SEC Filing

Alliance Data Systems Corporation

Date: October 26, 2010

/s/ CHARLES L. HORN

Charles L. Horn

Executive Vice President and

Chief Financial Officer

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Form 8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

October 26, 2010

ALLIANCE DATA SYSTEMS CORPORATION

(Exact Name of Registrant as Specified in Charter)

DELAWARE

001-15749

31-1429215

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

7500 DALLAS PARKWAY, SUITE 700

PLANO, TEXAS 75024

(Address and Zip Code of Principal Executive Offices)

(214) 494-3000

(Registrant’s Telephone Number, including Area Code)

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

ITEM 7.01.

Regulation FD Disclosure

Attached as Exhibit 99.1 is a presentation to be given to investors and others by senior officers of Alliance Data Systems Corporation.

ITEM 9.01.

Financial Statements and Exhibits

(d) Exhibits


EXHIBIT NUMBER		DESCRIPTION

99.1		Investor Presentation Materials.

Note: The information contained in this report (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX


EXHIBIT NUMBER		DESCRIPTION

99.1		Investor Presentation Materials.

Investor Presentation Materials

Confidential and Proprietary

Alliance Data

NYSE: ADS

Q4 2010

Exhibit 99.1

NYSE: ADS | Q4 2010

Confidential and Proprietary

Alliance Data is the largest and most comprehensive provider

of transaction-based marketing and loyalty solutions.

A Unique Business Model.

Advantages over traditional marketing channels:

Transaction-based

programs

allow

micro-segmentation

clients’

customer

data

Provide high, measurable ROIs

for our clients

Comprehensive suite of products that

target the $190 billion direct and digital marketing

channel:

NYSE: ADS | Q4 2010

Confidential and Proprietary

NYSE: ADS | Q4 2010

Confidential and Proprietary

Designs and executes

ROI-based marketing

programs that deliver

measurable results

Designs, delivers and

manages a suite of

loyalty marketing

programs and services

to profitably change

customer behavior

Drives sales for our

clients by providing

marketing driven

branded credit

programs that build

customer loyalty

Three Businesses. One Focus.

The largest and most comprehensive provider of

transaction-based marketing and loyalty solutions. These

solutions are delivered through 3 businesses:

Private Label

YTD Revenue: $576mm

YTD adj. EBITDA: $159mm

YTD Revenue: $434mm

YTD adj. EBITDA: $103mm

YTD Revenue: $1.0bn

YTD adj. EBITDA, net

of funding costs: $265mm

*******

NYSE: ADS | Q4 2010

Confidential and Proprietary

Key Clients

Shell Oil of Canada

We work with the biggest brands in North America.

NYSE: ADS | Q4 2010

Confidential and Proprietary

NYSE: ADS | Q4 2010

Confidential and Proprietary

2010 YTD Operating Results

($MM, except per share data)

2009

Actual

2009

Pro Forma

2010

Actual

% Change

10/09PF

Revenue

$1,418

$1,819

$2,036

12%

Net Income

$103

$147

43%

EPS

$1.78

$2.63

48%

Adjusted EBITDA

$415

$518

$629

21%

Core EPS

$3.53

$4.31

22%

Nine Months Ended September 30,

2009 revenue and adjusted EBITDA are shown pro forma to reflect the commercial presentation format effective

January 1, 2010. Net income, EPS and core EPS are not impacted by the change in accounting presentation.

NYSE: ADS | Q4 2010

Confidential and Proprietary

Corporate:

•

$500 million in

available liquidity,

excluding $274 million

of cash held at bank

subsidiaries

•

Debt levels remain

moderate (leverage

ratio 2.5x at

September 30, 2010)

Liquidity and Capital at September 30, 2010

Bank Liquidity:

•

$3.0 billion of available

liquidity

•

All financings completed

for 2010

•

Diversified funding

sources: conduits, bank

issued CDs and term

ABS

•

Approximately 70%

fixed rate

Bank Capital:

WFNNB Regulatory

Ratios at September

30, 2010:

•

Tier 1: 13%

•

Leverage: 11%

•

Total risk based: 20%

Liquidity and Capital

NYSE: ADS | Q4 2010

Confidential and Proprietary

2010 Guidance

($MM, except per share data)

2009

Pro Forma

2010

Guidance

Change

Revenue

Reported

Normalized

$2,513

$2,478

$2,800

+11%

+13%

Core EPS

Reported

Normalized

$5.16

$4.64

$5.70+

+10%+

+23%+

Excludes infrequently occurring items.

NYSE: ADS | Q4 2010

Confidential and Proprietary

2010 Trends

Double-digit Revenue Growth Across All 3 Businesses

LoyaltyOne:

•Flat issuance growth

•

100% sponsor renewal

rate

•New sponsors YTD:

Whirlpool, Ontario Power

•Brazilian pilot –

moving

toward national roll-out with

select sponsors

Epsilon:

•

Accelerating back-half of

year due to key program

launches

•Significant new wins YTD:

Kraft, Dell, Unilever, AAA

•Acquisition of Equifax DMS

adds approximately 5% to full

year revenue growth

Private Label:

•Available liquidity of $3.0

billion

•Principal loss rates continue

to improve (9.4% Q3,09 to

8.3% Q3,10)

•Solid growth in average

credit card receivables; up

approximately 10% for year

•Regulatory matters resolved

favorably

•David’s Bridal, MyPoints

signed for new programs;

expect 1-2 additional wins

NYSE: ADS | Q4 2010

Confidential and Proprietary

2011 Guidance

($MM, except per share data)

2010

Guidance

2011

Guidance

Change

Revenue

$2,800

$3,000

EPS

$3.48

$4.66

34%

Core EPS

$5.70

$6.75

18%

Diluted shares

55.6

56.0

+1%

NYSE: ADS | Q4 2010

Confidential and Proprietary

2011 Outlook

•

Over $400 million in free cash flow or $7.15 per diluted share in 2011

LoyaltyOne:

•Single-digit growth in both

revenue and adj. EBITDA

•Miles issued increase

approximately 5%

•Increased international

investment

Epsilon:

•Strongest growth rates in

the Company

•Double-digit organic growth

in both revenue and adj.

EBITDA

•Backlog of wins and DMS

acquisition drive above

average growth

Private Label:

•Moderate portfolio growth

•Continued divergence

between unemployment and

credit loss rates; 70 basis

point improvement in credit

loss rate

•High single-digit growth in

revenue and mid-teens

growth in adj. EBITDA

•Bank dividends will resume

Revenue and Core EPS Growth of at Least 8% and 18%, Respectively

NYSE: ADS | Q4 2010

Confidential and Proprietary

The Business Model: Units Cycle Differently

Strong Growth and Consistency Regardless of Macro

Macro

$3.88

The Great Recession

*Excludes infrequently occurring items

The Great “Muddle Through”

2012

2008

2009

2010

2007

2011

Good

Liquidity Crisis

Massive Layoffs

Weakened Consumer Confidence

Challenging Regulatory Environment

No Double-dip, But Only 2-3% GDP

Slow Employment Recovery:

Unemployment 9.6%

9.2%

8.7% in 2012

$4.42

$4.64*

$5.70

Alliance Data

Core EPS

~$8.00

$6.75

Balanced

Growth Across

All Businesses

LoyaltyOne

and Epsilon’s

Performance, Plus Buyback

Outpace Decline in Private Label

Double

-digit

Topline

Across

All 3 Businesses

EBITDA Growth

Across All 3

Businesses

Balanced

Growth Across

All Businesses

Restored

2007-12

CAGR

16%

NYSE: ADS | Q4 2010

Confidential and Proprietary

Alliance Data’s Safe Harbor Statement and

Forward-Looking Statements

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act

of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements

may

use

words

such

“anticipate,”

“believe,”

“estimate,”

“expect,”

“intend,”

“predict,”

“project”

and

similar

expressions

they

relate

our

management.

When

make

forward-looking

statements,

are

basing

them

our

management’s

beliefs

and

assumptions,

using

information

currently

available

us.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, these

forward-looking statements are subject to risks, uncertainties and assumptions, including the anticipated

effects of the CARD Act and those discussed in our filings with the Securities and Exchange Commission.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be

incorrect, actual results may vary materially from what we projected. Any forward-looking statements

contained in this presentation reflect our current views with respect to future events and are subject to these

and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy

and liquidity. We have no intention, and disclaim any obligation, to update or revise any forward-looking

statements, whether as a result of new information, future results or otherwise.

“Safe

Harbor”

Statement

under

the

Private

Securities

Litigation

Reform

Act

1995:

Statements

this

presentation regarding Alliance Data Systems Corporation’s business which are not historical facts are

“forward-looking statements”

that involve risks and uncertainties. For a discussion of such risks and

uncertainties, which could cause actual results to differ from those contained in the forward-looking

statements, see “Risk Factors”

in the Company’s Annual Report on Form 10-K for the most recently ended

fiscal year. Risk factors may be updated in Item 1A in each of the Company’s Quarterly Reports on Form 10-Q

for each quarterly period subsequent to the Company’s most recent Form 10-K.

NYSE: ADS | Q4 2010

Confidential and Proprietary

NYSE: ADS | Q4 2010

Confidential and Proprietary

Financial Measures

In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the

Company presents financial measures that are non-GAAP measures, such as constant currency financial

measures,

adjusted

EBITDA,

adjusted

EBITDA

margin,

core

earnings

and

core

earnings

per

diluted

share.

These non-GAAP financial measures exclude costs associated with the terminated merger with affiliates of

The Blackstone Group and other costs. The Company believes that these non-GAAP financial measures,

viewed in addition to and not in lieu of the Company’s reported GAAP results, provide useful information to

investors regarding the Company’s performance and overall results of operations. These metrics are an

integral part of the Company’s internal reporting to measure the performance of reportable segments and the

overall effectiveness of senior management. Reconciliations to comparable GAAP financial measures are

available in the accompanying schedules and on the Company’s website. The financial measures presented

are consistent with the Company’s historical financial reporting practices. Core earnings and core earnings per

diluted share represent performance measures and are not intended to represent liquidity measures. The non-

GAAP financial measures presented herein may not be comparable to similarly titled measures presented by

other

companies,

and

are

not

identical

corresponding

measures

used

other

various

agreements

public

filings.

NYSE: ADS | Q4 2010

Confidential and Proprietary