card and loan payment activity. Due to the homogenous nature of the Company’s credit card and loan receivables, amounts are classified as held for investment on an individual client portfolio basis.
Credit Card and Loan Receivables Held for Sale	Credit Card and Loan Receivables Held for Sale—Credit card and loan receivables held for sale are determined on an individual client portfolio basis. The Company carries these assets at the lower of aggregate cost or fair value. The fair value of the credit card and loan receivables held for sale is determined on an aggregate basis. The Company continues to recognize finance fees on these credit card and loan receivables on the accrual basis. Cash flows associated with credit card and loan portfolios that are purchased with the intent to sell are included in cash flows from operating activities. Cash flows associated with credit card and loan receivables originated or purchased for investment are classified as investing cash flows, regardless of a subsequent change in intent.
Transfers of Financial Assets	Transfers of Financial Assets—The Company accounts for transfers of financial assets under ASC 860, “Transfers and Servicing,” as either sales or financings. Transfers of financial assets that result in sales accounting are those in which (1) the transfer legally isolates the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee’s right to pledge or exchange the assets and provides more than a trivial benefit to the transferor and (3) the transferor does not maintain effective control over the transferred assets. If the transfer of financial assets does not meet these criteria, the transfer is accounted for as a financing. Transfers of financial assets that are treated as sales are removed from the Company’s accounts with any realized gain or loss reflected in the consolidated statements of income during the period of sale.
Allowance for Loan Loss	Allowance for Loan Loss— Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Measurement of Credit Losses on Financial Instruments.” Under this standard, referred to as Current Expected Credit Loss (“CECL”), the Company utilizes a financial instrument impairment model to establish an allowance based on expected losses over the life of the exposure rather than a model based on an incurred loss approach, which was the Company’s historic accounting prior to January 1, 2020. Under CECL, the allowance for loan loss is an estimate of expected credit losses, measured over the estimated life of its credit card and loan receivables that considers forecasts of future economic conditions in addition to information about past events and current conditions. The estimate under the CECL model is significantly influenced by the composition, characteristics and quality of the Company’s portfolio of credit card and loan receivables, as well as the prevailing economic conditions and forecasts utilized. The estimate of the allowance for loan loss includes an estimate for uncollectible principal as well as unpaid interest and fees. Charge-offs of principal amounts, net of recoveries are deducted from the allowance. Charge-offs for unpaid interest and fees as well as any adjustments to the allowance associated with unpaid interest and fees are recorded as a reduction to finance charges, net. The allowance is maintained through an adjustment to the provision for loan loss and is evaluated for appropriateness. In estimating its allowance for loan loss, for each identified group, management utilizes various models and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. These models utilize historical data and applicable macroeconomic variables with statistical analysis and behavioral relationships with credit performance. The Company’s quantitative estimate of expected credit losses under CECL is impacted by certain forecasted economic factors. The Company considers the forecast used to be reasonable and supportable over the estimated life of the credit card and loan receivables, with no reversion period. In addition to the quantitative estimate of expected credit losses, the Company also incorporates qualitative adjustments for certain factors such as Company-specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the allowance for loan loss reflects the Company’s best estimate of current expected credit losses. As permitted by ASC 326, “Financial Instruments—Credit Losses,” the Company excludes unbilled finance charges from its amortized cost basis of credit card and loan receivables. See Note 8, “Credit Card and Loan Receivables,” for more information about the Company’s allowance for loan loss.
Inventories, net	Inventories, net—Inventories, net are stated at the lower of cost and net realizable value and valued primarily on a first-in-first-out basis. The Company records valuation adjustments to its inventories if the cost of inventory exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future market conditions and an analysis of historical experience.
Redemption Settlement Assets, Restricted	Redemption Settlement Assets, Restricted—The cash and investments related to the redemption fund for the AIR MILES Reward Program are subject to a security interest which is held in trust for the benefit of funding redemptions by collectors. These assets are restricted to funding rewards for the collectors by certain of the Company’s sponsor contracts. Investments in equity securities are stated at fair value, with holding gains and losses recognized through net income. Investments in debt securities are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive loss, as the investments are classified as available-for-sale.
Property and Equipment	Property and Equipment—Furniture, equipment, computer software and development, buildings and leasehold improvements are carried at cost, less accumulated depreciation and amortization. Land is carried at cost and is not depreciated. Depreciation and amortization for furniture, equipment and buildings are computed on a straight-line basis, using estimated lives ranging from one to eleven years. Software development is capitalized in accordance with ASC 350-40, “Intangibles – Goodwill and Other – Internal–Use Software,” and is amortized on a straight-line basis over the expected benefit period, which ranges from three to seven years. Leasehold improvements are amortized over the remaining lives of the respective leases or the remaining useful lives of the improvements, whichever is shorter. Long-lived assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows. See Note 13, “Property and Equipment,” for additional information.
Goodwill and Other Intangible Assets	Goodwill—Goodwill is not amortized, but is reviewed at least annually for impairment or more frequently if circumstances indicate that an impairment is probable, using qualitative or quantitative analysis. Intangible Assets—The Company’s identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their respective estimated useful lives. Definite-lived intangible assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows. Indefinite-lived intangible assets are not amortized, but are reviewed at least annually for impairment or more frequently if circumstances indicate that an impairment is probable, using qualitative or quantitative analysis.
Income Taxes	Income Taxes— Income tax returns are filed in federal, state, local and foreign jurisdictions as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions. Deferred income tax assets and liabilities are computed on differences between the financial statement bases and tax bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities associated with components of other comprehensive income are charged or credited directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets when realization is less than more-likely-than-not. Liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on the technical merits of the positions. Additionally, liabilities may be established for uncertain tax positions when, in our judgment, the more-likely-than-not threshold is met, but the position does not rise to the level of highly certain based upon the technical merits of the position. Estimated interest and penalties related to uncertain tax positions are included as a component of income tax expense. The Company uses the portfolio approach relating to the release of stranded tax effects recorded in accumulated other comprehensive loss. Under the portfolio approach, the net unrealized gains or losses recorded in accumulated other comprehensive loss would be eliminated only on the date the entire portfolio of available-for-sale securities is sold or otherwise disposed of.
Derivative Instruments	Derivative Instruments—The Company uses derivatives to manage its exposure to various financial risks. The Company does not enter into derivatives for trading or other speculative purposes. Certain derivatives used to manage the Company’s exposure to foreign currency exchange rate movements are not designated as hedges and do not qualify for hedge accounting. Derivatives Designated as Hedging Instruments—The Company assesses both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in the hedging transaction, including net investment hedges, have been highly effective in offsetting changes in the cash flows or remeasurement of the hedged items and whether the derivatives may be expected to remain highly effective in future periods. The Company discontinues hedge accounting prospectively when (1) it determines that the derivative is no longer highly effective in offsetting changes in cash flow of the hedged item; (2) the derivative expires or is sold, terminated, or exercised; (3) it is no longer probable that the forecasted transaction will occur; or (4) it determines that designating the derivative as a hedging instrument is no longer appropriate. Changes in the fair value of derivative instruments designated as hedging instruments, excluding any ineffective portion, are recorded in other comprehensive income (loss) until the hedged transactions affect net income. The ineffective portion of this hedging instrument is recognized through net income when the ineffectiveness occurs. Derivatives not Designated as Hedging Instruments—Certain foreign currency exchange forward contracts are not designated as hedges as they do not meet the specific hedge accounting requirements of ASC 815, “Derivatives and Hedging.” Changes in the fair value of the derivative instruments not designated as hedging instruments are recorded in the consolidated statements of income as they occur. The Company’s derivative instruments were immaterial to the consolidated balance sheets and statements of income for the periods presented.
Other Investments	Other Investments—Other investments consist of marketable securities and U.S. Treasury bonds and are included in other current assets and other non-current assets in the Company’s consolidated balance sheets. Investments in equity securities are stated at fair value, with holding gains and losses recognized through net income. Investments in debt securities are stated at fair value, with the unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive loss, as the investments are classified as available-for-sale.
Revenue Recognition	Revenue Recognition—The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” The Company recognizes revenues when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. In that determination, under ASC 606, the Company follows a five-step model that includes: (1) determination of whether a contract, an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. See Note 3, “Revenue,” for more information about the Company’s revenue and the associated timing and basis of revenue recognition.
Earnings Per Share	Earnings Per Share—Basic earnings per share is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of options or other dilutive securities. Diluted earnings per share is based on the weighted average number of common and potentially dilutive common shares (dilutive stock options, unvested restricted stock units and other dilutive securities outstanding during the year) pursuant to the treasury stock method. For periods with participating securities, the Company computes earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders.
Currency Translation	Currency Translation—The assets and liabilities of the Company’s subsidiaries outside the U.S. are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates, primarily from Canadian dollars and Euros. Income and expense items are translated at the average exchange rates prevailing during the period. Gains and losses resulting from currency transactions are recognized currently in income and those resulting from translation of financial statements are included in accumulated other comprehensive loss. The Company recognized net foreign transaction losses of $0.5 million for the year ended December 31, 2020, gains of $1.3 million for the year ended December 31, 2019, and gains of $0.6 million for the year ended December 31, 2018.
Leases	Leases —The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease right-of-use assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. As the implicit rate is typically not readily determinable in the Company’s lease agreements, the Company uses its incremental borrowing rate as of the lease commencement date to determine the present value of the lease payments. The incremental borrowing rate is based on the Company’s specific rate of interest to borrow on a collateralized basis, over a similar term and in a similar economic environment as the lease. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recognized on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Additionally, the Company accounts for lease and nonlease components as a single lease component for its identified asset classes. As of December 31, 2020, the Company does not have any finance leases. Similar to other long-lived assets, right-of-use assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows. See Note 12, “Leases,” for additional information.
Marketing and Advertising Costs	Marketing and Advertising Costs—The Company participates in various marketing and advertising programs with certain clients. The cost of marketing and advertising programs is expensed in the period incurred. The Company has recognized marketing and advertising expenses, including on behalf of its clients, of $165.7 million, $229.4 million and $244.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.
Stock Compensation Expense	Stock Compensation Expense—The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation.” Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized ratably over the requisite service period.
Management Estimates	Management Estimates—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued and Adopted Accounting Standards	Recently Issued Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 eliminates certain exceptions within ASC 740, “Income Taxes,” and clarifies certain aspects of ASC 740 to promote consistency among reporting entities. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. This ASU is elective and is effective upon issuance for all entities. The Company is evaluating the impact that adoption of ASU 2020-04 will have on its consolidated financial statements. Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” or ASC 326. This standard, referred to as CECL, required entities to utilize a financial instrument impairment model to establish an allowance based on expected losses over the life of the exposure rather than a model based on an incurred loss approach. Estimates of expected credit losses under the CECL model are based on relevant information about past events, current conditions, and reasonable and supportable forward-looking forecasts regarding the collectability of the loan portfolio. The Company adopted CECL on January 1, 2020 and recorded an increase in its allowance for loan loss at adoption of $644.0 million, which was recorded through a cumulative-effect adjustment to retained earnings, net of taxes. CECL also expanded the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating its allowance for loan loss. See Note 8, “Credit Card and Loan Receivables,” for the Company’s CECL disclosures. In addition, CECL modified the impairment model for available-for-sale debt securities and provided for a simplified accounting model for purchased financial assets with credit deterioration since their origination. CECL impacts the Company’s valuation of its accounts receivable and available-for-sale debt securities. The Company’s adoption of CECL with respect to accounts receivable and available-for-sale debt securities did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements from ASC 820, “Fair Value Measurement.” The Company’s adoption of this standard on January 1, 2020 did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” ASU 2018-15 requires customers in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40, “Intangibles—Goodwill and Other—Internal-Use Software,” to determine which implementation costs may be capitalized. The amendments in ASU 2018-15 can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 on January 1, 2020 on a prospective basis and the adoption did not have a material impact on its consolidated financial statements.

REVENUE (Tables)

12 Months Ended

Dec. 31, 2020

REVENUE

Schedule of disaggregation of revenue by major source and geographic region


					Corporate/
Year Ended December 31, 2020	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Major Source:

Coalition loyalty program	$	262.5	$	—	$	—	$	262.5
Short-term loyalty programs		487.7		—		—		487.7
Servicing fees, net		—		(174.9)		—		(174.9)
Other		1.8		—		0.1		1.9
Revenue from contracts with customers	$	752.0	$	(174.9)	$	0.1	$	577.2

Finance charges, net		—		3,931.4		—		3,931.4
Investment income		12.8		—		—		12.8
Total	$	764.8	$	3,756.5	$	0.1	$	4,521.4


					Corporate/
Year Ended December 31, 2019	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Major Source:

Coalition loyalty program	$	290.1	$	—	$	—	$	290.1
Short-term loyalty programs		635.5		—		—		635.5
Servicing fees, net		—		(180.7)		—		(180.7)
Other		94.9		—		0.4		95.3
Revenue from contracts with customers	$	1,020.5	$	(180.7)	$	0.4	$	840.2

Finance charges, net		—		4,728.5		—		4,728.5
Investment income		12.6		—		—		12.6
Total	$	1,033.1	$	4,547.8	$	0.4	$	5,581.3


					Corporate/
Year Ended December 31, 2018	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Major Source:

Coalition loyalty program	$	352.3	$	—	$	—	$	352.3
Short-term loyalty programs		613.8		—		—		613.8
Servicing fees, net		—		(97.3)		—		(97.3)
Other		90.7		—		0.6		91.3
Revenue from contracts with customers	$	1,056.8	$	(97.3)	$	0.6	$	960.1

Finance charges, net		—		4,694.9		—		4,694.9
Investment income		11.6		—		—		11.6
Total	$	1,068.4	$	4,597.6	$	0.6	$	5,666.6


					Corporate/
Year Ended December 31, 2020	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Geographic Region:

United States	$	11.1	$	3,756.5	$	0.1	$	3,767.7
Canada		286.9		—		—		286.9
Europe, Middle East and Africa		332.6		—		—		332.6
Asia Pacific		80.5		—		—		80.5
Other		53.7		—		—		53.7
Total	$	764.8	$	3,756.5	$	0.1	$	4,521.4


					Corporate/
Year Ended December 31, 2019	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Geographic Region:

United States	$	40.1	$	4,547.8	$	0.4	$	4,588.3
Canada		352.2		—		—		352.2
Europe, Middle East and Africa		449.1		—		—		449.1
Asia Pacific		121.7		—		—		121.7
Other		70.0		—		—		70.0
Total	$	1,033.1	$	4,547.8	$	0.4	$	5,581.3


					Corporate/
Year Ended December 31, 2018	LoyaltyOne		Card Services		Other		Total

	(in millions)
Disaggregation of Revenue by Geographic Region:

United States	$	23.1	$	4,597.6	$	0.6	$	4,621.3
Canada		411.3		—		—		411.3
Europe, Middle East and Africa		463.2		—		—		463.2
Asia Pacific		122.0		—		—		122.0
Other		48.8		—		—		48.8
Total	$	1,068.4	$	4,597.6	$	0.6	$	5,666.6

Schedule of reconciliation of contract liabilities for the AIR MILES Reward Program


	Deferred Revenue
	Service		Redemption		Total

	(in millions)
Balance at January 1, 2019	$	248.0	$	627.3	$	875.3
Cash proceeds		192.0		313.3		505.3
Revenue recognized ⁽¹⁾		(193.7)		(309.2)		(502.9)
Other		—		0.6		0.6
Effects of foreign currency translation		12.3		31.4		43.7
Balance at December 31, 2019	$	258.6	$	663.4	$	922.0
Cash proceeds		173.1		286.2		459.3
Revenue recognized ⁽¹⁾		(188.8)		(211.5)		(400.3)
Other		—		1.4		1.4
Effects of foreign currency translation		4.3		17.3		21.6
Balance at December 31, 2020	$	247.2	$	756.8	$	1,004.0
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	$	141.7	$	756.8	$	898.5
Deferred revenue (non-current)	$	105.5	$	—	$	105.5

(1)

Reported on a gross basis herein.

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2020

EARNINGS PER SHARE

Schedule of computation of basic and diluted net income per share


	Years Ended December 31,
	2020		2019		2018

	(in millions, except per share amounts)
Basic income per share:
Numerator:
Income from continuing operations	$	295.0	$	572.6	$	945.5
Less: Dividends declared on preferred stock		—		2.8		—
Less: Allocation of undistributed earnings		—		6.8		—
Income from continuing operations - basic		295.0		563.0		945.5
(Loss) income from discontinued operations, net of tax		(81.3)		(294.6)		17.6
Net income - basic	$	213.7	$	268.4	$	963.1

Denominator:
Weighted average shares, basic		47.8		50.0		54.9

Basic income (loss) attributable to common stockholders per share:
Income from continuing operations	$	6.17	$	11.25	$	17.24
(Loss) income from discontinued operations	$	(1.70)	$	(5.89)	$	0.32
Net income per share	$	4.47	$	5.36	$	17.56

Diluted income per share ⁽¹⁾:
Numerator:
Income from continuing operations	$	295.0	$	572.6	$	945.5
(Loss) income from discontinued operations, net of tax		(81.3)		(294.6)		17.6
Net income	$	213.7	$	278.0	$	963.1

Denominator:
Weighted average shares, basic		47.8		50.0		54.9
Weighted average effect of dilutive securities:
Shares from assumed conversion of preferred stock		—		0.8		—
Net effect of dilutive stock options and unvested restricted stock ⁽²⁾		0.1		0.1		0.2
Denominator for diluted calculation		47.9		50.9		55.1

Diluted income (loss) attributable to common stockholders per share:
Income from continuing operations	$	6.16	$	11.24	$	17.17
(Loss) income from discontinued operations	$	(1.70)	$	(5.78)	$	0.32
Net income per share	$	4.46	$	5.46	$	17.49

(1)	Computed using the if-converted method, as the result was more dilutive.

(2)	For the years ended December 31, 2020, 2019 and 2018, a de minimis amount of restricted stock units was excluded from each calculation of weighted average dilutive common shares as the effect would have been anti-dilutive.

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2020

ACQUISITIONS

Summary of the fair values of the assets acquired and liabilities assumed


	As of December 3, 2020
	(in millions)
Installment loan receivables	$	111.7
Accounts receivable		0.2
Other current assets		0.6
Property and equipment		0.3
Developed technology		90.7
Right of use assets - operating		3.6
Deferred tax asset, net		7.0
Intangible assets		11.3
Goodwill		369.6
Total assets acquired		595.0

Accounts payable		2.0
Accrued expenses		2.9
Operating lease liabilities		3.5
Non-recourse borrowings of consolidated securitization entities		95.6
Total liabilities assumed		104.0

Net assets acquired, net of cash and restricted cash	$	491.0

DISPOSITION (Tables)

12 Months Ended

Dec. 31, 2020

DISPOSITION

Schedule of information related to disposition of business


	January 10,
	2020
	(in millions)
Total consideration ⁽¹⁾	$	43.8
Net carrying value of assets and liabilities (including other comprehensive income)		26.8
Allocation of goodwill		3.2
Strategic transaction costs		5.8
Pre-tax gain on sale of business, net of strategic transaction costs	$	8.0

(1)	Consideration as defined included cash associated with the sold Precima entities, which was $10.8 million.

DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2020

DISCONTINUED OPERATIONS

Schedule of financial statement information for discontinued operations


	July 1,
	2019
	(in millions)
Consideration received ⁽¹⁾	$	4,451.9
Net carrying value of assets and liabilities (including other comprehensive income)		3,939.7
Pre-tax gain on deconsolidation	$	512.2

(1)	Consideration as defined included cash associated with the sold Epsilon entities, which was $42.2 million.



	Years Ended December 31,
	2020		2019		2018

	(in millions)
Revenue	$	—	$	999.6	$	2,175.1
Cost of operations (exclusive of depreciation and amortization disclosed separately below)		110.0		993.9		1,744.4
Depreciation and other amortization		—		29.7		115.4
Amortization of purchased intangibles		—		43.5		178.3
Interest expense ⁽¹⁾		—		64.1		128.3
Gain on sale of Epsilon		—		(512.2)		—
Income before (benefit) provision from income taxes		(110.0)		380.6		8.7
(Benefit) provision for income taxes		(28.7)		675.2		(8.9)
(Loss) income from discontinued operations, net of taxes	$	(81.3)	$	(294.6)	$	17.6

(1)


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Depreciation and amortization	$	—	$	73.2	$	293.7
Capital expenditures	$	—	$	55.8	$	106.5

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=109226691&loc=SL51724579-110230

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109222650&loc=d3e1474-107760

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5D
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721677-107760

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109222160&loc=SL51721533-107759

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721659-107760

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721665-107760

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109226691&loc=d3e2941-110230

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5C
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721675-107760

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=109222650&loc=d3e1361-107760

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721671-107760

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5B
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721673-107760

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721663-107760

+ Details

CREDIT CARD AND LOAN RECEIVABLES (Tables)

12 Months Ended

Dec. 31, 2020

CREDIT CARD AND LOAN RECEIVABLES

Schedule of components of total credit card and loan receivables


	December 31,		December 31,
	2020		2019

	(in millions)
Credit card receivables	$	16,376.4	$	19,047.8
Installment loan receivables		118.0		—
Other		290.0		415.3
Total credit card and loan receivables		16,784.4		19,463.1
Less: Credit card and loan receivables – restricted for securitization investors		11,208.5		13,504.2
Other credit card and loan receivables	$	5,575.9	$	5,958.9

Schedule of Company's group similar risk characteristics and estimated life


	Estimated Life
	(in months)
Group A (Current, risk score - high)		14
Group B (Current, risk score - low)		19
Group C (Delinquent, risk score - high)		17
Group D (Delinquent, risk score - low)		26

Schedule of Company's allowance for loan loss


	Years Ended December 31,
	2020 ⁽¹⁾		2019		2018

	(in millions)
Balance at beginning of year	$	1,171.1	$	1,038.3	$	1,119.3
Adoption of ASC 326 ⁽²⁾		644.0		—		—
Provision for loan loss		1,266.2		1,187.5		1,016.0
Allowance associated with credit card and loan receivables transferred to held for sale		—		—		(54.8)
Change in estimate for uncollectible unpaid interest and fees		10.0		—		25.0
Recoveries		204.6		234.5		214.2
Principal charge-offs		(1,287.9)		(1,289.2)		(1,281.4)
Balance at end of year	$	2,008.0	$	1,171.1	$	1,038.3

(1)	With the acquisition of Bread in December 2020, the Company acquired certain installment loans which represented a separate portfolio segment. As the amount of the allowance for loan loss was immaterial, the amounts were included in the above table.

(2)	Recorded January 1, 2020 through a cumulative-effect adjustment to retained earnings, net of taxes.

Schedule of aging analysis of total credit card and loan receivables at amortized cost basis


	Aging Analysis of Delinquent Amortized Cost Credit Card and Loan Receivables
	31 to 60 days delinquent		61 to 90 days delinquent		91 or more days delinquent		Total delinquent		Current		Total

	(in millions)
As of December 31, 2020⁽¹⁾	$	272.5	$	203.3	$	439.8	$	915.6	$	15,578.8	$	16,494.4

As of December 31, 2019	$	399.1	$	293.9	$	698.4	$	1,391.4	$	17,656.4	$	19,047.8

Schedule of information on credit card and loan receivables that are considered troubled debt restructurings, which entered into a modification program

Year Ended December 31, 2020

Year Ended December 31, 2019

Pre-

Post-

Pre-

Post-

modification

Number of

Outstanding

Number of

Outstanding

Restructurings

Balance

Restructurings

Balance

(Dollars in millions)

Troubled debt restructurings – credit card receivables

391,049

554.5

552.6

259,311

381.4

380.8

The table below summarizes troubled debt restructurings that have defaulted in the specified periods where the default occurred within 12 months of their modification date:


	Year Ended December 31, 2020			Year Ended December 31, 2019
	Number of	Outstanding		Number of	Outstanding
	Restructurings	Balance		Restructurings	Balance

	(Dollars in millions)
Troubled debt restructurings that subsequently defaulted – credit card receivables	118,600	$	161.8	126,476	$	170.8

Schedule of composition of obligor credit quality


	Amortized Cost Revolving Credit Card Receivables
	December 31, 2020				December 31, 2019
			Percentage of				Percentage of
			Amortized				Amortized
Probability of an Account Becoming 91 or More Days Past	Amortized		Cost Basis		Amortized		Cost Basis
Due or Becoming Charged-off (within the next 12 months)	Cost Basis		Outstanding		Cost Basis		Outstanding

	(in millions, except percentages)
No Score	$	204.1	1.2	%	$	298.4	1.6	%
27.1% and higher		1,390.4	8.5			1,648.8	8.7
17.1% - 27.0%		848.8	5.2			1,108.5	5.8
12.6% - 17.0%		937.0	5.7			1,171.7	6.2
3.7% - 12.5%		7,305.5	44.6			8,292.1	43.5
1.9% - 3.6%		2,939.5	17.9			3,375.3	17.7
Lower than 1.9%		2,751.1	16.9			3,153.0	16.5
Total	$	16,376.4	100.0	%	$	19,047.8	100.0	%

Schedule of securitized credit card receivables, delinquencies and net charge-offs


	December 31,		December 31,
	2020		2019

	(in millions)
Total credit card and loan receivables – restricted for securitization investors	$	11,208.5	$	13,504.2
Principal amount of credit card and loan receivables – restricted for securitization investors, 91 days or more past due	$	200.8	$	321.8


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Net charge-offs of securitized principal	$	756.1	$	907.7	$	927.0

OTHER INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2020

OTHER INVESTMENTS

Schedule of principal components of other investments, which are carried at fair value


	December 31, 2020								December 31, 2019
	Amortized		Unrealized		Unrealized				Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value

	(in millions)
Marketable securities	$	219.0	$	6.4	$	—	$	225.4	$	257.2	$	3.0	$	(0.4)	$	259.8
Total	$	219.0	$	6.4	$	—	$	225.4	$	257.2	$	3.0	$	(0.4)	$	259.8

Schedule of unrealized losses and fair value for investments that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position


	December 31, 2019
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(in millions)
Marketable securities	$	18.8	$	(0.2)	$	13.1	$	(0.2)	$	31.9	$	(0.4)
Total	$	18.8	$	(0.2)	$	13.1	$	(0.2)	$	31.9	$	(0.4)

Schedule of securities by contractual maturity date


	Amortized		Estimated
	Cost		Fair Value

	(in millions)
Due in one year or less ⁽¹⁾	$	44.9	$	44.9
Due after one year through five years		1.0		1.0
Due after five years through ten years		—		—
Due after ten years		173.1		179.5
Total	$	219.0	$	225.4

(1)	Includes mutual funds, which do not have a stated maturity.

REDEMPTION SETTLEMENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

REDEMPTION SETTLEMENT ASSETS

Schedule of redemption settlement assets


	December 31, 2020								December 31, 2019
		Amortized	Unrealized		Unrealized					Amortized	Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value

	(in millions)
Restricted cash	$	55.4	$	—	$	—	$	55.4	$	39.3	$	—	$	—	$	39.3
Mutual funds		26.9		—		—		26.9		25.1		—		—		25.1
Corporate bonds		592.3		19.1		(0.2)		611.2		536.0		2.4		(2.0)		536.4
Total	$	674.6	$	19.1	$	(0.2)	$	693.5	$	600.4	$	2.4	$	(2.0)	$	600.8


	December 31, 2020
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(in millions)
Corporate bonds	$	46.2	$	(0.1)	$	10.3	$	(0.1)	$	56.5	$	(0.2)
Total	$	46.2	$	(0.1)	$	10.3	$	(0.1)	$	56.5	$	(0.2)


	December 31, 2019
	Less than 12 months				12 Months or Greater				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(in millions)
Corporate bonds	$	166.6	$	(1.3)	$	155.1	$	(0.7)	$	321.7	$	(2.0)
Total	$	166.6	$	(1.3)	$	155.1	$	(0.7)	$	321.7	$	(2.0)

Schedule of redemption settlement assets by contractual maturity date


	Amortized		Estimated
	Cost		Fair Value

	(in millions)
Due in one year or less ⁽¹⁾	$	144.9	$	146.0
Due after one year through five years		470.2		488.0
Due after five year through ten years		4.1		4.1
Total	$	619.2	$	638.1

(1)	Includes mutual funds, which do not have a stated maturity.

LEASES (Tables)

12 Months Ended

Dec. 31, 2020

LEASES

Schedule of lease cost

The components of lease expense were as follows:


	Years Ended December 31,
	2020		2019

	(in millions)
Operating lease cost	$	40.5	$	41.1
Short-term lease cost		1.0		2.7
Variable lease cost		6.2		6.8
Total	$	47.7	$	50.6

Other information related to leases was as follows:


	December 31,		December 31,
	2020		2019
Weighted-average remaining lease term (in years):
Operating leases		10.8		11.5
Weighted-average discount rate:
Operating leases		5.2%		5.2%

Supplemental cash flow information related to leases was as follows:


	Years Ended December 31,
	2020		2019

	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	45.8	$	46.6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	7.6	$	28.4

Schedule of maturities of lease liabilities


	Operating
Year	Leases
	(in millions)
2021	$	38.8
2022		41.2
2023		38.3
2024		36.0
2025		35.2
Thereafter		209.6
Total undiscounted lease liabilities		399.1
Less: Amount representing interest		(99.1)
Total present value of minimum lease payments	$	300.0

Amounts recognized in the December 31, 2020 consolidated balance sheet:
Current operating lease liabilities	$	23.6
Long-term operating lease liabilities		276.4
Total	$	300.0

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT

Schedule of property and equipment


	December 31,
	2020		2019

	(in millions)
Computer software and development	$	410.5	$	327.1
Furniture and equipment		151.0		164.3
Land, buildings and leasehold improvements		122.7		126.0
Construction in progress		32.9		46.2
Total		717.1		663.6
Accumulated depreciation and amortization		(406.2)		(381.3)
Property and equipment, net	$	310.9	$	282.3

INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2020

INTANGIBLE ASSETS AND GOODWILL

Schedule of intangible assets


	December 31, 2020
	Gross		Accumulated
	Assets		Amortization		Net		Amortization Life and Method

	(in millions)
Definite-Lived Assets
Customer contracts and lists	$	363.0	$	(354.5)	$	8.5	3-7 years—straight line
Premium on purchased credit card portfolios		137.2		(72.8)		64.4	3-13 years—straight line
Collector database		55.0		(54.5)		0.5	5 years—straight line
Tradenames		35.0		(30.1)		4.9	4-15 years—straight line
Non-compete agreements		2.2		—		2.2	5 years—straight line
	$	592.4	$	(511.9)	$	80.5
Indefinite-Lived Assets
Tradename		1.2		—		1.2	Indefinite life
Total intangible assets	$	593.6	$	(511.9)	$	81.7


	December 31, 2019
	Gross		Accumulated
	Assets		Amortization		Net		Amortization Life and Method

	(in millions)
Definite-Lived Assets
Customer contracts and lists	$	325.1	$	(278.7)	$	46.4	7 years—straight line
Premium on purchased credit card portfolios		192.6		(93.2)		99.4	1-13 years—straight line
Collector database		53.9		(52.9)		1.0	5 years—straight line
Tradenames		31.8		(26.5)		5.3	8-15 years—straight line
	$	603.4	$	(451.3)	$	152.1
Indefinite-Lived Assets
Tradename		1.2		—		1.2	Indefinite life
Total intangible assets	$	604.6	$	(451.3)	$	153.3

Schedule of estimated amortization expense related to intangible assets


	For the Years Ending
	December 31,
	(in millions)
2021	$	25.8
2022		21.0
2023		16.1
2024		11.2
2025		2.4
Thereafter		4.0

Schedule of changes in carrying amount of goodwill



	LoyaltyOne		Card Services		Total

	(in millions)
Balance at January 1, 2019	$	693.1	$	261.7	$	954.8
Goodwill acquired during the period		—		2.3		2.3
Effects of foreign currency translation		(2.2)		—		(2.2)
Balance at December 31, 2019	$	690.9	$	264.0	$	954.9
Goodwill acquired during the period		—		369.6		369.6
Goodwill allocated to sale of Precima		(3.2)		—		(3.2)
Effects of foreign currency translation		48.3		—		48.3
Balance at December 31, 2020	$	736.0	$	633.6	$	1,369.6

RESTRUCTURING AND OTHER CHARGES (Tables)

12 Months Ended

Dec. 31, 2020

RESTRUCTURING AND OTHER CHARGES

Schedule of restructuring and other charges incurred by reportable segment


	Termination		Asset		Lease		Other
Year Ended December 31, 2020	Benefits		Impairments		Termination Costs		Exit Costs		Total

	(in millions)
Corporate/Other	$	—	$	—	$	—	$	—	$	—
LoyaltyOne		0.1		—		—		—		0.1
Card Services		(8.3)		—		—		—		(8.3)
Total	$	(8.2)	$	—	$	—	$	—	$	(8.2)


	Termination		Asset		Lease		Other
Year Ended December 31, 2019	Benefits		Impairments		Termination Costs		Exit Costs		Total

	(in millions)
Corporate/Other	$	18.6	$	11.1	$	7.0	$	1.2	$	37.9
LoyaltyOne		7.6		40.7		0.2		2.3		50.8
Card Services		27.3		0.2		1.9		—		29.4
Total	$	53.5	$	52.0	$	9.1	$	3.5	$	118.1

Schedule of liability and activities related to restructuring and other charges


	Termination		Asset		Lease		Other
	Benefits		Impairments		Termination Costs		Exit Costs		Total

	(in millions)
Liability as of January 1, 2019	$	—	$	—	$	—	$	—	$	—
Charged to expense		53.5		52.0		9.1		3.5		118.1
Adjustments for non-cash charges		—		(52.0)		0.7		(0.1)		(51.4)
Cash payments		(18.8)		—		(9.8)		(3.3)		(31.9)
Liability as of December 31, 2019	$	34.7	$	—	$	—	$	0.1	$	34.8
Charged to expense		—		—		—		—		—
Adjustments for non-cash charges		(8.2)		—		—		—		(8.2)
Cash payments		(23.2)		—		—		(0.1)		(23.3)
Liability as of December 31, 2020	$	3.3	$	—	$	—	$	—	$	3.3

ACCRUED EXPENSES (Tables)

12 Months Ended

Dec. 31, 2020

ACCRUED EXPENSES

Schedule of accrued expenses


	December 31,
	2020		2019

	(in millions)
Accrued payroll and benefits	$	116.9	$	133.4
Accrued taxes		57.6		18.1
Accrued other liabilities		270.2		176.3
Accrued expenses	$	444.7	$	327.8

DEBT (Tables)

12 Months Ended

Dec. 31, 2020

DEBT

Schedule of debt


	December 31,		December 31,
Description	2020		2019		Maturity	Interest Rate

	(Dollars in millions)
Long-term and other debt:
2017 revolving line of credit	$	—	$	—	December 2022	⁽¹⁾
2017 term loans		1,484.3		2,028.8	December 2022	⁽²⁾
BrandLoyalty credit agreement		—		—	April 2023	⁽³⁾
Senior notes due 2024		850.0		850.0	December 2024	4.750%
Senior notes due 2026		500.0		—	January 2026	7.000%
Total long-term and other debt		2,834.3		2,878.8
Less: Unamortized debt issuance costs		28.6		28.9
Less: Current portion		101.4		101.4
Long-term portion	$	2,704.3	$	2,748.5

Deposits:
Certificates of deposit	$	6,014.9	$	8,585.2	Various – Jan 2021 to Dec 2025	0.15% to 3.75%
Money market deposits		3,790.2		3,589.8	Non-maturity	⁽⁴⁾
Total deposits		9,805.1		12,175.0
Less: Unamortized debt issuance costs		12.5		23.3
Less: Current portion		6,553.9		6,942.4
Long-term portion	$	3,238.7	$	5,209.3

Non-recourse borrowings of consolidated securitization entities:
Fixed rate asset-backed term note securities	$	3,423.8	$	4,891.0	Various – Feb 2021 to Sep 2022	2.03% to 3.95%
Conduit asset-backed securities		2,205.1		2,405.0	Various – Apr 2022 to Oct 2022	⁽⁵⁾
Secured loan facility		86.3		—	November 2022	⁽⁶⁾
Total non-recourse borrowings of consolidated securitization entities		5,715.2		7,296.0
Less: Unamortized debt issuance costs		5.3		12.0
Less: Current portion		1,850.7		3,030.8
Long-term portion	$	3,859.2	$	4,253.2

(1)	The interest rate is based upon LIBOR plus an applicable margin.

(2)	The interest rate is based upon LIBOR plus an applicable margin. The weighted average interest rate for the term loans was 1.90% and 3.30% at December 31, 2020 and 2019, respectively.

(3)	The interest rate is based upon the Euro Interbank Offered Rate plus an applicable margin.

(4)	The interest rates are based on the Federal Funds rate plus an applicable margin. At December 31, 2020, the interest rates ranged from 0.38% to 3.50%. At December 31, 2019, the interest rates ranged from 1.84% to 3.50%.

(5)	The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At December 31, 2020, the interest rates ranged from 1.39% to 1.89%. At December 31, 2019, the interest rates ranged from 2.79% to 2.96%.

(6)	The interest rate is based upon LIBOR plus an applicable margin. At December 31, 2020, the weighted average interest rate for the secured loan facility was 3.90%.

Schedule of maturity of debt

The future principal payments for the Company’s debt as of December 31, 2020 are as follows:


					Non-Recourse
					Borrowings of
	Long-Term				Consolidated
	and				Securitization
Year	Other Debt		Deposits		Entities

	(in millions)
2021	$	101.4	$	6,555.6	$	1,852.1
2022		1,382.9		1,739.6		3,863.1
2023		—		966.1		—
2024		850.0		530.6		—
2025		—		13.2		—
Thereafter		500.0		—		—
Total maturities		2,834.3		9,805.1		5,715.2
Unamortized debt issuance costs		(28.6)		(12.5)		(5.3)
	$	2,805.7	$	9,792.6	$	5,709.9

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES.

Schedule of actual capital ratios and minimum ratios

The actual capital ratios and minimum ratios as of December 31, 2020 are as follows:


					Minimum Ratio to be
			Minimum Ratio for		Well Capitalized under
	Actual		Capital Adequacy		Prompt Corrective
	Ratio		Purposes		Action Provisions
Comenity Bank
Tier 1 capital to average assets	19.0	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	20.7		4.5		6.5
Tier 1 capital to risk-weighted assets	20.7		6.0		8.0
Total capital to risk-weighted assets	22.0		8.0		10.0

Comenity Capital Bank
Tier 1 capital to average assets	14.8	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	15.6		4.5		6.5
Tier 1 capital to risk-weighted assets	15.6		6.0		8.0
Total capital to risk-weighted assets	16.9		8.0		10.0

The actual capital ratios and minimum ratios as of December 31, 2019 are as follows:


					Minimum Ratio to be
			Minimum Ratio for		Well Capitalized under
	Actual		Capital Adequacy		Prompt Corrective
	Ratio		Purposes		Action Provisions
Comenity Bank
Tier 1 capital to average assets	12.9	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	14.6		4.5		6.5
Tier 1 capital to risk-weighted assets	14.6		6.0		8.0
Total capital to risk-weighted assets	15.9		8.0		10.0

Comenity Capital Bank
Tier 1 capital to average assets	11.9	%	4.0	%	5.0	%
Common Equity Tier 1 capital to risk-weighted assets	14.4		4.5		6.5
Tier 1 capital to risk-weighted assets	14.4		6.0		8.0
Total capital to risk-weighted assets	15.7		8.0		10.0

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2020

STOCKHOLDERS' EQUITY

Schedule of stock-based compensation expense


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Cost of operations	$	12.5	$	16.5	$	23.3
General and administrative		8.8		8.6		21.1
Total	$	21.3	$	25.1	$	44.4

Schedule of performance-based and service-based restricted stock unit awards


					Weighted
	Market-	Performance-	Service-		Average
	Based ⁽¹⁾	Based ⁽¹⁾	Based	Total	Fair Value
Balance at January 1, 2018	28,172	450,579	329,059	807,810	$	207.45
Shares granted	28,057	263,542	138,160	429,759		233.98
Shares vested	—	(188,680)	(130,823)	(319,503)		224.62
Shares forfeited	—	(102,199)	(18,955)	(121,154)		227.66
Balance at December 31, 2018	56,229	423,242	317,441	796,912	$	218.81
Shares granted	37,878	420,239	246,118	704,235		161.05
Shares vested	—	(262,773)	(178,730)	(441,503)		218.45
Shares forfeited	(69,819)	(350,436)	(126,257)	(546,512)		188.40
Balance at December 31, 2019	24,288	230,272	258,572	513,132	$	172.06
Shares granted	20,770	219,186	241,610	481,566		89.11
Shares vested	—	(42,097)	(127,921)	(170,018)		175.09
Shares forfeited	(22,831)	(186,135)	(38,447)	(247,413)		166.93
Balance at December 31, 2020	22,227	221,226	333,814	577,267	$	103.89
Outstanding and Expected to Vest				345,266	$	105.49

(1)	Shares granted reflects a 100% target attainment of the respective market-based or performance-based metric. Shares forfeited include those restricted stock units forfeited as a result of the Company not meeting the respective market-based or performance-based metric conditions.

Summary of stock option activity


	Outstanding			Exercisable
		Weighted			Weighted
		Average			Average
	Options	Exercise Price		Options	Exercise Price
Balance at January 1, 2018	11,859	$	23.87	11,859	$	23.87
Options granted	—		—
Options exercised	(886)		12.70
Options forfeited	(119)		2.74
Balance at December 31, 2018	10,854	$	25.01	10,854	$	25.01
Options granted	—		—
Options exercised	(10,854)		25.01
Options forfeited	—		—
Balance at December 31, 2019	—	$	—	—	$	—
Options granted	—		—
Options exercised	—		—
Options forfeited	—		—
Balance at December 31, 2020	—	$	—	—	$	—

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2020

ACCUMULATED OTHER COMPREHENSIVE LOSS.

Schedule of changes in each component of accumulated comprehensive income (loss), net of tax effects


									Accumulated
	Net Unrealized		Net Unrealized		Net Unrealized		Foreign Currency		Other
	Gains (Losses) on		Gains (Losses) on		Gains (Losses) on		Translation		Comprehensive
	Securities		Cash Flow Hedges		Net Investment Hedge		Adjustments ⁽¹⁾		Loss

	(in millions)
Balance as of January 1, 2018	$	(8.7)	$	(0.1)	$	(42.0)	$	(89.4)	$	(140.2)
Changes in other comprehensive income (loss)		(2.0)		(0.1)		29.6		(25.4)		2.1
Balance at December 31, 2018	$	(10.7)	$	(0.2)	$	(12.4)	$	(114.8)	$	(138.1)
Changes in other comprehensive income (loss)		13.2		0.1		4.9		(6.8)		11.4
Recognition resulting from the sale of Epsilon's foreign subsidiaries		—		—		—		26.8		26.8
Balance at December 31, 2019	$	2.5	$	(0.1)	$	(7.5)	$	(94.8)	$	(99.9)
Changes in other comprehensive income (loss)		20.7		(0.6)		—		71.0		91.1
Recognition resulting from the sale of Precima's foreign subsidiaries		—		—		—		3.8		3.8
Balance at December 31, 2020	$	23.2	$	(0.7)	$	(7.5)	$	(20.0)	$	(5.0)

(1)

Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates.

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

INCOME TAXES

Schedule of components of income before income taxes and components of income tax expense


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Components of income from continuing operations before income taxes:
Domestic	$	281.7	$	591.9	$	1,052.7
Foreign		112.8		146.5		162.3
Total	$	394.5	$	738.4	$	1,215.0
Components of income tax expense:
Current
Federal	$	209.2	$	126.0	$	152.2
State		36.6		35.8		58.0
Foreign		47.8		11.5		52.8
Total current		293.6		173.3		263.0
Deferred
Federal		(135.1)		(11.8)		48.0
State		(37.6)		6.7		14.7
Foreign		(21.4)		(2.4)		(56.2)
Total deferred		(194.1)		(7.5)		6.5
Total provision for income taxes	$	99.5	$	165.8	$	269.5

Summary of reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Expected expense at statutory rate	$	82.8	$	155.1	$	255.1
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit		(0.8)		33.6		57.4
Foreign rate differential		4.1		(2.3)		11.6
Foreign restructuring		3.6		—		(48.0)
Impact of 2017 Tax Reform		(2.4)		(30.2)		(29.7)
Global intangible low-taxed income		(7.8)		8.7		15.5
Non-deductible expenses (non-taxable income)		8.3		9.1		3.7
IRC Section 199, net of tax reserves		12.5		—		(0.8)
Other		(0.8)		(8.2)		4.7
Total	$	99.5	$	165.8	$	269.5

Summary of deferred tax assets and liabilities


	December 31,
	2020		2019

	(in millions)
Deferred tax assets
Deferred revenue	$	29.2	$	9.5
Allowance for loan loss		482.3		267.6
Net operating loss carryforwards and other carryforwards		106.2		69.0
Stock-based compensation and other employee benefits		3.8		13.7
Lease liabilities		74.4		74.4
Accrued expenses and other		81.0		40.3
Intangible assets		5.5		23.2
Total deferred tax assets		782.4		497.7
Valuation allowance		(50.1)		(64.0)
Deferred tax assets, net of valuation allowance		732.3		433.7
Deferred tax liabilities
Deferred income	$	290.9	$	365.6
Depreciation		25.2		41.8
Right of use assets		57.0		61.1
Total deferred tax liabilities		373.1		468.5

Net deferred tax asset (liability)	$	359.2	$	(34.8)

Amounts recognized in the consolidated balance sheets:
Non-current assets	$	359.2	$	45.2
Non-current liabilities		—		(80.0)
Total – Net deferred tax asset (liability)	$	359.2	$	(34.8)

Summary of reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):


Balance at January 1, 2018	$	208.3
Increases related to prior years’ tax positions		41.3
Decreases related to prior years’ tax positions		(9.6)
Increases related to current year tax positions		61.5
Settlements during the period		(1.0)
Lapses of applicable statutes of limitation		(4.2)
Balance at December 31, 2018	$	296.3
Increases related to prior years’ tax positions		2.7
Decreases related to prior years’ tax positions		(76.6)
Increases related to current year tax positions		58.3
Settlements during the period		(0.6)
Lapses of applicable statutes of limitation		(5.8)
Balance at December 31, 2019	$	274.3
Increases related to prior years’ tax positions		64.7
Decreases related to prior years’ tax positions		(63.5)
Increases related to current year tax positions		10.7
Settlements during the period		(4.6)
Lapses of applicable statutes of limitation		(8.3)
Balance at December 31, 2020	$	273.3

FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2020

FINANCIAL INSTRUMENTS

Schedule of estimated fair value of Company's financial instruments


	December 31, 2020				December 31, 2019
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value

	(in millions)
Financial assets
Credit card and loan receivables, net	$	14,776.4	$	17,301.2	$	18,292.0	$	19,126.0
Credit card receivables held for sale		—		—		408.0		436.2
Redemption settlement assets, restricted		693.5		693.5		600.8		600.8
Other investments		225.4		225.4		259.8		259.8
Derivative instruments		0.4		0.4		0.2		0.2
Financial liabilities
Derivative instruments		1.5		1.5		0.3		0.3
Deposits		9,792.6		10,015.9		12,151.7		12,303.6
Non-recourse borrowings of consolidated securitization entities		5,709.9		5,783.4		7,284.0		7,333.6
Long-term and other debt		2,805.7		2,875.1		2,849.9		2,878.8

Schedule of assets and liabilities carried at fair value measured on recurring basis


			Fair Value Measurements at
			December 31, 2020 Using
	Balance at
	December 31,
	2020		Level 1		Level 2		Level 3

	(in millions)
Mutual funds ⁽¹⁾	$	26.9	$	26.9	$	—	$	—
Corporate bonds ⁽¹⁾		611.2		—		611.2		—
Marketable securities ⁽²⁾		225.4		34.2		191.2		—
Derivative instruments ⁽³⁾		0.4		—		0.4		—
Total assets measured at fair value	$	863.9	$	61.1	$	802.8	$	—

Derivative instruments ⁽³⁾	$	1.5	$	—	$	1.5	$	—
Total liabilities measured at fair value	$	1.5	$	—	$	1.5	$	—


			Fair Value Measurements at
			December 31, 2019 Using
	Balance at
	December 31,
	2019		Level 1		Level 2		Level 3

	(in millions)
Mutual funds ⁽¹⁾	$	25.1	$	25.1	$	—	$	—
Corporate bonds ⁽¹⁾		536.4		—		536.4		—
Marketable securities ⁽²⁾		259.8		26.2		233.6		—
Derivative instruments ⁽³⁾		0.2		—		0.2		—
Total assets measured at fair value	$	821.5	$	51.3	$	770.2	$	—

Derivative instruments ⁽³⁾	$	0.3	$	—	$	0.3	$	—
Total liabilities measured at fair value	$	0.3	$	—	$	0.3	$	—

(1)	Amounts are included in redemption settlement assets in the consolidated balance sheets.

(2)	Amounts are included in other current assets and other non-current assets in the consolidated balance sheets.

(3)	Amounts are included in other current assets and other current liabilities in the consolidated balance sheets.

Schedule of assets and liabilities disclosed but not carried at fair value


	Fair Value Measurements at
	December 31, 2020
	Total		Level 1		Level 2		Level 3

	(in millions)
Financial assets:
Credit card and loan receivables, net	$	17,301.2	$	—	$	—	$	17,301.2
Total	$	17,301.2	$	—	$	—	$	17,301.2

Financial liabilities:
Deposits	$	10,015.9	$	—	$	10,015.9	$	—
Non-recourse borrowings of consolidated securitization entities		5,783.4		—		5,783.4		—
Long-term and other debt		2,875.1		—		2,875.1		—
Total	$	18,674.4	$	—	$	18,674.4	$	—


	Fair Value Measurements at
	December 31, 2019
	Total		Level 1		Level 2		Level 3

	(in millions)
Financial assets:
Credit card and loan receivables, net	$	19,126.0	$	—	$	—	$	19,126.0
Credit card receivables held for sale		436.2		—		—		436.2
Total	$	19,562.2	$	—	$	—	$	19,562.2

Financial liabilities:
Deposits	$	12,303.6	$	—	$	12,303.6	$	—
Non-recourse borrowings of consolidated securitization entities		7,333.6		—		7,333.6		—
Long-term and other debt		2,878.8		—		2,878.8		—
Total	$	22,516.0	$	—	$	22,516.0	$	—

PARENT-ONLY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2020

PARENT-ONLY FINANCIAL STATEMENTS

Schedule of balance sheets


	December 31,
	2020		2019

	(in millions)
Assets:
Cash and cash equivalents	$	0.2	$	0.2
Investment in subsidiaries		5,127.0		5,326.2
Other assets		41.8		3.4
Total assets	$	5,169.0	$	5,329.8
Liabilities:
Current portion of long-term and other debt	$	101.4	$	101.4
Long-term and other debt		2,704.3		2,748.5
Intercompany liabilities, net		742.0		806.7
Other liabilities		99.7		84.9
Total liabilities		3,647.4		3,741.5
Stockholders’ equity		1,521.6		1,588.3
Total liabilities and stockholders’ equity	$	5,169.0	$	5,329.8

Schedule of statements of income

Statements of Income


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Interest from loans to subsidiaries	$	12.6	$	19.2	$	17.9
Dividends from subsidiaries		256.3		922.6		810.1
Total revenue		268.9		941.8		828.0
Loss on extinguishment of debt		—		71.9		—
Interest expense, net		109.5		130.0		281.2
Other expenses, net		1.7		(0.7)		(0.4)
Total expenses		111.2		201.2		280.8
Income before income taxes and equity in undistributed net income (loss) of subsidiaries		157.7		740.6		547.2
Benefit for income taxes		21.2		42.1		7.0
Income before equity in undistributed net income (loss) of subsidiaries		178.9		782.7		554.2
Equity in undistributed net income (loss) of subsidiaries		34.8		(504.7)		408.9
Net income	$	213.7	$	278.0	$	963.1

Schedule of statements of comprehensive income

Statements of Comprehensive Income


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Net income	$	213.7	$	278.0	$	963.1
Other comprehensive income, net of tax		—		4.9		29.6
Total comprehensive income, net of tax	$	213.7	$	282.9	$	992.7

Schedule of statements of cash flows

Statements of Cash Flows


	Years Ended December 31,
	2020		2019		2018

	(in millions)
Net cash (used in) provided by operating activities	$	(137.6)	$	(1,029.1)	$	82.3
Investing activities:
Investment in subsidiaries		(3.2)		(135.0)		—
Proceeds from sale of business		—		4,118.3		—
Dividends received		256.3		922.6		810.1
Net cash provided by investing activities		253.1		4,905.9		810.1
Financing activities:
Borrowings under debt agreements		1,276.0		3,083.0		4,527.0
Repayments of borrowings		(1,320.5)		(5,778.2)		(4,838.3)
Payment of debt extinguishment costs		—		(46.1)		—
Payment of deferred financing costs		(9.1)		(20.7)		(4.6)
Purchase of treasury shares		—		(976.1)		(443.2)
Dividends paid		(60.6)		(127.4)		(125.2)
Proceeds from issuance of common stock		2.8		12.4		17.6
Other		(4.1)		(23.6)		(25.7)
Net cash used in financing activities		(115.5)		(3,876.7)		(892.4)
Change in cash, cash equivalents and restricted cash		—		0.1		—
Cash, cash equivalents and restricted cash at beginning of year		0.2		0.1		0.1
Cash, cash equivalents and restricted cash at end of year	$	0.2	$	0.2	$	0.1

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2020

SEGMENT INFORMATION

Schedule of segment information


					Corporate/
Year Ended December 31, 2020	LoyaltyOne		Card Services		Other		Total

	(in millions)
Revenues	$	764.8	$	3,756.5	$	0.1	$	4,521.4

Income (loss) before income taxes	$	111.0	$	501.5	$	(218.0)	$	394.5
Interest expense, net		(0.8)		385.4		109.3		493.9
Operating income (loss)		110.2		886.9		(108.7)		888.4
Depreciation and amortization		78.0		102.8		3.0		183.8
Stock compensation expense		5.5		7.0		8.8		21.3
Gain on sale of business, net of strategic transaction costs		(8.0)		—		—		(8.0)
Strategic transaction costs		0.4		0.3		15.2		15.9
Asset impairments		—		63.7		—		63.7
Restructuring and other charges		0.1		(8.3)		—		(8.2)
Adjusted EBITDA ⁽¹⁾		186.2		1,052.4		(81.7)		1,156.9
Less: Securitization funding costs		—		165.9		—		165.9
Less: Interest expense on deposits		—		219.5		—		219.5
Adjusted EBITDA, net ⁽¹⁾	$	186.2	$	667.0	$	(81.7)	$	771.5

Capital expenditures	$	24.3	$	29.4	$	0.3	$	54.0


					Corporate/
Year Ended December 31, 2019	LoyaltyOne		Card Services		Other		Total

	(in millions)
Revenues	$	1,033.1	$	4,547.8	$	0.4	$	5,581.3

Income (loss) before income taxes	$	103.1	$	991.7	$	(356.4)	$	738.4
Interest expense, net		2.3		439.0		127.7		569.0
Operating income (loss)		105.4		1,430.7		(228.7)		1,307.4
Depreciation and amortization		80.1		89.3		6.7		176.1
Stock compensation expense		7.2		9.3		8.6		25.1
Strategic transaction costs		1.0		—		10.7		11.7
Restructuring and other charges		50.8		29.4		37.9		118.1
Loss on extinguishment of debt		—		—		71.9		71.9
Adjusted EBITDA ⁽¹⁾		244.5		1,558.7		(92.9)		1,710.3
Less: Securitization funding costs		—		213.4		—		213.4
Less: Interest expense on deposits		—		225.6		—		225.6
Adjusted EBITDA, net ⁽¹⁾	$	244.5	$	1,119.7	$	(92.9)	$	1,271.3

Capital expenditures	$	41.5	$	44.2	$	0.8	$	86.5



					Corporate/
Year Ended December 31, 2018	LoyaltyOne		Card Services		Other		Total

	(in millions)
Revenues	$	1,068.4	$	4,597.6	$	0.6	$	5,666.6

Income (loss) before income taxes	$	153.8	$	1,381.6	$	(320.4)	$	1,215.0
Interest expense, net		5.6		385.9		150.8		542.3
Operating income (loss)		159.4		1,767.5		(169.6)		1,757.3
Depreciation and amortization		84.8		101.1		7.7		193.6
Stock compensation expense		10.0		13.3		21.1		44.4
Adjusted EBITDA ⁽¹⁾		254.2		1,881.9		(140.8)		1,995.3
Less: Securitization funding costs		—		220.2		—		220.2
Less: Interest expense on deposits		—		165.7		—		165.7
Adjusted EBITDA, net ⁽¹⁾	$	254.2	$	1,496.0	$	(140.8)	$	1,609.4

Capital expenditures	$	34.0	$	53.8	$	5.5	$	93.3

(1)

The table below reconciles the reportable segments’ total assets to consolidated total assets:


		LoyaltyOne		Card Services		Corporate/ Other		Total
		(in millions)
Total Assets
December 31, 2020	$	2,422.3	$	19,884.6	$	240.2	$	22,547.1
December 31, 2019	$	2,338.0	$	23,931.1	$	225.7	$	26,494.8

Schedule of information concerning principal geographic areas


					Europe,
	United				Middle East
	States		Canada		and Africa		Asia Pacific		Other		Total

	(in millions)
Revenues
Year Ended December 31, 2020	$	3,767.7	$	286.9	$	332.6	$	80.5	$	53.7	$	4,521.4
Year Ended December 31, 2019	$	4,588.3	$	352.2	$	449.1	$	121.7	$	70.0	$	5,581.3
Year Ended December 31, 2018	$	4,621.3	$	411.3	$	463.2	$	122.0	$	48.8	$	5,666.6

Long Lived Assets
December 31, 2020	$	1,874.9	$	310.7	$	714.3	$	11.4	$	1.4	$	2,912.7
December 31, 2019	$	1,361.1	$	311.1	$	696.2	$	12.8	$	0.9	$	2,382.1

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

12 Months Ended

Dec. 31, 2020

SUPPLEMENTAL CASH FLOW INFORMATION

Schedule of reconciliation of cash and cash equivalents


	December 31,		December 31,		December 31,
	2020		2019		2018

	(in millions)
Cash and cash equivalents	$	3,081.5	$	3,874.4	$	3,863.1
Restricted cash included within other current assets ⁽¹⁾		326.3		44.4		60.7
Restricted cash included within redemption settlement assets, restricted⁽²⁾		55.4		39.3		43.9
Total cash, cash equivalents and restricted cash	$	3,463.2	$	3,958.1	$	3,967.7

(1)

(2)	See Note 11, “Redemption Settlement Assets,” for additional information regarding the nature of restrictions on redemption settlement assets.

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2020

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Summary of unaudited quarterly results of operations


	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
	2020		2020		2020		2020

	(in millions, except per share amounts)
Revenues	$	1,381.8	$	979.3	$	1,050.5	$	1,109.8
Operating expenses		1,217.8		804.6		759.5		851.1
Operating income		164.0		174.7		291.0		258.7
Interest expense, net		138.6		127.7		115.1		112.5
Income from continuing operations before income taxes		25.4		47.0		175.9		146.2
Provision for income taxes		(4.6)		8.6		42.6		52.9
Income from continuing operations		30.0		38.4		133.3		93.3
Loss from discontinued operations, net of taxes		—		—		—		(81.3)
Net income	$	30.0	$	38.4	$	133.3	$	12.0

Basic income (loss) per share:
Income from continuing operations	$	0.63	$	0.81	$	2.79	$	1.93
Loss from discontinued operations	$	—	$	—	$	—	$	(1.68)
Net income per share	$	0.63	$	0.81	$	2.79	$	0.25

Diluted income (loss) per share:
Income from continuing operations	$	0.63	$	0.81	$	2.79	$	1.93
Loss from discontinued operations	$	—	$	—	$	—	$	(1.68)
Net income per share	$	0.63	$	0.81	$	2.79	$	0.25


	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
	2019		2019		2019		2019

	(in millions, except per share amounts)
Revenues	$	1,334.2	$	1,348.5	$	1,437.6	$	1,461.0
Operating expenses		977.3		1,011.2		1,133.4		1,152.0
Operating income		356.9		337.3		304.2		309.0
Interest expense, net		143.9		143.5		140.0		141.6
Income from continuing operations before income taxes		213.0		193.8		164.2		167.4
Provision for income taxes		34.8		51.4		42.6		37.0
Income from continuing operations		178.2		142.4		121.6		130.4
Loss from discontinued operations, net of taxes		(29.1)		(3.4)		(229.2)		(32.9)
Net income (loss)	$	149.1	$	139.0	$	(107.6)	$	97.5

Basic income (loss) per share:
Income from continuing operations	$	3.36	$	2.72	$	2.47	$	2.73
Loss from discontinued operations	$	(0.55)	$	(0.07)	$	(4.69)	$	(0.70)
Net income (loss) per share	$	2.81	$	2.65	$	(2.22)	$	2.03

Diluted income (loss) per share:
Income from continuing operations	$	3.35	$	2.71	$	2.41	$	2.74
Loss from discontinued operations	$	(0.55)	$	(0.07)	$	(4.54)	$	(0.69)
Net income (loss) per share	$	2.80	$	2.64	$	(2.13)	$	2.05

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details)	12 Months Ended
	Dec. 31, 2020 segment
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Number of reportable segments	2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2020
Property, plant and equipment other than software development and conversion cost \| Minimum
Property and Equipment
Estimated useful life	1 year
Property, plant and equipment other than software development and conversion cost \| Maximum
Property and Equipment
Estimated useful life	11 years
Software Development and Conversion Costs \| Minimum
Property and Equipment
Estimated useful life	3 years
Software Development and Conversion Costs \| Maximum
Property and Equipment
Estimated useful life	7 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative Instruments (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
DERIVATIVE INSTRUMENTS
Unrealized (loss) gain on cash flow hedges, net of tax	$ (0.6)	$ 0.1	$ (0.1)
Notional amount, fair value and classification of the company's outstanding derivative contracts
Unrealized gain on net investment hedges		$ 4.9	$ 29.6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Marketing Costs and Other (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Currency Translation
Foreign currency transaction gains (losses) recognized	$ (0.5)	$ 1.3	$ 0.6
Marketing and Advertising Costs
Marketing and advertising expense	$ 165.7	$ 229.4	$ 244.5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued and Adopted Accounting Standards (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Adjustment \| ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan loss	$ 644.0

REVENUE (Details) $ in Millions	3 Months Ended								12 Months Ended
REVENUE (Details) $ in Millions	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) item segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Disaggregation of revenue
Number of segments \| segment									2
Revenue from contracts with customers									$ 577.2	$ 840.2	$ 960.1
Finance charges, net									3,931.4	4,728.5	4,694.9
Investment income									12.8	12.6	11.6
Total revenue	$ 1,109.8	$ 1,050.5	$ 979.3	$ 1,381.8	$ 1,461.0	$ 1,437.6	$ 1,348.5	$ 1,334.2	$ 4,521.4	$ 5,581.3	$ 5,666.6
Number of performance obligations \| item									3
Estimated breakage rate	20.00%				20.00%				20.00%	20.00%	20.00%
Estimated Life of an AIR MILES reward mile									38 months	38 months	38 months
Coalition loyalty program
Disaggregation of revenue
Revenue from contracts with customers									$ 262.5	$ 290.1	$ 352.3
Short-term loyalty programs
Disaggregation of revenue
Revenue from contracts with customers									487.7	635.5	613.8
Servicing fees, net
Disaggregation of revenue
Revenue from contracts with customers									(174.9)	(180.7)	(97.3)
Other
Disaggregation of revenue
Revenue from contracts with customers									1.9	95.3	91.3
United States
Disaggregation of revenue
Total revenue									3,767.7	4,588.3	4,621.3
Canada
Disaggregation of revenue
Total revenue									286.9	352.2	411.3
Europe, Middle East and Africa
Disaggregation of revenue
Total revenue									332.6	449.1	463.2
Asia Pacific
Disaggregation of revenue
Total revenue									80.5	121.7	122.0
Other
Disaggregation of revenue
Total revenue									53.7	70.0	48.8
Operating segment \| LoyaltyOne
Disaggregation of revenue
Revenue from contracts with customers									752.0	1,020.5	1,056.8
Investment income									12.8	12.6	11.6
Total revenue									764.8	1,033.1	1,068.4
Operating segment \| LoyaltyOne \| Coalition loyalty program
Disaggregation of revenue
Revenue from contracts with customers									262.5	290.1	352.3
Operating segment \| LoyaltyOne \| Short-term loyalty programs
Disaggregation of revenue
Revenue from contracts with customers									487.7	635.5	613.8
Operating segment \| LoyaltyOne \| Other
Disaggregation of revenue
Revenue from contracts with customers									1.8	94.9	90.7
Operating segment \| LoyaltyOne \| United States
Disaggregation of revenue
Total revenue									11.1	40.1	23.1
Operating segment \| LoyaltyOne \| Canada
Disaggregation of revenue
Total revenue									286.9	352.2	411.3
Operating segment \| LoyaltyOne \| Europe, Middle East and Africa
Disaggregation of revenue
Total revenue									332.6	449.1	463.2
Operating segment \| LoyaltyOne \| Asia Pacific
Disaggregation of revenue
Total revenue									80.5	121.7	122.0
Operating segment \| LoyaltyOne \| Other
Disaggregation of revenue
Total revenue									53.7	70.0	48.8
Operating segment \| Card Services
Disaggregation of revenue
Revenue from contracts with customers									(174.9)	(180.7)	(97.3)
Finance charges, net									3,931.4	4,728.5	4,694.9
Total revenue									3,756.5	4,547.8	4,597.6
Operating segment \| Card Services \| Servicing fees, net
Disaggregation of revenue
Revenue from contracts with customers									(174.9)	(180.7)	(97.3)
Operating segment \| Card Services \| United States
Disaggregation of revenue
Total revenue									3,756.5	4,547.8	4,597.6
Corporate/Other
Disaggregation of revenue
Revenue from contracts with customers									0.1	0.4	0.6
Total revenue									0.1	0.4	0.6
Corporate/Other \| Other
Disaggregation of revenue
Revenue from contracts with customers									0.1	0.4	0.6
Corporate/Other \| United States
Disaggregation of revenue
Total revenue									$ 0.1	$ 0.4	$ 0.6
Minimum \| Short-term loyalty programs
Disaggregation of revenue
Typical term of short-term loyalty programs									42 days
Maximum \| Short-term loyalty programs
Disaggregation of revenue
Typical term of short-term loyalty programs									140 days
Typical contract term of the short-term loyalty programs									1 year

REVENUE - Contract Assets and Liabilities (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2020	Jan. 01, 2019
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	$ 898.5	$ 807.9
Deferred revenue (non-current)	105.5	114.1
Other current liabilities	$ 220.9	338.3
Period for which interest and fee income accrue until balance, interest and fees paid or charged off	180 days
LoyaltyOne
Change in Contract with Customer, Liability
Deferred revenue	$ 1,004.0	922.0	$ 875.3
Cash proceeds	459.3	505.3
Revenue recognized	(400.3)	(502.9)
Other	1.4	0.6
Effects of foreign currency translation	21.6	43.7
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	898.5
Deferred revenue (non-current)	105.5
LoyaltyOne \| Other current liabilities
Change in Contract with Customer, Liability
Deferred revenue	66.9	122.8		$ 122.8	$ 110.2
Revenue recognized		(526.6)
Cumulative revenue recognized	375.9
Service
Change in Contract with Customer, Liability
Deferred revenue	247.2	258.6	248.0
Cash proceeds	173.1	192.0
Revenue recognized	(188.8)	(193.7)
Effects of foreign currency translation	4.3	12.3
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	141.7
Deferred revenue (non-current)	105.5
Redemption
Change in Contract with Customer, Liability
Deferred revenue	756.8	663.4	627.3
Cash proceeds	286.2	313.3
Revenue recognized	(211.5)	(309.2)
Other	1.4	0.6
Effects of foreign currency translation	17.3	31.4
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	756.8
Card Services
Amounts recognized in the consolidated balance sheets:
Unamortized contract costs	311.1	406.8
Amortization of contract costs	65.3	71.8	68.7
Impairment of contract costs	$ 38.1	0.0	0.0
Amortization term of direct loan amortization costs	1 year
Unamortized deferred costs related to loan origination	$ 38.0	47.1
Period for which interest and fee income accrue until balance, interest and fees paid or charged off	180 days
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables	120 days
Card Services \| Cost of operations
Amounts recognized in the consolidated balance sheets:
Amortization of contract costs	$ 11.9	$ 11.9	$ 9.8

REVENUE - Performance Obligation (Details) $ in Millions	12 Months Ended
REVENUE - Performance Obligation (Details) $ in Millions	Dec. 31, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Initial application and transition, completed contract, same reporting period	true
Incremental Cost of Obtaining Contract	true
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Revenue, expected timing of satisfaction of remaining performance	12 months
Revenue, remaining performance obligation	$ 141.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Revenue, expected timing of satisfaction of remaining performance	12 months
Revenue, remaining performance obligation	$ 75.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Revenue, expected timing of satisfaction of remaining performance	12 months
Revenue, remaining performance obligation	$ 29.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Revenue, expected timing of satisfaction of remaining performance	12 months
Revenue, remaining performance obligation	$ 0.9

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended								12 Months Ended
	Apr. 25, 2019	Oct. 31, 2019	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Income from continuing operations			$ 93.3	$ 133.3	$ 38.4	$ 30.0	$ 130.4	$ 121.6	$ 142.4	$ 178.2	$ 295.0	$ 572.6	$ 945.5
Less: Dividends declared on preferred stock												2.8
Less: Allocation of undistributed earnings												6.8
Income from continuing operations - basic											295.0	563.0	945.5
(Loss) income from discontinued operations, net of taxes			$ (81.3)				$ (32.9)	$ (229.2)	$ (3.4)	$ (29.1)	(81.3)	(294.6)	17.6
Net income - basic											$ 213.7	$ 268.4	$ 963.1
Weighted average shares, basic											47,800,000	50,000,000.0	54,900,000
Basic income (loss) attributable to common stockholders per share:
Income from continuing operations (in dollars per share)			$ 1.93	$ 2.79	$ 0.81	$ 0.63	$ 2.73	$ 2.47	$ 2.72	$ 3.36	$ 6.17	$ 11.25	$ 17.24
(Loss) income from discontinued operations (in dollars per share)			(1.68)				(0.70)	(4.69)	(0.07)	(0.55)	(1.70)	(5.89)	0.32
Net income per share (in dollars per share)			$ 0.25	$ 2.79	$ 0.81	$ 0.63	$ 2.03	$ (2.22)	$ 2.65	$ 2.81	$ 4.47	$ 5.36	$ 17.56
Diluted income per share:
Income from continuing operations			$ 93.3	$ 133.3	$ 38.4	$ 30.0	$ 130.4	$ 121.6	$ 142.4	$ 178.2	$ 295.0	$ 572.6	$ 945.5
(Loss) income from discontinued operations, net of taxes			$ (81.3)				$ (32.9)	$ (229.2)	$ (3.4)	$ (29.1)	(81.3)	(294.6)	17.6
Net income											$ 213.7	$ 278.0	$ 963.1
Weighted average effect of dilutive securities:
Shares from assumed conversion of preferred stock (in shares)												800,000
Net effect of dilutive stock options and unvested restricted stock (in shares)											100,000	100,000	200,000
Denominator for diluted calculations (in shares)											47,900,000	50,900,000	55,100,000
Diluted income (loss) attributable to common stockholders per share:
Income from continuing operations (in dollars per share)			$ 1.93	$ 2.79	$ 0.81	$ 0.63	$ 2.74	$ 2.41	$ 2.71	$ 3.35	$ 6.16	$ 11.24	$ 17.17
(Loss) income from discontinued operations (in dollars per share)			(1.68)				(0.69)	(4.54)	(0.07)	(0.55)	(1.70)	(5.78)	0.32
Net income per share (in dollars per share)			$ 0.25	$ 2.79	$ 0.81	$ 0.63	$ 2.05	$ (2.13)	$ 2.64	$ 2.80	$ 4.46	$ 5.46	$ 17.49
Series A Non-Voting Convertible Preferred Stock
Diluted income (loss) attributable to common stockholders per share:
Conversion of stock, shares converted		150,000
Value Act Holdings, L.P. \| Series A Non-Voting Convertible Preferred Stock
Diluted income (loss) attributable to common stockholders per share:
Conversion of stock, shares converted												150,000
Conversion of stock, shares issued	150,000											150,000
Value Act Holdings, L.P. \| Common Stock
Diluted income (loss) attributable to common stockholders per share:
Conversion of stock, shares converted	1,500,000											1,500,000

ACQUISITIONS (Details) shares in Millions, $ in Millions				12 Months Ended
ACQUISITIONS (Details) shares in Millions, $ in Millions	Dec. 03, 2020 USD ($) item shares	Sep. 28, 2020 USD ($) shares	Feb. 07, 2019 USD ($)	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Acquisition
Equity consideration shares of common stock \| shares				1.9
Total consideration, net of cash acquired				$ 266.8	$ 6.7
Fair values of assets acquired and liabilities assumed in acquisition
Goodwill				$ 1,369.6	$ 954.9	$ 954.8
Equity consideration shares of common stock \| shares				1.9
Developed technology
Fair values of assets acquired and liabilities assumed in acquisition
Developed technology	$ 90.7
Blispay
Acquisition
Cash consideration			$ 6.7
Fair values of assets acquired and liabilities assumed in acquisition
Capitalized software			5.0
Goodwill			2.3
Total assets acquired			7.3
Components of consideration
Contingent consideration, guarantee			1.0
Guarantee, fair value			$ 0.6
Bread
Acquisition
Number of shares initially acquired \| shares		3.5
Percentage of interest acquired		6.00%
Total acquisition percentage	100.00%
Equity consideration shares of common stock \| shares	1.9			1.9
Cash consideration	$ 275.0	$ 25.0
Equity consideration	149.2
Deferred consideration	75.0			$ 75.0
Total consideration paid	491.0
Gain (loss) recognized on remeasurement	0.0
Fair values of assets acquired and liabilities assumed in acquisition
Installment loan receivables	111.7
Accounts receivable	0.2
Other current assets	0.6
Property and equipment	0.3
Developed technology	90.7
Right of use assets - operating	3.6
Deferred tax asset, net	7.0
Intangible assets	11.3
Goodwill	369.6
Total assets acquired	595.0
Accounts payable	2.0
Accrued expenses	2.9
Operating lease liabilities	3.5
Non-recourse borrowings of consolidated securitization entities	95.6
Total liabilities assumed	104.0
Net assets acquired	$ 491.0
Number of warehouse facilities acquired \| item	2
Equity consideration shares of common stock \| shares	1.9			1.9

DISPOSITION (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jan. 10, 2020	Dec. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Earnout payments received	$ 5.0
Disposal Group, Estimated Fair Value of Remaining Contingent Purchase Price			$ 1.5
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Precima
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration		$ 43.8
Contingent consideration		10.0
Net carrying value of assets and liabilities (including other comprehensive income)		26.8
Allocation of goodwill		3.2
Strategic transaction costs		5.8
Pre-tax gain on sale of business, net of strategic transaction costs		8.0
Cash associated with Precima, included in total consideration		$ 10.8

DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions		12 Months Ended
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions	Jul. 01, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Apr. 30, 2019	Apr. 12, 2019
Disposal Group, Including Discontinued Operation, Additional Disclosures
Long-term Debt		$ 2,805.7
Depreciation and amortization			$ 73.2	$ 293.7
Capital expenditures			55.8	106.5
Epsilon
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration, cash associated with disposal group	$ 42.2
Transaction costs			79.0
After tax loss on sale			252.1
Disposal Group, Including Discontinued Operation, Additional Disclosures
Mandatory payment per credit agreement					$ 500.0
Epsilon \| Senior Notes
Disposal Group, Including Discontinued Operation, Additional Disclosures
Long-term Debt					$ 1,900.0
Epsilon \| Discontinued Operations, Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration						$ 4,400.0
Disposal Group, Including Discontinued Operation, Income Statement Disclosures
Revenue				2,175.1
Cost of operations (exclusive of depreciation and amortization disclosed separately below)				1,744.4
Depreciation and other amortization				115.4
Amortization of purchased intangibles				178.3
Interest expense				128.3
Income before provision (benefit) from income taxes				8.7
Provision (benefit) for income taxes				(8.9)
(Loss) income from discontinued operations, net of taxes				$ 17.6
Epsilon \| Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration	4,451.9
Net carrying value of assets and liabilities (including other comprehensive income)	3,939.7
Disposal Group, Including Discontinued Operation, Income Statement Disclosures
Revenue			999.6
Cost of operations (exclusive of depreciation and amortization disclosed separately below)		110.0	993.9
Depreciation and other amortization			29.7
Amortization of purchased intangibles			43.5
Interest expense			64.1
Gain on sale of Epsilon	$ (512.2)		(512.2)
Income before provision (benefit) from income taxes		(110.0)	380.6
Provision (benefit) for income taxes		(28.7)	675.2
(Loss) income from discontinued operations, net of taxes		$ (81.3)	$ (294.6)

CREDIT CARD AND LOAN RECEIVABLES - Allowance for Loan Loss and Delinquencies (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2020 USD ($) item	Dec. 03, 2020 USD ($)	Dec. 31, 2019 USD ($)
Total credit card and loan receivables				$ 16,784.4		$ 19,463.1
Less: Credit card and loan receivables - restricted for securitization investors				11,208.5		13,504.2
Other credit card and loan receivables				5,575.9		5,958.9
Unbilled finance charges				219.4
Allowance for loan loss	$ 1,171.1	$ 1,038.3	$ 1,119.3	$ 2,008.0		1,171.1
Allowance for Loan Loss
Number of credit card and loan receivable groups \| item				4
Payments allocated to future purchase activity				$ 0.0
Balance at beginning of period	1,171.1	1,038.3	1,119.3
Provision for loan loss	1,266.2	1,187.5	1,016.0
Allowance associated with credit card and loan receivables transferred to held for sale			(54.8)
Change in estimate for uncollectible unpaid interest and fees	10.0		25.0
Recoveries	204.6	234.5	214.2
Principal charge-offs	(1,287.9)	(1,289.2)	(1,281.4)
Balance at end of period	$ 2,008.0	1,171.1	1,038.3
Number of days a loan is contractually past due before resulting in charge-off	180 days
Number of days after notification of creditor's bankruptcy or death when an account is charged-off	60 days
Actual charge-offs for unpaid interest and fees	$ 717.4	$ 808.6	$ 803.1
Period for which interest and fee income accrue until balance, interest and fees paid or charged off	180 days
Period an account becomes past due before a proprietary collection scoring algorithm automatically scores the risk of an account becoming further delinquent	30 days
Amortized cost of receivables balances contractually delinquent:
Total delinquent				915.6		1,391.4
Principal receivables balances contractually delinquent:
Re-aged accounts as percentage of total credit card and loan receivables	2.80%	2.40%	2.10%
Modified Credit Card Receivables
Impaired credit card and loan receivables				489.8		308.7
Allowance for loan loss on impaired credit card receivables				$ 165.8		$ 75.4
Maximum percentage of credit card receivables to total portfolio				3.00%		3.00%
Average recorded investment in impaired credit card receivables	$ 412.4	$ 295.4
Interest income on modified credit card receivables	$ 30.1	22.6	$ 27.9
Maximum
Allowance for Loan Loss
Number of days after notification of creditor's bankruptcy or death when an account is charged-off	180 days
ASU 2016-13
Allowance for loan loss	$ 644.0	644.0		$ 644.0		$ 644.0
Allowance for Loan Loss
Balance at beginning of period	644.0
Balance at end of period	$ 644.0	$ 644.0
Group A (Current, risk score - high)
Allowance for Loan Loss
Estimated Life (in months)	14 months
Group B (Current, risk score - low)
Allowance for Loan Loss
Estimated Life (in months)	19 months
Group C (Delinquent, risk score - high)
Allowance for Loan Loss
Estimated Life (in months)	17 months
Group D (Delinquent, risk score - low)
Allowance for Loan Loss
Estimated Life (in months)	26 months
Credit Card and Loan Receivables
Receivables				16,376.4		19,047.8
Modified Credit Card Receivables
Period for which late fee waivers and payment deferrals were made for credit card receivables	2 months
Late fee waivers and payment deferrals				2,200.0
Extension of certain promotional plans	$ 89.0
Number of short term forbearance programs \| item	2
Short-term forbearance programs				67.3
Deferred forbearance programs				157.4
Period for which certain promotional plans were extended for credit card receivables	3 months
Duration of short term program one	3 months
Duration of short term program two	6 months
Outstanding Balance				39.9
Maximum period of time temporary programs' concessions remain in place	12 months
Installment Loan Receivables
Receivables				118.0
Allowance for Loan Loss
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables	120 days
Installment Loan Receivables \| Bread
Allowance for loan loss	$ 5.7			5.7	$ 5.7
Allowance for Loan Loss
Balance at end of period	$ 5.7
Other
Receivables				$ 290.0		$ 415.3

CREDIT CARD AND LOAN RECEIVABLES - Amortized Cost Basis Credit Card and Loan Receivables (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Total delinquent	$ 915.6	$ 1,391.4
Current	15,578.8	17,656.4
Total	16,494.4	19,047.8
31 to 60 days delinquent
Financing Receivable, Past Due [Line Items]
Total delinquent	272.5	399.1
61 to 90 days delinquent
Financing Receivable, Past Due [Line Items]
Total delinquent	203.3	293.9
91 or more days delinquent
Financing Receivable, Past Due [Line Items]
Total delinquent	$ 439.8	$ 698.4

CREDIT CARD AND LOAN RECEIVABLES - Troubled Debt Restructurings (Details) - Consumer Portfolio $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($) item
Credit Card Receivables
Modifications related to troubled debt restructurings within credit card and loan receivables
Number of Restructurings \| item	391,049	259,311
Pre-modification Outstanding Balance	$ 554.5	$ 381.4
Post-modification Outstanding Balance	$ 552.6	$ 380.8
Troubled debt restructurings that subsequently defaulted - credit card receivables
Modifications related to troubled debt restructurings within credit card and loan receivables
Number of Restructurings \| item	118,600	126,476
Outstanding Balance	$ 161.8	$ 170.8

CREDIT CARD AND LOAN RECEIVABLES - Credit Quality on Amortized Cost Basis (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 16,376.4	$ 19,047.8
Percentage of amortized cost basis of credit card receivables outstanding	100.00%	100.00%
No Score
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 204.1	$ 298.4
Percentage of amortized cost basis of credit card receivables outstanding	1.20%	1.60%
27.1% and higher
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 1,390.4	$ 1,648.8
Percentage of amortized cost basis of credit card receivables outstanding	8.50%	8.70%
17.1% - 27.0%
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 848.8	$ 1,108.5
Percentage of amortized cost basis of credit card receivables outstanding	5.20%	5.80%
12.6% - 17.0%
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 937.0	$ 1,171.7
Percentage of amortized cost basis of credit card receivables outstanding	5.70%	6.20%
3.7% - 12.5%
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 7,305.5	$ 8,292.1
Percentage of amortized cost basis of credit card receivables outstanding	44.60%	43.50%
1.9% - 3.6%
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 2,939.5	$ 3,375.3
Percentage of amortized cost basis of credit card receivables outstanding	17.90%	17.70%
Lower than 1.9%
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 2,751.1	$ 3,153.0
Percentage of amortized cost basis of credit card receivables outstanding	16.90%	16.50%
Bread \| Installment Loan Receivables
Credit Quality
Amortized Cost Basis of Receivables Outstanding	$ 118.0
Bread \| Installment Loan Receivables \| FICO Score Above 660
Credit Quality
Percentage of total amortized cost basis of revolving loan receivables outstanding	86
Bread \| Installment Loan Receivables \| FICO Score Below 660
Credit Quality
Percentage of total amortized cost basis of revolving loan receivables outstanding	14

CREDIT CARD AND LOAN RECEIVABLES - Securitized Credit Card Receivables (Details) $ in Millions		1 Months Ended					12 Months Ended
	Sep. 30, 2020 USD ($) Asset	Dec. 31, 2019 USD ($) item	Sep. 30, 2019 USD ($) item	Aug. 31, 2019 USD ($) item	Jun. 30, 2019 USD ($) item	Apr. 30, 2019 USD ($) item	Dec. 31, 2020 USD ($) item Asset	Dec. 31, 2019 USD ($) item	Dec. 31, 2018 USD ($)
Portfolio Held For Sale
Carrying value of the credit card portfolios held for sale		$ 408.0					$ 0.0	$ 408.0
Number of credit card portfolios transferred to held for sale \| item								1
Number of credit card portfolios transferred from held for sale to receivables \| Asset	1
Carring value of the loan and credit card portfolios transferred out of held for sale to receivables	$ 81.9
Carrying value of the loan and credit card portfolios transferred to held for sale								$ 510.3
Valuation adjustment on credit card and loan portfolios held for sale							$ 7.5	$ 189.8
Number of credit card portfolios sold \| item		7	1	1	3	1	1	13
Proceeds from sale of credit card portfolios		$ 1,082.4	$ 334.7	$ 70.4	$ 217.7	$ 356.6	$ 289.5	$ 2,061.8	$ 1,153.5
Gain (loss) on sales of credit card portfolio		24.5	$ 15.2	$ 1.7	$ 2.9	$ (0.4)	$ 20.4	$ 43.9
Portfolio Acquisitions
Number of credit card portfolios acquired							0	4
Purchase price of credit card portfolio								$ 924.8
Purchase price of credit card receivables portfolio		843.5						843.5
Purchase price of credit card receivables portfolio, intangible assets		35.7						35.7
Purchase price of credit card receivables portfolio, other non-current assets		45.6						45.6
Securitized Credit Card and Loan Receivables
Cash collateral, restricted deposits which are required to be used to cover losses on securitized credit card receivables		0.0					$ 0.0	0.0	0.0
Total credit card and loan receivables - restricted for securitization investors		13,504.2					11,208.5	13,504.2
Principal amount of credit card and loan receivables - restricted for securitization investors, 90 days		$ 321.8					200.8	321.8
Net charge-offs of securitized principal							$ 756.1	$ 907.7	$ 927.0
Minimum
Securitized Credit Card and Loan Receivables
Minimum interests requirement (as a percent)							4.00%
Maximum
Securitized Credit Card and Loan Receivables
Minimum interests requirement (as a percent)							10.00%

INVENTORIES, NET (Details) - USD ($) $ in Millions	12 Months Ended
INVENTORIES, NET (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2020
Inventories, net	$ 218.0	$ 164.3
LoyaltyOne
Inventory write-down	$ 18.4

OTHER INVESTMENTS (Details) - USD ($) $ in Millions	12 Months Ended
OTHER INVESTMENTS (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Marketable securities
Amortized Cost	$ 219.0	$ 257.2
Unrealized Gains	6.4	3.0
Unrealized Losses		(0.4)
Fair Value	225.4	259.8
Other Investments, Total
Amortized Cost	219.0	257.2
Unrealized Gains	6.4	3.0
Unrealized Losses		(0.4)
Fair Value	225.4	259.8
Fair Value, Marketable securities
Less than 12 months		18.8
12 Months or Greater		13.1
Total		31.9
Unrealized Losses, Marketable securities
Less than 12 months		(0.2)
12 Months or Greater		(0.2)
Total		(0.4)
Fair Value, Total
Less than 12 months		18.8
12 Months or Greater		13.1
Total		31.9
Unrealized Losses, Total
Less than 12 months		(0.2)
12 Months or Greater		(0.2)
Total		(0.4)
Amortized Cost
Due in one year or less	44.9
Due after one year through five years	1.0
Due after ten years	173.1
Total	219.0
Fair Value
Due in one year or less	44.9
Due after one year through five years	1.0
Due after ten years	179.5
Fair Value	225.4
Realized gains or losses
Realized gains or losses from the sale of investment securities	$ 0.0	$ 0.0	$ 0.0

REDEMPTION SETTLEMENT ASSETS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
REDEMPTION SETTLEMENT ASSETS
Amortized Cost	$ 674.6	$ 600.4
Unrealized Gains	19.1	2.4
Unrealized Losses	(0.2)	(2.0)
Fair Value	693.5	600.8
Fair Value
Less than 12 months	46.2	166.6
12 Months or Greater	10.3	155.1
Total	56.5	321.7
Unrealized Losses
Less than 12 months	(0.1)	(1.3)
12 Months or Greater	(0.1)	(0.7)
Total	(0.2)	(2.0)
Amortized cost of the redemption settlement assets by contractual maturity
Due in one year or less	144.9
Due after one year through five years	470.2
Due after five year through ten years	4.1
Total	619.2
Estimated fair value of the redemption settlement assets by contractual maturity
Due in one year or less	146.0
Due after one year through five years	488.0
Due after five year through ten years	4.1
Total	638.1
Realized gains or losses from the sale of investment securities	0.0
Restricted cash
REDEMPTION SETTLEMENT ASSETS
Amortized Cost	55.4	39.3
Fair Value	55.4	39.3
Mutual funds
REDEMPTION SETTLEMENT ASSETS
Amortized Cost	26.9	25.1
Fair Value	26.9	25.1
Corporate bonds
REDEMPTION SETTLEMENT ASSETS
Amortized Cost	592.3	536.0
Unrealized Gains	19.1	2.4
Unrealized Losses	(0.2)	(2.0)
Fair Value	611.2	536.4
Fair Value
Less than 12 months	46.2	166.6
12 Months or Greater	10.3	155.1
Total	56.5	321.7
Unrealized Losses
Less than 12 months	(0.1)	(1.3)
12 Months or Greater	(0.1)	(0.7)
Total	$ (0.2)	$ (2.0)

LEASES (Details)	12 Months Ended
LEASES (Details)	Dec. 31, 2020
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	18 years

LEASES - Lease expense (Details) - USD ($) $ in Millions	12 Months Ended
LEASES - Lease expense (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Lease expense
Operating lease cost	$ 40.5	$ 41.1
Short-term lease cost	1.0	2.7
Variable lease cost	6.2	6.8
Total	$ 47.7	$ 50.6
Lease expense			$ 47.5
Remaining lease term - operating leases	10 years 9 months 18 days	11 years 6 months
Discount rate - operating leases	5.20%	5.20%
Supplemental cash flow information related to leases was as follows:
Operating cash flows from operating leases	$ 45.8	$ 46.6
Operating leases - Right-of-use assets obtained in exchange for lease obligations	$ 7.6	$ 28.4

LEASES - Maturities of lease liabilities (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Lease liabilities
2021	$ 38.8
2022	41.2
2023	38.3
2024	36.0
2025	35.2
Thereafter	209.6
Total undiscounted lease liabilities	399.1
Less: Amount representing interest	(99.1)
Total present value of minimum lease payments	300.0
Amounts recognized in the December 31, 2020 consolidated balance sheet:
Current operating lease liabilities	23.6	$ 22.6
Long-term operating lease liabilities	276.4	$ 291.7
Total present value of minimum lease payments	300.0
Asset impairment charge	$ 18.4

PROPERTY AND EQUIPMENT (Details) $ in Millions		1 Months Ended	3 Months Ended	12 Months Ended
PROPERTY AND EQUIPMENT (Details) $ in Millions	Dec. 03, 2020 USD ($)	Oct. 31, 2019 USD ($) item	Dec. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Property and equipment
Total			$ 717.1	$ 717.1	$ 663.6
Accumulated depreciation and amortization			(406.2)	(406.2)	(381.3)
Property and equipment, net			310.9	310.9	282.3
Depreciation
Depreciation				65.5	40.6	$ 41.2
Amortization on capitalized software				35.5	39.3	$ 39.5
Unamortized capitalized software costs			165.5	165.5	74.0
Capitalized software, impairment				4.1
Proceeds from sale of building and land		$ 15.1			15.1
Gain on sale of building and land		$ 6.1
Lease term		15 years
Number of tenant options \| item		4
Term per each option to extend		5 years
Computer software and development
Property and equipment
Total			410.5	410.5	327.1
Furniture and equipment
Property and equipment
Total			151.0	151.0	164.3
Land, buildings and leasehold improvements
Property and equipment
Total			122.7	122.7	126.0
Construction in progress
Property and equipment
Total			32.9	$ 32.9	$ 46.2
Bread
Depreciation
Developed technology	$ 90.7
Developed technology
Depreciation
Developed technology	$ 90.7
Useful life	5 years
Card Services
Depreciation
Impairment charges			3.0
Accelerated depreciation			$ 24.7

INTANGIBLE ASSETS AND GOODWILL - Finite Lived Assets and Indefinite Lived Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 592.4	$ 603.4
Accumulated Amortization	(511.9)	(451.3)
Finite lived assets, net	80.5	152.1
Total Intangible Assets
Gross Assets	593.6	604.6
Accumulated Amortization	(511.9)	(451.3)
Net	81.7	153.3
Tradenames
Indefinite Lived Assets
Indefinite lived assets	1.2	1.2
Total Intangible Assets
Net	1.2	1.2
Customer contracts and lists
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	363.0	325.1
Accumulated Amortization	(354.5)	(278.7)
Finite lived assets, net	8.5	$ 46.4
Amortization Life and Method
Useful life		7 years
Total Intangible Assets
Accumulated Amortization	$ (354.5)	$ (278.7)
Customer contracts and lists \| Minimum
Amortization Life and Method
Useful life	3 years
Customer contracts and lists \| Maximum
Amortization Life and Method
Useful life	7 years
Premium on purchased credit card portfolios
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 137.2	192.6
Accumulated Amortization	(72.8)	(93.2)
Finite lived assets, net	64.4	99.4
Total Intangible Assets
Accumulated Amortization	$ (72.8)	$ (93.2)
Premium on purchased credit card portfolios \| Minimum
Amortization Life and Method
Useful life	3 years	1 year
Premium on purchased credit card portfolios \| Maximum
Amortization Life and Method
Useful life	13 years	13 years
Collector database
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 55.0	$ 53.9
Accumulated Amortization	(54.5)	(52.9)
Finite lived assets, net	$ 0.5	$ 1.0
Amortization Life and Method
Useful life	5 years	5 years
Total Intangible Assets
Accumulated Amortization	$ (54.5)	$ (52.9)
Tradenames
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	35.0	31.8
Accumulated Amortization	(30.1)	(26.5)
Finite lived assets, net	4.9	5.3
Total Intangible Assets
Accumulated Amortization	$ (30.1)	$ (26.5)
Tradenames \| Minimum
Amortization Life and Method
Useful life	4 years	8 years
Tradenames \| Maximum
Amortization Life and Method
Useful life	15 years	15 years
Noncompete agreements
Schedule of Finite and Indefinite-lived Intangible Assets
Finite lived assets, gross	$ 2.2
Finite lived assets, net	$ 2.2
Amortization Life and Method
Useful life	5 years

INTANGIBLE ASSETS AND GOODWILL - Maturity Schedule (Details) - USD ($) $ in Millions		12 Months Ended
	Dec. 03, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Intangible assets
Acquired intangible assets			$ 35.7
Amortization expense		$ 82.8	96.2	$ 112.9
Estimated amortization expense related to intangible assets for the next five years and thereafter
2021		25.8
2022		21.0
2023		16.1
2024		11.2
2025		2.4
Thereafter		$ 4.0
Customer relationships
Intangible assets
Acquired intangible assets			$ 21.8
Weighted average life			2 years 8 months 12 days
Marketing relationships
Intangible assets
Acquired intangible assets			$ 13.9
Weighted average life			5 years 10 months 24 days
Bread
Intangible assets
Acquired intangible assets	$ 11.3
Bread \| Customer relationships
Intangible assets
Acquired intangible assets	$ 8.8
Weighted average life	3 years
Bread \| Tradename
Intangible assets
Acquired intangible assets	$ 0.3
Weighted average life	4 years
Bread \| Noncompete agreements
Intangible assets
Acquired intangible assets	$ 2.2
Weighted average life	5 years

INTANGIBLE ASSETS AND GOODWILL - Goodwill Information (Details) - USD ($) $ in Millions			1 Months Ended		12 Months Ended
	Jul. 31, 2019	Jul. 31, 2018	Dec. 31, 2020	Jan. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Goodwill
Beginning Balance				$ 954.9	$ 954.9	$ 954.8
Goodwill acquired during the year					369.6	2.3
Goodwill related to sale of Precima					(3.2)
Effects of foreign currency translation					48.3	(2.2)
Ending Balance			$ 1,369.6		1,369.6	954.9
Goodwill impairment	$ 0.0	$ 0.0
Bread
Goodwill
Goodwill acquired during the year			369.6
Operating segment \| LoyaltyOne
Goodwill
Beginning Balance				690.9	690.9	693.1
Goodwill acquired during the year					0.0	0.0
Goodwill related to sale of Precima				(3.2)	(3.2)
Effects of foreign currency translation					48.3	(2.2)
Ending Balance			736.0		736.0	690.9
Operating segment \| Card Services
Goodwill
Beginning Balance				$ 264.0	264.0	261.7
Goodwill acquired during the year					369.6	2.3
Ending Balance			$ 633.6		$ 633.6	$ 264.0

RESTRUCTURING AND OTHER CHARGES (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Apr. 12, 2019
Restructuring costs and reserve
Restructuring charges	$ (8.2)	$ 118.1
Restructuring, adjustment	(8.2)	(51.4)
Epsilon \| Discontinued Operations, Held-for-sale
Restructuring costs and reserve
Total consideration			$ 4,400.0
Termination Benefits
Restructuring costs and reserve
Restructuring charges	(8.2)	53.5
Restructuring, adjustment	(8.2)
Asset Impairments
Restructuring costs and reserve
Restructuring charges		52.0
Restructuring, adjustment		(52.0)
Lease Termination Costs
Restructuring costs and reserve
Restructuring charges		9.1
Restructuring, adjustment		0.7
Other Exit Costs
Restructuring costs and reserve
Restructuring charges		3.5
Restructuring, adjustment		(0.1)
Corporate/Other
Restructuring costs and reserve
Restructuring charges		37.9
Corporate/Other \| Termination Benefits
Restructuring costs and reserve
Restructuring charges		18.6
Corporate/Other \| Asset Impairments
Restructuring costs and reserve
Restructuring charges		11.1
Corporate/Other \| Lease Termination Costs
Restructuring costs and reserve
Restructuring charges		7.0
Corporate/Other \| Other Exit Costs
Restructuring costs and reserve
Restructuring charges		1.2
LoyaltyOne
Restructuring costs and reserve
Restructuring charges	0.1	50.8
LoyaltyOne \| Termination Benefits
Restructuring costs and reserve
Restructuring charges	0.1	7.6
LoyaltyOne \| Asset Impairments
Restructuring costs and reserve
Restructuring charges		40.7
LoyaltyOne \| Lease Termination Costs
Restructuring costs and reserve
Restructuring charges		0.2
LoyaltyOne \| Other Exit Costs
Restructuring costs and reserve
Restructuring charges		2.3
Card Services
Restructuring costs and reserve
Restructuring charges	(8.3)	29.4
Card Services \| Termination Benefits
Restructuring costs and reserve
Restructuring charges	$ (8.3)	27.3
Card Services \| Asset Impairments
Restructuring costs and reserve
Restructuring charges		0.2
Card Services \| Lease Termination Costs
Restructuring costs and reserve
Restructuring charges		$ 1.9

RESTRUCTURING AND OTHER CHARGES - Liability (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Restructuring Reserve
Restructuring Reserve, Beginning Balance	$ 34.8
Restructuring charges	(8.2)	$ 118.1
Adjustments for non-cash charges	(8.2)	(51.4)
Cash payments	(23.3)	(31.9)
Restructuring Reserve, Ending Balance	3.3	34.8
LoyaltyOne
Restructuring Reserve
Restructuring charges	0.1	50.8
Card Services
Restructuring Reserve
Restructuring charges	(8.3)	29.4
Termination Benefits
Restructuring Reserve
Restructuring Reserve, Beginning Balance	34.7
Restructuring charges	(8.2)	53.5
Adjustments for non-cash charges	(8.2)
Cash payments	(23.2)	(18.8)
Restructuring Reserve, Ending Balance	3.3	34.7
Termination Benefits \| LoyaltyOne
Restructuring Reserve
Restructuring charges	0.1	7.6
Termination Benefits \| Card Services
Restructuring Reserve
Restructuring charges	(8.3)	27.3
Asset Impairments
Restructuring Reserve
Restructuring charges		52.0
Adjustments for non-cash charges		(52.0)
Asset Impairments \| LoyaltyOne
Restructuring Reserve
Restructuring charges		40.7
Asset Impairments \| Card Services
Restructuring Reserve
Restructuring charges		0.2
Lease Termination Costs
Restructuring Reserve
Restructuring charges		9.1
Adjustments for non-cash charges		0.7
Cash payments		(9.8)
Lease Termination Costs \| LoyaltyOne
Restructuring Reserve
Restructuring charges		0.2
Lease Termination Costs \| Card Services
Restructuring Reserve
Restructuring charges		1.9
Other Exit Costs
Restructuring Reserve
Restructuring Reserve, Beginning Balance	0.1
Restructuring charges		3.5
Adjustments for non-cash charges		(0.1)
Cash payments	$ (0.1)	(3.3)
Restructuring Reserve, Ending Balance		0.1
Other Exit Costs \| LoyaltyOne
Restructuring Reserve
Restructuring charges		$ 2.3

ACCRUED EXPENSES (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
ACCRUED EXPENSES
Accrued payroll and benefits	$ 116.9	$ 133.4
Accrued taxes	57.6	18.1
Accrued other liabilities	270.2	176.3
Accrued expenses	$ 444.7	$ 327.8

DEBT (Details) € in Millions			1 Months Ended						12 Months Ended
DEBT (Details) € in Millions	Apr. 03, 2020 EUR (€) item	Dec. 20, 2019 USD ($)	Dec. 31, 2020 USD ($)	Oct. 31, 2020 USD ($)	Aug. 31, 2020 USD ($)	May 31, 2020 USD ($)	Sep. 30, 2019 EUR (€)	Jul. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 22, 2020	Dec. 31, 2019 EUR (€)	Dec. 19, 2019 USD ($)	Apr. 30, 2019 USD ($)	Jun. 30, 2016 EUR (€)
Debt
Total long-term and other debt			$ 2,834,300,000						$ 2,834,300,000
Less: Unamortized discount and debt issuance costs			28,600,000						28,600,000
Debt repaid by the company									493,800,000
Less: Current portion			6,553,900,000						6,553,900,000	$ 6,942,400,000
Long-term portion			3,238,700,000						3,238,700,000	5,209,300,000
Less: Current portion			1,850,700,000						1,850,700,000	3,030,800,000
Long-term portion			3,859,200,000						3,859,200,000	4,253,200,000
Loss from extinguishment of debt										(71,900,000)
Maturities of long-term and other debt
2021			101,400,000						101,400,000
2022			1,382,900,000						1,382,900,000
2024			850,000,000.0						850,000,000.0
Thereafter			500,000,000.0						500,000,000.0
Long-Term and Other Debt			2,805,700,000						2,805,700,000
Maturities Of Deposits
2021			6,555,600,000						6,555,600,000
2022			1,739,600,000						1,739,600,000
2023			966,100,000						966,100,000
2024			530,600,000						530,600,000
2025			13,200,000						13,200,000
Total maturities			9,805,100,000						9,805,100,000
Unamortized discount			(12,500,000)						(12,500,000)
Total Deposits			9,792,600,000						9,792,600,000
Maturities Of Non Recourse Borrowings Of Consolidated Securitization Entities
2021			1,852,100,000						1,852,100,000
2022			3,863,100,000						3,863,100,000
Total maturities			5,715,200,000						5,715,200,000
Unamortized discount			(5,300,000)						(5,300,000)
Total non-recourse borrowings of consolidated securitization entities			5,709,900,000						$ 5,709,900,000
Warehouse facility
Debt
Debt repaid by the company			28,500,000
Number of facilities \| item									2
Series 2017-A asset backed term notes
Debt
Debt repaid by the company						$ 450,700,000
Retained amount of subordinated class of notes						$ 50,700,000
Series 2017-C asset backed term notes
Debt
Debt repaid by the company				$ 619,700,000
Retained amount of subordinated class of notes				$ 27,500,000
Series 2018-A Notes
Debt
Principal payments collected during accumulation period									$ 291,800,000
Series 2015-B asset-backed term notes
Debt
Debt repaid by the company					$ 625,000,000.0
Retained amount of subordinated class of notes					$ 150,000,000.0
Asset backed term notes
Debt
Amount borrowed									0
Total deposits
Debt
Less: Unamortized discount and debt issuance costs			12,500,000						12,500,000	23,300,000
Deposits			9,805,100,000						9,805,100,000	12,175,000,000.0
Less: Current portion			6,553,900,000						6,553,900,000	6,942,400,000
Long-term portion			3,238,700,000						3,238,700,000	5,209,300,000
Certificates of deposit
Debt
Deposits			$ 6,014,900,000						$ 6,014,900,000	$ 8,585,200,000
Certificates of deposit \| Comenity Bank and Comenity Capital Bank
Debt
Weighted average interest rate (as a percent)			2.58%						2.58%	2.66%			2.66%
Certificates of deposit \| Minimum
Debt
Interest Rate (as a percent)			0.15%						0.15%
Certificates of deposit \| Minimum \| Comenity Bank and Comenity Capital Bank
Debt
Interest Rate (as a percent)			0.15%						0.15%	1.33%			1.33%
Denomination amount of certificate of deposits									$ 1,000
Certificates of deposit \| Maximum
Debt
Interest Rate (as a percent)			3.75%						3.75%
Certificates of deposit \| Maximum \| Comenity Bank and Comenity Capital Bank
Debt
Interest Rate (as a percent)			3.75%						3.75%	4.00%			4.00%
Denomination amount of certificate of deposits									$ 100,000
Money market deposits
Debt
Money market deposits			$ 3,790,200,000						$ 3,790,200,000	$ 3,589,800,000
Debt instrument description of Variable rate basis									Federal Funds rate
Money market deposits \| Comenity Bank and Comenity Capital Bank
Debt
Money market deposits			$ 3,800,000,000						$ 3,800,000,000	$ 3,600,000,000
Weighted average interest rate (as a percent)			1.00%						1.00%	2.05%			2.05%
Money market deposits \| Minimum
Debt
Interest Rate (as a percent)			0.38%						0.38%	1.84%			1.84%
Money market deposits \| Minimum \| Comenity Bank and Comenity Capital Bank
Debt
Interest Rate (as a percent)			0.38%						0.38%	1.84%			1.84%
Money market deposits \| Maximum
Debt
Interest Rate (as a percent)			3.50%						3.50%	3.50%			3.50%
Money market deposits \| Maximum \| Comenity Bank and Comenity Capital Bank
Debt
Interest Rate (as a percent)			3.50%						3.50%	3.50%			3.50%
Non-recourse borrowings of consolidated securitization entities
Debt
Less: Unamortized discount and debt issuance costs			$ 5,300,000						$ 5,300,000	$ 12,000,000.0
Total non-recourse borrowings of consolidated securitization entities			5,715,200,000						5,715,200,000	7,296,000,000.0
Less: Current portion			1,850,700,000						1,850,700,000	3,030,800,000
Long-term portion			3,859,200,000						3,859,200,000	4,253,200,000
Fixed rate asset-backed term note securities
Debt
Total non-recourse borrowings of consolidated securitization entities			$ 3,423,800,000						$ 3,423,800,000	4,891,000,000.0
Fixed rate asset-backed term note securities \| Minimum
Debt
Interest Rate (as a percent)			2.03%						2.03%
Fixed rate asset-backed term note securities \| Maximum
Debt
Interest Rate (as a percent)			3.95%						3.95%
Secured Loan Facility
Debt
Total non-recourse borrowings of consolidated securitization entities			$ 86,300,000						$ 86,300,000
Weighted average interest rate (as a percent)			3.90%						3.90%
Line of credit amount outstanding			$ 86,300,000						$ 86,300,000
Debt instrument description of Variable rate basis									LIBOR
Conduit asset-backed securities
Debt
Maximum borrowing capacity			3,200,000,000						$ 3,200,000,000
Total non-recourse borrowings of consolidated securitization entities			2,205,100,000						2,205,100,000	$ 2,405,000,000.0
Reduction in Credit Facility			1,500,000,000						1,500,000,000
Line of credit amount outstanding			$ 2,200,000,000						$ 2,200,000,000
Debt instrument description of Variable rate basis									LIBOR
Number of facilities \| item									3
Conduit asset-backed securities \| Minimum
Debt
Interest Rate (as a percent)			1.39%						1.39%	2.79%			2.79%
Conduit asset-backed securities \| Maximum
Debt
Interest Rate (as a percent)			1.89%						1.89%	2.96%			2.96%
Long-term and other debt
Debt
Total long-term and other debt			$ 2,834,300,000						$ 2,834,300,000	$ 2,878,800,000
Less: Unamortized discount and debt issuance costs			28,600,000						28,600,000	28,900,000
Less: Current portion			101,400,000						101,400,000	101,400,000
Long-term and other debt			2,704,300,000						2,704,300,000	2,748,500,000
Senior Notes
Debt
Extinguishment of debt								$ 1,900,000,000
Loss from extinguishment of debt								(71,900,000)
Loss from extinguishment of debt, before write-off of deferred issuance costs								(49,900,000)
Write-off of deferred issuance costs								$ 22,000,000.0
Senior Notes Due 2024
Debt
Principal amount of debt		$ 850,000,000.0								850,000,000.0
Total long-term and other debt			$ 850,000,000.0						$ 850,000,000.0	$ 850,000,000.0
Interest Rate (as a percent)		4.75%	4.75%						4.75%	4.75%			4.75%
Senior Notes Due 2026
Debt
Principal amount of debt											$ 500,000,000.0
Total long-term and other debt			$ 500,000,000.0						$ 500,000,000.0
Interest Rate (as a percent)			7.00%						7.00%		7.00%	7.00%
2017 Credit Agreement
Debt
Total availability under Credit Facility			$ 750,000,000.0						$ 750,000,000.0
2017 revolving line of credit
Debt
Maximum borrowing capacity		$ 750,000,000.0								$ 750,000,000.0				$ 1,072,400,000	$ 1,072,400,000
Mandatory payment per credit agreement															500,000,000.0
Threshold amount for future asset sales															$ 50,000,000.0
Total availability under Credit Facility										750,000,000.0
Debt instrument description of Variable rate basis									LIBOR
2017 Term Loans
Debt
Principal amount of debt		2,028,800,000								2,028,800,000
Total long-term and other debt			$ 1,484,300,000						$ 1,484,300,000	$ 2,028,800,000
Debt repaid by the company		$ 833,000,000.0
Weighted average interest rate (as a percent)			1.90%						1.90%	3.30%			3.30%
Aggregate principal payments as a percentage of the initial term loan amount in each of the first and second year payable in equal quarterly installments									1.25%
Debt instrument description of Variable rate basis									LIBOR	LIBOR
BrandLoyalty credit agreement
Debt
Total long-term and other debt			$ 0						$ 0
Debt instrument description of Variable rate basis									Euro Interbank Offered Rate
Number of requests for one-year extensions \| item	2
Term of individual extensions	1 year
BrandLoyalty revolving line of credit
Debt
Maximum borrowing capacity	€ 30.0		36,600,000						$ 36,600,000
Debt repaid by the company \| €							€ 32.5
BrandLoyalty revolving line of credit \| Committed revolving credit facility
Debt
Maximum borrowing capacity \| €													€ 37.5
BrandLoyalty revolving line of credit \| Uncommitted revolving credit facility
Debt
Maximum borrowing capacity \| €													€ 37.5
BrandLoyalty uncommitted line of credit
Debt
Maximum borrowing capacity	30.0		36,600,000						36,600,000
BrandLoyalty uncommitted line of credit \| Credit Facility, Accordion Feature
Debt
Maximum borrowing capacity	€ 80.0		$ 97,700,000						$ 97,700,000
BrandLoyalty term loans
Debt
Debt repaid by the company \| €							€ 115.0
BrandLoyalty term loans \| A-1 Term loan facility
Debt
Principal amount of debt \| €																€ 90.0
BrandLoyalty term loans \| A-2 term loan facility
Debt
Principal amount of debt \| €																€ 100.0

COMMITMENTS AND CONTINGENCIES - AIR MILES Reward Program (Details) $ in Millions	Dec. 31, 2020 USD ($)
AIR MILES Reward Program
Letters of credit and other assurances	$ 150.5

COMMITMENTS AND CONTINGENCIES - Regulatory Matters and Cardholders (Details)		12 Months Ended
	Jan. 19, 2021 USD ($) item	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)
Cardholders
Approximate number of cardholders \| item		45,500,000
Average unused lines of credit per account		$ 2,367
Comenity Bank
Tier 1 capital to average assets
Tier 1 capital to average assets, Actual Ratio (as a prcent)		19.0	12.9
Tier 1 capital to average assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		4.0	4.0
Tier 1 capital to average assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions		5.0	5.0
Common Equity Tier 1 capital to risk-weighted assets
Common Equity Tier 1 capital to risk-weighted assets, Actual Ratio (as a percent)		20.7	14.6
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		4.50%	4.50%
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions (as a percent)		6.50%	6.50%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital to risk-weighted assets, Actual Ratio (as a percent)		20.7	14.6
Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		6.0	6.0
Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions (as a percent)		8.0	8.0
Total capital to risk-weighted assets, Actual Ratio (as a percent)		22.0	15.9
Total capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		8.0	8.0
Total capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under prompt Corrective Action Provisions (as a percent)		10.0	10.0
Comenity Capital Bank
Tier 1 capital to average assets
Tier 1 capital to average assets, Actual Ratio (as a prcent)		14.8	11.9
Tier 1 capital to average assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		4.0	4.0
Tier 1 capital to average assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions		5.0	5.0
Common Equity Tier 1 capital to risk-weighted assets
Common Equity Tier 1 capital to risk-weighted assets, Actual Ratio (as a percent)		15.6	14.4
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		4.50%	4.50%
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions (as a percent)		6.50%	6.50%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital to risk-weighted assets, Actual Ratio (as a percent)		15.6	14.4
Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		6.0	6.0
Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions (as a percent)		8.0	8.0
Total capital to risk-weighted assets, Actual Ratio (as a percent)		16.9	15.7
Total capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes (as a percent)		8.0	8.0
Total capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under prompt Corrective Action Provisions (as a percent)		10.0	10.0
Epsilon \| Discontinued Operations, Disposed of by Sale
Contingencies
Loss contingency, total	$ 150,000,000.0
Number of installment payments \| item	2
Loss contingency, pre-tax		$ 110,000,000.0	$ 40,000,000.0
Loss contingency, net of tax		$ 81,300,000	$ 32,900,000

STOCKHOLDERS' EQUITY - Stock Repurchase Programs (Details) - USD ($) $ / shares in Units, $ in Millions		6 Months Ended	12 Months Ended
	Aug. 15, 2019	Jun. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jul. 01, 2020	Jun. 30, 2020	Jun. 09, 2020	Jul. 31, 2019	Jul. 19, 2019	Jul. 26, 2018	Jul. 01, 2015	Jul. 01, 2010
Stock Repurchase Programs
Number of shares repurchased			0	6,300,000	2,200,000
Total cost of shares repurchased				$ 976.1	$ 443.2
2017 Stock Repurchase Program
Stock Repurchase Programs
Number of shares repurchased					800,000
Total cost of shares repurchased					$ 166.0
2018 Stock Repurchase Program
Stock Repurchase Programs
Amount of company's outstanding common stock authorized to be repurchased											$ 500.0
Number of shares repurchased		1,300,000			1,400,000
Total cost of shares repurchased		$ 222.8			$ 277.2
2019 Stock Repurchase Program
Stock Repurchase Programs
Amount of company's outstanding common stock authorized to be repurchased									$ 1,100.0
Number of shares repurchased	5,050,505
Average cost per share (in dollars per share)	$ 148.50
Total cost of shares repurchased	$ 750.0
Available balance under stock repurchase program				$ 347.8
Amount remaining of a stock repurchase plan that expired							$ 347.8
Total direct costs	3.3
Commission expense	$ 2.2
Modified Dutch Auction
Stock Repurchase Programs
Amount of company's outstanding common stock authorized to be repurchased										$ 750.0
Modified Dutch Auction \| Minimum
Stock Repurchase Programs
Share price (in dollars per share)										$ 144.00
Modified Dutch Auction \| Maximum
Stock Repurchase Programs
Share price (in dollars per share)										$ 162.00
2010 Omnibus Incentive Plan
Stock Compensation Plans
Shares of common stock reserved for grant													3,000,000
2015 Omnibus Incentive Plan
Stock Compensation Plans
Shares of common stock reserved for grant												5,100,000
2020 Omnibus Incentive Plan
Stock Compensation Plans
Shares of common stock reserved for grant						2,400,000		2,400,000
Stock Repurchase Programs
Maximum award amount			$ 1.0

STOCKHOLDERS' EQUITY - Stock Compensation Plans (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Apr. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Apr. 12, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense		$ 21.3	$ 25.1	$ 44.4
Forfeiture rate (as a percent)		5.00%	5.00%	5.00%
Unrecognized expenses		$ 24.7
Approximate weighted average period for recognizing expenses		1 year 6 months
Income tax benefits related to stock-based compensation expense		$ 3.0	$ 3.6	$ 7.3
Cost of operations.
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense		12.5	16.5	23.3
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense		$ 8.8	8.6	21.1
Discontinued Operations, Held-for-sale \| Epsilon
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Stock-based compensation expense	$ 19.4		$ 29.7	$ 36.4
Total consideration					$ 4,400.0

STOCKHOLDERS' EQUITY - Restricted Stock Unit Awards and Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended				12 Months Ended
	Jan. 28, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock option activity
Balance at the end of the period (in shares)		0				0
Dividends
Common Stock dividends and dividend equivalent rights declared (in dollars per share)		$ 0.21	$ 0.21	$ 0.21	$ 0.63		$ 0.63	$ 0.57
Dividends declared						$ 59.9	$ 127.1	$ 125.9
Dividends paid						60.6	127.4	125.2
Dividend equivalents accrued but not yet paid		$ 0.6				$ 0.6	$ 1.2	$ 0.7
Subsequent event
Dividends
Common Stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.21
Restricted stock units
Fair Value Assumptions
Price correlation		0.52%				0.52%
Expected volatility						32.50%
Risk-free interest rate						1.40%
Risk-free interest rate time period						2 years
Number of Shares
Balance at the beginning of the period (in shares)					513,132	513,132	796,912	807,810
Shares granted (in shares)						481,566	704,235	429,759
Shares vested (in shares)						(170,018)	(441,503)	(319,503)
Shares forfeited (in shares)						(247,413)	(546,512)	(121,154)
Balance at the end of the period (in shares)		577,267				577,267	513,132	796,912
Outstanding and Expected to Vest (in shares)		345,266				345,266
Weighted Average Fair Value
Balance at the beginning of the period (in dollars per share)					$ 172.06	$ 172.06	$ 218.81	$ 207.45
Shares granted (in dollars per share)						89.11	161.05	233.98
Shares vested (in dollars per share)						175.09	218.45	224.62
Shares forfeited (in dollars per share)						166.93	188.40	227.66
Balance at the end of the period (in dollars per share)		$ 103.89				103.89	$ 172.06	$ 218.81
Outstanding and Expected to Vest (in dollars per share)		$ 105.49				$ 105.49
Restricted stock, additional disclosures
Total fair value of units vested						$ 29.8	$ 96.4	$ 71.8
Aggregate intrinsic value of units outstanding and expected to vest		$ 25.6				$ 25.6
Weighted-average remaining contractual life						1 year 6 months
Market-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)					24,288	24,288	56,229	28,172
Shares granted (in shares)						20,770	37,878	28,057
Shares forfeited (in shares)						(22,831)	(69,819)
Balance at the end of the period (in shares)		22,227				22,227	24,288	56,229
Restricted stock, additional disclosures
Attainment percentage						100.00%	100.00%	100.00%
Performance-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)					230,272	230,272	423,242	450,579
Shares granted (in shares)						219,186	420,239	263,542
Shares vested (in shares)						(42,097)	(262,773)	(188,680)
Shares forfeited (in shares)						(186,135)	(350,436)	(102,199)
Balance at the end of the period (in shares)		221,226				221,226	230,272	423,242
Restricted stock, additional disclosures
Attainment percentage						100.00%	100.00%	100.00%
Stock Compensation Plans, Additional Disclosures
Award vesting period						3 years
Probable outcome (as a percent)						0.00%
Performance-based restricted stock unit awards \| Minimum
Stock Compensation Plans, Additional Disclosures
Earned percentage						0.00%
Performance-based restricted stock unit awards \| Maximum
Stock Compensation Plans, Additional Disclosures
Earned percentage						150.00%
Service-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)					258,572	258,572	317,441	329,059
Shares granted (in shares)						241,610	246,118	138,160
Shares vested (in shares)						(127,921)	(178,730)	(130,823)
Shares forfeited (in shares)						(38,447)	(126,257)	(18,955)
Balance at the end of the period (in shares)		333,814				333,814	258,572	317,441
Stock Compensation Plans, Additional Disclosures
Award vesting period						3 years
Employee Stock Options
Stock Compensation Plans, Additional Disclosures
Award vesting period						3 years
Expiration period for awards granted						10 years
Stock option activity
Balance at the beginning of the period (in shares)							10,854	11,859
Options exercised (in shares)						0	(10,854)	(886)
Options forfeited (in shares)								(119)
Balance at the end of the period (in shares)								10,854
Exercisable, Options (in shares)								10,854	11,859
Weighted Average Exercise Price
Outstanding beginning of period (in dollars per share)							$ 25.01	$ 23.87
Options exercised (in dollars per share)							$ 25.01	12.70
Options forfeited (in dollars per share)								2.74
Balance at end of period (in dollars per share)								25.01
Exercisable (in dollars per share)								$ 25.01	$ 23.87
Stock options activity, additional disclosures
Total intrinsic value of stock options exercised							$ 1.3	$ 0.2

STOCKHOLDERS' EQUITY - Preferred Stock (Details) - shares		1 Months Ended	12 Months Ended
	Apr. 25, 2019	Oct. 31, 2019	Dec. 31, 2019
Series A Non-Voting Convertible Preferred Stock
Conversion of stock, shares converted		150,000
Value Act Holdings, L.P. \| Series A Non-Voting Convertible Preferred Stock
Conversion of stock, shares converted			150,000
Conversion of stock, shares issued	150,000		150,000
Value Act Holdings, L.P. \| Common Stock
Conversion of stock, shares converted	1,500,000		1,500,000

EMPLOYEE BENEFIT PLANS (Details) - USD ($)		3 Months Ended	12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($)	Jun. 05, 2015	Jun. 30, 2015	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jul. 01, 2015	Jul. 20, 2001
EDCP
Retirement Plans
Vested percentage			100.00%
Retirement Savings Plan
Retirement Plans
Number of shares registered for issuance							1,500,000
Number of shares available for issuance			341,096
Minimum age limit of employees covered by the plan			18 years
Service period after which seasonal employees begin receiving employer matching contribution			12 months
Service period after which employees begin receiving employer matching contribution			180 days
Percentage of employees' contribution matched by dollar-to-dollar contribution by employer			5.00%
Company's matching and discretionary contributions			$ 15,700,000	$ 35,300,000	$ 44,800,000
Group Retirement Savings Plan And Deferred Profit Sharing Plan \| LoyaltyOne
Retirement Plans
Company's matching and discretionary contributions			$ 1,700,000	1,800,000	$ 1,700,000
Group Retirement Savings Plan \| LoyaltyOne
Retirement Plans
Service period after which full-time employees begin receiving company matching contribution			3 months
Service period after which part-time employees begin receiving company matching contribution			6 months
Deferred Profit Sharing Plan \| LoyaltyOne
Retirement Plans
Service period after which contributions vest			1 year
Service period after which employees begin receiving employer matching contribution			12 months
Percentage of employees' contribution matched by dollar-to-dollar contribution by employer			5.00%
Executive Deferred Compensation Plan
Retirement Plans
Deferred compensation liability			$ 19,900,000	$ 33,300,000
2005 Employee Stock Purchase Plan \| Retirement Savings Plan
Retirement Plans
Number of shares available for issuance		441,327
2015 Employee Stock Purchase Plan
Employee Stock Purchase Plan
Maximum amount of common stock permitted to be purchased annually per employee			$ 25,000
Maximum percentage of voting power after purchase of common stock under ESPP			5.00%
Offering period under ESPP			6 months
Purchase price of common stock as a percentage of fair market value of shares			85.00%
Maximum number of shares reserved for issuance under the ESPP		1,441,327
Number of shares registered for issuance	1,441,327
Number of shares issued under the ESPP			65,430
Weighted-average issue price of shares issued under the ESPP (in dollars per share)			$ 46.73
Number of shares issued under the ESPP since the inception of the plan			514,112
Retirement Plans
Number of shares available for issuance			927,215			1,000,000

ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Accumulated Other Comprehensive Income
Balance at the beginning of the period	$ (99.9)
Changes in other comprehensive income (loss)	94.9	$ 38.2	$ 2.1
Recognition of foreign currency translation adjustments upon sale of business	3.8	26.8
Balance at the end of the period	(5.0)	(99.9)
Epsilon
Accumulated Other Comprehensive Income
Recognition of foreign currency translation adjustments upon sale of business		26.8
Precima
Accumulated Other Comprehensive Income
Recognition of foreign currency translation adjustments upon sale of business	3.8
Accounting Standards Update ASU 2016-01
Accumulated Other Comprehensive Income
Cumulative effect adjustment to retained earnings				$ 1.5
Net Unrealized Gains (Losses) on Securities
Accumulated Other Comprehensive Income
Balance at the beginning of the period	2.5	(10.7)	(8.7)
Changes in other comprehensive income (loss)			(2.0)
Changes in other comprehensive income (loss)	20.7	13.2
Balance at the end of the period	23.2	2.5	(10.7)
Net Unrealized Gains (Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(0.1)	(0.2)	(0.1)
Changes in other comprehensive income (loss)			(0.1)
Changes in other comprehensive income (loss)	(0.6)	0.1
Balance at the end of the period	(0.7)	(0.1)	(0.2)
Net Unrealized Gains (Losses) on Net Investment Hedge
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(7.5)	(12.4)	(42.0)
Changes in other comprehensive income (loss)			29.6
Changes in other comprehensive income (loss)		4.9
Balance at the end of the period	(7.5)	(7.5)	(12.4)
Foreign Currency Translation Adjustments.
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(94.8)	(114.8)	(89.4)
Changes in other comprehensive income (loss)			(25.4)
Changes in other comprehensive income (loss)	71.0	(6.8)
Balance at the end of the period	(20.0)	(94.8)	(114.8)
Foreign Currency Translation Adjustments. \| Epsilon
Accumulated Other Comprehensive Income
Recognition of foreign currency translation adjustments upon sale of business		26.8
Foreign Currency Translation Adjustments. \| Precima
Accumulated Other Comprehensive Income
Recognition of foreign currency translation adjustments upon sale of business	3.8
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income
Balance at the beginning of the period	(99.9)	(138.1)	(140.2)
Changes in other comprehensive income (loss)	94.9	38.2	2.1
Changes in other comprehensive income (loss)	91.1	11.4
Balance at the end of the period	(5.0)	(99.9)	$ (138.1)
Accumulated Other Comprehensive Loss \| Epsilon
Accumulated Other Comprehensive Income
Recognition of foreign currency translation adjustments upon sale of business		$ 26.8
Accumulated Other Comprehensive Loss \| Precima
Accumulated Other Comprehensive Income
Recognition of foreign currency translation adjustments upon sale of business	$ 3.8

INCOME TAXES - Components of Income Tax and Reconciliation and Deferred Taxes (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Components of income before income taxes:
Domestic									$ 281.7	$ 591.9	$ 1,052.7
Foreign									112.8	146.5	162.3
Income from continuing operations before income taxes	$ 146.2	$ 175.9	$ 47.0	$ 25.4	$ 167.4	$ 164.2	$ 193.8	$ 213.0	394.5	738.4	1,215.0
Deferred
Total deferred									(222.8)	(186.1)	16.3
Total provision for income taxes	52.9	42.6	8.6	(4.6)	37.0	42.6	51.4	34.8	$ 99.5	$ 165.8	$ 269.5
Federal statutory rate (as a percent)									21.00%	21.00%	21.00%	35.00%
Reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate
Expected expense at statutory rate									$ 82.8	$ 155.1	$ 255.1
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit									(0.8)	33.6	57.4
Foreign rate differential									4.1	(2.3)	11.6
Foreign restructuring									3.6		(48.0)
Impact of 2017 Tax Reform									(2.4)	(30.2)	(29.7)
Global intangible low-taxed income									(7.8)	8.7	15.5
Non-deductible expenses (non-taxable income)									8.3	9.1	3.7
IRC Section 199, net of tax reserves									12.5		(0.8)
Other									(0.8)	(8.2)	4.7
Total provision for income taxes	52.9	$ 42.6	$ 8.6	$ (4.6)	37.0	$ 42.6	$ 51.4	$ 34.8	99.5	165.8	269.5
Deferred tax assets
Deferred revenue	29.2				9.5				29.2	9.5
Allowance for loan loss	482.3				267.6				482.3	267.6
Net operating loss carryforwards and other carryforwards	106.2				69.0				106.2	69.0
Stock-based compensation and other employee benefits	3.8				13.7				3.8	13.7
Lease liabilities	74.4				74.4				74.4	74.4
Accrued expenses and other	81.0				40.3				81.0	40.3
Intangibles assets	5.5				23.2				5.5	23.2
Total deferred tax assets	782.4				497.7				782.4	497.7
Valuation allowance	(50.1)				(64.0)				(50.1)	(64.0)
Deferred tax assets, net of valuation allowance	732.3				433.7				732.3	433.7
Deferred tax liabilities
Deferred income	290.9				365.6				290.9	365.6
Depreciation	25.2				41.8				25.2	41.8
Right of use assets	57.0				61.1				57.0	61.1
Total deferred tax liabilities	373.1				468.5				373.1	468.5
Total - Net deferred tax asset (liability)					(34.8)					(34.8)
Total - Net deferred tax asset (liability)	359.2								359.2
Amounts recognized in the consolidated balance sheets:
Non-current assets	359.2				45.2				359.2	45.2
Non-current liabilities					(80.0)					(80.0)
Total - Net deferred tax asset (liability)					$ (34.8)					(34.8)
Total - Net deferred tax asset (liability)	$ 359.2								359.2
Continuing Operations
Components of income before income taxes:
Income from continuing operations before income taxes									394.5	738.4	1,215.0
Current
Federal									209.2	126.0	152.2
State									36.6	35.8	58.0
Foreign									47.8	11.5	52.8
Total current									293.6	173.3	263.0
Deferred
Federal									(135.1)	(11.8)	48.0
State									(37.6)	6.7	14.7
Foreign									(21.4)	(2.4)	(56.2)
Total deferred									(194.1)	(7.5)	6.5
Total provision for income taxes									99.5	165.8	269.5
Increase (decrease) in income taxes resulting from:
Total provision for income taxes									$ 99.5	$ 165.8	$ 269.5

INCOME TAXES - Operating Loss Carryforward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating Loss, Carryforwards
Foreign net operating loss carryforwards	$ 240.9
Increase (decrease) in valuation allowance	(13.9)	$ 27.7	$ (40.1)
Reconciliation of unrecognized tax benefits
Balance at the beginning of the period	274.3	296.3	208.3
Increases related to prior years' tax positions	64.7	2.7	41.3
Decreases related to prior years' tax positions	(63.5)	(76.6)	(9.6)
Increases related to current year tax positions	10.7	58.3	61.5
Settlements during the period	(4.6)	(0.6)	(1.0)
Lapses of applicable statutes of limitation	(8.3)	(5.8)	(4.2)
Balance at the end of the period	273.3	274.3	296.3
Cumulative interest and penalties with respect to unrecognized tax benefits	74.7	67.0	66.7
Potential interest and penalties with respect to unrecognized tax benefits	7.6	(0.8)	24.5
Unrecognized tax benefits, if recognized, would impact effective tax rate	257.8	$ 255.1	$ 247.7
Capital losses
Operating Loss, Carryforwards
Foreign net operating loss carryforwards	6.6
Capital loss carryforward	10.6
Federal
Operating Loss, Carryforwards
Net operating loss carryovers	146.4
Foreign
Operating Loss, Carryforwards
Tax credits	33.8
State
Operating Loss, Carryforwards
Net operating loss carryovers	232.3
Tax credits	3.0
ASU 2016-13
Operating Loss, Carryforwards
Increase in net deferred tax assets	$ 159.0

FINANCIAL INSTRUMENTS - Fair Value of Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financial assets
Credit card and loan receivables, net	$ 14,776.4	$ 18,292.0
Credit card receivables held for sale		408.0
Redemption settlement assets, restricted	693.5	600.8
Other investments	225.4	259.8
Financial liabilities
Deposits	10,015.9	12,303.6
Non-recourse borrowings of consolidated securitization entities	5,783.4	7,333.6
Long-term and other debt	2,875.1	2,878.8
Carrying Amount
Financial assets
Credit card and loan receivables, net	14,776.4	18,292.0
Credit card receivables held for sale		408.0
Redemption settlement assets, restricted	693.5	600.8
Other investments	225.4	259.8
Derivative instruments	0.4	0.2
Financial liabilities
Derivative instruments	1.5	0.3
Deposits	9,792.6	12,151.7
Non-recourse borrowings of consolidated securitization entities	5,709.9	7,284.0
Long-term and other debt	2,805.7	2,849.9
Fair Value.
Financial assets
Credit card and loan receivables, net	17,301.2	19,126.0
Credit card receivables held for sale		436.2
Redemption settlement assets, restricted	693.5	600.8
Other investments	225.4	259.8
Derivative instruments	0.4	0.2
Financial liabilities
Derivative instruments	1.5	0.3
Deposits	10,015.9	12,303.6
Non-recourse borrowings of consolidated securitization entities	5,783.4	7,333.6
Long-term and other debt	$ 2,875.1	$ 2,878.8

FINANCIAL INSTRUMENTS - Fair Value Level Disclosure (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Assets disclosed at fair value
Marketable securities	$ 225.4	$ 259.8
Total assets measured at fair value	17,301.2	19,562.2
Liabilities disclosed at fair value
Total liabilities measured at fair value	18,674.4	22,516.0
Level 2
Liabilities disclosed at fair value
Total liabilities measured at fair value	18,674.4	22,516.0
Level 3
Assets disclosed at fair value
Total assets measured at fair value	17,301.2	19,562.2
Recurring
Assets disclosed at fair value
Mutual funds	26.9	25.1
Corporate bonds	611.2	536.4
Marketable securities	225.4	259.8
Derivative instruments	0.4	0.2
Total assets measured at fair value	863.9	821.5
Liabilities disclosed at fair value
Derivative instruments	1.5	0.3
Total liabilities measured at fair value	1.5	0.3
Recurring \| Level 1
Assets disclosed at fair value
Mutual funds	26.9	25.1
Marketable securities	34.2	26.2
Total assets measured at fair value	61.1	51.3
Recurring \| Level 2
Assets disclosed at fair value
Corporate bonds	611.2	536.4
Marketable securities	191.2	233.6
Derivative instruments	0.4	0.2
Total assets measured at fair value	802.8	770.2
Liabilities disclosed at fair value
Derivative instruments	1.5	0.3
Total liabilities measured at fair value	$ 1.5	$ 0.3

FINANCIAL INSTRUMENTS - Significant Unobservable Input Information (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3)
Fair value assets amount transfer from level 1 to level 2	$ 0.0	$ 0.0
Fair value assets amount transfer from level 2 to level 1	0.0	0.0
Fair value liabilities amount transfer from level 1 to level 2	0.0	0.0
Fair value liabilities amount transfer from level 2 to level 1	$ 0.0	$ 0.0

FINANCIAL INSTRUMENTS - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financial assets
Credit card and loan receivables, net	$ 17,301.2	$ 19,126.0
Credit card receivables held for sale		436.2
Total assets measured at fair value	17,301.2	19,562.2
Financial liabilities
Deposits	10,015.9	12,303.6
Non-recourse borrowings of consolidated securitization entities	5,783.4	7,333.6
Long-term and other debt	2,875.1	2,878.8
Total liabilities measured at fair value	18,674.4	22,516.0
Level 2
Financial liabilities
Deposits	10,015.9	12,303.6
Non-recourse borrowings of consolidated securitization entities	5,783.4	7,333.6
Long-term and other debt	2,875.1	2,878.8
Total liabilities measured at fair value	18,674.4	22,516.0
Level 3
Financial assets
Credit card and loan receivables, net	17,301.2	19,126.0
Credit card receivables held for sale		436.2
Total assets measured at fair value	$ 17,301.2	$ 19,562.2

FINANCIAL INSTRUMENTS - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
FINANCIAL INSTRUMENTS
Asset Impairment Charges	$ 63.7	$ 52.0

PARENT-ONLY FINANCIAL STATEMENTS (Details) - USD ($) shares in Millions, $ in Millions		3 Months Ended								12 Months Ended
	Dec. 03, 2020	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assets:
Cash and cash equivalents		$ 3,081.5				$ 3,874.4				$ 3,081.5	$ 3,874.4
Total assets		22,547.1				26,494.8				22,547.1	26,494.8
Liabilities:
Total liabilities		21,025.5				24,906.5				21,025.5	24,906.5
Stockholders' equity		1,521.6				1,588.3				1,521.6	1,588.3	$ 2,332.1	$ 1,855.3
Total liabilities and stockholders' equity		22,547.1				26,494.8				22,547.1	26,494.8
Statements of Income
Total revenue		1,109.8	$ 1,050.5	$ 979.3	$ 1,381.8	1,461.0	$ 1,437.6	$ 1,348.5	$ 1,334.2	4,521.4	5,581.3	5,666.6
Loss on extinguishment of debt											71.9
Interest expense, net		112.5	115.1	127.7	138.6	141.6	140.0	143.5	143.9	493.9	569.0	542.3
Income before income taxes and equity in undistributed net income (loss) of subsidiaries		146.2	175.9	47.0	25.4	167.4	164.2	193.8	213.0	394.5	738.4	1,215.0
Benefit for income taxes		(52.9)	$ (42.6)	$ (8.6)	4.6	(37.0)	(42.6)	(51.4)	(34.8)	(99.5)	(165.8)	(269.5)
Net income										213.7	278.0	963.1
Loss from discontinued operations		(81.3)				(32.9)	$ (229.2)	$ (3.4)	(29.1)	(81.3)	(294.6)	17.6
Other comprehensive income:
Net income										213.7	278.0	963.1
Other comprehensive income, net of tax										94.9	38.2	2.1
Statements of Cash Flows
Net cash (used in) provided by operating activities										1,882.7	1,217.7	2,754.9
Investing activities:
Proceeds from sale of business										26.7	4,409.7
Net cash provided by investing activities										1,774.3	2,860.8	(1,872.0)
Financing activities:
Payment of debt extinguishment costs											(46.1)
Payment of deferred financing costs										(18.8)	(45.4)	(25.8)
Purchase of treasury shares											(976.1)	(443.2)
Dividends paid										(60.6)	(127.4)	(125.2)
Proceeds from issuance of common stock										2.8	12.4	17.6
Other										1.1	(27.0)	(31.3)
Net cash used in financing activities										(4,166.5)	(4,091.7)	(1,217.9)
Change in cash, cash equivalents and restricted cash										(494.9)	(9.6)	(347.0)
Cash, cash equivalents and restricted cash at beginning of year					3,958.1				3,967.7	3,958.1	3,967.7	4,314.7
Cash, cash equivalents and restricted cash at end of year		3,463.2				3,958.1				$ 3,463.2	3,958.1	3,967.7
Non-cash investing items
Equity consideration shares of common stock										1.9
Parent company
Assets:
Cash and cash equivalents		0.2				0.2				$ 0.2	0.2
Investment in subsidiaries		5,127.0				5,326.2				5,127.0	5,326.2
Other assets		41.8				3.4				41.8	3.4
Total assets		5,169.0				5,329.8				5,169.0	5,329.8
Liabilities:
Current portion of long-term and other debt		101.4				101.4				101.4	101.4
Long-term and other debt		2,704.3				2,748.5				2,704.3	2,748.5
Intercompany liabilities, net		742.0				806.7				742.0	806.7
Other liabilities		99.7				84.9				99.7	84.9
Total liabilities		3,647.4				3,741.5				3,647.4	3,741.5
Stockholders' equity		1,521.6				1,588.3				1,521.6	1,588.3
Total liabilities and stockholders' equity		5,169.0				5,329.8				5,169.0	5,329.8
Statements of Income
Interest from loans to subsidiaries										12.6	19.2	17.9
Dividends from subsidiaries										256.3	922.6	810.1
Total revenue										268.9	941.8	828.0
Loss on extinguishment of debt											71.9
Interest expense, net										109.5	130.0	281.2
Other expenses, net										1.7	(0.7)	(0.4)
Total expenses										111.2	201.2	280.8
Income before income taxes and equity in undistributed net income (loss) of subsidiaries										157.7	740.6	547.2
Benefit for income taxes										21.2	42.1	7.0
Income before equity in undistributed net (loss) income of subsidiaries										178.9	782.7	554.2
Equity in undistributed net (loss) income of subsidiaries										34.8	(504.7)	408.9
Net income										213.7	278.0	963.1
Other comprehensive income:
Net income										213.7	278.0	963.1
Other comprehensive income, net of tax											4.9	29.6
Total comprehensive income, net of tax										213.7	282.9	992.7
Statements of Cash Flows
Net cash (used in) provided by operating activities										(137.6)	(1,029.1)	82.3
Investing activities:
Investment in subsidiaries										(3.2)	(135.0)
Proceeds from sale of business											4,118.3
Dividends received										256.3	922.6	810.1
Net cash provided by investing activities										253.1	4,905.9	810.1
Financing activities:
Borrowings under debt agreements										1,276.0	3,083.0	4,527.0
Repayments of borrowings										(1,320.5)	(5,778.2)	(4,838.3)
Payment of debt extinguishment costs											(46.1)
Payment of deferred financing costs										(9.1)	(20.7)	(4.6)
Purchase of treasury shares											(976.1)	(443.2)
Dividends paid										(60.6)	(127.4)	(125.2)
Proceeds from issuance of common stock										2.8	12.4	17.6
Other										(4.1)	(23.6)	(25.7)
Net cash used in financing activities										(115.5)	(3,876.7)	(892.4)
Change in cash, cash equivalents and restricted cash											0.1
Cash, cash equivalents and restricted cash at beginning of year					$ 0.2				$ 0.1	0.2	0.1	0.1
Cash, cash equivalents and restricted cash at end of year		$ 0.2				$ 0.2				$ 0.2	0.2	$ 0.1
Non-cash investing items
Non-cash dividend											$ 3,000.0
Bread
Non-cash investing items
Equity consideration shares of common stock	1.9									1.9

SEGMENT INFORMATION - Financial Information (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment information
Revenues	$ 1,109.8	$ 1,050.5	$ 979.3	$ 1,381.8	$ 1,461.0	$ 1,437.6	$ 1,348.5	$ 1,334.2	$ 4,521.4	$ 5,581.3	$ 5,666.6
Income (loss) before income taxes	146.2	175.9	47.0	25.4	167.4	164.2	193.8	213.0	394.5	738.4	1,215.0
Interest expense, net	112.5	115.1	127.7	138.6	141.6	140.0	143.5	143.9	493.9	569.0	542.3
Operating income (loss)	258.7	$ 291.0	$ 174.7	$ 164.0	309.0	$ 304.2	$ 337.3	$ 356.9	888.4	1,307.4	1,757.3
Depreciation and amortization									183.8	249.3	487.3
Stock compensation expense									21.3	54.8	80.8
Asset impairments									63.7	52.0
Restructuring and other charges									(8.2)	118.1
Loss on extinguishment of debt										71.9
Less: Securitization funding costs									165.9	213.4	220.2
Less: Interest expense on deposits									219.5	225.6	165.7
Capital expenditures									54.0	142.3	199.8
Total assets	22,547.1				26,494.8				22,547.1	26,494.8
Continuing Operations
Segment information
Revenues									4,521.4	5,581.3	5,666.6
Income (loss) before income taxes									394.5	738.4	1,215.0
Interest expense, net									493.9	569.0	542.3
Operating income (loss)									888.4	1,307.4	1,757.3
Depreciation and amortization									183.8	176.1	193.6
Stock compensation expense									21.3	25.1	44.4
Gain on sale of business, net of strategic transaction costs									8.0
Strategic transaction costs									15.9	11.7
Asset impairments									(63.7)
Restructuring and other charges									(8.2)	118.1
Loss on extinguishment of debt										71.9
Adjusted EBITDA									1,156.9	1,710.3	1,995.3
Less: Securitization funding costs									165.9	213.4	220.2
Less: Interest expense on deposits									219.5	225.6	165.7
Adjusted EBITDA, net									771.5	1,271.3	1,609.4
Capital expenditures									54.0	86.5	93.3
LoyaltyOne
Segment information
Restructuring and other charges									0.1	50.8
Card Services
Segment information
Restructuring and other charges									(8.3)	29.4
Operating segment \| LoyaltyOne
Segment information
Revenues									764.8	1,033.1	1,068.4
Income (loss) before income taxes									111.0	103.1	153.8
Interest expense, net									(0.8)	2.3	5.6
Operating income (loss)									110.2	105.4	159.4
Gain on sale of business, net of strategic transaction costs									8.0
Strategic transaction costs									0.4	1.0
Restructuring and other charges									0.1	50.8
Adjusted EBITDA									186.2	244.5	254.2
Adjusted EBITDA, net									186.2	244.5	254.2
Total assets	2,422.3				2,338.0				2,422.3	2,338.0
Operating segment \| LoyaltyOne \| Continuing Operations
Segment information
Depreciation and amortization									78.0	80.1	84.8
Stock compensation expense									5.5	7.2	10.0
Capital expenditures									24.3	41.5	34.0
Operating segment \| Card Services
Segment information
Revenues									3,756.5	4,547.8	4,597.6
Income (loss) before income taxes									501.5	991.7	1,381.6
Interest expense, net									385.4	439.0	385.9
Operating income (loss)									886.9	1,430.7	1,767.5
Strategic transaction costs									0.3
Asset impairments									(63.7)
Restructuring and other charges									(8.3)	29.4
Adjusted EBITDA									1,052.4	1,558.7	1,881.9
Less: Securitization funding costs									165.9	213.4	220.2
Less: Interest expense on deposits									219.5	225.6	165.7
Adjusted EBITDA, net									667.0	1,119.7	1,496.0
Total assets	19,884.6				23,931.1				19,884.6	23,931.1
Operating segment \| Card Services \| Continuing Operations
Segment information
Depreciation and amortization									102.8	89.3	101.1
Stock compensation expense									7.0	9.3	13.3
Capital expenditures									29.4	44.2	53.8
Corporate/Other
Segment information
Revenues									0.1	0.4	0.6
Income (loss) before income taxes									(218.0)	(356.4)	(320.4)
Interest expense, net									109.3	127.7	150.8
Operating income (loss)									(108.7)	(228.7)	(169.6)
Strategic transaction costs									15.2	10.7
Restructuring and other charges										37.9
Loss on extinguishment of debt										71.9
Adjusted EBITDA									(81.7)	(92.9)	(140.8)
Adjusted EBITDA, net									(81.7)	(92.9)	(140.8)
Total assets	$ 240.2				$ 225.7				240.2	225.7
Corporate/Other \| Continuing Operations
Segment information
Depreciation and amortization									3.0	6.7	7.7
Stock compensation expense									8.8	8.6	21.1
Capital expenditures									$ 0.3	$ 0.8	$ 5.5

SEGMENT INFORMATION - Geographic Information (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Information concerning principal geographic areas
Revenues	$ 1,109.8	$ 1,050.5	$ 979.3	$ 1,381.8	$ 1,461.0	$ 1,437.6	$ 1,348.5	$ 1,334.2	$ 4,521.4	$ 5,581.3	$ 5,666.6
Long-lived assets	2,912.7				2,382.1				$ 2,912.7	$ 2,382.1
Revenues \| Customer Concentration Risk \| L Brands
Concentration risk
Concentration Risk, Percentage									10.30%	10.60%	10.80%
United States
Information concerning principal geographic areas
Revenues									$ 3,767.7	$ 4,588.3	$ 4,621.3
Long-lived assets	1,874.9				1,361.1				1,874.9	1,361.1
Canada
Information concerning principal geographic areas
Revenues									286.9	352.2	411.3
Long-lived assets	310.7				311.1				310.7	311.1
Europe, Middle East and Africa
Information concerning principal geographic areas
Revenues									332.6	449.1	463.2
Long-lived assets	714.3				696.2				714.3	696.2
Asia Pacific
Information concerning principal geographic areas
Revenues									80.5	121.7	122.0
Long-lived assets	11.4				12.8				11.4	12.8
Other
Information concerning principal geographic areas
Revenues									53.7	70.0	$ 48.8
Long-lived assets	$ 1.4				$ 0.9				$ 1.4	$ 0.9

SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions			1 Months Ended	12 Months Ended
	Dec. 03, 2020	Apr. 25, 2019	Oct. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash and cash equivalents				$ 3,081.5	$ 3,874.4	$ 3,863.1
Restricted cash included within other current assets				326.3	44.4	60.7
Restricted cash included within redemption settlement assets, restricted				55.4	39.3	43.9
Total cash, cash equivalents and restricted cash				3,463.2	$ 3,958.1	$ 3,967.7	$ 4,314.7
Restricted cash in principal accumulation for repayment				$ 291.8
Equity consideration shares of common stock				1,900,000
Series A Non-Voting Convertible Preferred Stock
Conversion of stock, shares converted			150,000
Bread
Deferred consideration	$ 75.0			$ 75.0
Equity consideration shares of common stock	1,900,000			1,900,000
Value Act Holdings, L.P. \| Common Stock
Conversion of stock, shares converted		1,500,000			1,500,000
Value Act Holdings, L.P. \| Series A Non-Voting Convertible Preferred Stock
Conversion of stock, shares converted					150,000
Conversion of stock, shares issued		150,000			150,000

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Revenues	$ 1,109.8	$ 1,050.5	$ 979.3	$ 1,381.8	$ 1,461.0	$ 1,437.6	$ 1,348.5	$ 1,334.2	$ 4,521.4	$ 5,581.3	$ 5,666.6
Operating expenses	851.1	759.5	804.6	1,217.8	1,152.0	1,133.4	1,011.2	977.3	3,633.0	4,273.9	3,909.3
Operating income	258.7	291.0	174.7	164.0	309.0	304.2	337.3	356.9	888.4	1,307.4	1,757.3
Interest expense, net	112.5	115.1	127.7	138.6	141.6	140.0	143.5	143.9	493.9	569.0	542.3
Income from continuing operations before income taxes	146.2	175.9	47.0	25.4	167.4	164.2	193.8	213.0	394.5	738.4	1,215.0
Provision for income taxes	52.9	42.6	8.6	(4.6)	37.0	42.6	51.4	34.8	99.5	165.8	269.5
Income from continuing operations	93.3	133.3	38.4	30.0	130.4	121.6	142.4	178.2	295.0	572.6	945.5
(Loss) income from discontinued operations, net of taxes	(81.3)				(32.9)	(229.2)	(3.4)	(29.1)	(81.3)	(294.6)	17.6
Net income (loss)	$ 12.0	$ 133.3	$ 38.4	$ 30.0	$ 97.5	$ (107.6)	$ 139.0	$ 149.1	$ 213.7	$ 278.0	$ 963.1
Basic income (loss) per share (Note 4):
Income from continuing operations (in dollars per share)	$ 1.93	$ 2.79	$ 0.81	$ 0.63	$ 2.73	$ 2.47	$ 2.72	$ 3.36	$ 6.17	$ 11.25	$ 17.24
(Loss) income from discontinued operations (in dollars per share)	(1.68)				(0.70)	(4.69)	(0.07)	(0.55)	(1.70)	(5.89)	0.32
Net income (loss) per share (in dollars per share)	0.25	2.79	0.81	0.63	2.03	(2.22)	2.65	2.81	4.47	5.36	17.56
Diluted income (loss) per share (Note 4):
Income from continuing operations (in dollars per share)	1.93	2.79	0.81	0.63	2.74	2.41	2.71	3.35	6.16	11.24	17.17
(Loss) income from discontinued operations (in dollars per share)	(1.68)				(0.69)	(4.54)	(0.07)	(0.55)	(1.70)	(5.78)	0.32
Net income (loss) per share (in dollars per share)	$ 0.25	$ 2.79	$ 0.81	$ 0.63	$ 2.05	$ (2.13)	$ 2.64	$ 2.80	$ 4.46	$ 5.46	$ 17.49

SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for Doubtful Accounts -Trade receivables - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Movement in valuation and qualifying accounts
Balance at Beginning of Year	$ 3.4	$ 0.4	$ 0.1
Charged to Costs and Expenses	1.1	3.5	0.4
Write-Offs Net of Recoveries	(0.5)	(0.5)	(0.1)
Balance at End of Year	$ 4.0	$ 3.4	$ 0.4